title-3•3 AAC — Commerce, Community, and Economic Development
Part 1 Banking, Securities, Small Loans and Corporations
Chapter 01 Financial Institution General Administration
Article 1 Powers of the Department
3 AAC 01.010 Adjudicatory hearings
(a) Setting Hearings. When the department intends to issue or has issued an order directing a person to stop an act or practice considered by the department to be unsafe or unsound, or in violation of or likely to violate an order of the department, the provisions of AS 06, or regulations adopted under AS 06, the department will hold a hearing on the order or proposed order, on the department's own motion or upon timely written request by
(1) a person subject to the order or proposed order; or
(2) a person having a contractual relationship with the person subject to the order and who is directly affected by the order or proposed order, except that a person does not obtain standing to request a hearing solely due to the person's status as a depositor.
(b) Time of Hearing. Upon receipt of a written request for a hearing, the department will, within 30 days, schedule a hearing date on the subject matter of the order or proposed order.
(c) Notice of Hearing. Except for an emergency hearing under AS 06.05.468(d), notice of hearing will be given not less than 10 days before the hearing date to those parties named in the department's order or proposed order. The notice of hearing will contain
(1) the name of the party who is the subject of the order or proposed order;
(2) the time and place of the hearing;
(3) a statement of matters to be considered;
(4) a statement of the legal authority and jurisdiction under which the hearing is to be held; and
(5) references to the applicable statutes and regulations.
(d) Confidentiality. All hearings on orders under this section will be private unless the department, in its sole discretion, after considering the views of the party afforded the hearing, determines that a public hearing is necessary to protect the public interest.
(e) Witnesses. A party who is subject to the order or proposed order of the department has the right to have subpoenas issued by the department on the party's behalf to a witness.
(f) Right to Counsel. A party named in the order or proposed order has the right to appear in person and by counsel; counsel may be present during the presentation of evidence and will be given a reasonable opportunity to examine and inspect all documentary evidence made a part of the record.
(g) Rules of Evidence. The following rules of evidence apply in hearings held under this section:
(1) oral evidence will be taken only on oath or affirmation;
(2) a party or that party's counsel, but not both, may call and examine witnesses, introduce exhibits, cross-examine opposing witnesses on matter relevant to the issues even though that matter was not covered in the direct examination, impeach a witness regardless of which party first called the witness to testify, and rebut adverse evidence;
(3) a party may be called by another party and examined as if under cross-examination;
(4) the hearing need not be conducted according to technical judicial rules relating to evidence and witnesses; however, relevant evidence will be admitted if it is the sort of evidence on which responsible persons are accustomed to rely in the conduct of serious affairs, regardless of the existence of a common law, statutory, or court rule which makes improper the admission of the evidence over objection in a civil action; hearsay evidence may be used to supplement or explain direct evidence but is not sufficient by itself to support a finding unless it would be admissible over objection in a civil action; the rules of privilege are effective to the same extent that they are recognized in a civil action; irrelevant and unduly repetitious evidence will be excluded;
(5) nothing in this section alters the ordinary rules of burden of proof of judicial proceedings in the state.
(h) Transcript of Hearing. The hearing must be recorded. Upon written request by a party and at the party's expense, the department will make a transcript of the hearing.
(i) Contents of Record. The record of the hearing will include the following:
(1) all pleadings, motions, and intermediate rulings considered by the hearing officer;
(2) arguments of parties or their representatives and all evidence received and considered including a statement of matters of which official notice is taken by the hearing officer;
(3) questions or offers of proof, objections, and rulings on them by the hearing officer;
(4) proposed findings of fact and conclusions of law prepared by the parties if requested by the hearing officer; and
(5) the decision and final order of the department.
(j) Final Orders. A final order will be in writing and included in the record. A final order will include findings of fact and conclusions of law. All findings of fact will be based exclusively on the evidence presented at the hearing and on matters officially noticed. Findings of fact will be accompanied by a concise and explicit statement of the underlying facts supporting the findings. A copy of the final order will be delivered or mailed to all parties and to their counsels of record, if any, within 10 days after the termination of the hearing.
(k) Rehearings. The following provisions apply to rehearings held under this section:
(1) the department will, in its discretion, grant a rehearing to an aggrieved party if a written request is made for a rehearing within 10 days after the final order is mailed to the person entitled to receive it. A request for a rehearing must set out one or more of the following grounds:
(A) newly discovered evidence or newly available evidence relevant to the issues;
(B) the need for additional evidence to develop the facts essential to proper decision;
(C) probable error committed in the proceeding, the hearing officer's decision, or the final order which would be grounds for reversal on judicial review of the order; or
(D) need for further consideration of the issues and the evidence in the public interest;
(2) a rehearing will be limited to those grounds upon which the rehearing was requested or granted;
(3) the decision on rehearing will be delivered or mailed to all parties and to their counsels of record, if any, within 10 days of the termination of the rehearing;
(4) nothing in this section prohibits the department from rehearing, reopening, or reconsidering any matter in accordance with other applicable statutory provisions, on the ground of fraud by the prevailing party, or of procurement of the order by perjured testimony or fictitious evidence.
History
- Authority: AS 06.01.025; AS 06.01.030; AS 06.05.005(a)
- Eff. 4/4/79, Register 70; am 1/10/94, Register 129
3 AAC 01.020 Fact-finding hearings
Repealed.
History
- Eff. 4/4/79, Register 70; am 1/10/94, Register 129; am 3/29/2008, Register 185; repealed 12/27/2023, Register 248
3 AAC 01.030 Notice of fact-finding action by the department
Repealed.
History
- Eff. 4/4/79, Register 70; repealed 1/10/94, Register 129
3 AAC 01.110 Semiannual assessment of deposit institutions
(a) The department will assess a state-chartered deposit institution a regulatory fee based on total assets shown in the December 31 and June 30 report of condition. The assessment will be collected semiannually and will be computed using the following schedule:
(1) up to $20,000,000; $6,000;
(2) $20,000,001 or more, but not over $100,000,000; $8,000 plus .000124 of total assets over $20,000,000;
(3) $100,000,001 or more, but not over $200,000,000; $18,000 plus .000122 of total assets over $100,000,000;
(4) $200,000,001 or more, but not over $300,000,000; $31,000 plus .000114 of total assets over $200,000,000;
(5) $300,000,001 or more, but not over $500,000,000; $43,000 plus .000061 of total assets over $300,000,000;
(6) $500,000,001 or more, but not over $1,000,000,000; $56,000 plus .000038 of total assets over $500,000,000;
(7) $1,000,000,001 or more, but not over $3,000,000,000; $80,000 plus .000023 of total assets over $1,000,000,000;
(8) over $3,000,000,001; $126,000 plus .000015 of total assets over $3,000,000,000.
(b) The assessment will be included with the December 31 and June 30 reports of condition submitted on the form provided by the division. The assessment shall be submitted to the department no later than January 31 and July 31.
(c) After a certificate of authority has been issued, a new state-chartered deposit institution is subject to the full assessment in the second period for which a report of condition is due.
(d) In this section and in AS 06.01.010, unless the context requires otherwise,
(1) "deposit institution" means a "financial institution" licensed or regulated by the department which is not a trust company, a bank holding company, a premium finance company, a small loan company, or Alaska Commercial Fishing and Agriculture Bank;
(2) "regular examination" and "periodic examination" mean an examination conducted at the interval authorized under AS 06;
(3) "special examination or investigation" means an examination not classified as a regular or periodic examination.
History
- Authority: AS 06.01.010; AS 44.81.270
- Eff. 11/28/92, Register 124; am 3/4/2018, Register 225
Article 3 Prohibited Practices and Sanctions
3 AAC 01.210 Communications in debt collection
(a) A creditor may not communicate with a debtor regarding the collection of a debt without the prior written consent of the debtor or pursuant to an order by a court of competent jurisdiction
(1) after written notification from an attorney representing the debtor that all further communications regarding the loan must be addressed to the attorney, unless the attorney fails to respond within a reasonable time to the creditor's inquiries regarding the debt or the attorney consents to direct communication with the debtor;
(2) at the debtor's place of employment unless the debtor's employer permits employees to receive those communications during working hours.
(b) Any creditor communicating with any person for the purpose of acquiring information regarding the whereabouts of the debtor, e.g., the debtor's residence, telephone number, or place of employment, may not in any way use a form of communication or otherwise indicate that the debtor owes any debt.
(c) A creditor who has assigned an alleged debt to a credit reporting agency shall, upon receipt of a written notice from the debtor that any part of the alleged debt is disputed, forward a copy of the written notice to the credit reporting agency.
(d) A creditor may not
(1) take or threaten to take any nonjudicial action to effect dispossession or disablement of property if
(A) there is no present right to possession of the property through an enforceable security interest;
(B) in the case of a threat, there is no present intention to effect dispossession or disablement of the property;
(C) the property is exempted by law from dispossession or disablement;
(2) threaten to take any action which, if taken, would violate any law;
(3) obtain a signed confession of judgment, when permitted to do so by Alaska law, by deception or coercion or on a document which is not clearly labeled "Confession of Judgment."
History
- Authority: AS 06.05.005; AS 06.15.010; AS 06.50.550 AS 06.05.075; AS 06.20.340
- Eff. 4/4/79, Register 70
3 AAC 01.220 False or misleading representations
A creditor may not use any false, deceptive or misleading representation or means in connection with the collection of any debt, including but not limited to the following:
(1) any false representation
(A) that the lender is vouched for, bonded by, or affiliated with the United States or any state;
(B) of the character, amount or legal status of any debt;
(C) of any services rendered or compensation due the creditor for the collection of any debt;
(D) that documents are not legal process forms or do not require action by the debtor;
(2) communicating or threatening to communicate to any person credit information which is known to be false or, if a debt is disputed, failing to communicate that fact when giving credit information.
History
- Authority: AS 06.05.005; AS 06.15.010; AS 06.50.550 AS 06.05.075; AS 06.20.340
- Eff. 4/4/79, Register 70
Article 4 General Provisions
3 AAC 01.905 Records; disclosure and limitation on disclosure
(a) The records, reports, and correspondence files of the division with respect to financial institutions are not public documents, are not subject to subpoena, and are not open for inspection by the public. Neither the commissioner, the director, nor a member of their respective staffs will disclose information obtained in the discharge of official duties to a person not connected with the division, except that the commissioner will, in the commissioner's discretion, disclose that information to
(1) representatives of federal agencies insuring accounts in the financial institution;
(2) representatives of federal agencies, other states, and foreign countries having supervisory authority over the activities of the financial institution or enterprises, or similar financial institutions or enterprises, if those representatives are permitted to and do, upon request of the commissioner, disclose similar information respecting those financial institutions under their supervision;
(3) the attorney general of this state; and
(4) a person or financial institution the records, reports, or correspondence that apply to that particular person or financial institution; the records, reports, or correspondence will not be disclosed to a person who is not a current account holder, except in the discretion of the commissioner.
(b) The commissioner will, in the commissioner's discretion
(1) repealed 1/10/94;
(2) prepare and circulate reports reflecting the assets and liabilities of financial institutions, in the state as a whole, or other general statistical information; and
(3) prepare and circulate reports as provided by law.
(c) Repealed 1/10/94.
(d) No records, reports, or correspondence that are prohibited from disclosure under federal law will be disclosed by the department to any person or institution.
(e) The board of directors of a bank may release a report of examination, prepared by the department,
(1) to an independent auditor under contract to produce a report of the bank's condition under AS 06.05.438(d); or
(2) for review by a potential purchaser of a financial institution, upon written consent of the department under AS 06.01.025(a).
History
- Authority: AS 06.01.025; AS 06.20.340; AS 06.45.010 AS 06.05.005; AS 06.26.900 AS 06.15.010; AS 06.40.180
- Eff. 6/6/82, Register 82; am 1/10/94, Register 129; am 3/4/2018, Register 225
3 AAC 01.910 Definitions
In this chapter, unless the context requires otherwise
(1) "communicating" means conveying information regarding a debt, directly or indirectly, to any person through any medium;
(2) "creditor" means a financial institution with a certificate of authority or license issued by the department under AS 06 to conduct business as a financial institution in this state including, but not limited to, commercial and mutual savings banks, savings associations, trust companies, finance company licensees, and premium finance company licensees;
(3) "debt" means any obligation or alleged obligation to pay money, whether or not the obligation has been reduced to judgment;
(4) "debtor" means any person obligated or allegedly obligated to pay any debt and, in the case where the debtor is a minor, includes the guardian, executor, administrator, or parent of the debtor;
(5) "department" means the Department of Commerce, Community, and Economic Development;
(6) "director" means the director of banking and securities in the department or the director's designee;
(7) "division" means the division of banking and securities in the department.
History
- Authority: AS 06.05.005; AS 06.20.340; AS 06.40.180 AS 06.15.010; AS 06.26.250; AS 06.45.010
- Eff. 4/4/79, Register 70; am 6/6/82, Register 82; am 1/10/94, Register 129; am 12/7/2006, Register 180
Chapter 02 Banking
Article 1 Powers of the Department of Commerce
3 AAC 02.010 Retention or destruction of records
A bank shall maintain records of administration, cash, deposits, collections, United States Savings Bonds, and data processing for a minimum of 5 years, or longer if required by 31 C.F.R. 1010.410(d), revised as of October 26, 2010, and as amended from time to time.
History
- Authority: AS 06.05.005
- Eff. 12/13/70, Register 36; am 1/10/94, Register 129; am 9/21/2018, Register 227
3 AAC 02.020 Reports to the department
(a) A bank shall prepare the quarterly reports of condition required under AS 06.05.045(a) on the FFIEC Consolidated Reports of Condition and Income form and, if the bank is required to file the form with the FDIC or the Federal Reserve Bank, the report to the department must be a duplicate of the form filed with that agency.
(b) If compatible and with the approval of the department, a bank may file reports required by the department by means of electronic mail. If a signature is otherwise required, the department may accept an electronic signature in lieu of an original signature. If a bank files a report under this section, the bank shall maintain the original version of the report until the next examination by the department.
(c) In performing its annual examination of a state bank to be submitted to the department as required under AS 06.05.438(d), the board of directors shall have the books and records of the bank examined and a report prepared by an independent certified public accountant who has no interest, financial or otherwise, in the bank.
History
- Authority: AS 06.05.055; AS 06.05.045; AS 06.05.438
- Eff. 1/10/94, Register 129; am 9/21/2018, Register 227
3 AAC 02.030 Examinations
The examinations required under AS 06.01.015 may be conducted in alternate years, as appropriate, if the department determines that an examination of the financial institution conducted by the FDIC or other federal agency that regulates financial institutions, during the intervening year carries out the purposes of AS 06.01.015.
History
- Authority: AS 06.01.015; AS 06.05.005(a)
- Eff. 1/10/94, Register 129
Article 2 Banking Practices
3 AAC 02.110 Reserves against deposits
(a) In order to protect liquidity, a state bank shall comply with the reserve requirements imposed upon depository institutions by 12 C.F.R. 204, revised as of November 16, 2009, and adopted by reference.
(b) If a bank fails to maintain the reserve required in (a) of this section, the department may determine that the bank is in danger of becoming illiquid, and that the bank is engaged in an unsafe or unsound practice as defined in AS 06.01.030(h) or is in unsafe or unsound condition as defined in AS 06.05.990. The bank shall submit to the department, no later than 15 days after the department notifies the bank of its determination, a business plan to correct the condition and bring the bank into compliance with the requirements of this section.
History
- Authority: AS 06.05.005; AS 06.05.200
- Eff. 1/17/69, Register 28; am 12/13/70, Register 36; am 7/30/82, Register 83; am 1/10/94, Register 129; am 4/22/2010, Register 194
3 AAC 02.112 Disclosure of account charges
In meeting the requirement of AS 06.05.120 that a bank post a schedule of charges for certain accounts, a bank may make available upon request pamphlets, brochures, or other documents that clearly set out the required information and post a sign, readily visible, indicating the existence of the pamphlets, brochures or other documents.
History
- Authority: AS 06.05.005(a)AS 06.05.120
- Eff. 1/10/94, Register 129
3 AAC 02.115 Now accounts
Repealed.
History
- Eff. 3/29/80, Register 73; repealed 1/10/94, Register 129
3 AAC 02.120 Reporting of loans over $500,000
(a) The purpose of this section is to encourage the board of directors to review larger loans to ensure that lending practices are consistent with the bank's established lending policies, but not to require the reporting of the aggregate liability of a borrower.
(b) In each report to the board of directors under AS 06.05.438(c), the reporting officer shall specifically identify each loan made since the last report that exceeds $500,000.
History
- Authority: AS 06.05.005; AS 06.05.438
- Eff. 1/17/69, Register 28; am 10/2/83, Register 87; am 1/10/94, Register 129; am 9/21/2018, Register 227
3 AAC 02.121 Credit cards for officers. [Annulled; see editor's note.]
An officer of a state bank may have an uncollateralized credit card balance of up to $10,000 as a loan with that bank. For purposes of AS 06.05.210(a), such a loan must be approved by the board of directors of that bank only at the time the credit card is issued and the unpaid balance of the loan need not be reported to the department, unless it is $10,000 or greater.
History
- Authority: AS 06.05.005; AS 06.05.210
- Eff. 10/23/94, Register 132
3 AAC 02.122 Lending standards
A bank may not make a loan unless the bank has determined and documented, in the loan file, the type, amount, purpose, and repayment provisions of the loan and an analysis of the credit worthiness of the borrower.
History
- Authority: AS 06.05.005(a)AS 06.05.207
- Eff. 1/10/94, Register 129
3 AAC 02.125 Loan lending limits
(a) For purposes of determining compliance with the loan lending limits in AS 06.05.205, the department will consider a loan fully secured if the fair market value of the collateral for the loan exceeds the total principal, interest, and other charges owed to or incurred by the bank on the loan.
(b) For purposes of calculating the maximum amount that may be loaned to one borrower under AS 06.05.205(b), the "total capital accounts of the bank" must include the bank's capital accounts plus its loan loss reserves.
(c) A loan made to one borrower must be attributed to and combined with loans to another, for purposes of the lending limits in AS 06.05.205(b), when
(1) the proceeds of the loan to one borrower are to be used for the direct benefit of the other;
(2) the expected source of repayment of the loans is the same;
(3) there is substantial financial interdependence between the two borrowers, including where a majority of one's income is derived from sales or other transactions with the other; or
(4) the proceeds of the loans to each person will be used to purchase a business enterprise in which the borrowers will have a majority interest.
(d) A loan made to a partnership, joint venture, or association must be considered a loan, under AS 06.05.205(b), to each member of that entity who may be held liable for the debts of the entity.
History
- Authority: AS 06.01.020; AS 06.05.005(a)AS 06.05.205
- Eff. 5/2/84, Register 90; am 1/10/94, Register 129
3 AAC 02.129 Small loans
A financial institution organized under AS 06.05 or AS 06.15 may make loans on terms consistent with the provisions of AS 06.20.230 - 06.20.310 and 3 AAC 12.100 - 3 AAC 12.210 without obtaining a license under AS 06.20.010.
History
- Authority: AS 06.01.020; AS 06.05.005; AS 06.15.010
- Eff. 10/23/94, Register 132
3 AAC 02.130 Improved real estate
Repealed.
History
- Eff. 1/17/69, Register 28; am 4/6/79, Register 70; repealed 1/10/94, Register 129
3 AAC 02.135 Disposition of property not needed for banking business. [Annulled; see editor's note.]
(a) The time limit for disposing of real estate not necessary for the convenient transaction or promotion of a banking business, including property acquired to satisfy loans, is two years from the date the bank receives title to the property. Real property not disposed of within two years shall be written down annually at the rate of 20 percent of the book value at the time of acquisition until the book value is reduced to $10. The book value of the property must remain at $10 until disposed of by the bank.
(b) Repealed 1/10/94.
(c) The time limit for disposing of personal property not necessary for the convenient transaction or promotion of a banking business, including property acquired to satisfy loans, is one year from the date the bank receives title to the property, unless the department approves a longer time limit in a particular case. Personal property not disposed of within the time limit of this subsection shall be charged off in its entirety.
History
- Authority: AS 06.05.005(a)AS 06.05.240 AS 06.05.230; AS 06.05.245
- Eff. 12/13/70, Register 36; am 1/10/94, Register 129
3 AAC 02.140 Domestic bank holding company
Repealed 4/6/79.
3 AAC 02.141 Alternative mortgage instruments
Repealed.
History
- Eff. 3/29/80, Register 73; repealed 1/10/94, Register 129
3 AAC 02.145 Authorized activities for domestic bank holding companies
(a) A domestic bank holding company may engage in activities of a financial, fiduciary, or insurance nature, or other activities permitted for subsidiaries of banks under AS 06.05.272 and this chapter, and it may invest, without limitation, in the shares of subsidiaries that engage in these activities, subject to the requirements of (c) of this section. The following activities are considered to be financial or fiduciary activities:
(1) mortgage banking;
(2) factoring;
(3) leasing of equipment;
(4) property management;
(5) data processing services;
(6) armored car or messenger services; and
(7) operation of a credit bureau, travel agency, personal finance company, commercial finance company, or trust company.
(b) Upon application to and approval by the department, a domestic bank holding company may diversify its holdings or activities, if the department determines that
(1) the diversification serves the needs and convenience of the public;
(2) the diversification is not detrimental to the company's banking subsidiary;
(3) repealed 1/10/94; and
(4) the company has demonstrated that it has capable and sufficient management personnel to provide the new service or manage the new subsidiary.
(c) A domestic bank holding company or subsidiary may not engage in an activity for which qualifications or licensing requirements are established by law, without first demonstrating those qualifications or obtaining the license and obtaining the written approval of the activity or movement from the department.
(d) Repealed 1/10/94.
History
- Authority: AS 06.05.005(a)AS 06.05.235
- Eff. 7/31/69, Register 31; am 12/13/70, Register 36; am 4/6/79, Register 70; am 1/1/84, Register 88; am 1/10/94, Register 129
3 AAC 02.150 Permit to operate a bank holding company
(a) A domestic and out-of-state bank holding company shall apply for a permit from the department, authorizing the company to operate as a bank holding company in this state. The department will issue a permit if the department determines that its issuance will not disadvantage the public and is not inconsistent with the maintenance of a competitive, safe, and sound banking system.
(b) Before obtaining a permit, and at the close of each accounting year, a bank holding company shall submit a report to the department clearly reflecting its financial condition as of the end of its last accounting year, and a profit-and-loss statement covering operations for the preceding accounting year. The report must disclose the holding company's relationship with and investment in all subsidiaries as well as the nature and financial condition of their respective operations. For domestic bank holding companies, the report must be accompanied by an opinion of an independent certified public accountant.
(c) In addition to the report of financial condition, the department will, in its discretion, require a bank holding company to submit any other reports, accounts, or records the department determines necessary or desirable to ensure financially sound banking organization and practice.
History
- Authority: AS 06.05.005(a)AS 06.05.235; AS 06.05.570
- Eff. 7/31/69, Register 31; am 4/6/79, Register 70; am 1/10/94, Register 129
3 AAC 02.155 Extension of credit by a bank to the bank's holding company or subsidiaries of the holding company
A subsidiary bank may not extend credit, secured or unsecured, in excess of the bank's legal lending limit to the bank's holding company or any of the holding company's subsidiaries. In this section, to extend credit includes:
(1) loans;
(2) the purchase of securities or other assets under a repurchase agreement;
(3) the discount of promissory notes, bills of exchange, conditional sales contracts, or other similar paper; and
(4) advances made against collateral security in the form of capital stock, bonds, debentures, or other obligations of the domestic bank holding company or its subsidiaries.
History
- Authority: AS 06.05.005(a)AS 06.05.235 AS 06.05.205(b)AS 06.05.570
- Eff. 7/31/69, Register 31; am 4/6/79, Register 70; am 1/10/94, Register 129
3 AAC 02.160 Requirements to form a domestic bank holding company
(a) The executive officers, directors, and principal shareholders of a new domestic bank holding company must file, on forms provided by the department, required biographical and financial information before engaging in activities regulated by 3 AAC 02.145 - 3 AAC 02.180. New or additional directors and officers shall also file on forms provided by the department the information required by this subsection within 30 days after being elected to or hired for the position. Biographical and financial information required under this section is considered confidential by the department and not subject to subpoena.
(b) In this section "principal shareholder" means a person, company, association, or other entity owning 10 percent or more of the outstanding shares of the domestic bank holding company.
History
- Authority: AS 06.01.025(a)AS 06.05.005(a)AS 06.05.235
- Eff. 7/31/69, Register 31; am 4/6/79, Register 70; am 1/10/94, Register 129
3 AAC 02.165 Existing corporation qualifying as a domestic bank holding company
Repealed.
History
- Eff. 7/31/69, Register 31; am 4/6/79, Register 70; repealed 1/10/94, Register 129
3 AAC 02.170 Certificate of authority of a domestic bank holding company
Repealed.
History
- Eff. 7/31/69, Register 31; am 4/6/79, Register 70; repealed 1/10/94, Register 129
3 AAC 02.175 Change in control of a bank holding company
(a) Before a change of ownership may occur in the outstanding voting shares of a domestic bank holding company that will result in a change of control, the transaction must be approved by the department.
(b) If a change of ownership occurs or is about to occur in the outstanding voting shares of an out-of-state bank holding company, and the change results in or will result in a change of control, the transaction must be reported by the out-of-state bank holding company to the department immediately, but not later than the end of the next state business day.
History
- Authority: AS 06.05.005(a)AS 06.05.235; AS 06.05.570
- Eff. 7/31/69, Register 31; am 4/6/79, Register 70; am 1/10/94, Register 129
3 AAC 02.180 Definitions
Repealed 4/6/79.
3 AAC 02.185 Banking related activities
(a) A bank may engage in the activities described in (b) and (c) of this section even though those activities may not be included under the definitions of either "banking" in AS 06.05.990(3) or "branch bank" in AS 06.05.990(4).
(b) A bank may establish offices that engage in the following activities without a certificate of authority issued under AS 06.05.350 or 06.05.399:
(1) local representation and assistance to the public concerning banking services performed at the bank;
(2) loan production activities as described in (c) of this section; and
(3) other services or activities related to the bank's business such as tax preparation, insurance, accounting, data processing, and public relations.
(c) A loan production office may engage in the following loan production activities, which do not constitute lending money within the meaning of AS 06.05.990(3) or (4):
(1) soliciting loans on behalf of a bank or a branch bank;
(2) assembling credit information;
(3) making property inspections and appraisals;
(4) securing title information;
(5) preparing applications for loans, including making any recommendations to the bank for action;
(6) soliciting investors to purchase loans from the bank and seeking to have these investors contract with the bank for servicing of those loans; and
(7) other similar services or activities which may be allowed by the department.
(d) If loans are approved and funds disbursed solely at the main office or a branch of a bank, a loan production office that engages in only the activities listed in (c) of this section is not a "place ... at which ... money is lent" within the meaning of AS 06.05.990(4).
(e) An office that operates as a representative office or a loan production office under this section shall conduct its activities in such a manner that neither the public nor customers will be deceived as to the limited services available from the office.
(f) Notwithstanding (b) - (e) of this section, if an office of a bank or of any of its branches engages in receiving deposits, payment of checks, lending of money, or any other activity included under the definition of "banking" in AS 06.05.990(3), the office shall first apply to the department for a certificate of authority to operate as a branch bank.
(g) A bank may operate a courier service for the purpose of collecting or disbursing funds to customers if
(1) the activities of the courier are directly related to the bank's business;
(2) the courier service is approved by the department before operations begin; and
(3) the bank complies with any restrictions or limitations that the department places on the courier activities.
(h) A bank may make available its data processing equipment or perform data processing services on that equipment for other banks and bank customers if the bank is adequately insured against any additional liability incurred through the sale of those services.
History
- Authority: AS 06.05.005; AS 06.05.075; AS 06.05.272
- Eff. 6/16/82, Register 82; am 1/10/94, Register 129; am 12/27/2023, Register 248
3 AAC 02.190 Letters of credit
(a) Repealed 1/10/94.
(b) All letters of credit are subject to classification in all regulatory reports of examination.
(c) Repealed 1/10/94.
(d) If several banks participate in the issuance of a letter of credit under an agreement that provides that each participant is liable only up to a certain percentage or amount of the total amount of the letter of credit issued, only the amount of a participating bank's potential liability must be considered for purposes of determining compliance with lending limitations; otherwise, the entire amount of the letter of credit must be considered by the department.
(e) No bank may issue a letter of credit unless the credit standing of the account party is the subject of credit analysis equivalent to that applicable to the potential borrower in an ordinary loan situation.
(f) The total amount of all outstanding letters of credit must be fully and adequately disclosed in the bank's published financial statements.
(g) A bank shall maintain records of its letters of credit comparable to the records maintained in connection with the bank's direct loans in order that at all times the bank's potential liability under its letters of credit and the bank's compliance with this section can be readily determined by the department.
(h) A letter of credit is not subject to this section if the letter of credit is secured by cash, or a cash equivalent such as a certificate of deposit issued by the bank that issued the letter of credit.
History
- Authority: AS 06.01.015; AS 06.05.005(a)
- Eff. 8/18/88, Register 107; am 1/14/89, Register 109; am 1/10/94, Register 129
3 AAC 02.195 Borrowing
(a) Neither a bank's federal funds purchased nor its sale of securities, which a bank may deal in, underwrite, purchase, and sell for its own account without limitation, subject to an agreement that the bank will repurchase at the end of a stated period, constitute "money borrowed" for purposes of AS 06.05.255.
(b) The purchase of securities subject to an agreement that the seller will repurchase at the end of a stated period is regarded as a loan from the purchaser to the seller and not as an obligation of the underlying obligor or the security.
(c) The department will consider a bank's written request to allow a percentage larger than 15 percent of the bank's total assets, up to a maximum of 35 percent, under AS 06.05.255.
History
- Authority: AS 06.05.005; AS 06.05.255
- Eff. 8/18/88, Register 107; am 1/14/89, Register 109; am 1/10/94, Register 129; am 9/21/2018, Register 227
3 AAC 02.197 Pledge of assets
Repealed.
History
- Eff. 1/10/94, Register 129; am 10/23/94, Register 132; repealed 12/27/2023, Register 248
3 AAC 02.200 Bank subsidiaries
(a) A wholly-owned bank subsidiary may engage in business activity that is authorized for the parent bank, including conducting a safe deposit business, engaging in an activity authorized in 3 AAC 02.185, and operating a trust company formed under AS 06.25, except that a bank subsidiary may not take deposits. An activity authorized by this subsection must be solely for the benefit of the parent bank and may be performed by the subsidiary on the bank's premises by bank personnel.
(b) In addition to those activities authorized under (a) of this section and subject to the prior approval of the department and compliance with any conditions placed on the bank or its subsidiary by the department, a bank may invest in bank subsidiaries engaged in the following:
(1) activities expressly authorized by AS 06.05.272;
(2) activities authorized under (a) of this section, when the subsidiary is not wholly-owned by the bank; and
(3) any other activity approved in advance by the department.
(c) Each bank subsidiary shall conduct business and operations in a safe and sound manner, observe separate corporate formalities, and maintain separate accounting procedures and corporate records.
(d) A bank may not require a customer to use the services of the bank's subsidiary as a condition of engaging in a service of the bank.
(e) The department will, in its discretion, revoke or restrict the authority of a bank to hold stock in a subsidiary, if the department determines that the holding of the subsidiary stock is contributing to, or is likely to contribute to, the deterioration of the condition of the bank.
History
- Authority: AS 06.05.005(a)AS 06.05.272
- Eff. 1/10/94, Register 129
3 AAC 02.205 Bank investments
(a) In addition to loans, subsidiaries, and acquisitions expressly authorized by AS 06.05 and this chapter, a state bank may deal in, underwrite, and invest in for its own account
(1) direct or guaranteed obligations of the United States, either directly or in the form of securities of, or other interests in, an open-end management type investment company or investment trust registered under 15 U.S.C. 80a-1 - 80a-64 (Investment Company Act of 1940), if
(A) the portfolio of the investment company or investment trust is limited to obligations of the United States government and repurchase agreements fully collateralized by the obligations; and
(B) the investment company or investment trust takes delivery of the collateral directly or through an authorized custodian;
(2) general obligations of this state or its political subdivisions;
(3) general obligations of another state of the United States or its political subdivisions;
(4) revenue obligations of this state or its political subdivisions subject to the limitation of (b) of this section;
(5) revenue obligations of another state of the United States or its political subdivisions subject to the limitation of (b) of this section;
(6) obligations of instrumentalities of the United States government including Federal Intermediate Credit Banks, Federal Land Banks, the Federal National Mortgage Association, and Banks for Cooperatives;
(7) commercial paper of prime or equivalent quality as rated by a nationally recognized rating service subject to the limitation of (b) of this section;
(8) secured corporate obligations ranked or graded in the top four categories by a nationally recognized rating service subject to the limitation of (b) of this section;
(9) repealed 12/27/2023;
(10) stock in the Federal National Mortgage Association, a Federal Reserve Bank, or a Federal Home Loan Bank;
(11) the stocks, bonds, and other securities of
(A) a corporation licensed under AS 10.13; or
(B) a corporation attempting to become licensed under AS 10.13 if the corporation intends to use the proceeds to fulfill the tasks necessary to become licensed under AS 10.13; or
(12) obligations permitted under 12 U.S.C. 24 (Seventh) and (Eleventh), as of July 30, 2008, and adopted by reference, subject to the same restrictions and limitations imposed on national banks and except as prohibited elsewhere in this chapter.
(b) A state bank may not underwrite or invest in for its own account an amount exceeding 15 percent of its combined capital, surplus, and undivided profits in any one issue of securities authorized in (a)(4) and (a)(5) of this section or with any one obligor of the securities authorized in (a)(7) - (a)(9) and (a)(11) of this section.
History
- Authority: AS 06.05.005; AS 06.05.270
- Eff. 1/10/94, Register 129; am 12/27/2023, Register 248
Article 3 Organization and Corporate Functions of Banks
3 AAC 02.209 Application for a certificate of incorporation
(a) Required Application Material. The incorporators of a proposed bank shall initially submit to the department the following documents, together with supporting materials:
(1) a notice of intent to incorporate a bank;
(2) an application for a certificate of incorporation; and
(3) a request to use written solicitation materials to solicit bank stock subscribers as provided in 3 AAC 02.212.
(b) Notice of Intent. The incorporators of a proposed bank shall submit to the department a written notice of intent to organize the bank that
(1) is signed by each incorporator;
(2) contains the proposed name to be reserved for the proposed bank;
(3) specifies the proposed location of the bank;
(4) indicates the residence address, mailing address, and occupation of each incorporator; and
(5) indicates the individual selected by the incorporators to accept notice from the department on behalf of all incorporators.
(c) Application for Certificate of Incorporation. The following information and fee payment must be submitted to the department in support of the application for a certificate of incorporation:
(1) all information required under AS 06.05.344(a);
(2) a completed FDIC new bank application, which may be obtained directly from the FDIC;
(3) a copy of the proposed bylaws;
(4) a check or money order for $2,000 made payable to the State of Alaska in partial payment of the investigation expenses incurred by the department under AS 06.01.010;
(5) a list of the services to be offered by the proposed bank;
(6) the names and addresses of potential large commercial customers of the proposed bank;
(7) an economic analysis to support the need and feasibility of the proposed bank;
(8) a proposed list of the amounts of stock to be subscribed and paid for by each incorporator;
(9) a three-year projection of the proposed bank's capital accounts; and
(10) additional information requested by the department.
(d) Interim Banks. The information to be submitted to the department in support of an application for a certificate of incorporation of a bank that will never function under the proposed articles as an operating bank must include a written notice of intent as specified in (b) of this section and all of the information required by (c) of this section, except that the information in (c)(5) - (c)(7) of this section need not be included.
(e) Expense Fund. The incorporators of a proposed bank shall establish an expense fund over which the department has withdrawal control. All organizational expenses incurred in establishing the proposed bank will be paid out of the expense fund, after payment for those expenses is approved by the department. The expense fund must be established with the minimum balance required by the department before any withdrawals for pre-incorporation or other expenses are made.
History
- Authority: AS 06.01.010; AS 06.05.344 AS 06.05.005; AS 06.05.345
- Eff. 1/10/94, Register 129; am 12/27/2023, Register 248
3 AAC 02.210 Application for a certificate of authority
(a) Repealed 1/10/94.
(b) Repealed 1/10/94.
(c) Repealed 1/10/94.
(d) Repealed 1/10/94.
(e) Repealed 1/10/94.
(f) Application for Certificate of Authority. After receiving a certificate of incorporation under 3 AAC 02.209, the following information must be submitted to the department in support of an application for a certificate of authority:
(1) a statement whether the proposed bank will operate on owned or leased property and, if leased, a copy of all proposed lease documents which must contain a bankruptcy clause;
(2) a statement whether the proposed bank plans to finance any improvements to the property, and whether the property is leased, whether the proposed lessor will be a borrowing customer of the proposed bank;
(3) the amount of fire and liability insurance coverage to be carried for the proposed bank facility and equipment, who will pay the premium for the insurance coverage, and, if to be paid by the proposed bank, the amount of payment, and the annual premium for the coverage at the time of the application;
(4) the total investment in the proposed bank premises and equipment to be reflected on the books of the proposed bank, including the proposed bank's investment in land, building, leasehold improvements, furniture, fixtures and equipment, investment in other assets indirectly representing bank premises, and any proposed amount and method of depreciation;
(5) the amount and type of the proposed bank's fidelity bond and any excess coverage bond to be in force at the time of opening of the proposed bank;
(6) an organization chart of the proposed bank showing the line of authority to be used by the proposed bank in providing its services;
(7) copies, certified by the chief executive officer of the proposed bank, of all documents and information required by AS 06.05.350(b);
(8) the total proposed investment in each proposed bank subsidiary; and
(9) additional information requested by the department.
History
- Authority: AS 06.05.005(a)AS 06.05.350 AS 06.05.230; AS 06.05.385
- Eff. 12/13/70, Register 36; am 4/6/79, Register 70; am 1/10/94, Register 129
3 AAC 02.212 Solicitation materials
(a) If a public solicitation of shareholders for a proposed bank or for an increase in capital of an existing bank is contemplated, all written material to be used for solicitation must be submitted to the department for review and approval before use.
(b) The department's review of solicitation materials will be conducted as if the material were submitted for registration under AS 45.55.
(c) Upon approval of the written material by the department, the incorporators of a proposed bank may solicit subscribers until the capital stock is fully subscribed.
(d) Before calling the stock subscriptions or accepting payment for the subscriptions from the subscribers to a proposed bank, the chairperson shall submit to the department, for its approval or disapproval, a list of subscribers which indicates the name, residence address, mailing address, and amount of subscription for each subscriber.
(e) At the time the chairperson calls the stock subscriptions, all funds received from stock subscribers, including paid-in pre-incorporation subscriptions, must be placed in an escrow account approved by the department and over which the department has withdrawal control.
(f) The chairperson shall call the subscriptions and receive payment in full within 30 days from the date of the notice of the call. The chairperson may extend the period of the call if the extension is approved in writing by the department.
(g) When the subscriptions are fully paid and deposited in the escrow account, the incorporators on at least 20 days' written notice shall call the first meeting of subscribers. The agenda for the meeting must include those items required under AS 10.06.223 and a shareholder resolution that, upon departmental approval the paid-in subscriptions be converted to stock certificates.
(h) With prior departmental approval, a portion or all of the organizational expenses may be withdrawn and paid out of the stock subscription escrow account. No withdrawals or payments may be made until the stock subscriptions are fully paid into that account and full disclosure is made to subscribers at the first meeting of subscribers.
(i) In this section, "chairperson" means the individual who was appointed by the incorporators to represent them in dealing with the department on the new bank application.
History
- Authority: AS 06.05.005(a)AS 06.05.385 AS 06.05.345; AS 10.06.223
- Eff. 4/6/79, Register 70; am 1/10/94, Register 129
3 AAC 02.215 Application for a branch bank or change of permanent location
(a) A state bank shall apply to the department for a certificate of authority to operate a branch bank or to change the permanent location of an existing branch or the home office. The application must be on a form provided by the department and contain the information required under (b) of this section, including the address of the permanent location at which the state bank or branch bank will operate, to enable the department to determine whether a certificate of authority should be issued.
(b) The following information must accompany a bank's application for a new branch bank or a change of permanent location of an existing branch bank or the home office:
(1) the address of the permanent location at which the home office or existing branch office will operate;
(2) a completed FDIC branch or change of location application, which may be obtained directly from the FDIC;
(3) payment of $1,000 made payable to the State of Alaska, in a format determined by the department, in partial payment of the investigation expenses incurred by the department under AS 06.01.010;
(4) a statement as to whether the proposed office or branch bank will operate on owned or leased property and, if leased, a copy of all proposed lease documents; all proposed lease documents must contain a bankruptcy clause;
(5) a balance sheet and a statement of income and expenses for the bank current as of a date not later than 30 days preceding the application;
(6) a list of the banking services to be offered by the proposed office or branch bank;
(7) a brief economic analysis that supports the need for and feasibility of the proposed office or branch bank;
(8) if an international bank, the information required under AS 06.05.555; and
(9) additional information requested by the department.
(c) No bank may conduct a banking business through a branch office without a certificate of authority issued by the department. The certificate of authority must be prominently and publicly displayed in that branch office.
(d) Upon written request from a bank and after reviewing the past reports of examination of the bank and finding that the bank is in compliance with the department's recommendations in those reports, the department may waive any of the application requirements set out in (b)(2) and (4) - (7) of this section.
(e) The department will notify the state bank of the department's action regarding the application for a branch bank or for a change of location. If the application and the accompanying documents do not conform to the requirements under (a) of this section, the department will return the application and documents to the state bank with an explanation of the defects. If the department fails to respond within 30 days after receipt of the application, the application is considered accepted.
(f) Upon acceptance of an application for a certificate of authority to operate a branch bank or for approval to change location, the department will conduct an investigation to ascertain whether
(1) the capital structure of the state bank is adequate in relation to the anticipated business and costs of operating at the proposed location; and
(2) the state chartered bank has complied with applicable law governing its operation.
(g) Not later than 60 days after the application for a certificate of authority to operate a branch bank or to change location has been accepted, the department will determine whether to approve the application. After the department approves or denies the application, the department will notify the bank and any other person who requested in writing to be notified. If the application is denied, the department will state the reasons for its decision.
(h) The department will issue a certificate of authority to operate a branch bank or to change location if
(1) all conditions imposed by the department in granting the certificate have been fulfilled; and
(2) the requirements of this chapter are satisfied.
(i) If the rights conferred by a certificate of authority are not exercised within one year from the date of its issuance under this section, the certificate lapses unless the bank requests an extension in writing and department approves the extension.
History
- Authority: AS 06.05.005; AS 06.05.399; AS 06.05.990 AS 06.05.344; AS 06.05.555; AS 44.33.020
- Eff. 12/13/70, Register 36; am 4/6/79, Register 70; am 12/31/80, Register 76; am 1/10/94, Register 129; am 12/27/2023, Register 248
3 AAC 02.217 Application for a mobile facility branch bank
(a) The following information must accompany a bank's application for a mobile facility branch bank:
(1) materials and fee required by 3 AAC 02.215(b)(2) - (5);
(2) a map of the area to be served drawn to a scale that shows at least the community boundaries and indicating
(A) the locations at which the mobile facility branch bank would provide banking services;
(B) the point of origin of and storage location of the proposed mobile facility branch bank when not in use; and
(C) the location and identity of financial institutions within a 25-mile radius of the area to be served by the proposed mobile facility branch bank;
(3) a list of the banking services to be offered by the proposed mobile facility branch bank;
(4) the proposed schedule indicating the time of day and days of the week that the proposed mobile facility branch bank would provide banking services at the indicated locations and whether the proposed mobile facility branch bank would be operated on a year-round or seasonal basis;
(5) security procedures to be used when the proposed mobile facility branch bank is in use and when it is not in use; and
(6) additional information requested by the department.
(b) A proposed change in the daily schedule for a mobile facility branch bank or a change in the location at which a mobile facility branch bank is to provide banking services must be approved in writing by the department at least 30 days before the proposed implementation date of the change.
(c) A bank may not conduct a banking business through a mobile facility branch bank without a certificate of authority for that facility issued by the department. The certificate of authority must be prominently and publicly displayed in the mobile facility branch bank.
(d) Upon written request from a bank and after reviewing the past reports of examination of the bank and finding that the bank is in compliance with the department's recommendations in those reports, the department may waive those requirements referred to in (a)(1) of this section, except that the department will not waive the requirements of 3 AAC 02.215(b)(2) and (3).
History
- Authority: AS 06.05.005; AS 06.05.399
- Eff. 4/6/79, Register 70; am 12/31/80, Register 76; am 1/10/94, Register 129; am 12/27/2023, Register 248
3 AAC 02.219 Off-premises customer-bank communication terminals
Repealed.
History
- Eff. 6/8/76, Register 58; am 11/18/76, Register 60; repealed 1/10/94, Register 129
3 AAC 02.220 Annual directors examination
Repealed 10/2/83.
3 AAC 02.230 Definitions
Repealed 4/6/79.
Article 4 Liquidation, Dissolution, and Reorganization
3 AAC 02.310 Merger
(a) A proposed bank merger of an international, national, or state bank with an Alaska state bank must be accomplished under a merger plan filed with and approved by the department.
(b) Each bank shall approve a merger plan that sets out
(1) the names of the banks proposing to merge and the name of the bank into which they propose to merge, referred to in this chapter as the surviving bank;
(2) the terms and conditions of the proposed merger;
(3) the manner and basis of converting the shares of each merging bank into shares, other securities, or obligations of the surviving bank or of any other bank or corporation, in whole or in part, into cash or other property;
(4) a statement of any amendments to the articles of incorporation of the surviving bank caused by the merger; and
(5) other information and reports required by the department.
(c) Repealed 1/10/94.
History
- Authority: AS 06.05.005(a)AS 06.05.462; AS 06.05.555
- Eff. 4/6/79, Register 70; am 1/10/94, Register 129
3 AAC 02.320 Consolidation
(a) A proposed bank consolidation of an international, national, or state bank with an Alaska state bank must be accomplished under a consolidation plan filed with and approved by the department.
(b) Each bank shall approve a consolidation plan that sets out
(1) the names of the banks proposing to consolidate and the name of the bank into which they propose to consolidate, referred to in this chapter as the new bank;
(2) the terms and conditions of the proposed consolidation;
(3) the manner and basis of converting the shares of each bank into shares, other securities, or obligations of the new bank or of any other bank or corporation, in whole or in part, into cash or other property;
(4) if the new bank will be an Alaska state bank, all of the statements with respect to the new bank required to be set out in articles of incorporation for banks under AS 06.05.345; and
(5) other information and reports required by the department.
(c) Repealed 1/10/94.
History
- Authority: AS 06.05.005(a)AS 06.05.462 AS 06.05.345; AS 06.05.555
- Eff. 4/6/79, Register 70; am 1/10/94, Register 129
3 AAC 02.325 Conversion
(a) A proposed conversion of a national bank to an Alaska state bank must be accomplished under a conversion plan filed with and approved by the department.
(b) The board of directors of the converting national bank shall, by resolution adopted by the board, approve a conversion plan that sets out
(1) the name of the bank proposing to convert;
(2) the name of the bank into which it proposes to convert, referred to in this chapter as the converted bank;
(3) the terms and conditions of the proposed conversion;
(4) the manner and basis of converting the shares of the national bank into shares, other securities, cash, other property, or obligations, in whole or in part, of the converted bank or of any other bank or corporation;
(5) a statement of any amendments to the articles of incorporation of the converted bank caused by the conversion; and
(6) other information and reports required by the department.
(c) Repealed 1/10/94.
History
- Authority: AS 06.05.005(a)AS 06.05.075; AS 06.05.462
- Eff. 5/1/80, Register 74; am 1/10/94, Register 129
3 AAC 02.330 Adoption of conversion, merger or consolidation plans
Repealed.
History
- Eff. 4/6/79, Register 70; am 5/1/80, Register 74; repealed 1/10/94, Register 129
3 AAC 02.340 Articles of conversion, merger or consolidation
Repealed.
History
- Eff. 4/6/79, Register 70; am 5/1/80, Register 74; repealed 1/10/94, Register 129
3 AAC 02.350 Application for conversion, merger, or consolidation
(a) The board of directors of each bank proposing to convert, merge, or consolidate shall jointly or independently submit to the department an application for permission to implement the plan.
(b) The application must include
(1) an analysis by the
(A) converting bank, if applicable, of why the proposed conversion is in the best interest of promoting and maintaining a sound and competitive banking system; or
(B) banks proposing to merge or consolidate, if applicable, of why the proposed merger or consolidation is in the interest of promoting and maintaining a sound and competitive banking system, the security of deposits and customers, the preservation of the liquid position of the banks in general, and the prevention of injurious credit expansions and contractions in the state;
(2) a copy of the articles of incorporation of the converting national bank, merging banks, or consolidating banks;
(3) copies of the resolutions of each bank board of directors approving the plan of merger, consolidation, or conversion, or other evidence that necessary corporate approval was obtained;
(4) copies of the proposed articles of conversion, merger, or consolidation;
(5) copies of the bylaws of the converting national bank and the proposed bylaws for the converted bank;
(6) if the transaction is a merger or consolidation involving an international or interstate bank, all information required under AS 06.05.555(a); and
(7) other information and reports required by the department.
(c) The department will conduct an investigation of the application. If the department determines that the application meets the requirements of (b) of this section and that approval of the application is consistent with the maintenance or promotion of a safe and sound banking system, the department will issue a public notice of its intent to approve the conversion, merger, or consolidation and to issue a certificate of conversion, merger, or consolidation.
(d) The certificate of conversion, merger, or consolidation becomes effective upon issuance unless the certificate specifies a later effective date that is not later than 15 days after issuance of the certificate.
(e) Conversion, merger, or consolidation has the following effects:
(1) the converting national bank becomes a state-chartered bank as provided in the conversion plan; the merging or consolidating banks become a single bank, designated in the merger plan as the surviving bank and in the consolidation plan as the new bank;
(2) the converting national bank ceases to exist and the existence of the converted bank begins; the separate identities of merging or consolidating banks cease to exist and the existence of the surviving or new bank begins;
(3) the converted, surviving, or new bank has the rights, privileges, immunities, and powers, and is subject to the duties and liabilities of a bank under AS 06.05;
(4) the converted, surviving, or new bank possesses the rights, privileges, immunities, and franchises, public and private, of the converting national bank, and the respective merging or consolidating banks;
(5) all real, personal, and mixed property, all debts due, including subscriptions to shares, all choses in action, and every other interest in, belonging to, or due to each of the banks are transferred to and vested in the converted, surviving, or new bank;
(6) the title to or interest in real estate vested in the converted, surviving, or new bank does not revert nor is it in any way impaired by a conversion, merger, or consolidation;
(7) the converted, surviving, or new bank is liable for the liabilities and obligations of the converting national bank or each of the respectively merged or consolidated banks;
(8) an existing claim or pending action or proceeding by or against the bank may be prosecuted as if the conversion, merger, or consolidation has not taken place, or the converted, surviving, or new bank may be substituted in its place;
(9) neither the rights of creditors nor liens upon the property of a converting, merging, or consolidating bank are impaired by the conversion, merger, or consolidation;
(10) the articles of incorporation of the converted bank are amended to comply with the conversion plan;
(11) the articles of incorporation of the surviving bank are amended to comply with the merger plan;
(12) the articles of consolidation become the original articles of incorporation of the new bank; and
(13) the net undivided profits of the converting national bank or merging or consolidating banks available for the payment of dividends immediately before the conversion, merger, or consolidation, to the extent that the undivided net profits are not transferred to stated capital by the issuance of shares or otherwise, remain available for the payment of dividends by the converted, surviving, or new bank.
History
- Authority: AS 06.01.030; AS 06.05.075; AS 06.05.555 AS 06.05.005; AS 06.05.462
- Eff. 4/6/79, Register 70; am 5/1/80, Register 74; am 1/10/94, Register 129; am 12/27/2023, Register 248
3 AAC 02.360 Dissenting shareholder rights
If a shareholder of an Alaska state bank objects to a consolidation, merger, or conversion of the bank, the dissenting shareholder's rights shall be exercised under and governed by AS 10.06.574 - 10.06.582.
History
- Authority: AS 06.05.005(a)AS 06.05.075; AS 06.05.462
- Eff. 4/6/79, Register 70; am 5/1/80, Register 74; am 1/10/94, Register 129
Article 5 Prohibited Practices and Sanctions
3 AAC 02.410 Embezzlement by officers or employees
(a) When an embezzlement or mysterious disappearance of cash, securities, notes, or other assets is discovered in a state bank, an immediate report must be made by officers of the bank, providing full disclosures of the circumstances under which it occurred, to
(1) the department;
(2) the FDIC and the Bureau of Investigation;
(3) the nearest office of the Alaska State Troopers;
(4) the state district attorney serving the district in which the bank is located; and
(5) the bonding company.
(b) The officers shall notify the board of directors at the next regular or special meeting of the embezzlement or mysterious disappearance of assets and the circumstances under which it occurred.
History
- Authority: AS 06.05.005(1)
- Eff. 1/16/69, Register 28; am 4/6/79, Register 70
3 AAC 02.420 Debt collection practices
Repealed.
History
- Eff. 4/6/79, Register 70; repealed 1/10/94, Register 129
Article 7 General Provisions
3 AAC 02.910 Banking
3 AAC 02.910. Definitions.
History
- Authority: AS 06.01.020; AS 06.05.250; AS 06.15.180 AS 06.05.005; AS 06.05.540; AS 06.15.360 AS 06.05.075; AS 06.15.010
- Eff. 4/6/79, Register 70; am 3/29/80, Register 73; am 12/23/87, Register 105; em am 8/18/88 - 12/15/88, Register 107; am 1/10/94, Register 129; am 10/23/94, Register 132; am 12/27/2023, Register 248
3 AAC 02.910 Banking
3 AAC 02.910 is based on definitions in former 3 AAC 02.180 (Eff. 7/31/69, Register 31; am 12/13/70, Register 36; repealed 4/6/79, Register 70) and former 3 AAC 02.230 (Eff. 6/8/76, Register 58; am 11/18/76, Register 60; repealed 4/6/79, Register 70) as well as new definitions added with Register 70. As of Register 171 (October 2004), the regulations attorney made technical revisions under AS 44.62.125(b)(6) to reflect the name change of the Department of Community and Economic Development to the Department of Commerce, Community, and Economic Development made by ch. 47, SLA 2004 and the corresponding title change of the commissioner of community and economic development. In this chapter and AS 06.05, (1) "bankruptcy clause" means the following statement: Notwithstanding any other provision in this lease, if the tenant or its successors or assigns becomes insolvent or bankrupt, or makes an assignment for the benefit of creditors, or if it or their interest in this lease is levied upon or sold under execution or other legal process, or if the bank to be operated on the demised premises is closed or taken over by a banking authority or the state or other supervisory authority, the landlord may terminate this lease only with the concurrence of the supervisory authority, and that supervisory authority will have the election to either continue or terminate the lease; however, if the lease is terminated, the maximum claim of the landlord for damages or indemnity for injuries resulting from the termination of the unexpired lease may not exceed the rent payable under this lease. (2) "department" means the Department of Commerce, Community, and Economic Development; (3) "division" means the division of banking and securities, within the department; (4) "FDIC" means Federal Deposit Insurance Corporation; (5) "FFIEC" means the Federal Financial Institutions Examination Council; (6) "FHLBB" means the Federal Home Loan Bank Board; (7) repealed 12/27/2023; (8) "mobile facility branch bank" means a branch bank that (A) moves from one location to another to provide banking services; or (B) is located in or serves a remote area of the state not being adequately served by a permanently located bank or bank branch.
History
- Authority: AS 06.01.020; AS 06.05.250; AS 06.15.180 AS 06.05.005; AS 06.05.540; AS 06.15.360 AS 06.05.075; AS 06.15.010
- Eff. 4/6/79, Register 70; am 3/29/80, Register 73; am 12/23/87, Register 105; em am 8/18/88 - 12/15/88, Register 107; am 1/10/94, Register 129; am 10/23/94, Register 132; am 12/27/2023, Register 248
Chapter 03 Credit Unions
Article 1 Powers of the Department
3 AAC 03.010 Retention or destruction of records
Credit unions are subject to the NCUA records preservation program found at 12 CFR $ 749, as adopted on May 10, 1973.
History
- Authority: AS 06.45.010
- Eff. 1/21/81, Register 77
3 AAC 03.020 Regulations
Regulations adopted under this chapter apply only to credit unions subject to AS 06.45.
History
- Authority: AS 06.45.010
- Eff. 1/21/81, Register 77
3 AAC 03.030 Charge-offs
The commissioner will, in his discretion, require a state-chartered credit union to
(1) charge-off that portion of an asset classified as loss in the NCUA report of examination or the state report of examination; or
(2) charge-off all debts owed to the credit union in which interest due has been unpaid for a period of six months unless the debt principal is adequately secured and the credit union is in the process of collection.
History
- Authority: AS 06.01.020; AS 06.45.010
- Eff. 10/2/83, Register 87
Article 2 Credit Union Practices
3 AAC 03.105 Records and reports
Credit union accounting records must be maintained on an accrual basis when practicable, or otherwise on a modified cash basis, consistent with standard accounting procedures. Credit unions must provide the department with a financial statement including a balance sheet and income and expense statement at the end of each quarter in a format prescribed by the department. These reports must be received by the department not later than 30 days after the end of the quarter. Penalties for failure to provide complete and timely reports are established in AS 06.01.010.
History
- Authority: AS 06.45.010(b)AS 06.45.010(d)
- Eff. 1/21/81, Register 77
3 AAC 03.110 Loans to members
(a) Loan Policies. The board of directors shall establish written loan policies which will be made available to members. The policies must include relevant considerations such as types of loans, security, interest rates and maturities.
(b) Loan Repayment.
(1) Late charges and accrued interest are to be deducted from proceeds of loan payments first, with the remainder, if any, to be applied to the loan principal.
(2) Interest payments will be required on all loans at least annually.
History
- Authority: AS 06.45.010; AS 06.45.060(5)
- Eff. 1/21/81, Register 77
3 AAC 03.115 Shares
(a) Types of Accounts. The board of directors may offer types of share accounts which best meet the needs of the members.
(b) Dividends. Varying dividends may be paid on different types of accounts and at different intervals if sufficient amounts have been accrued to pay dividends earned or contracted for.
History
- Authority: AS 06.45.010; AS 06.45.060(6)AS 06.45.190
- Eff. 1/21/81, Register 77
3 AAC 03.120 Loans to other credit unions
(a) Written Policy. Loans to other credit unions will be considered investments. However, loans to other credit unions from a corporate credit union will be considered member loans. If a credit union intends to make loans to other credit unions, the board of directors of the lending credit union shall establish written investment policies regarding those loans to other credit unions. The policies will include maximum amounts, rates, terms and other relevant criteria.
(b) Documentation. A lending credit union must require a current financial statement, audit report and other appropriate corporate documents from a borrowing credit union.
History
- Authority: AS 06.45.010; AS 06.45.060(7)
- Eff. 1/21/81, Register 77
3 AAC 03.125 Borrowing
The board of directors may authorize the credit union to borrow from any source on competitive terms that the credit union can meet.
History
- Authority: AS 06.45.010; AS 06.45.060(9)
- Eff. 1/21/81, Register 77
3 AAC 03.130 Sales of negotiable checks, travelers checks and money orders
Credit unions which sell negotiable checks, travelers checks and money orders must institute proper controls and maintain minimum security measures as required by NCUA regulations found at 12 CFR $ 748, as adopted on June 5, 1971.
History
- Authority: AS 06.45.010; AS 06.45.060(12)
- Eff. 1/21/81, Register 77
3 AAC 03.135 Purchase or sale of eligible obligations
(a) Contract. All purchases or sales of eligible obligations from a credit union's members or purchase from a liquidating credit union of notes made by individual members of the liquidating credit union must be within limitations of written policies established by the board of directors and must be documented by a contract which specifies the items being sold, purchased or pledged, the monetary consideration, and all other terms and conditions of the transaction.
(b) Limitation. Government guaranteed education loans and real estate loans purchased for pooling and resale are not included in determining the aggregate unpaid balance of notes purchased under AS 06.45.060(a)(13), and may exceed five percent of the unimpaired capital and surplus of the credit union.
History
- Authority: AS 06.45.010; AS 06.45.060
- Eff. 1/21/81, Register 77
3 AAC 03.140 Purchase or sale of assets and assumption of liabilities
Any purchase or sale of assets must be within the limitations of written policies established by the board of directors and must be documented by a contract which specifies the items sold or purchased and liabilities assumed, the monetary consideration and all other terms and conditions of the transaction. Prior approval by the department is required on any sale or purchase under this section which would constitute 10 percent or more of either credit union's assets.
History
- Authority: AS 06.45.010; AS 06.45.060(14)
- Eff. 1/21/81, Register 77
3 AAC 03.145 Officer compensation
(a) Expenses. A credit union may reimburse reasonable expenses incurred by or on behalf of an official to carry out the responsibilities of the position to which the person was elected or appointed. Such reimbursement or expense will not be considered compensation under AS 06.45.100.
(b) Insurance. Reasonable health and accident insurance provided at the expense of the credit union is permitted, provided the benefits of such insurance will cease immediately when the insured person leaves office without providing residual benefits other than from pending claims.
History
- Authority: AS 06.45.010; AS 06.45.100
- Eff. 1/21/81, Register 77
3 AAC 03.150 Interest refund
The board of directors of a credit union may authorize an interest refund to members at the close of any dividend period after dividends have been declared and amounts have been set aside to pay such dividends. An interest refund may vary and be paid according to reasonable classifications of loans.
History
- Authority: AS 06.45.010; AS 06.45.120(b)(7)
- Eff. 1/21/81, Register 77
3 AAC 03.155 Loan security
Insurance obtained under Title 1 of the National Housing Act (12 U.S.C. 1701 - 1750(g)) is considered acceptable security for a loan.
History
- Authority: AS 06.45.010; AS 06.45.160
- Eff. 1/21/81, Register 77
3 AAC 03.160 Reserves
(a) Use of Reserves. The reserve fund will belong to the credit union and will be used to meet losses, except those resulting from an excess of expenses over income, and will not be distributed except on liquidation of the credit union or in accordance with a plan approved by the department.
(b) Risk Assets. For the purposes of establishing reserves required by AS 06.45.180, all assets except the following will be considered risk assets:
(1) cash on hand;
(2) deposits and shares in federally or state insured banks, savings and loan associations, and credit unions;
(3) assets which are insured by, fully guaranteed as to principal and interest by, or due from the U.S. government, its agencies, the Federal National Mortgage Association, or the Government National Mortgage Association;
(4) loans to other credit unions;
(5) loans to students insured under the provisions of Title IV, Part B of the Higher Education Act of 1965 (20 U.S.C. $ 1071), as amended on June 15, 1977, or similar state insurance programs;
(6) loans that are fully or partially insured or guaranteed by the federal or a state government or any federal or state agency;
(7) shares or deposits in corporate credit unions;
(8) common trust investments which deal in investments authorized by FCUA;
(9) prepaid expenses;
(10) accrued interest on nonrisk investments;
(11) furniture and equipment;
(12) land and buildings;
(13) loans fully secured by a pledge of shares in the lending credit union, equal to and maintained to at least the amount of the loan outstanding;
(14) loans which are purchased from liquidating credit unions and guaranteed by NCUA;
(15) National Credit Union Share Insurance Fund Guaranty Accounts established with the authorization of NCUA under the authority of Sec. 208(a)(1) of FCUA (12 U.S.C. $ 1788 as amended on November 10, 1978); and
(16) investments in the NCUA Central Liquidity Facility.
(c) Corporate Credit Union.
(1) "Risk assets" of a corporate credit union are defined in (b) of this section, except loans made to its member credit unions will not be considered risk assets.
(2) In addition to the regular reserve required by AS 06.45.180, a corporate credit union must establish and maintain a corporate reserve which must be established immediately before the payment of each dividend, as follows:
(A) a transfer of two percent of gross income must be made to the corporate reserve until that reserve equals one and one-half percent of the corporate credit union's total assets;
(B) whenever the corporate reserve falls below one and one-half percent of total assets, it must be replenished by regular transfers of two percent of gross income or by contributions in such amounts as may be needed to maintain the corporate reserve at one and one-half percent of total assets, whichever is less;
(C) charges may be made against the corporate reserve to the same extent and in the same manner as those permitted to be made against the regular reserve.
History
- Authority: AS 06.45.010; AS 06.45.180
- Eff. 1/21/81, Register 77
3 AAC 03.165 Share drafts
(a) A credit union may establish share draft accounts if
(1) a summary of the policies and procedures for the accounts is available at the credit union's principal office;
(2) for a program which incorporates truncation of the instruments, the original instruments are maintained on file for at least five years unless other satisfactory means of retrieval of copies of those instruments has been established;
(3) the account holder gives, in writing, at least 15 days before the day of withdrawal, a notice of intent to withdraw money in the account, except that the board of directors may waive or reinstitute this provision at any time;
(4) surety bond coverage is in force; and
(5) those participating in the share draft program receive information which outlines the account holder's and credit union's responsibilities.
(b) The board of directors may provide for
(1) fees for share draft account usage, which may include stop payment orders, overdrafts, failure to maintain required balances, and costs required to maintain the account;
(2) participation in guarantee arrangements, if the guarantee to make payment will not place the holder of a share draft account in a preferential position if notice is imposed under (a)(3) of this section. Instruments drawn or other orders authorized before the effective date of notice may be paid in accordance with normal operational procedures; and
(3) an experimental share draft program with terms and conditions that restrict the number of share draft accounts for a period not to exceed one year, except that the dividend rate for those share draft accounts may not exceed the rate paid on regular share accounts.
History
- Authority: AS 06.01.020; AS 06.45.010
- Eff. 1/21/81, Register 77
3 AAC 03.170 Alternative mortgage instruments
A credit union may, with the prior approval of the department, make, purchase, and participate in alternative mortgage instruments if the legal rate of interest charged by the credit union is less than or equal to the maximum rate allowed by AS 06.01 or AS 06.45.
History
- Authority: AS 06.45.010; AS 06.45.060(5)
- Eff. 1/21/81, Register 77
3 AAC 03.175 Central liquidity facility
A credit union may participate in programs offered by the National Credit Union Central Liquidity Facility under FCUA, subject to regulations issued under it found at 12 CFR $ 725, as adopted on August 23, 1979.
History
- Authority: AS 06.45.010; AS 06.45.270
- Eff. 1/21/81, Register 77
3 AAC 03.180 Investments
Repealed.
History
- Eff. 9/20/92, Register 123; am 4/16/2000, Register 154; repealed 10/16/2003, Register 168
Article 3 Organization and Corporate Functions of Credit Unions
3 AAC 03.210 Membership
(a) A credit union's field of membership must be limited to a group or groups of persons having a common bond, affinity, unifying factor or characteristic which links them together and distinguishes them from the general public.
(b) A credit union may serve diverse groups which possess the characteristics identified in (a) of this section within each group.
(c) Persons may be members of more than one credit union.
(d) A group may wish to spin off from an established credit union and form its own credit union under 3 AAC 03.340.
History
- Authority: AS 06.45.010; AS 06.45.070
- Eff. 1/21/81, Register 77
3 AAC 03.220 Organization requirements
(a) Certificate of Authority to Conduct Credit Union Business. No proposed credit union may conduct the business of a credit union unless a certificate of authority to conduct credit union business has been issued by the department and the certificate is prominently and publicly displayed in the principal office.
(b) Order of Approval. The incorporators of a proposed credit union must submit to the department the following documents, together with supporting materials, which must be reviewed and approved or disapproved in the following order:
(1) notice of intent to incorporate a credit union;
(2) application for a certificate of incorporation;
(3) request for approval of solicitation materials under 3 AAC 03.230;
(4) application for certificate of authority to conduct credit union business.
(c) Notice of Intent. The incorporators of a proposed credit union shall submit to the department a written notice of intent to organize a credit union which
(1) is signed originally by at least seven of the incorporators;
(2) contains the name to be reserved for the proposed credit union;
(3) contains the field of membership of the proposed credit union;
(4) indicates the city or otherwise specifies the proposed location of the proposed credit union;
(5) indicates the address, occupation, and amount of shares subscribed by each incorporator; and
(6) indicates the individual elected as president by the incorporators who will accept notice from the department on behalf of all incorporators.
(d) Application For a Certificate of Incorporation. The following information and fee must be submitted to the department in support of an application for a certificate of incorporation:
(1) a completed NCUA share insurance application which may be obtained directly from NCUA;
(2) a copy of the proposed articles of incorporation of the credit union executed in triplicate with all copies bearing original signatures;
(3) a copy of the proposed bylaws;
(4) an economic analysis to support the need and feasibility of the proposed credit union including but not limited to the number of potential members, the dispersion of the group, evidence of group interest, leadership, willingness of persons to serve as officers of the proposed credit union and otherwise participate in the affairs of the proposed credit union, economic factors or conditions present in the area, and the availability of other credit union services;
(5) any additional information requested by the department; and
(6) a check or money order for $1,000 made payable to the State of Alaska as a partial prepayment of investigation expenses incurred by the department in accordance with AS 06.01.010.
(e) Expense Fund. An expense fund over which the department has withdrawal control must be established by the incorporators subject to approval by the department. All organizational expenses incurred in establishing the proposed credit union must be paid out of that expense fund. The expense fund must be established with the minimum balance required by the department before any withdrawals will be authorized. All payments by incorporators must be deposited to this account. Individuals making deposits to this account must absorb any expenses pro rata if the proposed credit union does not become operational.
(f) Escrow Accounts. An escrow account over which the department has control must be established by the incorporators subject to approval by the department. All share subscriptions are to be deposited to this account prior to the receipt of the certificate of authority to conduct credit union business.
(g) Preliminary Investigation Report. It is desirable, although not mandatory, that a third party acceptable to the department and knowledgeable in credit union operations complete the department's preliminary investigation report to assist in gathering data on the proposed credit union.
(h) Issuance of Certificate of Incorporation. If the department finds that (d), (e) and (f) of this section and all other requirements of the department have been complied with by the incorporators, a certificate of incorporation will be issued.
(i) Application For Certificate of Authority. A credit union must submit the following information to the department for its consideration in issuing a certificate of authority to conduct credit union business:
(1) evidence that insurance of accounts has been obtained from NCUA;
(2) evidence that the surety bond is in force, including the amount and type of any excess coverage provided;
(3) a statement of where the proposed credit union will conduct its business and, if space is leased, a fully executed copy of all lease documents, which must contain a bankruptcy clause;
(4) a statement of whether or not the proposed credit union plans to finance any improvements to the property, and, if it intends to lease, whether the proposed lessor will be a borrowing member of the proposed credit union;
(5) the amount of fire and liability insurance coverage to be carried for the proposed credit union's facilities and equipment, who will pay the premium, and, if it will be paid by the proposed credit union, the amount of the premium;
(6) an itemized list of the proposed credit union's investment in land, building, leasehold improvements, furniture, fixtures and equipment, and any other proposed amount (and the method of depreciation to be used) to be reflected on the books of the proposed credit union;
(7) an organization chart showing the line of authority to be used by the proposed credit union in providing its services; and
(8) additional information as requested by the department.
(j) Timetable. The credit union will have a maximum of six months from the date of issuance of its certificate of incorporation until it receives its certificate of authority to conduct credit union business unless an extension of time has been approved by the department.
(k) Corporate Credit Union. A corporate credit union may be incorporated under this chapter and will be subject to the requirements of this chapter which are consistent with this section.
(1) Purposes. The purposes of a corporate credit union are
(A) to accumulate and prudently manage the liquidity of its member credit unions through interlending and investment services;
(B) to act as an intermediary for credit union funds between members and other corporate credit unions;
(C) to obtain liquid funds from other credit union organizations, financial intermediaries, and other sources;
(D) to promote, in cooperation with other state, regional, and national corporate credit unions and credit union organizations or associations, the economic security, growth and development of member credit unions; and
(E) to perform other services of benefit to its members which may be authorized by the department.
(2) Voting Representatives. When becoming a member of the corporate credit union, the board of directors of each credit union or organization serving the interest of credit unions shall designate one person to be a voting representative in the corporate credit union. That voting representative is eligible to hold office in the corporate credit union as if the person were a member of the corporate credit union.
(3) Organization.
(A) Application to form a corporate credit union must be made in writing to the department and will be subject to the same application process as set out in this section and 3 AAC 03.230 to organize a credit union, except that the application must contain the names of at least 10 credit unions which have agreed to subscribe to shares in the corporate credit union at the time the application is made.
(B) The bylaws must provide for the selection of a board of directors of at least five members and must require credit unions applying for membership to subscribe to shares in a minimum amount as specified in the bylaws.
History
- Authority: AS 06.45.010; AS 06.45.020; AS 06.45.030
- Eff. 1/21/81, Register 77
3 AAC 03.230 Solicitation materials
(a) All written material which may be used for solicitation of shares or share subscriptions in a proposed credit union must be submitted to the department for review and approval before use.
(b) All subscribers must be provided with a copy of the material approved under (a) of this section.
(c) All funds received from share subscribers must be placed in an escrow account approved by the department and over which the department has withdrawal control. The department will relinquish this control to the credit union only upon issuance of a certificate of authority to conduct credit union business.
History
- Authority: AS 06.45.010; AS 06.45.020; AS 06.45.030
- Eff. 1/21/81, Register 77
3 AAC 03.240 Insurance of accounts
Credit unions must obtain insurance of accounts under programs offered by the NCUA under FCUA, subject to regulations issued under it found at 12 CFR $ 741.1 et seq., as adopted on March 31, 1980.
History
- Authority: AS 06.45.010; AS 06.45.260
- Eff. 1/21/81, Register 77
3 AAC 03.250 Surety bond
Credit union surety bonds must meet minimum surety bond requirements prescribed by NCUA as found at 12 CFR $ 701.20 as adopted on July 18, 1979.
History
- Authority: AS 06.45.010; AS 06.45.120(b)
- Eff. 1/21/81, Register 77
3 AAC 03.260 Application for branch or change of location
(a) A credit union must apply to the department for a certificate of authority to operate a branch office, including a mobile facility branch, or to change the location of the principal office or a branch office.
(b) The department may require the following before it approves an application to operate a branch, including a mobile facility branch, or change the location of an office:
(1) payment of $1,000 made payable to the State of Alaska, in a format determined by the department, in partial prepayment of the investigation expenses incurred by the department under AS 06.01.010;
(2) a statement of whether the proposed office will be owned or leased property, and, if leased, a fully executed copy of all lease documents which must contain a bankruptcy clause;
(3) a statement of whether the credit union plans to finance any improvements to the property, and, if it intends to lease, whether the proposed lessor is or will be a borrowing member of the credit union;
(4) a statement of the amount of fire and liability insurance coverage that will be carried for the proposed office location and equipment, who will pay the premium, and, if paid by the credit union, the amount of payment, and the annual premium for the coverage;
(5) the total investment in credit union premises and equipment that will be reflected on the books of the credit union for the proposed office;
(6) the itemized book value of the credit union's present investment in land, buildings, leasehold improvements, furniture, fixtures and equipment, investment in stock of a building corporation, and investment in other assets and any depreciation reflected on the books;
(7) a balance sheet and statement of income and expenses for the credit union as of the last day of the month immediately before the month in which the application is made;
(8) the amount and type of the credit union's fidelity bond in force and any excess coverage;
(9) a list of services that will be offered by the proposed office;
(10) the name and resume of the proposed branch manager or, if none, a resume of the individual who will be directly responsible for the management of the proposed office;
(11) a brief economic analysis which supports the need for and feasibility of the proposed office; and
(12) other materials as requested by the department.
(c) A credit union may not conduct business through a branch office, including a mobile facility branch, without a certificate of authority issued by the department, which must be prominently and publicly displayed in that branch.
History
- Authority: AS 06.45.010; AS 06.45.040; AS 06.45.300
- Eff. 1/21/81, Register 77; am 12/27/2023, Register 248
Article 4 Reorganization, Liquidation and Dissolution
3 AAC 03.310 Merger
(a) Any proposed credit union merger of a state chartered or federally chartered credit union with a credit union established under AS 06.45 must be accomplished under a merger plan filed with and approved by the department.
(b) A merger may be accomplished if the following procedures are completed:
(1) adoption of a merger plan by the board of directors of each credit union;
(2) notification to the department;
(3) investigation by the department and notice of intent;
(4) approval of notice of meetings by the department;
(5) approval by members of the merging credit unions;
(6) final determination; and
(7) implementation.
(c) Adoption of Merger Plan. A majority of the board of directors of each credit union must, by resolution adopted by each board, approve a merger plan which sets out:
(1) the name of the credit union proposing to merge and the name of the credit union into which it proposes to merge, referred to in this chapter as the surviving credit union;
(2) the terms and conditions of the proposed merger;
(3) any amendments to the articles of incorporation of the surviving credit union caused by the merger;
(4) current financial reports of each credit union;
(5) current delinquent loan schedules annotated to reflect collection problems;
(6) combined financial reports; and
(7) other provisions as required by the department.
(d) Notification to the Department. The board of directors of each credit union must notify the department of its action on a proposed merger. The notice must include
(1) the merger plan adopted by the boards;
(2) a proposed notice of meeting of members to approve the merger if required by the bylaws of the credit union which shall be in conformance with the bylaws and must contain
(A) a summary of the proposed merger plan;
(B) a statement of reasons for the proposed merger;
(C) the name and location of the surviving credit union and its branches;
(D) a statement to inform the members that they have the right to vote on the merger proposal at the meeting.
(e) Investigation and Notice of Intent. The department will conduct an investigation of the application and, if the department finds that the application is in order and that the merger proposal complies with state law and regulations, it will issue a public notice of the department's intent to approve the merger and to issue a certificate of merger and authority. The notice must inform the public of the date by which opposition in writing to the department's approved action must be received.
(f) Approval of Meeting Notice. If the department determines that the proposed notice of meeting is adequate, the department will issue an approval and return the notice to the appropriate credit union for distribution.
(g) Membership Meetings. Members of the credit unions must vote on the merger proposal at separate meetings to be held within 120 days after the department's approval of the proposed merger. The merger proposal must be approved by an affirmative vote of a majority of the members of a credit union organized under AS 06.45 present at a meeting called to approve the plan. The boards of directors of the credit unions shall promptly notify the department of the results of the membership vote. The credit unions must also provide the department with the following:
(1) statements expressing the opinion of NCUA and, where applicable, another state's credit union supervisory agency regarding the merger proposal;
(2) application and agreements for insurance of member accounts by NCUA if the merging credit union is not already insured by NCUA;
(3) a check or money order for $1,000 made payable to the State of Alaska as a partial prepayment of investigation expenses incurred by the department in accordance with AS 06.01.010; and
(4) other materials as required by the department.
(h) Final Determination. If the department does not receive a request for hearing within the time specified in the public notice required by (e) of this section, or determines after a hearing that the application is in order and all requirements have been met, the department will approve the application and issue a certificate of merger and authority.
(i) Implementation.
(1) The surviving credit union must notify the department of completion of the merger and forward the following documents to the department:
(A) financial reports for each credit union before the completion of merger;
(B) a financial report for the surviving credit union after the completion of merger;
(C) the certificate of incorporation of the merging credit union if it was organized under AS 06.45.
(2) If the department is satisfied that the merger has been accomplished in accordance with the approved merger plan, it will terminate the corporate status of the credit union which has lost its identity in the merger if the credit union was organized under AS 06.45.
(3) A surviving credit union is vested with all of the assets and is responsible for all the obligations of a merging credit union.
History
- Authority: AS 06.45.010; AS 06.45.290
- Eff. 1/21/81, Register 77
3 AAC 03.320 Conversion, federal to state
(a) A federal credit union may convert to a credit union incorporated under AS 06.45 if it completes the following steps:
(1) adoption of a conversion plan;
(2) notification to the department;
(3) investigation by the department and notice of intent;
(4) approval by membership, if required;
(5) final determination; and
(6) implementation.
(b) Adoption of Conversion Plan. A conversion proposal must be adopted by the board of directors.
(c) Notification to the Department. The board of directors must submit the following to the department:
(1) the conversion plan adopted by the board of directors;
(2) an application for certificate of incorporation and authority using the provisions of 3 AAC 03.220(d) of this chapter as a guide;
(3) authorization for the department to conduct an examination of the credit union and for compensation as provided under AS 06.01.010(b).
(d) Investigation by the Department and Notice of Intent. The department will conduct an investigation of the application and, if the department finds that the application is in order, it will issue a public notice of the department's intent to approve the incorporation of the credit union under AS 06.45 and to issue a certificate of conversion and authority. The notice shall advise the public of the date by which opposition in writing to the conversion must be submitted to the department.
(e) Repealed 8/9/85.
(f) Final Determination. If the department does not receive a request for hearing within the time specified in the public notice required by (d) of this section, or determines after a hearing that the application is in order and all conditions imposed by the department have been met, the department will approve the application and issue a certificate of conversion and authority.
(g) Implementation. A certificate of conversion and authority to conduct credit union business will be issued upon the department's receipt of evidence that NCUA has given approval of insurance of accounts for the converted credit union as a state-chartered credit union. The converted credit union will be vested with all of the assets and will continue to be responsible for all of the obligations of the federal credit union to the same extent as though the conversion had not taken place.
History
- Authority: AS 06.01.020; AS 06.45.010
- Eff. 1/21/81, Register 77; am 8/9/85, Register 95
3 AAC 03.330 Conversion, state to federal
(a) A credit union incorporated under AS 06.45 may convert to a federal credit union if it completes the following steps:
(1) adoption of a conversion plan by the board of directors;
(2) notification to the department;
(3) implementation.
(b) Adoption of Conversion Plan. A conversion plan must be adopted by a majority of the board of directors of the credit union.
(c) Notification to the Department. The department must be notified of the board of directors' action to convert to a federal credit union within 10 days after adoption of the conversion plan by the board of directors. The notice must include a copy of the conversion plan and the estimated timetable for conversion.
(d) Implementation. The board of directors shall keep the department advised as to the status of the conversion and shall, within 10 days after receipt, submit a copy of the federal charter and the credit union's certificate of incorporation under AS 06.45 to the department. If the department is satisfied that the conversion has been properly accomplished, it will terminate the credit union's certificate of incorporation.
History
- Authority: AS 06.45.010; AS 06.45.250
- Eff. 1/21/81, Register 77
3 AAC 03.340 Division of assets, liabilities and capital
(a) A group of members of an existing credit union may choose to undertake an equitable division of assets, liabilities and capital and form a new credit union and shall be referred to in this chapter as the "spinoff group." The department will determine whether a sufficient number of those in the group have authorized transfer of their share and loan accounts to justify the division and that other requirements of this section are met.
(b) The following steps must be taken before a division of assets, liabilities and capital may be approved by the department:
(1) adoption of a plan of division of assets, liabilities and capital, and organization of a new credit union;
(2) notification to the existing credit union and the department;
(3) other action required by the spinoff group under (e) of this section;
(4) action required by the existing credit union under (f) of this section;
(5) notice of membership meeting;
(6) mailing of notice and preparation for meeting; and
(7) application for certificate of incorporation.
(c) Adoption of Plan and Organizational Meeting For New Credit Union. The spinoff group must hold a meeting or meetings to address organizational matters and to adopt a spinoff plan. The spinoff plan must include
(1) the basis for equitable division of assets, liabilities and capital;
(2) the proposed name for the proposed new credit union;
(3) the proposed field of membership of the proposed credit union; and
(4) the individual elected as president by the incorporators.
(d) Notification to Existing Credit Union and the Department. The spinoff group must present a plan to the board of directors of the existing credit union and notify the department of its action on a proposed spinoff. The notice must include
(1) identification of the group and approximate number of accounts currently held, including dollar volume of savings and loans;
(2) information required by 3 AAC 03.220(c);
(3) a proposed notice to members of the spinoff group as set out in 3 AAC 03.930 which informs members of the spinoff group that they may authorize transfer of their accounts to the new credit union.
(e) Action Required by Spinoff Group. The spinoff group must send a check or money order for $500 made payable to the State of Alaska as a partial prepayment of investigation expenses incurred by the department in accordance with AS 06.01.010.
(f) Action Required by the Existing Credit Union. The board of directors of the existing credit union shall
(1) appoint a committee to work with the president of the spinoff group in the preparation of a final plan for an equitable division of assets, liabilities and capital;
(2) determine whether the existing credit union wishes to allow members of the spinoff group to continue to join the existing credit union if the plan is implemented;
(3) estimate the cost of identifying the members of the group, as well as the cost of preparation and postage for a mailing to them, and also estimate the cost of preparation and mailing of a notice for a special meeting and the cost of the meeting, if necessary, for the final approval of the plan by the entire membership;
(4) identify and send notices to all accounts within the identified spinoff group upon approval of the mailing by the department and receipt of payment for the estimated cost of preparation and mailing; and
(5) notify the department of actions taken no later than 45 days after receipt of the proposal unless an extension of time is approved by the department.
(g) Notice of Membership Meeting.
(1) The board of directors of the credit union shall prepare a notice of membership meeting which must include
(A) a summary of the spinoff proposal;
(B) a statement describing the division of assets, liabilities and capital; and
(C) a statement to inform the members that they have the right to vote on the proposal at the meeting.
(2) A copy of the notice of the meeting must be sent to the department for approval before it is used.
(h) Mailing of Notice and Preparation for Meeting.
(1) The credit union must mail the notice and prepare for the meeting in conformance with the bylaws upon receipt of the following:
(A) determination by the department that there is sufficient interest in a division of assets, liabilities and capital;
(B) the estimated cost of preparation and mailing the notice for a meeting and the cost of a special meeting, if necessary; and
(C) the department's approval of the notice of that meeting.
(2) The board of directors of the credit union shall promptly notify the department of the results of the membership vote.
(i) Application for Certificate of Incorporation. If the spinoff plan receives the affirmative vote of a majority of the members of the credit union present at the meeting called to approve it, the department will treat the anticipated spinoff assets, liabilities and capital as payment toward any required minimum-share subscription when considering the new credit union's application for certificate of incorporation under 3 AAC 03.220(d).
History
- Authority: AS 06.45.010; AS 06.45.020
- Eff. 1/21/81, Register 77
Article 5 Prohibited Practices and Sanctions
3 AAC 03.410 Embezzlement by officers or employees
(a) If an embezzlement or mysterious disappearance of cash, securities, notes, or other assets is discovered in a credit union, an immediate report must be made by officers of the credit union, which fully discloses the circumstances under which it occurred. The disclosure shall be made to the following:
(1) the department;
(2) NCUA and the Federal Bureau of Investigation;
(3) the nearest office of the Alaska State Troopers;
(4) the state district attorney serving the district in which the credit union is located; and
(5) the bonding company.
(b) The officers of the credit union shall notify the board of directors at the next regular or special meeting of the embezzlement or mysterious disappearance of assets and the circumstances under which it occurred.
History
- Authority: AS 06.45.010
- Eff. 1/21/81, Register 77
3 AAC 03.420 Debt collection practices
The debt collection procedures and requirements as set out at 3 AAC 01 apply to credit unions regulated under AS 06.45.
History
- Authority: AS 06.45.010
- Eff. 1/21/81, Register 77
Article 6 General Provisions
3 AAC 03.910 Definitions
In this chapter and in AS 06.45, unless otherwise specified
(1) "bankruptcy clause" means the following statement:
Notwithstanding any other provision in this lease, if the tenant or its successors or assigns becomes insolvent, bankrupt, or makes an assignment for the benefit of creditors, or if it or their interest in this lease is levied upon or sold under execution or other legal process, or if the credit union to be operated on the demised premises is closed or is taken over by a banking authority of the state or other supervisory authority, including the National Credit Union Administration, the landlord may terminate this lease only with the concurrence of the supervisory authority; and that supervisory authority will have the election to either continue or terminate the lease; however, if the lease is terminated, the maximum claim of the landlord for damages or indemnity for injuries resulting from the termination of the unexpired lease may not exceed the rent payable under this lease.
(2) "commissioner" means the commissioner of commerce, community, and economic development or his designee;
(3) "corporate credit union" means a credit union whose membership primarily consists of other credit unions organized under state or federal law;
(4) "department" means Department of Commerce, Community, and Economic Development;
(5) "FCUA" means Federal Credit Union Act (12 U.S.C. $ 1751. , as amended on March 31, 1980;
(6) "NCUA" means National Credit Union Administration;
(7) "shares" or "share account" means an account that earns dividends from undivided earnings at a rate determined by the board of directors at the close of a stated accounting period;
(8) "share certificate" or "share certificate account" means an account that earns a predetermined rate of return when held to maturity and that has a prior claim on credit union assets;
(9) "share draft account" means an account from which the holder is authorized to withdraw shares by means of a negotiable or transferable instrument or other order;
(10) "FHLB" means the Federal Home Loan Bank created under 12 U.S.C. 1421 - 1449;
(11) "mobile facility branch" means a branch that
(A) moves from one location to another to provide services allowed under AS 06.45; or
(B) is located in or serves a remote area of the state not being adequately served by a permanently located branch.
History
- Authority: AS 06.45.010
- Eff. 1/21/81, Register 77; am 4/16/2000, Register 154; am 12/27/2023, Register 248
3 AAC 03.920 Credit union associations
Credit unions may pay dues or fees and participate in credit union associations which provide educational or operational assistance or promote the interests of credit unions.
History
- Authority: AS 06.45.010; AS 06.45.400(3)
- Eff. 1/21/81, Register 77
3 AAC 03.930 Communication between members
The following procedures must be used for communications between members that involve credit union matters:
(1) a member interested in communicating with other members must submit to the department the text of the communication and notify the credit union that a submission has been made;
(2) within 10 days after receipt of the notification from a member, the credit union must furnish to the requesting member and the department a statement of the approximate number of members and an estimate of the cost of preparing and forwarding the communication to the members;
(3) if the department issues a certificate of approval, the department will immediately notify the credit union and the requesting member of the issuance or, if the certificate will not be issued, notify the requesting member of the credit union of the reasons for the denial; and
(4) upon notification that the certificate was issued and receipt of payment for the estimated preparation and mailing expenses, the credit union must, within 15 days, unless a longer period is approved in writing by the department, prepare the communication and mail it to the members.
History
- Authority: AS 06.45.010
- Eff. 1/21/81, Register 77
Chapter 04 Trust Companies
Article 1 General Authority
3 AAC 04.010 Fee schedule
The following fees are established for trust companies, with respect to the following applications, filings, renewals, and exemptions:
(1) filing fee for establishing a branch office, inside or outside the state, $2,000;
(2) filing fee for establishing a representative office, inside or outside the state, $1,000;
(3) application fee for exemption under AS 06.26.200 for a private trust company, $3,000;
(4) fee for annual certification of a private trust company's exempt status, $1,000;
(5) application fee under AS 06.26.220 for a change in control of a private trust company, $5,000;
(6) filing fee for a private trust company to offer fiduciary services to the general public as a trust company, $3,000;
(7) filing fee for merger or consolidation, $3,000;
(8) application fee to purchase or sell substantially all assets, $3,000;
(9) fee to request an exemption by order increasing the maximum number of settlors under AS 06.26.020(a)(18), $1,000;
(10) fee for an interstate state trust company, an interstate national trust company, or an international trust company to establish a new trust office or acquire an existing trust office, $2,000.
History
- Authority: AS 06.01.010; AS 06.26.200; AS 06.26.720 AS 06.26.090; AS 06.26.210; AS 06.26.830 AS 06.26.160; AS 06.26.240; AS 06.26.850 AS 06.26.170; AS 06.26.660; AS 06.26.860 AS 06.26.180; AS 06.26.680; AS 06.26.900
- Eff. 3/29/2008, Register 185
3 AAC 04.020 Exemptions
(a) For purposes of the exemptions set out in AS 06.26.020(a)(1) and (9), the maximum number of trusts may not exceed 25 for each person who qualifies for one or more of the exemptions set out in AS 06.26.020(a)(1) and (9), unless the person who otherwise qualifies under one or more of those exemptions applies for and receives prior written permission from the department in order to serve as the sole, individual trustee for more than 25 trusts.
(b) For purposes of the exemption set out in AS 06.26.020(a)(18), the maximum number of settlors may not exceed 25.
(c) A person claiming an exemption under AS 06.26.020(a)(1), (9), and (18) shall maintain and provide evidence of compliance with (a) - (b) of this section, and shall initially notify the department, on forms provided by the department, which exemption the person is claiming.
History
- Authority: AS 06.26.020; AS 06.26.900
- Eff. 3/29/2008, Register 185
Article 2 Name, Powers, Organization, and Capitalization
3 AAC 04.110 Organizational expenses and capitalization
The amount of capital required by AS 06.26.120 is exclusive of organizational expenses incurred either in establishing a trust company or in preparing it to commence business.
History
- Authority: AS 06.26.120; AS 06.26.900
- Eff. 3/29/2008, Register 185
3 AAC 04.120 Application for a certificate of authority
(a) An application for a certificate of authority to act as a trust company may be filed with the application for incorporation required under AS 10 or afterwards. An applicant must submit
(1) the proposed name and location of the trust company;
(2) a statement whether the applicant will operate on owned or leased property;
(3) a statement whether the applicant plans to finance any improvements to the property, and if the property is leased, whether the proposed lessor will be a customer of the applicant;
(4) a statement of the amount of fire and liability insurance coverage to be carried for the applicant's premises and equipment, identification of the person who will pay the premium for the insurance coverage, and, if the applicant will pay the premium, the
(A) amount of payment; and
(B) annual premium for the coverage at the time of the application;
(5) a statement of the total investment in the applicant's premises and equipment to be reflected on the books of the applicant, including
(A) the applicant's investment in land, buildings, leasehold improvements, furniture, fixtures and equipment, and other assets indirectly representing trust company premises; and
(B) any proposed amount and method of depreciation;
(6) a statement of the amount and type of the applicant's fidelity bond and any excess coverage bond to be in force at the time of opening of the proposed trust company;
(7) an organization chart of the applicant showing the line of authority to be used by the applicant in providing its services;
(8) copies, certified by the applicant's chief executive officer, of
(A) the certification that the capital and surplus required by the department have been paid in full;
(B) a list of all shareholders, giving the name, address, and number of shares held or to be held by each;
(C) resumes of each
(i) director;
(ii) executive officer;
(iii) trust officer; and
(iv) shareholder or subscriber who will own or hold with the power to vote 10 percent or more of the voting securities or other capital stock;
(D) a statement of each market to be served, and the type and nature of services to be offered;
(E) an economic analysis to support the need for and feasibility of the proposed trust company;
(F) a pro forma statement of operations and results for the first 12 months of operations;
(G) a three-year projection of the applicant's capital accounts;
(H) a statement of all internal controls for the protection of trust assets for which the applicant will act as a fiduciary;
(I) the location of the home office, the name of the executive in charge of the home office, the location of each proposed branch office, and the name of the executive in charge of each proposed branch office;
(J) bylaws of the corporation; and
(K) evidence satisfactory to the department that the applicant has complied with each requirement and condition imposed by the department and has advised the department in writing of any change that has occurred in the facts reflected in material filed under AS 06.26;
(9) a statement of the total proposed investment in each proposed trust company subsidiary; and
(10) additional information requested by the department to ascertain compliance with AS 06.26 and this chapter.
(b) An applicant for a certificate of authority under AS 06.05 or AS 06.26 may apply to the department to have designated portions of the applications treated as confidential and not subject to public disclosure to protect business trade secrets or information the disclosure of which would adversely and materially affect the applicant's ability to compete in its intended markets.
History
- Authority: AS 06.01.025; AS 06.26.620 AS 06.26.090; AS 06.26.900
- Eff. 3/29/2008, Register 185
3 AAC 04.130 Public notice of filing of application for certificate of authority
(a) A notice required to be published under AS 06.26.100 must be published at least once each week for two successive weeks
(1) in the manner required under AS 06.26.100 for the community proposed as the trust company's principal place of business; and
(2) in Anchorage, Fairbanks, and Juneau; for each community, the notice must be published in a newspaper of general circulation published in that community.
(b) The first publication of the notice must appear within 15 days after the date of the department's notification under AS 06.26.100(a). The notice must state
(1) the name of the proposed trust company;
(2) the date on which the department accepted the application;
(3) the geographic and product market to be served;
(4) the proposed capital and paid-in capital and surplus;
(5) that a copy of the application, the articles of incorporation, and a list of the names and addresses of the organizers, incorporators, initial board of directors, and company's chief executive and financial officers, except for information made confidential under 3 AAC 04.120(b), may be obtained from the department;
(6) a request for persons to submit comments and objections to the department; and
(7) the address of the department.
(c) Within 60 days after the last date that the notice required by (a) of this section is published, a person opposing approval of the application may file a written objection with the department.
(d) The applicant shall file with the department an affidavit of publication from the newspaper in which the notice was published.
History
- Authority: AS 06.26.100; AS 06.26.900
- Eff. 3/29/2008, Register 185
3 AAC 04.140 Payment of dividends and use of earnings and net profits
(a) The directors of a trust company transacting business in this state may declare a dividend out of the trust company's net profits, subject to restrictions under AS 06.26.120, 06.26.130, and this chapter.
(b) The department may require a trust company to suspend the payment of any dividends until the trust company has complied with all orders or requirements of AS 06.26.120, AS 06.26.130, and this chapter.
History
- Authority: AS 06.26.120; AS 06.26.900 AS 06.26.130; AS 06.26.960
- Eff. 3/29/2008, Register 185
Article 3 Investments, Loans, Deposits, and Trust Assets
3 AAC 04.210 Investments
A trust company may invest for its own account
(1) in the investments authorized for a bank by
(A) 3 AAC 02.205(a)(1) - (8), (10), and (11), subject to the limitations in 3 AAC 02.205(b); or
(B) an order issued under AS 06.01.020; or
(2) in accordance with AS 13.36.225 - 13.36.290 (Alaska Uniform Prudent Investor Act), except that AS 13.36.225(b) does not apply to this chapter.
History
- Authority: AS 06.26.250; AS 06.26.900
- Eff. 3/29/2008, Register 185
3 AAC 04.220 Deposit of trust assets
(a) The security fund required by AS 06.26.370 may be comprised of securities that are permitted under 3 AAC 04.210 for the trust company's own account. Market values of the securities must be determined by quotations based upon actual transactions on an auction or similarly available daily bid-and-ask price market. The security fund must at all times have a readily ascertainable market value equal to or in excess of the trust money or assets retained for deposit by the trust company.
(b) The trust company shall maintain adequate policies, procedures, and records to readily identify the depositor and the dollar amount of the trust money or trust assets deposited with the trust company.
(c) A deposit of trust money may be secured by a pledged certificate of deposit at a depository institution if
(1) the identity of the depository institution is clearly evident; and
(2) the beneficial interest of each customer of trust money accepted for deposit by the trust company is clearly identified and fully insured by the Federal Deposit Insurance Corporation.
History
- Authority: AS 06.26.260; AS 06.26.370; AS 06.26.900
- Eff. 3/29/2008, Register 185
3 AAC 04.230 Investment and management fees and costs
Fees charged by a trust company for investing and managing trust assets must be fully and clearly disclosed to the customer. Fees that must be disclosed under this section include fees charged by third parties which are passed on to the customer by the trust company.
History
- Authority: AS 06.26.390; AS 06.26.900
- Eff. 3/29/2008, Register 185
Article 4 Ownership
3 AAC 04.310 Change in control if required by the department
(a) If the department, acting to reorganize a trust company under AS 06.26.770, requires a change in control of a trust company, the department may waive the requirements of AS 06.26.450 - 06.26.470.
(b) In a public notice required under AS 06.26.770 for the department's reorganization of a trust company, the department will include the information required by 3 AAC 04.130 if the subject of that information is affected by the reorganization.
History
- Authority: AS 06.26.450; AS 06.26.770 AS 06.26.760; AS 06.26.900
- Eff. 3/29/2008, Register 185
3 AAC 04.320 Application for acquisition of control
An application for acquisition of control required by AS 06.26.460 must contain
(1) the identity, trust experience, and business experience of each person by whom or on whose behalf acquisition is to be made;
(2) the terms and conditions of any proposed acquisition and the manner in which the acquisition is to be made;
(3) the source and amount of the money or other consideration used or to be used in making the acquisition, and, if any part of that money or other consideration
(A) has been or is to be borrowed or otherwise obtained for the purpose of making the acquisition, a description of the transaction and the names of the parties; or
(B) will be the issuance of the trust company capital stock, a list of the names of shareholders and number of shares held by shareholders;
(4) resumes of all
(A) new directors;
(B) new executive and trust officers; and
(C) shareholders or subscribers who own or hold with the power to vote, or will own or hold with the power to vote, 10 percent or more of the voting securities or other capital stock; and
(5) any additional information that the department requires for the protection of trust depositors, trust settlors, trust beneficiaries, shareholders, and the public interest.
History
- Authority: AS 06.26.460; AS 06.26.900
- Eff. 3/29/2008, Register 185
3 AAC 04.330 Public notice of filing of application for acquisition of control
(a) A notice that is made in accordance with AS 06.26.460 must be published once each week for two successive weeks. The notice must state
(1) the date the application was filed with and accepted by the department;
(2) the name and address of each participant in the acquisition of control;
(3) that the names, addresses, and resumes of new directors, subscribers of irrevocable subscriptions to the company's capital stock, and any new executive officers of the acquired company may be obtained from the department;
(4) that a copy of the full application may be obtained from the department;
(5) a request for persons to submit comments and protests to the department; and
(6) the address of the department.
(b) Within 30 days after the second publication of the notice required by (a) of this section, a person opposing approval of the application may file a written objection with the department.
(c) The applicant shall file with the department an affidavit of publication from the newspaper in which the notice was published.
History
- Authority: AS 06.26.460; AS 06.26.900
- Eff. 3/29/2008, Register 185
Article 5 Governance
3 AAC 04.410 Directors and officers
(a) The trust company shall report to the department any change in directors and officers. The trust company shall file with the department a certified copy of the affidavit required by AS 06.26.510(e) together with a resume of each new director. The trust company shall file with the department a resume of each new officer.
(b) The board of directors shall appoint annually an examining committee of no less than three directors. A member of the examining committee may not be an officer or employee of the trust company. The committee shall examine or cause to be examined the condition of the trust company. In performing its annual examination of a trust company, the board of directors shall have the books and records of the trust company examined and a report prepared by an independent certified public accountant that does not have an interest, financial or otherwise, in the trust company. A copy of the report shall be submitted to the department within 30 days after receipt by the board of directors after completion of the examination.
(c) Unless prohibited by the articles of incorporation or bylaws of the trust company, the members of the board of directors, or of a committee of the board, may validly conduct a meeting by communicating simultaneously with each other by means of telephone conferences or similar communications equipment.
History
- Authority: AS 06.26.510; AS 06.26.530 AS 06.26.520; AS 06.26.900
- Eff. 3/29/2008, Register 185
3 AAC 04.420 Officers and employees
If the department determines that an officer or employee of the trust company has been negligent, dishonest, reckless, or incompetent in the performance of official duties, the department may do one or more of the following:
(1) fine the trust company;
(2) suspend or revoke its certificate of authority.
History
- Authority: AS 06.01.030; AS 06.26.150; AS 06.26.900 AS 06.01.035; AS 06.26.530
- Eff. 3/29/2008, Register 185
3 AAC 04.430 Insurance
The board of directors of a trust company shall maintain, in addition to the insurance coverage identified in AS 06.26.620, adequate fire and liability insurance coverage for the trust facility and equipment.
History
- Authority: AS 06.26.620; AS 06.26.900
- Eff. 3/29/2008, Register 185
Article 6 Organic Change
3 AAC 04.510 General provisions for conversions
(a) A proposed conversion of a national bank whose main office is located in the state or a state bank whose main office is located in the state to a trust company must be accomplished under a conversion plan filed with and approved by the department.
(b) The board of directors of the converting national bank or state bank shall, by resolution adopted by the board, approve a conversion plan that sets out
(1) the name of the bank proposing to convert;
(2) the name of the trust company into which the bank proposes to convert;
(3) the terms and conditions of the proposed conversion;
(4) the manner and basis of converting the shares of the national bank or state bank into shares, other securities, cash, other property, or obligations, in whole or in part, of the proposed trust company;
(5) a statement of any amendments to the institution's articles of incorporation caused by the conversion; and
(6) any additional information requested by the department, and that the department considers necessary to make an informed decision on the proposed conversion.
History
- Authority: AS 06.26.090; AS 06.26.650; AS 06.26.900
- Eff. 3/29/2008, Register 185
3 AAC 04.520 Merger
(a) A national bank whose main office is located in the state or a state bank whose main office is located in the state may merge with a trust company, and a trust company may merge with another trust company, under a merger plan filed with and approved by the department.
(b) Each national bank, state bank, and trust company shall approve a merger plan that sets out
(1) the names of the national banks, state banks, and trust companies proposing to merge and the name of the surviving trust company into which they propose to merge;
(2) the terms and conditions of the proposed merger;
(3) the manner and basis of converting the shares of each merging national bank, state bank, and trust company into cash or other property, or into shares, other securities, or obligations of the surviving trust company;
(4) a copy of any amendments to the articles of incorporation of the surviving trust company caused by the merger; and
(5) any additional information requested by the department, and that the department considers necessary to make an informed decision on the proposed merger.
History
- Authority: AS 06.26.650; AS 06.26.660; AS 06.26.900
- Eff. 3/29/2008, Register 185
3 AAC 04.530 Consolidation
(a) A proposed consolidation of a national bank whose main office is located in the state or a state bank whose main office is located in the state with a trust company, or of a trust company with another trust company, shall be accomplished under a consolidation plan filed with and approved by the department.
(b) Each national bank, state bank, and trust company shall approve a consolidation plan that sets out
(1) the names of the national banks, state banks, and trust companies proposing to consolidate and the name of the new trust company into which they propose to consolidate;
(2) the terms and conditions of the proposed consolidation;
(3) the manner and basis of converting the shares of each national bank, state bank, and trust company into cash or other property, or into shares, other securities, or obligations of the new trust company; and
(4) any additional information requested by the department, and that the department considers necessary to make an informed decision on the proposed consolidation.
History
- Authority: AS 06.26.650; AS 06.26.660; AS 06.26.900
- Eff. 3/29/2008, Register 185
3 AAC 04.540 Application for merger or consolidation
(a) The board of directors of each national bank, state bank, and trust company proposing to merge or consolidate shall jointly or independently submit to the department an application for permission to implement the plan.
(b) The application must include
(1) an analysis by the entities proposing to merge or consolidate of why the proposed merger or consolidation is in the interest of promoting and maintaining a sound and competitive trust system and the security of trust assets and customers;
(2) a copy of the articles of incorporation of the merging or consolidating entities;
(3) copies of the resolutions of each entity's board of directors approving the plan of merger or consolidation, or other evidence that necessary corporate approval was obtained;
(4) copies of the proposed articles of merger or consolidation; and
(5) any additional information requested by the department, and that the department considers necessary to make an informed decision on the proposed merger or consolidation.
(c) The department will conduct an investigation of the application. If the department determines that the application meets the requirements of (b) of this section and that approval of the application is consistent with the maintenance or promotion of a safe and sound trust system, the department will issue a public notice of its intent to approve the merger or consolidation and to issue a certificate of merger or consolidation.
(d) The department will review any comments in response to the public notice and determine whether the merger or consolidation is consistent with the maintenance or promotion of a safe and sound trust system. Not later than 30 days after the final publication of notice under (c) of this section, the department will determine whether the application meets the requirements of (b) and (c) of this section. If the department approves the application, it will issue a certificate of merger or consolidation, and forward the certificate to the chair or board representative of the surviving or new trust company. The certificate of merger or consolidation becomes effective upon issuance unless the certificate specifies a later effective date. If the certificate specifies a later effective date, the department will not set a date that is later than 15 days after issuance of the certificate.
(e) Merger or consolidation has the following effects:
(1) the merged or consolidated entities become a single trust company designated in the merger plan as the surviving trust company and in the consolidation plan as the new trust company;
(2) the separate identities of the merged or consolidated entities cease to exist and the existence of the surviving or new trust company begins;
(3) the surviving or new trust company has the rights, privileges, immunities, and powers and is subject to the duties and liabilities of a trust company under AS 06.26;
(4) the surviving or new trust company possesses the rights, privileges, immunities, and franchises, public and private, of the merged or consolidated entities;
(5) all real, personal, and mixed property, all debts due, including subscriptions to shares, all choses in action, and every other interest in, belonging to, or due to each of the merged or consolidated entities are transferred to and vested in the surviving or new trust company;
(6) the title to or interest in real estate vested in the surviving or new trust company does not revert and is not in any way impaired by a merger or consolidation;
(7) the surviving or new trust company is liable for the liabilities and obligations of the merged or consolidated entities;
(8) an existing claim or pending action or proceeding by or against the merged or consolidated entities may be prosecuted as if the merger or consolidation has not taken place, or the surviving or new trust company may be substituted in its place;
(9) the rights of creditors and any liens upon the property of the merged or consolidated entities are not impaired by the merger or consolidation;
(10) the articles of incorporation of the surviving trust company are amended to comply with the merger plan;
(11) the articles of consolidation become the original articles of incorporation of the new trust company; and
(12) if the net undivided profits are not transferred to stated capital by the issuance of shares or otherwise, the net undivided profits of the merged or consolidated entities available for the payment of dividends immediately before the merger or consolidation, remain available for the payment of dividends by the surviving or new trust company.
History
- Authority: AS 06.26.650; AS 06.26.660; AS 06.26.900
- Eff. 3/29/2008, Register 185; am 12/27/2023, Register 248
3 AAC 04.550 Authority to purchase assets of another trust company
(a) A trust company that purchases all or substantially all of the assets of another trust company shall
(1) document that purchase with a contract that specifies
(A) the items purchased and liabilities assumed;
(B) the monetary consideration; and
(C) all other terms and conditions of the transaction; and
(2) require notice of the sale to all customers of the selling trust company.
(b) A trust company must file with the department a letter of application to purchase assets of another trust company and must include
(1) a summary of the transaction;
(2) a copy of the contract to purchase assets;
(3) a current pro forma balance sheet and income statement for the purchasing trust company that
(A) reflects the proposed transaction as of the most recent quarter ended immediately before the filing of the application;
(B) demonstrates that the purchasing trust company meets the statutory capital requirement or capital requirement imposed by order or condition of the department; and
(C) includes a statement of fiduciary assets and corporate assets; and
(4) copies of all other required regulatory notices or filings submitted to other state or federal regulatory agencies concerning the transaction.
History
- Authority: AS 06.26.680; AS 06.26.900
- Eff. 3/29/2008, Register 185
3 AAC 04.560 Sale of assets
(a) The board of a trust company that sells all or substantially all of the trust company's assets, with or without shareholder approval, must
(1) document that sale with a contract that specifies
(A) the items sold and liabilities assumed;
(B) the monetary consideration; and
(C) all other terms and conditions of the transaction; and
(2) require notice of the sale to all customers of the selling trust company.
(b) A trust company must file with the department a letter of application to sell all or substantially all of its assets and must include
(1) a summary of the transaction;
(2) a copy of the contract to sell the assets; and
(3) copies of all other required regulatory notices or filings submitted to other state or federal regulatory agencies concerning the transaction.
History
- Authority: AS 06.26.720; AS 06.26.900
- Eff. 3/29/2008, Register 185
3 AAC 04.570 Dissenting shareholder rights
If a shareholder of a state bank or of a trust company dissents from a consolidation, merger, or conversion of the bank or trust company, the exercise of the dissenting shareholder's rights is subject to AS 10.06.574 - 10.06.582.
History
- Authority: AS 06.26.720; AS 06.26.900
- Eff. 3/29/2008, Register 185
Article 7 Interstate State Trust Company and International Trust Company Offices
3 AAC 04.610 Interstate state trust company and international trust company reports
An interstate state trust company or international trust company shall file reports in the same manner as, and at the times established for, reports required under AS 06.26.930.
History
- Authority: AS 06.26.870; AS 06.26.900
- Eff. 3/29/2008, Register 185
3 AAC 04.620 Notice of merger, consolidation, or closing of an interstate state trust company or international trust company
If an interstate state trust company or international trust company maintains a trust office or a representative office in this state under this chapter, and if that trust company merges or consolidates with another entity or closes, the trust company shall file, with the notice required under AS 06.26.890, a copy of the application filed with, and a copy of the approval by, the trust company's primary regulator.
History
- Authority: AS 06.26.840; AS 06.26.890; AS 06.26.900
- Eff. 3/29/2008, Register 185
Article 8 General Provisions
3 AAC 04.900 Retention of records
A trust company shall retain a trust agreement, and the records pertaining to that trust agreement, for seven years after the trust is terminated. All other trust company records shall be maintained in accordance with 3 AAC 02.010. Any record required to be retained under this section may be retained on microfilm, on microfiche, or in any other form that preserves a true and accurate reproduction of the original document and that is admissible as evidence in a court of this state and under the Alaska Rules of Evidence.
History
- Authority: AS 06.26.900
- Eff. 3/29/2008, Register 185
3 AAC 04.910 Procedures for appeals
(a) If an appeal is brought under AS 06.26.910, or on the department's own motion, the department will refer the appeal in accordance with AS 44.64.060 to the office of administrative hearings. However, a person may not obtain a hearing solely due to the person's status as a customer. In accordance with AS 44.64.030(a)(5) and 44.64.060(a),
(1) the procedures set out in 2 AAC 64.100 - 2 AAC 64.990 apply to an appeal conducted under this section, unless they conflict with an applicable provision of AS 06;
(2) to the extent that they do not conflict with 2 AAC 64.100 - 2 AAC 64.990, the procedures set out in 3 AAC 01.010 apply to an appeal conducted under this section; and
(3) to the extent that a provision of 2 AAC 64.100 - 2 AAC 64.990 conflicts with AS 06, a provision in 3 AAC 01.010, if any, addressing the same subject matter as the provision in conflict applies to an appeal conducted under this section.
(b) Repealed 12/27/2023.
History
- Authority: AS 06.01.030; AS 06.26.900; AS 06.26.910
- Eff. 3/29/2008, Register 185; am 12/27/2023, Register 248
3 AAC 04.920 Trust company reports to department
(a) A trust company shall prepare the quarterly reports of condition required under AS 06.26.930(a) on
(1) the Federal Financial Institutions Examination Council (FFIEC) Consolidated Reports of Condition and Income form, Schedule RC-T (Fiduciary and Related Services); and
(2) a form prepared by the department.
(b) With the approval of the department, a trust company may file a report required by the department as an electronic record or by facsimile transmission. The department may accept an electronic signature on an electronic record that is filed with the department and that requires a signature under AS 06.26 or this chapter in accordance with AS 09.80.150.
History
- Authority: AS 06.26.900; AS 06.26.930; AS 09.80.150
- Eff. 3/29/2008, Register 185
3 AAC 04.990 Definitions
In AS 06.26 and this chapter, unless the context requires otherwise,
(1) "department" means the Department of Commerce, Community, and Economic Development;
(2) "executive"
(A) means
(i) the chair of the board of directors;
(ii) the chief executive officer, the president, the treasurer, the chief financial officer, the secretary, the cashier, and each vice president of the trust company; and
(iii) any person who participates or has authority to participate, other than in the capacity of a director, in major policymaking functions of the trust company, regardless of whether the person has an official title, the person's title designates that person as an assistant, or the person serves without salary or other compensation;
(B) does not include a person
(i) excluded, by resolution of the board of directors or by the bylaws of the trust company, from participation, other than in the capacity of a director, in major policymaking functions of the trust company; and
(ii) who does not actually participate in major policymaking functions of the trust company.
History
- Authority: AS 06.26.900
- Eff. 3/29/2008, Register 185
Chapter 05 Savings Associations
Article 1 Powers of the Department
3 AAC 05.010 Retention or destruction of records
Repealed.
History
- Eff. 4/4/79, Register 70; repealed 10/16/2003, Register 168
Article 2 Association Practices
3 AAC 05.110 Communication between members
Repealed.
History
- Eff. 4/4/79, Register 70; repealed 10/16/2003, Register 168
3 AAC 05.120 Service charges on dormant accounts
Repealed.
History
- Eff. 4/4/79, Register 70; repealed 10/16/2003, Register 168
3 AAC 05.130 Redemption of savings accounts
Repealed.
History
- Eff. 4/4/79, Register 70; repealed 10/16/2003, Register 168
3 AAC 05.140 General reserve account
Repealed.
History
- Eff. 4/4/79, Register 70; repealed 10/16/2003, Register 168
3 AAC 05.150 Net worth requirements
Repealed.
History
- Eff. 4/4/79, Register 70; repealed 10/16/2003, Register 168
3 AAC 05.160 Alternative mortgage instruments
Repealed.
History
- Eff. 12/30/79, Register 72; repealed 10/16/2003, Register 168
3 AAC 05.170 NOW accounts
Repealed.
History
- Eff. 10/26/80, Register 76; repealed 10/16/2003, Register 168
3 AAC 05.180 Participation in first mortgages where mortgaged property is located outside of state
Repealed.
History
- Eff. 5/20/82, Register 82; repealed 10/16/2003, Register 168
3 AAC 05.190 Revolving credit plans
Repealed.
History
- Eff. 3/30/84, Register 89; repealed 10/16/2003, Register 168
3 AAC 05.195 Issue of credit cards
Repealed.
History
- Eff. 3/30/84, Register 89; repealed 10/16/2003, Register 168
3 AAC 05.197 Real estate loans
Repealed.
History
- Eff. 9/23/84, Register 91; repealed 10/16/2003, Register 168
3 AAC 05.200 Consumer loans
Repealed.
History
- Eff. 9/23/84, Register 91; repealed 10/16/2003, Register 168
3 AAC 05.202 Property improvement loans
Repealed.
History
- Eff. 9/23/84, Register 91; repealed 10/16/2003, Register 168
3 AAC 05.205 Commercial loans
Repealed.
History
- Eff. 9/23/84, Register 91; repealed 10/16/2003, Register 168
Article 3 Organization and Corporate Functions of Associations
3 AAC 05.210 Organization and incorporation requirements
Repealed.
History
- Eff. 4/4/79, Register 70; repealed 10/16/2003, Register 168
3 AAC 05.220 Solicitation materials
Repealed.
History
- Eff. 4/4/79, Register 70; repealed 10/16/2003, Register 168
3 AAC 05.230 Corporate name and change of name
Repealed.
History
- Eff. 4/4/79, Register 70; repealed 10/16/2003, Register 168
3 AAC 05.240 Amendment of articles of incorporation
Repealed.
History
- Eff. 4/4/79, Register 70; repealed 10/16/2003, Register 168
3 AAC 05.250 Special meetings
Repealed.
History
- Eff. 4/4/79, Register 70; repealed 10/16/2003, Register 168
3 AAC 05.260 Vacancies on the board of directors
Repealed.
History
- Eff. 4/4/79, Register 70; repealed 10/16/2003, Register 168
3 AAC 05.270 Application for branch or change of location
Repealed.
History
- Eff. 4/4/79, Register 70; am 12/31/80, Register 76; repealed 10/16/2003, Register 168
3 AAC 05.280 Application for a mobile facility
Repealed.
History
- Eff. 4/4/79, Register 70; am 12/31/80, Register 76; repealed 10/16/2003, Register 168
3 AAC 05.290 Change in schedule of branch or mobile facility
Repealed.
History
- Eff. 4/4/79, Register 70; repealed 10/16/2003, Register 168
Article 5 Prohibited Practices
3 AAC 05.410 Embezzlement by officers or employees
Repealed.
History
- Eff. 4/4/79, Register 70; repealed 10/16/2003, Register 168
3 AAC 05.420 Debt collection practices
Repealed.
History
- Eff. 4/4/79, Register 70; repealed 10/16/2003, Register 168
Article 6 General Provisions
3 AAC 05.910 Definitions
Repealed.
History
- Eff. 4/4/79, Register 70; am 9/23/84, Register 91; repealed 10/16/2003, Register 168
Chapter 06 Mutual Savings Banks
Article 1 Powers of the Department
3 AAC 06.010 Retention and destruction of records
The following is the retention schedule for Alaskan savings banks:
SCHEDULE FOR RETENTION OR
DESTRUCTION OF RECORDS
Key to Abbreviations
P.S. or Opt.- Purpose served or OptionalD- DestroyMonths- Figure with ''mos.''Years- FiguresPermanently- P
I. ADMINISTRATIVEMINUTE BOOKSMinute books of directors', executive committees', stock-holders', and other meetings . . . . . PAUDITING AND ACCOUNTINGAccrual records . . . . . 1Audit copy of debits and credits to loans and discounts . . . . . 1Audit work papers . . . . . 3Bank call reports . . . . . 25Bank examiner's reports . . . . . PBudget work sheets . . . . . Opt.Daily reserve computations . . . . . 2Difference records . . . . . 6Earnings and dividends report . . . . . PMonthly reports to directors . . . . . PReports to executive committees . . . . . PSecurities vault, in and out tickets . . . . . 3Tax records . . . . . 25GENERAL LEDGERDaily statement of condition . . . . . PGeneral journal . . . . . 1General ledger . . . . . 25General ledger tickets . . . . . 10INSURANCE RECORDSBankers' blanket . . . . . 3Expired policies . . . . . 3Records of policies in force . . . . . 3Schedule of fire and other policies, and record of payment ofpremiums and sums recovered . . . . . 3INVESTMENTS - BANK'S PORTFOLIOBond ledger . . . . . PBrokers' confirmations . . . . . 3Brokers' statements . . . . . 3Descriptive literature on securities disposed of . . . . . OptBuy and sell orders . . . . . 3LOANS AND DISCOUNTSAudit copy of debits and credits to loans and discounts . . . . . 1Collateral cards . . . . . 10Collateral receipts . . . . . 10Collateral register . . . . . 10Collateral substitution slips (receipts) . . . . . 10Credit files (closed) . . . . . Opt.Daily reports . . . . . Opt.Debit and credit tickets . . . . . 10Journal . . . . . 10Liability ledger . . . . . 10Loan applications . . . . . Opt.Loan committee minutes . . . . . PMargin card . . . . . Opt.Note or discount register . . . . . 10Note or discount tickler . . . . . 2Resolutions (after loan is paid) . . . . . 6Payment receipts . . . . . 6PERSONNELAttendance record (after leaving service) inc. "hoursworked" . . . . . 5Salary ledger . . . . . 5Salary receipts . . . . . 5Records of employees:Applications, reference records, reports & results of exam-inations, service record, efficiency tests, etc., after leavingservice . . . . . PII. CASHDUE FROM BANKSAdvices from correspondents . . . . . 1Affidavits/bonds of indemnity for duplicate drafts issued . . . . . 10Bank statements . . . . . 2Drafts . . . . . 10Draft register . . . . . 10Reconcilements:Domestic . . . . . 2Foreign . . . . . 5Departmental or tellers proof sheets . . . . . 2PROOF OF CLEARINGSClearinghouse settlement sheets . . . . . 3 mos.Deposit proof sheets or tapes . . . . . 1In-clearing proof sheets . . . . . 1In-clearing tapes . . . . . 1Out-clearing proof sheets . . . . . 1Clearinghouse settlement checks . . . . . 10TELLERSCash item record . . . . . 2Cash item register . . . . . 2Receipts for return items . . . . . 1Return item carbons . . . . . 1Teller's cash books . . . . . Opt.Teller's cash tickets, orig. and carbon . . . . . 1Teller's recapitulation (with general ledger tickets) . . . . . 10Teller's scratch sheet or blotter . . . . . 3TRANSITOutgoing cash letters . . . . . 1Proof sheets . . . . . 1SAVINGS ACCOUNTSDeposits . . . . . 7Journals . . . . . 1Ledger cards or sheets . . . . . 7Control journal tapes . . . . . Opt.Window bookkeeping machine control tapes . . . . . Opt.Reports of accounts opened and closed . . . . . Opt.Resolution (after closed) . . . . . 7Signature cards (after closed) . . . . . 7Signatures power of attorney . . . . . 7Trial balances . . . . . 3 mos.Affidavits lost P/B . . . . . 7Withdrawal . . . . . 7Work sheets interest on time accounts . . . . . Opt.III. DEPOSITSCERTIFICATES OF DEPOSITCertificates (paid) . . . . . 7Ledger cards (paid) . . . . . 7Register (paid) . . . . . 7OFFICIAL CHECKS AND DRAFTSCashier's checks . . . . . 10Cashier's check register . . . . . 10Certified checks . . . . . 10Certified check register . . . . . 10Drafts . . . . . 10Draft stubs . . . . . Opt.Draft register . . . . . 10Expense checks . . . . . 10Expense check register . . . . . 10Expense vouchers . . . . . 10Letters of credit & documents . . . . . 10Receipts for certified checks . . . . . 10Requisitions . . . . . Opt.SAVINGS DEPOSITSDeposit tickets . . . . . 7Duplicate deposit tickets . . . . . Opt.Journal . . . . . 1Ledger cards or sheets . . . . . 7Control journal tapes . . . . . 1Passbooks (closed accounts) . . . . . DReports of accounts opened and closed . . . . . Opt.Resolutions (after account closed) . . . . . 7Signature powers of attorney . . . . . 7Trial balances . . . . . 1Withdrawal receipts . . . . . 7CHRISTMAS CLUBChecks . . . . . 7Check register . . . . . 7Coupons (deposit ticket) . . . . . 7Journal . . . . . 3 mos.Ledger cards or sheets . . . . . 7(a) if paid by cash and receipt taken on card or sheet . . . . . 7(b) if paid by official check . . . . . 7Signature cards (after closed) . . . . . 7Trial balances . . . . . 1Withdrawal receipts . . . . . 7IV. MISCELLANEOUS COLLECTIONSCollection receipts, carbons of . . . . . 3Collection register . . . . . 3Coupon cash letters, outgoing . . . . . 3Coupon envelopes . . . . . Opt.Customers' file copies . . . . . 1Incoming collection letters . . . . . 3Installment contract or note records (after closing) . . . . . 10GENERALAffidavits . . . . . 10Applications for travelers' checks . . . . . 1Attachments, garnishments . . . . . 7Attachment releases . . . . . 7Change of address orders . . . . . 1Code books (not returned) . . . . . DCourt order (after case closed) . . . . . 10Court order memorandum record . . . . . 10Death notices . . . . . Opt.General correspondence . . . . . 3Incoming mail envelopes . . . . . Opt.Night depository records . . . . . 1Paid bills, statements and invoices . . . . . 1Receipts (ordinary) . . . . . 7Stenographer's note books and mechanical device records,and extra copies of letters . . . . . Opt.Telegrams, cable and radiogram copies . . . . . 3Telegraphic transfer receipts and records . . . . . 3Vault records, opening and closing . . . . . 6 mos.REGISTERED MAILInsurance declarations . . . . . Opt.Marine insurance books . . . . . Opt.Registered mail (incoming) record . . . . . 2Registered mail (outgoing) record . . . . . 2Return receipt cards . . . . . 1
V. U.S. SAVINGS BONDU.S. Savings Bond stubs, Series E . . . . . As required in federalregulations.U.S. Savings Bond Series E. applications . . . . . As required in federalregulations.(Memo: Applications must show bond numbers.File alphabetically by years).
VI. DATA PROCESSING RECORDS
TAPE & DISK FILES
Computer program tapes/disks - When a change is made, retain old
tape or disk one month to verify program.
Master file tape/disk - One day if back up is kept, until a Grand-
father* if not.
Sorted daily transaction tape/disk - One day if a print-out is made,
until a Grandfather if not.
Report tape/disks - Until updated report has been verified for
accuracy.
Miscellaneous data tapes/disks
New accounts - If print-outs are made daily, one day; until master
is proven, if not.
Change of address - If print-outs are made daily, one day; until
master is proven, if not.
Stop payment - If print-outs are made daily, one day; until master
is proven, if not.
Other master files
Account history tapes - Until it is a Grandfather tape.
Statistical tapes - Until it is a Grandfather tape.
Original entry punch cards or cards punched by the computer - Two
reporting periods of information or two statement cycles.
History
- Authority: AS 06.15.010(b)
- Eff. 12/13/70, Register 36
Article 2 Banking Practices
3 AAC 06.105 Bank investments
The provisions of 3 AAC 02.205 apply to a mutual savings bank.
History
- Authority: AS 06.15.240; AS 06.15.270; AS 44.33.020
- Eff. 12/27/2023, Register 248
3 AAC 06.110 NOW accounts
(a) No bank may offer NOW accounts to its depositors unless NOW accounts are authorized by a bylaw or article of the bank and the bylaw or article is approved by the department.
(b) A bank offering NOW accounts must conspicuously post and must make available to depositors a written description of the conditions under which depositors may open and maintain NOW accounts. All amendments to these conditions must likewise be posted and made available to depositors. All conditions and amendments to them are binding upon holders of NOW accounts.
(c) A bank may pay interest on NOW accounts unless prohibited or limited by applicable federal law or regulation.
(d) On an annual or more frequent periodic basis, a bank offering NOW accounts must issue NOW account statements to holders of NOW accounts.
(e) Repealed 4/22/2010.
(f) In this section, "NOW account" means an account the terms of which provide that one of the methods by which money can be withdrawn is by a negotiable order; the acronym "NOW" means negotiable order of withdrawal.
History
- Authority: AS 06.05.075; AS 06.15.230; AS 06.15.360 AS 06.15.010; AS 06.15.350
- Eff. 12/30/79, Register 72; am 4/22/2010, Register 194
3 AAC 06.120 Alternative mortgage instruments
A bank may make, purchase, and participate in alternative mortgage instruments if the legal rate of interest charged by the bank complies with the provisions of AS 45.45.010(b) and 12 C.F.R. 545.6 - 1, 2, as amended January 1, 1979, and July 1, 1979.
History
- Authority: AS 06.01.020; AS 06.15.010; AS 06.15.360 AS 06.05.075; AS 06.15.250
- Eff. 12/30/79, Register 72
Article 3 Organization and Corporate Functions of Mutual Savings Banks
3 AAC 06.210 Organization requirements
(a) Certificate of Charter. No bank or proposed bank may conduct the business of a mutual savings bank unless a Certificate of Charter has been issued by the department and the certificate is prominently and publicly displayed in the lobby or equivalent business area.
(b) Notice of Intent. The corporators of a proposed bank shall submit to the division a written notice of intent to organize a bank, which
(1) is signed originally by at least five of the corporators;
(2) contains the proposed name to be reserved for the proposed bank;
(3) indicates the city or otherwise specifies the proposed location of the proposed bank;
(4) indicates the residence address, mailing address, occupation, and amount of deposits subscribed by each corporator; and
(5) indicates the individual elected by the corporators who will accept notice from the department on behalf of all corporators.
(c) Application for a Certificate of Charter. The following information and fee must be submitted to the division in support of an application for a certificate of charter:
(1) a completed FDIC new bank application which may be obtained directly from FDIC;
(2) a copy of the proposed charter and articles of incorporation of the bank executed in triplicate with all copies bearing original signatures;
(3) a copy of the proposed bylaws;
(4) a check or money order for $1,000 made payable to the State of Alaska as a partial prepayment of investigation expenses incurred by the department in accordance with AS 06.01.010;
(5) an economic analysis to support the need and feasibility of the proposed bank; and
(6) any additional information requested by the department.
(d) Issuance of Certificate of Charter. If the department finds the provisions of (c) of this section have been complied with by the corporators and insurance of accounts has been obtained through FDIC, a certificate will be issued, if the corporators submit the following information:
(1) statements as to whether the proposed bank will own or lease the property within which it will conduct its business and, if leased, a fully executed copy of all lease documents, which must contain a bankruptcy clause;
(2) a statement as to whether or not the proposed bank plans to finance any improvements to the property, and, if it intends to lease, whether the proposed lessor will be a borrowing customer of the proposed bank;
(3) the amount of fire and liability insurance coverage to be carried for the proposed bank's facilities and equipment, who will pay the premium, and, if to be paid by the proposed bank, the amount of the premium;
(4) the total investment in proposed bank premises and equipment to be reflected on the books of the proposed bank;
(5) the proposed itemized book value of the proposed bank's investment in land, building, leasehold improvements, furniture, fixtures and equipment, investment in other assets indirectly representing bank premises, and any proposed amount and method of depreciation to be reflected on the books of the proposed bank;
(6) the amount and type of the proposed bank's fidelity bond and any excess coverage bond to be in force at the time of opening of the proposed bank;
(7) an organization chart of the proposed bank showing the line of authority to be used by the proposed bank in providing its services; and
(8) additional information as requested by the department.
History
- Authority: AS 06.01.010; AS 06.15.030; AS 06.15.140 AS 06.15.010; AS 06.15.040 AS 06.15.020; AS 06.15.050
- Eff. 8/22/79, Register 71
3 AAC 06.220 Application for branch office or change of location
The provisions of 3 AAC 02.215 apply to an application for a branch or change of location under this chapter.
History
- Authority: AS 06.01.010; AS 06.15.010; AS 06.15.290
- Eff. 8/22/79, Register 71
3 AAC 06.230 Application for a mobile facility
The provisions of 3 AAC 02.217 apply to an application for a mobile facility under this chapter.
History
- Authority: AS 06.01.010; AS 06.15.010; AS 06.15.290
- Eff. 8/22/79, Register 71
Article 4 Reorganization, Liquidation and Dissolution
3 AAC 06.310 Association's conversion to a bank
(a) Any conversion of an association to a bank under AS 06.15.300 must be accomplished under a conversion plan filed with, as a part of an application for conversion, and approved by the department.
(b) The board of directors of the converting association must by resolution adopt a conversion plan which sets forth
(1) the name of the association proposing to convert and the name of the resulting bank after conversion;
(2) the terms and conditions of the proposed conversion;
(3) a statement of any amendments to the articles of incorporation of the converting association to become effective at the time of conversion, including required articles of incorporation for banks organized under AS 06.15; and
(4) other provisions as required by the department.
(c) The chairperson shall submit to the division a copy of the resolution immediately after the resolution is adopted under (b) of this section.
History
- Authority: AS 06.15.010; AS 06.15.050; AS 06.15.300
- Eff. 8/22/79, Register 71
3 AAC 06.315 Adoption of association's conversion plan
(a) The board of directors of the converting association, after approving the conversion plan and receiving the department's approval of its application to convert, shall by resolution direct that the plan be submitted to a vote at a meeting of the members. The meeting may be either an annual or a special meeting. Written or printed notice must be given to each member of record entitled to vote, not less than 30 days before the meeting, and must state the purpose of the meeting. A copy or a summary of the conversion plan must be included with the notice to members.
(b) Notice of a membership meeting called under this section must be transmitted personally or by mail, by or at the direction of the president, the secretary, or any persons authorized under the articles of incorporation or bylaws of the association to call the meeting. If mailed, the notice is considered delivered when deposited in the United States mail, and addressed to the member at the address appearing in the records of the converting association with postage prepaid.
(c) At the members' meeting, a vote must be taken on the proposed conversion plan. Members may vote in person or by proxy. The plan is approved if it receives the affirmative vote of a simple majority of the members of the converting association.
(d) After member approval of the plan of conversion but before filing the amended articles of incorporation, the conversion may be abandoned under provisions, if any, set forth in the plan.
History
- Authority: AS 06.15.010; AS 06.15.300
- Eff. 8/22/79, Register 71
3 AAC 06.320 Amended articles of incorporation
Upon approval of the conversion plan, amended articles of incorporation must be executed in duplicate by the chairperson, president, or a vice president of the converting association and its secretary or an assistant secretary, and verified by one of the officers of the converting association, all signatures being original. The amended articles of incorporation must include
(1) the conversion plan;
(2) the number of members who voted for and against the plan, and the total number of members eligible to vote;
(3) requirements of AS 06.15 for the initial articles of incorporation of a bank.
History
- Authority: AS 06.15.010; AS 06.15.300
- Eff. 8/22/79, Register 71
3 AAC 06.325 Application for conversion
(a) The chairperson shall apply to the department for permission to implement the proposed conversion plan. The application must include
(1) a completed FDIC new bank application using forms which may be obtained directly from FDIC;
(2) an analysis of why the proposed conversion is in the best interests of promoting and maintaining a sound and competitive banking system, the security of deposits and customers, the preservation of the liquid position of the converting association in general, and the preventing of injurious credit expansion and contractions in the state; and demonstrate how the converting association proposes to discharge the duties and conform to the restrictions upon banks under AS 06.15;
(3) a copy of the proposed amended articles of incorporation;
(4) a check or money order for $1,000, made payable to the State of Alaska, as a partial prepayment of investigation expenses incurred by the department in accordance with AS 06.01.010;
(5) other materials as required by the department.
(b) The department will conduct an investigation of the application and, if the department finds that the application is in order and that the provisions of AS 06.15 have been met, it will issue a public notice of the department's intent to approve the proposed conversion and to issue a certificate of authority for the conversion.
(c) If the department does not receive a request for hearing within the time specified under AS 06.01.030(b), or determines after a hearing that the application is in order, the department will approve the application, file both copies of the originally signed amended articles of incorporation, issue a certificate of authority to convert, and forward it along with a copy of the amended articles to the chairperson of the former association. The certificate of authority to convert is effective immediately unless the certificate states a later effective date, which must be within 15 days after issuance of the certificate.
(d) Conversion of an association to a bank has the following effect:
(1) the association becomes a bank with the board of directors of the association becoming the board of trustees of the bank;
(2) the converting association ceases to exist;
(3) the bank has the rights, privileges, immunities and powers, and is subject to the duties and liabilities of a bank organized under AS 06.15; however, it may retain and service all accounts lawfully held by it as a association on the date of its conversion;
(4) all real, personal, and mixed property, all debts due, all choses in action, and every other interest in, possession of, and obligation due to the converting association are transferred to and vested in the bank;
(5) title to or interest in real property vested in the converting association is transferred to and vests in the bank;
(6) the bank is liable for the liabilities and obligations of the converting association incurred before conversion;
(7) a claim existing or action or proceeding pending by or against the converting association may be prosecuted as if the conversion had not taken place, or the bank may be substituted in its place;
(8) neither the rights of creditors nor liens upon the property of a converting association are impaired by the conversion;
(9) the statements set forth in the amended articles of incorporation which are required or permitted as articles of incorporation for banks organized under AS 06.15 are the original articles of incorporation of the bank into which the association has converted; and
(10) the net undivided profits of the converting association available for the payment of dividends immediately before the conversion, to the extent that the net undivided profits are not transferred to stated capital, remain available for the payment of dividends by the bank.
(e) The final amended articles of incorporation of the converting association must be filed with the department within 180 days of the department's approval of the application. The department will, in its discretion, grant an extension of the filing period upon written request to the department by the chairperson with a satisfactory explanation of the need for an extension.
History
- Authority: AS 06.01.010; AS 06.15.010 AS 06.01.030; AS 06.15.300
- Eff. 8/22/79, Register 71
3 AAC 06.399 Definitions for secs. 310 - 399
In secs. 310 - 399 of this chapter
(1) "association" means a mutual savings and loan association;
(2) "chairperson" means the chairperson of the board of directors of a converting association; and
(3) "member" means a person holding an account in the converting association or to whom a loan has been made by that association.
History
- Authority: AS 06.01.010; AS 06.15.010 AS 06.01.030; AS 06.15.300
- Eff. 8/22/79, Register 71
Article 5 Prohibited Practices and Sanctions
3 AAC 06.410 Embezzlement by officers or employees
(a) When an embezzlement or mysterious disappearance of cash, securities, notes, or other assets is discovered in a bank, an immediate report must be made by officers of the bank, providing full disclosure of the circumstances under which it occurred, to
(1) the department;
(2) the FDIC and the Federal Bureau of Investigation;
(3) the nearest office of the Alaska State Troopers;
(4) the state district attorney serving the district in which the bank is located; and
(5) the bonding company.
(b) The officers of the bank shall notify the board of trustees at the next regular or special meeting of the embezzlement or mysterious disappearance of assets and the circumstances under which it occurred.
History
- Authority: AS 06.15.010
- Eff. 8/22/79, Register 71
3 AAC 06.420 Debt collection practices
The debt collection procedures and requirements as set forth at 3 AAC 01 apply to banks regulated under AS 06.15.
History
- Authority: AS 06.15.010
- Eff. 8/22/79, Register 71
Article 6 General Provisions
3 AAC 06.910 Definitions
In this chapter, unless otherwise specified
(1) "articles of incorporation" means rules of corporators adopted under AS 06.15.050;
(2) "bank" means a mutual savings bank;
(3) "department" means the Department of Commerce, Community, and Economic Development;
(4) "division" means the division of banking and securities in the department;
(5) "FDIC" means the Federal Deposit Insurance Corporation;
(6) "mobile facility" means a branch bank which moves from one location to another to provide banking services allowed under AS 06.15 and which is located in or services remote areas of the state not adequately served by permanently located branch banks;
(7) "FHLBB" means the Federal Home Loan Bank Board.
History
- Authority: AS 06.05.075; AS 06.15.010
- Eff. 8/22/79, Register 71; am 12/30/79, Register 72; am 12/7/2006, Register 180
Chapter 07 Premium Finance Companies
Article 1 License Applications
3 AAC 07.010 Requirements for licensure
(a) A person wishing to do business as a premium finance company is required to be licensed for this activity and must submit to the division, as conditions to licensure, the following:
(1) an application on the department's application form;
(2) a bond in the face amount of $5,000 on the department's bond form;
(3) a copy of the proposed premium finance agreement form to be used by applicant;
(4) a copy of the proposed schedule of rates to be used in calculating interest rates;
(5) a check or money order for $700, drawn to the order of the State of Alaska, which includes $500 as partial prepayment of investigation expenses and $200 for the annual license fee; and
(6) sworn answers to any interrogatories or materials required by the commissioner.
(b) In addition to the required submissions under (a) of this section, a licensee under this chapter shall submit to the department for approval a proposed revised premium finance agreement form, if the licensee intends to make a material change to a premium finance agreement form that was submitted under (a) of this section. As a part of the submission, the licensee shall include a description of the intended changes to the form. The department will approve the proposed revised form if it meets the requirements of AS 06.40 and this chapter. The licensee may not use the revised form for borrowers in this state before approval is given by the department.
History
- Authority: AS 06.40.010; AS 06.40.050; AS 06.40.080 AS 06.40.030; AS 06.40.060; AS 06.40.110 AS 06.40.040; AS 06.40.070
- Eff. 4/28/79, Register 70; am 4/16/2000, Register 154
3 AAC 07.020 Investigation of applicant
(a) The department will conduct an investigation of the applicant and will issue a premium finance company license if all requirements for licensure are met and the department has been reimbursed the full cost of its investigation of the applicant.
(b) If the department finds that the applicant has not met the requirements for licensure, the department will, within 30 days of receipt of the application and fees, notify the applicant that the application is denied and inform the applicant of the hearing procedures if the applicant desires to contest the denial. The 30-day period is stopped for the duration of delays caused by applicant in providing insufficient or inaccurate information or by submitting forms or schedules that do not comply with the law of Alaska. If the application is denied, the $200 annual license fee and the unexpended portion of the investigation fee will be returned to the applicant.
History
- Authority: AS 06.01.010; AS 06.40.070; AS 06.40.180
- Eff. 4/28/79, Register 70
3 AAC 07.030 License fee
The license fee submitted with the application is the annual fee for the calendar year in which the application is approved.
History
- Authority: AS 06.40.040; AS 06.40.180
- Eff. 4/28/79, Register 70
Article 2 Operations
3 AAC 07.110 Permanent file for department communications
Each licensee shall maintain a permanent file for all communications to and from the department.
History
- Authority: AS 06.40.180
- Eff. 4/28/79, Register 70
3 AAC 07.120 Maintenance of records
Each licensee shall establish in its place of business and maintain in a manner which will readily lend them to inspection, examination, and audit by the department all books, accounts, and records of loans made to Alaska borrowers.
History
- Authority: AS 06.40.100; AS 06.40.180
- Eff. 4/28/79, Register 70
3 AAC 07.130 Discontinuance of business
A licensee who discontinues the business of entering into premium finance agreements but continues to service outstanding accounts remains subject to the jurisdiction of the department until all outstanding accounts are transferred or closed.
History
- Authority: AS 06.40.010; AS 06.40.180
- Eff. 4/28/79, Register 70
3 AAC 07.140 Report to department upon discontinuance of business
(a) A sale or transfer of assets or outstanding accounts by a licensee constitutes discontinuance of business. At least 30 days before discontinuing business, the licensee shall notify the department of the proposed sale or transfer and the identity of the proposed purchaser. The proposed purchaser must be a licensee under this chapter by the date of sale or transfer.
(b) Within 30 days after the date of sale or transfer, the selling licensee shall file with the department all required documents and reports.
History
- Authority: AS 06.40.010; AS 06.40.180
- Eff. 4/28/79, Register 70
3 AAC 07.150 Examination of records
A licensee shall, upon request by the department, submit reports containing the information requested for examination of records. The reports must be received by the department within 30 days after the receipt of the request.
History
- Authority: AS 06.01.015; AS 06.40.100; AS 06.40.180
- Eff. 10/16/2003, Register 168
Article 3 Advertising
3 AAC 07.210 Advertising loan costs
(a) All advertising, including but not limited to, premium finance agreements and examples or tables of fixed periodic payment plans must include all charges to the borrower as well as interest and principal. A statement of the annual percentage rate must be clearly disclosed in a premium finance agreement.
(b) No advertisement may include reference to any average prepayment period or an average cost of a loan.
History
- Authority: AS 06.40.090; AS 06.40.180
- Eff. 4/28/79, Register 70
3 AAC 07.220 Misleading advertising prohibited
(a) All advertisements, whether printed or spoken, must be truthful and must not be misleading or deceptive. In determining whether an advertisement violates the provisions, intent, or spirit of AS 06.40, the department will consider the layout of written copy and the inference or impression that may reasonably be drawn from the written copy or oral advertisement when considered with all other facts.
(b) It is misleading to use terms such as "lowest cost," "lowest rates," "quickest service," "legal rates," "no red tape," "easy payments," "repayment in easy installments," "new reduced rates," or "a new type of service." No comparative statement may be used in any advertisements unless the statement is factually accurate with respect to the business of the licensee using the advertisement. Any advertisements referring specifically to a change in a particular licensee's plan of operation may reflect only changes of substantial importance to the business of licensee; these advertisements may be used only during the first 60 days after the effective date of the operational change.
(c) It is misleading for a licensee to use "blind" loan advertisements that refer a prospective borrower only to telephone numbers or newspaper box addresses. Every advertisement must clearly indicate the identity of the licensee.
(d) It is misleading for a licensee, by advertisement or otherwise, to use any phrase or expression which refers to its authority or supervision by the state or any department or officer of the state except "Licensed under the Alaska Premium Financing Act, AS 06.40, and regulations adopted under the Act." This phrase must be used only in conjunction with the business of making premium finance loans.
History
- Authority: AS 06.40.090; AS 06.40.180
- Eff. 4/28/79, Register 70
Article 4 Loans, Payments, and Refunds
3 AAC 07.310 Loan documents
The statement of the loan, acknowledgment by the borrower, and receipt for proceeds of the loan may be incorporated into one instrument.
History
- Authority: AS 06.40.100; AS 06.40.180
- Eff. 4/28/79, Register 70
3 AAC 07.320 Maximum interest permitted
(a) A premium finance company may not charge, contract for, receive, or collect a service charge other than as permitted in AS 06.40.
(b) Repealed 11/14/80.
(c) If the service charge is to be computed monthly, the licensee may only charge up to 1.25 percent interest on the unpaid principal balance. The unpaid principal balance must not include the unpaid interest balance or any other unpaid charges.
(d) The service charge must not exceed a simple interest equivalent annual rate of 15 percent plus an additional charge of no more than $10 per premium finance agreement.
(e) If an additional charge of a maximum of $10 per premium finance agreement is charged as set out in (d) of this section, the licensee shall clearly disclose the charge to the borrower in the premium finance agreement.
History
- Authority: AS 06.40.120; AS 06.40.180
- Eff. 4/28/79, Register 70; am 11/14/80, Register 76; am 4/16/2000, Register 154
3 AAC 07.330 Refund of unearned service charge on accounts terminated due to default
(a) If a premium finance agreement is terminated because of a borrower's default, the refund of the unearned service charge must be computed by the licensee from the date that the borrower's balance was paid in full.
(b) A refund credit of the unearned service charge made under this section must be computed by the licensee in accordance with the sum-of-the-digits method, commonly known as the Rule of 78's.
(c) The nonrefundable charge of a maximum of $10 per premium finance agreement may be excluded from the computation for a refund under this section since interest may not be charged for that fee.
History
- Authority: AS 06.40.120; AS 06.40.150; AS 06.40.180
- Eff. 4/28/79, Register 70; am 11/14/80, Register 76; am 4/16/2000, Register 154
3 AAC 07.335 Refund of unearned service charge on prepaid accounts
(a) A borrower may prepay the outstanding balance on a premium finance agreement in full at any time before the due date of the final installment. If a borrower does prepay the outstanding balance in full, the borrower is entitled to receive a refund credit of the unearned service charge on the account, computed from the date that the prepayment is received by the licensee.
(b) A refund credit of the unearned service charge made under this section must be computed by the licensee in accordance with the sum-of-the-digits method, commonly known as the Rule of 78's.
(c) The nonrefundable charge of a maximum of $10 per premium finance agreement may be excluded from the computation for a refund under this section, since interest may not be charged for that fee.
History
- Authority: AS 06.40.120; AS 06.40.180
- Eff. 4/16/2000, Register 154
3 AAC 07.340 Refunds to be computed on total service charges
Refunds must be computed by the licensee on the total amount of precomputed service charges.
History
- Authority: AS 06.40.120; AS 06.40.180
- Eff. 4/28/79, Register 70; am 4/16/2000, Register 154
3 AAC 07.350 Notice of default charges
Repealed.
History
- Eff. 4/28/79, Register 70; repealed 4/16/2000, Register 154
3 AAC 07.355 Notice of delinquency charges
(a) If a borrower is assessed delinquency charges, the licensee shall give the borrower written notice of the amount of the assessment within 10 days of the assessment.
(b) If a licensee assesses the allowable delinquency charges under AS 06.40.130, the licensee shall disclose the terms of the delinquency charges in the premium finance agreement.
History
- Authority: AS 06.40.130; AS 06.40.180
- Eff. 4/16/2000, Register 154
Article 5 General Provisions
3 AAC 07.910 Definitions
In this chapter
(1) "commissioner" means the commissioner of the Department of Commerce, Community, and Economic Development;
(2) "department" means the Department of Commerce, Community, and Economic Development;
(3) "division" means the division of banking and securities in the Department of Commerce, Community, and Economic Development;
(4) "loan" means a lending of money to an Alaskan borrower for the purpose of financing an insurance premium for that borrower.
History
- Authority: AS 06.40.180
- Eff. 4/28/79, Register 70; am 12/7/2006, Register 180
Chapter 08 Securities
Article 1 Registration, Notice, and Regulation of Broker-Dealers, Agents, State Investment Advisers, and Federal Covered Advisers, and Investment Adviser Representatives
3 AAC 08.005 Scope
(a) The applicable provisions of 3 AAC 08.005 - 3 AAC 08.070 set out the regulatory standards for registration, exemption to registration, renewal of registration, qualification and examination requirements, required fees, effective dates of registration, and related matters for the following occupations under AS 45.55:
(1) broker-dealer;
(2) agent;
(3) state investment adviser;
(4) investment adviser representatives.
(b) The applicable provisions of 3 AAC 08.010 - 3 AAC 08.018 also set out the regulatory standards for the administrator's acceptance of filing of notice and renewal of notice, required fees, required filings, effective date of notice, renewal of notice on federal covered investment advisers, and related matters.
History
- Authority: AS 45.55.040; AS 45.55.060 AS 45.55.050; AS 45.55.950
- Eff. 10/1/99, Register 151
3 AAC 08.007 Applicability of registration requirements to supervised persons of state investment advisers
For purposes of determining whether, by providing to clients who are natural persons the services described in AS 45.55.990(15)(A)(i), the supervised person of a state investment adviser is an investment adviser representative subject to the requirements of AS 45.55 and this chapter, "clients who are natural persons" as defined in AS 45.55.990(8) does not include natural persons who are "qualified clients" under 17 C.F.R. 275.205-3(d)(1).
History
- Authority: AS 45.55.030; AS 45.55.950; AS 45.55.990
- Eff. 4/19/2000, Register 154
3 AAC 08.010 Registration; notice; exemptions to registration; waivers for dual representation
(a) A broker-dealer, an agent, an investment adviser representative, or a state investment adviser may be registered or have the registration renewed under AS 45.55, if the administrator finds that the applicant
(1) is qualified;
(2) has sufficient training, knowledge and experience in the securities business;
(3) is of good repute; and
(4) has otherwise fully satisfied the requirements of AS 45.55 and this chapter.
(b) A federal covered adviser may file initial and renewal notices to provide advisory services under AS 45.55 by filing notice with the administrator and paying applicable fees set out in 3 AAC 08.015.
(c) A broker-dealer may not transact business as a state investment adviser in this state unless the broker-dealer's registration or renewal of registration specifies training, experience, and knowledge as a state investment adviser. A broker-dealer may not transact business in this state as a federal covered adviser unless the broker-dealer has provided notice to the administrator and paid applicable fees set out in 3 AAC 08.015.
(d) In addition to complying with AS 45.55 and this chapter, a foreign corporation doing business in this state as a broker-dealer, an agent, a federal covered adviser, or a state investment adviser must register under AS 10.06 before doing business in this state, unless exempted under AS 10.06.718.
(e) Unless the administrator grants a waiver under (f) of this section, an agent, including a partner, an officer, or a director who registers as an agent, may not be registered for more than one broker-dealer, one issuer, one state investment adviser, or one federal covered adviser, or for a combination of one state investment adviser and one federal covered adviser. However, an agent may register to be an agent for any combination of the occupations listed in this subsection, so long as the combination does not result in the agent being registered for
(1) two or more broker-dealers;
(2) two or more issuers;
(3) two or more state investment advisers;
(4) two or more federal covered advisers; or
(5) a combination of
(A) one or more state investment advisers; and
(B) one or more federal investment advisers.
(f) A request for a waiver from the dual representation restriction set out in (e) of this section may be submitted to the administrator. The administrator will, in the administrator's discretion, grant the request submitted under this subsection if
(1) the management and controlling persons are essentially identical of the following:
(A) broker-dealers;
(B) issuers;
(C) state investment advisers;
(D) federal covered advisers;
(2) a conflict of interest does not exist if the waiver is granted by the administrator;
(3) the administrator finds that the need for a waiver is fully justified;
(4) each issuer, broker-dealer, state investment adviser, or federal covered adviser for which an application has been made has acknowledged by written consent the dual registration and the need for the waiver; and
(5) if the application concerns other occupations not involving the securities business, dual representation already exists among those applicants.
History
- Authority: AS 45.55.040; AS 45.55.060 AS 45.55.050; AS 45.55.950
- Eff. 2/20/72, Register 41; am 10/1/99, Register 151
3 AAC 08.011 Initial applications and notices; effective dates of applications and notices
(a) This section sets out the regulatory requirements for submitting initial applications for broker-dealers, issuers, agents, state investment advisers, and investment adviser representatives. This section also sets out requirements for the administrator's acceptance of filing of initial notices by federal covered advisers. The section also establishes the effective dates of the initial applications and notices.
(b) An application for initial broker-dealer registration for broker-dealers that are not NASD members and are not required by federal law to become NASD members shall be made by submitting the following items to the administrator:
(1) a complete current, signed SEC Form BD, or its successor, with "AK" checked in item two of page two, and the appropriate schedules to the form;
(2) a copy of the most recent
(A) audited financial statements; and
(B) a SEC Form X-17A-5, or its successor, which is commonly known as the "focus report";
(3) documents showing that the applicant is registered with the SEC, if the applicant is not a member of the NASD and is not required by federal law to become an NASD member;
(4) applicable fees set out in 3 AAC 08.015.
(c) An application for initial registration for broker-dealers that are NASD members or are required by federal law to become NASD members must be made through the NASDR's Central Registration Depository (CRD), or any successor system. The broker-dealer shall comply with applicable NASD rules regarding filing requirements, dates, and payments of applicable fees set out in 3 AAC 08.015, and must check "AK" in item two of page two of SEC Form BD. The administrator will consider an application for registration filed on the date on which notice of intention to register in this state is received by the administrator from the NASD.
(d) Unless the application for initial broker-dealer registration is made effective earlier by the administrator, registration becomes effective at noon on the thirtieth day after an application is filed and the applicable fee set out in 3 AAC 08.015 is paid if
(1) a denial order is not in effect concerning the applicant;
(2) a proceeding is not pending under AS 45.55.060 concerning the applicant; and
(3) the administrator has not initiated an investigation of the application under AS 45.55.910.
(e) A broker-dealer whose registration is effective in this state may file an initial agent registration by submitting the following items:
(1) if the broker-dealer is not an NASD member and is not required by federal law to become an NASD member, the broker-dealer must file with the administrator
(A) a signed, complete NASDR Form U-4 for each agent with "AK" checked as location for registration;
(B) documents demonstrating that each agent has passed the NASDR Series 63 examination and any other applicable NASDR examination; and
(C) the applicable fee as set out in 3 AAC 08.015 for each agent;
(2) if the broker-dealer is an NASD member or is required by federal law to become an NASD member, the broker-dealer must
(A) make application through the CRD, or its successor;
(B) comply with applicable NASD rules regarding filing requirements, dates, and payments of applicable fees set out in 3 AAC 08.015;
(C) submit documents demonstrating that each agent has passed the NASDR Series 63 or Series 66 examination and any other applicable NASDR examination.
(f) The administrator will consider an application for registration under (e)(2) of the section as filed with the administrator on the day on which notice of intention to register in this state is received by the administrator from the NASD.
(g) Initial registration of an agent under AS 45.55 becomes effective as follows:
(1) if the broker-dealer is not an NASD member and is not required by federal law to become an NASD member,
(A) if the agent is not seeking dual registration and has indicated no affirmative response to any part of question 23 of NASDR Form U-4, or its successor, the application for registration becomes effective as of
(i) the effective date of the registration for broker-dealer if both applications are submitted together; or
(ii) the date that the items in (e)(1) of this section are received by the administrator;
(B) if the agent is not seeking dual registration and has indicated an affirmative response to any part of question 23 of NASDR Form U-4, or its successor, unless the application is made effective earlier by the administrator, the registration becomes effective at noon on the thirtieth day after the application and the items in (e)(1) are filed, if
(i) a denial order is not in effect concerning the application;
(ii) a proceeding is not pending concerning the applicant under AS 45.55.060; and
(iii) the administrator has not initiated an investigation of the application under AS 45.55.910;
(2) if the broker-dealer is an NASD member or is required by federal law to become an NASD member,
(A) the application for registration becomes effective as of the date that
(i) the items in (e)(2) of this section are filed with the CRD, or its successor if the agent has indicated no affirmative response to any part of question 23 of NASDR Form U-4, or its successor; and
(ii) is not seeking dual registration;
(B) unless the application is made effective on the CRD earlier by the administrator, the application for registration becomes effective at noon on the thirtieth day after the application and items in (e)(2) are filed with the CRD if the agent is not seeking dual registration and has indicated an affirmative response to any part of question 23 of NASDR Form U-4 and
(i) a denial order is not in effect concerning the applicant;
(ii) a proceeding is not pending concerning the applicant under AS 45.55.060; and
(iii) the administrator has not initiated an investigation under AS 45.55.910.
(h) An issuer may file initial application for registration of an agent with the administrator containing the following:
(1) a signed complete NASDR Form U-4, or its successor, for each agent;
(2) documents demonstrating that each agent has passed the NASDR Series 63 or Series 66 examination, unless waived by the administrator; and
(3) the applicable fees set out in 3 AAC 08.015 for each agent.
(i) Unless the administrator makes the issuer's initial application for registration of an agent effective earlier, the registration becomes effective at noon on the thirtieth day after the application and items listed in (h) are filed with the administrator if the agent is not seeking dual registration; and
(1) an affirmative response is not made to question 23 of NASDR Form U-4;
(2) a denial order is not in effect concerning the applicant;
(3) a proceeding is not pending concerning the applicant under AS 45.55.060; and
(4) the administrator has not initiated an investigation under AS 45.55.910.
(j) A person may file an initial application to register as a state investment adviser by submitting the following with the administrator:
(1) a complete, current, signed SEC Form ADV, or it successor;
(2) a surety bond on a State of Alaska Form 08-100 or its successor, if required by 3 AAC 08.025;
(3) a complete, current, and signed NASDR Form U-4, or its successor, for each investment adviser representative together with evidence that the investment adviser representative has satisfied the qualification requirements of 3 AAC 08.013;
(4) applicable fees for the applicant and each investment adviser representative as set out in 3 AAC 08.015.
(k) Unless the administrator makes the application effective earlier, the registration for initial state investment adviser registration is effective at noon on the thirtieth day after an application is filed if
(1) the applicable fee set out under 3 AAC 08.015 has been paid;
(2) a denial order is not in effect concerning the applicant;
(3) a proceeding is not pending under AS 45.55.060 concerning the applicant; and
(4) the administrator has not initiated an investigation of the application under AS 45.55.910.
(l) Unless the administrator has set an earlier date, initial registration of the investment adviser representative is effective as follows:
(1) if the investment adviser representative is not seeking dual registration and has indicated no affirmative response to any part of question 23 of NASDR Form U-4, or its successor, the application for registration becomes effective as of the date of effectiveness of the registration of the state investment adviser if both applications are submitted together, or as of the date that the administrator receives all required items in this section and applicable fees if the state investment adviser is already registered under AS 45.55;
(2) if the investment adviser representative is not seeking dual registration and has indicated an affirmative response to any part of question 23 of NASDR Form U-4, or its successor, the registration is effective at noon of the thirtieth day after the application and items in (j)(3) and (j)(4) of this section are filed with the administrator if the registration as a state investment adviser is already effective; and
(A) a denial order is not in effect;
(B) a proceeding is not pending under AS 45.55.060; and
(C) the administrator has not initiated an investigation of the application under AS 45.55.910.
(m) A federal covered adviser may file an initial notice to provide advisory services in this state by submitting an optional cover letter stating the notice of intent to provide advisory services as a federal covered adviser and filing the following with the administrator:
(1) a complete, current, signed SEC Form ADV, or its successor, as filed with the SEC, and a copy of the most current SEC Schedule I, or its successor;
(2) a complete, current, and signed NASDR Form U-4, or any similar document as filed with the SEC, for each investment adviser representative having a place of business in this state and evidence that the investment adviser representative has satisfied the qualification requirements of 3 AAC 08.013; and
(3) applicable fees for the federal covered adviser filing notice, and for each investment adviser representative as set out in 3 AAC 08.015.
(n) The initial notice given by federal covered adviser is effective as of the date of receipt of the notice by the administrator, or the date of filing with the SEC, whichever is later. The initial registration for investment adviser representatives of the federal covered adviser is effective in a manner essentially the same as for investment adviser representatives of state investment advisers described in ( l) of this section.
(o) The administrator will, in the administrator's discretion, request the applicant to submit additional exhibits or information not specifically required but essential to a full presentation of all material facts relating to an applicant's qualifications. The applicant shall furnish to the administrator and properly identify as the additional exhibits or information requested by the administrator. The applicant may also furnish any other exhibits or information desired relating to the applicant's qualifications.
(p) The administrator may determine an application abandoned if the applicant
(1) has not passed each required qualifying examination, if any, within 180 days after application;
(2) has failed to receive registration approval within 90 days after the application from the state of primary jurisdiction;
(3) has failed to respond within 60 days after receipt of the administrator's request for information under (o) of this section; or
(4) has failed to respond within 30 days after receipt of an administrator's request under AS 45.55.910.
History
- Authority: AS 45.55.040; AS 45.55.060 AS 45.55.050; AS 45.55.950
- Eff. 2/20/72, Register 41; am 10/1/99, Register 151; am 4/19/2000, Register 154; am 1/17/2016, Register 217
3 AAC 08.012 Exemptions from qualifying examination
The administrator will, in the administrator's discretion, exempt an applicant or a class of applicants from passing a qualifying examination required by AS 45.55 or this chapter, if granting the exemption is consistent with the purposes intended by policy and AS 45.55.
History
- Authority: AS 45.55.040; AS 45.55.060 AS 45.55.050; AS 45.55.950
- Eff. 10/1/99, Register 151
3 AAC 08.013 Qualification requirements for registration of investment adviser representatives
(a) Except as provided in (b) of this section, a person applying for registration as an investment adviser representative shall provide the administrator with proof that the applicant has successfully passed
(1) for an application filed on or before December 31, 1999,
(A) the NASDR Series 63 and Series 65 examinations; or
(B) the NASDR Series 66 examination;
(2) for an application filed after December 31, 1999, the new modified versions, developed by the North American Securities Administrators Association of the following:
(A) the NASDR Series 65 examination (Uniform Investment Adviser Law Examination); or
(B) the NASDR Series 7 examination (General Securities Representative Examination) and the NASDR Series 66 examination (Uniform Combined State Law Examination).
(b) The administrator will waive the examination requirements of (a) of this section if, at the time that the application is filed with the administrator, the applicant
(1) has earned and currently holds in good standing the professional designation of
(A) chartered financial analyst (CFA) of the Institute of Chartered Financial Analysts of the Association for Investment Management and Research;
(B) chartered financial consultant (ChFC) of the American College of Bryn Mawr;
(C) certified financial planner (CFP) of the Certified Financial Planner Board of Standards;
(D) chartered investment counselor (CIC) of the Investment Counsel Association of America;
(E) certified investment management analyst (CIMA) of the Investment Management Consultants Association;
(F) personal financial specialist (PFS) of the American Institute of Certified Public Accountants;
(G) another professional organization accepted by the administrator upon the written request of the state investment adviser or federal covered adviser employing the applicant; or
(H) another professional organization accepted by the administrator that was adopted by a membership vote of NASAA;
(2) is filing for renewal of a current registration of an investment adviser representative issued by this state, unless the current registration was issued based on the waiver under this subsection and the applicant desires to register without being limited to the solicitation of business;
(3) is employed by the state investment adviser or federal covered adviser only to solicit business, if the applicant does not provide any other services as an investment adviser representative other than to solicit business.
(c) A person who is registered as a state investment adviser or an investment adviser representative or is noticed as a federal covered adviser in any jurisdiction in the United States on December 31, 1999 is not required to satisfy the examination requirements of (a) of this section for continued registration, except that the administrator may require additional examinations for any person found to have violated any state or federal securities law. If the person's current registration was issued based on the waiver granted by (b)(3) of this section or a similar waiver in this or any other jurisdiction and the person intends to offer services of an investment adviser representative in addition to soliciting business, the person must meet the examination requirements of (a) of this section before offering those services.
(d) Notwithstanding (c) of this section, on or after January 1, 2000, a person applying for registration as an investment adviser representative, who has not been registered as a state investment adviser or investment adviser representative or has not been noticed as a federal covered adviser in any jurisdiction in the United States for a period of 24 consecutive months immediately before applying for a license in this state, is required to satisfy the examination requirements of (a)(2) of this section notwithstanding having previously passed the examination requirements of (a)(1) or (2) of this section unless the applicant
(1) files a written request for waiver of the examination requirement and the administrator grants the request in writing; or
(2) is exempt from the examination requirement through a waiver granted under (b) of this section.
(e) In this section, "solicit business" means to offer or negotiate for the sale of investment advisory services of the state investment adviser or federal covered adviser.
History
- Authority: AS 45.55.040; AS 45.55.060; AS 45.55.990 AS 45.55.050; AS 45.55.950
- Eff. 10/1/99, Register 151; am 4/19/2000, Register 154
3 AAC 08.014 Renewal of registration or notice; effective date of renewal or notice
(a) The administrator will, in the administrator's discretion, renew a registration of a broker-dealer, agent of a broker-dealer, or agent of an issuer as follows:
(1) an issuer or a broker-dealer that is also not registered with NASD or required by federal law to be registered with NASD may renew the registration of its agents by filing with the administrator a signed, complete NASDR Form U-4, or its successor, with "AK" checked, together with the applicable fee set out in 3 AAC 08.015;
(2) a broker-dealer that is also not registered with NASD or required to be registered with NASD may renew its registration by filing with the administrator a signed copy of the SEC Form BD together with the applicable fee set out in 3 AAC 08.015;
(3) a broker-dealer who is also registered with NASD shall renew its registration under this chapter and that of its agents through the CRD, or any successor system, and shall comply with applicable NASD rules regarding filing requirements, dates, and payments of applicable fees set out in 3 AAC 08.015; and
(4) the administrator will consider an application for renewal of registration as filed with the administrator on the day on which notice of intention to renew is received by the administrator from the NASD; the effective date of renewal of registrations filed through the CRD system is January 1, unless otherwise ordered by the administrator.
(b) A state investment adviser may renew its registration by submitting no later than December 1 of each year the following with the administrator:
(1) a complete, current, signed SEC Form ADV, or its successor;
(2) a surety bond on State of Alaska Form 08-100, or its successor, if required by 3 AAC 08.025;
(3) a list of the names and CRD numbers, if applicable, of currently registered investment adviser representatives previously approved by the administrator, with signed NASDR Form U-4, or its successor, showing any changes from an earlier submission;
(4) a complete, current, and signed NASDR Form U-4, or its successor, for each new applicant for investment adviser representative and evidence that the applicant for investment adviser representative has satisfied the qualification requirements of 3 AAC 08.013; and
(5) applicable fees for the state investment adviser applicant and each investment adviser representative as set out in 3 AAC 08.015.
(c) The effective date of renewal of registrations for state investment advisers and for their investment adviser representatives is January 1, unless otherwise ordered by the administrator.
(d) A federal covered adviser may renew its notice filing by providing no later than December 1 of each year an optional cover letter stating the renewal of notice of intent to provide advisory services as a federally covered adviser and by submitting the following with the administrator
(1) a signed page 1 of SEC Form ADV, and a copy of the most recent Schedule I, or its successor, for the federal covered adviser;
(2) a list of the names and CRD numbers, if applicable, of currently registered investment adviser representatives previously approved by this state, with signed NASDR Form U-4, or any similar document as filed with SEC, showing any changes from the information submitted previously to the administrator;
(3) a complete, current, and signed NASDR Form U-4, or any similar document as filed with the SEC, for each new investment adviser representative having a place of business in this state together with evidence that the investment adviser representative has satisfied the qualification requirements of 3 AAC 08.013; and
(4) applicable fees for the federal covered adviser to file renewal of notice and for each investment adviser representative as set out in 3 AAC 08.015.
(e) The effective date of renewal of a federal covered adviser notice and a renewal of registration for their investment adviser representatives is January 1, unless otherwise ordered by the administrator.
(f) If a registration for a broker-dealer, agent, state investment adviser, or investment adviser representative or a notice filing by a federal covered adviser is expired for one year or more, a holder of the expired registration or notice who wishes to reactivate it
(1) may not use the renewal procedures in this section; and
(2) must submit an initial application for registration or an initial notice as required by 3 AAC 08.011.
History
- Authority: AS 45.55.040; AS 45.55.060 AS 45.55.050; AS 45.55.950
- Eff. 10/1/99, Register 151; am 4/19/2000, Register 154
3 AAC 08.015 Fees and assessments
(a) The following fees are established for registration of broker-dealers, agents, and investment adviser representatives, and state investment advisers, and for filing of notices of federal covered advisers:
(1) application fee for an initial or annual renewal registration or notice, for
(A) a broker-dealer, $250;
(B) an agent of a broker-dealer or issuer, $75;
(C) an investment adviser representative, $75;
(D) a state investment adviser, $250;
(E) a federal covered adviser, $250;
(F) a broker-dealer branch office, $75;
(2) application fee for registration or notice of a successor, for a
(A) registered broker-dealer, $125;
(B) registered state investment adviser, $125;
(C) noticed federal covered adviser, $125;
(3) application fee for a broker-dealer or issuer to transfer the unexpired portion of registration of an agent, $75;
(4) application fee for a successor state investment adviser or successor federal covered adviser to transfer the unexpired portion of registration of an investment adviser, $75.
(b) For an initial or annual examination, or for an investigation conducted under AS 45.55.910, the administrator will assess to the issuer, broker-dealer, agent, investment advisor representative, federal covered adviser, or state investment adviser who is the subject of the examination or investigation, a fee of $150 plus the proportionate part of the actual travel expenses and per diem incurred by each examiner while away from the examiner's duty station. The assessment shall be made as soon as possible after the examination or investigation has been completed, and payment of the assessment must be received by the department within 30 days after the assessment is mailed to the subject of the examination or investigation.
(c) Fees paid or assessed under this section are nonrefundable. The fees must be paid by check, money order, or another payment form approved by the administrator and made payable to the State of Alaska.
History
- Authority: AS 45.55.040; AS 45.55.915 AS 45.55.910; AS 45.55.950
- Eff. 9/8/91, Register 119; am 10/1/99, Register 151; am 1/17/2016, Register 217
3 AAC 08.016 Transferred or successor registration or notice
(a) A broker-dealer or an issuer may apply to the administrator to transfer its agent's registration in order to transfer the business of the agent to other registered broker-dealers or issuers. The agent may not conduct the business of an agent after transfer until the transferred registration is effective under this chapter.
(b) A broker-dealer or issuer who is also not registered with NASD or required by federal law to be registered with NASD shall transfer an agent's affiliation from another broker-dealer or issuer by filing with the administer a signed, complete NASDR Form U-4, or its successor, with "AK" checked, together with the applicable fee as provided in 3 AAC 08.015.
(c) A broker-dealer that is a member of NASD or is required by federal law to be a NASD member shall transfer an agent's affiliation from another NASD broker-dealer by filing the appropriate application with the CRD, or any successor system, and shall comply with applicable NASD rules regarding filing requirements, dates, and payments of applicable fees set out in 3 AAC 08.015. An application filed under this subsection is processed as an initial applications in accordance with 3 AAC 08.010 and 3 AAC 08.011.
(d) A registered broker-dealer may register a successor by filing with the administrator the following:
(1) a current, complete, and signed copy of SEC Form BD, or its successor, with "AK" checked;
(2) a list of registered agents associated or to be associated with the successor broker-dealer;
(3) the applicable fee under 3 AAC 08.015 for each agent for applying for transfer of registration;
(4) if the successor is a broker-dealer who is also registered with NASD, the application for transfer of agents must be filed and processed through the CRD system, or any successor system.
(e) If a broker-dealer succeeds to and continues the business of another broker-dealer, the registration of the predecessor broker-dealer is effective as the registration of the successor broker-dealer for 60 days after that succession or until the last day of the calendar year, whichever is sooner, but only if the successor broker-dealer has filed the SEC Form BD, or its successor, with the administrator within 30 days after the succession or before the last day of the calendar year, whichever occurs earlier.
(f) If a broker-dealer partnership that is not registered with the administrator succeeds to and continues the business of a predecessor partnership that was registered as a broker-dealer and files an SEC Form BD, or its successor, with the administrator to reflect changes in the partnership the administrator will treat a SEC Form BD, or its successor, as an application for registration under this chapter. The administrator will take this action even though the form filed may be designated as an amendment to an existing registration of the predecessor partnership under this chapter.
(g) A registered state investment adviser or federal covered adviser that filed notice under this chapter may register or notice a successor by filing the following:
(1) a current, complete, and signed copy of SEC Form ADV, or its successor, and, in the case of a federal covered adviser, a copy of the most current SEC Schedule I, or its successor;
(2) a list of the names and CRD numbers, if applicable, of currently registered investment adviser representatives previously approved by this state associated or to be associated with the successor;
(3) for an initial application for investment adviser representative, a complete, current, and signed NASDR Form U-4, or its successor, together with evidence the investment adviser representative has satisfied the qualification requirements of 3 AAC 08.013; and
(4) applicable fees for each initial application for registration as an investment adviser representative and for the transfer registration or notice fee as provided in 3 AAC 08.015.
(h) If a state investment adviser registered under this chapter or a federal covered adviser that filed notice under this chapter succeeds to and continues the business of another state investment adviser registered under this chapter or a federal covered adviser that filed notice under this chapter, the registration or notice of the predecessor is effective as the registration or notice of the successor for the unexpired portion of the predecessor's registration or notice. If, after the succession, the resulting entity is a federal covered adviser, the notice of succession remains valid as the filing of notice required of a federal covered adviser, whether the predecessor had been registered under AS 45.55 as a state investment adviser or noticed as a federal covered adviser.
(i) The administrator will treat a SEC Form ADV as an application for registration or notice even though the form was designated as an amendment if
(1) the form was filed by the state investment adviser partnership or federal covered adviser partnership that is not registered or noticed when the form was filed;
(2) the partnership described in (1) of this subsection succeeds to and continues the predecessor partnership registered as a state investment adviser or noticed as a federal covered adviser; and
(3) the form was filed to reflect the changes in partnership and to furnish required information concerning any new partners.
History
- Authority: AS 45.55.040; AS 45.55.060 AS 45.55.050; AS 45.55.950
- Eff. 10/1/99, Register 151
3 AAC 08.017 Central registration depository system
(a) Notwithstanding any contrary provision of 3 AAC 08.005 - 3 AAC 08.070, if the administrator approves a central registration depository system for filing notices or applications for registrations under this chapter, a person shall file a notice or an application under this chapter with the system. The person must meet other requirements of the system, including the payment of applicable fees set out in 3 AAC 08.015. If a notice or an application is filed with the system in accordance with this chapter, the administrator will consider the application as filed when the administrator receives notice from the system of the person's filing of a notice or an application demonstrating the person's intent to give notice or register.
(b) The administrator will, in the administrator's discretion, waive any procedural requirements specified in this chapter if the administrator determines that the waiver is
(1) necessary to facilitate the operations of the central registration depository system;
(2) consistent with AS 45.55 and its purposes; and
(3) in the public interest.
History
- Authority: AS 45.55.040; AS 45.55.050; AS 45.55.950
- Eff. 10/1/99, Register 151
3 AAC 08.018 Amendments to filings
(a) A person registered under this chapter shall promptly file with the administrator amendments to the person's filings to ensure that information remains current and correct in the files of the administrator. The amendments required to be filed with the administrator under this section include amendments to SEC Form BD, SEC Form ADV, or NASDR Form U-4.
(b) A federal covered adviser shall file with the administrator a copy of any amendment to SEC Form ADV at the same time that the person files an amendment with the SEC.
(c) If a material change as set out in 3 AAC 08.050(a)-(b) occurs, a person registered under this chapter or a federal covered adviser shall file with the administrator an amendment as required in 3 AAC 08.050(b).
History
- Authority: AS 45.55.040; AS 45.55.050; AS 45.55.950
- Eff. 10/1/99, Register 151; am 4/19/2000, Register 154
3 AAC 08.020 Financial reports of broker-dealers
Repealed.
History
- Eff. 2/20/72, Register 41; am 3/24/76, Register 57; am 4/4/76, Register 58; repealed 4/19/2000, Register 154
3 AAC 08.021 Financial reports, minimum capital requirements, bonds, and record keeping requirements of broker-dealers
(a) A broker-dealer registered or required to be registered under AS 45.55 shall comply with the net capital requirements for brokers and dealers set out in 17 C.F.R. 240.15c3-1, the rules on use of customer free-credit balances set out in 17 C.F.R. 240.15c3-2, and the customer-protection reserves and custody of securities requirements set out in 17 C.F.R. 240.15c3-3.
(b) A broker-dealer registered or required to be registered under AS 45.55 shall comply with 17 C.F.R. 240.17a-11, and shall file with the administrator upon request copies of all reports and notices required under 17 C.F.R. 240.17a-5, 17 C.F.R. 240.17a-10, and 17 C.F.R. 240.17a-11. The administrator will, in the administrator's discretion, by order restrict or condition the broker-dealer's right to transact business in this state as the administrator finds appropriate for the protection of investors.
(c) If the SEC amends a federal regulation with which a broker-dealer must comply under (a) or (b) of this section, a broker-dealer in compliance with that federal regulation as amended is not subject to an enforcement action by the administrator for violation of this section, if the violation results solely from the broker-dealer's compliance with that federal regulation as amended.
(d) A broker-dealer registered or required to be registered under AS 45.55 whose business is exclusively within this state, who does not make use of a facility of a national securities exchange, and who is not registered under 15 U.S.C. 78o (sec. 15 of the Securities Exchange Act of 1934), shall post a surety bond on the form prescribed by the administrator in an amount not less than $35,000. A deposit of cash or liquid securities acceptable to the administrator may be posted with the administrator in place of the bond.
History
- Authority: AS 45.55.040; AS 45.55.060 AS 45.55.050; AS 45.55.950
- Eff. 4/19/2000, Register 154
3 AAC 08.023 Net capital requirements for broker-dealers
Repealed.
History
- Eff. 3/24/76, Register 57; repealed 4/19/2000, Register 154
3 AAC 08.025 Bonding requirements for certain state investment advisers
(a) A state investment adviser registered or required to be registered under AS 45.55 that has custody of client funds or securities shall be bonded in the amount of $35,000.
(b) A state investment adviser registered or required to be registered under AS 45.55 that has discretionary authority over, but does not have custody of, client funds or securities shall be bonded in the amount of $10,000.
(c) A state investment adviser that has its principal place of business in a state other than this state is exempt from the requirements of this section, if the state investment adviser is registered as an investment adviser in the state where it has its principal place of business and is in compliance with that state's bonding requirements.
(d) The administrator will only accept a bond as meeting the requirements of this section if the bond is
(1) issued by a company qualified to do business in this state;
(2) issued on State of Alaska Form 08-100, or other form acceptable to the administrator; and
(3) subject to the claims of all clients of the state investment adviser regardless of the client's state of residence.
(e) The administrator will, in the administrator's discretion, waive all or part of the requirements of this section if
(1) the state investment advisor submits a written application showing good cause for the waiver; and
(2) the administrator determines that the waiver is consistent with AS 45.55 and its purposes and is in the public interest.
(f) Repealed 4/19/2000.
History
- Authority: AS 45.55.040; AS 45.55.060 AS 45.55.050; AS 45.55.950
- Eff. 3/24/76, Register 57; am 10/1/99, Register 151; am 4/19/2000, Register 154
3 AAC 08.027 Minimum financial requirements for state investment advisers
(a) A state investment adviser registered or required to be registered under AS 45.55 that is not required to be bonded under 3 AAC 08.025 shall maintain a positive net worth at all times.
(b) A state investment adviser registered or required to be registered under AS 45.55 that does not otherwise have custody of or discretionary authority over client funds or securities requiring a bond under 3 AAC 08.025, but that accepts prepayment of more than $500 per client and six or more months in advance, shall maintain a positive net worth at all times.
(c) As a condition of the right to continue to transact business in this state, if the net worth of a state investment adviser registered or required to be registered under AS 45.55 that is not bonded under 3 AAC 08.025 becomes negative, the state investment adviser shall notify the administrator of that fact by the close of business on the next business day, unless the state investment adviser receives a waiver from the administrator. A state investment adviser registered or required to be registered under AS 45.55 that is required to be bonded under 3 AAC 08.025 shall notify the administrator by the close of business on the next business day if the state investment adviser's net worth is less than the amount of the bond required under 3 AAC 08.025. After transmitting a notice required by this subsection, the state investment adviser shall file with the administrator by the close of business on the next business day a report of the state investment adviser's financial condition, including the following:
(1) a trial balance of all ledger accounts;
(2) a statement of all client funds or securities which are not segregated;
(3) a computation of the aggregate amount of client ledger debit balances; and
(4) a statement as to the number of client accounts.
(d) For purposes of this section, "net worth" means an excess of assets over liabilities, as determined by generally accepted accounting principles; for purposes of this subsection, assets do not include
(1) prepaid expenses, other than items properly classified as current assets under generally accepted accounting principles;
(2) deferred charges;
(3) goodwill;
(4) franchise rights;
(5) organizational expenses;
(6) patents;
(7) copyrights;
(8) marketing rights;
(9) unamortized debt;
(10) discount and expense;
(11) assets of an intangible nature;
(12) a personal residence;
(13) home furnishings;
(14) automobiles;
(15) an individual's personal belongings, if not readily marketable;
(16) a corporation's advances or loans to shareholders and officers; and
(17) a partnership's advances or loans to partners.
(e) The administrator will, in the administrator's discretion, require that a current appraisal be submitted in order to establish the worth of an asset.
(f) A state investment adviser that has its principal place of business is in a state other than this state is exempt from the requirements of this section, if the state investment adviser is registered as an investment adviser in the state in which it has its principal place of business and is in compliance with that state's minimum capital requirements.
History
- Authority: AS 45.55.040; AS 45.55.060 AS 45.55.050; AS 45.55.950
- Eff. 3/24/76, Register 57; am 4/19/2000, Register 154
3 AAC 08.029 Custody of client funds or securities by state investment advisers
(a) A state investment adviser may not take custody of client funds or securities unless
(1) the state investment adviser notifies the administrator in writing that the state investment adviser has or may have custody; notification may be given on SEC Form ADV;
(2) the securities of each client are segregated, marked to identify the particular client having the beneficial interest in the security, and held in safekeeping in a place reasonably free from risk of destruction or other loss;
(3) all client funds are deposited in one or more bank accounts that contain only client funds, and
(A) each account is maintained in the name of the state investment adviser as agent or trustee for the clients; and
(B) the state investment adviser maintains a separate record for each account that shows the name and address of the bank where the account is maintained, the dates and amounts of deposits to and withdrawals from the account, and the exact amount of each client's beneficial interest in the account;
(4) the state investment adviser, immediately after accepting custody of funds or securities from a client, notifies the client in writing of the place and the manner in which the funds and securities will be maintained, and thereafter immediately notifies the client in writing of any changes in the place or the manner in which the funds or securities are maintained;
(5) the state investment adviser, at the end of every three months, sends each client an itemized statement showing the funds and securities in the state investment adviser's custody and each debit, credit, and transaction in the client's account during the period; and
(6) at least once every calendar year,
(A) an independent certified public accountant or public accountant
(i) verifies all client funds and securities by actual examination at a time chosen by the accountant without prior notice to the state investment adviser; and
(ii) issues a report stating that the accountant has made an examination of all client funds and securities and describing the nature and extent of the examination; and
(B) the report prepared under (A)(ii) of this paragraph is filed with the administrator promptly after each examination.
(b) This section does not apply to a state investment adviser also registered as a broker-dealer under 15 U.S.C. 78o (sec. 15 of the Securities Exchange Act of 1934) if the broker-dealer is
(1) subject to and in compliance with 17 C.F.R. 240.15c3-1 (Net Capital Requirements for Brokers or Dealers); or
(2) a member of an exchange whose members are exempt from 17 C.F.R. 240.15c3-1, as provided in 17 C.F.R. 240.15c3-1(b), and the broker-dealer is in compliance with all rules and settled practices of the exchange imposing requirements with respect to financial responsibility and the segregation of funds or securities carried for the account of customers.
History
- Authority: AS 45.55.020; AS 45.55.050; AS 45.55.950 AS 45.55.040; AS 45.55.060
- Eff. 3/24/76, Register 57; am 4/19/2000, Register 154
3 AAC 08.030 Books and records of broker-dealers
(a) Unless otherwise provided by order of the SEC, a broker-dealer registered or required to be registered under AS 45.55 shall make the following books and records and keep them true, accurate, and current:
(1) copies of confirmations of transactions required by 17 C.F.R. 240.10b-10;
(2) all records required to be maintained by 17 C.F.R. 240.17a-3 and 17 C.F.R. 240.17a-4;
(3) all records required to be maintained by any self-regulatory organization or exchange of which the broker-dealer is a member; and
(4) all records required to be maintained by 17 C.F.R. 240.15c2-11.
(b) If the SEC amends a federal regulation with which a broker-dealer must comply under (a) of this section, a broker-dealer in compliance with that federal regulation as amended is not subject to an enforcement action by the administrator for violation of this section, if the violation results solely from the dealer's compliance with that federal regulation as amended.
History
- Authority: AS 45.55.050; AS 45.55.060; AS 45.55.950
- Eff. 2/20/72, Register 41; am 4/19/2000, Register 154
3 AAC 08.031 Confirmations
Repealed.
History
- Eff. 3/24/76, Register 57; repealed 4/19/2000, Register 154
3 AAC 08.040 Books and records of state investment advisers
(a) A state investment adviser registered or required to be registered under AS 45.55 shall make the following books and records and keep them true, accurate, and current:
(1) journals, including cash receipts and disbursements records, and any other records of original entry forming the basis of entries in any ledger;
(2) general and auxiliary ledgers, or other comparable records, reflecting asset, liability, reserve, capital, income, and expense accounts;
(3) a memorandum of each order given by the state investment adviser for the purchase or sale of a security, of any instruction received by the state investment adviser from the client concerning the purchase, sale, receipt, or delivery of a particular security, and of any modification or cancellation of an order or instruction; the memorandum must
(A) show the terms and conditions of the order, instruction, modification, or cancellation;
(B) identify the person connected with the investment adviser who recommended the transaction to the client and the person who placed the order;
(C) show the account for which the order was entered, the date of entry, and the bank, broker, or dealer by or through whom the order was executed, if applicable; and
(D) designate that the order was entered under the exercise of discretionary power, if discretionary power was exercised;
(4) all check books, bank statements, cancelled checks, and cash reconciliations of the state investment adviser;
(5) all bills or statements, or copies of them, paid or unpaid, relating to the state investment adviser's business as an investment adviser;
(6) all trial balances, financial statements, and internal audit working papers relating to the state investment adviser's business as an investment adviser;
(7) the original of each written communication received and a copy of each written communication sent by the state investment adviser,
(A) and relating to
(i) a recommendation made or proposed to be made or advice given or proposed to be given;
(ii) the receipt, disbursement, or delivery of funds or securities; or
(iii) the placing or execution of any order to purchase or sell any security; and
(B) except that
(i) the state investment adviser is not required to keep unsolicited market letters or other similar communications of general public distribution not prepared by or for the state investment adviser; and
(ii) if the state investment adviser sends a notice, circular, or other advertisement offering a report, analysis, publication, or other advisory service to more than 10 persons, the state investment adviser is not required to keep a record of the names and addresses of the persons to whom the notice, circular, or advertisement was sent; however, if the notice, circular, or advertisement is distributed to persons named on a list, the state investment adviser shall retain with the copy of the notice, circular, or advertisement a memorandum describing the list and all its source;
(8) a list or other record of each client account, identifying those accounts in which the state investment adviser is vested with discretionary power with respect to the funds, securities, or transactions of a client;
(9) a copy of a power of attorney and other evidence of the granting of any discretionary authority by a client to the state investment adviser;
(10) a copy in writing of each agreement entered into by the state investment adviser with a client, and any other written agreements otherwise relating to the business of the state investment adviser as an investment adviser;
(11) a copy of each notice, circular, advertisement, newspaper article, investment letter, bulletin, or other communication, including a communication by electronic media, that the state investment adviser circulates or distributes, directly or indirectly, to two or more persons, other than persons connected with the state investment adviser; if a communication listed in this paragraph recommends the purchase or sale of a specific security and does not state the reasons for the recommendation, the state investment adviser shall include a memorandum indicating the reasons for the recommendation;
(12) a record of each transaction in a security in which the state investment advisor or any advisory representative has, or by reason of any transaction acquires, direct or indirect beneficial ownership; the record must state the title and amount of the security involved, the date of the transaction, whether the transaction was a purchase, sale, or other acquisition or disposition, the price at which the transaction was effected, and the name of the broker, dealer, or bank with or through whom the transaction was effected; the record may also contain a statement declaring that the reporting or recording of any transaction may not be construed as an admission that the state investment adviser or advisory representative has a direct or indirect beneficial ownership in the security; a transaction must be recorded not later than 10 days after the end of the calendar quarter in which the transaction was effected; however, a state investment adviser
(A) need not make or keep a record of a transaction
(i) effected in any account over which the state investment advisor or an advisory representative lacks direct or indirect influence or control; or
(ii) in securities that are direct obligations of the United States; and
(B) does not violate this paragraph because of the failure to record a securities transaction of an advisory representative if the state investment adviser establishes that adequate procedures were instituted and reasonable diligence was used to obtain reports of each transaction required to be recorded;
(13) a copy of each written disclosure statement and each amendment or revision to that statement given or sent to a client or prospective client of the state investment adviser in accordance with the provisions of 17 C.F.R. 275.204-3 and a record of the dates that each written disclosure statement, and each amendment or revision, was given, or offered to be given, to any client or prospective client who subsequently becomes a client;
(14) for each client that the state investment adviser obtained by means of a solicitor to whom a cash fee was paid by the state investment adviser
(A) evidence of a written agreement to which the state investment adviser is a party related to the payment of the fee; a written agreement that satisfies the requirements of 17 C.F.R. 275.206(4)-3(a) also satisfies the requirements of this subparagraph;
(B) a signed and dated acknowledgment of receipt from the client evidencing the client's receipt of the
(i) state investment adviser's written disclosure statement given or sent in accordance with 17 C.F.R. 275.204-3; and
(ii) solicitor's written disclosure statement given or sent in accordance with 17 C.F.R. 275.206(4)-3; and
(C) a copy of the solicitor's written disclosure statement given or sent in accordance with 17 C.F.R. 275.206(4)-3;
(15) all accounts, books, internal working papers, and other records or documents that are necessary to form the basis for or demonstrate the calculation of the performance or rate of return of all managed accounts or securities recommendations in any notice, circular, advertisement, newspaper article, investment letter, bulletin, or other communication, including a communication by electronic media, that the state investment adviser circulates or distributes, directly or indirectly, to two or more persons, other than persons connected with the state investment adviser; however, with respect to the performance of a managed account, the retention of the following items satisfies the requirements of this paragraph:
(A) each account statement, if it reflects all debits, credits, and other transactions in a client's account for the period of the statement; and
(B) each worksheet necessary to demonstrate the calculation of the performance or rate of return of the managed accounts;
(16) a copy of all communications received or sent regarding any litigation related to a written customer or client complaint involving the state investment adviser, an investment adviser representative, or an employee of the state investment adviser or investment adviser representative;
(17) written information about each advisory client that is the basis for making a recommendation or providing investment advice to that client;
(18) written procedures for the supervision of the activities of employees and investment adviser representatives that are reasonably designed to achieve compliance with applicable securities laws and regulations;
(19) a copy of each document, other than a notice of general dissemination, that was filed with or received from a state or federal agency or self-regulatory organization and that pertains to the state investment adviser or to an advisory representative within the meaning set out in (l)(1)(A) of this section; documents to be kept under this paragraph include applications, amendments, renewal filings, and correspondence.
(b) If a state investment adviser has custody of client funds or securities, the state investment adviser shall, in addition to the books and records required under (a) of this section, make the following books and records and keep them true, accurate, and current:
(1) a journal or other record showing all purchases, sales, receipts, and deliveries of securities for all accounts and all other debits and credits to the accounts;
(2) a separate ledger account for each client showing all purchases, sales, receipts, and deliveries of securities, the date and price of each purchase and sale, and all debits and credits;
(3) copies of confirmations of all transactions effected by or for the account of each client; and
(4) a record for each security in which a client has a position showing the name of each client having an interest in the security, the amount invested or interest of each client in the security, and the location of the security.
(c) A state investment adviser who renders an investment supervisory or management service to a client shall, with respect to the portfolio being supervised or managed and to the extent that the information is reasonably available to or obtainable by the state investment adviser, make and keep true, accurate, and current
(1) records showing separately for each client the securities purchased and sold, and the date, amount, and price of each purchase and sale; and
(2) for each security in which a client has a current position, information from which the state investment adviser can promptly furnish the name of the client, and the current amount or interest of the client.
(d) A state investment adviser may maintain books or records required by this section so that the identity of a client to whom the state investment adviser renders investment supervisory services is indicated by a numerical or alphabetical code or a similar designation.
(e) A state investment adviser shall preserve the following records in the following manner:
(1) records required by (a)(1)-(10), (a)(12)-(14), (b), and (c)(1) of this section shall be maintained and preserved in an easily accessible place for not less than five years after the end of the fiscal year during which the last entry was made on the record; for the first two years, those records shall be kept in the state investment adviser's principal place of business;
(2) partnership articles and any amendments to them, articles of incorporation, charters, minute books, and stock certificate books of the state investment adviser and of any predecessor shall be maintained in state investment adviser's principal place of business and shall be preserved until at least three years after termination of the enterprise;
(3) each record required by (a)(11) and (a)(15) of this section shall be maintained and preserved in an easily accessible place for not less than five years after the end of the fiscal year during which the state investment adviser last published or otherwise disseminated that record, directly or indirectly; for the first two years, that record shall be kept in the state investment adviser's principal place of business; and
(4) each record required by (a)(16)-(19) of this section shall be maintained and preserved in an easily accessible place for not less than five years after the end of the fiscal year during which the last entry was made on the record; for the first two years, that record shall be kept in the state investment adviser's principal place of business; however, that record need be kept only for the period during which the state investment adviser was registered or required to be registered in this state, if that period is less than the five-year period required by this paragraph.
(f) If a state investment adviser provides a client advisory services at a place of business other than the state investment adviser's principal place of business, the state investment adviser shall maintain, for the applicable period set out in (e) of this section, the following records or copies of those records at the place of business of the state investment adviser from which the client receives advisory services:
(1) records required by (a)(3), (a)(7)-(10), (a)(13)-(14), (a)(16)-(18), (b), and (c) of this section;
(2) records required by (a)(11) and (a)(15) of this section, if those records identify the name of the investment adviser representative providing investment advice from that business location, or which identify the business location's physical address, mailing address, electronic mailing address, or telephone number.
(g) A state investment adviser, before ceasing to conduct or discontinuing business as an investment adviser, shall arrange for and be responsible for the preservation of the books and records required to be maintained and preserved under this section for the remainder of the applicable period specified in (e) of this section, and shall notify the administrator in writing of the exact address where those books and records will be maintained during the remainder of that period.
(h) Records required to be maintained and preserved under this section may be maintained and preserved by photographic process on magnetic disk, tape, or other computer storage medium, and may be maintained and preserved in that form for the applicable period required by (e) or (f) of this section. If records are produced or reproduced by a photographic film or computer storage medium, the state investment adviser shall
(1) arrange the records and index the films or computer storage medium so as to permit the immediate location of any particular record;
(2) be ready at all times to provide promptly any facsimile enlargement of film, computer printout, or copy of the computer storage medium that the administrator or the administrator's representative requests;
(3) store, separately from the original, at least one copy of the film or computer storage medium for the applicable period required by (e) or (f) of this section;
(4) with respect to records stored on a computer storage medium, maintain procedures for maintenance and preservation of, and access to, records so as to reasonably safeguard records from loss, alteration, or destruction;
(5) with respect to records stored on photographic film, and for purposes of examining those records, at all times have available facilities for immediate, easily readable projection of the film and for producing easily readable facsimile enlargements; and
(6) with respect to records which, in the ordinary course of the state investment adviser's business, are created by the state investment adviser on electronic media or are received by the state investment adviser solely on electronic media or by electronic data transmission, be able to electronically display and immediately produce printed copies of those records.
(i) If a state investment adviser is engaged in more than one enterprise or activity the state investment adviser shall maintain separate books of accounts and records for the investment advisory business and the other businesses. The books and records must clearly identify the division among these businesses of income, expenses, and assets.
(j) A book or other record made, kept, maintained, and preserved in compliance with 17 C.F.R. 240.17a-3 and 17 C.F.R. 240.17a-4 that is substantially the same as a book or other record required to be made, kept, maintained, and preserved under this section, satisfies the applicable record-keeping requirement of this section.
(k) A state investment adviser registered or required to be registered in this state and that has its principal place of business in a state other than this state is exempt from the requirements of this section, if the state investment adviser
(1) is registered or licensed as an investment adviser in the state in which it maintains its principal place of business; and
(2) is in compliance with the applicable books and records requirements of the state in which it maintains its principal place of business.
(l) In this section,
(1) "advisory representative," if the state investment adviser is primarily engaged in a business
(A) providing services to advisory clients, means
(i) a partner, officer, or director of the state investment adviser;
(ii) an employee of the state investment adviser who makes a recommendation or takes part in determining which recommendation is to be made, or whose functions or duties relate to the determination of which securities are to be recommended before the effective dissemination of the recommendations; and
(iii) a person who obtains information concerning securities recommendations by the state investment adviser before the effective dissemination of the recommendations, if the person who obtains the information is in a control relationship to the state investment adviser, is an affiliated person of that controlling person, or is an affiliated person of that affiliated person;
(B) other than providing services to advisory clients, means
(i) a partner, officer, director, or employee of the state investment adviser who makes a recommendation or takes part in determining which recommendation is to be made, or whose functions or duties relate to the determination of which securities are to be recommended before the effective dissemination of the recommendations; and
(ii) a person who obtains information concerning securities recommendations by the state investment adviser before the effective dissemination of the recommendations, if the person who obtains the information is in a control relationship to the state investment adviser, is an affiliated person of that controlling person, or is an affiliated person of that affiliated person;
(2) "control" means the power to exercise a controlling influence over the management or policies of a company, unless that power is solely the result of an official position with that company; a person who owns beneficially, either directly or through one or more controlled companies, more than 25 percent of the voting securities of a company is presumed to control that company;
(3) "discretionary power" does not include discretion as to the price at which or the time when a transaction is or is to be effected, if, before the order is given by the state investment adviser, the client has directed or approved the purchase or sale of a definite amount of the particular security;
(4) "financial statements" means a balance sheet prepared in accordance with generally accepted accounting principles, an income statement, and a cash flow statement;
(5) "investment supervisory services" means the giving of continuous advice as to the investment of funds on the basis of the individual needs of each client;
(6) "solicitor" means a person who, for compensation, acts as an agent of an investment adviser in referring potential clients.
(m) For purposes of (l)(1)(B) of this section, a state investment adviser is primarily engaged in a business other than providing services to advisory clients if, for each of its most recent three fiscal years or for the period of time since organization, whichever period is shorter, the state investment adviser derived from that other business, on an unconsolidated basis, more than 50 percent of the state investment adviser's
(1) total sales and revenues; and
(2) income or loss before income taxes and extraordinary items.
History
- Authority: AS 45.55.050; AS 45.55.060; AS 45.55.950
- Eff. 2/20/72, Register 41; am 4/19/2000, Register 154
3 AAC 08.042 Books and records of agents of issuers
An agent of an issuer registered or required to be registered under AS 45.55.030 shall make, maintain, and preserve for a period of not less than three years records containing the following information:
(1) copies of all writings confirming the sale or purchase of securities;
(2) the date and amount of each cash receipt or disbursement associated with a sale or purchase of securities;
(3) for each sale or purchase of securities, the number of shares or units involved, the certificate numbers, and the date each was delivered to or received from the investor.
History
- Authority: AS 45.55.950
- Eff. 4/19/2000, Register 154
3 AAC 08.050 Effectiveness and post-effective requirements
(a) If any information, exhibit, or schedule submitted or circumstance disclosed in an application or notice under 3 AAC 08.011 or 3 AAC 08.014 undergoes a material change, either while the application or notice is pending or while the registration obtained through that application or the notice is effective,
(1) the applicant or person registered under this chapter shall file with the administrator a corrective amendment within 30 days after the day the material change occurred or was discovered, whichever day is later; and
(2) a federal covered adviser shall file with the administrator a corrective amendment at the latest of the following times:
(A) within 30 days after the day the material change occurred;
(B) within 30 days after the day the material change was discovered;
(C) on or before the date that a corresponding corrective amendment was filed with the SEC.
(b) For purposes of (a) of this section, a material change includes
(1) for a broker-dealer, state investment adviser, or federal covered adviser,
(A) a change in firm name, ownership, management, or control;
(B) a change in any of its partners, directors, officers, or persons in similar positions;
(C) a change in its business address; or
(D) the creation or termination of a branch office in this state;
(2) a change in the type of entity, general plan, or charter of a broker-dealer or state investment adviser, a change in the method of operation of a broker-dealer or state investment adviser, or a change in the type of securities in which a broker-dealer or state investment adviser deals or trades;
(3) for a state investment adviser, insolvency, dissolution, or liquidation, a material adverse change in or impairment of working capital, or non-compliance with the minimum bond or financial requirements in 3 AAC 08.025 and 3 AAC 08.027, if applicable;
(4) termination of a business or discontinuance of those activities as a broker-dealer, agent, investment adviser representative, state investment adviser, or federal covered adviser;
(5) the filing of a criminal charge or civil action, in which a fraudulent, dishonest, or unethical act is alleged, or a violation of a securities law is involved, against
(A) a person registered as a broker-dealer, agent, state investment adviser, or investment adviser representative;
(B) a person who submits a notice filing as a federal covered adviser;
(C) an applicant for registration as a broker-dealer, agent, state investment adviser, or investment adviser representative; or
(D) a partner, director, or officer of a person listed in (A)-(C) of this paragraph; and
(6) the entry of an order or the initiation of a proceeding by a
(A) court or regulatory agency to
(i) deny, suspend, or revoke a person's registration or application for registration under AS 45.55, this chapter, or applicable federal or state securities laws; or
(ii) enjoin a person listed in (5)(A)-(D) of this subsection from engaging in or continuing any conduct or practice in the securities business;
(B) stock exchange or the NASD to expel from membership a person listed in (5)(A)-(D) of this section, or to enjoin that person from engaging in or continuing any conduct or practice in the securities business.
(c) A registration or notice filing for an agent, investment adviser representative, broker-dealer, state investment adviser, or federal covered adviser expires on December 31 of the calendar year in which the registration or notice filing became effective, without notification by the administrator, unless sooner withdrawn or terminated.
(d) Termination of a broker-dealer's registration automatically terminates the registration of an agent of that broker-dealer.
(e) If the agency relationship terminates between an agent and the broker-dealer or issuer for whom the agent is registered,
(1) and the agent commences employment for another broker-dealer or issuer, the
(A) broker-dealer or issuer with whom the agency relationship terminated shall file with the administrator a notice of termination or withdrawal with respect to the prior association; and
(B) new employing broker-dealer or issuer shall file a transfer request with the administrator; and
(2) both the broker-dealer and the agent shall immediately notify the administrator of the circumstances involving the termination.
(f) If a broker-dealer desires to terminate or the administrator terminates a broker-dealer's registration, the broker-dealer shall furnish, upon the request of the administrator and within 10 days after termination, a
(1) detailed statement of the broker-dealer's financial condition, disclosing the nature and amount of assets and liabilities, the broker-dealer's net worth, and unsatisfied judgments and liens against the broker-dealer;
(2) statement of where and in whose custody books and records required under 3 AAC 08.030 will be kept; and
(3) separate schedule of securities in which the broker-dealer has an interest and the market value of those securities.
(g) The termination of a state investment adviser's registration or of a federal covered adviser's notice filing automatically terminates all investment adviser representative registrations of that state investment adviser or federal covered adviser.
(h) A broker-dealer that seeks to withdraw or fails to renew its registration shall file SEC Form BDW or its successor with the administrator or with a central registration depository approved under 3 AAC 08.017. A broker-dealer or an issuer that seeks to terminate or fails to renew the registration of an agent shall file an NASDR Form U-5, or its successor, for that agent with the administrator or with a central registration depository approved under 3 AAC 08.017. A state investment adviser that seeks to withdraw or fails to renew its registration shall file a SEC Form ADV-W, or its successor, with the administrator. A federal covered adviser that seeks to withdraw its notice filing may file a notice to that effect with the administrator or with a central registration depository approved under 3 AAC 08.017 for that purpose. A state investment adviser or federal covered adviser that seeks to withdraw or fails to renew the registration of an investment adviser representative shall file an NASDR Form U-5, or its successor, for that investment adviser representative with the administrator or with a central registration depository approved under 3 AAC 08.017 for that purpose, except that the federal covered adviser shall file whatever form it files with the SEC, for purposes of the withdrawal or failure to renew the registration of an investment adviser representative, if that form is other than the NASDR Form U-5 or its successor.
History
- Authority: AS 45.55.030; AS 45.55.050 AS 45.55.040; AS 45.55.950
- Eff. 2/20/72, Register 41; am 4/19/2000, Register 154; am 10/26/2000, Register 156
3 AAC 08.053 Disclosures to clients
(a) A state investment adviser registered or required to be registered under AS 45.55 shall furnish clients and prospective clients a written disclosure statement that complies with 17 C.F.R. 275.204-3.
(b) Upon or before completing each purchase or sale of a security or completing a debit or credit for securities, cash, and other items for account of others, an agent of an issuer registered or required to be registered under AS 45.55 shall notify a customer in writing of the
(1) identity and price of the security;
(2) account for which the transaction was entered;
(3) date of execution;
(4) name of the person handling the transaction; and
(5) fact that the transaction was unsolicited, if it was.
History
- Authority: AS 45.55.030; AS 45.55.050 AS 45.55.040; AS 45.55.950
- Eff. 4/19/2000, Register 154
3 AAC 08.055 Advertising on the internet by issuers, broker-dealers, state investment advisers, broker-dealer agents, and investment adviser representatives
(a) An issuer, broker-dealer, state investment adviser, federal covered adviser, agent, or investment adviser representative registered or required to be registered under AS 45.55 who distributes, through communications made on the internet, information on available products and services that are subject to AS 45.55 does not transact or conduct business in this state for purposes of AS 45.55.030(a), (c), or (e), regardless of whether those communications are directed generally to persons having access to the internet, transmitted through postings on electronic bulletin boards, or displayed on home pages, on websites, or by similar methods, if
(1) the internet communication contains a legend that clearly states that the issuer, broker-dealer, state investment adviser, federal covered adviser, agent, or investment adviser representative
(A) may transact business subject to AS 45.55 in this state only upon registration or a notice filing as required under AS 45.55, unless excluded or exempted from registration or notice requirements; and
(B) may not make a follow-up, individualized response to a person in this state that involves effecting or attempting to effect a transaction in securities, or the rendering of personalized investment advisory services for compensation, unless the issuer, broker-dealer, state investment adviser, federal covered adviser, agent, or investment adviser representative complies with the registration or notice requirements of AS 45.55, or unless an applicable exemption or exclusion from those requirements applies;
(2) the internet communication contains a mechanism, including technical "firewalls" or other implemented policies and procedures, reasonably designed to ensure that before any subsequent, direct communication with prospective customers or clients in this state, the issuer, broker-dealer, state investment adviser, federal covered adviser, agent, or investment adviser representative complies with the registration or notice requirements of AS 45.55, or qualifies for an exemption or exclusion from those requirements;
(3) the internet communication does not effect or attempt to effect a transaction in securities or the delivery of personalized investment advice for compensation in this state, and is limited to the dissemination of general information on products and services; and
(4) in the case of an agent or investment adviser representative,
(A) the association of the agent or the investment adviser representative with the broker-dealer, state investment adviser, or federal covered adviser is prominently disclosed within the internet communication;
(B) the broker-dealer, state investment adviser, or federal covered adviser with whom the agent or investment adviser representative is associated retains responsibility for reviewing and approving the content of any internet communication by an agent or investment adviser representative;
(C) the broker-dealer, state investment adviser, or federal covered adviser with whom the agent or investment adviser representative is associated first authorizes the distribution of information on the particular products and services through the internet communication; and
(D) in disseminating information through the internet communication, the agent or investment adviser representative acts within the scope of the authority granted by the broker-dealer, state investment adviser, or federal covered adviser.
(b) This section does not relieve an issuer, broker-dealer, state investment adviser, federal covered adviser, agent, or investment adviser representative from compliance with the applicable registration or notice requirements or antifraud or related provisions of AS 45.55.
(c) For purposes of this section, the internet includes the world wide web and similar proprietary or common carrier electronic systems.
History
- Authority: AS 45.55.150; AS 45.55.950
- Eff. 4/19/2000, Register 154; am 6/8/2001, Register 158
3 AAC 08.060 Unethical practices for broker-dealers and sales agents
Repealed.
History
- Eff. 2/20/72, Register 41; am 11/18/90, Register 116; repealed 4/19/2000, Register 154
3 AAC 08.061 Fraudulent practices of broker-dealers and sales agents
Repealed.
History
- Eff. 11/18/90, Register 116; repealed 4/19/2000, Register 154
3 AAC 08.062 Fraudulent practices of issuers and persons acting on an issuer's behalf
The administrator will consider an issuer responsible under AS 45.55.010 for the fraudulent actions of a person acting on the issuer's behalf that violate AS 45.55.025, 45.55.027, or 45.55.028, regardless of whether the person acting on the issuer's behalf is registered or required to be registered under AS 45.55.030(a) or is excluded from the definition of "agent" under AS 45.55.990(5)(A).
History
- Authority: AS 45.55.010; AS 45.55.950
- Eff. 4/19/2000, Register 154
3 AAC 08.065 Sales of securities at financial institutions
(a) This section applies exclusively to broker-dealer services conducted by broker-dealers on the premises of a financial institution where retail deposits are taken. This section does not apply to broker-dealer services provided to non-retail customers, such as institutional investors within the meaning of AS 45.55.990(7)(D)(i) - (iii).
(b) A broker-dealer may not conduct broker-dealer services on the premises of a financial institution where retail deposits are taken, unless the broker-dealer complies with the following requirements:
(1) if practical, broker-dealer services must be conducted in a physical location distinct from the area in which the financial institution's retail deposits are taken; the broker-dealer must identify its services in a manner that clearly distinguishes those services from the financial institution's deposit-taking activities; the broker-dealer's name must be clearly displayed in the area in which the broker-dealer conducts its services;
(2) networking and brokerage affiliate arrangements must be governed by a written agreement that sets out the responsibilities of the parties and the compensation arrangements; that agreement must provide that supervisory personnel of the broker-dealer and representatives of the administrator are to be permitted access to the financial institution's premises where the broker-dealer conducts broker-dealer services in order to inspect the books and records and other relevant information maintained by the broker-dealer with respect to broker-dealer services; the broker-dealer must ensure that the agreement clearly outlines the duties and responsibilities of each party;
(3) at or before the time that a customer's securities brokerage account is opened by a broker-dealer on the premises of a financial institution where retail deposits are taken, the broker-dealer must
(A) disclose, orally and in writing, that the securities products purchased or sold in a transaction with the broker-dealer are
(i) not insured by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Share Insurance Fund (NCUSIF), as appropriate;
(ii) not deposits or other obligations of the financial institution and are not guaranteed by the financial institution; and
(iii) subject to investment risks, including possible loss of the principal invested; and
(B) make reasonable efforts to obtain from each customer during the account-opening process a written acknowledgment of the disclosures required by (A) of this paragraph;
(4) if broker-dealer services include any written or oral representations concerning insurance coverage, other than coverage through the FDIC or NCUSIF, clear and accurate written or oral explanations of the coverage must also be provided to the customers when those representations are first made;
(5) each of the broker-dealer's confirmations and account statements must indicate clearly that the broker-dealer services are provided by the broker-dealer;
(6) recommendations by a broker-dealer concerning non-deposit investment products with a name similar to that of the financial institution must occur under a sales program designed to minimize the risk of customer confusion;
(7) advertisements and sales literature that announce the location of a financial institution where broker-dealer services are provided by the broker-dealer, or that are distributed by the broker-dealer on the premises of a financial institution, must disclose that securities products are
(A) not insured by the FDIC or NCUSIF, as appropriate;
(B) not deposits or other obligations of the financial institution and are not guaranteed by the financial institution; and
(C) subject to investment risks, including possible loss of the principal invested;
(8) to comply with (7) of this subsection, a broker-dealer may use the following shorter, logo format disclosures in advertisements and sales literature, including material published, or designed for use, in a radio or television broadcast or on the screen of an automated teller machine, billboards, signs, posters, and brochures, if those disclosures are displayed in a conspicuous manner:
(A) "Not FDIC Insured," or "Not NCUSIF Insured," as appropriate;
(B) "No Bank Guarantee";
(C) "May Lose Value";
(9) if the omission of the disclosures required by (7) of this subsection does not cause the advertisement or sales literature to be misleading in the context in which the material is presented, those disclosures are not required for messages contained in
(A) radio broadcasts of 30 seconds or less;
(B) electronic signs, including billboard-type signs that are electronic, time and temperature signs, and ticker tape signs; for purposes of this subparagraph, electronic signs do not include television, on-line computer services, or automated teller machines; and
(C) signs, banners, and posters if used only as location indicators;
(10) the broker-dealer must promptly notify the financial institution if any agent of the broker-dealer who is employed by the financial institution is terminated for cause by the broker-dealer.
(c) This section does not relieve a broker-dealer from compliance with AS 45.55, this chapter, or other applicable laws, rules, or regulations that govern the operations of broker-dealers and their agents, including supervisory obligations.
(d) In this section,
(1) "affiliate" means a company that controls, is controlled by, or is under common control with a broker-dealer as defined in NASD Rule 2720(b);
(2) "broker-dealer services" means the investment banking or securities business; for purposes of this paragraph, "investment banking or securities business" has the meaning given in paragraph (p) of Article I of the by-laws of the NASD, as incorporated by NASD Rule 121;
(3) "financial institution" means one of the following institutions, if located in this state:
(A) a federal, national, or state-chartered bank, savings and loan association, savings bank, or credit union; or
(B) a service corporation of an institution listed in (A) of this paragraph;
(4) "networking arrangement" and "brokerage affiliate arrangement" mean a contractual or other arrangement between a broker-dealer and a financial institution under which the broker-dealer conducts broker-dealer services on the premises of the financial institution where retail deposits are taken.
History
- Authority: AS 45.55.025; AS 45.55.060; AS 45.55.950
- Eff. 4/19/2000, Register 154; am 3/4/2015, Register 213
3 AAC 08.070 Definitions relating to operational regulations of broker-dealers
Repealed.
History
- Eff. 2/20/72, Register 41; repealed 4/19/2000, Register 154
3 AAC 08.075 Failure to cooperate
(a) A registered person shall cooperate in any inquiry, investigation, or inspection conducted by, or on behalf of, the administrator, for the purposes of determining whether a person has violated or is about to violate a provision of AS 45.55 or this chapter or an order issued under AS 45.55 or this chapter.
(b) A registered person's wilful failure to cooperate, absent good cause or bona fide claim of privilege, may be determined by the administrator a violation of AS 45.55 within the meaning of AS 45.55.060 and therefore subject the registered person to denial, suspension, or revocation of registration. The administrator may determine failure to cooperate to include
(1) the failure to timely respond by way of appearance or production of documents to a subpoena or order issued by the administrator under AS 45.55.910 or as may otherwise be provided by law;
(2) the failure to answer any question pertinent to an inquiry or request for information made under AS 45.55 or this chapter unless the response to said question is subject to a bona fide claim of privilege;
(3) the failure to grant the administrator access to the business premises of a registered person or to the records and documents that the registered person is required under AS 45.55 or this chapter to make available for inspection;
(4) the failure to attend any scheduled proceeding at which the registered person's appearance is directed; or
(5) aiding or abetting another registered person's failure to cooperate.
(c) For purposes of this section, a registered person includes
(1) a person who the administrator has approved to conduct business as a brokerdealer, agent, state investment adviser, or investment adviser representative; and
(2) a person applying for registration as a broker-dealer, agent, state investment adviser, or investment adviser representative.
History
- Authority: AS 45.55.060; AS 45.55.910; AS 45.55.950
- Eff. 1/17/2016, Register 217
Article 2 Registration and Notice of Securities
3 AAC 08.080 Application to register securities
(a) An application to register securities for distribution in this state may be filed with the administrator in substantially the form and content required by the appropriate application form, together with the exhibits required for applications for registration by notification, coordination, or qualification, as the case may be. The uniform NASAA Form U-1, or its successor, filed with the SEC, will also be accepted for offerings. Forms will be supplied upon request, at a nominal cost.
(b) A copy of the proposed prospectus may be filed as a part of the application for registration in lieu of furnishing the information in item-and-answer form. If this procedure is followed, the text of the items of the form must be omitted from the registration statement, as well as from the prospectus.
(c) If any items of a form call for information not required to be included in the prospectus, the text of those items together with the answers to the items must be filed with the prospectus under cover of the facing sheet as a part of the application for registration. If any of those items is inapplicable, or the answer to any of those items is in the negative, a statement to that effect must be made. Any financial statements not required to be included in the prospectus but required for registration must be filed as a part of the application for registration, unless incorporated by reference.
(d) An application for registration must include a table of contents or a cross-reference sheet showing the location in the prospectus of the required information in response to the items of the form. If any item is inapplicable, or the answer to the item is in the negative and is omitted from the prospectus, a statement to that effect must be made.
(e) A person filing an application to register securities under AS 45.55 must at the time of filing the application pay a fee as provided in 3 AAC 08.920(a)(5).
History
- Authority: AS 45.55.070; AS 45.55.110 AS 45.55.100; AS 45.55.950
- Eff. 2/20/72, Register 41; am 9/8/91, Register 119; am 4/19/2000, Register 154
3 AAC 08.085 Notice filings for offerings of investment company securities, face-amount certificate companies, and unit investment trusts
(a) Except as provided in (b) of this section, an investment company, face-amount certificate company, or unit investment trust that is registered under 15 U.S.C. 80a-1 - 80a-64 (Investment Company Act of 1940) or that has currently filed a registration statement under 15 U.S.C. 77a - 77bbbb (Securities Act of 1933) is not required to file with the administrator, either before or after the initial offer in this state of a federal covered security of the type described in 15 U.S.C. 77r(b)(2) (sec. 18(b)(2) of the Securities Act of 1933), a copy of any document that is part of a federal registration statement filed with the SEC or is part of an amendment to that federal registration statement.
(b) An investment company, face-amount certificate company, or unit investment trust that is registered under 15 U.S.C. 80a-1 - 80a-64 (Investment Company Act of 1940) or that has filed a registration statement under 15 U.S.C. 77a - 77bbbb (Securities Act of 1933) shall file upon written request of the administrator, and within the time period set forth in the request, a copy of any document, identified in the request, that is part of the federal registration statement filed with the SEC or part of an amendment to that federal registration statement.
(c) Before offering or selling a federal covered security of the type described in 15 U.S.C. 77r(b)(2) (sec. 18(b)(2) of the Securities Act of 1933), the issuer shall file with the administrator, for each individual fund for which notice is being made,
(1) a NASAA Form NF, or its successor, or the first page of a NASAA Form U-1, or its successor, or any other form as the administrator prescribes that is part of the filing with the SEC or a uniform filing form;
(2) a consent to service of process, or NASAA Form U-2; and
(3) the fee required by 3 AAC 08.920(a)(4).
(4) evidence the filing is effective with the SEC.
(d) A notice filing under this section is effective
(1) only if the administrator receives each item required by (c) of this section; and
(2) on the date that the administrator receives the last of the items required by (c) of this section.
(e) A notice filing under this section is valid for one year from the effective date established under (d) of this section. To renew a notice, the issuer must submit the items required by (c) of this section, as if the issuer were making an initial filing. The administrator will not accept a renewal earlier than 60 days before the expiration date of the filing.
History
- Authority: AS 45.55.075; AS 45.55.110; AS 45.55.950
- Eff. 4/19/2000, Register 154; am 1/17/2016, Register 217
3 AAC 08.086 Notice filing requirement for federal crowdfunding offerings
(a) An issuer that offers and sells securities in this state in an offering exempt under 15 U.S.C. 77r(b)(4) (sec. 18(b)(4) of the Securities Act of 1933) and 17 C.F.R. Part 227 (Regulation Crowdfunding) and that has its principal place of business in this state or sells 50 percent or greater of the aggregate amount of the offering to residents of this state shall file with the administrator
(1) a completed NASAA Uniform Notice of Federal Crowdfunding Offering form; and
(2) the filing fee required by 3 AAC 08.920(a)(13).
(b) If the issuer has its principal place of business in this state, the filing required under (a) of this section shall be filed with the administrator when the issuer makes its initial Form C filing concerning the offering with the SEC. If the issuer does not have its principal place of business in this state but state residents have purchased 50 percent or greater of the aggregate amount of the offering, the filing required under (a) of this section shall be filed when the issuer becomes aware that those purchases have met this threshold and in no event later than 15 days from the date of completion of the offering.
(c) The initial notice is effective for one year following the effective date of the filing.
(d) For each additional one-year period in which the same offering is continued, an issuer conducting an offering under 17 C.F.R. Part 227 (Regulation Crowdfunding) may renew its notice filing by filing, on or before the expiration of the notice filing,
(1) a completed NASAA Uniform Notice of Federal Crowdfunding Offering form marked "renewal"; and
(2) the filing fee required by 3 AAC 08.920(a)(13).
History
- Authority: AS 45.55.950
- Eff. 11/26/2016, Register 220
3 AAC 08.087 Solicitations of interest before the filing of a registration statement
(a) An issuer or an agent of the issuer may make an offer, but not a sale, of a security for the sole purpose of soliciting an indication of interest in receiving a prospectus, if
(1) the issuer is or will be a business entity organized under the laws of one of the states or possessions of the United States or one of the provinces or territories of Canada;
(2) the issuer is engaged in or proposes to engage in a business other than petroleum exploration or production or mining or other extractive industries;
(3) the issuer is not soliciting for a blind pool offering or other offering for which the specific business in which the issuer is or proposes to be engaged or the properties to be acquired cannot be described at the time of the solicitation;
(4) the offeror intends to register the security in this state under AS 45.55 and to conduct its offering under either 17 C.F.R. 230.251 - 230.263 (Regulation A) or 17 C.F.R. 230.501 - 230.504 and 17 C.F.R. 230.507 (Rule 504 of Regulation D);
(5) only a person who is registered under AS 45.55.030(a) as a broker-dealer or an agent, or who is exempted from registration makes a sale of the security; and
(6) the offeror does not know, and in the exercise of reasonable care could not know, that the issuer or any of the issuer's agents or promoters
(A) has filed a registration statement that is the subject of a currently effective registration stop order entered under a federal or state securities law within five years before the filing of the solicitation of interest form required by (c) of this section;
(B) within five years before the filing of the solicitation of interest form required by (c) of this section, was convicted of a
(i) felony or misdemeanor in connection with the offer, purchase, or sale of a security; or
(ii) felony involving fraud or deceit, including forgery, embezzlement, obtaining money under false pretense, larceny, or conspiracy to defraud;
(C) is currently subject to a federal or state administrative enforcement order or judgment entered within five years before the filing of the solicitation of interest form required by (c) of this section, and
(i) entered by a state securities administrator or the SEC; or
(ii) in which fraud or deceit was found in connection with the purchase or sale of a security; for purposes of this subparagraph, fraud and deceit include making untrue statements of material facts and omitting material facts;
(D) is subject to a federal or state administrative enforcement order or judgment that prohibits, denies, or revokes the use of an exemption from registration in connection with the offer, purchase, or sale of securities;
(E) is currently subject to an order, judgment, or decree entered by a court of competent jurisdiction within five years before the filing of the solicitation of interest form required by (c) of this section, and
(i) temporarily, preliminarily, or permanently restraining or enjoining the agent or promoter from engaging in or continuing a conduct or practice involving fraud or deceit in connection with the purchase or sale of a security; or
(ii) involving the making of a false filing under applicable securities laws and regulations with this state, another state, or the SEC; or
(F) is currently subject to an administrative enforcement order or judgment entered by a self-regulatory organization within five years before the filing of the solicitation of interest form required by (c) of this section, and finding fraud or deceit; for purposes of this subparagraph, fraud and deceit include making untrue statements of material facts and omitting to state material facts.
(b) The requirement in (a)(6) of this section does not apply if
(1) a person subject to a disqualification in (a)(6)(A) - (F) of this section is
(A) licensed or registered to conduct securities-related business in the state in which the administrative order or judgment was entered against the person, and if that person acts only in a capacity for which the person is licensed or registered; or
(B) the employee of a broker-dealer, the broker-dealer is registered in this state, and the SEC Form BD filed with this state as required by 3 AAC 08.011 or 3 AAC 08.014 discloses the order, conviction, judgment, or decree relating to that employee; or
(2) notwithstanding the existence of a disqualification listed in (a)(6)(A) - (F) of this section, the agency that created the basis for disqualification determines upon a showing of good cause that, within the agency's jurisdiction, denial of the solicitation of interest registration is not necessary.
(c) At least 10 business days before an initial solicitation of interest under this section, the offeror must submit to the administrator
(1) a solicitation of interest form (State of Alaska Form 08-113);
(2) any materials to be used to conduct solicitations of interest, including the script of any broadcast to be made and a copy of any notice to be published; and
(3) the fee required by 3 AAC 08.920(a)(9).
(d) At least five business days before using materials submitted under (c) of this section, an offeror must submit to the administrator any amendments to those materials or any additional materials to be used to conduct solicitations of interest. However, materials provided to a particular offeree upon a request by that offeree need not be submitted to the administrator until five business days after usage.
(e) Except for scripted broadcasts and published notices, and except to the extent necessary to obtain information needed to submit a solicitation of interest form required under (c) of this section, an offeror may not communicate with an offeree about the contemplated offering unless the offeree is provided with a copy of the most current solicitation of interest form at or before the time of the communication or within five calendar days after the communication.
(f) During the solicitation of interest period, an offeror may not solicit or accept money or a commitment to purchase securities.
(g) An offeror may not make a sale of the security until seven calendar days after delivery to the purchaser of a final prospectus that is part of a registration statement that is effective under AS 45.55.090 or 45.55.100.
(h) Failure of an offeror to comply with the requirements of this section is a violation of AS 45.55, and the administrator will, in the administrator's discretion, take action under AS 45.55.920 or deny registration under AS 45.55.
(i) Except as provided in (j) of this section, any published notice, script for broadcast, or printed material delivered apart from a copy of the most current solicitation of interest form submitted under (c) of this section must contain the identity of the chief executive officer of the issuer, a brief and general description of the issuer's business and products, and the following legends:
"THIS IS A SOLICITATION OF INTEREST ONLY. NO MONEY OR OTHER CONSIDERATION IS BEING SOLICITED AND NONE WILL BE ACCEPTED. NO SALES OF THE SECURITIES WILL BE MADE OR COMMITMENT TO PURCHASE ACCEPTED UNTIL THE DELIVERY OF AN OFFERING CIRCULAR THAT INCLUDES COMPLETE INFORMATION ABOUT THE COMPANY AND THE OFFERING.
AN INDICATION OF INTEREST MADE BY A PROSPECTIVE INVESTOR INVOLVES NO OBLIGATION OR COMMITMENT OF ANY KIND. THIS OFFER IS BEING MADE UNDER THE REQUIREMENTS OF FEDERAL AND STATE SECURITIES LAWS. NEITHER THE FEDERAL NOR THE STATE AUTHORITIES HAVE CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT OR ANY OTHER DOCUMENT PRESENTED TO YOU IN CONNECTION WITH THIS OFFER. NO SALE MAY BE MADE UNTIL THE OFFERING STATEMENT IS QUALIFIED BY THE US SECURITIES AND EXCHANGE COMMISSION AND THE SECURITIES ARE REGISTERED IN ALASKA.
REGISTRATION OF THE SECURITIES FOR SALE IN ALASKA IS DEPENDENT ON COMPLIANCE WITH THE ALASKA SECURITIES ACT (AS 45.55). THEREFORE, THERE CAN BE NO ASSURANCE THAT THE SECURITIES WILL BE REGISTERED FOR SALE IN ALASKA."
(j) The requirements of (i) of this section do not apply to the delivery of printed material to a person who has already received a copy of the most current solicitation of interest form as required by (e) of this section, with the legends required by (i) of this section included on the form.
(k) All communications with an offeree made in reliance on this section must cease after a registration statement is filed in this state. A sale may not be made until at least 20 calendar days after the last communication made in reliance on this section.
(l) Except for the requirements at (a)(5) of this section, the administrator will, in the administrator's discretion, waive any requirement of this section in writing, upon application by the offeror for cause shown. Neither compliance nor attempted compliance with this section, nor the absence of an objection or order by the administrator with respect to an offer of securities undertaken under this section, is a waiver of any condition of this section or a confirmation by the administrator of the availability of this section.
(m) An offer made in reliance on this section is not a violation of AS 45.55.070 by virtue of being integrated with a subsequent offer or sale of securities unless that subsequent offer or sale would be integrated under federal securities laws.
(n) An issuer on whose behalf an indication of interest is solicited under this section may not make an offer or sale in reliance on AS 45.55.900(b)(5)(A) - (C) until six months after the last communication with a prospective investor is made under this section.
(o) The administrator will, in the administrator's discretion, review the materials filed under this section to determine whether those materials are fraudulent or misleading. Any discussion in the offering documents of the potential rewards of the investment must be balanced by a discussion of possible risks.
(p) An offeror may begin to conduct solicitations of interest under this section if the requirements of this section have been satisfied, unless notified otherwise by the administrator. The administrator will, in the administrator's discretion, at any time notify the offeror not to distribute a solicitation of interest form submitted under (c) of this section, script, advertisement or other material that the administrator considers to be in violation of AS 45.55.010.
History
- Authority: AS 45.55.070; AS 45.55.110 AS 45.55.100; AS 45.55.950
- Eff. 4/19/2000, Register 154
3 AAC 08.090 Application to register or notice securities on a continuing basis
(a) An application for registration of a security to be issued on a continuing or recurring basis must be made by means of a separate application for each individual security.
(b) A notice filing for a face-amount certificate company, an open-end management company issuing a redeemable security, or a unit investment trust issuing a redeemable security must be made by a separate notice filing for each individual fund.
History
- Authority: AS 45.55.075; AS 45.55.090; AS 45.55.110 AS 45.55.080; AS 45.55.100; AS 45.55.950
- Eff. 2/20/72, Register 41; am 2/23/83, Register 85; am 4/19/2000, Register 154
3 AAC 08.100 Application to register mining securities
(a) For the registration of mining securities, an applicant shall give the location and means of access to the mining properties now held or intended to be acquired and the nature of the title under which those properties are held or intended to be held. The applicant shall indicate any known risks to which that title may be subject, and include
(1) a survey certificate, or a photostatic copy of that certificate, prepared and signed by a qualified mining engineer or registered land surveyor showing the location of unpatented claims, with at least transit stadia accuracy;
(2) a report of a qualified mining engineer or professional geologist setting forth at least the following:
(A) a description of each property, including its geographical features, mineralization, occurrence and disposition of ore or mineral bodies, and other conditions of which an investor should reasonably be informed;
(B) the identification of principal metallic or other constituents of the deposits to be explored or developed; the report must describe the characteristics of those deposits; unless a body of ore has been sufficiently tested to be properly classified as proven or probable ore, the report
(i) may not make a claim as to the existence of a body of ore; and
(ii) must state that a body of commercial ore is not known to exist on the property;
(C) the names of the locators of each unpatented claim, with a statement that each claim has been properly located in accordance with applicable laws and regulations, that surface boundaries have been properly marked, that all monuments or markers are in place, that location notices have been recorded in the recorder's office of the district court in which the claims are situated, and that all assessment work as required by law has been done;
(D) a surface map of the properties included in the report showing their relative location to the general area and the means of access to those properties;
(3) a title opinion of an attorney relating to each claim or group;
(4) a copy of the deed and any lease, option, contract to purchase, or assignment relative to those claims, with a statement signed by lessor or vendor that the instrument is presently in good standing and that no forfeiture or default has occurred;
(5) a copy of any contract for engineering services, core drilling, development work, and similar services; and
(6) a report of the technical training and experience in mining of each of the officers, directors and promoters of the person for whom the application is made.
(b) An SEC Form S-3 (Registration Statement) filed with the SEC will be acceptable application for this section.
(c) For purposes of this section, a body of ore is
(1) proven ore if it is so extensively sampled that the risk of failure in continuity of the ore in that body is reduced to a minimum; and
(2) probable ore if the risk of failure in continuity is greater than for proven ore as described in (1) of this section but sufficient justification exists to assume continuity of the ore.
History
- Authority: AS 45.55.100; AS 45.55.950
- Eff. 2/20/72, Register 41; am 4/19/2000, Register 154
3 AAC 08.110 Application to register oil and gas securities
An application to register an interest or participation in an oil or gas lease must contain the following:
(1) a description of the properties involved and copies of all conveyances, assignments, leases, subleases, or other agreements relating to those properties together with an opinion of counsel or title policy indicating that applicant has title to those properties;
(2) a statement of the area of interest to the applicant, a description of the plan of exploration including, if available, anticipated drilling depth, each horizon in which hydrocarbon substances are expected and the nature of those hydrocarbons, the estimated costs of drilling and completing each well proposed to be drilled, and the availability of a market for hydrocarbons discovered;
(3) in the case of drilling programs other than programs for wildcat drilling, a geological report and appraisal, that are prepared by a registered engineer or a professional geologist, and that indicate the proposed method of development and production, a statement of the method used in preparing that report, together with supporting geological and engineering data, a table setting forth the estimated future production and the present value of that production, together with a statement of each factor used in making that estimate, and an estimate of expenses to be incurred in connection with development and production of minerals as proposed in that geological report;
(4) a statement in tabular form, for all productive properties, of
(A) net production of oil and gas to the issuer's interest from each of the properties by years for the past four years before the latest year, and by months for the latest year; and
(B) the number of net producing wells owned by the issuer that contributed to the production during each of the time periods specified in (A) of this paragraph.
History
- Authority: AS 45.55.100; AS 45.55.950
- Eff. 2/20/72, Register 41; am 4/19/2000, Register 154
3 AAC 08.120 Prospectus
(a) An issuer applying to register a sale of securities shall prepare a prospectus disclosing all material facts affecting the sale of the securities. The prospectus must be designated as an exhibit to and is a part of the application for registration. A prospectus meeting the requirements of 15 U.S.C. 77a - 77bbbb (Securities Act of 1933) satisfies the requirements of this subsection.
(b) A person who knowingly uses a prospectus that contains a false or misleading statement, or omits a material fact necessary for an accurate and complete presentation of matters affecting the securities being offered violates AS 45.55.
(c) A copy of the prospectus must be delivered to each prospective purchaser of securities before consummation of any sale or contract for sale.
(d) An issuer shall file an amended prospectus
(1) at the end of each 13-month period from the effectiveness of the registration, for a registration by notification or qualification;
(2) at the end of each 16-month period from the effectiveness of the registration, for a registration by coordination; and
(3) in the event of any material change relating to the issuer or the offering.
(e) An amended prospectus filed under (d) of this section must include each material change and an up-to-date presentation of the issuer's condition and circumstances, including financial statements. Amendments must be filed in the form required by 3 AAC 08.230(i) - (k). Additional solicitations or sales may not be made until the amended or revised prospectus has been prepared and copies have been filed with the administrator. The prospectus must include its expiration date.
History
- Authority: AS 45.55.100; AS 45.55.950
- Eff. 2/20/72, Register 41; am 4/19/2000, Register 154
3 AAC 08.125 Unsound financial condition
(a) The administrator will consider an issuer to be in unsound financial condition if
(1) the issuer's financial statements contain a footnote to those statements or an explanatory paragraph in the independent auditor's report regarding the issuer's ability to continue as a going concern; and
(2) one or more of the following is identified from the financial statements described in (1) of this subsection or, if the application for registration contains audited financial statements that were issued more than 90 days before the date of the application, from accompanying interim unaudited financial statements:
(A) an accumulated deficit;
(B) negative shareholder equity;
(C) an inability to satisfy current obligations as they come due;
(D) negative cash flow; for purposes of this subparagraph, an issuer has negative cash flow if revenues are not being generated by operations in excess of cash outflow;
(E) other indicators of financial difficulties.
(b) The administrator will, in the administrator's discretion, deny an application for registration by an issuer in unsound financial condition.
(c) The administrator will, in the administrator's discretion, register an application for registration by an issuer in unsound financial condition if the chief financial officer of the issuer provides pro forma financial data acceptable to the administrator that
(1) demonstrate that the issuer's financial condition will improve either as a direct result of the offering proceeds, or through the use of the offering proceeds as part of a long term business plan;
(2) demonstrate when profitability is expected to occur; and
(3) are supported with documentation of and the bases for any assumptions.
(d) An issuer registered under the provisions of (c) of this section must disclose in its prospectus
(1) that the issuer is considered to be in unsound financial condition, and that persons should not invest unless they can afford to lose their entire investment; and
(2) any of the following risk factors, if applicable:
(A) the presence of an explanatory paragraph in the independent auditor's report;
(B) the means by which the issuer has been financing its operations, if the issuer has not been generating revenues from operations;
(C) the amount of any accumulated deficit;
(D) the presence and amount of any negative shareholder equity;
(E) the need for future financing.
(e) The administrator will, in the administrator's discretion, require an issuer registered under (c) of this section to apply the net worth standards set out in (1) - (2) of this subsection or limit the sales of securities to accredited investors. The imposition of minimal net worth standards under this subsection does not relieve a broker-dealer of the responsibility of making an independent determination of suitability required under industry standards. Unless the administrator determines that the risks associated with the offering require different standards, the issuer may sell securities only to accredited investors or to investors that have the following:
(1) a minimum annual gross income of $65,000 and a minimum net worth of $65,000, exclusive of the investor's principal automobile, principal residence, and home furnishings; or
(2) a minimum net worth of $150,000, exclusive of the investor's principal automobile, principal residence, and home furnishings.
(f) If the issuer's latest audited financial statements contain an auditor's report or footnote that contains an opinion or statement regarding the ability of the issuer to continue as a going concern, the administrator will, in the administrator's discretion, require that all promotional shares be deposited in escrow in accordance with 3 AAC 08.180 - 3 AAC 08.186.
History
- Authority: AS 45.55.120; AS 45.55.950
- Eff. 4/19/2000, Register 154
3 AAC 08.130 Maximum commissions and expenses
(a) The administrator will, in the administrator's discretion, disallow an offer or sale of securities if the underwriting expenses to be incurred exceed 17 percent of the gross proceeds from the public offering.
(b) Underwriting expenses consist of
(1) commissions to underwriters or broker-dealers;
(2) non-accountable fees or expenses to be paid to the underwriter or broker-dealer;
(3) underwriter's warrants and options; underwriter's warrants and options must be valued as follows:
(A) the warrant value is calculated using the following formula: warrant value = $[165 % x (aggregate offering price)] - [(exercise price) x (number of shares offered to the public)] / 2} x [(number of shares underlying the warrant) / (number of shares offered to the public)]
(B) the value calculated under (A) of this paragraph is reduced by 20 percent if the exercise period of the warrants is extended from one year after the public offering to two years after the public offering and by 40 percent if the exercise period of the warrants is extended from one year after the public offering to three years after the public offering; a reduction under this subparagraph applies if the warrants granted to underwriters are subject to the following restrictions:
(i) the underwriter must be a managing underwriter;
(ii) the public offering must be either a firmly underwritten offering or a "minimum-maximum" offering, and options or warrants may be issued in a "minimum-maximum" public offering only if the options or warrants are issued on a pro rata basis and the minimum amount of securities has been sold;
(iii) the exercise price of the warrants must be at least equal to the public offering price;
(iv) the number of shares covered by underwriter's options or warrants may not exceed 10 percent of the shares of common stock actually sold in the public offering;
(v) the life of the options or warrants may not exceed a period of five years from the completion date of the public offering;
(vi) the options or warrants may not be exercisable for the first year after the completion date of the public offering;
(vii) options or warrants may not be transferable, except to partners of the underwriter, if the underwriter is a partnership, to officers and employees of the underwriter who are also shareholders of the underwriter, if the underwriter is a corporation, by will, under the laws of descent and distribution, or by the operation of law;
(viii) the warrant agreement may not allow for a reduction in the exercise price of the options or warrants resulting from a subsequent issuance of shares by the issuer except if that issuance is under a stock dividend or stock split, merger, consolidation, reclassification, reorganization, recapitalization, or sale of assets;
(C) in this paragraph, "aggregate offering price" means the sum of all cash and other consideration to be received for issuance of the securities;
(4) rights of first refusal, rights of first refusal must be valued at
(A) one percent of the public offering; or
(B) the amount payable to the underwriter if the issuer terminates the right of first refusal;
(5) solicitation fees payable to the underwriter; solicitation fees must be valued at the lesser of
(A) actual cost; or
(B) one percent of the public offering, if the fees are payable within one year of the offering;
(6) financial consulting or financial advisory agreements with an underwriter or any other similar type of agreement or fee, however designated; those agreements must be valued at actual cost;
(7) expenses that the underwriter incurs to meet due diligence obligations;
(8) payments either made within six months before or required to be made within six months after the public offering to investor relations firms designated by the underwriter; and
(9) other underwriting expenses incurred in connection with the public offering of securities as determined by the administrator.
(c) Underwriting expenses do not include financial consulting or financial advisory agreements with the underwriter payable at the time the services are rendered, if those agreements were entered into at least twelve months before the registration is filed with the SEC.
(d) The administrator will, in the administrator's discretion, disallow an offer or sale of securities if the direct and indirect selling expenses of the offering exceed 20 percent of the gross proceeds from the public offering.
(e) Selling expenses consist of
(1) commissions to underwriters or broker-dealers;
(2) non-accountable fees or expenses to be paid to the underwriters or broker-dealers;
(3) auditors' and accountants' fees;
(4) legal fees;
(5) the cost of printing prospectuses, circulars, and other documents required to comply with securities laws and regulations;
(6) charges of transfer agents, registrars, indenture trustees, escrow holders, depositories, engineers, appraisers, and other experts;
(7) the cost of authorizing and preparing the securities, including issue taxes and stamps;
(8) financial consulting or financial advisory agreements with an underwriter or any similar type agreement or fee, however designated; those agreements
(A) must be valued at actual cost; and
(B) do not include a financial or consulting agreement that is entered into at least twelve months before the registration is filed with the SEC;
(9) payments either made within six months before or required to be made within six months after the public offering to an investor relations firm designated by the underwriter;
(10) expenses incurred in connection with bridge financing in the twelve month period preceding a public offering of securities; those expenses include
(A) direct expenses attributable to the financing including interest charges and those expenses set forth in this subsection and (b) of this section;
(B) warrants and options valued in accordance with (b)(3) of this section; and
(C) expenses attributable to the issuance of securities that are not options, warrants, or convertible securities; those expenses must be valued using the following formula:
$[(public offering price per share) - (cost per share)] x [(number of securities issued) x 100]} / (aggregate public offering proceeds); and
(11) other cash expenses incurred in connection with the public offering of securities as determined by the administrator.
(f) The administrator will, in the administrator's discretion, disallow a public offering or sale of securities, that includes selling security holders offering more than 10 percent of the securities to be sold in the public offering, unless selling security holders offering
(1) or selling more than 10 percent but less than 50 percent of the securities to be sold in the public offering pay a pro rata share of all selling expenses of the public offering, excluding the legal and accounting expenses of the public offering, and the prospectus or offering document discloses the amount of selling expenses that the selling security holders will pay; or
(2) more than 50 percent of the securities to be sold in the offering pay a pro rata share of all selling expenses of the public offering, and the prospectus or offering document discloses the amount of selling expenses that the selling security holders will pay.
(g) The provisions of (f) of this section do not apply if the selling security holders have a written agreement with the issuer, that was entered into in an arm's-length transaction, under which the issuer has agreed to pay all of the selling security holders' selling expenses. In the agreement, the issuer need not agree to pay an underwriter's or broker-dealer's compensation.
History
- Authority: AS 45.55.120; AS 45.55.950
- Eff. 2/20/72, Register 41; am 4/19/2000, Register 154
3 AAC 08.135 Disclosure of use of proceeds
(a) The administrator will, in the administrator's discretion, deny registration unless it complies with the requirements of this section.
(b) An issuer's prospectus must disclose, in a tabular form, for both the minimum and maximum amounts proposed, if applicable, the following information:
(1) the estimated cash proceeds that the issuer is to receive from the offering;
(2) the purposes for which the issuer is to use the proceeds disclosed under (1) of this subsection;
(3) the amount, expressed as a percentage and as a dollar amount, to be used for each purpose identified under (2) of this subsection;
(4) the order or priority in which the proceeds disclosed under (1) of this subsection will be used for the purposes identified in (2) of this subsection.
(c) In addition to the information required under (b) of this section, an issuer's prospectus must disclose the following:
(1) the amounts of any money to be raised from other sources to achieve the purposes identified under (b)(2) of this section, the sources of that money, whether the sources are firm or contingent, and any contingencies;
(2) if any part of the proceeds is to be used to acquire property, including goodwill, other than in the ordinary course of business, the following information:
(A) the name and address of each person selling the property;
(B) the purchase price of the property;
(C) the name of any person who has received a commission in connection with the acquisition of the property, and the amount of that commission;
(D) any other expense in connection with the acquisition of the property, including the cost of borrowing money to finance the acquisition;
(3) if any part of the proceeds is to be used to acquire property in the future, the acquisition criteria to be used by the issuer to determine whether or not to acquire that property; and
(4) the amount of any proceeds used to pay indebtedness, including unpaid salaries, to promoters, and the reasons for using those proceeds for that purpose.
(d) The issuer may not reserve more than 15 percent of the proceeds for working capital or general corporate purposes, or for any other unspecified use, unless the issuer's prospectus
(1) discloses each potential use of unspecified proceeds with qualifying language that the potential use may be subject to change; and
(2) indicates the specific circumstances leading to reallocation and the potential areas of reallocation.
(e) The issuer must demonstrate to the administrator's satisfaction that the offering proceeds, together with all other sources of financing currently available to the issuer, are sufficient to sustain the issuer's proposed activities. If the offering proceeds are insufficient to sustain the issuer's activities for at least 12 months following the offering, the issuer must provide the appropriate risk disclosure of that fact in the prospectus.
(f) If an offering is not a firmly underwritten offering, the issuer must set a minimum amount of proceeds to be raised consistent with the business plan set out in the prospectus. The proceeds of the offering must be impounded, in accordance with 3 AAC 08.190, in an interest-bearing escrow or trust account until the minimum amount is reached. The prospectus must disclose if officers, directors, or other promoters have the right to purchase shares for the purpose of meeting the impound requirements.
History
- Authority: AS 45.55.120; AS 45.55.950
- Eff. 4/19/2000, Register 154
3 AAC 08.140 Offering price
(a) In applications for the registration of securities by qualification or coordination the offering price of the issue sought to be registered must bear a reasonable relationship to the established public market price if an established price exists. The issuer must submit information justifying the adequacy of that public market, including the public market price, the number of shares owned by public shareholders, the names and locations of the dealers regularly making a market in the shares, and the newspapers and financial publications where the shares are regularly quoted. If the price/earnings multiple of the issuer has changed significantly during that period, information must be submitted accounting for that change.
(b) In applications for the registration of securities if a public market price has not been established, the offering price of the securities sought to be registered must bear a reasonable relationship to one or more of the following:
(1) an amount per share not to exceed 25 times the net earnings per share for the last two complete fiscal years of the issuer before the proposed offering date; the administrator will, in the administrator's discretion, approve a higher price/earnings ratio or a different period of operation for measuring the price/earnings ratio if increased future earnings are clearly established;
(2) book value;
(3) the current market prices of the shares of companies closely similar and comparable to the issuer in terms of size, industry, products, and other factors relevant to the setting of those prices; an applicant who submits information to demonstrate a reasonable relationship between those prices and the proposed offering price must also demonstrate that the price/earnings ratio for each comparable company is below the limit set in (1) of this subsection or is justified by clearly established increased future earnings.
(c) The administrator will, in the administrator's discretion, accept an underwriter's pricing memorandum prepared in connection with the proposed offering and submitted to satisfy the requirements of this section for submission of information.
History
- Authority: AS 45.55.120; AS 45.55.950
- Eff. 2/20/72, Register 41; am 4/19/2000, Register 154
3 AAC 08.150 Options and warrants
(a) An issuer may issue options or warrants to underwriters as compensation with a public offering if the options or warrants comply with the requirements of 3 AAC 08.130.
(b) An issuer may grant options or warrants to unaffiliated institutional investors in connection with loans if
(1) the options or warrants are issued contemporaneously with the issuance of the loan;
(2) the options or warrants are granted as the result of bona fide negotiations between the issuer and unaffiliated institutional investor;
(3) the exercise price of the options or warrants is not less than the fair market value of the issuer's shares of common stock underlying the options or warrants on the date that the loan was approved; and
(4) the number of shares issuable upon exercise of the options or warrants multiplied by the exercise price of the options or warrants does not exceed the face amount of the loan.
(c) An issuer may grant options or warrants in connection with acquisitions, reorganizations, consolidations, or mergers if the
(1) options or warrants are granted to persons who are unaffiliated with the issuer; and
(2) earnings of the issuer at the time of the grant and after giving effect to the acquisition, reorganization, consolidation, or merger would not be materially diluted by the exercise of the options or warrants.
(d) An issuer may not grant options and warrants at an exercise price of less than 85 percent of the fair market value of the issuer's underlying shares of common stock on the date of the grant. If the administrator and the issuer dispute the fair market value of the stock, the administrator will consider whether the issuer and its officers and directors have obtained a concurrent appraisal, by a qualified independent appraiser, of the value of the shares of common stock at the time of the grant as evidence of the fair market value.
(e) The total number of options and warrants issued or reserved for issuance at the date of the public offering may not, for one year following the effective date of the registration, exceed 15 percent of the issuer's shares of common stock outstanding at the date of the public offering plus the number of shares of common stock being offered that are firmly underwritten, or in the case of offerings not firmly underwritten, the number of shares of common stock required to be sold in order to meet the minimum offering amount. In calculating the number of options and warrants, the following are excluded:
(1) options and warrants that were issued or reserved for issuance under (a), (b), or (c) of this section;
(2) options and warrants that were issued or reserved for issuance to employees or consultants who are not promoters, in connection with an incentive stock option plan qualified under 26 U.S.C. 422 (Internal Revenue Code); and
(3) options and warrants that are exercisable at or above the public offering price.
(f) An option or warrant issued and outstanding at the date of the public offering, except for an option or warrant issued under an incentive stock option plan qualified under 26 U.S.C. 422 (Internal Revenue Code), may not be exercisable more than five years from the date of the public offering.
(g) If the number of options and warrants that are issued and outstanding or that are reserved for issuance is material, the final offering circular must disclose the potential dilutive effects of those options and warrants.
(h) If the number of options and warrants issued exceeds the 15 percent limit established in (e) of this section, the administrator will, in the administrator's discretion, require the cancellation of the excess options or, in the alternative, subject the excess options to an escrow or lock-in agreement consistent with 3 AAC 08.180 - 3 AAC 08.186.
History
- Authority: AS 45.55.120; AS 45.55.950
- Eff. 2/20/72, Register 41; am 4/19/2000, Register 154
3 AAC 08.160 Cheap stock (promotional shares)
(a) The administrator will presume securities to be cheap stock if they are sold or issued within two years before the public offering date to promoters, finders, underwriters, or controlling persons for a consideration lower than the proposed public offering price of those securities, including options and warrants exercised, in the absence of any
(1) public market for those securities; or
(2) substantial change in the earnings or financial position of the issuer.
(b) In applications for the registration of securities by qualification or coordination, in which cheap stock has been previously issued or is to be issued, the following conditions must be met in order to avoid a requirement to escrow or lock-in promotional shares under 3 AAC 08.180 - 3 AAC 08.186:
(1) the issuance of the cheap stock must be fully justified;
(2) only a promotional or development stage company may issue cheap stock;
(3) the number of shares of cheap stock issued may not exceed 25 percent of the securities to be outstanding at the completion of the proposed public offering;
(4) the consideration paid for the shares of cheap stock must be at least 50 percent of the proposed public offering price.
(c) If the shares of cheap stock were or are to be acquired by the underwriters, the difference between the consideration for the shares and the proposed public offering price, when added to the other discounts, commissions, and fees in connection with the offering may not exceed the limitation imposed by 3 AAC 08.130(a).
(d) The provisions of (a) of this section apply to cheap stock acquired from selling shareholders unless those shareholders are so lacking in control of the issuer as to require different treatment.
(e) This section applies to applications for registration of equity securities or securities convertible into equity securities. For securities that are convertible into equity securities, the administrator will consider the conversion price to be the public offering price.
(f) The administrator will, in the administrator's discretion, require that cheap stock be, in accordance with 3 AAC 08.180 - 3 AAC 08.186,
(1) deposited, in whole or in part, in escrow; or
(2) subject to a lock-in agreement.
(g) The administrator will, in the administrator's discretion, waive a provision of (a) or (b) of this section for a registration application being reviewed under a multi-jurisdictional review procedure.
History
- Authority: AS 45.55.110; AS 45.55.120; AS 45.55.950
- Eff. 2/20/72, Register 41; am 4/19/2000, Register 154
3 AAC 08.170 Promoters' equity investment
(a) Except as described in (c) of this section, the administrator will, in the administrator's discretion, disallow a public securities offering by a promotional or development stage company if, for an aggregate public offering
(1) of $1,000,000 or less, the promoters' equity investment is less than 10 percent of that amount;
(2) greater than $1,000,000 and no more than $1,500,000, the promoters' equity investment is less than the sum of $100,000 and seven percent of the amount by which the offering exceeds $1,000,000;
(3) greater than $1,500,000 and no more than $2,000,000, the promoters' equity investment is less than the sum of $135,000 and five percent of the amount by which the offering exceeds $1,500,000; and
(4) greater than $2,000,000, the promoters' equity investment is less than the sum of $160,000 and two and one-half percent of the amount by which the offering exceeds $2,000,000.
(b) For purposes of this section, the promoters' equity investment consists of the total of cash, property, other tangible assets, and intangible assets that the promoters contribute to the issuer, if the administrator accepts the value of the property, other tangible assets, and intangible assets. The promoters' equity investment may be adjusted by the issuer's earned surplus immediately before the public offering.
(c) If the promoters' equity investment consists of tangible assets of one-half of the amount required by (a) of this section, the administrator will consider the promoters' equity investment to be acceptable if all promotional shares are deposited in escrow in accordance with 3 AAC 08.180 - 3 AAC 08.186.
History
- Authority: AS 45.55.120; AS 45.55.950
- Eff. 2/20/72, Register 41; am 2/9/78, Register 65; am 4/19/2000, Register 154
3 AAC 08.180 Escrow and lock-in of promotional shares
(a) The administrator will, in the administrator's discretion, require that a promoter deposit some or all of the promoter's promotional shares into an escrow account with an escrow agent, according to the terms of an escrow agreement, as a condition to registering a public offering of equity securities. The administrator will, in the administrator's discretion, require a lock-in agreement on substantially the same terms and conditions as an escrow agreement.
(b) Unless a promoter must comply with (d) of this section,
(1) the following formula determines the number of promotional shares to be deposited in escrow:
number of promotional shares to be escrowed = (number of shares held by promoters) - [(total amount paid by promoters for all shares held by promoters) / (public offering price per share x .85)]; and
(2) if the result from the formula in (1) of this subsection is not a whole number, that result must be rounded to the nearest whole number.
(c) If the total paid by the promoter described in (b) of this section is paid in something other than cash, then the value attributed to that consideration must be acceptable to the administrator.
(d) The administrator will, in the administrator's discretion, require that all promotional shares be deposited in escrow if the issuer's latest audited financial statements contain an auditor's report or footnote that contains an opinion or statement regarding the ability of the issuer to continue as a going concern.
(e) The administrator will, in the administrator's discretion, require each promoter to deposit promotional shares into escrow on a pro rata basis.
(f) Except as provided in 3 AAC 08.182, a depositor shall have the same voting rights as a shareholder who purchases equity securities under the public offering.
(g) If, while promotional shares are held in escrow, a depositor receives or is granted certificates representing stock dividends and shares resulting from stock splits of escrowed shares, recapitalizations, or other activities or events that change the number of shares or affect the initial sale of escrowed shares, those certificates must be deposited with and held by the escrow agent subject to the terms of the escrow agreement. Any cash dividends that are granted to or received by a depositor while promotional shares are held in escrow must be deposited with and be held by the escrow agent subject to the terms of the escrow agreement, unless those cash dividends are approved by a majority of the independent directors of the issuer. The escrow agent shall invest those cash dividends as directed by the depositor. Those cash dividends and any interest earned on them may be disbursed only in proportion to the number of shares released from escrow.
(h) Equity securities that are received by a depositor as the result of the conversion or exercise of convertible securities, warrants, options, or rights to purchase common stock or similar securities while the depositor's promotional shares are in escrow must be deposited with and held by the escrow agent subject to the terms of the escrow.
(i) Until the public offering has been terminated, the issuer shall include a summary of the escrow agreement in the prospectus, subsequent amendments to the prospectus, annual reports to shareholders, proxy statements, and other disclosure materials that are used to make investment decisions.
(j) The issuer shall pay the escrow agent reasonable compensation, as set out in the escrow agreement, for the escrow agent's services. If the escrow agent is required to render additional services that are not expressly provided for in the escrow agreement, or if the escrow agent is made a party to or intervenes in any action, suit, or proceeding pertaining to the agreement, the issuer and depositors shall pay the escrow agent reasonable compensation for the additional services provided. If additional services are provided, the escrow agent, after giving written notice to the depositors and issuer, may deduct reasonable compensation from any cash dividends, interest, and proceeds that the escrow agent holds for distribution under the escrow agreement.
(k) The issuer and the depositors shall hold the escrow agent harmless from and indemnify it for any cost or liability regarding any administrative proceeding, investigation, litigation, interpretation, implementation, or interpleading relating to the escrow agreement, including the release of promotional shares and the disbursement of dividends, interest, or proceeds, unless the cost or the liability arises from the escrow agent's failure to abide by the terms of the escrow agreement.
(l) The escrow agreement must be binding upon the depositors, their heirs and assignees, and upon the issuer and escrow agent and their successors.
(m) Notwithstanding (b) of this section, promoters may not sell promotional shares that are not subject to escrow during the time that the issuer offers its securities to the public in a self-underwritten offering.
History
- Authority: AS 45.55.110; AS 45.55.950
- Eff. 2/20/72, Register 41; am 4/19/2000, Register 154
3 AAC 08.182 Release of escrowed promotional shares
(a) If each of the applicable provisions of the escrow agreement required under 3 AAC 08.180 has been satisfied, and if
(1) the issuer's aggregate revenues are at least $500,000 and the auditor's report or the issuer's latest audited financial statements do not contain an opinion or statement regarding the ability of the issuer to continue as a going concern, the escrow agent shall release two and one-half percent of the promotional shares from escrow each quarter, beginning one year after the date of completion of the offering, shall distribute those shares pro rata among the depositors, and shall release all remaining promotional shares from escrow two years after the date of completion of the offering;
(2) the issuer's aggregate revenues are less than $500,000, the escrow agent shall release two and one-half percent of the promotional shares from escrow each quarter, beginning two years after the date of completion of the offering, shall distribute those shares pro rata among the depositors, and shall release all remaining promotional shares from escrow four years after the date of completion of the offering; or
(3) the public offering is terminated without a sale of securities under the offering or all of the gross proceeds that were derived from the offering have been returned to the public investors, the escrow agent shall release all of the promotional shares from escrow.
(b) The escrow agent shall release promotional shares
(1) in the event of a dissolution, liquidation, merger, consolidation, reorganization, sale or exchange of the issuer's assets or securities, including by way of tender offer, or any other transaction or proceeding with a person who is not a promoter that results in the distribution of the issuer's assets or securities; and
(2) if, while the escrow agreement remains in effect, the depositors agree that
(A) all holders of the issuer's equity securities will initially share on a pro rata, per share basis in the distribution, in proportion to the amount of cash or other consideration that they paid per share of equity securities, until the public shareholders receive, or have irrevocably set aside for them, an amount that is equal to 100 percent of the public offering's price per share times the number of shares of equity securities that the public shareholders purchased under the public offering and still hold at the time of the distribution, adjusted for stock splits, stock dividends, recapitalizations, or other activities or events that change the number of shares or affect the initial sale of escrowed shares;
(B) for purposes of (A) of this paragraph, the value of consideration other than cash is subject to acceptance by the administrator; and
(C) after the initial distribution provided in (A) of this paragraph, all holders of the issuer's equity securities shall participate on an equal, per share basis times the number of shares of equity securities they hold at the time of the distribution, adjusted for stock splits, stock dividends, recapitalizations, or other activities or events that change the number of shares or affect the initial sale of escrowed shares.
(c) A distribution may proceed on lesser terms and conditions than those provided in (b) of this section if a majority of the equity securities that are not held by promoters or the associates or affiliates of promoters vote, or consent by consent procedure, to approve the lesser terms and conditions at a special meeting of the shareholders called for that specific purpose.
(d) In the event of a dissolution, liquidation, merger, consolidation, reorganization, or sale or exchange of the issuer's assets or securities, including by way of tender offer, or any other transaction or proceeding with a person who is a promoter that results in a distribution while the escrow agreement remains in effect, the depositors' promotional shares must remain in escrow subject to the terms of the escrow agreement.
(e) If securities held in escrow become federal covered securities of the type described in 15 U.S.C. 77r(b)(1) (sec. 18(b)(1) of the Securities Act of 1933), all securities in escrow must be released.
(f) An escrow agreement required under 3 AAC 08.180 terminates when all of the promotional shares have been released or the issuer's equity securities or the issuer's assets have been distributed under the agreement. However, the provisions in that escrow agreement for compensation and indemnification of the escrow agent survive until they are satisfied.
History
- Authority: AS 45.55.110; AS 45.55.950
- Eff. 4/19/2000, Register 154
3 AAC 08.184 Documentation of termination of escrow
(a) A request to the escrow agent for the release of promotional shares from escrow must be in writing. The issuer shall provide the escrow agent with documentation showing that the requirements of 3 AAC 08.182 have been met.
(b) The escrow agent shall maintain all records relating to an escrow agreement required under 3 AAC 08.180 for three years following the date of termination of the agreement. The escrow agent shall forward promptly a copy of each record retained by the escrow agent to the administrator upon written request. For purposes of this subsection, the escrow agreement terminates when all of the promotional shares have been released or the issuer's equity securities or the issuer's assets have been distributed under the agreement.
History
- Authority: AS 45.55.110; AS 45.55.950
- Eff. 4/19/2000, Register 154
3 AAC 08.186 Transfer of escrowed promotional shares
(a) An escrow agreement required under 3 AAC 08.180 may provide for the transferability of escrowed promotional shares by will, the laws of descent and distribution, or the operation of law, or by any court of competent jurisdiction and proper venue, as follows:
(1) the escrowed promotional shares of a deceased depositor may be hypothecated to pay the expenses of the deceased depositor's estate, if the hypothecated promotional shares remain subject to the terms of the escrow agreement;
(2) promotional shares may not be transferred, sold, or disposed of until the escrow agent receives a written statement signed by the proposed transferee that states that the transferee
(A) has full knowledge of the terms of the escrow agreement;
(B) accepts the promotional shares subject to the terms of the escrow agreement; and
(C) agrees that the promotional shares must remain in escrow until they are released under 3 AAC 08.184.
(b) Except as provided in (a)(1) of this section, the escrow agreement may not allow a pledge of escrowed promotional shares to secure a debt.
(c) The escrow agreement may allow a transfer of escrowed promotional shares by gift to the depositor's family members, if the promotional shares remain subject to the terms of the escrow agreement.
(d) Except as provided in (a)(2) or (c) of this section, the escrow agreement may not allow the transfer of escrowed promotional shares, an interest in those shares, or a right or title to those shares.
History
- Authority: AS 45.55.110; AS 45.55.950
- Eff. 4/19/2000, Register 154
3 AAC 08.190 Impoundment of proceeds
(a) If an offering is not firmly underwritten, the administrator will, in the administrator's discretion, require, as a condition of registration, that a specific minimum amount of proceeds from a sale of securities be impounded to assure receipt of necessary money to finance the proposed undertaking as described in the application.
(b) If the administrator orders an impoundment agreement, the proceeds from the sale of the securities must be deposited in an interest bearing escrow or trust account under an impoundment agreement with an impoundment agent. The impoundment agent may not be affiliated with the issuer, the issuer's affiliates, the issuer's officers or directors, the issuer's underwriters, or any promoter.
(c) The impoundment agreement must be signed by an officer of the issuer, an officer of the underwriter, if applicable, and an officer of the impoundment agent, who must each warrant that they have the authority to sign the documents. A signed copy of the agreement must be filed with the administrator and, together with a summary of the principal terms of the agreement, becomes part of the registration statement.
(d) The impoundment agreement must provide that the impounded proceeds are not subject to claims by creditors until the proceeds have been released to the issuer and that the administrator has the right to inspect and make copies of the records of the impoundment agent at any reasonable time wherever the records are located. For purposes of this subsection, "creditors" means creditors of the
(1) issuer;
(2) issuer's affiliates;
(3) issuer's associates; or
(4) underwriters of the issuer's offering.
(e) The impoundment agent shall notify the administrator in writing upon the release of the proceeds. If the proceeds are insufficient to attain, within the time prescribed by the impoundment agreement, the minimum amount of proceeds set under 3 AAC 08.135(f), the impoundment agent shall release and return the proceeds directly to the investors without deduction for expenses, including impoundment agent fees, and shall distribute all interest earned pro rata to the investors along with the proceeds.
(f) If a person who is an underwriter for the issuer's offering or an officer, director, promoter, affiliate, or associate of the issuer purchases securities that are a part of the public offering being sold under the registration statement, and if the proceeds from that purchase are used to attain the minimum amount of proceeds set under 3 AAC 08.135(f),
(1) the purchase of the securities must be on the same terms as purchases by unaffiliated public investors; and
(2) the prospectus must contain a disclosure that those persons may purchase securities of the issuer for purposes of completing the impoundment requirements imposed by this section.
History
- Authority: AS 45.55.110; AS 45.55.950
- Eff. 2/20/72, Register 41; am 4/19/2000, Register 154
3 AAC 08.200 Real estate investment trusts
(a) The administrator will, in the administrator's discretion, determine that an offering or sale of securities in an issuer that qualifies as a real estate investment trust under 26 U.S.C. 856 and 858 (Internal Revenue Code) does not protect investors and is not in the public interest, unless that trust's declaration of trust or other organizational instrument contains provisions that satisfy the following minimum conditions:
(1) a majority of the trustees may not be affiliated with the adviser of the trust or any organization affiliated with the adviser of the trust; the trustees must be elected by the shareholders of the trust annually;
(2) self dealing must be restricted as follows:
(A) a trustee, officer, or adviser of the trust, or any person affiliated with that person may not, directly or indirectly, sell property or assets to the trust, purchase property or assets from the trust, or receive a commission or other remuneration in connection with the purchase or sale of trust assets, except under transactions that are fair and reasonable to the shareholders of the trust and that relate to the acquisition by the trust of
(i) property or assets at the formation of the trust or shortly thereafter that is fully disclosed in the prospectus;
(ii) federally insured or guaranteed mortgages at prices not exceeding the currently quoted prices at which the Federal National Mortgage Association purchases comparable mortgages;
(iii) mortgages other than those described in (ii) of this subparagraph, on terms not less favorable to the trust than similar transactions involving unaffiliated parties; or
(iv) property other than property described in (i) - (iii) of this subparagraph, at prices not exceeding the fair value of that property as determined by independent appraisal;
(B) transactions described in (A) of this paragraph and all other transactions in which a trustee, officer, or adviser of the trust have a direct or indirect interest must be approved by a majority of the trustees, including a majority of the independent trustees; commissions or remuneration received by any of those persons in connection with any of those transactions must be deducted from the advisory fee;
(3) fees and expenses that the trust incurs or pays must be restricted as follows:
(A) the aggregate annual expenses of every character paid or incurred by the trust may not exceed two and one-half percent of the total invested assets of the trust, and may not exceed the greater of
(i) two and one-half percent of the average net assets of the trust; net assets must be calculated at least quarterly on a basis consistently applied;
(ii) 25 percent of the net income of the trust, before deducting advisory and servicing fees and expenses; net income must be calculated at least quarterly on a basis consistently applied;
(B) the adviser must reimburse the trust at least annually for the amount by which aggregate annual expenses paid or incurred by the trust exceed the amounts set out in (A) of this paragraph;
(C) for purposes of this paragraph, aggregate annual expenses
(i) include advisory fees and mortgage servicing fees; and
(ii) do not include interest, taxes, or expenses in connection with the issuance of securities or shareholder relations, or the acquisition, operation, maintenance, protection, or disposition of trust properties;
(D) for purposes of this paragraph, net income does not include provision for depreciation, realized capital gains or losses, or extraordinary items;
(4) leverage may not be unreasonable in relation to the net assets of the trust, and the maximum amount of leverage in relation to the net assets must be stated in the prospectus;
(5) minimum capital must be the lesser of $200,000 or 10 percent of the net assets of the trust upon completion of the public offering;
(6) a trust may not
(A) invest more than 10 percent of its total assets in unimproved real property or mortgages on unimproved real property, except for property that is being developed or will be developed within a reasonable period;
(B) invest more than 10 percent of its total assets in junior mortgages, except for wraparound type junior mortgages;
(C) engage in any material trading activities with respect to its properties;
(D) issue redeemable equity securities or equity securities of more than one class;
(E) issue debt securities to the public unless the historical cash flow of the trust or the substantiated future cash flow of the trust, excluding extraordinary items, is sufficient to cover the interest on the debt securities; or
(F) issue options or warrants to purchase its securities to the adviser of the trust or any person affiliated with the adviser, or to a person at exercise prices less than the fair market value of those securities on the date of grant;
(7) an advisory contract entered into by the trust
(A) before the initial public offering may not exceed three years in length;
(B) after the initial public offering may not exceed one year in length; and
(C) must be terminable at any time without penalty, by the trustees or a majority of the holders of outstanding shares of beneficial interest, upon not less than 60 days' written notice to the adviser;
(8) the trust must prepare reports and hold meetings as follows:
(A) the trust must prepare an annual report concerning its operations for each fiscal year ending after the public offering of the trust's securities, including financial statements certified by independent public accountants and prepared in accordance with generally accepted accounting principles applied on a consistent basis; the annual report must be delivered to each public shareholder and debenture holder within 120 days after the end of the fiscal year;
(B) the trust must hold an annual meeting of the holders of outstanding shares of beneficial interest of the trust, upon reasonable notice, following delivery of the annual report prepared as required in (A) of this paragraph;
(C) the trust must file with the administrator the annual report required under (A) of this paragraph and other interim reports delivered to public shareholders.
(b) In this section,
(1) "leverage" means the aggregate secured and unsecured borrowings of the trust;
(2) "minimum capital" means the net assets of the trust before the initial public offering;
(3) "net assets" means total invested assets at cost before deducting depreciation reserves, less total liabilities.
History
- Authority: AS 45.55.120; AS 45.55.950
- Eff. 2/20/72, Register 41; am 4/19/2000, Register 154
3 AAC 08.210 Unequal voting rights of stock
(a) If stock, including preferred or common stock, has less-than-equal voting rights compared to another of the issuer's authorized or outstanding stock, including preferred or common stock, the administrator will, in the administrator's discretion, determine that the offer or sale of that stock does not protect investors and is not in the public interest, unless
(1) the securities are given preferential treatment as to dividends and liquidation, or the less-than-equal voting rights are justified by the issuer to the administrator's satisfaction; and
(2) the terms of the voting rights are prominently disclosed on the cover page of the issuer's circular or prospectus.
(b) In this section, "less-than-equal voting rights" means unequal voting rights
(1) in proportion to the number of shares of each class of stock outstanding; and
(2) on any matter, including the election of members to the board of directors of the issuer.
History
- Authority: AS 45.55.120; AS 45.55.950
- Eff. 2/20/72, Register 41; am 4/19/2000, Register 154
3 AAC 08.215 Loans and other material affiliated transactions
(a) If loans and other material affiliated transactions as described in this section are made or proposed to be made, the administrator will, in the administrator's discretion, disallow the offer or sale of securities unless the issuer has, and represents in the prospectus or offering document that the issuer will maintain, at least two independent directors on its board of directors.
(b) The administrator will, in the administrator's discretion, disallow the offer or sale of securities if the issuer or its affiliates will have a loan or loan guarantee outstanding to a promoter after the offering, or intends to make a loan to or a loan guarantee on behalf of a promoter, other than
(1) an advance to an officer, director, or employee for travel, business expenses, and similar ordinary operating expenditures;
(2) loans or loan guarantees made for the purchase of an issuer's securities by its officers, directors, and employees, and loans for relocation of officers, directors, and employees, if those loans or loan guarantees that are ongoing are approved by a majority of the independent directors without an interest in the transactions, and if those independent directors had access, at the issuer's expense, to the issuer's or independent legal counsel; or
(3) a loan made by an issuer or an affiliate whose primary business is that of making loans, if
(A) the loan is evidenced by a promissory note naming the lender as payee;
(B) the loan bears interest at a rate comparable to that generally charged by other commercial lenders for similar loans made in the lender's locale;
(C) the loan is to be repaid under appropriate amortization schedules, and contains default provisions comparable to those generally used by other commercial lenders for similar loans made in the lender's locale;
(D) the loan is to be made only if credit reports and financial statements show the loan to be collectible and the borrower is a satisfactory credit risk, in light of the nature and terms of the loan and other circumstances;
(E) the loan meets the loan policies generally used by other commercial lenders for similar loans made in the lender's locale;
(F) the purposes of the loan and the disbursement of proceeds are to be reviewed and monitored in a manner comparable to that generally used by other commercial lenders for similar loans made in the lender's locale; and
(G) the loan does not violate the requirements of any banking or other financial institution regulatory authority.
(c) Except for a loan described in (b) of this section, each loan existing at the time of the application for registration must be repaid in full before the offering. The administrator will, in the administrator's discretion, waive this requirement if
(1) repayment of the loan will be made under appropriate amortization schedules; or
(2) a portion of the offering is made on behalf of a promoter and the promoter agrees to repay the loan from the proceeds of the offering.
(d) The administrator will, in the administrator's discretion, disallow the offer or sale of securities if the issuer or an affiliate have engaged in a material transaction with promoters, unless
(1) the prospectus discloses the terms of the transaction and indicates whether those terms are as favorable to the issuer or its affiliates as those generally available from unaffiliated third parties; and
(2) for an issuer whose board of directors includes
(A) two or more independent directors without an interest in the transaction, a majority of those directors ratifies the transaction; those independent directors must have access, at the issuer's expense, to the issuer's or independent legal counsel; or
(B) less than two independent directors without an interest in the transaction, the prospectus discloses that the issuer lacked sufficient disinterested independent directors to ratify the transaction at the time the transaction was initiated.
(e) The issuer shall disclose in the prospectus or offering document if the issuer or an affiliate makes or intends to make a loan to, makes or intends to make a loan guarantee on behalf of, or engages or intends to engage in a material transaction with promoters, and shall also disclose the terms of that transaction. If a material transaction with or loan to promoters has been made, or may be made, the administrator will, in the administrator's discretion, require the following representations to appear in the prospectus or offering document:
(1) that any future material transaction with or loan to promoters will be made or entered into on terms that are no less favorable to the issuer than those that can be obtained from unaffiliated third parties;
(2) that any future material transaction with or loan to promoters, and any forgiveness of a loan, will be approved by a majority of the issuer's independent directors without an interest in the transaction, and that those independent directors will have access, at the issuer's expense, to the issuer's or independent legal counsel.
(f) The issuer and its officers and directors shall consider
(1) their due diligence and other obligations to affirmatively demonstrate a reasonable basis for the representations in (d) and (e) of this section; and
(2) whether to formalize, in the issuer's charter or bylaws, the representation made as described in (e)(2) of this section.
(g) In order to satisfy the ratification provisions of (b)(2), (d)(2)(A), and (e)(2) of this section, the issuer must have on its board of directors at least two independent directors without an interest in the transaction. If the issuer has on its board of directors only two independent directors without an interest in the transaction, both independent directors must approve a loan and other material transaction to satisfy the ratification provisions of (b)(2), (d)(2)(A), and (e)(2) of this section.
(h) The administrator will, in the administrator's discretion, waive any part of this section upon the issuer's petition or as part of a coordinated review with other regulatory jurisdictions.
History
- Authority: AS 45.55.120; AS 45.55.950
- Eff. 4/19/2000, Register 154
3 AAC 08.220 Debentures
(a) Repealed 4/19/2000.
(b) The administrator will, in the administrator's discretion, determine that an offer or sale of debt securities, including debentures, notes, and bonds of an issuer, does not protect investors, is not in the public interest, and involves unreasonable participation by any promoters holding equity securities if
(1) the cash flow of the issuer for the last year before the public offering, or the average cash flow of the issuer over the last three years before the public offering, exclusive of non-recurring items and adjusted for the issuance of debt securities or the substantiated future cash flow capability of the issuer, is insufficient to cover the interest on the securities proposed to be offered to the public; or
(2) the ratio of debt to equity on the balance sheet of the issuer exceeds two to one unless the administrator finds that participation in the public interest and consistent with the protection of the investors in the debt security proposed to be offered.
(c) If the issuer makes a material acquisition after the latest year for which actual figures are stated in the prospectus, the issuer shall make the computation of earnings or cash flow in this section on a pro forma basis to include those acquisitions.
(d) The issuance of debentures by an issuer in the promotional or developmental stage will not be permitted unless justified by the applicant as protective of investors or in the public interest.
(e) This section does not apply to the issuance of
(1) debt securities by a non-profit issuer;
(2) industrial development revenue bonds;
(3) securities under a voluntary or involuntary corporate reorganization; or
(4) securities by an issuer whom a federal or state governmental authority regulates with respect to the issuer's financial structure or the issuance of those securities.
History
- Authority: AS 45.55.120; AS 45.55.950
- Eff. 2/20/72, Register 41; am 4/19/2000, Register 154
3 AAC 08.222 Suitability standards
In reviewing the registration application of a commodity or option pool, or other investment considered by the administrator to be above average in terms of risk of loss or volatility, the administrator will, in the administrator's discretion, require that the issuer offer the security only to purchasers with
(1) a minimum annual gross income of $70,000 and a minimum net worth of $70,000, exclusive of principal automobile, principal residence, and home furnishings; or
(2) a minimum net worth of $250,000, exclusive of principal automobile, principal residence, and home furnishings.
History
- Authority: AS 45.55.120; AS 45.55.950
- Eff. 4/19/2000, Register 154; am 1/17/2016, Register 217
3 AAC 08.225 Preferred stock
(a) The administrator will, in the administrator's discretion, disallow a public offering of preferred stock if
(1) the issuer's adjusted net earnings for the last fiscal year or the issuer's average adjusted net earnings for the last three fiscal years before the public offering were insufficient to
(A) pay the issuer's fixed charges and preferred stock dividends, whether or not accrued; and
(B) meet the redemption requirements, if applicable, of the preferred stock being offered; or
(2) a cash analysis indicates that the issuer lacks sufficient cash to cover the preferred stock dividend, whether or not declared.
(b) If determining whether to disallow, under (a)(2) of this section, a public offering of preferred stock, the administrator will, in the administrator's discretion,
(1) consider the statement of cash flows, if the statement demonstrates that the issuer had positive net cash provided by operating activities for the issuer's last fiscal year before the public offering; or
(2) require the issuer to submit a financial statement demonstrating that the issuer had average positive net cash provided by operating activities for the issuer's last three fiscal years before the public offering.
(c) The requirements of (a) and (b) of this section apply to a public offering of convertible preferred stock that is superior in right to payment of dividends, interest, and liquidation proceeds to any preferred stock and convertible debt that is or may be legally or beneficially, directly or indirectly, owned by promoters. The risks of failure to declare or pay dividends and the equity characteristics of the convertible preferred stock must be disclosed in the prospectus. The administrator will, in the administrator's discretion, review an offering of these securities using the requirements in AS 45.55 and this chapter for equity offerings.
(d) If the issuer's net earnings are subject to cyclical fluctuations or if the administrator determines redemption requirements to be necessary for investor protection, the administrator will, in the administrator's discretion, require that the issuer establish redemption requirements.
(e) The administrator will, in the administrator's discretion, disallow a public offering of equity securities if the issuer's articles of incorporation authorize the issuer's board of directors to issue preferred stock in the future without a vote of the common shareholders, unless
(1) the issuer represents in its prospectus or offering document that the issuer will not offer preferred stock to a promoter except on the same terms as that stock is offered to all other existing shareholders or to new shareholders; or
(2) the issuance of preferred stock is approved by a majority of the issuer's independent directors without an interest in the transaction; those directors must have access, before voting and at the issuer's expense, to the issuer's or independent legal counsel; if the issuer has on its board of directors only two independent directors without an interest in the transaction, both independent directors must approve the issuance of preferred stock.
History
- Authority: AS 45.55.120; AS 45.55.950
- Eff. 4/19/2000, Register 154
3 AAC 08.227 Participation in coordinated securities reviews
The administrator will, in the administrator's discretion, participate with other regulatory jurisdictions in the review of applications to register securities.
History
- Authority: AS 45.55.950
- Eff. 4/19/2000, Register 154
3 AAC 08.230 Effectiveness, post-registration, and post-notice requirements for securities
(a) After an application for registration of securities or a notice filing for federal covered securities becomes effective the offering may be commenced in accordance with AS 45.55 and the terms and conditions of the certificate of registration. The administrator may request that the applicant submit additional information relating to an applicant's filing. Within 30 days after receipt of the request, the applicant shall furnish and properly identify the additional information that the administrator requested. The administrator may delay issuance of a certificate of registration of securities, but not a certificate of notice pending an applicant's completion of arrangements satisfactory to the administrator for the sale and distribution of the securities.
(b) The administrator may determine an application for registration or exemption is terminated, abandoned, or withdrawn if one of the following has occurred:
(1) an applicant requests withdrawal before the effective date of the registration or exemption;
(2) an applicant requests termination after the effective date of the registration or exemption;
(3) the administrator determines an application for registration or exemption to be abandoned because the applicant fails to complete the application process, including
(A) paying the appropriate fee;
(B) completing and filing the required documents; or
(C) failing to respond to a request for information within 90 days after the application;
(4) the administrator determines an application for registration or exemption to be terminated if the applicant has failed to respond within 30 days after receipt of a request made under AS 45.55.910.
(c) If an application is withdrawn or terminated under (b) of this section, the administrator will record that action in the register of applications maintained under AS 45.55.970(b). The administrator will notify the applicant by regular mail that the application has been terminated. The applicant may submit a new application, which will be treated as a new application by the administrator.
(d) The administrator will notify an applicant by deficiency letter of an omission or noncompliance with any requirement for registration. An applicant's failure to comply with the requirements of a deficiency letter is grounds for entry of a stop order under AS 45.55.120.
(e) Before its effective date as determined under 3 AAC 08.085(d), a notice filing for federal covered securities may be withdrawn by the applicant or terminated by the administrator, upon the request of the applicant, or if the notice filer refuses to pay the required notice filing fee. For purposes of this subsection, a notice filer is considered to have refused to pay the required notice fee if the administrator sends a letter by regular mail to the notice filer informing the notice filer of the deficiency of the notice fee, and the administrator does not receive full payment of the notice fee within 30 calendar days after the date the letter was sent.
(f) The administrator will terminate a notice filing for federal covered securities by recording that action in the register of notice filings maintained under AS 45.55.970(b). The administrator will notify the notice filer by regular mail that the notice filing has been terminated. The notice filer may submit a new notice, which will be treated as a new notice by the administrator.
(g) After filing an application for registration, and during the period that a registration is effective, the applicant or registrant shall promptly file with the administrator a correcting amendment within 15 days after discovery of
(1) a statement, document, or information contained in the application that has become inaccurate, incorrect, or misleading; or
(2) a change in circumstances that makes an amendment necessary for a full and fair disclosure of all material facts affecting the issuer's business or offering.
(h) A registrant shall file an amended prospectus as required under 3 AAC 08.120(d)-(e).
(i) An amendment under (g) or (h) of this section must contain the appropriate information or document to which the change pertains. If a document is being amended, a revised form or marked copy must be submitted, or a copy of an existing document, pertinent pages from that document, or a sticker amendment reflecting the changes must be attached. A deletion must be identified by lining through wording, and a substitution or addition must be identified by underlining new language.
(j) If an amendment under (h) of this section to a prospectus is presented in "draft" or "proof" form, a final copy of the prospectus must be filed when completed.
(k) An applicant for registration by qualification, in addition to the copies of amendments, prospectuses, and financial statements, must file a copy of each amendment marked to indicate clearly and precisely the changes effected in the registration statement by that amendment; if the amendment alters the text of the prospectus or of any item, exhibit, or other document previously filed as a part of the registration statement, the changes in the text must be indicated by means of underlining or in some other appropriate manner.
(l) An issuer that offers its securities for sale under a registration, other than through a broker-dealer, shall preserve the following records during the period those securities are offered for sale and for three years following the expiration date of the registration to sell those securities:
(1) a copy of the application for registration with exhibits;
(2) a copy of each advertisement, together with a complete record of the dates, names and addresses of media carrying that advertisement;
(3) the original of any communication received and a copy of any communication sent by the issuer pertaining to the offering, sale, and transfer of the securities;
(4) the original of each subscription or purchase agreement executed by purchasers of those securities;
(5) a list with the name and address of each person purchasing those securities, the amount and type of securities purchased by each, the consideration paid by each, whether payment by that person was in cash, property, services, a note, or another form, and the name of the agent making the sale to that person;
(6) a list with the name and address of each person selling securities for the issuer and the date each was registered to sell securities for the issuer.
(m) The requirements of (g)-( l) of this section do not apply to an issuer that submits a notice filing for federal covered securities.
(n) Termination, abandonment, or withdrawal under (b) of this section does not preclude commencement of proceedings for denial, suspension, or revocation of registration as provided in AS 45.55.120.
History
- Authority: AS 45.55.075; AS 45.55.110; AS 45.55.950
- Eff. 2/20/72, Register 41; am 4/19/2000, Register 154; am 10/26/2000, Register 156; am 1/17/2016, Register 217
Article 3 Alaska Native Claims Act Corporations: Solicitation of Proxies
3 AAC 08.300 Advertising and sales literature
Relocated to 3 AAC 08.900.
3 AAC 08.305 Securities
3 AAC 08.305. Application of 3 AAC 08.305 - 3 AAC 08.365. 3 AAC 08.305 - 3 AAC 08.365 apply only to corporations organized under AS 10.06 and 43 U.S.C. 1601 - 1629h (Alaska Native Claims Settlement Act) and subject to the requirements of AS 45.55.139.
History
- Authority: AS 45.55.138; AS 45.55.240 AS 45.55.139; AS 45.55.950
- Eff. 1/4/81, Register 77; am 3/20/2016, Register 217
3 AAC 08.307 Securities
3 AAC 08.307. Filing of proxy solicitation materials. (a) An annual report, proxy, consent or authorization, proxy statement, or other material relating to proxy solicitation required to be filed with the administrator under AS 45.55.139 shall be filed electronically, in digital media format, or in paper format. The filing must be similar in appearance to the material that is distributed to shareholders. (b) A document filed electronically must be in searchable, portable document format (pdf) or another format pre-approved in writing by the administrator. (c) A filing in digital media format, including an audio, video, or digital recording, must be in a compact disc (CD) or digital versatile disc (DVD) medium or another format pre-approved in writing by the administrator. Two copies shall be filed with the administrator. (d) If a filing is submitted in paper format, two legible, printed copies shall be filed with the administrator. (e) An annual report, proxy, consent or authorization, proxy statement, or other material relating to proxy solicitation is filed under AS 45.55.139 when the administrator receives it, unless the administrator rejects it under (f) of this section. (f) The administrator may reject a filing if it is not required to be filed under AS 45.55.139, contains personal information, or is illegible or corrupt. If a filing is rejected, it may be corrected and resubmitted to the administrator. In this subsection, "personal information" has the meaning given in AS 45.48.090. (g) Material filed and accepted under AS 45.55.139 becomes a part of the records of the administrator and, unless the administrator designates it confidential, is available for public inspection.
History
- Authority: AS 45.55.139; AS 45.55.160; AS 45.55.950
- Eff. 1/4/2013, Register 205
3 AAC 08.310 Securities
3 AAC 08.310. Exemptions. Relocated to 3 AAC 08.910.
3 AAC 08.312 Securities
3 AAC 08.312. Use of electronic forums and filing requirements. (a) A person who posts an annual report, proxy, consent or authorization, proxy statement, or other material relating to proxy solicitation on the Internet, including on an electronic forum, is responsible for filing it with the administrator as required by AS 45.55.139 and for ensuring it complies with 3 AAC 08.300 - 3 AAC 08.365. (b) A posting on an electronic forum is presumed to be distributed, published, or made available to at least 30 Alaska resident shareholders under AS 45.55.139.
History
- Authority: AS 45.55.139; AS 45.55.160; AS 45.55.950
- Eff. 1/4/2013, Register 205
3 AAC 08.315 Securities
3 AAC 08.315. False or misleading statements. (a) A solicitation may not be made by means of a proxy statement, proxy, notice of meeting, or other communication that contains a material misrepresentation. A misrepresentation is a statement that, at the time and under the circumstances in which it is made (1) is false or misleading with respect to a material fact; (2) omits a material fact necessary in order to make a statement made in the solicitation not false or misleading; or (3) omits a material fact necessary to correct a statement, in an earlier communication regarding the solicitation of a proxy for the same meeting or subject matter, which has become false or misleading. A misrepresentation is material if there is substantial likelihood that a reasonable shareholder would consider it important in deciding how to vote. A series of statements or omissions that are objectively false or misleading, but which might not be material misrepresentations if considered separately, might be material misrepresentations if there is a substantial likelihood that a reasonable shareholder would consider the series important in deciding how to vote. Subjective proof that one or more shareholders actually granted a proxy because of a misrepresentation is not required. (b) The fact that a proxy statement, proxy, or other soliciting material has been filed with or examined by the administrator under AS 45.55.139 is not a finding by the administrator that the material is accurate or complete or not false or misleading, or that the administrator has passed upon the merits of or approved any statement contained in the solicitation or any matter to be acted upon by shareholders. No representation to the contrary may be made. (c) The administrator may require a person who has brought to the administrator's attention a solicitation which the person believes contains materially false or misleading statements to explain the reasons for the person's view in writing.
History
- Authority: AS 45.55.138; AS 45.55.160 AS 45.55.139; AS 45.55.950
- Eff. 1/4/81, Register 77; am 11/27/88, Register 108; am 11/3/2013, Register 208
3 AAC 08.320 Securities
3 AAC 08.320. Filing, fees and forms. Relocated to 3 AAC 08.920.
3 AAC 08.322 Securities
3 AAC 08.322. Hearings. Relocated to 3 AAC 08.930.
3 AAC 08.324 Securities
3 AAC 08.324. Rulings, forms, and statements of policy. Relocated to 3 AAC 08.940.
3 AAC 08.325 Securities
3 AAC 08.325. Prohibition of certain solicitations. A person may not solicit (1) an undated or postdated proxy; (2) a proxy which provides that it is dated after the date on which it is signed by the shareholder; (3) a proxy which fails to disclose the shareholders' meeting, or any adjournment of that shareholders' meeting, for which it is solicited; (4) a proxy which confers authority to vote at more than one shareholders' meeting or any adjournment of that shareholders' meeting; or (5) a proxy which authorizes a vote at any shareholders' meeting other than the one disclosed.
History
- Authority: AS 45.55.138; AS 45.55.160 AS 45.55.139; AS 45.55.240
- Eff. 1/4/81, Register 77
3 AAC 08.330 Securities
3 AAC 08.330. Definitions. Relocated to 3 AAC 08.950.
3 AAC 08.335 Securities
3 AAC 08.335. Requirements as to proxy. (a) A proxyholder shall either attend the shareholders' meeting in person or execute a power of substitution so that the shares for which the proxyholder has proxies are represented at the meeting. (b) A proxyholder shall vote in accordance with any choices made by the shareholder or in the manner provided by the proxy when the shareholder has not specified a choice. (c) The proxy must (1) indicate that the proxy is solicited on behalf of the board or, if solicited other than by the board, indicate the identity of the persons on whose behalf the solicitation is made; (2) provide a specifically designated blank space for dating the proxy; and (3) provide a means for the shareholder to specify by boxes a choice between approval or disapproval of each matter or group of related matters identified in the proxy as intended to be acted upon, other than the election of directors. (d) A proxy may confer authority for matters on which a choice is not made by the shareholder if the proxy discloses how the shares represented by the proxy will be voted in each case. (e) A proxy that provides for the election of directors must (1) set out the names of the nominees for whom the proxy is solicited; and (2) clearly provide one of the following: (A) a box opposite the name of each nominee which may be marked to indicate that authority to vote for that nominee is withheld; (B) an instruction that the shareholder may withhold authority to vote for a nominee by lining through or otherwise striking out the name of that nominee; (C) a "ballot" type of selection in which the shareholder is permitted to award votes to selected nominees of the shareholder's choosing. (f) A proxy may confer discretionary authority to vote only with respect to the following: (1) matters which the persons making the solicitation do not know, a reasonable time before the solicitation, are to be presented at the meeting; (2) approval of the minutes of the prior meeting if the approval does not amount to ratification of the action taken at that meeting; (3) the election of a person to an office for which a bona fide nominee is named in the proxy statement and the nominee is unable to serve or for good cause will not serve; (4) a proposal omitted from the proxy statement and proxy, if solicited for an annual meeting by participants other than the board; or (5) matters incident to the conduct of the meeting. (g) If action is to be taken on the election of directors and if the shareholders have cumulative voting rights, a proxy may confer discretionary authority to cumulate votes.
History
- Authority: AS 45.55.138; AS 45.55.160 AS 45.55.139; AS 45.55.950
- Eff. 1/4/81, Register 77; am 11/27/88, Register 108; am 11/3/2013, Register 208
3 AAC 08.345 Securities
3 AAC 08.345. Board solicitations. (a) The solicitation of proxies on behalf of the board for an annual meeting must be preceded or accompanied by the annual report for the corporation's last fiscal year, unless (1) the solicitation is made on behalf of the board before the annual report is available; (2) solicitation is being made at the time in opposition to the board; and (3) the board's proxy statement includes an undertaking to furnish the annual report to all shareholders being solicited at least 50 days before the date of the annual meeting. (b) The solicitation of proxies on behalf of the board must be preceded or accompanied by a dated, written proxy statement including the following: (1) if action is to be taken on the election of directors, a description of each nominee of the board who has consented to act if elected and of each director whose term of office will continue after the shareholders' meeting; each description must include (A) name, age, and state and city of residence; (B) all positions and offices presently and previously held with the corporation and its subsidiaries; (C) the remaining term in office as director and all other periods of service as a director for the corporation and its subsidiaries; (D) the total number of board meetings, including regularly scheduled and special meetings, and the number of meetings of committees on which the nominee or director served, and the percentage attendance during the last fiscal year at meetings of the board, including regularly scheduled and special meetings, and meetings of committees on which the nominee or director served, including those meetings for which the absence was excused; (E) the nature of any family relationship with any director, nominee, or executive officer of the corporation and its subsidiaries; (F) business experience during the past five years, including (i) principal employment or occupation; (ii) the nominee's or director's employer; and (iii) other directorships held for other entities; (G) any of the following events that occurred during the past 10 years: voluntary or involuntary petition under any bankruptcy or insolvency laws, appointment of a receiver, pending criminal proceedings, except traffic violations or other minor offenses, conviction or plea of nolo contendere in a criminal proceeding, except traffic violations or other minor offenses, and the entry of any final judgment, order, or decree, not subsequently reversed or vacated, that the nominee or director engaged in unethical or illegal business practices, violated fiduciary duties, or violated securities laws; and (H) financial transactions by the corporation since the beginning of the corporation's last fiscal year and presently proposed financial transactions by the corporation or its subsidiaries if (i) the transactions in the aggregate exceed $20,000; and (ii) the transaction is with the nominee, director, a member of the nominee's or director's family, or an entity, other than an affiliate of the corporation, where a nominee, director, or a member of the nominee's or director's family is employed by, is an officer or director of, or owns, directly or indirectly, an interest in the entity; (2) a statement of all current compensation or other remuneration distributed or accrued and of all future compensation or other remuneration contributed during the corporation's last fiscal year on behalf of (A) each of the five most highly compensated persons of the corporation, whether directors or officers for the director's or officer's services in all capacities to the corporation and its subsidiaries, naming each such person; and (B) all officers and directors as a group, stating the number of persons in the group without naming them; future remuneration contributed includes amounts that were reported in the corporation's annual report for the last fiscal year for annuity, pension, or retirement plans and for deferred compensation or profit sharing plans; information need not be furnished regarding costs for ordinary and necessary business expenses or for personal benefits, group life, health, hospitalization, or medical reimbursement plans that do not discriminate in favor of officers or directors of the corporation and that are available generally to all salaried employees; (3) a brief description, including the purpose and amount, of financial transactions by the corporation or its subsidiaries since the beginning of the corporation's last fiscal year and any presently proposed financial transactions by the corporation or a subsidiary if (A) the transactions in the aggregate exceed $20,000; and (B) the transaction is with a director, nominee, executive officer, or family member of a director, nominee, or executive officer, or is with an entity, other than an affiliate of the corporation, where the director, nominee, or executive officer or a family member is employed by, is an officer or director of, or owns, directly or indirectly, an interest in the entity; (4) a brief description of all legal proceedings to which any director, nominee, or executive officer has been a party with interests adverse to the corporation or its subsidiaries during the last 10 years; (5) if action is to be taken on the election of directors or other matters for which the financial statements are material to the exercise of prudent judgment, a description of the corporation's relationship with its independent public accountants; this description must include (A) the name of the principal accountant for the last fiscal year; (B) a statement indicating whether representatives of the principal accountant are expected to be present at the meeting with the opportunity of making a statement, if they desire, and with the responsibility of responding to appropriate questions; (C) each professional service provided by the principal accountant and paid for by the corporation during the last fiscal year, such as preparation of corporate tax returns, preparation of personal tax returns, review of proposed corporate acquisitions, review of personal investments, or development of corporate data processing systems; (D) the percentage relationship which the aggregate of the fees for all nonaudit services bears to the aggregate of fees for both audit and nonaudit services performed by the principal accountant and paid for by the corporation; (E) each disagreement with the principal accountant in connection with audits of the last two fiscal years and any subsequent interim period if (i) the principal accountant has been changed since the date of publication or distribution of the proxy statement for the last annual meeting; and (ii) there have been disagreements on matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of the former principal accountant, would have caused the former principal accountant to make references to the disagreements in the audit report; the corporation must, at least 20 days before the date of publication or distribution of the proxy statement, furnish by certified mail its description of any disagreements to the former principal accountant; if the former principal accountant believes the description to be incorrect or incomplete, and if the former principal accountant forwards to the corporation, not later than 10 days of the date of the former principal accountant's receipt of the corporation's description, a brief written statement of the former principal accountant's view, the statement must be included in the corporation's proxy statement; (6) a brief description of any arrangement, stating amounts, by which a director is compensated for all services as a director of the corporation and its subsidiaries, including any additional amounts payable for committee participation or special assignments; information need not be furnished regarding costs for ordinary and necessary business expenses or for personal benefits, group life, health, hospitalization, or medical reimbursement plans that do not discriminate in favor of officers or directors of the corporation and that are available generally to all salaried employees; (7) a brief description of the board's leadership structure, including whether the same person serves as president and board chair, or as president and chief executive officer, the attendance policy for meetings, and a list of the board's committees, if any, performing audit, nominating, and compensation functions, the membership of each committee, the number of meetings held by each committee during the last fiscal year, and a brief description of the functions actually performed by each committee; (8) a brief description of the methods to be employed to solicit proxies, if other than by use of the mail, and a statement that solicitation is made on behalf of the board; (9) a statement of the total amount estimated to be spent and the total already expended on the solicitation of proxies; expenditures include fees for attorneys, accountants, solicitors, and public relations or financial advisers and expenses for advertising, printing, transportation, litigation, or other expenses incidental to the solicitation; however, the following expenses may be excluded: (A) the amounts which the corporation would normally spend on a solicitation for an election of directors in the absence of a contest; and (B) the salaries and wages of regular employees and officers, if a statement to that effect is included in the proxy statement; (10) a statement indicating who will bear the cost of solicitation and the total amount any participant, other than the board and the corporation, has contributed or has agreed to contribute, unless the participant is a contributor of less than $500 in the aggregate; (11) a statement describing any formal procedure or deadline limiting the shareholder's rights to revoke a proxy before its exercise; (12) a statement of the number of shares outstanding and entitled to be voted at the meeting; (13) a statement of the date on which the record of shareholders entitled to vote at the meeting will be determined; if the right to vote is not limited to shareholders of record on that date, the solicitation must indicate the conditions under which other shareholders may be entitled to vote; (14) if action is to be taken on the election of directors and if the shareholders have cumulative voting rights (A) a statement that they have the rights; and (B) a brief description of those rights; (15) for each matter that is to be submitted to a vote of the shareholders, other than the election of directors, a description of the proposal, a statement of the vote required for its approval, and the name of any director who has notified the corporation in writing that the director intends to oppose the proposed action; for example, if action is to be taken on (A) a proposed amendment to the articles of incorporation or bylaws, the description must include the reasons for and against the proposed amendment, the general effect of the amendment, and the names of any directors who oppose the amendment; or (B) a proposed property transaction, in addition to identifying any directors who oppose the transaction, the description must (i) outline the material features of the proposed transaction; (ii) state the nature and amount of consideration and, to the extent practicable, outline the facts that bear on the question of the fairness of consideration; and (iii) state the name and address of the other party or parties to the proposed transaction and the nature of any material relationship of the party or parties to the corporation, its subsidiaries, officers, or directors; (16) a brief description of any substantial interest, direct or indirect, by shareholdings or otherwise, of each participant or executive officer in any matter to be acted upon at the meeting, unless the participant or executive officer owns shares in the corporation and would receive no extra or special benefit not shared on a pro rata basis by all other shareholders of the same class; and (17) a brief description of the nominating procedures for board candidates. (c) If a candidate included in a board solicitation or a candidate soliciting write-in votes does not engage in any additional proxy solicitations, the candidate may rely on inclusion in the board's proxy statement, but the candidate remains responsible for the accuracy and completeness of the information the candidate provided to the board. If, however, the candidate, whether recommended by the board or a candidate included on an open proxy, elects to engage in any additional solicitation, the candidate must comply with 3 AAC 08.355.
History
- Authority: AS 45.55.138; AS 45.55.160 AS 45.55.139; AS 45.55.950
- Eff. 1/4/81, Register 77; am 11/27/88, Register 108; am 11/3/2013, Register 208; am 3/20/2016, Register 217
3 AAC 08.355 Securities
3 AAC 08.355. Non-board solicitations. The solicitation of proxies on behalf of a participant, other than solicitations under 3 AAC 08.345, must be preceded or accompanied by a dated, written proxy statement including the following: (1) the name of the corporation in respect to which proxies are being solicited; (2) the name and address of each participant, including each proxyholder, who has joined or proposes to join in the solicitation; (3) a statement indicating whether any of the participants in the solicitation has an arrangement or understanding with an entity for future employment by the corporation or future financial transactions to which the corporation will or may become a party, and a description listing the terms of and the parties to each arrangement or understanding; (4) if action is to be taken on the election of directors, a description of each nominee of the participant who has consented to act if elected; each description must include, if applicable (A) name, age, and state and city of residence; (B) all positions and offices presently and previously held with the corporation and its subsidiaries; (C) the remaining term in office as director and all other periods of service as a director for the corporation and its subsidiaries; (D) the total number of board meetings, including regularly scheduled and special meetings, and the number of meetings of committees on which the nominee served, and the percentage attendance during the last fiscal year at meetings of the board, including regularly scheduled and special meetings, and meetings of committees on which the nominee served, including those meetings for which the absence was excused; (E) the nature of any family relationship with any director, nominee, or executive officer of the corporation and its subsidiaries; (F) business experience during the past five years, including (i) principal employment or occupation; (ii) the nominee's or director's employer; and (iii) other directorships held for other entities; and (G) any of the following events that occurred during the past 10 years: voluntary or involuntary petition under any bankruptcy or insolvency laws, appointment of a receiver, pending criminal proceedings except traffic violations or other minor offenses, conviction or plea of nolo contendere in a criminal proceeding, except traffic violations or other minor offenses, and the entry of any final judgment, order, or decree, not subsequently reversed or vacated, that the nominee engaged in unethical or illegal business practices, violated fiduciary duties, or violated securities laws; (5) a brief description of financial transactions by the corporation, including purpose and amount, with that participant, a member of that participant's family, or any entity since the beginning of the corporation's last fiscal year and presently proposed financial transactions by the corporation with that person or entity if (A) the transactions in the aggregate exceed $20,000; and (B) the participant in the solicitation or a member of the participant's family is a party to the transaction or is employed by, is an officer or director of, or owns, directly or indirectly, an interest in the entity who is a party to the transaction; (6) a brief description of all legal proceedings to which each participant in the solicitation is a party with interests adverse to the corporation or its subsidiaries during the last 10 years; (7) a brief description of the methods to be employed to solicit proxies, if other than by the use of the mail; (8) a statement of the total amount estimated to be spent and the total already expended on the solicitation of proxies; (9) a statement indicating who will bear the expense of solicitation, and the amount each participant in the solicitation has contributed or has agreed to contribute, unless the participant is a contributor of less than $500 in the aggregate; (10) a statement indicating whether reimbursement for solicitation expenses will be sought from the corporation; and (11) if the proxy statement relates to any matter requiring notice to shareholders by law or to a special shareholders' meeting for which any participant in the solicitation sought shareholder signatures on a document calling for the special meeting (A) a description of each matter which is to be submitted to a vote of the shareholders and a statement of the vote required for its approval; and (B) a description of any substantial interest, direct or indirect, by shareholdings or otherwise, of each participant in the solicitation, or family member of that participant, in any matter to be acted upon at the meeting, unless the participant or family member owns shares in the corporation and would receive no extra or special benefit not shared on a pro rata basis by all other shareholders of the same class.
History
- Authority: AS 45.55.138; AS 45.55.160 AS 45.55.139; AS 45.55.950
- Eff. 1/4/81, Register 77; am 11/3/2013, Register 208; am 3/20/2016, Register 217
3 AAC 08.360 Securities
3 AAC 08.360. Investigations. (a) A shareholder, director, or officer of a corporation subject to AS 45.55.139, aggrieved by an alleged violation of 3 AAC 08.305 - 3 AAC 08.365 may request that the administrator investigate the alleged violation. An aggrieved person is not required to request that the administrator investigate an alleged violation before seeking other remedies, including court action. (b) Except as provided in this subsection, a request for investigation must be filed with the administrator not later than 90 days after the date of the shareholder vote for which the proxies in question were solicited. If the administrator finds the requester did not discover and reasonably could not have discovered the alleged violation within the time required by this subsection, the deadline for filing the request for investigation is 90 days after the time the requester discovered or reasonably should have discovered the alleged violation. (c) A request for investigation must be filed with the administrator on a form provided by the administrator or in a separate writing. A request for investigation that is not filed on a form provided by the administrator must include (1) the full name, mailing address, telephone number, and electronic mail address, if any, for the requester and, if the requester is not a corporation under 3 AAC 08.305, for both the requester and the corporation; (2) the date of the shareholder meeting for which proxies are solicited, if known; (3) the full name, mailing address, telephone number, and electronic mail address, if known, of the alleged violator of 3 AAC 08.305 - 3 AAC 08.365; (4) each regulation allegedly violated; (5) a description of the solicitation involving an alleged violation and a copy of any materials relevant to an alleged violation; (6) the full name, mailing address, telephone number, and electronic mail address, if any, of other persons who may have information regarding the alleged violation; (7) a written summary of any meetings, communications, or other contacts that the requester has had with the alleged violator of 3 AAC 08.305 - 3 AAC 08.365 regarding the alleged violation; (8) a description of any court action related to the alleged violation of 3 AAC 08.305 - 3 AAC 08.365 that has been filed; and (9) the requester's signed acknowledgment that the information provided (A) is true and complete to the best of the requester's knowledge; (B) must be updated immediately by the requester if other information is discovered, a ruling or decision is issued in a court action, or a court action is filed; (C) may be disclosed by the administrator as necessary or appropriate to investigate an allegation, in a public order of the administrator, or at an administrative hearing that could result from an investigation; (D) constitutes a request for an investigation under this section; (E) if the request is filed more than 90 days after the date of the shareholder vote for which the proxies in question were solicited, the reason that the requester did not discover and reasonably could not have discovered the alleged violation within the 90-day period required by (b) of this section. (d) The administrator (1) shall return an incomplete request for investigation to the person making the request; (2) may consolidate multiple requests for investigation; and (3) may commence an investigation at any time whether or not a request for investigation is filed. (e) Not later than 10 business days after the administrator's receipt of a complete request for investigation, the administrator shall notify the requester whether the administrator will open or decline to open an investigation. If, within the 10-business-day period specified in this subsection, the administrator is unable to obtain necessary information about the request, the administrator shall notify the requester in writing within the 10-business-day period of the additional time that the administrator needs to decide whether to open or decline to open an investigation. If the administrator opens an investigation, the administrator may limit the scope of the investigation. (f) If the administrator opens an investigation, the administrator shall provide the alleged violator and may provide the corporation written notice of the investigation. The administrator may disclose information, including the identity of the requester, if necessary or appropriate to investigate an allegation. (g) After investigation, the administrator shall notify the requester, the corporation, if previously notified under (f) of this section, and the alleged violator in writing of the administrator's decision to take no administrative action or to issue an order under AS 45.55.920. (h) This section applies to a request for investigation filed with the administrator or an investigation initiated by the administrator on or after November 5, 2011.
History
- Authority: AS 45.55.139; AS 45.55.905; AS 45.55.950 AS 45.55.160; AS 45.55.910
- Eff. 11/5/2011, Register 200; am 3/20/2016, Register 217
3 AAC 08.365 Securities
3 AAC 08.365. Definitions relating to solicitation of proxies. For purposes of 3 AAC 08.305 - 3 AAC 08.365, the following definitions apply: (1) "annual report" means a summary by the corporation of its business activities, results of operations, and financial condition for the last fiscal year, including consolidated financial statements confirming that the corporation's accounts were audited annually in accordance with generally accepted auditing standards by independent certified public accountants or independent licensed public accountants, certified or licensed by a regulatory authority of the state or the United States as required by 43 U.S.C. 1601 - 1629; (2) "board" means the board of directors of the issuer of shares for which a proxy is solicited; (3) "contest" means an issue in which the board expects one or more solicitations to be made which will be subject to 3 AAC 08.355; (4) "corporation" means the issuer of shares with respect to which a proxy is solicited; (5) "entity" means an individual, sole proprietorship, partnership, joint venture, trust, association, firm, corporation, or other organization, whether or not operated for profit; (6) "executive officer" means the president, secretary, treasurer, a vice president in charge of a principal business function, such as sales, administration, or finance, or any other person who performs similar policy-making functions for the corporation; (7) "family" means an individual's spouse, parents, children, or siblings by blood or adoption; (8) "financial transaction" means (A) the buying, selling, or leasing of real or personal property or of an interest in real or personal property, including, but not limited to, an option, right of first refusal, or joint venture interest; (B) the buying or selling of services; (C) the loaning or borrowing of money or a preliminary commitment to that transaction; or (D) any other transaction which is substantially similar in nature to those listed in this paragraph, excluding distributions mandated by 43 U.S.C. $ 1606. j), effective December 18, 1971; (9) "last fiscal year" means the fiscal year of the corporation most recently completed before the date of the meeting for which proxies are to be solicited; (10) "nominee" means a person who has consented to being named in a proxy statement and who has agreed to serve if elected; (11) "participant" (A) means the board and the corporation; (B) means a nominee for whose election as director proxies are solicited; (C) means a committee or group which solicits proxies or a member of the committee or group; (D) means a person who finances, directly or indirectly, the solicitation of proxies, except a person who contributes not more than $500 and who is not otherwise a participant; (E) means a person who solicits proxies; (F) does not include (i) a person or organization retained or employed by a participant to solicit shareholders whose activities are limited to the performance of the person's duties in the course of employment; (ii) a person who merely transmits proxy soliciting material or performs other ministerial or clerical duties; (iii) a person employed by a participant in the capacity of attorney, accountant, or as an advertising, public relations, or financial adviser, whose activities are limited to the performance of the person's duties in the course of employment; or (iv) a person regularly employed as an officer or employee of a participant who is not otherwise a participant; (12) "proxy" means a written authorization which may take the form of a consent, revocation of authority, or failure to act or dissent, signed by a shareholder or his attorney-in-fact and giving another person power to vote with respect to the shares of the shareholder; (13) "proxyholder" means a person to whom a proxy or power of substitution is given; (14) "proxy statement" means a letter, publication, press release, advertisement, radio/television script or tape, or other communication of any type which is made available to shareholders under circumstances reasonably calculated to result in the procurement, withholding, or revocation of a proxy; (15) "shareholder" means one who is the holder of record of a share in the corporation; (16) "solicitation" means (A) a request to execute or not to execute, or to revoke a proxy; or (B) the distributing of a proxy or other communication to shareholders under circumstances reasonably calculated to result in the procurement, withholding, or revocation of a proxy; (17) "electronic forum" (A) means a forum that is created on and accessible by means of the Internet, and that allows communication among users; (B) includes (i) blogs or other websites that allow for the posting of reader comments; and (ii) websites for social networking, websites for microblogging, and other forms of electronic communication through which users create communities on the Internet to share information, ideas, personal messages, videos, and similar content; (18) "affiliate" has the meaning given in AS 10.06.990; (19) "control" has the meaning given in AS 10.06.990; (20) "minor offense" has the meaning given in Rule 2 of the Alaska Rules of Minor Offense Procedure; (21) "residence" means residence for purpose of voting, as determined under AS 15.05.020; (22) "subsidiary" has the meaning given in AS 10.06.990.
History
- Authority: AS 45.55.138; AS 45.55.160 AS 45.55.139; AS 45.55.950
- Eff. 1/4/81, Register 77; am 11/27/88, Register 108; am 1/4/2013, Register 205; am 11/3/2013, Register 208; am 3/20/2016, Register 217
Article 4 “Regulation D” Registration and Notice Procedure
3 AAC 08.500 Securities
3 AAC 08.500. Creation of classifications. The following classifications of transactions in securities are created, to which 3 AAC 08.500 - 3 AAC 08.540 apply: (1) an offering relying on "Regulation D" as adopted by the SEC in 17 C.F.R. 230 and 239; (2) an offering relying on another federal regulation or statute and that otherwise meets the requirements of 3 AAC 08.500 - 3 AAC 08.540.
History
- Authority: AS 45.55.110; AS 45.55.950
- Eff. 5/24/84, Register 90; am 4/19/2000, Register 154
3 AAC 08.501 Securities
3 AAC 08.501. Definitions specific to "Regulation D" procedure. (a) As used in 3 AAC 08.500 - 3 AAC 08.540, the definitions of the following terms are contained in 17 C.F.R. 230.501, as revised as of October 1, 1999, and are adopted by reference: (1) "accredited investor;" (2) "affiliate;" (3) "aggregate offering price;" (4) "business combination;" (5) "calculation of number of purchasers;" (6) "executive officer;" (7) "issuer;" (8) "purchaser representative." (b) Unless the context indicates otherwise, in 3 AAC 08.501 - 3 AAC 08.540, (1) "closing a sale" means that transaction under which the offeror becomes legally bound to sell the securities; (2) repealed 4/19/2000; (3) "permitted Alaska purchaser" means a person who, at the time the person becomes a purchaser of the securities, comes within any of the following categories or whom the issuer reasonably believes comes within any of the following categories: (A) a natural person who purchases, in this state, at least $10,000 of the securities being offered, if the purchaser's total purchase does not exceed five percent of the purchaser's net worth at the time of purchase; the purchase must be only for cash, marketable securities, or both; the net worth of the purchaser's spouse may be included for the purpose of this subparagraph; (B) a natural person who had an individual income in excess of $70,000 in each of the two most recent years and who reasonably expects an income in excess of $70,000 in the current year, if the amount purchased in this state does not exceed 10 percent of the person's individual income for the most recent year; the purchase must be only for cash, marketable securities, or both; the income of a spouse may be included for the purpose of this subparagraph; (C) a limited partnership, limited liability partnership, limited liability company, partnership, corporation, trust, or other entity in which each of the equity owners, or holders of beneficial interests in the case of a trust, satisfies the requirements of (A) or (B) of this paragraph, if the amount invested by the entity would be allowable as an individual purchase by each person under (A) or (B) of this paragraph. (c) A person who is not a registered agent, a registered state investment adviser, or a federal covered adviser in compliance with AS 45.55.040(h) and who acts as a purchaser representative, is not considered an agent, state investment adviser, or federal covered adviser if the activity as purchaser representative is merely an incidental part of the person's usual activities or occupation.
History
- Authority: AS 45.55.110; AS 45.55.950
- Eff. 5/24/84, Register 90; am 4/19/2000, Register 154
3 AAC 08.502 Securities
3 AAC 08.502. General requirements. Repealed.
History
- Eff. 5/24/84, Register 90; repealed 4/19/2000, Register 154
3 AAC 08.503 Securities
3 AAC 08.503. Registration and reporting of "Regulation D" offerings. (a) An applicant registering under the provisions of 3 AAC 08.500 - 3 AAC 08.540 is only required to file the registration statement on State of Alaska Form 08-101, any items required by the registration statement, any items requested by the staff, and the fee required by in 3 AAC 08.920(a)(5). If additional documents, including the offering documents, are filed with the administrator, the administrator will treat the filing as an application for registration by qualification. (b) Sales of an offering registered under 3 AAC 08.500 - 3 AAC 08.505 may be made only by a broker-dealer and salesperson registered under this chapter or by other persons exempted from registration by AS 45.55 or this chapter. (c) Notwithstanding the requirements of (b) of this section, an issuer or sponsor of an issuer to be formed may register up to five salespersons as agents who are exempt from the examination requirement of 3 AAC 08.011(h)(2). To register an agent, the issuer or sponsor of an issuer must file an application for registration in accordance with 3 AAC 08.011(h)(1) and pay a fee in accordance with 3 AAC 08.015(a)(1)(B). A salesperson may not be registered to more than one person at a time without complying with the dual registration provisions of 3 AAC 08.010(e) - (f). (d) The registrant shall, for three years after the closing of the offering, maintain and keep open for inspection by the administrator or his designee inside or outside of this state (1) all offering materials; (2) records relating to purchaser representatives used, and materials and data relied upon to determine the qualifications of the purchaser representatives; (3) records relating to purchasers, and materials and data relied upon to determine the qualifications of the purchasers; (4) records relating to securities sales after the closing of the offering, that are considered as part of the offering; and (5) all offering materials used in connection with offerings registered under 3 AAC 08.500 - 3 AAC 08.505. (e) The administrator will, in the administrator's discretion, modify or waive any requirement in 3 AAC 08.500 - 3 AAC 08.505. An applicant for waiver must prove that the action requested is consistent with AS 45.55, and that the investors are otherwise adequately protected.
History
- Authority: AS 45.55.110; AS 45.55.950
- Eff. 5/24/84, Register 90; am 9/8/91, Register 119; am 10/1/99, Register 151; am 4/19/2000, Register 154
3 AAC 08.504 Securities
3 AAC 08.504. Registration of Rule 504 offerings. (a) Offerings of securities not exceeding the greater of $1,000,000 or the limit established under 17 C.F.R. 230.504(b)(2) (SEC Rule 504(b)(2)) may be registered as follows: (1) an unlimited number of sophisticated or suitable purchasers may be involved; (2) written offering documents providing full and adequate disclosure of material facts must be provided to each purchaser; (3) advertising is not allowed without a waiver from the administrator under 3 AAC 08.520(b); (4) the sum of the following amounts may not exceed the greater of $1,000,000 or the limit established under 17 C.F.R. 230.504(b)(2): (A) the dollar value for the amount of securities being registered; (B) the aggregate offering price of all securities of the issuer sold within the 12 months before the effective date of the certificate of registration; (C) the aggregate offering price of all securities of the issuer sold during the course of the offering being registered if the securities were sold in reliance on 15 U.S.C. 77c(b) (sec. 3(b) of the Securities Act of 1933) or in violation of 15 U.S.C. 77e(a) (sec. 5(a) of the Securities Act of 1933); (5) provisions on offerings to sophisticated purchasers are as follows: (A) the registration of an offering to sophisticated purchasers under this section allows sales to (i) an accredited investor; (ii) a permitted Alaska purchaser; or (iii) a person, acting alone or with a purchaser representative, who the issuer reasonably believes has the knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of the proposed investment; the issuer's reasonable belief of the person's knowledge and experience must exist before a person becomes a purchaser; (B) sales under this paragraph may be made by the issuer, a person registered in this state to sell for the issuer, a broker-dealer, or a person exempted from registration by AS 45.55 or this chapter; (6) the registration of an offering to suitable purchasers under this section allows (A) sales to be made only by a broker-dealer registered in this state who is also registered as a broker-dealer with the SEC under 15 U.S.C. 78o(b) (sec. 15(b) of the Securities Exchange Act of 1934); (B) registration if the broker-dealer who will conduct the sales reasonably believes that adequate diligence and review have been applied in connection with the offering being registered in order for the broker-dealer to adequately determine the suitability of the offering to a purchaser; and (C) sales if the broker-dealer reasonably believes that the security is suitable for the purchaser after reasonable inquiry concerning the purchaser's investment objectives, financial situation, and needs, and after consideration of any other information known by the broker-dealer. (b) For purposes of this section, 17 C.F.R. 230.504(b)(2), as revised as of October 1, 1999, is adopted by reference.
History
- Authority: AS 45.55.110; AS 45.55.950
- Eff. 5/24/84, Register 90; am 4/19/2000, Register 154
3 AAC 08.505 Securities
3 AAC 08.505. Registration of Rule 505 offerings. (a) Offerings of securities not exceeding the greater of $5,000,000 or the limit established under 17 C.F.R. 230.505(b)(2)(i) (SEC Rule 505(b)(2)(i)) may be registered under this section, subject to the following: (1) an unlimited number of accredited investors may be involved; (2) the issuer must reasonably believe that, applying the provisions for "calculation of number of purchasers" in 17 C.F.R. 230.501, the number of purchasers, other than accredited investors, total no more than 35; (3) sales may be made only to sophisticated or suitable purchasers as described in (b) - (c) of this section; (4) the requirements of 3 AAC 08.515(a) and (c) - (f) apply to offerings registered under this section; (5) advertising is not allowed without a waiver from the administrator under 3 AAC 08.520(b); (6) the sum of the following amounts may not exceed the greater of $5,000,000 or the limit established under 17 C.F.R. 230.505(b)(2)(i): (A) the dollar value for the amount of securities being registered; (B) the aggregate offering price of all securities of the issuer sold within the 12 months before the effective date of the certificate of registration; (C) the aggregate offering price of all securities of the issuer sold during the course of the offering being registered if the securities were sold in reliance on 15 U.S.C. 77c(b) (sec. 3(b) of the Securities Act of 1933) or in violation of 15 U.S.C. 77e(a) (sec. 5(a) of the Securities Act of 1933). (b) Provisions on offerings to sophisticated purchasers are as follows: (1) the registration of an offering to sophisticated purchasers under this section allows sales to (A) an accredited investor; (B) a permitted Alaska purchaser; or (C) a person, acting alone or with a purchaser representative, who the issuer reasonably believes has the knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of the proposed investment; the issuer's reasonable belief of the person's knowledge and experience must exist before a person becomes a purchaser; (2) sales under this paragraph may be made by the issuer, a person registered in this state to sell for the issuer, a broker-dealer, or a person exempt from registration by AS 45.55 or this chapter. (c) The registration of an offering to suitable purchasers under this section allows (1) sales to be made only by a broker-dealer registered in this state who is also registered as a broker-dealer with the SEC under 15 U.S.C. 78o(b) (sec. 15(b) of the Securities Exchange Act of 1934); (2) registration if the broker-dealer who will conduct the sales reasonably believes that adequate diligence and review have been applied in connection with the offering being registered in order for the broker-dealer to adequately determine the suitability of the offering to a purchaser; and (3) sales if the broker-dealer reasonably believes that the security is suitable for the purchaser after reasonable inquiry concerning the purchaser's investment objectives, financial situation, and needs, and after consideration of any other information known by the broker-dealer. (d) For purposes of this section, 17 C.F.R. 230.505(b)(2)(i), as revised as of October 1, 1999, is adopted by reference.
History
- Authority: AS 45.55.110; AS 45.55.950
- Eff. 5/24/84, Register 90; am 4/19/2000, Register 154
3 AAC 08.506 Securities
3 AAC 08.506. Notice filing procedures for transactions of federal covered securities not involving public offerings. (a) An issuer offering a federal covered security in a transaction that is not a public offering for the purposes of 15 U.S.C. 77d(2) and 15 U.S.C. 77r(b)(4)(D) (secs. 4(a)(2) and 18(b)(4)(D) of the Securities Act of 1933) shall file with the administrator through the EFD system no later than 15 days after the first sale of that federal covered security in this state (1) a notice on SEC Form D, including Part E and the Appendix, or on any successor form adopted by the SEC; and (2) a nonrefundable notice filing fee as provided in 3 AAC 08.920(a)(3). (b) A notice filing under this section is effective (1) only if the administrator receives through the EFD system each item required by (a) of this section; and (2) on the date that the administrator receives through the EFD system the last of the items required by (a) of this section. (c) After receipt of the items required by (a) of this section, the administrator will issue through the EFD system a certificate of notice as of the date of receipt of those items. Sales may occur before the effective date of the notice filing under this section. (d) A notice filing under this section is valid for one year from the effective date established under (b) of this section. To renew a notice, the issuer must submit the items required by (a) of this section to the administrator through the EFD system, as if the issuer were making an initial filing. The administrator will not accept a renewal earlier than 60 days before the expiration date of the filing. (e) To qualify as a federal covered security under AS 45.55.075, offers and sales under this section must satisfy all the terms and conditions of this section and 17 C.F.R. 230.506. (f) Notwithstanding (a) of this section, an issuer may choose to claim an available exemption under AS 45.55.900 even if the issuer has filed an SEC Form D with the SEC. However, securities offered under an available exemption under AS 45.55.900 will not be considered federal covered securities.
History
- Authority: AS 45.55.075; AS 45.55.950
- Eff. 5/24/84, Register 90; am 4/19/2000, Register 154; am 1/17/2016, Register 217; am 11/26/2016, Register 220
3 AAC 08.510 Securities
3 AAC 08.510. Integration requirements. (a) All separate sales of securities by an issuer that are a part of the same offering registered under 3 AAC 08.501 - 3 AAC 08.505, or noticed under 3 AAC 08.506 are included as securities sold under the same offering, except as otherwise provided in this section. (b) In determining whether to treat separate sales of securities inside or outside of this state as part of the same offering, the administrator will consider whether the sales (1) are part of a single plan of financing; (2) involve issuance of the same class of security; (3) are made at or about the same time; (4) are made for the same type of consideration; and (5) are made for the same general purpose. (c) A sale of securities made more than six months before the effective date of registration under 3 AAC 08.501 - 3 AAC 08.505, or of notice under 3 AAC 08.506, or more than six months after the termination of the offering, is not included as a sale made as part of the same offering under this section if sales of securities of the same or similar class by the issuer do not occur during either six-month period. For purposes of this subsection, (1) the effective date of a registration under 3 AAC 08.504 or 3 AAC 08.505 is the date a registrant is authorized to sell securities under a certificate of registration issued by the administrator; (2) the effective date of a notice under 3 AAC 08.506 is the date established under 3 AAC 08.506(b); (3) the termination date of the offering under 3 AAC 08.504, 3 AAC 08.505, or 3 AAC 08.506 is the earlier of the (A) expiration date of a certificate of registration in the case of an offering under 3 AAC 08.504 or 3 AAC 08.505, or a certificate of notice in the case of an offering under 3 AAC 08.506; or (B) date of last sale of securities. (d) An offering of an interest in a partnership is not included as a security sold under the same offering under 3 AAC 08.504 or 3 AAC 08.506, even if a common sponsor or affiliate is involved in an offering of interest in another entity, if the following conditions are satisfied: (1) the partnership (A) must be a separate legal entity; (B) must maintain separate books and records; and (C) may not commingle funds of the partnership with those of the sponsor or any other entity having the same sponsor; (2) the partnership, at the time the interests are sold, must have an independent opportunity to meet its primary investment objective; for purposes of this paragraph, the partnership does not have an independent opportunity to meet its primary investment objective if the partnership is substantially dependent on the creation, continued existence, or economic results of investments of another entity having a common sponsor; (3) a material portion of the gross offering proceeds of the partnership may not be invested in properties where another entity having a common sponsor has also invested, and continues to hold invested, a material portion of the other entity's gross offering proceeds; (4) an offering that does not identify at least 50 percent of the assets in which the partnership intends to invest does not qualify under this subsection if (A) another entity with a common sponsor was formed to conduct the same general type of activity and that entity has not invested or committed the major portion of that entity's gross offering price before commencement of this offering by the registering partnership; or (B) the sponsor creates a simultaneous or subsequent offering through another entity to conduct the same general type of activity before the registering partnership has invested or committed for investment the major portion of the partnership's gross offering proceeds; this subparagraph does not apply if the investment to be made by the other entity is fully identified; (5) an offering of interests in a partnership that is formed to engage in sale and leaseback transactions does not qualify under this subsection if the ultimate intended lessee of the assets in which the partnership invests is a sponsor of the partnership. (e) A person may request an order from the administrator as to whether a transaction is exempt, under (b), (c), or (d) of this section, from treatment under (a) of this section as a sale under the same offering. To make that request, a person must file it with the person's application for registration, setting out arguments and citations in support of the request. For registrations under 3 AAC 08.504 and 3 AAC 08.505, and upon receipt of a properly filed request, the administrator will include with the certificate of registration an order as to whether separate sales will be integrated under this section. (f) If, under (e) of this section, a person requests an order for an exemption under (c) or (d) of this section, but not for an exemption under (b) of this section, an order that an exemption is unavailable under (c) or (d) of this section does not raise a presumption of integration under (b) of this section. (g) Offers and sales of securities under an employee benefit plan, as defined by 17 C.F.R. 230.405, are not included under (a) of this section for purposes of integration. For purposes of this subsection, the definition of "employee benefit plan" in 17 C.F.R. 230.405, as revised as of October 1, 1999, is adopted by reference. (h) In this section, (1) "partnership" (A) includes a general partnership, limited partnership, limited liability partnership, joint venture, or other similar entity; and (B) means a partnership existing on May 24, 1984 or formed on or after that date; (2) "sponsor" (A) means a promoter or person directly or indirectly instrumental in organizing the entity wholly or in part, or a person who manages or participates in the management of the partnership; (B) includes a general partner and affiliate of the sponsor; and (C) does not include an independent third party whose only compensation is for professional services rendered in connection with the offering of interests in the partnership; for purposes of this subparagraph, "independent third party" includes an attorney, accountant, or underwriter.
History
- Authority: AS 45.55.110; AS 45.55.950
- Eff. 4/19/2000, Register 154
3 AAC 08.515 Securities
3 AAC 08.515. Information requirements. (a) The provisions of 3 AAC 08.501 - 3 AAC 08.540 do not relieve a person from compliance with the statutory requirements of AS 45.55 for full and adequate disclosures of material items. (b) If an offering is registered under 3 AAC 08.504, written disclosures must be provided in connection with all offers and sales as required under (a)(2) of that section. (c) If an offering is registered under 3 AAC 08.505, the offeror must provide full and adequate disclosure of all matters material to an understanding of the issuer, the issuer's business, and the securities being offered. Disclosures must (1) provide each prospective purchaser with at least the type of information and documentation required by 17 C.F.R. 230.502(b)(2); for purposes of this paragraph, 17 C.F.R. 230.502(b)(2), as revised as of October 1, 1999, is adopted by reference; (2) include a procedure for a prospective purchaser to ask questions and receive answers concerning the terms of the offering and to obtain any additional information that (A) the issuer possesses or can acquire through reasonable effort or expense; and (B) is necessary to verify the accuracy of information provided under this section; and (3) include a procedure for a prospective purchaser who is not an accredited investor to obtain a brief written description of any written information concerning the offering that is provided by the issuer to any accredited investor; failure by a purchaser to request the information does not constitute a waiver of the issuer's statutory obligation to provide full and complete disclosure; for purposes of this paragraph, a prospective purchaser includes a permitted Alaska purchaser. (d) Notwithstanding (c) of this section, if an offering is registered under 3 AAC 08.505 and is restricted to accredited investors, full and adequate disclosure of material items does not require disclosure of specific information or a specific method of providing disclosure. (e) A disclosure required by this section must be provided to a person before that person purchases the securities. (f) If written information is provided to a prospective permitted Alaska purchaser, the offering materials must contain the following legend, which must be set out in a prominent place: "IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. "THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. "THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME."
History
- Authority: AS 45.55.110; AS 45.55.950
- Eff. 4/19/2000, Register 154
3 AAC 08.520 Securities
3 AAC 08.520. Limitations on manner of offering. (a) An issuer or person acting on behalf of an issuer may not offer or sell securities registered under 3 AAC 08.500 - 3 AAC 08.540 by general solicitation or general advertising. For purposes of this subsection, general solicitation or general advertising includes (1) an advertisement, article, notice, or other communication published in a newspaper, magazine, or similar medium, broadcast over television or radio, or available on an unrestricted, publicly accessible website; and (2) a seminar or meeting to which attendees are invited by general solicitation or general advertising. (b) The administrator will, in the administrator's discretion, waive or conditionally waive the provisions of (a) of this section. To request a waiver, the registrant must (1) file a request for waiver; (2) provide the advertising materials or an adequate description of the advertising materials and identify the media that will be used; (3) state the reasons for requesting the waiver and show that purchasers are otherwise protected; and (4) provide an attorney's opinion that the proposed use of the advertising will not invalidate the offering under the laws or regulations of any federal or state regulatory agencies having securities jurisdiction over the offering.
History
- Authority: AS 45.55.110; AS 45.55.950
- Eff. 4/19/2000, Register 154; am 11/26/2016, Register 220
3 AAC 08.530 Securities
3 AAC 08.530. Disqualification. (a) A person who is disqualified from using an exemption under 17 C.F.R. 230.504 or 17 C.F.R. 230.505 is also disqualified from registering under 3 AAC 08.504 or 3 AAC 08.505, respectively. (b) The administrator will, in the administrator's discretion, deny registration under 3 AAC 08.500 - 3 AAC 08.540 if a person described in 17 C.F.R. 230.262(a), (b), or (c) (1) meets any of the disqualification provisions of 17 C.F.R. 230.262 applicable to that person; (2) has filed a registration statement that is the subject of a currently effective stop order entered by a state within five years before the registration of the offering; (3) within the 10 years preceding the filing of the registration, has been convicted of (A) a felony or misdemeanor in connection with the purchase or sale of a security or involving a false filing with a state; or (B) a felony involving fraud or deceit, including forgery, embezzlement, obtaining money under false pretenses, larceny, and conspiracy to defraud; or (4) has been subject to a state administrative or court order or judgment, including an injunction, entered within the five years preceding the filing of the registration, if a violation of a state banking, insurance, real estate, or securities law is the grounds for the order or judgment. (c) A disqualification under (b)(2) - (4) of this section does not apply if the person subject to the disqualifying order is licensed to conduct securities-related business in the state in which the order or judgment was entered. (d) A disqualification under (b)(2) - (4) of this subsection is automatically waived if the state that created the basis for disqualification waives the disqualification. (e) The administrator will review the representations in each registration to determine whether registration should be denied under (b) of this section. The administrator will, in the administrator's discretion, allow the registration upon a showing that allowing the registration is in the public interest and that safeguards have been provided for that offering. (f) For purposes of this section, 17 C.F.R. 230.262, as revised as of October 1, 1999, is adopted by reference.
History
- Authority: AS 45.55.110; AS 45.55.950
- Eff. 4/19/2000, Register 154
3 AAC 08.535 Securities
3 AAC 08.535. Limitation on sales expenses. (a) Expenses of an offering registered under 3 AAC 08.504 or 3 AAC 08.505, including sales expenses, acquisition expenses, expenses for preparing the offering, and other similar expenses, must be reasonable after taking into account the nature of the offering, the amount to be raised by the offering, and the proposed use of the money. (b) If the proposed business of the issuer requires a minimum amount of proceeds to commence or continue the business in the manner proposed, those proceeds are subject to impoundment as provided under 3 AAC 08.190.
History
- Authority: AS 45.55.110; AS 45.55.950
- Eff. 4/19/2000, Register 154
3 AAC 08.540 Securities
3 AAC 08.540. Rescission of improvident sales. (a) The improvident closing of a sale of securities in violation of a provision of 3 AAC 08.500 - 3 AAC 08.505 does not by itself invalidate the registration of the securities if the registrant (1) seeks an appropriate amendment to the registration with the administrator, provides full details of the transaction, demonstrates that the registrant and the person acting on behalf of the registrant who sold the security acted in good faith, demonstrates that the sale was made without an intent to violate the provisions of this section, and receives an amended order authorizing the proposed transaction; (2) cancels the sale or provides rescission to the purchaser involved within a reasonable time after discovery; or (3) either (A) cancels the sale or provides rescission before release of proceeds held in escrow under AS 45.55.110 and 3 AAC 08.180 - 3 AAC 08.186; or (B) has the financial capacity to pay and offers to or does provide the rescission payment out of separate funds, if the payment does not create additional risks or obligations to the remaining purchasers or the project for which the money was raised. (b) Regardless of whether a registrant cancels a sale or provides rescission under this section to a purchaser who is counted as a purchaser in a "calculation of number of purchasers" under 17 C.F.R. 230.501, the registrant may not omit that purchaser from the "calculation of number of purchasers" for purposes of meeting the requirements of 3 AAC 08.505(a)(2). (c) A rescission payment or payment date may not be made subject to resale of the interest to be cancelled. (d) This section applies to the registrant and any other person who is responsible for the sale of security and subject to the requirements of AS 45.55 and this chapter. (e) A rescission payment under this section must be made without condition, and the person offering the rescission must have the financial capacity to pay. (f) If the rescission creates additional risks or obligations for the remaining purchasers who do not accept rescission under (a) of this section, those risks and obligations must be disclosed. (g) This section does not relieve a person from compliance with other federal or state law.
History
- Authority: AS 45.55.110; AS 45.55.950
- Eff. 4/19/2000, Register 154
Article 5 Small Corporate Offering Registration SCOR Procedure
3 AAC 08.600 Securities
3 AAC 08.600. General provisions relating to small corporate offerings. (a) As an alternative to a registration procedure under this chapter, a corporation or limited liability company issuing securities that are exempt from registration with the SEC under either 17 C.F.R. 230.251 - 17 C.F.R. 230.263 (Regulation A) or 17 C.F.R. 230.501 - 17 C.F.R. 230.504 and 17 C.F.R. 230.507 (Rule 504 of Regulation D), may use the NASAA registration Form U-7, or its successor, as the disclosure document for the offering. (b) The administrator will, in the administrator's discretion, for good cause shown, waive or modify a requirement of 3 AAC 08.600 - 3 AAC 08.650. (c) The administrator will, in the administrator's discretion, apply a provision of 3 AAC 08.080 - 3 AAC 08.230 to offerings under 3 AAC 08.600 - 3 AAC 08.650, if the administrator determines that application of that provision is necessary for the protection of investors.
History
- Authority: AS 45.55.110; AS 45.55.950
- Eff. 9/18/91, Register 119; am 4/19/2000, Register 154
3 AAC 08.610 Securities
3 AAC 08.610. Qualifications for small corporate offerings. (a) An applicant may use NASAA Form U-7, or its successor if (1) the corporation or limited liability company relies upon and meets the requirements of either 17 C.F.R. 230.251 - 17 C.F.R. 230.263 (Regulation A), or 17 C.F.R. 230.501 - 17 C.F.R. 230.504 and 17 C.F.R. 230.507 (Rule 504 of Regulation D), and engages in or proposes to engage in a business other than petroleum exploration or production, mining, or other extractive industry; (2) the offering describes the specific business, properties and use of all proceeds; blind pool offerings are ineligible; (3) the securities are offered and sold only on behalf of the issuer; however, a selling security-holder, including a purchasing underwriter in a firm commitment underwriting or an affiliate of the issuer, may use NASAA Form U-7, or its successor, to register the securities for resale, if (A) for an offering or sale made in reliance upon (i) 17 C.F.R. 230.251 - 17 C.F.R. 230.263 (Regulation A), those regulations permit resale by the selling security-holder; or (ii) 17 C.F.R. 230.501 - 17 C.F.R. 230.504 and 17 C.F.R. 230.507 (Rule 504 of Regulation D), those regulations permit resale by the selling security-holder; (B) the issuer specifically requests that the administrator waive the restriction in this paragraph; and (C) the administrator grants the waiver request made under (B) of this paragraph; (4) the offering price for common stock, the exercise price for options, warrants or rights for common stock, or the conversion price for securities that are convertible into common stock is equal to or greater than $1 per share; (5) the issuer does not split the issuer's common stock or declare a stock dividend for two years after the effective date of the registration without the written consent of the administrator; (6) commissions, fees, or other remuneration for soliciting a prospective purchaser in this state in connection with an offering made under 3 AAC 08.600 - 3 AAC 08.650 are paid only to persons who the issuer reasonably believes are registered under AS 45.55.030, if required; (7) the aggregate offering price of the securities within or outside this state does not exceed the greater of (A) $1,000,000; (B) the amount allowed under 17 C.F.R. 230.251(b), for an offering or sale made in reliance upon 17 C.F.R. 230.251 - 230.263 (Regulation A); or (C) the amount allowed under 17 C.F.R. 230.504(b)(2), for an offering or sale made in reliance upon 17 C.F.R. 230.501 - 230.504 and 17 C.F.R. 230.507 (Rule 504 of Regulation D); however, NASAA Form U-7, or its successor, is not available to an issuer that is subject to the reporting requirements of 15 U.S.C. 78m and 15 U.S.C. 78o-5 (secs. 13 and 15C of the Securities Act of 1934); (8) the issuer files with the (A) SEC an (i) SEC Form 1-A, or its successor, claiming exemption of the offering from registration under 17 C.F.R. 230.251, and also files other documents that the SEC requires to be filed under 17 C.F.R. 230.252; or (ii) SEC Form D, or its successor, claiming exemption of the offering from registration under 17 C.F.R. 230.504; and (B) administrator a copy of the materials filed under (A) of this paragraph, with appropriate state signature pages, at the same time that those materials are filed with the SEC; and (9) for registration of debt offerings, the issuer demonstrates a reasonable ability to service its debt. (b) For purposes of this section, 17 C.F.R. 230.251 (b) and 17 C.F.R. 230.504(b)(2), as revised as of October 1, 1999, are adopted by reference. (c) In this section, "aggregate offering price" has the meaning given in 17 C.F.R. 230.501(c). For purposes of this section, 17 C.F.R. 230.501(c), as revised as of October 1, 1999, is adopted by reference.
History
- Authority: AS 45.55.110; AS 45.55.950
- Eff. 9/18/91, Register 119; am 4/19/2000, Register 154
3 AAC 08.620 Securities
3 AAC 08.620. Disqualification of small corporate offerings. (a) An issuer may not use NASAA Form U-7, or its successor, if the issuer, a beneficial owner of 10 percent or more of a class of the issuer's equity securities, an officer, director, or promoter of the issuer, a selling agent of the securities to be offered, or an officer, director, or partner of that selling agent (1) files a registration statement that is the subject of a currently effective registration stop order entered under a federal or state securities law within the five years before the filing of the registration application; (2) was convicted, within five years before the filing of the application for registration, of (A) a misdemeanor in connection with the offer, purchase, or sale of a security; or (B) a felony; (3) is currently subject to a federal or state administrative enforcement order or judgment, entered within five years before the filing of the application for registration, and (A) entered by a state's securities administrator or the SEC; or (B) in which fraud or deceit was found; for purposes of this subparagraph, fraud and deceit include the making of untrue statements of material facts or omitting to state material facts; (4) is subject to a state administrative enforcement order or judgment that prohibits, denies, or revokes the use of an exemption for registration in connection with the offer, purchase, or sale of securities; (5) is currently subject to a court order, judgment, or decree, entered within five years before the filing of the application for registration, and (A) temporarily, preliminarily, or permanently restraining or enjoining that person from engaging in or continuing a conduct or practice in connection with the purchase or sale of a security; or (B) involving the making of a false filing with a state or with the SEC, entered within five years before the filing of the application for registration. (b) The disqualifications under (a)(1)-(3) and (a)(5) of this section do not apply if (1) the person subject to the disqualification is licensed or registered to conduct securities-related business in the state in which the administrative order or judgment was entered, or if the broker-dealer employing that person is licensed or registered in this state and the SEC Form BD, or its successor, filed with the administrator discloses the order, conviction, judgment, or decree; and (2) the person acts only in the capacity for which the person is licensed or registered. (c) A disqualification under (a) of this section does not apply if the agency that created the basis for the disqualification determines upon a showing of good cause that, within the agency's jurisdiction, a prohibition on the use of NASAA Form U-7, or its successor, is not necessary. (d) If any of the circumstances set out in (a)(1)-(3) or (a)(5) of this section occurred more than five years before the date of the application for registration, the circumstances must be described on NASAA Form U-7, or its successor, as a miscellaneous factor.
History
- Authority: AS 45.55.110; AS 45.55.950
- Eff. 9/18/91, Register 119; am 4/19/2000, Register 154
3 AAC 08.630 Securities
3 AAC 08.630. Filing requirements for small corporate offerings. In addition to filing a properly completed and signed NASAA Form U-7, or its successor, an issuer who seeks registration under 3 AAC 08.600 - 3 AAC 08.650 must file with the administrator a NASAA Form U-1, Uniform Application to Register Securities, or its successor. References in the NASAA Form U-1, or its successor, to SEC registration and effectiveness and Questions 6 and 8(a) of the form are inapplicable. The following documents must be filed as exhibits to the NASAA Form U-1, or its successor: (1) a representative form of the selling agency agreements; (2) a copy of (A) the issuer's (i) articles of incorporation, if the issuer is a corporation; or (ii) other charter documents, for an issuer other than a corporation; and (B) any amendment to a document listed in (A) of this paragraph; (3) a copy of the issuer's bylaws, as most recently amended; (4) a copy of any resolutions by directors setting out the terms and provisions of capital stock or ownership interests to be issued; (5) a copy of any indenture, note, or other contractual provision for debt, or of any options, warrants, or rights to be offered; (6) a specimen of the security to be offered, including any legend restricting resale; (7) a NASAA Form U-2 (Consent to Service of Process), and an appropriate NASAA Form U-2A (Corporate Resolution), or successors to those forms; (8) copies of all advertising or other materials directed at or to be furnished to investors in the offering; (9) a form of escrow agreement for the escrow of proceeds of the offering; (10) a consent to inclusion in the disclosure document of an accountant's report; (11) a consent to inclusion in the disclosure document of a tax advisor's opinion or description of tax consequences; (12) a consent to inclusion in the disclosure document of an evaluation by an attorney of litigation or administrative action; (13) a copy of any subscription agreement forms for the purchase of securities in the offering; (14) an opinion of an attorney, licensed to practice in a state or territory of the United States, that the securities to be sold in the offering have been authorized and, when issued upon payment of the offering price, will be legally and validly issued, fully paid, and nonassessable and binding on the issuer in accordance with their terms; (15) a list of the resident street addresses of promoters of the issuer; (16) a copy of any work sheet showing computations for responses to Questions 5, 6, 7(a), 8(a), 8(b), 17(a), 37, 38, 41(a), and 41 (b) of NASAA Form U-7, or its successor.
History
- Authority: AS 45.55.110; AS 45.55.950
- Eff. 9/18/91, Register 119; am 4/19/2000, Register 154
3 AAC 08.640 Securities
3 AAC 08.640. Registration and reporting for small corporate offerings. (a) The issuer shall pay a registration and filing fee as provided in 3 AAC 08.920(a)(5) for the registration of the offering under NASAA Form U-7. (b) An issuer may register up to five salespersons as agents of the issuer who are exempt from the examination requirement of 3 AAC 08.011(h)(2). To register an agent, the issuer must file an application for registration in accordance with 3 AAC 08.011(h)(1) and pay a fee in accordance with 3 AAC 08.015(a)(1)(B). A salesperson may not be registered to more than one issuer at a time without compliance with the dual registration provisions of 3 AAC 08.010(e) - (f). (c) For three years after the close of the offering, the issuer shall maintain and keep open for inspection by the administrator all (1) offering materials; (2) records relating to purchasers; and (3) records relating to securities sales following the close of the offering that are considered as part of the offering.
History
- Authority: AS 45.55.110; AS 45.55.915; AS 45.55.950
- Eff. 9/18/91, Register 119; am 10/1/99, Register 151; am 4/19/2000, Register 154
3 AAC 08.650 Securities
3 AAC 08.650. Escrow, lock-in, and impound provisions for small corporate offerings. (a) Promotional shares in an offering under 3 AAC 08.600 - 3 AAC 08.640 are subject to the escrow and lock-in requirements of 3 AAC 08.180 - 3 AAC 08.186. (b) If the proposed business of the issuer requires a minimum amount of proceeds to commence or continue the business in the manner proposed, impoundment of the sale proceeds are subject to the requirements of 3 AAC 08.190.
History
- Authority: AS 45.55.110; AS 45.55.950
- Eff. 9/18/91, Register 119; am 4/19/2000, Register 154
Article 6 Viatical Settlement Interests
3 AAC 08.700 Securities
3 AAC 08.700. Viatical settlement interests as securities. An investment contract known as a viatical settlement interest is a security that is subject to AS 45.55 and this chapter.
History
- Authority: AS 45.55.070; AS 45.55.950; AS 45.55.990
- Eff. 4/20/2000, Register 154
3 AAC 08.705 Securities
3 AAC 08.705. Scope of viatical settlement requirements. The provisions of 3 AAC 08.700 - 3 AAC 08.740 (1) set out the registration requirements, requirements for renewal of registration, fees, effective dates, and related matters for a viatical settlement interest; and (2) do not (A) provide an exemption from the fraud provisions of AS 45.55.010 - 45.55.028, or from another fraud provision of AS 45.55 or this chapter; (B) relieve broker-dealers or agents from compliance with AS 45.55.010 - 45.55.060 or 3 AAC 08.005 - 3 AAC 08.065; or (C) prohibit an issuer from using the registration procedures in AS 45.55 and this chapter or from claiming an exemption available under AS 45.55.900.
History
- Authority: AS 45.55.025; AS 45.55.028; AS 45.55.950 AS 45.55.027; AS 45.55.070
- Eff. 4/20/2000, Register 154
3 AAC 08.710 Securities
3 AAC 08.710. Registration requirements for viatical settlement interests. (a) Under 3 AAC 08.700 - 3 AAC 08.740, an offer or sale of a viatical settlement interest, or of a security that represents or is secured by a viatical settlement interest, may be registered if (1) a person listed in (b) of this section is not subject to a disqualification set out in (1)-(4) of that subsection; (2) a registration statement on State of Alaska Form 08-102, the fee established in 3 AAC 08.920(a)(10), and the consent to service of process required by AS 45.55.980(g) are filed with the administrator; the registration statement must include (A) the name, address, and telephone number of the issuer and a brief description of the general character and location of the issuer's business; (B) a statement demonstrating eligibility for registration under (7) of this subsection and (b) of this section; (C) a description of the security being offered or sold, (i) including a general description of the program offered by the issuer; and (ii) not including details of specific viaticated policies or viatical settlement contracts; and (D) a description of the kind and amount of commissions, finders' fees, or other remuneration paid directly or indirectly in connection with soliciting a sale of a viatical settlement interest in this state; (3) the following items are filed along with the registration statement: (A) any prospectus, pamphlet, circular, form letter, advertisement, or other sales literature used or intended to be used in connection with the offer or sale of the security; (B) the issuer's most recent audited income and expense statement and balance sheet; as part of the information required under (5) of this subsection, the issuer must inform a prospective viatical settlement purchaser of the availability of those documents; a prospective viatical settlement purchaser may obtain copies upon written request to the administrator; (C) information to be furnished under (5) of this subsection to a prospective individual viatical settlement purchaser; (D) other information or documents as the administrator by order requires; (4) the offer or sale is made by, and commissions or other remuneration in connection with making the sale are made only to, persons registered or required to be registered under AS 45.55.030(a) or (c) and AS 45.55.040; (5) before a sale, each prospective individual viatical settlement purchaser is furnished written information that is sufficient to make an informed investment decision; for purposes of this paragraph, (A) information that is sufficient to make an informed investment decision includes the (i) viatical settlement disclosure document developed by the administrator and available on State of Alaska Form 08-114, Part A; the issuer must provide in that document an address to which a notice of rescission may be sent under 3 AAC 08.720; and (ii) disclosure of any significant factors that may affect the outcome of the investment; and (B) a sale occurs when the viatical settlement purchaser executes and the seller, or its representative, accepts the viatical settlement purchase agreement; (6) on or before the date when the viatical settlement provider identifies and presents to the viatical settlement purchaser an acceptable, specific viatical contract under the executed viatical settlement purchase agreement, an individual viatical settlement purchaser receives a viatical settlement disclosure document that the issuer has completed using State of Alaska Form 08-114, Part B; and (7) the issuer and the issuer's predecessors have been in continuous operation for at least three years without a default during the current fiscal year or within the two preceding fiscal years in the payment of principal, interest, dividends, or other obligations on a security of the issuer or a predecessor of the issuer with a fixed maturity or a fixed interest, dividend, or other provision. (b) Registration under 3 AAC 08.700 - 3 AAC 08.740 is not available to an issuer if the issuer, a predecessor of the issuer, an affiliate of the issuer, a director of the issuer, an officer of the issuer, a general partner of the issuer, a beneficial owner of 10 percent or more of a class of the issuer's equity securities, a promoter of the issuer presently connected with the issuer in any capacity, an underwriter of the securities to be offered, a partner of an underwriter of the securities to be offered, a director of an underwriter of the securities to be offered, or an officer of the underwriter of the securities to be offered (1) has filed within the last five years a registration statement that is the subject of a currently effective registration stop order entered by a state securities administrator or the SEC; (2) within the last five years has been convicted of (A) a felony; (B) a criminal offense involving fraud or deceit; or (C) a criminal offense in connection with the offer, purchase, or sale of a security; (3) is currently subject to a state or federal administrative enforcement order or judgment entered within the last five years finding fraud or deceit in connection with the purchase or sale of a security; or (4) is currently subject to an order, judgment, or decree of a court of competent jurisdiction entered within the last five years, temporarily, preliminarily, or permanently restraining or enjoining the person subject to the order from engaging in or continuing to engage in conduct or a practice involving fraud or deceit in connection with the purchase or sale of a security.
History
- Authority: AS 45.55.070; AS 45.55.150 AS 45.55.110; AS 45.55.950
- Eff. 4/20/2000, Register 154
3 AAC 08.715 Securities
3 AAC 08.715. Effective date and expiration date for registration of viatical settlement interests. The effective date of a registration under 3 AAC 08.700 - 3 AAC 08.740 is the date a registrant is authorized to sell securities under a certificate of registration issued by the administrator. A certificate of registration issued under 3 AAC 08.700 - 3 AAC 08.740 expires one year after the effective date.
History
- Authority: AS 45.55.070; AS 45.55.110; AS 45.55.950
- Eff. 4/20/2000, Register 154
3 AAC 08.720 Securities
3 AAC 08.720. Right of rescission applicable to sales of viatical settlement interests. (a) The issuer of a viatical settlement interest or a security that represents or is secured by a viatical settlement interest shall provide the viatical settlement purchaser an opportunity to rescind the purchase. The issuer shall provide the viatical settlement purchaser 10 business days after execution of the viatical settlement purchase agreement to submit personally or mail a written notice of rescission to the address designated in the disclosure document required under 3 AAC 08.710(a)(5)(A)(i). (b) The notice of rescission required under (a) of this section is sufficient if addressed to the entity designated for the notice at the address given in the disclosure statement required under 3 AAC 08.710(a)(5)(A)(i). The rescission notice is effective on the date that it is mailed or the date that it is received, whichever is earlier. The rescission notice may be in any form that expresses the intention of a purchaser to rescind the transaction. (c) Within 90 days after the execution of the viatical settlement purchase agreement, the issuer shall provide the viatical settlement purchaser with a rescission offer using State of Alaska Form 08-118, if within that period the issuer has not identified a viatical settlement contract acceptable to and suitable for the viatical settlement purchaser and closed the transaction. The viatical settlement purchaser may accept the rescission offer within 10 business days after receiving it. The issuer shall keep a record of the rescission offer and its acceptance or rejection for at least three years after providing that offer, and shall provide that record to the administrator at the administrator's request. (d) In this section, "business day" means a day other than Saturday, Sunday, or a state or federal holiday.
History
- Authority: AS 45.55.070; AS 45.55.120; AS 45.55.950
- Eff. 4/20/2000, Register 154
3 AAC 08.725 Securities
3 AAC 08.725. Sales agents. In addition to meeting other requirements for agents under AS 45.55 and this chapter, a sales agent who is registered to sell viatical settlement interests shall (1) clearly and affirmatively disclose the nature of the return or the duration of time to obtain the return of any investment related to one or more viatical settlements sold by a viatical settlement provider or other seller whom the agent represents; and (2) provide the disclosure documents required under 3 AAC 08.710(a)(5)-(6) to the purchaser in a timely manner.
History
- Authority: AS 45.55.030; AS 45.55.040; AS 45.55.950
- Eff. 4/20/2000, Register 154
3 AAC 08.730 Securities
3 AAC 08.730. Waiver of viatical settlement requirements. Upon the request of an issuer, the administrator will, in the administrator's discretion, waive a requirement of 3 AAC 08.710 - 3 AAC 08.725 by order if the administrator determines the waiver to be in the public interest and that the requirement to be waived is not necessary for protection of investors. The issuer bears the burden of proof to satisfy the administrator that the waiver is in the public interest and that the requirement to be waived is not necessary for protection of investors.
History
- Authority: AS 45.55.110; AS 45.55.950
- Eff. 4/20/2000, Register 154
3 AAC 08.740 Securities
3 AAC 08.740. Privacy. Except as required for the administrator to execute the administrator's responsibilities under AS 45.55 or this chapter, an issuer of a viatical settlement interest may not disclose to another person the identity of the viator or insured of the insurance policy that is the subject of the viatical settlement interest. The viator may waive this prohibition against disclosure if the waiver is in writing and signed by the viator.
History
- Authority: AS 45.55.950
- Eff. 4/20/2000, Register 154
Article 7 Small Intrastate Securities Offerings
3 AAC 08.810 Securities
3 AAC 08.810. Notice filing requirements. (a) In an offering conducted in reliance upon the crowdinvesting exemption in AS 45.55.175, the issuer shall file with the administrator, not later than 10 days before the use of a general solicitation or not later than 15 days after the first sale of a security, (1) a completed notice filing form as prescribed by the administrator; (2) the nonrefundable notice filing fee required by 3 AAC 08.920(a)(12); (3) a copy of all advertising and other materials directed to or to be supplied to prospective purchasers in the offering; (4) a copy of the offering document and disclosures to be provided to prospective purchasers; (5) a copy of the escrow agreement between the issuer and an escrow agent in which the offering proceeds will be deposited; and (6) a copy of any agreement between the issuer and a third-party website operator, if applicable. (b) A notice filing under this section is effective for one year from the date the administrator receives all the items required by (a) of this section. To renew a notice in which the same offering is continued, the issuer shall submit the items required by (a) of this section, as if the issuer were making an initial filing. (c) An issuer who has filed a notice filing under this section shall update any material change on the notice filing form and file it with the administrator not later than 30 days from the date of the change. (d) To claim an exemption under AS 45.55.175, an issuer must have an active business license issued under AS 43.70.
History
- Authority: AS 45.55.175; AS 45.55.950
- Eff. 11/26/2016, Register 220
3 AAC 08.820 Securities
3 AAC 08.820. Required disclosures. (a) Before any offer or sale of a security under AS 45.55.175, the issuer shall contemporaneously provide to each prospective purchaser the following disclosures: (1) the name and physical address of the issuer, officers, directors, and controlling persons; (2) a description of the experience and qualifications of the issuer, officers, directors, and controlling persons; (3) a description of the business, including how long it has been in operation and the specific reason for the offering; (4) a discussion in plain language of the significant factors material to the offering, including those that make the offering speculative or risky; (5) the total offering amount and how the issuer expects to use the proceeds of the offering, including compensation and expenses related to the offering; (6) the minimum target offering amount the issuer is seeking to raise through the offering and the deadline to raise the minimum target offering amount; (7) the terms and conditions of the securities being offered, the total amount of securities that are outstanding before the offering, and the total amount of securities being offered or sold in reliance on the exemption in AS 45.55.175; and (8) a description of any litigation or legal proceedings within the past five years, if any, involving the issuer or any persons associated with the issuer. (b) The issuer shall inform all investors that the securities exempted under 3 AAC 08.810 - 3 AAC 08.895 are not registered with the state, that they are subject to a limitation on resale and investors may not be able to sell their securities promptly or may only be able to sell them at a substantial discount from the offering price. On the cover page of the offering document, the disclosure must contain in all capital letters in 12 point font or larger the following language: "THESE SECURITIES ARE BEING SOLD IN RELIANCE ON AN EXEMPTION TO THE FEDERAL SECURITIES REGISTRATION REQUIREMENTS UNDER SECTION 3(a)(11) OF THE SECURITIES ACT OF 1933 AND UNDER AS 45.55.175 OF THE ALASKA SECURITIES ACT. THESE SECURITIES CAN ONLY BE SOLD TO RESIDENTS OF ALASKA AND ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. IN MAKING AN INVESTMENT DECISION, INVESTORS SHOULD RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS REVEALED IN THESE OFFERING DOCUMENTS, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE AUTHORITY OR REGULATORY COMMISSION NOR HAVE THEY CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE." (c) At the time of sale the issuer shall require all investors to sign the following acknowledgement: "I acknowledge that I am investing in a high-risk, speculative business venture, that I may lose all of my investment, and that I can afford the loss of my investment."
History
- Authority: AS 45.55.175; AS 45.55.950
- Eff. 11/26/2016, Register 220
3 AAC 08.830 Securities
3 AAC 08.830. Escrow agreement. (a) An issuer conducting an offering under AS 45.55.175 shall enter into an escrow agreement with an escrow agent located in this state that includes the following terms (1) all offering proceeds shall be maintained in an account controlled by the escrow agent; (2) all offering proceeds will be released to the issuer only when the aggregate capital raised from all investors is equal to or greater than the minimum target offering amount; and (3) if the issuer does not raise the minimum target offering amount by the offering deadline, the escrow agent shall release and return all proceeds directly to investors. (b) The escrow agent may not be affiliated with the issuer, any third-party website operator assisting with the offering, or any officers, directors, controlling persons, or affiliates of the issuer or of any third-party website operator assisting with the offering.
History
- Authority: AS 45.55.175; AS 45.55.950
- Eff. 11/26/2016, Register 220
3 AAC 08.840 Securities
3 AAC 08.840. Advertising and solicitation. (a) An issuer may engage in public advertising or general solicitation of securities in an offering relying on the exemption in AS 45.55.175 if (1) the issuer files a copy of the advertising or solicitation materials with the administrator at least 10 days before the use of those materials; (2) the advertisement or solicitation is directed only to residents of this state; and (3) before advertising or solicitation materials are viewed, each person viewing the materials affirmatively certifies that they are a resident of this state. (b) Advertising or solicitation materials may contain only the following information: (1) the name and contact information of the issuer; (2) a brief description of the general type of business of the issuer; (3) the type of security offered; (4) the minimum target offering amount and total offering amount; (5) a description of how the issuer will use the funds; (6) the deadline for raising funds through the offering; (7) the issuer's logo; and (8) a link to the issuer's website in which the securities are offered or sold or to a third-party website in which the securities are advertised. (c) The advertisement, including any advertisement through a website, must clearly state that the advertisement does not constitute an offer to sell a security and must include contact or other relevant information notifying an interested person how the person can obtain the required disclosure information. (d) Advertising to the general public without regard to residency, or advertising information outside the scope of this section is prohibited.
History
- Authority: AS 45.55.175; AS 45.55.950
- Eff. 11/26/2016, Register 220
3 AAC 08.850 Securities
3 AAC 08.850. Evidence of residency. (a) At or before the time an issuer accepts any funds or an irrevocable commitment to invest by a person in an offering conducted in reliance on the exemption in AS 45.55.175, the issuer shall obtain evidence that the person is a resident of this state. (b) For purposes of (a) of this section, the following is a nonexclusive list of evidence that the person is a resident of this state, unless the issuer has knowledge that the person is not a resident of this state: (1) a copy of a valid driver's license or official personal identification card issued by this state; (2) a copy of a current voter registration issued by this state; or (3) a copy of property tax records showing the person owns and occupies property in this state as the person's principal residence.
History
- Authority: AS 45.55.175; AS 45.55.950
- Eff. 11/26/2016, Register 220
3 AAC 08.860 Securities
3 AAC 08.860. Recordkeeping requirements. (a) An issuer that has filed or is required to file under the exemption in AS 45.55.175 shall keep and maintain written or electronic records relating to offers and sales of securities made in reliance on the exemption for at least five years following the termination of the offering. These records must include (1) the issuer's filings with the administrator required by 3 AAC 08.810 and 3 AAC 08.840, together with any amendments; (2) evidence of state residency consistent with 3 AAC 08.850 from each investor in the offering; (3) a manually or electronically signed copy of the investor acknowledgement required by 3 AAC 08.820(c) for each investor in the offering; and (4) all other correspondence or other communications with prospective purchasers and investors. (b) Records under (a) of this section are subject to reasonable periodic, special, or other examination by the administrator, as the administrator considers necessary or appropriate in the public interest or for the protection of investors. An audit or examination may be made at any time and without prior notice and the administrator may charge a fee associated with the examination as described in 3 AAC 08.015(b).
History
- Authority: AS 45.55.175; AS 45.55.915 AS 45.55.910; AS 45.55.950
- Eff. 11/26/2016, Register 220
3 AAC 08.870 Securities
3 AAC 08.870. Website operated by issuer. (a) An issuer relying on the exemption in AS 45.55.175 may use a website operated by the issuer to advertise, offer, and sell securities if the issuer (1) segregates all advertising materials and information relating to the offer and sale of securities on a webpage that is not accessible by the general public; (2) provides a disclaimer on its website explaining that access to securities offerings on the website is limited to residents of this state only and that offers and sales of securities are limited to residents of this state only; (3) requires an affirmative representation by a visitor to the website that the visitor is a resident of this state before the visitor can view securities-related offering materials on the website; and (4) supplies the administrator with the address of each webpage where the offering material is located on the notice form required by 3 AAC 08.810(a)(1) and provides the administrator with full access to each webpage at all times. (b) An issuer using its own website to advertise, offer, and sell securities is not required to comply with 3 AAC 08.880.
History
- Authority: AS 45.55.175; AS 45.55.950
- Eff. 11/26/2016, Register 220
3 AAC 08.880 Securities
3 AAC 08.880. Website operated by third party. (a) An issuer relying on the exemption in AS 45.55.175 may use a website operated by a third party to advertise securities. A third-party website shall (1) be operated by an entity that (A) has its principal place of business in this state; (B) is incorporated or organized in this state; and (C) has an active business license issued under AS 43.70; (2) provide a disclaimer on its website explaining that access to securities offerings on the third-party website is limited to residents of this state only and that offers and sales of securities are limited to residents of this state only; (3) require an affirmative representation by a visitor to the third-party website that the visitor is a resident of this state before the visitor can view securities-related advertising materials on the third-party website; (4) maintain and preserve the following records for a period of five years from the date of the document or communication: (A) records of any compensation received for acting as a third-party website, including the name of the payor, the date of the payment, and the name of the issuer; (B) any agreement or contract between the third-party website and an issuer; (C) any correspondence or other communications with issuers; and (D) ledgers or other records that reflect all assets and liabilities, income and expense, and capital accounts; (5) file with the administrator a notice form as prescribed by the administrator and pay the filing fee required by 3 AAC 08.920(a)(14); and (6) update any material change on the third-party website notice form and file it with the administrator not later than 30 days from the date of the change. (b) A third-party website may not (1) solicit, sell, or effect transactions in securities unless it is a registered broker-dealer under AS 45.55.030 or a funding portal as defined by 17 C.F.R. 227.300(c)(2), as revised as of May 16, 2016 and adopted by reference; (2) offer investment advice or recommendations; (3) compensate employees, agents, or other persons for the solicitation of securities or based on the sale of securities displayed or referenced on the third-party website; (4) hold, manage, possess, or otherwise handle investor funds or securities; (5) be affiliated with or under common control with an issuer whose securities appear on the third-party website; (6) hold a financial interest in an issuer as compensation for services provided to or on behalf of an issuer; or (7) employ a director, officer, controlling person, or any affiliated person having management authority over the third-party website who has been the subject of any disqualifier described in the regulations adopted under 15 U.S.C. 78c(a)(39). (c) Records of a third-party website under this section are subject to reasonable periodic, special, or other examination by the administrator, as the administrator considers necessary or appropriate in the public interest or for the protection of investors. An audit or examination may be made at any time and without prior notice and the administrator may charge a fee associated with the examination as described in 3 AAC 08.015(b). (d) A third-party website notice filing under this section expires on December 31 of each year and must be renewed by filing an updated notice form and the annual fee with the administrator in order to continue operating as a third-party website.
History
- Authority: AS 45.55.175; AS 45.55.915 AS 45.55.910; AS 45.55.950
- Eff. 11/26/2016, Register 220
3 AAC 08.895 Securities
3 AAC 08.895. Definitions relating to small intrastate securities offerings. In 3 AAC 08.810 - 3 AAC 08.895, (1) "general solicitation" includes (A) an advertisement, article, notice, or other communication published in a newspaper, magazine, or similar medium, broadcast over television or radio, or available on an unrestricted, publicly available website; and (B) a seminar or meeting to which attendees are invited by general solicitation or general advertising; (2) "third-party website" means a website operated by anyone other than the issuer to advertise securities offered under AS 45.55.175.
History
- Authority: AS 45.55.175; AS 45.55.910; AS 45.55.950
- Eff. 11/26/2016, Register 220
Article 8 General Provisions
3 AAC 08.900 Securities
3 AAC 08.900. Advertising and sales literature. (a) Except as provided in (c) of this section, an advertisement to be used or circulated in connection with the sale and promotion of a public offering of securities is subject to the following requirements and restrictions: (1) at least 10 days before the intended use or dissemination of the advertisement, the applicant shall file with the administrator one copy of the proposed material; (2) the use of the material is permitted if not disallowed by the administrator by written notice or otherwise within 10 days from the date filed; (3) the administrator will not issue formal approval of the literature, and the user is responsible for determining the accuracy and reliability of the statements and material to be used in conformity with this section. (b) The use of any of the following devices or sales presentations constitutes a deceptive or misleading practice: (1) comparison charts or graphs showing a distorted, unfair, or unrealistic relationship between the issuer's past performance, progress, or success and that of another company, business, industry, or investment medium; (2) the use of the layout format, size, kind, and color of type to attract attention to favorable or incomplete portions of the advertising matter, or to minimize less favorable, modified, or modifying portions necessary to make the entire advertisement a fair and truthful representation; (3) statements or representations that (A) by themselves predict future profit, success, appreciation, or performance, or that otherwise relate to the merit or potential of the securities; (B) are positive or imperative in form; and (C) fail to clearly indicate that they represent solely the opinion of the publisher or author; (4) generalized conclusions, opinions, representations, or statements based upon a particular set of facts and circumstances, unless those facts and circumstances are stated and modified or explained by those additional facts or circumstances as are necessary to make the entire advertisement a full, fair, and truthful representation; (5) sales kits or film clips, displays, or exposures that, alone or by sequence and progressive compilation, tend to present to the prospective purchaser a cumulative or composite picture or impression of certain or exaggerated potential, profit, safety, or returns, or of an assured or extraordinary investment opportunity or similar benefit; (6) distribution, by words, pictures, charts, graphs, or other means, of nonfactual or inaccurate data, or of material based upon conjectural, unfounded, extravagant, or flamboyant claims, assertions, or predictions, or upon excessive optimism; (7) a package or bonus deal, prize, gift, gimmick, or similar inducement, combined with or dependent upon the sale of some other product, contract, or service, unless that unit or combination has been fully disclosed and specifically described and identified in the application as the security being offered; (8) performance figures or charts used to market investment advisory services, unless the figures or charts comply with the Performance Presentation Standards (PPS) or Global Investment Performance Standards (GIPS) of the Association for Investment Management and Research; the Performance Presentation Standards as revised as of February 12, 1999 and the Global Investment Performance Standards as revised as of April 14, 1999 are adopted by reference; this paragraph does not apply to individual account performance reports intended for use only by an individual client in assessing the individual's account; (9) performance figures or charts not verified by an independent member of the Association for Investment Management and Research (AIMR), if the performance figures or charts are advertising intended for an individual; this paragraph does not apply to individual account performance reports intended for use only by an individual client in assessing the individual's account. (c) The following advertisements are not subject to (a) of this section, unless specifically prohibited: (1) a "tombstone" advertisement that contains no more than the following information: (A) the name and address of the issuer; (B) the identity or title of the security; (C) the per-unit offering price, number of shares, and amount of the offering; (D) a brief, general description of the business; (E) the name and address of the underwriter, or the address where an offering circular or prospectus can be obtained; (F) the date of issuance; (2) dividend notices, proxy statements, and reports to shareholders, including investment company quarterly and semiannual reports; (3) sales literature, advertisements, or market letters prepared in conformity with the applicable regulations and in compliance with the filing requirements of the SEC, FINRA, or a national securities exchange, and not found by that agency or organization to be out of compliance with those regulations and requirements; (4) factual or information letters, bulletins or releases, similar to newsletters, relating to the issuer's progress or activities, the status of the offering, or the issuer's current financial condition; (5) dissemination of data incorporated in the offering circular or prospectus, if the use of that material out of context does not tend to detract from, distort, supersede, or express a different meaning of the representations or disclosures contained in the offering circular or prospectus. (d) A person who knowingly prepares, distributes, or causes to be issued or published sales literature that is inaccurate, false, misleading, or tending to mislead in a material respect, or that is otherwise in violation of this section is subject to an administrative or civil enforcement proceeding arising under AS 45.55. (e) For purposes of this section, an advertisement includes a (1) display, pamphlet, brochure, letter, article, or communication published in a newspaper, magazine, or other periodical; (2) script or recording; and (3) radio or television announcement, broadcast, or commercial. (4) issuer-based website, social media account, blogging site, or other investing portal or intermediary.
History
- Authority: AS 45.55.150; AS 45.55.170; AS 45.55.950
- Eff. 2/20/72, Register 41; am 4/19/2000, Register 154; am 6/8/2001, Register 158; am 3/4/2015, Register 213; am 1/17/2016, Register 217
3 AAC 08.910 Securities
3 AAC 08.910. Exemptions. The following governs exemptions under AS 45.55 relating to securities and transactions as indicated: (1) manual exemptions (A) for the purpose of the "manual exemption" under AS 45.55.900(b)(17), the following publications that contain information prescribed at AS 45.55.900(b)(17) are "nationally recognized securities manuals": (i) Mergent's Industrial Manual; (ii) Mergent's Bank and Finance Manual; (iii) Mergent's Public Utility Manual; (iv) Mergent's Municipal and Governmental Manual; (v) Mergent's Transportation Manual; (vi) Mergent's OTC Industrial Manual; (vii) Mergent's OTC Unlisted Manual; (viii) Mergent's International Manual; (ix) OTC Market Group's OTCQX Market; (x) OTC Market Group's OTCQB Market; (B) the distribution of large blocks of securities by controlling persons will ordinarily be presumed to be for the direct or indirect benefit of the issuer, and not within the provisions of the manual exemption; (2) unsolicited orders - a purchaser acquiring securities in a nonissuer transaction by or through a registered broker-dealer under an unsolicited order to buy, and in which the broker-dealer acts as agent for the purchaser and receives no commission or other compensation from any source other than the purchaser, shall acknowledge in writing that the purchaser's order to buy was unsolicited; a signed copy of each acknowledgment shall be preserved by the broker-dealer as may be required by the SEC; (3) private offering exemption (A) repealed 3/4/2015; (B) in AS 45.55.900(b)(5)(A) and (B), "in this state" has the same meaning as "in this state" in AS 45.55.980(c); (C) in AS 45.55.900(b)(5)(B)(i), "solely in this state" is satisfied if the issuer meets the criteria of 17 C.F.R. 230.147(c) adopted under 15 U.S.C. 77a-77bbbb (Securities Act of 1933); (D) in AS 45.55.900(b)(5)(C), "initial issue of shares" means the first distribution of stock or ownership or partnership interests by the entity issuing the securities; (E) unless waived by the administrator at the written request of the issuer, the exemption at AS 45.55.900(b)(5)(A) may not be relied upon unless the issuer has reason to believe, in the case of (i) a corporation, the total number of security holders in this state does not before the sale and will not in consequence of the sale exceed twenty holders; (ii) a limited partnership or limited liability partnership, the total number of limited partners in this state does not before the sale and will not in consequence of the sale exceed twenty partners; (iii) a limited liability company, the total number of members in this state does not before the sale and will not in consequence of the sale exceed twenty members; (F) unless waived by the administrator at the written request of the issuer, the exemption provided by AS 45.55.900(b)(5)(B) may not be relied upon unless the issuer has reason to believe, in the case of (i) a corporation, the total number of security holders in this state does not before the sale and will not in consequence of the sale exceed thirty holders; (ii) a limited partnership or limited liability partnership, the total number of limited partners in this state does not before the sale and will not in consequence of the sale exceed thirty partners; (iii) a limited liability company, the total number of members in this state does not before the sale and will not in consequence of the sale exceed thirty members; (4) for the purposes of (3)(E) and (3)(F) of this section, the administrator will consider the following to be a single owner of a security: (A) a husband and wife; (B) a child and the child's parent or guardian when the parent or guardian holds the security for the benefit of the child; (C) a corporation, a partnership, a limited liability partnership, a limited liability company, an association or other unincorporated entity, a joint stock company, or a trust, if the corporation, partnership, limited liability partnership, limited liability company, association or other unincorporated entity, joint stock company, or trust that was not formed for the purpose of purchasing or owning the security; (5) repealed 3/4/2015; (6) an application for exemption under AS 45.55.900(b)(7), when a commission or other remuneration other than a standby commission is paid, shall be filed with the administrator on State of Alaska Form 08-109 along with the fees as required by 3 AAC 08.920(a)(6); the application must be in the administrator's possession five full business days before the proposed transaction, unless the administrator waives the five-day time requirement; (7) an application for exemption under AS 45.55.900(b)(18) shall be filed with the administrator on State of Alaska Form 08-110 along with the fees as required by 3 AAC 08.920(a)(6); the application must be in the administrator's possession within 15 days of the first sale in this state; (8) the limitation on the availability of the exemption at AS 45.55.900(b)(18) includes issuers that are in the development stage that either have no specific business plan or purpose or have a business plan or purpose to engage in a merger or acquisition with an unidentified company or other entity or person; the administrator will consider in making decisions under this paragraph that the limitation on the availability of the exemption does not include issuers that are in the development stage that have a specific business plan or purpose where that business plan or purpose is not to engage in a merger or acquisition with an unidentified company or other entity or person; the administrator will consider in making decisions under this paragraph that one of the explicit objectives of the exemption at AS 45.55.900(b)(18) is to allow issuers to use electronic and other matching services such as the Small Business Administration's ACE-Net (Angel Capital Electronic Network); the administrator will consider that issuers that meet the criteria of the ACE-Net to meet the criteria of this exemption unless explicitly included in the limitation on availability; (9) an application for exemption under AS 45.55.900(b)(19) shall be filed with the administrator on State of Alaska Form 08-111 along with the fees as required by 3 AAC 08.920(a)(6), and must be in the administrator's possession at least 10 business days before the offer is made, unless the administrator waives the 10-day time requirement; (10) in AS 45.55.900(b)(20), (A) "affinity" means by marriage; (B) "consanguinity" means by blood; (C) "within the fourth degree of affinity or consanguinity" includes only, whether by marriage or blood, the person or the person's (i) children; (ii) grandchildren; (iii) great-grandchildren; (iv) parents; (v) brothers and sisters; (vi) nephews and nieces; (vii) grandnephews and grandnieces; (viii) grandparents; (ix) uncles and aunts; (x) first cousins; (xi) great grandparents; (xii) great uncles and great aunts; and (xiii) great-great grandparents; (11) each application for exemption filed under AS 45.55.900 must be accompanied by the fee as provided in 3 AAC 08.920(a)(6); the administrator will not consider the application for exemption complete until both the application, containing the required information, and the required fee are received by the administrator; (12) each application for exemption is effective as of the date provided in the order or notice of effectiveness sent by the administrator to the person requesting the exemption; the administrator will set the effectiveness date as the date of receipt of the application and fees and the statutory requirement for prenotification, if any, unless the prenotification period is waived by the administrator; if the administrator waives the prenotification period, the effective date is the date of receipt of the application and fees; (13) the exemption in AS 44.55.900(a)(4) for instruments of nine months' maturity or less applies only to commercial paper, notes, drafts, bills of exchange, and bankers' acceptances that, in addition to meeting the requirements of AS 45.55.900(a)(4), are also prime quality commercial paper; to be prime quality commercial paper, those instruments must arise out of current commercial, agricultural, or industrial transactions, and may not be intended to be marketed to the public, whether or not eligible for discount by a federal reserve bank; for purposes of this paragraph, "prime quality" means rated "A" or better by Fitch Investor Services. (14) in AS 44.55.900(b)(9), "controlling person" means a person who owns or controls more than 50 percent of the outstanding shares of the securities of a person.
History
- Authority: AS 45.55.900; AS 45.55.950
- Eff. 2/20/72, Register 41; am 3/24/76, Register 57; am 2/9/78, Register 65; am 11/18/90, Register 116; am 9/8/91, Register 119; am 10/1/99, Register 151; am 6/8/2001, Register 158; am 3/4/2015, Register 213; am 11/26/2016, Register 220
3 AAC 08.915 Securities
3 AAC 08.915. Rescission of illicit sales. (a) In dealing with a sale of securities that violates AS 45.55 or this chapter, the administrator will, in the administrator's discretion, impose a reduced sanction or penalty or decline to pursue civil enforcement against an issuer or person acting on behalf of the issuer if the issuer provides (1) appropriate current disclosures and an offer of rescission to each investor under AS 45.55.930(k), 45.55.900(b)(19), and 3 AAC 08.910(9) within a reasonable time after discovery of the violation and seeks an appropriate amendment to any registration or exemption; and (2) the administrator with the full details of the transaction, demonstrates that the seller sold the security in good faith, and proves that there was no intent to violate 45.55 or this chapter. (b) A rescission payment under this section must be made without condition, and the person offering the rescission must have the financial capacity to pay. (c) If the rescission creates additional risks or obligations for purchasers who do not accept rescission under (a) of this section, those risks and obligations must be disclosed. (d) This section does not relieve an issuer or person acting on behalf of an issuer from compliance with or liability under other federal or state law.
History
- Authority: AS 45.55.900; AS 45.55.930 AS 45.55.920; AS 45.55.950
- Eff. 4/19/2000, Register 154
3 AAC 08.920 Securities
3 AAC 08.920. Filing, fees and forms. (a) All applications, notices, petitions, amendments, reports, and complaints required to be filed under AS 45.55 and this chapter, except for proxy solicitation materials filed under AS 45.55.139, are governed by the following: (1) a document is filed for record when it is received in the office of the administrator, as follows: (A) only the original executed copy of each form is required; if a document pertains to more than one subject or application, a separate form, including cover or transmittal letter, or two or more copies of it, commensurate with the number of items submitted, shall be filed; (B) all forms and documents shall be in electronic medium or printed, typewritten, or prepared by a similar process which, in the opinion of the administrator, produces copies suitable for a permanent record and shall be clear, easily readable, and suitable for repeated copying; exhibits may be attached to additional sheets or filed in separate envelopes, properly marked or identified; (C) all documents filed become a part of the records of the administrator and, unless designated as confidential by the administrator, are available for public inspection; (2) all fees shall accompany the application or supplemental amendment to which they pertain and are payable by check or money order to the State of Alaska; the administrator will, in the administrator's discretion, approve another payment form if it furthers the purposes of AS 45.55 and this chapter; (3) the nonrefundable notice fee for offerings of securities covered under 15 U.S.C. 77r(b)(4)(D) (sec. 18(b)(4)(D) of the Securities Act of 1933), as amended is $600 for one year; (4) the nonrefundable notice fee for offerings of securities covered under 15 U.S.C. 77r(b)(2) (sec. 18(b)(2) of the Securities Act of 1933), as amended is $600 for one year; (5) a person filing an application for registration of securities shall pay a nonrefundable fee of $600 for one year; (6) a person filing or required to file a notice under AS 45.55.900, except under AS 45.55.900(b)(19) or (22), shall pay a nonrefundable fee of $50; (7) a person filing a request for interpretative opinions under AS 45.55.970(e), including requests for "No Action Letters," shall pay a nonrefundable fee of $250; (8) a person filing a notice of a name change of an issue or adding or deleting classes to an issue registered or noticed under AS 45.55 shall pay a $20 nonrefundable notice fee for each change, addition, or deletion filed; (9) a person submitting a solicitation of interest form under 3 AAC 08.087 shall pay a nonrefundable fee of $50; (10) a person filing a registration statement under 3 AAC 08.710 shall pay a nonrefundable fee of $250; (11) a person filing or required to file a notice under AS 45.55.900(b)(19) shall pay a nonrefundable fee of $250; (12) a person filing a notice under AS 45.55.175 shall pay a nonrefundable fee of $150; (13) a person filing a notice under 3 AAC 08.086 shall pay a nonrefundable fee of $50; (14) a person filing a notice under 3 AAC 08.880 shall pay a nonrefundable fee of $50. (b) To comply with a provision for a consent to service of process required to be filed with the administrator under AS 45.55 and this chapter, a broker-dealer, an agent, a federal covered adviser, a state investment adviser, an investment adviser representative, or an issuer may incorporate by reference any consent to service of process previously filed with the administrator by that person or entity. (c) A corporation subject to the requirements of AS 45.55.139 shall pay a filing fee of $250 plus an additional fee based on the corporation's total assets as reported in its last annual report. The filing fee and additional fee is due concurrently with the filing of the corporation's annual report. The additional fee is computed using the following schedule: (1) up to $5,000,000; $250; (2) $5,000,001 or more, but not over $15,000,000; $500; (3) $15,000,001 or more, but not over $50,000,000; $1,250; (4) $50,000,001 or more, but not over $100,000,000; $2,500; (5) $100,000,001 or more, but not over $250,000,000; $5,000; (6) $250,000,001 or more, but not over $500,000,000; $12,500; (7) $500,000,001 or more; $25,000.
History
- Authority: AS 45.55.110; AS 45.55.175; AS 45.55.980 AS 45.55.139; AS 45.55.950
- Eff. 2/20/72, Register 41; am 10/1/99, Register 151; am 4/19/2000, Register 154; am 4/20/2000, Register 154; am 1/4/2013, Register 205; am 3/4/2015, Register 213; am 1/17/2016, Register 216; am 3/20/2016, Register 217; am 11/26/2016, Register 220
3 AAC 08.930 Securities
3 AAC 08.930. Hearings. (a) The administrator or the administrator's designated hearing officer will hold hearings under AS 45.55.935 upon written request by any person aggrieved by any act or failure to act of the administrator or by any report, ruling, or order of the administrator. The written request for hearing must specify the grounds to be relied upon as a basis for the relief requested at the hearing. The administrator or the hearing officer will, in the administrator's discretion, hold hearings upon the administrator's own motion, under AS 45.55.935. (b) Upon receipt of written request for a hearing, the administrator will, within 30 days from the receipt of the request, either schedule the matter for hearing or vacate in writing the order that the request concerns. The hearing shall take place no later than 90 days after the request is received by the administrator. If a delay is made necessary because of exigencies beyond the control of the parties or the hearing officer, application may be made to the administrator for an extension of time for good cause shown. (c) At least 10 days advance notice of the hearing will be given to all persons directly affected by the hearing. In the notice of hearing the administrator will or the hearing officer shall include (1) the time and place of the hearing; (2) a statement of the matters to be considered; (3) a statement of the legal authority and jurisdiction under which the hearing is to be held; (4) references to the particular sections of AS 45.55 or this chapter that are involved. (d) The parties shall, no later than 20 days before the hearing, exchange those documents they intend to introduce at the hearing. A party may not obtain additional discovery, except upon a motion that demonstrates, to the satisfaction of the administrator or hearing officer, that good cause exists for additional discovery, and that additional discovery is to be limited to those areas that are relevant to the matter to be heard. Discovery must be completed at least 10 days before the hearing. (e) Any person who is a party to the hearing before the administrator and who may be adversely affected by the order of the administrator may have subpoenas issued to any witness on that person's behalf in accordance with AS 44.62.430. The party or the party's counsel is responsible for timely service of the subpoenas. (f) Any person affected by the hearing may appear in person or by counsel. That person or counsel may be present during the giving of evidence, may have a reasonable opportunity to examine and inspect all documentary evidence, may examine witnesses, and may present evidence on counsel's client's behalf. (g) The following rules of evidence apply in hearings held under this section: (1) oral evidence will be taken only on oath or affirmation; (2) each party may call and examine witnesses, introduce exhibits, cross-examine opposing witnesses on matters relevant to the issues, including matters not covered in the direct examination, impeach a witness regardless of which party first called the witness to testify, and rebut the evidence against that party; (3) witnesses must give testimony relevant to the issue; upon objection of any party, the party calling the witness must make an offer of proof as to the witnesses' testimony and its relevance; repetitive witnesses are not allowed, unless for extraordinary good cause; (4) if the respondent does not testify in the respondent's own behalf, the respondent may be called and examined as if under cross-examination; (5) the hearing need not be conducted according to technical rules relating to evidence and witnesses; relevant evidence, as defined at Rule 401 of the Alaska Rules of Evidence, must be admitted if it is the sort of evidence on which responsible persons are accustomed to rely in the conduct of serious affairs, regardless of the existence of a common law or statutory rule that makes improper the admission of the evidence over objection in a civil action; hearsay evidence may be used to supplement or explain direct evidence but is not sufficient by itself to support a finding unless it would be admissible over objection in a civil action; the rules of privilege are effective to the same extent that they are recognized in a civil action; irrelevant and unduly repetitious evidence will be excluded. (h) A record of all hearings will be made. Upon reasonable request made by any person affected by the hearing, and at that person's expense, a full stenographic record of the proceedings will be made. When a transcription is made part of the records of the division, any person having a direct interest in it will be furnished with a copy of the stenographic or electronic record at the requestor's expense. (i) The record in a hearing includes the following: (1) all pleadings, motions, and intermediate rulings; (2) all evidence received or considered, including a statement of matters officially noted; (3) questions or offers of proof, objections, and rulings on them; (4) proposed findings and exceptions; (5) the proposed decision, opinion, report, or order of the hearing officer, or the decision, opinion, report, or order of the administrator, if the hearing is conducted by the administrator. (j) If the matter is heard before a hearing officer, the hearing officer shall make recommended findings of fact and conclusions of law to be presented within 10 days of the termination of the hearing to the administrator for adoption, amendment, or rejection. The administrator shall, within 10 days of receiving the hearing officer's recommendations, make a final order or remand the matter to the hearing officer for additional findings. If the matter is heard before the administrator, the administrator shall make a final order within 10 days of the termination of a hearing. A final order will be in writing. A final order will include findings of fact and conclusions of law. All findings of fact will be based exclusively on the evidence presented and on matters officially noticed. Findings of fact will be accompanied by a concise and explicit statement of the underlying facts supporting the findings. A copy of a final order will be delivered or mailed to each party affected or to that party's attorney of record within 10 days of the termination of the hearing or 10 days after the hearing officer makes the recommendation to the administrator. (k) The administrator will, in the administrator's discretion, grant a rehearing to any aggrieved party if the party makes a written request within 10 days after the final order is mailed to the person entitled to receive it. A party requesting rehearing must set out one or more of the following grounds: (1) newly discovered evidence or newly available evidence relevant to the issues; (2) a need for additional evidence to develop the facts essential to a proper decision; (3) probable error committed in the proceeding or in the administrator's decision that would be grounds for reversal on judicial review of the order; (4) the need for further consideration of the issues and the evidence in the public interest. (l) A rehearing is limited to those grounds upon which the rehearing was requested or granted. However, the administrator will, in the administrator's discretion, rehear, reopen, or reconsider any matter (1) in accordance with other applicable statutory provisions; or (2) on the grounds of (A) fraud by the prevailing party; or (B) procurement of the order by perjured testimony or fictitious evidence. (m) An order or decision resulting from a rehearing will be delivered or mailed to each party affected and to that party's attorney of record within 10 days after termination of the rehearing.
History
- Authority: AS 45.55.060; AS 45.55.900; AS 45.55.935 AS 45.55.120; AS 45.55.920; AS 45.55.950
- Eff. 1/10/78, Register 65; am 4/19/2000, Register 154
3 AAC 08.940 Securities
3 AAC 08.940. Rulings, forms, and statements of policy. (a) Proceedings for the promulgation, adoption, repeal or revision of rulings, forms, or statements of policy will be initiated by the administrator. (b) Notice. General notice of not less than 20 days before the adoption, repeal, or revision of rulings, forms or statements of policy will be given by mail to all persons who have made timely request for advance notice of the proceedings and will, in the administrator's discretion, also be published in an Alaska newspaper of general circulation. (c) Opportunity to be Heard. All persons will be afforded a reasonable opportunity to participate through submission of written data, views, or arguments. Oral arguments may be presented at the discretion of the administrator. (d) Adoption. The administrator will consider fully all written and oral submissions respecting the proposed ruling, form, or statement of policy. (e) Filing and Publication. Rulings, forms, and statements of policy will be on public file. Copies of all rulings, forms, and statements of policy adopted while the legislature is in session will be filed with the speaker of the house of representatives and the president of the senate within 10 days after their adoption. Copies of rulings, forms, and statements of policy adopted while the legislature is not in session will be filed with the speaker of the house of representatives and president of the senate within 10 days after the reconvening of the next legislative session. Copies of all rulings, forms, and statements of policy will be made available to any person upon request.
History
- Authority: AS 45.55.240
- Eff. 1/10/78, Register 65
3 AAC 08.945 Securities
3 AAC 08.945. Electronic signatures. The administrator will, in the administrator's discretion, accept an electronic signature on an electronic application or other electronic record that is filed with the administrator and that requires a signature under AS 45.55 or this chapter if (1) a certifying authority registered under AS 09.25.510(b) verifies that the electronic signature is authentic; and (2) the person providing the electronic signature has made an agreement, with the certifying authority described in (1) of this section, that the person accepts or agrees to be bound by an electronic record executed or adopted with that signature.
History
- Authority: AS 09.25.510; AS 09.25.950
- Eff. 4/19/2000, Register 154
3 AAC 08.950 Securities
3 AAC 08.950. Definitions. Unless the context requires otherwise, in AS 45.55 and this chapter, and in the forms, instructions, and orders of the administrator, (1) repealed 4/19/2000; (2) "affiliate" means a person who directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, another person; (3) "applicant" means the person executing an application for the registration of securities, or registration as a broker-dealer, agent, investment adviser representative, or state investment adviser, or any person who will be engaged for all or part of the person's time in selling of securities, either as an executive officer, a dealer, an issuer, or as a salesman for a dealer or an issuer a person executing an application to file a notice in connection with a federal covered adviser or federal covered securities; (4) "application" means the form prescribed by the administrator for filing in connection with the registration of securities, or as a broker-dealer, agent, investment adviser representative, or state investment adviser, or in connection with notice filings of federal covered securities or federal covered adviser, including all amendments, papers, documents and exhibits incidental thereto; (5) "associate" means if used to indicate a relationship with a person, (A) any corporation or legal entity, other than the issuer or majority-owned subsidiary of the issuer, of which a person is an officer, director, partner, or a direct or indirect legal or beneficial owner of five percent or more of any class of equity securities; (B) a trust or other estate in which a person has a substantial beneficial interest or for which a person serves as a trustee or in a similar capacity; and (C) a person's spouse and relatives, by blood or by marriage, if the person is a promoter of the issuer, its subsidiaries, its affiliates, or its parent; (6) "certified" means certified by an independent certified public accountant in accordance with generally accepted accounting practices when used in connection with financial statements; (7) "control" means the power to direct or influence the direction of the management or policies of a person directly or indirectly, through the ownership of voting securities, by contract or otherwise; (8) "nonprofit corporation" means a corporation organized for any lawful purpose and no part of the net income inures to the benefit of any person; (9) "division" means the division assigned securities functions in the Alaska Department of Commerce, Community, and Economic Development; (10) "domestic corporation" means a corporation organized under AS 10.05; (11) "foreign corporation" means a corporation organized under laws other than the laws of this state; (12) "NASD" means the National Association of Securities Dealers, Inc.; (13) "parent" means an affiliate controlling another person; (14) "predecessor" means a person, a major portion of whose business assets or control has been acquired by another; (15) "professional corporation" means a corporation organized under AS 10.45 to render a professional service; (16) "promoter" (A) means a person who (i) alone or in conjunction with one or more persons, directly or indirectly, takes the initiative in founding or organizing the issuer or controls the issuer; (ii) directly or indirectly receives, as consideration for services, property, or both, rendered, five percent or more of any class of the issuer's equity securities or five percent or more of the proceeds from the sale of any class of the issuer's equity securities; (iii) is an officer or director of the issuer; (iv) legally or beneficially owns, directly or indirectly, five percent or more of the issuer's equity securities; or (v) is an affiliate or an associate of a person specified in (i)-(iv) of this subparagraph; and (B) does not include (i) a person who receives securities or proceeds solely as underwriting compensation if that person is not included in (A) of this paragraph; or (ii) an unaffiliated institutional investor, who purchased the issuer's equity securities more than one year before the filing date of the issuer's registration statement; the administrator will, in the administrator's discretion, exclude an unaffiliated institutional investor, who purchased the issuer's equity securities on an arm's-length basis within one year before the filing date of the issuer's registration statement as a promoter, if the exclusion is consistent with the purposes of AS 45.55 and this chapter; (17) "registrant" means an applicant for whom a registration has been declared effective; (18) "SEC" means the Securities and Exchange Commission; (19) "SECO" means the prevailing requirements of the SEC for brokers and dealers who are not members of the NASD; (20) "underwriter" means any person who has agreed with the issuer or other person on whose behalf a distribution is to be made (A) purchase securities for distribution; (B) distribute securities for or on behalf of the issuer or other person; or (C) manage or supervise a distribution of securities for or on behalf of the issuer or other person; (21) "controlling person" means an officer, a director, a partner, a trustee, or an individual occupying similar status or performing similar functions, or a person owning at least 10 percent of the outstanding shares of securities of a person; (22) "custody of client funds or securities" means for a state investment adviser, the state investment adviser directly or indirectly holds client funds or securities, has authority to obtain possession of client funds or securities, or has the ability to appropriate the client funds or securities, except a state investment adviser is not considered as having constructive custody of a client's funds or securities, if such possession is for the sole purpose of immediately forwarding those funds or securities to a third party at the request of the client; (23) "discretionary authority over client funds or securities" means, for a state investment adviser, the state investment adviser has a power of attorney or other evidence, including investment advisory contracts, granting discretionary authority by any client to the state investment adviser, or means the state investment adviser exercises discretionary power in violation of AS 45.55.023(a)(2); (24) "equity securities" means shares of common stock or similar securities and convertible securities, warrants, options, or rights that may be converted into or exercised to purchase shares of common stock or similar securities; (25) "independent director" means a member of the issuer's board of directors who (A) is not an officer of the issuer, its subsidiaries, or their affiliates, and has not been an officer, or employee of the issuer, its subsidiaries, or their affiliates or associates within the last two years; (B) is not a promoter; and (C) does not have a material business or professional relationship with the issuer or any of its affiliates or associates; for purposes of determining whether a business or professional relationship is material, the gross revenue derived by the independent director from the issuer, its affiliates, and associates is considered material per se if it exceeds five percent of the independent director's (i) annual gross revenue, derived from all sources, during either of the last two years; or (ii) net worth, on a fair market value basis; (26) "NASAA" means the North American Securities Administrators Association, Inc.; (27) "NASDR" means the National Association of Securities Dealers Regulation, Inc.; (28) "net earnings" means the issuer's after-tax earnings that are derived from its normal operations, exclusive of extraordinary and nonrecurring items, determined according to generally accepted accounting principles, consistently applied; (29) "person" has the meaning given in AS 45.55.990(9); (30) "promotional or development stage company" means an issuer who is not listed on the New York Stock Exchange, the American Stock Exchange or the NASDAQ National Market System, or whose annual net earnings for each of the last two consecutive fiscal years or whose average, annual net earnings for the last five fiscal years before the public offering have been less than five percent of the aggregate public offering; (31) "promotional shares" means equity securities that are to be issued or were issued (A) by an issuer, which is a promotional or development stage company, to promoters for cash or other consideration, including services rendered, patents, copyrights, and other intangibles; or (B) within three years before the filing of the registration statement by an issuer, which is not a promotional or development stage company, to promoters for cash or other consideration, including services rendered, patents, copyrights, and other intangibles; (32) "unaffiliated institutional investor" means an unaffiliated (A) bank or savings and loan company; (B) investment company registered under 15 U.S.C. 80a (Investment Company Act of 1940); (C) business development company as defined in 15 U.S.C. 80a (Section 2(a)(48) of the Investment Company Act of 1940); (D) small business investment company licensed by the United States Small Business Administration under 15 U.S.C. 681 (Section 301 of the Small Business Investment Act of 1958); (E) employee benefit plan, within the meaning of 29 U.S.C. 1002 (Title I of the Employee Retirement Income Security Act of 1974), and state and local government employees retirement and pension plans; (F) insurance company; (G) trust company; (H) private business development company, as defined in 15 U.S.C. 80b-2 (Section 202(a)22 of the Investment Advisors Act of 1940), or a comparable business entity, that is engaged as a substantial part of its business in the purchase and sale of securities, and that will own less than twenty percent of the issuer's securities upon completion of the public offering; or (I) qualified purchaser as defined under 15 U.S.C. 80a-2(a)(51)(sec. 209(b) of the (National Securities Markets Improvement Act of 1996); (33) "accredited investor" has the meaning given in 17 C.F.R. 230.501(a), as revised as of October 1, 2013 and adopted by reference; (34) "adjusted net earnings" means the issuer's net earnings, after charges for interest and dividends, and adjusted on a pro forma basis to reflect (A) the elimination of any required charges for debt, debt securities, or preferred stock that are to be redeemed or retired from the proceeds derived from the public offering of preferred stock; (B) the effect of any acquisitions or capital expenditures that materially affect the issuer's net earnings, and that (i) were made by the issuer after its last fiscal year; or (ii) are proposed or required to be made by the issuer during its current fiscal year; (C) the effect of charges or dividends on debt, debt securities, or preferred stock issued after the issuer's last fiscal year; (D) the effect of any charges or dividends on debt, debt securities, or preferred stock that were issued during the issuer's last fiscal year, but that were outstanding for only a portion of that fiscal year, as if charges or dividends on the debt, debt securities, or preferred stock had been outstanding for the entire fiscal year; and (E) the effect of any other material changes to an issuer's future net earnings; (35) "aggregate public offering" means the dollar amount of the whole public offering; (36) "aggregate revenues" means the aggregate amount of revenues a promotional or development stage company has received within the last three consecutive fiscal years immediately preceding the public offering plus revenues received during the period covered by any interim period for financial information included in the prospectus, excluding revenues from interest and extraordinary items; (37) "average promotional price" means the average per share price paid for promotional shares and other shares issued before the public offering that are of the same class of shares being offered in the public offering; "average promotional price" is determined by reference to the audited financial statements of the issuer included in the prospectus; (38) "cash analysis" means a calculation of the issuer's net cash provided by operating activities, as reflected on the statement of cash flows and presented in conformity with generally accepted accounting principles; if debt securities are to be redeemed or retired from the proceeds from the public offering, a pro forma adjustment for the elimination of the related interest charges, net of applicable income taxes, must be made; (39) "CRD" means the Central Registration Depository within the NASDR; (40) "depositor" means a promoter who is required to deposit promotional shares into escrow in accordance with 3 AAC 08.180 - 3 AAC 08.186; (41) "escrow agent" means (A) a financial institution (i) whose principal place of business and domicile is in the United States; and (ii) that is not affiliated with the issuer, promoters of the issuer, or associates of the issuer, except that the issuer, promoters of the issuer, or associates of the issuer may be customers of the financial institution; or (B) an attorney or certified public accountant, if the attorney or certified public accountant is not affiliated with the issuer, its promoters, or associates, is licensed to do business in the state in which the attorney or certified public accountant practices, and can demonstrate that the attorney or certified public accountant is adequately insured or can provide a fidelity bond; (42) "face-amount certificate company" has the meaning given in 15 U.S.C. 80a-4(1) (sec. 4(1) of the Investment Company Act of 1940); (43) "FDIC" means Federal Deposit Insurance Corporation; (44) "firmly underwritten offering" means an offering that is purchased by the broker-dealer, who assumes the risk of distribution; (45) "impoundment agent" means a financial institution that is domiciled and whose principal place of business is located in the United States and whose deposits are insured by the FDIC; (46) "investment adviser representative," as defined in AS 45.55.990, does not include this state, an executive department of this state, or an employee of this state, if engaged in the normal course of official duties; (47) "investment company" has the meaning given in 15 U.S.C. 80a-3 (sec. 3 of the Investment Company Act of 1940); (48) "lock-in agreement" means an agreement between an issuer and persons who hold promotional shares in which the issuer and those persons agree, as a condition of registration and for the period specified in the lock-in agreement, not to sell, pledge, hypothecate, assign, grant any option for the sale of, or otherwise transfer or dispose of, whether or not for consideration, directly or indirectly, promotional shares and all certificates representing stock dividends, stock splits, recapitalizations, or similar transactions, that are granted to or received by the security holder; (49) "'minimum-maximum' offering" means an offering in which the risk of distribution stays with the issuer, the broker-dealer agrees to use best efforts to sell the securities, and a minimum and maximum amount of proceeds is set to determine when the offering closes; (50) "national securities exchange" means an exchange that has been registered as a national securities exchange as required by 15 U.S.C. 78e - 78f (secs. 5-6 of the Securities Act of 1934); (51) "NCUSIF" means the National Credit Union Share Insurance Fund; (52) "nonprofit corporation" means a corporation (A) that is organized for any lawful purpose; and (B) from which no part of the net income inures to the benefit of any person; (53) "open-end management company" means a management company as defined in 15 U.S.C. 80a-4(3) (sec. 4(3) of the Investment Company Act of 1940) and classified according to the definition in 15 U.S.C. 80a-5(a)(1) (sec. 5(a)(1) of the Investment Company Act of 1940); (54) "professional geologist" means a geologist certified under AS 08.02.011, or under the applicable occupational licensing statutes and regulations of another state; (55) "public offering price" means the per share price at which a promotional or development stage company proposes to offer equity securities to the public; (56) "qualified mining engineer" means an engineer registered under AS 08.48 and 12 AAC 36, or under the applicable occupational licensing statutes and regulations of another state, who has specialized knowledge and skills in the field of mining; (57) "registered engineer" means an engineer registered under AS 08.48 and 12 AAC 36, or under the applicable occupational licensing statutes and regulations of another state; (58) "registered land surveyor" means a land surveyor registered under AS 08.48 and 12 AAC 36, or under the applicable occupational licensing statutes and regulations of another state; (59) "state" has the meaning given in AS 45.55.990; (60) "state investment adviser," as defined in AS 45.55.990, does not include this state, an executive department of this state, or an employee of this state, if engaged in the normal course of official duties; (61) "unit investment trust" has the meaning given at 15 U.S.C. 80a-4(2) (sec. 4(2) of the Investment Company Act of 1940); (62) "issuer," as defined in AS 45.55.990, (A) includes a viatical settlement provider or other person that purchases or otherwise acquires a viatical settlement contract for the purpose of selling a viatical settlement interest in the contract; and (B) for purposes of (A) of this paragraph, does not include a broker-dealer, agent, viator, or insured; (63) "life insurance policy" includes a certificate of life insurance under a group insurance policy; (64) "owner of a life insurance policy" means the person that is the original owner or subsequent assignee or transferee, and that has had a bona fide insurable interest in a life insurance policy, if that policy insures the life of an individual who has the right to assign, transfer, sell, devise, or bequeath the benefits of the life insurance policy and who enters or seeks to enter into a viatical settlement contract; "owner of a life insurance policy" does not include (A) a viatical settlement purchaser; (B) a viatical settlement provider; (C) a person acquiring the policy or interest in a policy from a viatical settlement provider; or (D) an independent third party trustee or escrow agent; (65) "viatical settlement contract" (A) means a written agreement between a viator or insured and a viatical settlement provider for the sale, assignment, transfer, devise, or bequest to the viatical settlement provider by the viator or insured of all or a portion of the death benefit or ownership of a life insurance policy, for consideration that is less than the expected death benefit of the life insurance policy; (B) includes a contract for a loan or other financial transaction secured primarily by an individual or group life insurance policy; and (C) does not include (i) a loan by a life insurance company under the terms of a life insurance contract; (ii) a loan secured by the cash value of a policy; (iii) the assignment of a life insurance policy as collateral for a loan to a bank, saving bank, savings and loan association, credit union, or other licensed lending institution; (iv) the exercise by the viator of an accelerated benefits provision under the terms of the life insurance contract; or (v) the assignment, transfer, sale, devise, or bequest of a life insurance policy, for less than the expected death benefit, by the viator to a friend or family member if the friend or family member does not enter into more than one agreement in a calendar year; (66) "viatical settlement financing entity" means an underwriter, placement agent, lender, purchaser of securities, purchaser of a life insurance policy from a viatical settlement provider, credit enhancer, reinsurer, or person that is a party to a viatical settlement contract and that has a direct ownership in a life insurance policy that is the subject of a viatical settlement contract but whose sole activity related to the transaction is providing funds to effect the viatical settlement contract and that has an agreement in writing with a viatical settlement provider to act as a participant in a viatical settlement financing transaction; (67) "viatical settlement financing transaction" means a transaction in which a viatical settlement provider or a viatical settlement financing entity obtains financing for viatical settlement contracts, viaticated policies, or interests in those contracts or policies; "viatical settlement financing transaction" includes secured or unsecured financing, a securitization transaction or securities offering either registered or exempt from registration under federal and state securities law, or a direct purchase of interests in that policy, if that financing transaction complies with federal and state securities law; (68) "viatical settlement interest" means the entire interest or any fractional interest in a life insurance policy or in the death benefit under a life insurance policy that is the subject of a viatical settlement contract; "viatical settlement interest" does not include the initial purchase from the viator by a viatical settlement provider; (69) "viatical settlement provider" means a person, other than a viator or insured, that enters into a viatical settlement contract, including a person that (A) obtains financing for the purchase, acquisition, transfer or other assignment of a viatical settlement contract, viaticated policy, or interest in viatical settlement contracts or viaticated policies; or (B) sells, assigns, transfers, pledges, hypothecates, or disposes of a viatical settlement contract, viaticated policy, or interest in viatical settlement contracts or viaticated policies; (70) "viatical settlement purchase agreement" means a contract or agreement, entered into by a viatical settlement purchaser for the purpose of deriving an economic benefit and to which the owner of a life insurance policy is not a party, to purchase that life insurance policy or an interest in that life insurance policy for an amount that is less than the death benefit payable under the policy; (71) "viatical settlement purchaser" means a person that, for the purpose of deriving an economic benefit, gives money or other consideration for a life insurance policy or an interest in the death benefits of a life insurance policy that is the subject of a viatical settlement contract; "viatical settlement purchaser" does not include an issuer, a viatical settlement financing entity, or a special purpose entity that is created solely to act as a financing source for the viatical settlement provider; (72) "viaticated policy" means a life insurance policy that has been acquired by a viatical settlement provider under a viatical settlement contract; (73) "viator" means the owner of a life insurance policy insuring the life of an individual who enters or who seeks to enter a viatical settlement contract; "viator" does not include a viatical settlement provider or a person that acquires a viaticated policy or a fractional interest in a viaticated policy from a viatical settlement provider or a subsequent viatical settlement purchaser. (74) "FINRA" means the Financial Industry Regulatory Authority, formerly NASD. (75) "institutional buyer" has the meaning given in 17 C.F.R. 230.144A, as revised as of October 1, 2013, and adopted by reference. (76) "EFD system" means the Electronic Filing Depository system provided by the North American Securities Administrators Association.
History
- Authority: AS 45.55.950; AS 45.55.990
- Eff. 2/20/72, Register 41; am 10/1/99, Register 151; am 4/19/2000, Register 154; am 4/20/2000, Register 154; am 12/7/2006, Register 180; am 3/4/2015, Register 213; am 1/17/2016, Register 217; am 11/26/2016, Register 220
Chapter 11 Deferred Deposit Advances
3 AAC 11.010 Deferred deposit advances applications
(a) To apply for a deferred deposit license under AS 06.50.010, an applicant must submit a separate application to the department through the registry for each physical location, Internet website, and software application through which the applicant conducts business. In addition to the information required under AS 06.50.030, the application must contain
(1) a complete Form MU1;
(2) a complete Form MU2 for each control person and office manager;
(3) the applicant's current business license issued under AS 43.70;
(4) for an applicant that is a corporation, a limited liability company, a partnership, or another entity,
(A) a brief description of the structure or organization of the applicant, including any parent or subsidiary of the applicant, and whether any parent or subsidiary is publicly traded;
(B) documentation of the business organization and authorization required under (b) through (e) of this section; and
(C) a copy of the current filing, with the department division overseeing corporations, that designates the registered agent in the state;
(5) a copy of the business name registration form for the legal name of the applicant, submitted to and stamped "received" by the department division overseeing corporations;
(6) if the applicant is applying for the use of one or more other trade names on the Form MU1, a copy of the business name registration form for each other trade name, submitted to and stamped "received" by the department division overseeing corporations;
(7) satisfactory proof that the person holds at least $25,000 in cash assets for each location engaging in deferred deposit activity;
(8) proposed and current instruments that are related to advance transactions for the purpose of investigating compliance with AS 06.50, other state law, and federal law requirements, including
(A) the advance agreement;
(B) the disclosure statements required under AS 06.50 and under Federal law;
(C) the maximum advance terms and fees;
(D) the required fee notice and descriptions of where the notice will be posted in each location; and
(E) other documents used in the regular course of business;
(9) a fully executed bond as required under AS 06.50.040, to be submitted electronically through the registry;
(10) a written summary of the applicant and each control person's personal history, on a form prescribed by the registry, to demonstrate the qualifications required under AS 06.50.020(a)(2) and authorization for the registry and the department to obtain information related to administrative, civil, or criminal findings by a governmental jurisdiction; and
(11) other information the department reasonably requires with respect to the applicant.
(b) If the applicant is a corporation, in addition to the requirements in (a) of this section, the applicant must submit through the registry a certified copy of
(1) complete and current articles of incorporation and bylaws, and a certificate of good standing issued by the domestic state; and
(2) if the corporation is not organized in this state, the corporation's certificate of authority to transact business in this state.
(c) If the applicant is a limited liability company, in addition to the requirements in (a) of this section, the applicant must submit through the registry a certified copy of
(1) complete and current articles of organization and operating agreement, and a certificate of good standing issued by the domestic state; and
(2) the limited liability company's certificate of registration in this state, required before transacting business in this state, if the limited liability company is not organized in this state.
(d) If the applicant is a limited partnership, in addition to the requirements in (a) of this section, the applicant must submit through the registry a certified copy of
(1) the complete and current certificate of limited partnership and the partnership agreement, and a certificate of good standing issued by the domestic state; and
(2) the limited partnership's certificate of registration in this state, required before transacting business in this state, if the limited partnership is not organized in this state.
(e) If the applicant is a limited liability partnership, in addition to the requirements in (a) of this section, the applicant must submit through the registry a certified copy of
(1) the complete and current certificate of qualification and the partnership agreement, and a certificate of good standing issued by the domestic state; and
(2) the limited liability partnership's statement of foreign qualification required before transacting business in this state, if the limited liability partnership is not organized in this state,
(f) If the answer to any of the disclosure questions on the Form MU1 or Form MU2 is "yes," the applicant must provide complete details in writing of each event or proceeding, including, as applicable, the name and location of the court, the docket or case number, the status and summary of the event or proceeding, and a copy of an applicable charge, order, or consent agreement submitted through the registry.
(g) To obtain and maintain a license under AS 06.50 a person must comply with all requirements of the registry, including the payment of fees assessed by the registry.
(h) An applicant must pay in full reasonable investigation expenses incurred by the department when processing and reviewing an initial or renewal license application to do business under AS 06.50 before the department will approve a license.
(i) The first installment of the fee required under 3 AAC 11.020 must be paid at the time of application through the registry.
History
- Authority: AS 06.01.010; AS 06.50.080; AS 06.50.500 AS 06.50.020; AS 06.50.330; AS 06.50.510 AS 06.50.030; AS 06.50.400; AS 06.50.600 AS 06.50.040; AS 06.50.410; AS 06.50.610 AS 06.50.050; AS 06.50.460
- Eff. 1/1/2005, Register 172; am 12/21/2019, Register 232
3 AAC 11.020 Fee for initial or renewed license
(a) The nonrefundable fee for an initial or biennial renewed license to do business under AS 06.50 is $3,000, which must be paid to the department through the registry in two annual installments of $1,500.
(b) Nothing in this section relieves an applicant from the obligation to pay processing or other fees that the registry sets for services that the registry provides.
History
- Authority: AS 06.50.030; AS 06.50.600 AS 06.50.080; AS 44.33.020
- Eff. 1/1/2005, Register 172; am 12/21/2019, Register 232
3 AAC 11.030 Duration of license
Repealed.
History
- Eff. 1/1/2005, Register 172; repealed 12/21/2019, Register 232
3 AAC 11.040 License renewal application
A licensee seeking to renew a deferred deposit advance license must make the request to the department through the registry. A licensee seeking to renew a license must submit the renewal application, bond, and first installment of the fee required under 3 AAC 11.020 to the department so that the department receives the renewal application, bond, and annual fee installment no later than November 1 of the year in which the license is due to expire.
History
- Authority: AS 06.50.020; AS 06.50.080 AS 06.50.030; AS 06.50.600
- Eff. 1/1/2005, Register 172; am 12/21/2019, Register 232
3 AAC 11.050 Reports to the department
In addition to the information required in AS 06.50.310(b)(1) - (10), reports submitted to the department, through the registry, must include the
(1) total number of advance recipients offered a payment plan under AS 06.50.550(a)(2);
(2) average length of the payment plans entered into under AS 06.50.550(a)(2);
(3) total number of advance recipients whose payment obligations were assigned to third parties for collection;
(4) total number of advance recipients against whom the licensee initiated a court action under AS 06.50.550(b);
(5) completed reports of financial condition of the licensee on the form prescribed by the department; and
(6) any other information the department reasonably requires with respect to the licensee under AS 06.50.550(b).
History
- Authority: AS 06.50.300; AS 06.50.310; AS 06.50.600
- Eff. 1/1/2005, Register 172; am 12/21/2019, Register 232
3 AAC 11.060 Posted notice of license
In addition to posting the information required under AS 06.50.500, the licensee must post notice that license information may be found through the registry's consumer access Internet website in each business location, including each licensed Internet website and software application, so that the notice is clear and conspicuous to the consumer.
History
- Authority: AS 06.50.500; AS 06.50.600
- Eff. 1/1/2005, Register 172; am 12/21/2019, Register 232
3 AAC 11.080 Right to challenge information entered into the registry by the department
(a) A person required to be licensed under this chapter may challenge information pertaining to the person that is entered into the registry by the department. The challenge must be limited to the factual accuracy of the information pertaining to the person's record as entered into the registry by the department. The requested relief must be limited to correction of the information entered into the registry by the department pertaining to the person's record. The challenge must be in writing, must set out the specific information being challenged, and must include supporting evidence. A person may not submit a challenge under this section for the purpose of protesting disciplinary action taken against the person by the department or to appeal the underlying reasons for the disciplinary action.
(b) The department will review all information submitted by a person to support a challenge and will determine the merits of the challenge. The department will issue a written determination and send a copy of the determination to the last known address of the person making the challenge by certified mail, return receipt requested. If the department determines that the information entered into the registry by the department is factually incorrect, the department will take prompt steps to correct the information submitted. The department will not grant relief other than correction of the information entered into the registry by the department.
(c) The department's determination is the final decision on a challenge under this section, unless the person making the challenge files a written request for a hearing under AS 44.64.030 not later than 30 days after receipt of the department's determination.
History
- Authority: AS 06.50.010; AS 06.50.030; AS 44.33.020 AS 06.50.020; AS 06.50.600
- Eff. 12/21/2019, Register 232
3 AAC 11.090 Surety bond required
(a) An applicant for a deferred deposit advance license under AS 06.50 must file with the department a bond as required under AS 06.50.040 with at least one surety. The bond must be executed by the applicant and by a surety company authorized to conduct a surety business in the state. The bond must be submitted as required under 3 AAC 11.010(a)(9).
(b) The bond must run to the benefit of the department, the Department of Law, or another person with a claim for relief because of a violation of AS 06.50 or this chapter by a licensee.
(c) The bond must provide that
(1) the surety shall pay the amount ordered by a court or the department to a designated beneficiary listed in (b) of this section if the licensee is found in violation of AS 06.50 or this chapter, up to the full amount of the bond, not later than 14 days after receipt of the final order;
(2) the surety shall make a pro rata payment to each claimant if the amount claimed under (1) of this subsection exceeds the amount of the bond;
(3) the surety shall provide written notice of an action against a bond or a final order issued against a bond by regular or electronic mail not later than 10 days after receipt;
(4) immediately upon making a payment under (1) or (2) of this subsection, the surety shall provide written notice of the payment to the department by regular or electronic mail; and
(5) the surety shall provide the department written notice by regular or electronic mail that a bond will be cancelled not later than 10 days before cancellation.
(d) If a licensee receives notice of an action that could result in recovery against a bond, the licensee must provide the department with written notice by regular or electronic mail not later than 10 days after receipt.
(e) A licensee must ensure that the full amount of a required bond is in effect continuously while the licensee is licensed and for a three-year period after the department revokes or otherwise terminates a license. If a surety makes a payment under a bond, the licensee must immediately file a new bond with the department. Failure to maintain a surety bond at the level required in this section is grounds for immediate suspension of the deferred deposit advance license under AS 06.50.300.
(f) If the department receives notice of a final order of a court under (c) of this section or submits a final order of the department to the surety under (c) of this section, the department may require the deferred deposit advance licensee to file a new bond. If a new bond is required, the licensee must file a new bond in the required amount not later than 30 days after receiving notice from the department.
(g) Upon receipt of a notice of cancellation from a surety, the department will notify the deferred deposit advance licensee listed as the principal on the bond through the registry. The notice will inform the licensee of the effective date of the cancellation of the bond, that the deferred deposit advance license will be suspended under AS 06.50.300 on the effective date of cancellation, and that the licensee may retain the license if the licensee furnishes the department with an equivalent bond before the effective date of the cancellation.
(h) The remedies provided under this section are cumulative and nonexclusive and do not affect any other remedy available at law.
History
- Authority: AS 06.50.010; AS 06.50.300; AS 06.50.600 AS 06.50.040; AS 06.50.310
- Eff. 12/21/2019, Register 232
3 AAC 11.100 Department notifications
The department may use the registry as an agent for posting notice to a licensee or applicant regarding a deficiency, an application or license status change, or a request for additional information. The registry serves as the primary license record.
History
- Authority: AS 06.50.010; AS 06.50.300; AS 06.50.600 AS 06.50.020; AS 06.50.310
- Eff. 12/21/2019, Register 232
3 AAC 11.110 Advance notice of change
(a) A licensee shall file a written report through an advance change notice in the registry at least 15 days prior to the occurrence of:
(1) a material change to the license ownership;
(2) a change in control person or office manager listed in Form MU2 of the licensee's application;
(3) a change of the licensee's business name as issued on the licensee's business license under AS 43.70 or on the business name registration form, including other trade names;
(4) a change in the business location listed on the licensee's application.
(b) If a licensee files an advance change notice in the registry, the department may require the licensee to submit information necessary to determine if the licensee must submit a new application. If the department determines that the change requires a new application, a licensee must complete a new application under 3 AAC 11.010. If the department grants a new license, a new surety bond would be required under 3 AAC 11.090 and an annual fee installment would be required under 3 AAC 11.020.
(c) The licensee must submit a $300 payment for the department's investigative expenses when the licensee submits an advance change notice to the registry. The licensee must pay additional reasonable investigation expenses incurred by the department in the course of its investigation.
History
- Authority: AS 06.50.200; AS 06.50.220; AS 06.50.600 AS 06.50.210; AS 06.50.310
- Eff. 12/21/2019, Register 232
3 AAC 11.120 Prohibited practices in debt collection
In addition to other provisions in 3 AAC 01 that apply to this title, the regulations regarding debt collection activities under 3 AAC 01.210 - 3 AAC 01.220 apply to the provisions of this chapter.
History
- Authority: AS 06.50.050; AS 06.50.600; AS 45.50.471
- Eff. 12/21/2019, Register 232
3 AAC 11.300 Late filing civil penalty
A licensee must pay a late filing civil penalty of $25 per day for each day that a report required under AS 06.50.310 and 3 AAC 11.050 is late.
History
- Authority: AS 06.01.035
- Eff. 12/21/2019, Register 232
3 AAC 11.400 Abandoned applications
(a) An application is considered abandoned if the department does not receive any response from the applicant or licensee for 60 days after the department assigns a notice of deficiency to the record of the applicant or licensee in the registry.
(b) An abandoned application is denied without prejudice and all fees are forfeited.
History
- Authority: AS 06.50.030; AS 06.50.600
- Eff. 12/21/2019, Register 232
3 AAC 11.500 Termination of operations
A licensee terminating deferred deposit advance operations must
(1) provide electronic notice to the department through the registry of a decision to cease operations or the cessation of operations not later than seven days after that decision or cessation; and
(2) submit a completed request for surrender; and
(3) submit reports as required under 3 AAC 11.050 through the date of termination of operations.
History
- Authority: AS 06.50.210; AS 06.50.600; AS 44.33.020
- Eff. 12/21/2019, Register 232
3 AAC 11.600 Authority to conduct examinations and investigations
When the department conducts an investigation under AS 06.50.330,
(1) the licensee shall provide the department unrestricted access to the licensee's place of business, accounts, and records, including electronic records and records stored outside of the licensee's place of business to examine and make copies as necessary;
(2) the department may retain accountants, professionals, or specialists as examiners, auditors, or investigators, to conduct or assist in conducting an investigation or examination; and
(3) the applicant must pay reasonable examination and investigation fees in accordance with AS 06.01.010 and any expenses required under 3 AAC 11 for each representative of the department who is reasonably necessary to conduct the investigation or examination.
History
- Authority: AS 06.01.010; AS 06.50.600
- Eff. 12/21/2019, Register 232
3 AAC 11.700 Reimbursement of expenses
When the department conducts an investigation or examination under AS 06.50.330, the applicant shall pay the fees and actual expenses of required travel, including transportation, lodging, and per diem expense not to exceed the per diem allowance for employees of the state under AS 39.20.110.
History
- Authority: AS 06.01.010; AS 06.50.600
- Eff. 12/21/2019, Register 232
3 AAC 11.990 Definitions
In this chapter, unless the context requires otherwise,
(1) "control person" means a key individual described in the deferred deposit advance license application form of the registry NMLS who directly or indirectly exercises control over the applicant. A member, partner, director, senior officer, or owner of 10 percent or more of the equity of the applicant for a deferred deposit advance licensee;
(2) "department" means the Department of Commerce, Community, and Economic Development;
(3) "Form MU1" means the uniform company application developed and used by the registry;
(4) "Form MU2" means the uniform individual statement and consent form developed and used by the registry;
(5) "office manager" means an individual who is in charge of and responsible for the business operations of an office of a deferred deposit advance licensee;
(6) "other trade name" means a name other than the legal name of a business entity;
(7) "registry" means the Nationwide Multistate Licensing System and Registry (NMLS), a licensing system owned and operated by the State Regulatory Registry, LLC, for the licensing and registration of persons in the mortgage and other financial services industries;
(8) "report of condition" means a quarterly report as required by the registry.
History
- Authority: AS 06.50.600
- Eff. 12/21/2019, Register 232
Chapter 12 Small Loans
3 AAC 12.010 Licenses
Repealed 6/30/77.
3 AAC 12.020 Application for a license; bonds
(a) A person wishing to do business as a small loan company under AS 06.20 must submit a written request to the division for an application for licensure form and a bond form and indicate in the written request the location at which the applicant proposes to do business.
(b) Only fully completed applications on the department's application for licensure form and bonds on the department's bond form are to be submitted to the division for department approval. Whenever space on either form is inadequate, for a full and complete answer, the answer must be continued on a separate sheet attached to the form.
History
- Authority: AS 06.20.010; AS 06.20.050; AS 06.20.340 AS 06.20.020; AS 06.20.090
- In effect before 7/28/59; am 6/30/77, Register 62; am 4/13/79, Register 70
3 AAC 12.030 License and investigation fees
Repealed.
History
- In effect before 7/28/59; am 6/30/77, Register 62; am 4/13/79, Register 70; repealed 10/16/2003, Register 168
3 AAC 12.040 Liquid assets
Each applicant and licensee must have not less than $20,000 in liquid assets as a condition precedent to the receipt of and continuing use of a license.
History
- Authority: AS 06.20.040; AS 06.20.340
- In effect before 7/28/59; am 4/13/79, Register 70
3 AAC 12.050 Bond
Repealed 6/30/77.
3 AAC 12.060 Place of business
If the licensee wishes to continue doing business without interruption, he or she shall notify the department at least 30 days before the change of location. The notice must include the address of the new location and the exact date of the relocation.
History
- Authority: AS 06.20.070; AS 06.20.090; AS 06.20.340
- In effect before 7/28/59; am 6/30/77, Register 62
3 AAC 12.070 Maintenance of records
(a) Each licensee shall install and maintain in his or her place of business such books, accounts, and records as will lend themselves readily to inspection, examination and audit. If other businesses are conducted in the same office, he or she shall maintain separate books and records pertaining to the loan business.
(b) No licensee may, however, conduct any other type of business in association or conjunction with the loan business except as may be authorized in writing by the department. If another business, not authorized under AS 06.20, is conducted in the same office, the licensee shall fairly and equitably allocate all expenses so that the books relating to the licensee's business under AS 06.20 will fairly reflect expenses of conducting that business.
History
- Authority: AS 06.20.160; AS 06.20.210 AS 06.20.180; AS 06.20.340
- In effect before 7/28/59; am 6/30/77, Register 62
3 AAC 12.080 Accounting records
(a) The licensee shall maintain a record of each loan, showing the number of the loan, date of the loan, name of the borrower, and amount of the loan.
(b) The licensee shall maintain a separate account record for each loan made to any one borrower. Each account record must state the
(1) loan number;
(2) date of the loan;
(3) name and address of the borrower;
(4) name of any endorsers, comakers, cosigners, or sureties;
(5) cost of any insurance;
(6) amount of recording and releasing fees and dates of payment of recording and releasing fees as paid out for filing a financing statement or termination statement including the fee required for securing a lien on a vehicle title;
(7) description of security;
(8) rate at which charges are to be computed;
(9) terms of repayment;
(10) face amount of note;
(11) amount of payment showing the
(A) date of payment;
(B) amount paid on principal;
(C) amount paid on interest;
(D) remaining principal balance;
(E), (F) repealed 4/13/79.
(c) If a portion of the interest earned is not paid at the time payment is made, the account record must show either the date to which interest is paid or the amount of interest then due but unpaid.
(d) When any loan is prepaid in full, either by cash or renewal, refunds of any unearned premiums must be recorded on the account record.
(e) If payment is made in any way other than in the ordinary course of business, it shall be noted on the account record, for example, payment by sale of security, insurance claim or endorser.
(f) Deletions may not be made in the payment section of any account record. The entries must correspond with the receipts given to the borrower.
(g) Account records that are paid in full or renewed and that no longer reflect an active loan must be accumulated in a separate section of the files of the licensee and retained from one departmental examination to the next. After the examination, these records may be filed in a permanent file.
(h) All payments must be credited to the account records on the day they are received.
(i) Adequate files must be kept of all information required by AS 06.20 and this chapter.
(j) Proper records must be maintained showing all cash receipts and disbursements.
(k) An alphabetical record must be maintained and show the name of each borrower, endorser, comaker, cosigner, or surety who is currently indebted, directly or indirectly, to the licensee, together with sufficient information to locate the account record and showing liability on all loans.
(l) A general ledger must be maintained and posted at least once a month as of the close of business on a fixed date, preferably the last business day of each month, and a trial balance prepared from it. All receipts and disbursements of any amount must be entered to subsidiary records as of the day they occur.
(m) Records segregating income and expense accounts must be kept in a manner that will facilitate checking the annual reports required by AS 06.20. Combination forms may be used if approved by the department.
History
- Authority: AS 06.20.160; AS 06.20.240; AS 06.20.270 AS 06.20.180; AS 06.20.250; AS 06.20.280 AS 06.20.230; AS 06.20.260; AS 06.20.340
- In effect before 7/28/59; am 6/30/77, Register 62; am 10/16/2003, Register 168
3 AAC 12.090 Sample forms to be filed with the department
The licensee shall file copies of all application forms, notes, statements to borrowers, receipts, mortgages, assignments, and other instruments in general use by the licensee and which relate to loan transactions with the department.
History
- Authority: AS 06.20.180; AS 06.20.340
- In effect before 7/28/59; am 6/30/77, Register 62
3 AAC 12.100 Permanent record of loans required
Every licensee shall maintain a separate permanent record of all loans in litigation, including all loans assigned, sold, or transferred for the purpose of suit. The records must contain the following: the loan number, the original amount of loan, and the unpaid balance; the nature of the security foreclosed, attached, to be recovered, or otherwise repossessed; the name of the owner of the security if it is not the property of the borrower; and the date and terms of settlement of the account if before obtaining judgment, or if after a judgment is obtained, all items included in the collection after suit is instituted. These records must be maintained separately from other records of the licensee and shall be known as the "Litigation Register." Account records or cards for these loans must be segregated and maintained separately.
History
- Authority: AS 06.20.180; AS 06.20.340
- In effect before 7/28/59; am 6/30/77, Register 62
3 AAC 12.110 Note reduced to judgment
When a note has been reduced to judgment, the account record must show the date of judgment, the amount of judgment, and any court costs. After the notice has been reduced to judgment, all payments received must be applied on the judgment and properly itemized. Account records or cards for these loans must be segregated and maintained separately by the licensee.
History
- Authority: AS 06.20.180; AS 06.20.340
- In effect before 7/28/59; am 6/30/77, Register 62; am 10/16/2003, Register 168
3 AAC 12.120 Preservation of records
Repealed 6/30/77.
3 AAC 12.130 Loan record numbering and retention
Each instrument taken in connection with any loan must bear the respective loan number. Each instrument and paper required by AS 06.20 to be retained by the licensee shall be filed so as to be readily available for a period of two years after final entry.
History
- Authority: AS 06.20.180; AS 06.20.340
- In effect before 7/28/59; am 10/16/2003, Register 168
3 AAC 12.140 Equal periodic payments
Repealed.
History
- In effect before 7/28/59; repealed 10/16/2003, Register 168
3 AAC 12.145 Due date of first payment
(a) If the first loan payment is proposed to be due 31 days or more after the date the loan is made, the licensee shall disclose to the borrower in writing and before the borrower signs any loan documents, the
(1) amount due as the first payment if payment is made within 30 days after the date the loan is made;
(2) amount due as the first payment if payment is made 31 days or more after the date the loan is made; and
(3) the difference between the amounts disclosed under (1) and (2) of this subsection.
(b) The licensee shall allow the borrower to elect the date of the first loan payment if the
(1) payment date complies with AS 06.20.250(d); and
(2) borrower's election is made in writing after receipt of the disclosure required by (a) of this section.
History
- Authority: AS 06.20.250; AS 06.20.340
- Eff. 10/16/2003, Register 168
3 AAC 12.150 Statement of loan and receipt from borrower
The statement of the loan, the acknowledgment by the borrower, and the receipt for proceeds of the loan may be incorporated in one instrument.
History
- Authority: AS 06.20.270; AS 06.20.340
- In effect before 7/28/59; am 6/30/77, Register 62
3 AAC 12.160 Receipts
The licensee shall retain, for a period of two years, a copy of all receipts given to borrowers for the receipt of money. The licensee shall make the receipts available at all times for inspection by the department. If payment cards are used and entries correspond to the receipts given to the borrowers, the department will consider the cards a copy of the receipt, and additional receipt copies will not have to be retained by the licensee.
History
- Authority: AS 06.20.270; AS 06.20.340
- In effect before 7/28/59; am 6/30/77, Register 62
3 AAC 12.170 Advance payments
Repealed 6/30/77.
3 AAC 12.180 Repayment in full
Repealed 6/30/77.
3 AAC 12.190 Computation of charges
Repealed 6/30/77.
3 AAC 12.200 Interest rates
Repealed 6/30/77.
3 AAC 12.210 Allowable insurance and charges
(a) Nothing in this chapter requires loan insurance of any type and no licensee may require the borrower to purchase any type of insurance that is payable directly to the licensee.
(b) All insurance sold under this section must be reasonably related to a likely hazard or risk of loss. Any person receiving compensation for the sale of insurance must be an agent licensed in this state, and the insurance policy sold by the licensee must be issued by an insurance company permitted to conduct the business of insurance in this state under AS 21.
(c) Property insurance may be purchased at the option of the borrower in an amount not to exceed the reasonable value of the insured property or the approximate amount of the loan or transaction, whichever is less.
(d) When a loan is paid by renewal and original loan collateral is retained as collateral for the renewed loan, any termination fee collected under AS 45.05 for the collateral held for the original loan must be carried forward and identified on the new payment record as a prepaid termination fee for the new loan.
History
- Authority: AS 06.20.260; AS 06.20.340
- In effect before 7/28/59; am 6/30/77, Register 62; am 4/13/79 Register 70; am 10/16/2003, Register 168
3 AAC 12.220 Use of state's name or laws in advertising
No licensee, by advertising or otherwise, may use any phrase or expression referring to his authority or supervision by the state or any department or officer of the state except the following: "Licensed under the Alaska Small Loans Act, AS 06.20, and regulations adopted under that Act," When this phrase is employed, it shall be used only in conjunction with the business of making small loans under the act.
History
- Authority: AS 06.20.200; AS 06.20.340
- In effect before 7/28/59; am 6/30/77, Register 62
3 AAC 12.230 Misleading advertising prohibited
(a) All advertising, printed or spoken, must be truthful and must avoid being misleading or deceptive in any manner whatever. in determining whether any particular advertising matter violates the provisions, intent, or spirit of AS 06.20 or any regulations under it, the department will give consideration to the general arrangement of copy and to the inference or impression that may reasonably be drawn from it after all facts are considered.
(b) It is misleading to use phrases such as "lowest cost," "lowest rates," "quickest service," "legal rates," "no red tape," "easy payments," "repayment in easy installments"; and to advertise "new reduced rates" or "a new type of service" or any similar comparative expressions unless the statement is in fact accurate with respect to the business of the licensee using the advertising, and unless the advertisement clearly indicates that the new plan refers specifically to a change in a particular licensee's plan of operation which must be a change of more than minor importance with respect to the business of the licensee. Such advertisements may not be used for a period exceeding 60 days after the plan has been put into effect.
History
- Authority: AS 06.20.200; AS 06.20.340
- In effect before 7/28/59; am 6/30/77, Register 62
3 AAC 12.240 "Blind" loan advertisements prohibited
Licensees shall not use "blind" loan advertisements wherein they refer only to telephone numbers or newspaper box addresses. Every advertisement shall clearly indicate the identity of the licensee.
History
- Authority: AS 06.20.340
- In effect before 7/28/59
3 AAC 12.250 Full information on terms for extension of payment
Licensees shall not advertise that in the event of sickness or disability or other contingency payment will be extended without also stating what interest and other charges continue during the period of extension.
History
- Authority: AS 06.20.340
- In effect before 7/28/59
3 AAC 12.260 Handbills
Repealed.
History
- In effect before 7/28/59; repealed 10/16/2003, Register 168
3 AAC 12.270 Use of credit cards prohibited
No licensee shall solicit business by means of "credit cards," "letters of credit," or other similar devices which indicate that a holder has an established credit standing with the licensee unless such holder has made a bona fide application to the licensee and credit has actually been established.
History
- Authority: AS 06.20.340
- In effect before 7/28/59
3 AAC 12.280 Collateral inducements to borrow
(a) No licensee shall by any representation or device, either directly or indirectly, offer to any person anything of value by means of which he will be encouraged to become a borrower, or shall recommend, refer, or induce an applicant to apply for or secure a loan from any such licensee.
(b) The distribution of articles of trivial value for general goodwill advertising in the ordinary course of business will not be deemed to be in violation of this section.
History
- Authority: AS 06.20.340
- In effect before 7/28/59
3 AAC 12.290 Advertising all costs of loan
When examples or tables of periodic payments under a flat payment plan are advertised, they shall include all charges to the borrower as well as interest and principal. If only principal and interest payments are advertised, a clear statement of the rate of charge or the total amount of charge shall also be included. In all such advertising, the total number and frequency of payments must be specified. No advertising shall include average repayments or average cost of a loan.
History
- Authority: AS 06.20.200; AS 06.20.340
- In effect before 7/28/59
3 AAC 12.300 Filing of signs and displays
A copy of all permanent signs and window displays that include any material other than the name of the licensee must be submitted to the department before or at the time they are placed into use.
History
- Authority: AS 06.20.340
- In effect before 7/28/59; am 6/30/77, Register 62
3 AAC 12.310 Retention of advertising copy for two years
Each licensee shall retain for a period of two years from the date of use, with date of use indicated thereon, information disclosing the medium through which any advertisement was disseminated. Identical copies of all advertising materials which are published, distributed, or broadcast shall be available for inspection at all times by representatives of the commissioner of commerce.
History
- Authority: AS 06.20.340
- In effect before 7/28/59
3 AAC 12.320 Retention of form letters
The department considers all form letters designed to solicit additional loans as advertising, and copies of all such material must be retained for inspection by representatives of the department at any time. All advertising and business shall be conducted under the name on the license.
History
- Authority: AS 06.20.200
- In effect before 7/28/59; am 6/30/77, Register 62
3 AAC 12.330 Permanent file for official communications
Each licensee shall maintain a permanent file for all official communications to and from the department.
History
- Authority: AS 06.20.340
- In effect before 7/28/59; am 6/30/77, Register 62
3 AAC 12.340 Licensee required to know Small Loans Act and regulations
Each licensee shall be familiar with the laws and regulations relating to the business.
History
- Authority: AS 06.20.340
- In effect before 7/28/59; am 6/30/77, Register 62
3 AAC 12.350 Business day
The place of business designated in the license shall be open each business day during customary hours to receive payments from borrowers.
History
- Authority: AS 06.20.340
- In effect before 7/28/59
3 AAC 12.360 Guarantor or endorser
If a borrower is also a guarantor or endorser on another loan, the file and account record of the borrower must be cross-referenced to the guaranteed or endorsed loan file.
History
- Authority: AS 06.20.240; AS 06.20.280; AS 06.20.340
- Eff. 6/30/77, Register 62; am 10/16/2003, Register 168
3 AAC 12.370 Loans
(a) On the date the loan is made, loan proceeds must be delivered to the borrower or to a third party on behalf of the borrower. Loan proceeds delivered by mail must be sent by registered mail, by certified mail, or in another manner that allows the licensee to obtain written confirmation of the date the loan proceeds are received. The licensee shall obtain written confirmation of the date of receipt for loan proceeds hand-delivered or electronically deposited. Interest may be charged only from the date the loan proceeds are received even if the note bears a prior date. If loan proceeds are delivered to a third party, the promissory note and disclosure must state the name of the third party and the amount delivered.
(b) When a death claim is filed with an insurance company, the exact date of death must be recorded on the account record.
(c) No licensee may accept applications for loans or close loans at any place other than that named in the license. However, if the loan is made by mail, the signature of one or more of the borrowers may be obtained outside the loan office if the signatures are obtained by an actual and bona fide employee of the licensee or by the spouse of the borrower.
(d) When making loans by mail the licensee shall mail all necessary forms and documents to the borrower, and upon completion of those forms by the borrower, the proceeds of the loan must be delivered from the licensee's office.
(e) No licensee may permit any person other than a bona fide employee to complete its notes, security instruments or any other forms used in small loan transactions, nor may any person other than a bona fide employee be permitted to accept payments on those loans except delinquent loans referred to other parties for collection purposes.
(f) The licensee shall explain to the borrower the contents of the note, the statement of loan, the security agreement and any other forms or documents used in connection with the completion of a loan. No instrument may have blanks left to be completed after being signed.
(g) Security for any loan must be released by the licensee when the loan is paid in full, unless the loan is paid by renewal and the security is used as collateral for the new loan. Copies of any releasing documents, such as termination statements, properly documented, must be retained in the borrower's file.
History
- Authority: AS 06.20.220; AS 06.20.270 AS 06.20.250; AS 06.20.340
- Eff. 6/30/77, Register 62; am 10/16/2003, Register 168
3 AAC 12.380 Insurance premium refunds
(a) Whenever a loan is paid in full or renewed before maturity (except by insurance), the licensee shall cancel existing life insurance and refund all unearned premiums.
(b) When a loan is paid in full or renewed before the first scheduled due date, the insurance is considered to have been in force for one full month unless paid or renewed the day the loan is made.
(c) In computing unearned premiums on or after the first scheduled due date, the number of months elapsed is the number of expired due dates plus the next due date if prepayment in full or renewal occurs eight days or more after a scheduled due date.
History
- Authority: AS 06.20.260; AS 06.20.340
- Eff. 6/30/77, Register 62
3 AAC 12.390 Loan file
A separate file must be maintained for each loan in the office of the licensee. The file must contain the note, the security agreement, the disclosure and acknowledgement required in 3 AAC 12.145, the financing statement, the termination statement, and all other evidence of indebtedness, security, or the release of indebtedness that pertains to the loan, except if the note or any court documents are kept in a separate file or if the papers are in the custody of a court or an agent for collection. If a borrower is also a comaker or guarantor on another loan, the file of the borrower must be cross-referenced to the comade or guaranteed loan file.
History
- Authority: AS 06.20.160; AS 06.20.240; AS 06.20.340 AS 06.20.180; AS 06.20.280
- Eff. 6/30/77, Register 62; am 10/16/2003, Register 168
3 AAC 12.395 Debt collection practices
The debt collection procedures and requirements set out at ch. 01 of this title apply to licensees under this chapter.
History
- Authority: AS 06.20.320; AS 06.20.340
- Eff. 4/13/79, Register 70
3 AAC 12.900 Definitions
(a) In this chapter "department" means the Department of Commerce, Community, and Economic Development.
(b) In this chapter and in AS 06.20 "releasing fee" means a fee taken to release a financing statement, mortgage, deed of trust, or a vehicle lien.
History
- Authority: AS 06.20.340
- Eff. 6/30/77, Register 62
Chapter 13 Money Services
Article 1 Licensing
3 AAC 13.005 Virtual currency as money transmission
An activity or transaction that would be covered as money transmission remains covered as money transmission if that activity or transaction is in the form of virtual currency.
History
- Authority: AS 06.55.990
- Eff. 1/1/2023, Register 244
3 AAC 13.006 Money transmitters who only conduct virtual currency activity or transactions
Beginning January 1, 2023, a person who is engaging in activities or transactions for which a license is required under AS 06.55 with activity or transactions in the form of virtual currency, shall submit an application for licensure through the registry. The department considers a person to be engaging in activities for which a license is required under AS 06.55 if the person is conducting money transmission and that activity or transaction is in the form of virtual currency being transmitted to, from, or within the state. A limited licensing agreement, as related to virtual currency activity, entered into with the state shall be void and removed from the registry.
History
- Authority: AS 06.55.101; AS 06.55.102; AS 06.55.990
- Eff. 1/1/2023, Register 244
3 AAC 13.010 Money transmission and currency exchange license applications
(a) A person applying for a money transmission or currency exchange license under AS 06.55.101 or 06.55.201 must submit an application that complies with AS 06.55.102 or 06.55.202 to the department through the registry. In addition to the information required by AS 06.55.102 or 06.55.202, the application must contain
(1) a full description of the screening process used by the applicant in selecting an authorized delegate, including a sample of any forms used, and the method used to screen for criminal history;
(2) satisfactory proof that, if applying for a money transmission license, the person has obtained the security required by AS 06.55.104 and that the security is in force, including the amount and type of any excess coverage provided; and
(3) personal history and experience in a form prescribed by the registry and authorization for the registry and the department to obtain
(A) an independent credit report from a consumer reporting agency; and
(B) information related to administrative, civil, or criminal findings by a governmental jurisdiction.
(b) For the purposes of this section, the department may use the registry as an agent for requesting information from and distributing information to the United States Department of Justice, another governmental agency, or another source directed by the department.
(c) As part of the investigation of an application for a license under this chapter, the department will, under (a)(3) of this section, including through the registry, obtain an independent credit report and other information related to administrative, civil, or criminal findings regarding the applicant and each control person of the applicant.
History
- Authority: AS 06.55.102; AS 06.55.202 AS 06.55.104; AS 44.33.020
- Eff. 7/12/2008, Register 187; am 11/22/2017, Register 224
3 AAC 13.020 Approval to engage in services under AS 06.55 with a license from another state
(a) A person seeking approval to engage in money transmission or currency exchange activities under AS 06.55.103 without obtaining a license under AS 06.55.101 from the department must submit to the department
(1) the items described in AS 06.55.103(a)(2) and 3 AAC 13.010(a);
(2) satisfactory proof that the person holds a license in good standing to engage in money transmissions in at least one other state that has either adopted the Uniform Money Services Act or has money transmission laws that are substantially similar to those of this state;
(3) satisfactory proof that the person has obtained the security required by AS 06.55.104 and that the security is in force, including the amount and type of any excess coverage provided;
(4) a signed release of information that allows the department to obtain information from licensing agencies of other states necessary to verify the person's eligibility to engage in money transmission or currency exchange under AS 06.55.103; and
(5) any other information that the department reasonably requires with respect to the applicant.
(b) The department will deny approval to offer money transmission or currency exchange services under AS 06.55.103 if
(1) the person fails to comply with 3 AAC 13.010(a), (a) of this section, or AS 06.55.103;
(2) the person or any of the person's authorized delegates are the subject of a negative licensing action in any of the states in which the person is licensed;
(3) the person is not licensed to provide money transmission services in at least one state that has enacted the Uniform Money Services Act or has money transmission laws that are substantially similar to those of this state;
(4) the department finds that the person would not qualify for a money transmission license under AS 06.55.105(a)(2) or this chapter if the person applied for one;
(5) the person has not met the security requirements of AS 06.55.104 or the net worth requirement of AS 06.55.107;
(6) another state has suspended or revoked the person's money transmission license or currency exchange license within the last five years; or
(7) the person knowingly makes a false statement or knowingly submits false information in order to obtain an approval to offer services under AS 06.55.103.
(c) An application for approval under AS 06.55.103 must be made to the department through the registry.
History
- Authority: AS 06.55.103; AS 44.33.020
- Eff. 7/12/2008, Register 187; am 11/22/2017, Register 224
3 AAC 13.030 Security requirement
(a) An applicant for a money transmission license or for approval under AS 06.55.103 must provide, and must maintain at all times, security that satisfies the requirements of AS 06.55.104. The security must secure the faithful performance of the obligations of the money transmission licensee, including its principals, responsible individuals, employees, and authorized delegates, with respect to money transmission. For purposes of this subsection, the obligations of the money transmission licensee are
(1) its legal obligations to its customers;
(2) its obligation to comply with AS 06.55, with this chapter, with any order issued under AS 06.55 or this chapter, and with any other applicable law; and
(3) for a money transmission licensee that engages in currency exchange or advertises, solicits, or holds itself out as providing currency exchange under AS 06.55.201(a)(2) or (3), obligations listed in (1) and (2) of this subsection and related to currency exchange.
(b) If a surety bond is used to satisfy AS 06.55.104, it must be in a form acceptable to the department, issued by a surety company authorized to engage in business in this state and acceptable to the department with an assignment in favor of the department. The surety bond must cover claims for the entire period that the person who is licensed under AS 06.55.105 or is offering services under AS 06.55.103 provides money transmission services in this state and for at least five years after the person ceases to provide those services. The department may require that the surety bond be kept in place for more than five years after the services are no longer provided in the state if the department determines that the surety bond will be needed to satisfy claims against the person after expiration of the five-year period.
(c) Not later than 14 days after the money transmission licensee receives notice of an action against the money transmission licensee that could result in recovery against the bond, a money transmission licensee shall provide written or electronic notice to the department of the action.
(d) The bond must provide that, not later than 14 days after the surety receives notice of an action against the bond or a final order of a court under (c) of this section, the surety shall provide written or electronic notice of the action or final order to the department.
(e) The bond must provide that immediately upon a payment by the surety under the bond, the surety shall provide written or electronic notice of the payment to the department.
(f) If a letter of credit is used to satisfy the security requirement of AS 06.55.104, it must be
(1) in a form acceptable to the department;
(2) clean and unconditional;
(3) irrevocable for a period not less than five years after the person obtaining the letter of credit ceases to provide services in the state; and
(4) issued or confirmed by, and payable and presentable at, a financial institution whose deposits are insured by the federal government.
(g) The security remains in effect until canceled. Cancellation may occur only after at least 30 days' written or electronic notice to the department. Nothing in this subsection affects any liability incurred or accrued during the period covered by the security. Cancellation of a security used to satisfy the requirements of AS 06.55.104 constitutes grounds for suspension or revocation of a license issued under AS 06.55 or the department's approval to offer services in the state under AS 06.55.103.
(h) If the department at any time reasonably determines that the required security is insecure, deficient in amount, or exhausted in whole or in part, the department will require the money transmission licensee to provide new or additional security to comply with AS 06.55.104 and this section. The department may increase the amount of security required, to a maximum of $500,000, if the financial condition of a money transmission licensee requires the increase. In determining whether to require new, additional, or increased security, the department may consider one or more of the following criteria:
(1) significant reduction of net worth;
(2) financial losses;
(3) potential losses resulting from violations of AS 06.55 or this chapter;
(4) the licensee filing for bankruptcy;
(5) a judicial or administrative finding against the licensee in any state or foreign country based on the conduct of a money services business;
(6) a licensee, executive officer, board director, person in control, responsible individual, principal, or authorized delegate being convicted of a felony;
(7) any unsafe or unsound practice;
(8) other events and circumstances that the department considers to impair the ability of the licensee to meet its obligations to its customers.
History
- Authority: AS 06.55.104; AS 44.33.020
- Eff. 7/12/2008, Register 187; am 11/22/2017, Register 224
3 AAC 13.040 Money services license denial
(a) Subject to (b) and (c) of this section, the department will deny a money services license application if the department determines that
(1) the applicant has not submitted all the information required by AS 06.55 or this chapter;
(2) the application is for a money transmission license and the applicant has not met the security requirements of AS 06.55.104 or the net worth requirement of AS 06.55.107;
(3) under AS 06.55.105(a)(2) or 06.55.203(a)(2), as applicable, permitting the applicant to engage in money transmission or currency exchange is not in the public interest, as demonstrated by findings that may include one or more of the following:
(A) the applicant, an executive officer, a board director, a person in control, or an authorized delegate has been convicted of any felony involving fraud or dishonesty within the past 10 years;
(B) the applicant, an executive officer, a board director, a person in control, or an authorized delegate has been convicted of a crime involving a financial transaction within the past 10 years;
(C) the applicant, an executive officer, a board director, or a person in control has knowingly falsified any information supplied in connection with the application;
(D) the applicant, or any proposed authorized delegate of the applicant, has had an adverse action taken against any license related to providing financial services by a jurisdiction within the United States within the past five years;
(E) the applicant has allowed a business under its control to deteriorate to a condition of insolvency determined by the fact that its liabilities exceed its assets or it cannot meet its liabilities as they mature;
(4) the applicant, or any authorized delegate of the applicant, fails to respond to a request for information from the department;
(5) the applicant's proposed screening process for selecting authorized delegates will be ineffective in determining the fitness of proposed delegates;
(6) the applicant has failed to register with the United States Department of Treasury when required to do so by 31 U.S.C. 5330; or
(7) the applicant, an executive officer, a board director, or a person in control is listed on the specially designated nationals and blocked persons list prepared by the United States Department of Treasury.
(b) Instead of denying an application under (a) of this section, the department may return the application or extend the application period if the department determines that the condition or circumstances that would likely lead to denial may be temporary and resolved satisfactorily within a reasonable period of time. The department may resume processing the application if the department determines that a favorable resolution of the disqualifying condition has occurred.
(c) The department may extend the application period for processing a money services license application if due to staff shortages or encountered problems the department is unable to process the application and complete the investigation mandated by AS 06.55.105(a) or 06.55.203(a) within 120 days after the department receives the complete application.
History
- Authority: AS 06.55.103; AS 06.55.105; AS 06.55.203 AS 06.55.104; AS 06.55.107; AS 44.33.020
- Eff. 7/12/2008, Register 187; am 11/22/2017, Register 224
3 AAC 13.050 Renewal of approval or money transmission license
(a) The department may deny renewal of a money transmission license, including an approval under AS 06.55.103, on the same grounds for which the license may be revoked or suspended under AS 06.55.601 or this chapter, including the failure to provide proof of adequate security.
(b) If the money transmission licensee fails to make a timely request for renewal of the license, the department will send a notice of suspension to the licensee at the address most recently provided to the department by the licensee.
(c) The department will extend the date for renewing a money transmission license if the licensee makes a written request for an extension not later than 30 days before the anniversary date of the issuance of the money transmission license and the department finds that the licensee has shown the requested extension of time is reasonably necessary in order to submit the documentation required in AS 06.55.106.
(d) A request to renew a money transmission license must be made to the department through the registry.
History
- Authority: AS 06.55.103; AS 06.55.990 AS 06.55.106; AS 44.33.020
- Eff. 7/12/2008, Register 187; am 11/22/2017, Register 224
3 AAC 13.060 Renewal of currency exchange license
(a) The department may deny renewal of a currency exchange license on the same grounds for which the license may be revoked or suspended under AS 06.55.601 or this chapter.
(b) If the currency exchange licensee fails to make a timely request for renewal of the license, the department will send a notice of suspension to the licensee at the address most recently provided to the department by the licensee.
(c) The department will extend the date for renewing a currency exchange license if the licensee makes a written request for an extension not later than 30 days before the anniversary date of the issuance of the currency exchange license and the department finds that the licensee has shown the requested extension of time is reasonably necessary in order to submit the documentation required in AS 06.55.204.
(d) A request to renew a currency exchange license must be made to the department through the registry.
History
- Authority: AS 06.55.204; AS 44.33.020
- Eff. 7/12/2008, Register 187; am 11/22/2017, Register 224
3 AAC 13.070 Abandoned applications
(a) An application is considered abandoned if the department does not receive any response from the applicant or licensee for 60 days after the department assigns a notice of deficiency to the record of the applicant or licensee in the registry.
(b) An abandoned application is denied without prejudice and all fees are forfeited.
History
- Authority: AS 06.55.850; AS 44.33.020
- Eff. 11/22/2017, Register 224
Article 2 Business Duties and Restrictions
3 AAC 13.110 Conduct of business through authorized delegate
(a) A money transmission licensee may conduct business regulated under AS 06.55 through an authorized delegate designated by the money transmission licensee in accordance with AS 06.55 and this chapter.
(b) Before a money transmission licensee is authorized to conduct business through an authorized delegate or allows a person to act as the money transmission licensee's authorized delegate, the money transmission licensee must
(1) adopt, and update as necessary, written policies and procedures sufficient to ensure that the authorized delegate complies with AS 06.55 and this chapter; and
(2) enter into a written contract that complies with AS 06.55.301.
(c) The written contract required by (b)(2) of this section must be signed by the money transmission licensee and the authorized delegate and, at a minimum, must
(1) designate the person signing the contract as the money transmission licensee's authorized delegate with the authority to conduct business regulated under AS 06.55 on behalf of the money transmission licensee;
(2) require the authorized delegate to certify that the delegate is familiar with and agrees to operate in full compliance with AS 06.55 and this chapter, including the requirements of AS 06.55.301(b) for remission of money, the trust and other requirements of AS 06.55.301(d), and the record maintenance requirements of AS 06.55.405 and this chapter;
(3) acknowledge that the authorized delegate consents to examination or investigation by the department;
(4) state that the money transmission licensee is subject to regulation by the department and that, as part of that regulation, the department may suspend or revoke an authorized delegate designation or require the money transmission licensee to terminate an authorized delegate designation; and
(5) acknowledge receipt of the written policies and procedures required under AS 06.55.301(a).
(d) A money transmission licensee must maintain on file with the department a current list of its authorized delegates operating in this state that includes the name and business address of each delegate. The money transmission licensee must update the list within 15 business days after any change in the list.
History
- Authority: AS 06.55.301; AS 06.55.403 AS 06.55.302; AS 44.33.020
- Eff. 7/12/2008, Register 187
3 AAC 13.120 Request for approval of change of control
(a) A request for approval of change of control required by AS 06.55.404 must include a comprehensive description of the proposed change and be submitted to the department through the registry. The description must set out
(1) the identity of each person acquiring control under the proposed change;
(2) the ownership interest and managerial authority of each person in control under the proposed change; and
(3) for each new person in control under the proposed change, information about personal history and experience as described in 3 AAC 13.010(a)(3), including employment history for the immediate previous 10 years.
(b) Any request under AS 06.55.404(e) for an exemption from any of the requirements of AS 06.55.404(a)(2) and (3) must be received by the department at least 30 days before the proposed change of control, and must set out the grounds on which the request relies.
History
- Authority: AS 06.55.404; AS 44.33.020
- Eff. 7/12/2008, Register 187; am 11/22/2017, Register 224
Article 3 Examinations, Reports, and Records
3 AAC 13.210 Authority to conduct examinations and investigations
(a) When the department conducts an on-site investigation under AS 06.55.105(a), 06.55.103(b), or 06.55.203(a) or an examination under AS 06.55.401,
(1) the applicant, money services licensee, or authorized delegate shall provide the department free access to the place of business, books, accounts, safes, and vaults of that person to examine and make copies as necessary;
(2) the department may retain accountants, professionals, or specialists as examiners, auditors, or investigators, to conduct or assist in the conduct of an investigation or examination; and
(3) the applicant, money services licensee, or authorized delegate shall pay the department examination and investigation fees in accordance with AS 06.01.010 and any expenses required to be paid under 3 AAC 13.850 for each representative of the department who is reasonably necessary to conduct the investigation or examination.
(b) Instead of an on-site investigation under AS 06.55.105(a) or 06.55.203(a) or an examination under AS 06.55.401, the department will accept the audit of a licensed certified public accountant, if
(1) the applicant, money services licensee, or authorized delegate pays the costs of the audit;
(2) the audit is equal in scope to the investigation or examination required by the department;
(3) the licensee provides written or electronic notice through the registry that the licensee is having the audit prepared instead of the investigation or examination required by the department; and
(4) the department has given prior written or electronic approval for the person to conduct the audit.
History
- Authority: AS 06.01.010; AS 06.55.105; AS 06.55.401 AS 06.55.103; AS 06.55.203; AS 44.33.020
- Eff. 7/12/2008, Register 187; am 11/22/2017, Register 224
3 AAC 13.220 Records
In addition to the records required to be maintained under AS 06.55.405(a), a money transmission licensee shall maintain a record of money transmittals in accordance with 31 C.F.R. 103.33(f).
History
- Authority: AS 06.55.405; AS 44.33.020
- Eff. 7/12/2008, Register 187
3 AAC 13.230 Access to confidential information
(a) Before disclosing confidential information under AS 06.55.407(b), the department will send written notice to the applicant, money services licensee, or authorized delegate with a confidentiality interest in the information of the department's intent to release the information. The department will not release the information for at least 14 days following the date of the notice unless the delay would defeat the interests of justice or endanger the public. The applicant, money services licensee, or authorized delegate may request a further delay of release, and the department will grant that request if the person establishes that additional time is required to obtain a judicial order preventing the release, unless granting the extension would defeat the interests of justice or an earlier release is reasonably necessary to protect the public.
(b) The department will not release information made confidential by AS 06.55.407(a) to a representative of a state or federal agency under AS 06.55.407(b) unless an employee of the agency
(1) executes and delivers to the department a written certification that the agency will maintain the confidentiality of the information received from the department; and
(2) has the authority to make that certification on behalf of the state or federal agency.
History
- Authority: AS 06.55.407; AS 44.33.020
- Eff. 7/12/2008, Register 187
Article 4 Miscellaneous Provisions
3 AAC 13.810 Additional permissible investments
In addition to the assets and securities listed in AS 06.55.502, a permissible investment for purposes of AS 06.55 includes
(1) commercial paper within the top three rating categories of a nationally recognized rating service;
(2) interest-bearing bills, notes, or bonds that bear a rating within the top three rating categories of a nationally recognized rating service; and
(3) virtual currency for outstanding obligations denominated in the same virtual currency.
History
- Authority: AS 06.55.501; AS 06.55.502; AS 44.33.020
- Eff. 7/12/2008, Register 187; am 1/1/2023, Register 244
3 AAC 13.820 Required office notice
The sign required by AS 06.55.810 must utilize a large enough font to be easily read by persons visiting the location where it is displayed.
History
- Authority: AS 06.55.810; AS 44.33.020
- Eff. 7/12/2008, Register 187
3 AAC 13.830 Termination of operations
A money services licensee shall provide electronic notice to the department through the registry in writing of its decision to cease operations as a money services licensee or the cessation of operations of any of its authorized delegates not later than seven days after that decision or cessation.
History
- Authority: AS 44.33.020
- Eff. 7/12/2008, Register 187; am 11/22/2017, Register 224
3 AAC 13.840 Fees
(a) The following nonrefundable fees are established for services provided under AS 06.55 or this chapter and shall be paid to the department through the registry:
(1) an application fee for a money transmission license under AS 06.55.102, approval under AS 06.55.103, or currency exchange license under AS 06.55.202, $2,000, plus $200 for each additional location;
(2) an annual renewal fee for a money transmission license, including an approval under AS 06.55.103, $1000;
(3) a biennial renewal fee for a currency exchange license under AS 06.55.204, $2,000; the fee shall be paid through the registry in two annual installments of $1,000 each;
(4) a late fee for each day after suspension that the department does not receive the renewal report or the renewal fee under AS 06.55.106(c)(2), $25;
(5) a request for approval of a change in control of a money services licensee under AS 06.55.404(a), $750;
(6) a request for a change in mailing address, $50;
(7) a request for a change in name, $100.
(b) The following fees, paid to the department through the registry, are refundable if the application is denied, are nonrefundable if the application is withdrawn or abandoned, and are established for services provided under AS 06.55 or this chapter:
(1) license fee for a license under AS 06.55.102 or 06.55.202, $1000 for the initial location, $200 for each additional physical location, and $1,000 for each additional Internet-based location where the applicant or its authorized delegate will provide services;
(2) a fee for the first year of operating with the approval given under AS 06.55.103, $1,000 for the initial location, $200 for each additional physical location, and $1,000 for each additional Internet-based location where the applicant or its authorized delegate will provide services.
(c) Nothing in this section relieves an applicant from the obligation to pay processing or other fees that the registry sets for services that the registry provides.
History
- Authority: AS 06.55.103; AS 06.55.203; AS 06.55.990 AS 06.55.105; AS 06.55.401; AS 44.33.020 AS 06.55.106; AS 06.55.404
- Eff. 7/12/2008, Register 187; am 11/22/2017, Register 224
3 AAC 13.850 Reimbursement of expenses
When the department conducts an investigation under AS 06.55.103(b), 06.55.105(a), or 06.55.203(a) or an examination under AS 06.55.401, the applicant, money services licensee, or authorized delegate shall pay the actual expenses of required travel, including transportation, lodging, and per diem expense not to exceed the per diem allowance for employees of the state under AS 39.20.110.
History
- Authority: AS 06.55.103; AS 06.55.203; AS 44.33.020 AS 06.55.105; AS 06.55.401
- Eff. 7/12/2008, Register 187; am 11/22/2017, Register 224
Article 5 General Provisions
3 AAC 13.910 Filing or submission date
(a) An application for department action under AS 06.55 and this chapter will be considered filed or submitted at the time the filing or submission is received in electronic form by the department through the registry.
(b) Repealed 11/22/2017.
History
- Authority: AS 44.33.020
- Eff. 7/12/2008, Register 187; am 11/22/2017, Register 224
3 AAC 13.920 Name and address changes
(a) A money services licensee shall maintain a current, valid, mailing address and electronic mail address on file with the department through the registry at all times. An applicant or licensee shall monitor its record in the registry and its electronic mail address filed with the registry for communications from the department and information regarding its license or registration. The department will use the latest mailing address submitted to the registry for official communications, notifications, and service of legal process.
(b) A person required to be licensed under AS 06.55 shall file an application to amend its record with the department through the registry 30 days before a change of a mailing address and immediately upon change of an electronic mail address. A money services licensee shall submit the required fee to the department through the registry with an application to amend its record because of a change of a mailing address. A change of the mailing address of a licensee in the registry is effective when approved by the department in the registry.
(c) If a money services licensee seeks to change its name, the licensee must submit an application to amend its Form MU1 and the required fee to the department through the registry. Not later than seven days after filing the application to amend the Form MU1 for a change of name, a licensee must submit directly to the department
(1) organizational documents filed with the domestic state under AS 06.55.102 with the changed name and, if the licensee is organized outside this state, documentation of authority to conduct business in this state with the changed name; and
(2) a copy of the name registration form with the changed name, stamped "received" by the regulatory agency overseeing corporations.
(d) Repealed 11/22/2017.
(e) A name change takes effect in the registry upon the approval of the department.
History
- Authority: AS 06.55.102; AS 06.55.106; AS 44.33.020 AS 06.55.103; AS 06.55.202
- Eff. 7/12/2008, Register 187; am 11/22/2017, Register 224
3 AAC 13.990 Definitions
In AS 06.55 and this chapter,
(1) "business day" means a day other than Saturday, Sunday, or a state or federal holiday;
(2) "department" means the Department of Commerce, Community, and Economic Development;
(3) "Form MUI" means the uniform money services license application developed and used by the registry;
(4) "monetary value" has the meaning of AS 06.55.990(10) and includes virtual currency;
(5) "registry" means the Nationwide Multistate Licensing System and Registry; in this paragraph, "Nationwide Multistate Licensing System and Registry" means a licensing system developed by the Conference of State Bank Supervisors and the American Association of Residential Registry, LLC, or a successor or an affiliated entity, for the licensing and registration of persons in the mortgage and other financial services industries;
(6) "virtual currency"
(A) means a digital representation of value that is used as a medium of exchange, unit of account, or store of value; and is not money, whether or not denominated in money;
(B) does not include
(i) a transaction in which a merchant grants, as part of an affinity or rewards program, value that cannot be taken from or exchanged with the merchant, bank credit, or virtual currency; or
(ii) a digital representation of value issued by or on behalf of a publisher and used solely within an online game, game platform, or family of games sold by the same publisher or offered on the same game platform.
History
- Authority: AS 06.55.102; AS 06.55.203; AS 06.55.405 AS 06.55.103; AS 06.55.204; AS 06.55.820 AS 06.55.105; AS 06.55.403; AS 06.55.990 AS 06.55.106; AS 06.55.404; AS 44.33.020
- Eff. 7/12/2008, Register 187; am 11/22/2017, Register 224; am 1/1/2023, Register 244
Chapter 14 Mortgage Lending
Article 1 Licensing
3 AAC 14.010 Mortgage license required to operate as mortgage lender or mortgage broker
(a) Unless exempt from licensing under AS 06.60.015(a), a person must be licensed by the department as a mortgage licensee to operate in the state as a mortgage broker or mortgage lender with respect to a dwelling or residential real estate in the state.
(b) A mortgage licensee may operate in the state as a mortgage lender or a mortgage broker, or as both a mortgage lender and mortgage broker.
History
- Authority: AS 06.60.010; AS 06.60.015 AS 06.60.013; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 12/4/2010, Register 196
3 AAC 14.015 Mortgage license or exemption required to operate as mortgage broker
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
3 AAC 14.020 Mortgage loan originator license or exemption required
(a) A person, including a sole proprietor or control person of a mortgage licensee or a registered depository institution, and an individual who works under a mortgage licensee or a registered depository institution, may not operate in the state as a mortgage loan originator with respect to a dwelling or residential real estate in the state unless licensed by the department as a mortgage loan originator.
(b) An individual covered under AS 06.60.015(b) is exempt from the licensing requirements of this section.
(c) A bona fide nonprofit organization referenced in AS 06.60.015(a)(5) and (c) may submit an application for an exemption registration to the department through the registry to determine if the organization qualifies for an exemption. In addition to the information required under AS 06.60.015(c), an application for an exemption must contain
(1) a complete Form MU1;
(2) a current business license issued under AS 43.70;
(3) documentation of the status of a tax-exempt organization under 26 U.S.C. 501(c)(3) (Internal Revenue Code);
(4) complete and current articles of incorporation and bylaws, and a certificate of good standing issued by the domestic state; and if the corporation is not organized in this state, a copy of the corporation's certificate of authority to transact business in this state;
(5) policies and procedures detailing how the organization ensures that the organization and the organization's mortgage loan originators meet the requirements of AS 06.60.330;
(6) a list of other trade names if the organization is operating under a name that is different from the organization's legal name;
(7) details of each mortgage loan program that is available to consumers; the details of each program must include the interest rate, terms, underwriting guidelines, flyers, websites where the program is advertised, and funding source;
(8) a list of mortgage loan originators that are currently under contract with the organization; for each mortgage loan originator who is currently under contract with the organization, the organization shall provide
(A) a list of the originator's training and education;
(B) the date of the originator's most recent criminal history background check and independent credit report; and
(C) details of the originator's compensation plan;
(9) documentation or an explanation of affordable housing promotion or homeownership education;
(10) organization and management charts;
(11) a business plan related to mortgage origination activities;
(12) a list of any consumer complaints received, resolution of those complaints, and management response; and
(13) any other information that the department reasonably requires with respect to the organization.
History
- Authority: AS 06.60.010; AS 06.60.015 AS 06.60.012; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 12/4/2010, Register 196; am 1/1/2017, Register 220; am 2/6/2020, Register 233
3 AAC 14.025 License required for individual mortgage licensee to operate as an originator
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
3 AAC 14.030 Business from outside this state
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
3 AAC 14.035 Operating in this state
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
3 AAC 14.040 Exemptions
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
3 AAC 14.045 Biennial renewal of exemptions
Repealed
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
3 AAC 14.050 Maintenance of exemption eligibility records
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
3 AAC 14.051 Licensee and registered depository institution compliance with requirements of the registry
To obtain and maintain a license or registration under AS 06.60 a person shall comply with all requirements of the registry, including the payment of fees assessed by the registry.
History
- Authority: AS 06.60.016; AS 06.60.910
- Eff. 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.052 Right to challenge information entered into the registry by the department
(a) A person required to be licensed or that is registered under this chapter may challenge information pertaining to the person that is entered into the registry by the department. The challenge must be limited to the factual accuracy of the information pertaining to the person's record entered into the registry by the department. The requested relief must be limited to correction of the information submitted by the department to the registry pertaining to the person's record. The challenge must be in writing, must set out the specific information being challenged, and must include supporting evidence. A person may not submit a challenge for the purpose of protesting disciplinary action taken against the person by the department or to appeal the underlying reasons for the disciplinary action.
(b) The department will review all information submitted by a person to support a challenge and will determine the merits of the challenge. The department will issue a written determination and send a copy of the determination to the last known address of the person making the challenge by certified mail, return receipt requested. If the department determines that the information submitted by the department to the registry is factually incorrect, the department will take prompt steps to correct the information submitted. The department will not grant relief other than correction of the information submitted to the registry by the department.
(c) The department's determination is the final decision on the challenge, unless the person making the challenge files a written request for a hearing under AS 44.64.030 no later than 30 days after receipt of the department's determination.
History
- Authority: AS 06.60.016; AS 06.60.910
- Eff. 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.053 Surety bond required of mortgage licensee and registered depository institution
(a) An applicant for a mortgage license or for a registration under AS 06.60.014 shall file with the department a bond with one or more sureties. The amount of the bond must be at least $75,000. The bond must be executed by the applicant and by a surety company authorized to conduct a surety business in the state. The bond must secure the performance by the mortgage licensee or the registered depository institution of its obligations under AS 06.60 and this chapter and must be in a form acceptable to the department.
(b) The bond must run to the benefit of the department, the Department of Law, or another person with a claim for relief because of a violation of AS 06.60 or this chapter by a mortgage licensee or a registered depository institution.
(c) The bond must provide that, no later than 90 days after receipt of a final order issued by a court or the department that finds the mortgage licensee or the registered depository institution has violated AS 06.60 or this chapter and orders the mortgage licensee or the registered depository institution to pay a sum of money as a result of the violation, the surety shall pay the amount required in the final order to be paid to the department, the Department of Law, or another person up to the full amount of the bond. The bond must provide that if, at the time the surety makes payment under the bond, the surety has received a final order under this subsection from more than one claimant and the total amount of the claims exceeds the bond amount, the surety shall make a pro rata payment to all claimants who have submitted a final order to the surety under this subsection.
(d) No later than 14 days after the mortgage licensee or the registered depository institution receives notice of an action against the mortgage licensee or the registered depository institution that could result in recovery against the bond, a mortgage licensee or a registered depository institution shall provide written notice or electronic mail notice to the department of the action.
(e) The bond must provide that, no later than 14 days after the surety receives notice of an action against the bond or a final order of a court under (c) of this section, the surety shall provide written notice or electronic mail notice of the action or final order to the department.
(f) The bond must provide that immediately upon a payment by the surety under the bond, the surety shall provide written notice or electronic mail notice of the payment to the department.
(g) A mortgage licensee or a registered depository institution shall ensure that the full amount of the required bond is in effect continuously while the mortgage licensee is licensed or the registered depository institution is registered and for a three-year period after the department revokes or otherwise terminates the license or registration. Failure to maintain the surety bond at the level required in this section is grounds for immediate suspension of the mortgage license or of the registration under AS 06.60.014. If the department receives notice of a final order of a court under (c) of this section or submits a final order of the department to the surety under (c) of this section, the department may require the filing of a new bond. If a new bond is required, the mortgage licensee or the registered depository institution shall file a new bond in the required amount no later than 30 days after receiving notice from the department. Immediately upon payment by the surety under the bond the mortgage licensee or the registered depository institution shall file a new bond with the department.
(h) The bond must provide that the surety shall provide written notice or electronic mail notice to the department at least 30 days before canceling the surety bond for any reason. Upon receipt by the department of a notice of cancellation, the department will notify the mortgage licensee who or the registered depository institution that is the principal on the bond of the effective date of the cancellation of the bond and that the mortgage license, or the registration under AS 06.60.014, will be suspended when the bond is cancelled, unless the mortgage licensee or the registered depository institution furnishes the department with an equivalent bond before the effective date of the cancellation. The department will send the notice to the mortgage licensee or the registered depository institution through the registry. The department will suspend the mortgage license, or the registration under AS 06.60.014, on the effective date of the cancellation, unless the surety bond has been replaced, renewed, or otherwise reinstated.
(i) The remedies provided under this section are cumulative and nonexclusive and do not affect any other remedy available at law.
History
- Authority: AS 06.60.045; AS 06.60.910
- Eff. 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.054 Financial statement to be submitted with mortgage license or registered depository institution application
(a) An applicant for a mortgage license or for a registration under AS 06.60.014 shall submit an unaudited financial statement for the preceding fiscal year prepared under generally accepted accounting principles.
(b) The financial statement described under (a) of this section must
(1) be prepared no earlier than 12 months before the date the department receives the initial application and no later than 90 days after the end of the applicant's fiscal year; and
(2) include at least a balance sheet and an income statement and notes relevant to each component, except that if the applicant is licensed or registered or is applying in one or more jurisdictions in addition to this state, the applicant shall submit to the department the highest level financial statement required by any jurisdiction to which the applicant is applying or in which the applicant is licensed or registered.
(c) The levels of financial statement are
(1) at the lowest level, an unaudited financial statement;
(2) at the second lowest level, an unaudited and compiled financial statement;
(3) at the second highest level, an unaudited and reviewed financial statement; and
(4) at the highest level, an audited financial statement.
(d) A financial statement prepared by a parent company of an applicant as a consolidated financial statement for the parent company and its subsidiaries is not acceptable as a financial statement of the applicant. In this subsection, "parent company" means a company that controls management and operations of another firm.
(e) in this section,
(1) "audited financial statement" means a financial statement
(A) that is certified by a certified public accountant; and
(B) the contents of which include a balance sheet, cash flow statement, and income statement;
(2) "unaudited and compiled financial statement" means a financial statement for which the financial data have been assembled by a certified public accountant but not reviewed for accuracy;
(3) "unaudited and reviewed financial statement" means an unaudited financial statement for which the financial data have been reviewed for accuracy by a certified public accountant;
(4) "unaudited financial statement" means a financial statement in which the balance sheet, cash flow statement, or income statement has not been audited.
History
- Authority: AS 06.60.014; AS 06.60.060 AS 06.60.020; AS 06.60.910
- Eff. 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.055 Application for mortgage license
To apply for a mortgage license under AS 06.60.020, a person must submit to the department through the registry
(1) a complete Form MU1;
(2) a complete Form MU2 for a control person and branch manager of the applicant;
(3) a financial statement in compliance with 3 AAC 14.054;
(4) the designation of a registered agent under 3 AAC 14.057;
(5) if the registry accepts fingerprints for the purpose of conducting a criminal history background check of a mortgage license applicant, consent to a federal criminal history record check and a complete set of fingerprints in a form acceptable to the registry for the applicant and each control person of the applicant;
(6) a copy of the applicant's current business license issued under AS 43.70;
(7) for an applicant that is a business entity,
(A) documentation of the business organization and authorization under 3 AAC 14.056; and
(B) a copy of the current filing, with the department division overseeing corporations, that designates the registered agent in the state;
(8) a copy of the certificate of business name registration, issued by the department division overseeing corporations, for each other trade name used by the applicant as described in 3 AAC 14.059;
(9) two complete sets of fingerprints in a form acceptable to the Department of Public Safety for the applicant and a control person of the applicant, if the registry does not accept fingerprints for a mortgage license applicant;
(10) authorization under AS 06.60.027(a)(2) for the registry and the department to obtain for the applicant and a control person of the applicant
(A) an independent credit report from a consumer reporting agency; and
(B) information related to administrative, civil, or criminal findings by a governmental jurisdiction;
(11) if the answer to any of the disclosure questions on the Form MU1 or Form MU2 is "yes," complete details in writing of each event or proceeding, including as applicable, the name and location of the court, the docket or case number, and the status and summary of the event or proceeding, and a copy of an applicable charge, order, or consent agreement; and
(12) other information, documentation, and payments as allowed by AS 06.60 and required by the department.
History
- Authority: AS 06.60.020; AS 06.60.035; AS 06.60.910 AS 06.60.027; AS 06.60.060
- Eff. 7/1/2008, Register 186; am 7/24/2009, Register 191; am 12/4/2010, Register 196; am 2/6/2020, Register 233
3 AAC 14.056 Documentation of business organization and authorization and registered agent
(a) To apply for a mortgage license, an applicant must submit to the department a certified copy of,
(1) if the applicant is a corporation,
(A) complete and current articles of incorporation and bylaws, and a certificate of good standing issued by the domestic state; and
(B) if the corporation is not organized in this state, a copy of the corporation's certificate of authority to transact business in this state;
(2) if the applicant is a limited liability company,
(A) complete and current articles of organization and operating agreement, and a certificate of good standing issued by the domestic state; and
(B) if the limited liability company is not organized in this state, a copy of the limited liability company's certificate of registration in this state, required before conducting affairs in this state;
(3) if the applicant is a limited partnership,
(A) the complete and current certificate of limited partnership and the partnership agreement, and a certificate of good standing issued by the domestic state; and
(B) if the limited partnership is not organized in this state, a copy of the limited partnership's certificate of registration in this state, required before transacting business in this state; and
(4) if the applicant is a limited liability partnership,
(A) the complete and current certificate of qualification and the partnership agreement, and a certificate of good standing issued by the domestic state; and
(B) if the limited liability partnership is not organized in this state, a copy of the limited liability partnership's statement of foreign qualification, required before transacting business in this state.
(b) The certificate of good standing required under (a)(1 ) - (4) of this section must be dated no earlier than 60 days before the filing of the mortgage license application.
History
- Authority: AS 06.60.020; AS 06.60.060; AS 06.60.910
- Eff. 12/4/2010, Register 196
3 AAC 14.057 Appointment of registered agent
(a) An applicant for a mortgage license or for a registration under AS 06.60.014 shall designate on the Form MU1 a registered agent for service of process located in this state. The registered agent must be an agent of the mortgage licensee or of the registered depository institution upon whom process, notice, or demand required or permitted by law to be served upon the mortgage licensee or the registered depository institution may be served.
(b) If applicant for a mortgage license is a business entity, the registered agent on the Form MU1 must be the person filed as registered agent for the business entity with the department division overseeing corporations.
(c) A mortgage licensee or a registered depository institution shall continuously maintain a registered agent in this state and provide the department, through the registry, with the registered agent's name, physical and mailing address, telephone number, and electronic mail address.
History
- Authority: AS 06.60.014; AS 06.60.060 AS 06.60.020; AS 06.60.910
- Eff. 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.058 Qualifying individual for mortgage licensee
Repealed.
History
- Eff. 12/4/2010, Register 196; repealed 2/6/2020, Register 233
3 AAC 14.059 Use of other trade name
(a) If an applicant for a mortgage license intends to use one or more other trade names, the applicant must disclose each other trade name on the Form MU1.
(b) A mortgage licensee may conduct business using more than one other trade name only if the mortgage licensee obtains a separate mortgage license for each other trade name under which the mortgage licensee intends to do business. An applicant for a mortgage license may not receive more than six mortgage licenses with different trade names.
(c) At the time of filing the Form MU1, and for each other trade name filed on the Form MU1, an applicant for a mortgage license must submit to the department through the registry a copy of the certificate of business name registration issued by the department division overseeing corporations.
History
- Authority: AS 06.60.020; AS 06.60.910
- Eff. 12/4/2010, Register 196; am 2/6/2020, Register 233
3 AAC 14.060 Application for originator license
To apply for an originator license under AS 06.60.020, a person must submit
(1) to the registry Form MU4;
(2) an authorization for a federal criminal background check through the registry and a complete set of fingerprints for a federal criminal history background check under procedures established by the registry;
(3) upon request of the department, an additional complete set of fingerprints to the department in a form acceptable to the Department of Public Safety for a state criminal history record check;
(4) authorization under AS 06.60.027(a)(2) for the registry and the department to obtain
(A) an independent credit report from a consumer reporting agency; and
(B) information related to administrative, civil, or criminal findings by a governmental jurisdiction;
(5) if the answer to any of the disclosure questions on the Form MU4 is "yes," complete details in writing to the department of all events or proceedings, including as applicable, the name and location of the court, the docket or case number, and the status and summary of the event or proceeding, and a copy of an applicable charge, order, or consent agreement;
(6) to the registry proof that the applicant has completed the approved prelicensing education required under AS 06.60.038; however, prelicensing education expires, and the applicant must complete an additional 20 hours of approved prelicensing education in order to be eligible under AS 06.60 for a state mortgage loan originator license, if the applicant
(A) fails to acquire a valid state license or federal registration as a mortgage loan originator within three years from the date of completion of any approved prelicensing education course; or
(B) fails to acquire a valid state license or federal registration as a mortgage loan originator within three years from the last date of licensure or registration as a mortgage loan originator;
(7) to the registry proof that the applicant has passed the national component of the qualified written test required under AS 06.60.040;
(8) proof to the department through the registry that the applicant has achieved a passing score on the state component of the qualified written test; and
(9) other information, documentation, and payments as allowed by AS 06.60 and required by the department or the registry.
History
- Authority: AS 06.60.020; AS 06.60.035; AS 06.60.910 AS 06.60.027; AS 06.60.040
- Eff. 7/1/2008, Register 186; am 7/24/2009, Register 191; am 12/4/2010, Register 196; am 2/6/2020, Register 233
3 AAC 14.061 Other business of applicant or control person
An applicant, licensee, or control person shall provide the information requested on the Form MU2 or Form MU4 regarding any business of the applicant, licensee, or control person other than the business for which a license is required under AS 06.60, including the nature of the business, the individual's position, title, or relationship with the other business, start date, hours per month, description of duties, and other information the department or the registry may request.
History
- Authority: AS 06.60.020; AS 06.60.910
- Eff. 12/4/2010, Register 196
3 AAC 14.062 Sponsorship
(a) A mortgage loan originator license will not be granted to an applicant, unless a mortgage licensee or a registered depository institution sponsors the mortgage loan originator in the registry.
(b) The sponsorship of a mortgage loan originator licensee by a mortgage licensee or a registered depository institution is not effective until it is approved by the department in the registry.
(c) To operate as a mortgage loan originator licensee in the state, an individual must maintain a sponsorship by a mortgage licensee or a registered depository institution in the registry approved by the department.
(d) A mortgage loan originator licensee may be sponsored by only one mortgage licensee or one registered depository institution under AS 06.60.159.
History
- Authority: AS 06.60.012; AS 06.60.159 AS 06.60.155; AS 06.60.910
- Eff. 7/24/2009, Register 191; am 12/13/2009, Register 192; am 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.063 Financial responsibility required to obtain and maintain licensure
(a) The department will consider an applicant or licensee financially responsible under AS 06.60.060(2)(C), if the applicant or licensee has a credit score of 600 or a higher score on the credit report obtained under AS 06.60.027(c).
(b) If the credit score of an applicant or licensee is less than 600, to determine financial responsibility under AS 06.60.060(2)(C), the department will review evidence of the applicant's or licensee's financial responsibility, including
(1) current outstanding judgments, excluding judgments solely as a result of medical expenses;
(2) current outstanding tax liens or other government liens and filings;
(3) foreclosures during the past three years; and
(4) seriously delinquent accounts during the past three years.
(c) The department will notify the applicant or licensee through the registry that the credit history of the applicant or licensee is under review and that the applicant or licensee may request a copy of the credit report and submit to the department a written explanation of adverse information in the credit report no later than 21 days after the date the notice that the credit history is under review is posted in the registry.
History
- Authority: AS 06.60.027; AS 06.60.060; AS 06.60.910
- Eff. 12/4/2010, Register 196
3 AAC 14.064 Submittal of application to the department
An applicant for a license or registration under AS 06.60 must complete all license or registration requirements, including the payment of all required fees, before submitting the application to the department through the registry.
History
- Authority: AS 06.60.014; AS 06.60.016; AS 06.60.910
- Eff. 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.065 Reimbursement of costs and investigative expenses related to applications
When the department evaluates an application for an initial license or registration or the renewal of a license or registration under AS 06.60, if the reasonable costs and reasonable investigative fees, including examination costs, incurred by the department exceed a fee established in 3 AAC 14.072 or 3 AAC 14.160, the applicant must reimburse those excess fees and costs, with the hours expended by a department employee to be reimbursed at the rate of $75 per hour, before the department takes action on the application.
History
- Authority: AS 06.60.035; AS 06.60.250; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.067 Registry fees
Repealed.
History
- Eff. 7/24/2009, Register 191; repealed 12/4/2010, Register 196
3 AAC 14.069 Fees for first year of participation in registry
Repealed.
History
- Eff. 7/24/2009, Register 191; am 12/13/2009, Register 192; repealed 12/4/2010, Register 196
3 AAC 14.070 Payment of fees required
The department will not take action with respect to an application unless the applicable fees established in AS 06.60 or in this chapter have been received by the department through the registry.
History
- Authority: AS 06.60.035; AS 06.60.085; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 12/4/2010, Register 196
3 AAC 14.072 Application and license fees
(a) When a person applies for a mortgage license under AS 06.60, the person shall pay to the department through the registry
(1) an application fee of $500 in partial payment of investigative expenses incurred by the department; and
(2) an annual license fee of $1,000 for the period that expires on December 31 after the date the license is issued.
(b) When a person applies for a mortgage loan originator license under AS 06.60, the person shall pay to the department through the registry
(1) an application fee of $250 in partial payment of investigative expenses incurred by the department;
(2) an annual license fee of $300 for the period that expires on December 31 after the date the license is issued; and
(3) a surety fund fee of $50.
(c) Fees established under this chapter are nonrefundable.
(d) Nothing in this section relieves an applicant from the obligation to pay processing or other fees that the registry sets for services that the registry provides.
(e) The nonrefundable fee for an annual bona fide nonprofit exemption registration under AS 06.60.015(e) is $400. The organization shall pay the fee to the department through the registry each year for the period that expires on December 31 after the date the registration is issued. An organization that chooses to apply for a bona fide nonprofit exemption registration shall apply annually on or after November 1 to ensure that the organization continues to comply with AS 06.60. The application must be received by the department through the registry on or before December 1.
History
- Authority: AS 06.60.010; AS 06.60.015; AS 06.60.910 AS 06.60.012; AS 06.60.035
- Eff. 12/4/2010, Register 196; am 1/1/2017, Register 220; am 2/6/2020, Register 233
3 AAC 14.075 Notice of complete application
The department will provide notice through the registry to the applicant upon receipt of a complete application. For the purpose of beginning the 30-day period described in AS 06.60.050, the date the department assigns a "pending review" notice to the record of the applicant in the registry is the date of the determination that the department has received a complete application.
History
- Authority: AS 06.60.014; AS 06.60.050 AS 06.60.020; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.080 Originator fee waiver
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
3 AAC 14.085 Abandoned applications
(a) An application is considered abandoned if the department does not receive any response from the applicant, licensee, or registered depository institution for 60 days after the department assigns a notice of deficiency to the record of the applicant, licensee, or registered depository institution in the registry.
(b) An abandoned application is denied without prejudice and all fees are forfeited.
History
- Authority: AS 06.60.016; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.090 Mortgage licensee and originator licensing between July 1, 2008 and March 1, 2009
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
Article 2 Registration as a Small Mortgage Lender or Small Mortgage Originator
3 AAC 14.110 Application for small mortgage lender registration
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
3 AAC 14.115 Application for small mortgage originator registration
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
3 AAC 14.120 Small mortgage originator employment or exclusive contract
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010. Register 196
3 AAC 14.125 Small mortgage lender operation through small mortgage originator
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
3 AAC 14.130 Loan limit for small mortgage lender
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
3 AAC 14.135 Application for renewal of small mortgage lender registration
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
3 AAC 14.140 Small mortgage originator registration renewal application
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
3 AAC 14.145 Notice of complete application
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
Article 3 Depository Institution Registration
3 AAC 14.150 Application for registration
(a) To apply for registration under AS 06.60.014, a depository institution shall submit
(1) to the registry
(A) a complete Form MU1;
(B) a complete Form MU2 for each control person and branch manager of the applicant;
(C) a financial statement in compliance with 3 AAC 14.054;
(D) a copy of the surety bond in compliance with 3 AAC 14.053; and
(E) the designation of a registered agent under 3 AAC 14.057; and
(2) to the department
(A) if the answer to any of the disclosure questions on the Form MU1 or Form MU2 is "yes," complete details in writing of each event or proceeding, including as applicable, the name and location of the court, the docket or case number, and the status and summary of the event or proceeding, and a copy of an applicable charge, order, or consent agreement; and
(B) other information, documentation, and payments as allowed under AS 06.60 and required by the department.
(b) A registration under AS 06.60.014 remains in effect until December 31 of the year in which the registration is issued.
History
- Authority: AS 06.60.014; AS 06.60.910
- Eff. 1/1/2017, Register 220
3 AAC 14.155 Registration renewal
(a) To renew a registration under AS 06.60.014, a registered depository institution shall submit to the department through the registry on or after November 1 of the annual registration period the annual registration fee required under 3 AAC 14.160(a)(2) and a renewal application updating the record of the registered depository institution, if necessary, and attesting to the current accuracy and completeness of the information in the record of the registered depository institution with the department and the registry.
(b) The department will designate an incomplete renewal application as "on hold" in the registry. The department will approve or deny the application for renewal of registration not later than 60 days after the renewal application is submitted to the department through the registry. The 60-day period begins on the date all documentation required by the department is received, and an "on hold" designation in the registry for the renewal application is removed. If a registered depository institution fails to satisfy the requirements of (a) of this section, the registration expires at the end of the period for which the registration was issued.
(c) To renew a registration, a registered depository institution shall pay to the department the annual registration fee and any other outstanding fee, including an investigative fee, a registration fee, a late fee, an administrative penalty owed to the department, or a refund or restitution payment ordered by the department to be made to a consumer.
(d) Nothing in this section relieves an applicant from the obligation to pay processing or other fees that the registry sets for services that the registry provides.
History
- Authority: AS 06.60.014; AS 06.60.910
- Eff. 1/1/2017, Register 220
3 AAC 14.160 Application and registration fees
(a) When a depository institution applies for registration under AS 06.60.014, the depository institution shall pay to the department through the registry
(1) an application fee of $500 in partial payment of investigative expenses incurred by the department; and
(2) an annual registration fee of $1,000 for the period that expires on December 31 after the date the registration is issued.
(b) Fees under this section are nonrefundable.
(c) Nothing in this section relieves an applicant from the obligation to pay processing or other fees that the registry sets for services that the registry provides.
History
- Authority: AS 06.60.014; AS 06.60.910
- Eff. 1/1/2017, Register 220
3 AAC 14.165 Registration termination and late renewal
(a) If a registered depository institution does not submit an application for renewal and pay the annual registration fee required by 3 AAC 14.160(a)(2) to the department through the registry on or before December 31 of the annual registration period, the department will assign a registration status of "terminated/failed to renew" to the record of the licensee in the registry, and the registered depository institution may not conduct activities for which a registration is required under AS 06.06.014 after December 31 of the annual registration period. To be eligible for a late renewal of a registration, a registered depository institution shall pay a late renewal fee of $500 and submit all information and payment required for renewal, including the reasonable costs under AS 06.60.250 of any investigation, before March 1 of the year following the annual registration period. A registered depository institution may resume activities for which a registration is required under AS 06.60.014 when the department has approved the late renewal of the registration in the registry. If a registered depository institution does not pay the late renewal fee and submit all information and other payment required for renewal or otherwise fails to meet the requirements of renewal before March 1 of the year following the annual licensing period, the department will deny the late renewal and change the registration status to "terminated/expired."
(b) If a registered depository institution submits an application for renewal and annual registration fee under 3 AAC 14.160(a)(2) to the department through the registry on or before December 31 of the annual licensing period, the registered depository institution may continue to operate under the registration until the renewal is denied. A renewal is effective on January 1 of the renewed annual registration period, even if granted after December 31 of the previous annual registration period. If a registered depository institution fails to submit all information and payment required for renewal before March 1 of the year following the annual registration period or otherwise fails to meet the requirements for renewal, the department will deny the renewal and change the license status to "terminated/expired."
(c) After a registration status is changed to "terminated/expired," a registration will not be renewed and the former registered depository institution shall submit a new application for registration and pay the fees and costs for initial registration, if the former registered depository institution seeks to conduct activities for which a registration is required under AS 06.60.014.
History
- Authority: AS 06.60.014; AS 06.60.910
- Eff. 1/1/2017, Register 220
Article 4 Originator Competency Testing and Continuing Education
3 AAC 14.210 Testing of mortgage loan originators
(a) An applicant for a mortgage loan originator license must comply with the requirements of the registry for taking a qualified written test that includes a national component and a state component.
(b) An applicant for a mortgage loan originator license must submit to the department through the registry a passing score for each test component.
History
- Authority: AS 06.60.040; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 12/4/2010, Register 196
3 AAC 14.212 Retakes of mortgage loan originator competency test
(a) Upon failing the initial taking and three consecutive retakings of a component of a qualified written mortgage loan originator competency test that is administered through the registry, an individual must wait at least 180 days before retaking the test. An individual may retake a component of the competency test after the waiting period set out in Table 1 of this subsection:
TABLE 1. WAITING PERIODS TO RETAKE MORTGAGE LOAN
ORIGINATOR COMPETENCY TEST.
TEST ATTEMPT TEST RESULT RETAKE WAITING PERIOD Initial attemptFail30 daysSecond attempt (first retake)Fail30 daysThird attempt (second retake)Fail30 daysFourth attempt (third retake)Fail180 daysEach further attemptFail30 days, except 180
days after each fourth
attempt
(b) The retake waiting period under (a) of this section applies independently to each component of the qualified written test that is administered through the registry.
(c) If a former mortgage loan originator licensee under AS 06.60 fails for a period of five years or longer to either maintain a mortgage loan originator license under AS 06.60 or be employed as a registered mortgage loan originator, the former mortgage loan originator licensee must retake and pass the qualified written test before being relicensed as a mortgage loan originator under AS 06.60.
History
- Authority: AS 06.60.040; AS 06.60.910
- Eff. 12/4/2010, Register 196
3 AAC 14.214 Testing requirement for mortgage loan originator holding a valid license on July 1, 2010
Repealed.
History
- Eff. 12/4/2010, Register 196; repealed 1/1/2017, Register 220
3 AAC 14.215 Competency test review
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
3 AAC 14.217 Prelicensing education for mortgage loan originator holding a valid license on July 1, 2010
Repealed
History
- Eff. 12/4/2010, Register 196; repealed 1/1/2017, Register 220
3 AAC 14.220 Continuing education requirement for mortgage loan originator licensee
(a) A mortgage loan originator licensee shall complete the continuing education required under AS 06.60.160 during the annual license period before license renewal or reactivation. Continuing education obtained in excess of the annual requirement under AS 06.60.160 may not be carried over to meet the continuing education requirement for the following year.
(b) The department may suspend or terminate the license, and will deny renewal or reactivation of the license, of a mortgage loan originator licensee who fails to complete the continuing education required under AS 06.60.160 or whose certification or other documentation of continuing education is not timely submitted to the department through the registry. If the department denies renewal of, suspends, or terminates a mortgage loan originator license for failure to complete or report continuing education, a person may not obtain a new or reinstated mortgage loan originator license without first satisfying the applicable continuing education requirement.
History
- Authority: AS 06.60.160; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 12/4/2010, Register 196
3 AAC 14.222 Continuing education deficiency
(a) Notwithstanding 3 AAC 14.220(b), a mortgage loan originator licensee who meets the requirements of AS 06.60.087 other than the continuing education requirement of AS 06.60.087(a)(2) may make up the deficiency in continuing education, if the mortgage loan originator licensee,
(1) before December 31 of the license period, submits an application for renewal that is complete except for the continuing education information required under AS 06.60.160 and pays all fees for renewal under 3 AAC 14.310;
(2) before March 1 of the year following the year the license would otherwise have expired, completes the required continuing education, submits the certification of completion of the continuing education, and pays the late renewal fee under 3 AAC 14.315 to the department through the registry; and
(3) continues to meet the minimum standards for renewal until the time the renewal is approved.
(b) If a mortgage loan originator licensee satisfies the requirements of (a)(1) of this section, the department will assign the mortgage loan originator licensee a license status of "approved/deficient," until the mortgage loan originator licensee meets the requirements of (a)(2) and (3) of this section.
(c) If a licensed mortgage loan originator with a continuing education deficiency at the end of the annual licensing period satisfies the requirements of (a)(1) of this section, but does not meet the requirements (a)(2) and (3) of this section for making up a continuing education deficiency before March 1 of the year following the deficiency, the mortgage loan originator license expires on March 1, and mortgage loan originator must apply for a new license.
History
- Authority: AS 06.60.160; AS 06.60.087 AS 06.60.085; AS 06.60.910
- Eff. 12/4/2010, Register 196
3 AAC 14.224 Prelicensing education and continuing education obtained in same calendar year
The prelicensing education required under AS 06.60.038 to obtain a mortgage loan originator license may be used to satisfy the continuing education required under AS 06.60.160 to renew a license, if the prelicensing education was completed in the calendar year immediately preceding the annual license period for which the renewal is sought.
History
- Authority: AS 06.60.038; AS 06.60.085; AS 06.60.160 AS 06.60.060; AS 06.60.087; AS 06.60.910
- Eff. 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.225 Submission of continuing education course for department approval
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
3 AAC 14.230 Review of approved instruction
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
3 AAC 14.235 Withdrawal of approval
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
3 AAC 14.240 Renewal of approval
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
3 AAC 14.245 Education committee
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
Article 5 License Duration, Renewal, Inactivity, and Surrender
3 AAC 14.305 Termination of employment relationship and reactivation
(a) If a relationship between a mortgage licensee or a registered depository institution and a mortgage loan originator is terminated, the mortgage licensee, the registered depository institution, or the mortgage loan originator shall terminate the sponsorship through the registry. The termination is effective when reported to the department through the registry.
(b) When a relationship between a mortgage licensee or a registered depository institution and a mortgage loan originator is terminated, the mortgage loan originator license becomes inactive and the mortgage loan originator may not operate as a mortgage loan originator until the department has
(1) approved another sponsorship of the mortgage loan originator's license by the same or another mortgage licensee or registered depository institution; and
(2) reactivated the mortgage loan originator's license in the registry.
(c) To maintain an inactive mortgage loan originator license, a mortgage loan originator licensee must
(1) submit a renewal application, when due, with the applicable renewal fee; and
(2) satisfy the other requirements under AS 06.60 and this chapter for renewal, including continuing education.
(d) The department will not charge a fee for the reactivation of a license that becomes inactive due to a termination of a relationship between a mortgage licensee or a registered depository institution and a mortgage loan originator.
History
- Authority: AS 06.60.012; AS 06.60.095 AS 06.60.090; AS 06.60.910
- Eff. 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.310 License renewal
(a) To renew a license under AS 06.60.085, a licensee must submit to the department through the registry on or after November 1 of the annual licensing period the annual license fee required under 3 AAC 14.072(a)(2) or (b)(2), the surety fund fee if required under 3 AAC 14.072(b)(3), and a renewal application updating the record of the licensee, if necessary, and attesting to the current accuracy and completeness of the information in the record of the licensee with the department and the registry.
(b) The department will designate an incomplete renewal application as "on hold" or the department will approve or deny a complete application as provided in AS 06.60.085 and 06.60.087. The 60-day period described in AS 06.60.085(c) begins on the date all documentation required by the department is received, and an "on hold" designation in the registry for the renewal application is removed.
(c) To renew a license, a licensee shall pay to the department the renewal fee and any other outstanding fee, including an investigative fee, a license fee, a late fee, an administrative penalty owed to the department, or a refund or restitution payment ordered by the department to be made to a consumer.
(d) Nothing in this section relieves an applicant from the obligation to pay processing or other fees that the registry sets for services that the registry provides.
History
- Authority: AS 06.60.035; AS 06.60.085; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 7/24/2009, Register 191; am 12/13/2009, Register 192; am 12/4/2010, Register 196
3 AAC 14.315 License termination and late renewal
(a) If a licensee does not submit an application for renewal and pay the renewal fees under 3 AAC 14.310 to the department through the registry on or before December 31 of the annual licensing period, the department will assign a license status of "terminated/failed to renew" to the record of the licensee in the registry, and the licensee may not conduct activities for which a license is required under AS 06.60 after December 31 of the annual licensing period. To be eligible for a late renewal of a license, a licensee must pay a late renewal fee and submit all information and payment required for renewal, including the reasonable costs under AS 06.60.250 of any investigation, before March 1 of the year following the annual licensing period. The late renewal fees under this subsection are $500 for a mortgage licensee and $250 for a mortgage loan originator. A licensee may resume activities for which a license is required under AS 06.60 when the department has approved the late renewal of the license in the registry. If a licensee does not pay the late renewal fee and submit all information and other payment required for renewal before March 1 of the year following the annual licensing period, the department will deny the late renewal and change the license status to "terminated/expired."
(b) If a licensee submits an application for renewal and renewal fees under 3 AAC 14.310 to the department through the registry on or before December 31 of the annual licensing period, the licensee may continue to operate under the license until the renewal is denied. A renewal is effective on January 1 of the renewed annual licensing period, even if granted after December 31 of the previous annual licensing period. If a licensee fails to submit all information and payment required for renewal before March 1 of the year following the annual licensing period or otherwise fails to meet the requirements for renewal, the department will deny the renewal and change the license status to "terminated/expired."
(c) After a license status is changed to "terminated/expired," a license will not be renewed and the former licensee must submit a new application for licensure and pay the fees and costs for initial licensure, if the former licensee seeks to conduct activities for which a license is required under AS 06.60.
History
- Authority: AS 06.60.085; AS 06.60.090; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.320 Effective date of renewed license, registration, or exemption
Repealed.
History
- Eff. 7/1/2008, Register 186; am 7/24/2009, Register 191; am 12/13/2009, Register 192; repealed 12/4/2010, Register 196
3 AAC 14.325 Inactive license
(a) If a license becomes inactive under AS 06.60.090, the license remains inactive until the license expires or is revoked or suspended, the person who holds the inactive license surrenders the license, or the department grants the person's request to reactivate the license, whichever first occurs.
(b) Repealed 1/1/2017.
History
- Authority: AS 06.60.090; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 1/1/2017, Register 220
3 AAC 14.330 Surrender of mortgage license and surrender of registration of exempt bona fide nonprofit organization
(a) The voluntary surrender of a mortgage license is not effective until the mortgage licensee has provided proof acceptable to the department that all loans of that mortgage licensee have either been paid in full or sold. The mortgage licensee shall submit a surrender checklist to the department through the registry for approval by the department.
(b) The voluntary surrender of the registration of an exempt bona fide nonprofit organization is not effective until the organization has provided proof acceptable to the department that all loans of that organization have either been paid in full or sold. The organization shall submit a surrender checklist to the department through the registry for approval by the department.
(c) There is no fee to surrender.
History
- Authority: AS 06.60.015; AS 06.60.097 AS 06.60.080; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 2/6/2020, Register 233
Article 6 Licensee Obligations
3 AAC 14.410 Reports
On or before March 15 of the year following an annual period of licensure, a mortgage licensee shall submit to the department the annual report required under AS 06.60.100(a), providing relevant information concerning the business and operations of the mortgage licensee, including, as to the mortgage licensee,
(1) the total number and dollar amount of mortgage loans closed;
(2) the total number of mortgage loan applications received;
(3) the total number of brokerage agreements executed;
(4) the total number of persons hired by the mortgage licensee to operate as originators, the number who were hired as employees, and the number who were hired under an exclusive contract; and
(5) any other information as allowed by AS 06.60 and that the department determines is required for the department to conduct its review.
History
- Authority: AS 06.60.100; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 12/4/2010, Register 196
3 AAC 14.411 Financial statement to be submitted annually
No later than 90 days after the close of its fiscal year, a mortgage licensee or a registered depository institution shall submit to the department through the registry a financial statement for the preceding fiscal year that satisfies the requirements of 3 AAC 14.054.
History
- Authority: AS 06.60.100; AS 06.60.135; AS 06.60.910
- Eff. 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.412 Submittal of program administration fee
A mortgage lender shall submit a report and a program administration fee of $10 directly to the department for each mortgage loan transaction closed by the mortgage lender. A mortgage lender shall submit a report and the collected fee no later than the 15th day of each month for each mortgage loan transaction closed in the previous calendar month. The mortgage lender shall submit a complete report on a form supplied by the department.
History
- Authority: AS 06.60.800; AS 06.60.910
- Eff. 12/4/2010, Register 196
3 AAC 14.414 Late filing civil penalty
A mortgage licensee or a registered depository institution shall pay a late filing civil penalty of $25 per day for each day that the annual report required under 3 AAC 14.410, the financial statement required under 3 AAC 14.411, the report and fees required under 3 AAC 14.412, or a report of condition required under AS 06.60.100(c) is late.
History
- Authority: AS 06.60.035; AS 06.60.100; AS 06.60.910 AS 06.60.060; AS 06.60.800
- Eff. 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.415 Supervision required
(a) A mortgage licensee shall supervise all operations and personnel at its principal office and any branch offices to ensure compliance with AS 06.60 and this chapter. A mortgage licensee or a registered depository institution shall diligently supervise each person operating as a mortgage loan originator for the mortgage licensee or for the registered depository institution, whether under an exclusive contract or as an employee.
(b) A mortgage licensee or a registered depository institution shall
(1) establish, maintain, and enforce procedures to supervise the activities of all personnel, including persons operating as mortgage loan originators on behalf of the mortgage licensee or of the registered depository institution;
(2) monitor and review the activities of all personnel at each business location, including persons operating as mortgage loan originators on behalf of the mortgage licensee or of the registered depository institution, to ensure compliance with AS 06.60 and this chapter; and
(3) ensure that each mortgage loan originator working on behalf of the mortgage licensee or of the registered depository institution has the training and education needed to comply with AS 06.60 and this chapter.
(c) A mortgage licensee and a registered depository institution shall ensure that if a mortgage loan originator's home or other location is used to conduct the majority of activities of a mortgage loan originator that the mortgage loan originator's home or other location is registered as a branch office for the mortgage licensee or the registered depository institution.
History
- Authority: AS 06.60.012; AS 06.60.159; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.420 Records of mortgage licensee, registered exempt bona fide nonprofit organization, or registered depository institution
(a) A mortgage licensee, a registered exempt bona fide nonprofit organization, or registered depository institution shall maintain
(1) a list of all signed loan applications or executed fee agreements that provides each the following items:
(A) the applicant's name;
(B) the application date;
(C) the amount of the initial loan request;
(D) the final disposition date;
(E) whether the loan was funded or denied, or any other disposition;
(F) the name of the mortgage loan originator;
(2) a cash receipts journal or other record of all money received in connection with a mortgage loan; the journal or other record must contain
(A) the original contract with the customer for the mortgage licensee's, the registered exempt bona fide nonprofit organization's, or the registered depository institution's compensation;
(B) copies of the note, settlement statement, and truth-in-lending disclosure; and
(C) an account of fees received in connection with the loan, and other papers or records relating to the loan that may be required by department order or any applicable state or federal regulation;
(3) documentation of trust or escrow money showing the
(A) borrower's name and the name of each co-borrower, if any;
(B) loan number, if any;
(C) amount received;
(D) purpose for the amount received;
(E) date received;
(F) date deposited into the trust or escrow account;
(G) amount disbursed;
(H) date disbursed;
(I) disbursement's payee and purpose; and
(J) balance;
(4) a file for each closed application for a mortgage loan; the file must contain
(A) a settlement statement, a denial or withdrawal letter, or other documentation showing the application's final disposition;
(B) correspondence sent or received by the mortgage licensee, the registered exempt bona fide nonprofit organization, or the registered depository institution relating to the loan application;
(C) the contract with, agreement with, and escrow instructions to any depository institution;
(D) documents showing compliance with federal law referenced in AS 06.60.330; and
(E) an itemized list of each fee taken in advance of the closing of a loan, including the appraisal fee, credit report fee, and application fee;
(5) a copy of advertising that references the mortgage licensee's or the registered depository institution's business or that was paid for by the mortgage licensee or the registered depository institution;
(6) copies of any governmental or regulatory compliance reviews;
(7) if the mortgage licensee or the registered depository institution is not a natural person, a file containing
(A) organizational documents for the entity;
(B) minutes of board of directors or members meetings;
(C) a stock or ownership transfer ledger or other record showing ownership of all proportional equity interests in the licensee or the registered depository institution, ascertainable as of any given record date; and
(D) an annual report, if required by state or federal law;
(8) repealed 12/4/2010;
(9) repealed 12/4/2010;
(10) if the department has granted approval to maintain records outside this state, the specific address where the records are kept, and a person's name and telephone number to contact for them; and
(11) other records required to be maintained under state or federal law.
(b) Documents required to be maintained under (a)(5) - (11) of this section must be maintained for three years after the date the document is created unless a longer retention period is otherwise required by law.
(c) If a licensee or a registered depository institution does business in other states, it must be able to separate information regarding business transactions that occur entirely or partially in this state from information relating to other states, to enable the department to conduct an examination.
History
- Authority: AS 06.60.015; AS 06.60.135; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 12/4/2010, Register 196; am 1/1/2017, Register 220; am 2/6/2020, Register 233
3 AAC 14.425 Branch office registration
(a) Before engaging in activities for which a license is required under AS 06.60 at a branch office, a mortgage licensee and a registered depository institution must register the branch office with the department through the registry. To apply for the registration of a branch office, a mortgage licensee or a registered depository institution shall submit to the department through the registry
(1) a complete Form MU3;
(2) an application fee of $200;
(3) an annual registration fee of $300; and
(4) investigative expenses incurred by the department under AS 06.60.250.
(b) A mortgage licensee or a registered depository institution shall identify a branch manager on the Form MU3 for each branch office. A branch manager identified on the Form MU3 shall submit to the department through the registry a complete Form MU2.
(c) A mortgage licensee or a registered depository institution shall identify on the Form MU3 the company name and address for the location where the books and records of a branch office are maintained. The records custodian reported on the Form MU3 must be an individual with authority on behalf of the mortgage licensee to answer inquiries from the department about the location of books and records of the branch office and to provide the department with access to a storage location.
(d) A branch office registration remains in effect no later than December 31 of the year in which the registration is approved by the department, except that an initial or renewed branch office registration approved by the department between November 1 and December 31 will remain in effect no later than December 31 of the following year, unless the registration is revoked, suspended, or surrendered under this chapter.
(e) To renew a branch office registration, a mortgage licensee or a registered depository institution shall submit to the department through the registry
(1) an application to renew the branch office registration;
(2) a branch office annual registration fee of $300; and
(3) investigative expenses incurred by the department under AS 06.60.250.
(f) If a mortgage licensee or a registered depository institution does not submit an application for renewal of the branch office registration and pay the registration renewal fee under (e) of this section to the department through the registry on or before December 31 of the annual registration period, the department will assign a status of "terminated/failed to renew" to the registry record of the branch office registration, and the mortgage licensee or the registered depository institution may not conduct activities for which a license or registration is required under AS 06.60 at the branch office after December 31 of the annual registration period. To be eligible for a late renewal of the branch office registration, the mortgage licensee or the registered depository institution must pay a late registration renewal fee of $250 and submit all information and any other payment required for registration renewal, including the reasonable costs under AS 06.60.250 of any investigation, before March 1 of the year following the annual registration period. The mortgage licensee or the registered depository institution may resume activities for which a license or a registration is required under AS 06.60 at the branch office when the department has approved the late renewal of the branch office registration in the registry. If a mortgage licensee or a registered depository institution does not pay the late branch registration renewal fee and submit all information and other payment required for renewal before March 1 of the year following the annual registration period, the department will deny the renewal of the branch registration and change the branch office registration status to "terminated/expired."
(g) If a mortgage licensee or a registered depository institution submits an application for branch office registration renewal and a registration renewal fee under (e) of this section to the department through the registry on or before December 31 of the annual registration period, the mortgage licensee or the registered depository institution may continue to conduct activities for which a license or registration is required under AS 06.60 at the branch office until the branch office registration renewal is denied. A registration renewal is effective on January 1 of the renewed annual registration period, even if granted after December 31 of the previous annual registration period. If a mortgage licensee or a registered depository institution fails to submit all information and payments required for branch office registration renewal before March 1 of the year following the annual registration period or otherwise fails to meet the requirements for branch office registration renewal, the department will deny the branch office registration renewal and change the branch office registration status to "terminated/expired."
(h) After a branch office registration status is changed to "terminated/expired," a branch office registration may not be renewed and a mortgage licensee or a registered depository institution shall submit a new application for branch office registration and pay the fees and costs for an initial branch office registration, if the mortgage licensee or the registered depository institution seeks to conduct activities for which a license or a registration is required under AS 06.60 at the branch office.
(i) A branch office registration may be issued only in the name in which the mortgage licensee is licensed or the registered depository institution is registered to conduct business at the main address reported on the Form MU1.
(j) A mortgage licensee or a registered depository institution is responsible for and shall supervise all business operations subject to AS 06.60 and this chapter at a branch office of the mortgage licensee or the registered depository institution.
(k) If a mortgage loan originator conducts the majority of activities of a mortgage loan originator from the mortgage loan originator's home or other location, the mortgage licensee or the registered depository institution that sponsors the mortgage loan originator shall register the mortgage loan originator's home or other location as a branch office.
(l) Fees under this section are nonrefundable.
(m) Nothing in this section relieves an applicant from the obligation to pay processing or other fees that the registry sets for services that the registry provides.
History
- Authority: AS 06.60.035; AS 06.60.112; AS 06.60.910 AS 06.60.110; AS 06.60.115
- Eff. 7/1/2008, Register 186; am 7/24/2009, Register 191; am 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.427 Office relocation
A mortgage licensee who or a registered depository institution that seeks to relocate the office listed as the main address on the Form MU1 or an office listed as a branch address on the Form MU3 shall submit a written notice directly to the department at least 30 days before relocating the business. In this section, "written notice" includes communication by electronic mail, but not by facsimile transmission. If the mortgage licensee or the registered depository institution is otherwise in compliance with AS 06.60, the department will approve the change of address after the mortgage licensee or the registered depository institution submits the amendment of its record to the department through the registry.
History
- Authority: AS 06.60.115; AS 06.60.910
- Eff. 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.430 Closure of office at main address on Form MU1 without relocation of office or surrender of license or registration
(a) If a mortgage licensee or a registered depository institution seeks to close but not relocate the office listed at the main address on the Form MU1 without surrendering its license or registration, the mortgage licensee or the registered depository institution shall provide written notice and a request for approval of the office closure and inactive license or registration directly to the department at least 30 days before the proposed effective date of the office closure. The mortgage licensee or the registered depository institution shall certify that all mortgage loans will be paid in full or sold before the office closure and inactive status and shall acknowledge to the department that the office closure and inactive license or registration will not be approved until all mortgage loans of the mortgage licensee or the registered depository institution have been paid in full or sold.
(b) If the department approves the office closure and the inactive mortgage license or registration, the licensee or the registered depository institution shall report the post-closure location of books and records and the post-closure records custodian by submitting an application for amendment of the Form MU1 to the department through the registry. The department will not approve the office closure and inactive license or registration unless the mortgage licensee or the registered depository institution submits written verification to the department that
(1) all mortgage loans of the mortgage licensee or the registered depository institution have been paid in full or sold; and
(2) the books and records of the office at the main address on the Form MU1 have been transferred to the post-closure location approved on the Form MU1.
History
- Authority: AS 06.60.090; AS 06.60.130; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 7/24/2009, Register 191; am 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.431 Closure of office at main address on Form MU1 with surrender of license or registration
(a) If a mortgage licensee or registered depository institution seeks to close but not relocate the office listed at the main address on the Form MU1 and surrender its license or registration, the mortgage licensee or registered depository institution shall provide written notice and a request for approval of the office closure and license or registration surrender directly to the department at least 30 days before the proposed effective date of the office closure and license or registration surrender. The mortgage licensee or registered depository institution shall certify that all mortgage loans will be paid in full or sold before the office closure and license or registration surrender and shall acknowledge that the office closure and license or registration surrender will not be approved by the department until all mortgage loans of the mortgage licensee or registered depository institution have been paid in full or sold.
(b) The mortgage licensee shall submit an application for license or registration surrender and office closure to the department through the registry. The department will not approve the application until the mortgage licensee or the registered depository institution has submitted directly to the department
(1) written verification that the books and records of the office at the main address on the Form MU1 have been transferred to the post-closure location approved on the Form MU1;
(2) a complete closure report on a form provided by the department; and
(3) written verification that all mortgage loans of the mortgage licensee or the registered depository institution have been paid in full or sold, to be submitted on the letterhead of the business and signed, if the business is
(A) a corporation, by the president or chief executive officer;
(B) a limited liability company, by a member with a majority ownership, or by all members, if the limited liability company does not have a member with a majority ownership;
(C) a partnership, by the general partner or a partner with a majority interest, or by all partners, if the partnership does not have a general partner or partner with a majority interest;
(D) a sole proprietorship, by the sole proprietor.
(c) The department approval of a closure of the location of the main address on the Form MU2 and a license or registration surrender is not effective until the department has approved the closure and license or registration surrender in the registry and changed the license or registration status in the registry to "terminated/surrendered."
History
- Authority: AS 06.60.090; AS 06.60.130 AS 06.60.097; AS 06.60.910
- Eff. 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.432 Surrender of branch office registration
A mortgage licensee who or a registered depository institution that seeks to surrender a branch office registration shall submit an application for surrender of the branch office registration to the department through the registry. No later than seven days after submitting the application for surrender, the mortgage licensee or the registered depository institution shall submit directly to the department the post-surrender location of books and records for the branch whose registration is surrendered. The department will not approve the surrender of the branch office registration until the mortgage license or the registered depository institution has submitted written verification that the books and records of the branch office have been transferred to the approved post-closure location.
History
- Authority: AS 06.60.112; AS 06.60.910
- Eff. 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.433 Surrender of mortgage loan originator license
A mortgage loan originator licensee who seeks to surrender the mortgage loan originator license must file an application for license surrender with the department through the registry. The license surrender is not effective until the department has approved the license surrender in the registry and changed the license change to "terminated/surrendered."
History
- Authority: AS 06.60.097; AS 06.60.910
- Eff. 12/4/2010, Register 196
3 AAC 14.434 Change in control of mortgage licensee
(a) A mortgage licensee shall apply to the department for approval of a change in control of the mortgage licensee. An application for a change in control must be submitted 30 days before the change in control is effective.
(b) If a mortgage licensee seeks approval from the department for a new control person of the licensee, the mortgage licensee must submit a complete set of fingerprints to the department for the proposed new control person of the mortgage licensee.
(c) When a mortgage licensee applies for department approval of a change in control of the mortgage licensee, the mortgage licensee shall pay to the department a fee of $300 per control person. The mortgage licensee must also pay investigative expenses incurred by the department under AS 06.60.130 and 06.60.250, before the department grants or denies the application.
(d) A mortgage licensee shall maintain at least two control persons at all times, unless the department temporarily waives the requirement of this subsection because circumstances beyond the mortgage licensees's control make only one control person available.
History
- Authority: AS 06.60.027; AS 06.60.130 AS 06.60.035; AS 06.60.910
- Eff. 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.435 Shared business location
A mortgage licensee, a registered exempt bona fide nonprofit organization, or a registered depository institution may share office space with another business if each business
(1) has office space and signage that are sufficiently separate and distinct for a reasonable customer to understand which business the customer is transacting business with at all times;
(2) operates as a separate legal entity with distinct personnel; and
(3) maintains separate accounts, books, and records.
History
- Authority: AS 06.60.015; AS 06.60.110; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 12/4/2010, Register 196; am 1/1/2017, Register 220; am 2/6/2020, Register 233
3 AAC 14.440 Amendments to information on file with department within or outside the registry
A licensee, a registered exempt bona fide nonprofit organization, or a registered depository institution shall notify the department in writing no later than seven days after a change in a document or information previously submitted directly to the department. A licensee, a registered exempt bona fide nonprofit organization, or a registered depository institution shall submit an amendment to the department through the registry no later than seven days after any change in the information that was previously submitted to the department through the registry, unless a different time period is otherwise specified.
History
- Authority: AS 06.60.015; AS 06.60.130 AS 06.60.016; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 12/4/2010, Register 196; am 1/1/2017, Register 220; am 2/6/2020, Register 233
3 AAC 14.445 Termination of operations
Repealed.
History
- Eff. 7/1/2008, Register 186; am 7/24/2009, Register 191; repealed 12/4/2010, Register 196
Article 7 Business Duties and Restrictions, and Disciplinary Action
3 AAC 14.510 Misleading, unfair, or deceptive advertising
Misleading, unfair, or deceptive advertising under AS 06.60.320 and 06.60.340(7), (11), or (25) includes the following practices by a person who is required to be licensed or registered under AS 06.60:
(1) making a representation or statement of fact in an advertisement if the representation or statement is false or misleading, or has the tendency or capacity to be misleading, or if the person does not have sufficient information upon which a reasonable belief in the truth of the representation or statement could be based;
(2) advertising without clearly and conspicuously disclosing the complete name of the licensee or the registered depository institution, any other name listed in the registry, and the unique identifier of the mortgage licensee or the registered depository institution, and if the advertisement refers to the name of a mortgage loan originator, any other name listed in the registry, and, if the advertisement refers to the name of a mortgage loan originator, the unique identifier of the mortgage loan originator, except that the licensee or the registered depository institution is not required to display the unique identifier in radio or television advertisements;
(3) advertising an address at which the mortgage licensee does not conduct mortgage brokering or mortgage lending activities;
(4) advertising in a manner that misleads a person to believe that the advertisement or solicitation is from a person's current mortgage holder or a government agency, that an offer is a limited opportunity, or that a check is included in the advertising materials;
(5) advertising any program that would be in violation of 24 C.F.R. Part 3500 (Regulation X);
(6) misrepresenting, directly or by failure to adequately disclose, the terms, conditions, or charges incident to the mortgage loan being advertised; a violation of this paragraph includes
(A) advertising an offer to procure, arrange, or otherwise assist a borrower in obtaining a mortgage loan on terms that the mortgage licensee cannot or does not intend to provide, or that the mortgage licensee knows or should know at the time the advertisement is made cannot reasonably be provided; and
(B) advertising terms of credit while knowingly failing to disclose material limitations on the availability of that credit;
(7) advertising in violation of applicable federal regulations.
History
- Authority: AS 06.60.320; AS 06.60.340 AS 06.60.330; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.515 Unfair or deceptive mortgage loan practices
Unfair or deceptive acts or practices under AS 06.60.340 include
(1) charging a prepayment penalty that violates AS 45.45.010(g);
(2) failing to give to the borrower or the borrower's attorney the time and reasonable opportunity to review each document that relates to a mortgage loan and is required by this chapter or other applicable law before the disbursement of the mortgage loan money, unless the borrower signs a waiver of the right to receive the time and opportunity for review before disbursement;
(3) accepting any fees required to be disclosed by applicable law that are not disclosed in accordance with applicable law;
(4) refusing to permit a borrower to be represented by the attorney of the borrower's choice in any part of the process of obtaining a mortgage loan;
(5) for a mortgage broker, engaging the services of another mortgage broker who will charge the borrower an additional fee without obtaining in advance the written permission of the borrower to charge that fee, or without specifying the amount of that fee in writing;
(6) directly or indirectly, regardless of the receipt or the expectation of receipt of compensation from the contractor,
(A) providing loan application documents to a home improvement contractor for use by that contractor in connection with the financing by mortgage loans of home improvement contracts;
(B) using a home improvement contractor as an agent for the business of the person subject to AS 06.60.340; or
(C) accepting a mortgage application from a contractor on behalf of a third party.
(7) conducting loan modification without servicing rights;
(8) conducting foreclosure relief services for a fee without a mortgage license; and
(9) conducting the majority of activities for which a license is required under AS 06.60 at a location that is not the main office or registered as a branch office under 3 AAC 14.425.
History
- Authority: AS 06.60.340; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.520 Bona fide nonprofit organization exemption registration
The following statutes apply to bona fide nonprofit organizations who wish to complete an application for exemption:
(1) AS 06.60.135 (records of mortgage licensee);
(2) AS 06.60.200 (disciplinary action);
(3) AS 06.60.250 (investigation and examination authority);
(4) AS 06.60.330 (compliance with federal requirements);
(5) AS 06.60.340 (prohibited activities);
(6) AS 06.60.400 - 06.60.430 (enforcement);
(7) AS 06.60.850 - 06.60.860 (duties and powers of the department).
History
- Authority: AS 06.60.015; AS 06.60.910
- Eff. 2/6/2020, Register 233
3 AAC 14.525 Investigation and examination of an exempt bona fide nonprofit organization
The department shall investigate and examine the affairs, business, office, and records of an exempt bona fide nonprofit organization at intervals the department considers appropriate as necessary to carry out the purposes of this chapter. The department may conduct an examination without prior notice. Examination fees are to be charged to and paid by the organization in accordance with AS 06.01.010. The department may maintain an action for the recovery of the costs in any court of competent jurisdiction. Not later than 30 days after the department requests payment, the licensee shall pay the department the cost of examination in accordance with AS 06.01.010 and any expenses required for each representative of the department who is reasonably necessary to conduct the investigation or examination, including travel costs and per diem allowance that does not exceed the allowance for employees of the state under AS 39.20.110.
History
- Authority: AS 06.60.015; AS 06.60.910
- Eff. 2/6/2020, Register 233
3 AAC 14.610 Disciplinary action
Repealed.
History
- Eff. 7/1/2008, Register 186; repealed 12/4/2010, Register 196
Article 8 Originator Surety Fund
3 AAC 14.710 Claims
Claims for reimbursement from the mortgage loan originator surety fund under AS 06.60.500 must
(1) be accompanied by the filing fee established by AS 06.60.620;
(2) be submitted on a form provided by the department;
(3) assert a claim for a loss suffered in a mortgage loan transaction as a result of fraud, misrepresentation, deceit, or the wrongful conversion of money by a mortgage loan originator licensee;
(4) include a current mailing address and telephone number for the claimant;
(5) include a current mailing address and telephone number for the mortgage licensee for whom the mortgage loan originator licensee worked, whether as an employee or under an exclusive contract, during the time period relevant to the claim;
(6) include a current mailing address and telephone number for any party involved in the mortgage loan transaction that is the subject of the fund claim;
(7) include all the information required by AS 06.60.580 and the claim form itself; and
(8) be executed under penalty of unsworn falsification.
History
- Authority: AS 06.60.580; AS 06.60.620; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 12/4/2010, Register 196
3 AAC 14.715 Current address of claimant
The claimant shall notify the department in writing of any change in its mailing address or telephone number while its claim is pending. Failure to maintain a current mailing address and telephone number on file with the department while a claim is pending may result in dismissal of the claim.
History
- Authority: AS 06.60.580; AS 06.60.910
- Eff. 7/1/2008, Register 186
3 AAC 14.720 Notification of claim
(a) No later than 30 days after receipt of a fund claim filed under AS 06.60.570 and at least 20 days before a hearing is held on the fund claim, whichever is earlier, the department will mail a copy of the claim, and any documentary material filed with the claim to those entitled to notice under AS 06.60.600.
(b) The department will mail the documents described in (a) of this section by certified mail, return receipt requested.
(c) The department's duty to mail the claim to any other parties involved in the mortgage loan transaction under AS 06.60.600(3) is satisfied by mailing the claim to the parties involved in the mortgage loan transaction who are disclosed in the claim form filed with the department.
(d) In AS 06.60.600(2), "employer of the mortgage loan originator licensee" includes a person who employs the mortgage loan originator licensee under an exclusive contract or as an employee.
History
- Authority: AS 06.60.600; AS 06.60.640; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 12/4/2010, Register 196
3 AAC 14.725 Department action if licensee does not request a hearing
If a mortgage loan originator licensee named in a fund claim under AS 06.60.570 - 06.60.580 does not file a timely request for hearing after receiving written notice of the claim under 3 AAC 14.720, the department will review the materials submitted by the claimant and apply the standards in AS 06.60.680 to prepare a written determination as to whether to award the claimant reimbursement from the fund. The written determination is the final decision of the department, unless the claimant requests a hearing no later than 30 days after receipt of the written determination.
History
- Authority: AS 06.60.680; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 12/4/2010, Register 196
3 AAC 14.730 Disciplinary action based on final decision
The department may use the final decision under AS 06.60.680 as to a fund claim as the basis for disciplinary action against a licensee.
History
- Authority: AS 06.60.210; AS 06.60.680; AS 06.60.910
- Eff. 7/1/2008, Register 186
3 AAC 14.735 Addition to licensee file
When the department pays a claim from the fund, the following information will be added to the license file of each mortgage loan originator licensee named in the findings and conclusions as responsible for the loss:
(1) a copy of the findings and conclusions and the order adopted by the department;
(2) proof of payment from the fund to the claimant.
History
- Authority: AS 06.60.210; AS 06.60.670; AS 06.60.910 AS 06.60.650; AS 06.60.680
- Eff. 7/1/2008, Register 186; am 12/4/2010, Register 196
Article 9 Participation in Registry
3 AAC 14.810 Transition to registry for current licensees
Repealed.
History
- Eff. 7/24/2009, Register 191; am 12/13/2009, Register 192; repealed 12/4/2010, Register 196
3 AAC 14.815 Changes to licenses in effect on July 31, 2009
A person with a license under AS 06.60 in effect on July 31, 2009, who wishes to amend or surrender a license, establish or terminate an employment relationship with a licensee, or request other department action relating to a license under AS 06.60, must submit the necessary forms to the registry and pay state and registry fees through the registry.
History
- Authority: AS 06.60.870; AS 06.60.910
- Eff. 7/24/2009, Register 191
3 AAC 14.820 New license applicants
A person who applies for a license under AS 06.60 after July 31, 2009, must submit the necessary forms to the registry and pay state and registry fees through the registry.
History
- Authority: AS 06.60.070; AS 06.60.870
- Eff. 7/24/2009, Register 191
3 AAC 14.825 Confidentiality
(a) Except as otherwise provided in this section, a requirement under federal or state law regarding the privacy or confidentiality of information or material provided to the registry, and a privilege arising under federal or state law, including the rules of a federal or state court, with respect to the information or material, continues to apply to the information or material after the information or material has been disclosed to the registry. The information and material may be shared with all state and federal regulatory officials with mortgage industry oversight authority without the loss of privilege or the loss of confidentiality protections provided by federal and state laws.
(b) The department may enter into agreements or sharing arrangements with other governmental agencies, the organizations identified in 12 U.S.C. 5102(5) as the organizations that develop and maintain the registry, and other associations representing governmental agencies in accordance with any applicable regulation or order.
(c) Information or material that is subject to a privilege or confidentiality under (a) of this section is not subject to
(1) disclosure under a federal or state law, including AS 40.25.100 - 40.25.295 (Alaska Public Records Act), governing the disclosure to the public of information held by an officer or an agency of the federal government or the respective state; or
(2) subpoena or discovery, or admission into evidence, in a private civil action or administrative process, unless, with respect to a privilege held by the registry with respect to the information or material, the person to whom the information or material pertains waives, in whole or in part, in the discretion of the person, that privilege.
(d) A state law, including AS 40.25.100 - 40.25.295 (Alaska Public Records Act), relating to the disclosure of confidential supervisory information and information or material described in (a) of this section that is inconsistent with (a) of this section is superseded by the requirements of (a) of this section to the extent state law provides less confidentiality or a weaker privilege.
(e) This section does not apply to the information or material relating to the employment history of and publicly adjudicated disciplinary and enforcement actions against mortgage loan originators that is included in the registry for access by the public.
(f) A state official or agency or an employee of a state agency is not subject to a civil action or proceeding for monetary damages because of the good faith action or omission of an officer or employee of the agency, while acting within the scope of office or employment, relating to the collection, furnishing, or dissemination of information concerning persons who are mortgage loan originators or are applying for licensing as mortgage loan originators.
History
- Authority: AS 06.60.910
- Eff. 7/24/2009, Register 191; am 12/13/2009, Register 192
Article 10 General Provisions
3 AAC 14.910 Filing or submission date
(a) An application for department action under AS 06.60 and this chapter will be considered filed or submitted as of the postmark date of the document. If the document is submitted by a method that does not provide a postmark date, the document will be considered filed or submitted as of the date stamped or otherwise marked on the document when it is received at the department's Anchorage office. An electronic filing or submission, if allowed, will be considered filed or submitted at the time the filing or submission is received in electronic form by the department or the registry.
(b) For the purposes of this section, "postmark date" means the date of mailing stamped or otherwise marked by the United States Postal Service or other domestic courier service on a document with prepaid postage and correctly addressed to the department's Anchorage office.
History
- Authority: AS 06.60.910
- Eff. 7/1/2008, Register 186; am 7/24/2009, Register 191; am 12/4/2010, Register 196
3 AAC 14.915 Filing with department when registry unavailable
Any document required to be filed with the department that is not permitted to be filed with or cannot be transmitted through the registry shall be filed in paper directly with the department.
History
- Authority: AS 06.60.016; AS 06.60.910
- Eff. 12/4/2010, Register 196
3 AAC 14.917 Change of labels for license or registration status designations used by the registry
If the registry uses a label for a license or a registration status that is different from a label used in this chapter for the license or registration status, a change of license or registration status through the registry is effective for the licensee or the registered depository institution without regard to the difference in the label used.
History
- Authority: AS 06.60.016; AS 06.60.910
- Eff. 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.920 Name and address changes
(a) A person required to be licensed or registered under AS 06.60 shall maintain a current, valid mailing address and electronic mail address with the department through the registry. An applicant, licensee, or registered depository institution shall monitor its record in the registry and its electronic mail address filed with the registry for communications from the department and information regarding its license or registration. For an applicant, licensee, or registered depository institution, the department will use the latest mailing address submitted to the registry for official communications, notifications, and service of legal process.
(b) A person required to be licensed or registered under AS 06.60 shall file an application to amend its record with the department through the registry 30 days before a change of a mailing address and immediately upon a change of an electronic mail address. A mortgage licensee or a registered depository institution shall submit a fee of $50 to the department through the registry with an application to amend its record because of a change of a mailing address. The department will not assess a fee to amend the mailing address of a mortgage loan originator in the registry. A change of the mailing address of a licensee or a registered depository institution in the registry is effective when approved by the department in the registry.
(c) If a mortgage licensee or a registered depository institution seeks to change its name, the mortgage licensee or the registered depository institution shall submit an application to amend its Form MU1 and a fee of $100 to the department through the registry. No later than seven days after filing the application to amend the Form MU1 for a change of name, a mortgage licensee shall submit directly to the department
(1) organizational documents filed with the domestic state under 3 AAC 14.056 with the changed name and, if the mortgage licensee is organized outside this state, documentation of authority to conduct business in this state with the changed name; and
(2) a copy of the name registration form with the changed name, stamped "received" by the department division overseeing corporations.
(d) If a mortgage loan originator licensee changes the licensee's name, the mortgage loan originator licensee shall submit an amended Form MU4 to the department through the registry no later than 30 days after the change of name.
(e) No later than seven days of filing the amended Form MUI or Form MU4 due to a change of name, a mortgage loan originator licensee must submit directly to the department a copy of the marriage certificate, court document, or other legal document, if applicable, verifying the change of name.
(f) The department will not charge a fee for a change of name of a mortgage loan originator licensee. Nothing in this subsection relieves the mortgage loan originator licensee of the obligation, if any, to pay the registry a fee for a change of name.
(g) A name change takes effect in the registry upon the approval of the department.
History
- Authority: AS 06.60.035; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 7/24/2009, Register 191; am 12/13/2009, Register 192; am 12/4/2010, Register 196; am 1/1/2017, Register 220
3 AAC 14.990 Definitions
(a) In this chapter, unless the context requires otherwise,
(1) "branch manager" means an individual who is in charge of and responsible for the business operations of a branch office of a mortgage licensee;
(2) "business entity"
(A) means a form of business ownership other than a natural person; and
(B) includes a corporation, limited liability company, partnership, limited partnership, limited liability partnership, and trust;
(3) "Form MU1" means the uniform mortgage lender and mortgage broker license application developed and used by the registry;
(4) "Form MU2" means the uniform mortgage biographical statement and consent form developed and used by the registry;
(5) "Form MU3" means the uniform mortgage branch office form developed and used by the registry;
(6) "Form MU4" means the uniform individual mortgage license, registration, and consent form developed and used by the registry;
(7) "other trade name" means a name other than the legal name of a business entity;
(8) repealed 2/6/2020;
(9) "registered agent" means a person located in this state and appointed to accept service of process;
(10) "mortgage loan originator's home" means the current residential address as listed on the mortgage loan originator's Form MU4.
(b) In AS 06.60 and this chapter, unless the context requires otherwise,
(1) "advertising" means making or permitting to be made any oral, written, graphic, or pictorial statements, in any manner, whether in print, aurally, or by electronic means, in the course of the solicitation of business;
(2) "branch office" means a location separate from main address on the Form MU1 where one or more persons are authorized to act on behalf of a mortgage licensee to perform activities for which a license is required under AS 06.60;
(3) "change in control" means a change in the identity of a person holding a control interest in the mortgage licensee;
(4) "closing" means the process of executing legally binding documents regarding a lien on real property that is subject to a mortgage loan;
(5) "loan application" means the Uniform Residential Loan Application, Fannie Mae Form 1003, Freddie Mac Form 65, any successor form, or any other similar form or document, whether standardized or unique, used to collect mortgage loan qualification information;
(6) "principal place of business" means the location of the main address listed on the Form MU1;
(7) "report of condition" means a quarterly mortgage call report as required by the registry.
(8) "registry" means the Nationwide Multistate Licensing System and Registry (NMLS), previously known as the Nationwide Mortgage Licensing System and Registry, a licensing system owned and operated by the State Regulatory Registry, LLC, for the licensing and registration of persons in the mortgage and other financial services industries.
(c) In AS 06.60.015(b)(4)(F)(i), "the loan does not have a payment schedule that results in negative amortization" means
(1) the loan is fully amortized and each payment includes principal and interest to fulfill the loan obligation without a balloon payment;
(2) during the term of the loan the outstanding principal balance decreases;
(3) the loan has equal monthly payments during the term of the loan except for the last payment; and
(4) the last payment of the loan is equal to or less than the monthly payment.
History
- Authority: AS 06.60.010; AS 06.60.016; AS 06.60.990 AS 06.60.015; AS 06.60.910
- Eff. 7/1/2008, Register 186; am 7/24/2009, Register 191; am 12/13/2009, Register 192; am 12/4/2010, Register 196; am 1/1/2017, Register 220; am 2/6/2020, Register 233
Chapter 16 Corporations, Partnerships, and Other Business Organizations
3 AAC 16.010 Fee for reservation, registration, or renewal of a reserved or registered business name under AS 10.06, AS 10.15, AS 10.20, AS 10.25, AS 10.35, AS 10.40, AS 10.45, AS 10.50, AS 32.06, or AS 32.11
(a) The nonrefundable fee for the initial reservation or registration of a business name is $25.
(b) The nonrefundable fee for renewal of a reserved or registered business name is $25.
(c) If a business name reservation is renewed more than twice within a 12-month period, a statement of intent to start a business shall be provided with the renewal application.
History
- Authority: AS 10.06.140; AS 10.25.530; AS 10.45.240 AS 10.06.145; AS 10.35.010; AS 10.50.850 AS 10.06.953; AS 10.35.060; AS 10.50.900 AS 10.15.580; AS 10.35.070; AS 32.06.970 AS 10.20.905; AS 10.40.140; AS 32.11.870
- Eff. 7/1/80, Register 75; am 7/7/89, Register 111; am 7/3/95, Register 135; am 1/30/97, Register 141; am 7/13/2003, Register 167; am 7/1/2014, Register 211
3 AAC 16.020 Fee for registration or renewal of registration of a business name under AS 10.35
Repealed.
History
- Eff. 7/1/80, Register 75; repealed 7/3/95, Register 135
3 AAC 16.030 Fees and charges for business corporations under AS 10.06
(a) The fee for a domestic corporation filing articles of incorporation under AS 10.06 or a foreign corporation filing an application for certificate of authority under AS 10.06 is $150.
(b) The nonrefundable fee for filing articles of amendment, articles of merger or consolidation, an amendment of certificate of authority, or any other document filed under AS 10.06 is $25.
(c) Repealed 7/7/89.
(d) Repealed 7/7/89.
(e) The fee for filing a change of office address for three or more corporations submitted at one time by a registered agent is $40.
(f) Repealed 7/3/95.
(g) Repealed 7/3/95.
(h) The nonrefundable fee for filing
(1) a certificate of election to dissolve is $10; and
(2) articles of dissolution is $15.
(i) Repealed 11/2/80.
(j) Repealed 7/7/89.
History
- Authority: AS 10.06.828; AS 10.06.835; AS 10.06.848 AS 10.06.830; AS 10.06.838; AS 10.06.953 AS 10.06.833; AS 10.06.843
- Eff. 7/1/80, Register 75; am 11/2/80, Register 76; am 7/7/89, Register 111; am 7/3/95, Register 135; am 7/13/2003, Register 167
3 AAC 16.040 Fees and charges for cooperative corporations under AS 10.15
(a) The biennial license fee for a cooperative corporation is $100.
(b) The fee for filing articles of incorporation for a cooperative corporation is $150.
(c) The nonrefundable fee for filing articles of amendment, articles of merger or consolidation, an amendment of certificate of authority, or any other document filed under AS 10.15 is $25.
(d) The nonrefundable fee for filing
(1) a certificate of election to dissolve is $10;
(2) articles of dissolution is $15; and
(3) evidence of dissolution of a foreign corporation is $25.
(e) Repealed 7/7/89.
History
- Authority: AS 10.15.545; AS 10.15.555; AS 10.15.580
- Eff. 7/1/80, Register 75; am 11/2/80, Register 76; am 7/7/89, Register 111; am 10/21/92, Register 124; am 7/3/95, Register 135; am 7/13/2003, Register 167
3 AAC 16.050 Fees and charges for nonprofit corporations under AS 10.20
(a) Repealed 7/7/89.
(b) The fee for a domestic nonprofit corporation filing articles of incorporation or a foreign nonprofit corporation filing an application for certificate of authority is $50.
(c) The nonrefundable fee for filing articles of amendment, articles of merger or consolidation, an amendment of certificate of authority, or any other document filed under AS 10.20 is $25.
(d) Repealed 7/7/89.
(e) The nonrefundable fee for filing
(1) a resolution to dissolve is $10;
(2) articles of dissolution is $15; and
(3) evidence of dissolution of a foreign corporation is $25.
(f) Repealed 7/7/89.
(g) Repealed 7/3/95.
(h) Repealed 7/3/95.
(i) Repealed 11/2/80.
(j) Repealed 7/7/89.
History
- Authority: AS 10.20.635; AS 10.20.905
- Eff. 7/1/80, Register 75; am 11/2/80, Register 76; am 7/7/89, Register 111; am 7/3/95, Register 135; am 7/13/2003, Register 167
3 AAC 16.055 Fees and charges for limited liability partnership under AS 32.06
(a) The fee for a domestic limited liability partnership or a foreign limited liability partnership filing a statement of qualification under AS 32.06 is $150.
(b) The nonrefundable fee for filing an amendment to a statement, a withdrawal or cancellation of a statement, or any other document filed under AS 32.06 is $25.
(c) The fee to file a biennial report for a domestic limited liability partnership doing business in this state is $100. The fee to file a biennial report for a foreign limited liability partnership doing business in this state is $200. A domestic or foreign limited liability partnership that is delinquent in filing its biennial report on or before the time prescribed under AS 32.06.913 shall pay a late charge of $25 for each year or part of a year of delinquency.
(d) A domestic or foreign limited liability partnership that fails to file a biennial report within the time prescribed under AS 32.06.913 is subject to an additional charge of 10 percent of the total amount of the filing fee, and the late charge as stated in (c) of this section.
History
- Authority: AS 32.06.913; AS 32.06.970
- Eff. 1/30/97, Register 141; am 7/13/2003, Register 167; am 7/1/2014, Register 211
3 AAC 16.060 Fees for electric and telephone cooperatives under AS 10.25
(a) The fee for an electric or telephone cooperative filing articles of incorporation is $150.
(b) The nonrefundable fee for filing articles of amendment, articles of merger or consolidation, an amendment of certificate of authority, or any other document filed under AS 10.25 is $25.
(c) The nonrefundable fee for filing
(1) a certificate of election to dissolve is $10;
(2) articles of dissolution is $15; and
(3) evidence of dissolution of a foreign corporation is $25.
History
- Authority: AS 10.25.530
- Eff. 7/1/80, Register 75; am 7/7/89, Register 111; am 7/3/95, Register 135; am 7/13/2003, Register 167
3 AAC 16.065 Fees and charges for limited liability companies under AS 10.50
(a) The fee for a domestic limited liability company filing articles of organization under AS 10.50 or a foreign limited liability company filing an application for registration as a foreign limited liability company under AS 10.50 is $150.
(b) The nonrefundable fee for filing articles of amendment, articles of merger or consolidation, articles of dissolution, an amendment of registration, or any other document filed under AS 10.50 is $25.
(c) The fee to file a biennial report for a domestic limited liability company is $100; a foreign limited liability company doing business in this state is $200. A domestic or foreign limited liability company that is delinquent in filing its biennial report on or before the time prescribed under AS 10.50.760(b) shall pay a late charge of $25 for each year or part of a year of delinquency.
(d) A domestic or foreign limited liability company that fails to file a biennial report within the time prescribed under AS 10.50.760(b) is subject to an additional charge of 10 percent of the total amount of the filing fee, and the late charge as stated in (c) of this section.
History
- Authority: AS 10.50.850; AS 10.50.900
- Eff. 7/3/95, Register 135; am 7/13/2003, Register 167
3 AAC 16.070 Fees for religious corporations under AS 10.40
(a) The fee for filing articles of incorporation of a religious corporation is $50.
(b) The nonrefundable fee for filing articles of amendment, articles of merger or consolidation, an amendment of certificate of authority, or any other document filed under AS 10.40 is $25.
(c) The nonrefundable fee for filing
(1) a certificate of election to dissolve is $10;
(2) articles of dissolution is $15; and
(3) evidence of dissolution of a foreign corporation is $25.
History
- Authority: AS 10.40.140
- Eff. 7/1/80, Register 75; am 7/7/89, Register 111; am 7/3/95, Register 135; am 7/13/2003, Register 167
3 AAC 16.075 Fees and charges for limited partnerships under AS 32.11
(a) The fee for a domestic limited partnership filing a certificate of limited partnership or a foreign limited partnership filing an application for registration as a foreign limited partnership under AS 32.11 is $150.
(b) The nonrefundable fee for filing a certificate of amendment, an amended registration of foreign limited partnership, or any other document filed under AS 32.11 is $25.
(c) The nonrefundable fee for filing a certificate of cancellation under AS 32.11 is $25.
(d) Repealed 7/13/2003.
History
- Authority: AS 32.11.870
- Eff. 7/28/93, Register 127; am 7/3/95, Register 135; am 7/13/2003, Register 167
3 AAC 16.080 Fees for copies
(a) The nonrefundable fee for an uncertified copy of a one-page document or a biennial report is $1.
(b) The nonrefundable fee for an uncertified copy of a specified document that contains more than one page and that pertains to one corporation file is $10.
(c) The fee for an uncertified copy of all the documents contained in one corporation file is $30 for up to 50 pages and $1 per page for each additional page above 50.
(d) The nonrefundable fee to obtain a certificate of corporate status is $10.
(e) The nonrefundable fee to certify a document as a true and correct copy is $5.
(f) The nonrefundable fee for an electronic copy, on compact disc-read only memory (CD-ROM), of the department's database of business entity filings is $25.
History
- Authority: AS 10.06.840; AS 10.25.530; AS 32.11.870 AS 10.06.953; AS 10.50.850; AS 40.25.110 AS 10.15.555; AS 10.55.603; AS 40.25.115 AS 10.20.640; AS 32.06.970; AS 40.25.120
- Eff. 7/1/80, Register 75; am 7/7/89, Register 111; am 7/3/95, Register 135; am 1/30/97, Register 141; am 7/13/2003, Register 167; readopt 7/1/2014, Register 211
3 AAC 16.090 Fee for accepting service of process
The nonrefundable fee for the commissioner of commerce, community, and economic development to act as an agent for service of process, notice, or demand under AS 10.06, AS 10.20, AS 10.25, AS 10.40, AS 10.45, AS 10.50, AS 10.55, AS 32.06, or AS 32.11 is $25.
History
- Authority: AS 10.06.175; AS 10.40.130; AS 32.06.970 AS 10.06.953; AS 10.45.240; AS 32.11.870 AS 10.20.530; AS 10.50.850 AS 10.25.530; AS 10.55.603
- Eff. 7/7/89, Register 111; am 7/28/93, Register 127; am 7/3/95, Register 135; am 1/30/97, Register 141; am 7/13/2003, Register 167; am 7/1/2014, Register 211
3 AAC 16.100 Fee for filing any other instrument
The nonrefundable fee for filing any instrument authorized or required to be filed under AS 10.06, AS 10.15, AS 10.20, AS 10.25, AS 10.40, AS 10.45, AS 10.50, AS 10.55, AS 32.06, or AS 32.11, that is not otherwise specified in this chapter, is $25.
History
- Authority: AS 10.06.843; AS 10.25.530; AS 10.55.603 AS 10.06.953; AS 10.40.140; AS 32.06.970 AS 10.15.555; AS 10.45.240; AS 32.11.870 AS 10.20.635; AS 10.50.850
- Eff. 7/7/89, Register 111; am 7/28/93, Register 127; am 7/3/95, Register 135; am 1/30/97, Register 141; am 7/13/2003, Register 167; am 7/1/2014, Register 211
3 AAC 16.105 Fee for expedited filings and copies
(a) The additional fee for an expedited filing under AS 10.06, AS 10.15, AS 10.20, AS 10.25, AS 10.40, AS 10.45, AS 10.50, AS 10.55, AS 32.06, or AS 32.11 is $150.
(b) The additional fee for providing expedited copies of documents under 3 AAC 16.080 is $50.
(c) Repealed 7/13/2003.
(d) Expedited filings and expedited requests for copies made in accordance with this section will be given priority over those received in the regular course of business.
(e) The commissioner may offer expedited filings in accordance with AS 10, AS 32, and this section.
History
- Authority: AS 10.06.175; AS 10.06.953; AS 10.40.130 AS 10.06.828; AS 10.15.545; AS 10.40.140 AS 10.06.830; AS 10.15.555; AS 10.45.240 AS 10.06.833; AS 10.15.580; AS 10.50.850 AS 10.06.835; AS 10.20.530; AS 10.50.900 AS 10.06.838; AS 10.20.635; AS 10.55.603 AS 10.06.840; AS 10.20.640; AS 32.06.970 AS 10.06.843; AS 10.20.905; AS 32.11.870 AS 10.06.845; AS 10.25.530
- Eff. 7/3/95, Register 135; am 1/30/97, Register 141; am 4/22/2000, Register 154; am 7/13/2003, Register 167; am 7/1/2014, Register 211
3 AAC 16.110 Reprocessing fee
Repealed.
History
- Eff. 7/7/89, Register 111; am 7/28/93, Register 127; am 1/30/97, Register 141; repealed 7/13/2003, Register 167
3 AAC 16.115 Fees and class codes for trademark filings under AS 45.50
(a) The fee for filing signed and verified instruments relating to a registered mark or application for registration under AS 45.50.125(b) is $25.
(b) The classification of goods, services, certification marks, and collective membership marks under AS 45.50.150 is the international schedule of classes of goods and services adopted by the United States Patent and Trademark Office in 37 C.F.R. 6.1, as amended through November 1, 1996, adopted by reference in this section.
History
- Authority: AS 45.50.125; AS 45.50.205
- Eff. 1/30/97, Register 141
3 AAC 16.120 Determining distinguishable names
(a) For purposes of the reservation, registration, or use of a name under AS 10 or AS 32, a name is
(1) distinguishable on the records of the department from the name of any other organized entity and from a reserved or registered name if
(A) each name contains one or more different letters or numerals or has a different sequence of letters or numerals;
(B) one of the key words is different;
(C) the key words are the same, but they are in a different order;
(D) the key words are the same, but the spelling is creative, unusual, or artistic;
(E) the key words have a marked difference in meaning in their contexts and the words are not literally identical;
(F) the difference in key words is between how a number is expressed, as a numeral, Roman numeral, or word representing a numeral; or
(G) an "s" is added or deleted to make the word plural, singular, or possessive; and
(2) not distinguishable on the records of the department from the name of any other organized entity or from a reserved or registered name if the names differ only in one or more of the following ways:
(A) use of the words or abbreviations of the words "incorporated," "corporation," "company," "limited," "limited liability company," or "limited liability partnership," or use of the words "limited partnership," without abbreviation;
(B) differences in punctuation or special characters;
(C) differences in capitalization;
(D) differences in whether the letters or numbers immediately follow each other or are separated by a space if the sequence of letters or numbers is identical;
(E) the presence or absence of an article, preposition, or conjunction, or a symbol for that word, including "a," "an," "by," "for," "in," "plus," "the," "to," and "with."
(b) In this section, "key word" means a word other than an article, preposition, conjunction, or entity identifier. Entity identifiers include "incorporated," "inc.," "corporation," "corp.," "company," "co.," "limited partnership," "limited," "ltd.," "limited liability company," "llc.," "limited liability partnership," and "llp."
History
- Authority: AS 10.06.105; AS 10.20.470; AS 10.50.040 AS 10.06.115; AS 10.20.471; AS 10.50.408 AS 10.06.125; AS 10.25.040; AS 32.06.911 AS 10.06.130; AS 10.35.020; AS 32.06.922 AS 10.06.633; AS 10.35.040; AS 32.11.120 AS 10.06.720; AS 10.40.015; AS 32.11.810 AS 10.13.120; AS 10.45.120; AS 32.11.820 AS 10.15.578; AS 10.50.025 AS 10.20.021; AS 10.50.035
- Eff. 4/22/2000, Register 154; readopt 7/1/2014, Register 211
3 AAC 16.130 Electronic signatures
The commissioner may accept an electronic signature on an electronic record that is filed under AS 10, AS 32, or AS 45.50.
History
- Authority: AS 09.80.020; AS 09.80.150
- Eff. 4/22/2000, Register 154; am 7/1/2014, Register 211
3 AAC 16.140 Fees and charges for filing under AS 10.55
The nonrefundable fee for filing a
(1) statement of merger is $25;
(2) statement of abandonment of merger is $25;
(3) statement of interest exchange is $25;
(4) statement of abandonment of interest exchange is $25;
(5) statement of conversion is $25;
(6) statement of abandonment of conversion is $25;
(7) statement of domestication is $25;
(8) statement of abandonment of domestication is $25.
History
- Authority: AS 10.55.603
- Eff. 7/1/2014, Register 211
Chapter 20 Land Sales
Article 1 Filing Procedures
3 AAC 20.010 Filing and registration fees
Every person filing a registration statement under AS 34.55.010 shall pay a filing fee of $100 and a registration fee of $200. The filing and registration fees must accompany the registration statement. When a registration statement is withdrawn without prejudice before its effective date, the department will retain the $100 filing fee.
History
- Authority: AS 34.55.020
- Eff. 4/17/69, Register 28; am 4/3/76, Register 58
3 AAC 20.020 Inspection fees
Investigations made under AS 34.55.022 shall be made at the expense of the applicant according to the current per diem rate for each day of travel and on-site inspection; plus round trip air and ground transportation from the examiner's duty station. An applicant shall deposit an amount equal to the estimated cost of the on-site inspection prior to the on-site inspection.
History
- Authority: AS 34.55.020
- Eff. 4/17/69, Register 28; am 5/30/74, Register 50; am 4/3/76, Register 58
3 AAC 20.030 Penalty for failure to pay fees
A developer who fails to pay when due, after written notice by the department, the required filing, registration or inspection fees is liable in a civil action brought by the attorney general on behalf of the department for a penalty in an amount equal to the unpaid fees. The department may suspend or revoke a registration for which any filing, registration or inspection fees are unpaid, after written notice by the department.
History
- Authority: AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.040 Notification of suits against developer
In a suit by or against a developer involving his development, the developer shall promptly inform the department of any legal action involving the development and shall provide at the department's request all information relating to the legal action. This requirement does not apply where the department is a party to the suit.
History
- Authority: AS 34.55.010(c)AS 34.55.020
- Eff. 4/3/76, Register 58
Article 2 Unfair Acts and Practices
3 AAC 20.050 General provisions
It is an unfair act or practice for a developer, his agents, servants, employees, or others acting on his behalf
(1) to make a representation with no present intent to perform it;
(2) to fail to reveal to the purchaser or prospective purchaser all terms, conditions, notices, and amounts of any contract, agreement, option, deed, property report, or other evidence of the purchaser's indebtedness;
(3) to substitute another lot, unit, parcel, or interest in land for that purchased or optioned without the knowing, intelligent, and voluntary consent by the purchaser;
(4) to fail to afford to a purchaser all rights, privileges, or advantages that are represented or implied to be available to a purchaser as a result of the purchase;
(5) to represent that a developer, salesman, agent, servant, employee, or others acting on behalf of a developer are conducting a survey, contest, poll, or other similar inquiry, when in fact it is a systematic marketing approach in an effort to sell property;
(6) to represent to a prospective purchaser that he or she is specially selected, if in fact he or she is not;
(7) to use a method of rebate or finance charge which requires or results in a purchaser paying a greater amount of interest or finance charge upon prepayment than if he had financed for a shorter period of time initially.
History
- Authority: AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.060 Documents
(a) Unless a purchaser or prospective purchaser agrees in writing on a separate document, it is unfair for a person to use a contract, agreement, deed, option or other evidence of disposition of lands under the Act which contains provisions that
(1) attempt to waive a right afforded by the Act, the Interstate Land Sales Full Disclosure Act, or the Consumer Credit Protection Act, commonly known as the Federal Truth in Lending Act, and any regulations promulgated under these acts;
(2) assume all risk of loss to the property without title passing to the purchaser or actual possession being with the purchaser;
(3) permit a prior or subsequent sale of the optioned or purchased property;
(4) waive as against an assignee of the developer, a mortgagee, or subsequent holder, a claim or defense arising out of the transaction that the purchaser would have against the developer;
(5) forfeit all prior payments upon default;
(6) provide acceleration of the unpaid balance of a contract upon default:
(7) can result in loss of possession of the property without notice of and a prior hearing in a court of competent jurisdiction;
(8) waive a right to redeem the property after default;
(9) cause an assignee, mortgagee, or subsequent holder of the developer not to be obligated to perform as to the purchaser.
(b) It is an unfair act or practice for a developer, his agents, servants, employees or others acting on his behalf
(1) to offer or induce a purchaser to execute a document, paper, or other writing without all spaces filled in or inapplicable spaces clearly stricken;
(2) to alter or deface a document, paper, or other writing without the knowing, intelligent, and voluntary consent of the parties to it.
History
- Authority: AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.070 Approvals and memberships
It is an unfair act or practice for a person
(1) to represent that the developer, his agents, servants, employees, or others acting upon his behalf have the sponsorship, approval or certification unless they do have that sponsorship, approval, or certification;
(2) to represent that the land has been inspected by the department or received approval whether in fact it has or has not been inspected or approved by the department;
(3) to represent the necessity, desirability, or the advantage to a prospective purchaser of dealing with a developer who has a connection with or an endorsement by a governmental body, a nationally known organization, or a professional association, unless it is true.
History
- Authority: AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.080 Availability of land and utilities
It is an unfair act or practice for a person
(1) to represent the availability of land without clearly and conspicuously disclosing, with the representation, any limitation on availability, location or quantity of the land;
(2) to use the developer's personnel or others to repeatedly announce that lots are being sold when in fact this is not the case, or to make false repetitive announcement of the same lot being sold;
(3) to represent a utility service as "available" or some similar representation, unless the utility service is installed in the subdivision and ready for use, or the use is assured under financial arrangements made for installation, and these arrangements are disclosed.
History
- Authority: AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.090 Access to subdivisions
It is an unfair act or practice for a person
(1) to represent or imply that a subdivision is restricted to owners, purchasers, or their families by means of guards, or private roads, or facilities, the use and enjoyment of which require special identification, unless this is true;
(2) to represent that a prospective purchaser has to pay a refundable or nonrefundable temporary membership fee in order to visit, tour, or inspect a subdivision for the reason that it is restricted to members only when, in fact, the offer is made systematically and on a regular basis to all persons solicited for purchase.
History
- Authority: AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.100 Visits, free goods, services
It is an unfair act or practice for a person
(1) to fail to reveal in an offer to induce a person to visit, inspect, or tour a subdivision all the terms, conditions or prerequisites that have to be met by that person;
(2) to offer or represent that goods or services are "free" without clearly and conspicuously disclosing in immediate conjunction with the offer or representation all terms, conditions, or prerequisites to the receipt, retention, or use of the goods or services.
History
- Authority: AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.110 Price, value, credit
It is an unfair act or practice for a person
(1) to represent or imply that a prospective purchaser has to act quickly to purchase land at a savings because the price is about to increase unless, in fact, a decision has been made by the developer to increase the price and that the increase does take effect and remains in effect for a minimum period of 30 days;
(2) to represent that the price of land to a prospective purchaser is a discount or reduction from a regular price unless, in fact, the represented regular price was the customary and regularly sold-at price for a reasonable period of time previously;
(3) to represent or imply that the price of land is a savings when compared to the price of other land sold by competitors of the developer, unless the other lands with the higher prices have the same characteristics, attributes, and qualities of the offered land and the compared-to prices are not fictitious;
(4) to fail to reveal the basis of the projected value where it is represented that the purchaser is making an investment which will increase in value due to the efforts of the developer;
(5) to represent that credit is easily available when, in fact, it is not;
(6) to misrepresent or to cause others to misrepresent the interest rate or finance charge as being other than it actually is.
History
- Authority: AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.120 Repurchases, refunds, referrals
It is an unfair act or practice for a person
(1) to represent to a purchaser or a prospective purchaser that the developer will buy back, resell, list, or otherwise dispose of purchased property, unless it is true;
(2) to induce a purchaser or prospective purchaser to buy land or execute a contract, agreement, option for consideration, or other evidence of indebtedness on the basis that if the purchaser is not satisfied, a refund will be made, unless this is true;
(3) to represent or promise a commission, bonus, discount, reward, override, or prize for referring other purchasers to the developer, where the promise or representation is similarly made to those referred.
History
- Authority: AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.130 Miscellaneous unfair acts
It is an unfair act or practice for a developer, his agents, servants, employees, or others acting on his behalf
(1) to discriminate on the basis of race, color, religion, sex, or national origin in an offer to sell, sale, financing or other disposition of land including making available the use of all improvements, or other amenities of the existing or proposed subdivision;
(2) to obtain a prospective purchaser's signature to a contract, agreement, option, or other evidence of indebtedness by representing that it is only a reservation, receipt, or temporary membership certificate;
(3) to fail to clearly inform a purchaser that a contract, promissory note, or other evidence of indebtedness could be assigned;
(4) to represent the advantage to a prospective purchaser of dealing with a developer by misrepresenting the developer's size or financial condition;
(5) to fail to clearly disclose the use to which contiguous land has been put or the use to which it will be put in the future where the disclosure is material to the use or value of the lot or subdivision in light of the positive representations made;
(6) to engage in any other method, act, or practice which is misleading, deceptive or fraudulent.
History
- Authority: AS 34.55.020
- Eff. 4/3/76, Register 58
Article 3 Advertising and Promotional Plans
3 AAC 20.140 General standards
All advertising methods and materials must be approved by the department before they can be used or disseminated. The following standards are not all-inclusive for the department in evaluating advertising to determine whether it is false, deceptive, or misleading and fails to make full and fair disclosure within the intent of the Act and this chapter.
(1) Claims and representations contained in advertising shall be accurate and provable.
(2) Advertising may not misrepresent facts or create misleading impressions.
(3) Advertising may not contain an untrue statement or a statement which implies an untruth.
(4) Advertising may not make a derogatory or unfair reference to competitive developments, subdivisions, or properties.
(5) Advertising may not reprint published material unless information contained in the reprint is representative, truthful, relevant, and pertinent to the property being offered.
(6) Advertising may not contain a statement, photograph or sketch portraying the use to which land can be put unless the land can be put to that use at a reasonable cost.
(7) Advertising may not contain an asterisk or any other reference symbol as a means of contradicting or substantially changing a previously made statement or as a means of obscuring a material fact.
(8) Advertising may not use a name which implies that the advertiser is a nonprofit research organization or public bureau or group, when it is not true. Advertising by this type of organization is prohibited when the true nature of the plan of sale is misrepresented or concealed.
(9) Maps, plats, or other representations must clearly indicate the estimated date that the development will be completed.
History
- Authority: AS 34.55.010(a)AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.150 Distances
(a) Where a community is referred to, the advertising must contain the location of the subdivision and the mileage from the approximate geographical center of the subdivision in road miles to the geographical center of the community.
(b) Where an amenity or improvement is referred to, advertising must disclose, within reason, the location of the amenity or improvement in relation to the size and location of the subdivision.
(c) Advertising may not use the terms "minutes away," "short distances," "only miles," "near," and terms of similar nature to indicate distances, unless the actual distance in road miles is used in conjunction with the terms.
History
- Authority: AS 34.55.010(a)AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.160 Sketches and pictures
(a) Advertising may not contain an artist's sketch to portray a proposed improvement or nonexistent scene without an indication that the portrayal is an artist's sketch and that the improvement is proposed or that the scene does not exist. An artist's conception of an existing improvement or scene must be representative and state that the rendering is an artist's conception.
(b) Advertising may not contain before and after pictures for comparative purposes without an analysis of the pictures.
History
- Authority: AS 34.55.010(a)AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.170 Improvements and facilities
(a) Advertising of an improvement to a subdivision or any specific part of the subdivision which is not completed may not be made unless it is stated in clear terms that the improvement is merely proposed or under construction and the estimated date of the promised completion is indicated.
(b) Advertising may not describe land as a homesite or building lot if potable water is not available.
(c) Advertising may not contain a statement, photograph, or sketch relating to a facility for recreation, sports, or other convenience not on the subdivision, unless it is stated that the facility is not on the land and the distance to it in miles is given.
(d) Advertising may not refer to a governmental facility unless money has been budgeted for actual construction of the facility and it is available to the public authority having the responsibility of construction, or an actual disclosure of the existing facts concerning a governmental facility is made.
(e) Advertising which refers to "roads" and "streets" must make affirmative disclosure as to the nature of the roads and streets, including terms such as paved, gravel or dirt. In order to be described as improved or paved, a road or street must be constructed and surfaced according to county, city, or other acceptable authority specifications, or satisfactory guarantees must exist for the construction and surfacing.
(f) Advertising must disclose if the land or any part of it is regularly flooded or substantially covered by standing water for extended periods of time during the year, even if adequate drainage is assured by bonding or other means.
History
- Authority: AS 34.55.010(a)AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.180 Access and easements
(a) Advertising of land which does not have available access to the purchaser shall disclose that fact and its effect.
(b) Advertising which refers to legal access shall indicate whether or not the access is usable as a passage for conventional automobiles.
(c) Advertising may not refer to the existence of a road easement or a road right-of-way unless the easement or right-of-way has been dedicated to the public or to appropriate property owners and recorded in the public records of the county or borough where the property is located.
(d) Advertising which indicates the size of the tract offered must indicate the size and kind of all easements to which the property may be subject.
History
- Authority: AS 34.55.010(a)AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.190 Consideration, prices and values
(a) Land may not be advertised as "free" if the prospective purchaser is required to give any consideration for it. Land may not be advertised for "closing costs only" when these costs are substantially more than normal, or when additional land has to be purchased at a higher price to make the land usable.
(b) Advertising which refers to the purchase price of any lot, parcel, or unit of land must also unmistakably include any additional compulsory assessments or costs to the prospective purchaser.
(c) Advertising which makes reference to property exchange privileges must clearly state any qualifications concerning the exchange privileges.
(d) Advertising which makes reference to predevelopment sales at a lower price because the land has not yet been developed must disclose whether there are bona fide plans of development and whether a subdivision plat has been recorded.
(e) Advertising may not make predictions of specific or immediate price or value increases of, advertised lands when the subdivider does not have control over the price increases.
(f) Advertising may not compare land values unless it is clear who is making the comparison and that it is relevant and fair.
(g) Advertising may not contain false or misleading statements as to future price increases by the subdivider.
History
- Authority: AS 34.55.014(3)AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.200 Taxes and assessments
(a) Advertising which contains statements regarding taxes and the amounts of taxes must employ the latest available figures.
(b) Advertising which refers to the purchase price of the land must also include any additional compulsory assessments or costs to the prospective purchaser that are known, or should be reasonably known, at the time of disposition.
History
- Authority: AS 34.55.014(3)AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.210 Visitation programs
(a) The terms and requirements for the use of a visitation program must be disclosed clearly to the prospective purchaser in advance of his visitation. These conditions include, but are not limited to, the developer's participation in the program, the nature of any gift or other benefit, including what the prospect will actually receive, when he will receive it, the obligation he is under, and the fact, if true, that he is to pay his own transportation, food, lodging, or other incidental expenses.
(b) In the promotion of a visitation plan, the developer or his representatives shall clearly identify themselves.
(c) Promotional materials must clearly disclose the identity of places of lodging, transportation companies, restaurants, attractions, and other similar establishments which participate in the visitation plan.
(d) A certificate of other written material evidencing the visitation rights of the holder must contain a fixed expiration date for the rights.
(e) A certificate to be used in a visitation program must be submitted to the department and must meet the advertising standards as set forth in this chapter.
(f) The department shall be advised of a material change, including identity of the participating companies and facilities before the institution of the material change.
History
- Authority: AS 34.55.014(3)AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.220 Promotional plans - General provisions
The department will not enter an order registering a subdivision and will consider the general promotional plan false and misleading, and lacking adequate safeguards, if
(1) the contract or agreement given to a prospective purchaser by the developer upon payment of the first money by the purchaser is not sufficient in form to immediately vest an interest in the land to him;
(2) the developer does not provide adequate safeguards, approved by the department, that if the refund privileges in the contract or agreement are exercised, the developer will be in a position to grant the refund;
(3) title to the subdivision is so encumbered that the lands to be offered cannot be used for any purpose expressly or impliedly represented without the removal of the encumbrance, unless adequate safeguards are established to reasonably assure that the encumbrance will be removed before the time the subdivider promises to deliver the interest contracted for;
(4) the owner transfers, assigns, sells, pledges, or gives as collateral security any sales contracts on a subdivision without notice and submission to the department of evidence of adequate safeguards to reasonably assure that each contract purchaser, upon payment of the purchase price provided in the sales agreement, will receive the full title to the lands as promised; the safeguards will be subject to review and approval by the department in its discretion.
History
- Authority: AS 34.55.012(c)AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.230 Promotional plans - Group meetings
(a) The department shall be notified of a meeting in writing not less than 15 days before its date. The notice shall consist of the date, hour, and place of the meeting and the names of the developer and the real estate broker or brokers involved.
(b) All advertising calculated to induce any attendance or participation in a land sales presentation must unmistakably call attention to that fact.
(c) The meeting shall be conducted in a place open to departmental personnel for inspection and monitoring. The departmental personnel shall be given free access to the meeting and the sales presentation.
(d) A false or dummy buyer shall not be used to initiate sales or to create a buying climate, or for any other purpose.
(e) All oral statements made at the meeting to prospective purchasers shall be consistent with the written material approved by the department.
(f) A prospective purchaser who expresses a desire to leave the meeting at any time during or after the meeting may not in any manner be impeded from leaving, pressured to remain, or denied any benefit promised in exchange for attending the meeting.
(g) The advertising in the meeting is subject to the standards of advertising contained in this chapter.
History
- Authority: AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.240 Inferences
(a) An inference that can be reasonably drawn from advertising or promotional material will be considered to be a positive assertion unless the inference is negated in the advertising or material in clear and unmistakable terms, or unless adequate safeguards have been provided by the developer to reasonably guarantee existence of the thing inferred. Advertising and promotional material will be judged on the basis of the positive representation contained in them and the reasonable inferences to be drawn from them. Unless the contrary affirmatively appears in advertising or promotional material, the inferences set forth will be assumed to have been intended.
(b) When homesites or building lots are advertised without qualification, the inferences are that
(1) the lots are usable for the purpose without any further improvement or development by the prospective purchaser;
(2) there is an adequate potable water supply available;
(3) the lands have been approved for installation of septic tanks or that an adequate sewage disposal system is installed;
(4) the individual homesites are accessible by automobile, without additional expense to the purchaser, over an existing right-of-way;
(5) no other fact or circumstance exists to prohibit use of the lots as homesites or building lots.
(c) When lands are advertised without qualification as usable for a particular purpose other than homesites or building lots, the inference is that the land is immediately accessible and usable for that purpose by prospective purchasers without the necessity for improvements before putting the lands to use for that purpose, except for reasonable preparation; and that no fact or circumstance exists to prohibit use of the lands for that purpose.
(d) When title insurance, an abstract, or attorney's opinion is advertised, the inference is that the seller can and will convey fee simple title free and clear of all liens, encumbrances, and defects except those which are disclosed in writing to the prospective purchaser before purchase.
(e) When a recreational facility, improvement, accommodation or privilege is advertised, the inference is that it is on the land at the present time and available to the purchasers of lots at no additional expense, unless otherwise specified.
(f) When an improvement is advertised, the inference is that it is completed, unless it is advertised as proposed, and sufficient guarantees have been made for its completion.
History
- Authority: AS 34.55.010(3)AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.250 Miscellaneous provisions
(a) Advertising may not represent that the land offered for sale may be subdivided or resubdivided unless it includes necessary and relevant information regarding the estimated cost of future subdividing.
(b) Advertising may not infer or imply that the subdivider will resell or repurchase the land being offered at some future time unless the subdivider has agreed with the department to resell or repurchase the land for, or on behalf of, purchasers and has given reasonable assurances to the department to demonstrate his ability to perform this agreement.
(c) Advertising which refers to oil, gas or mineral rights shall disclose all pertinent facts pertaining to these rights.
(d) Advertising which uses the term "water rights" shall give a full disclosure as to the type, quantity, quality, rights of access to, costs of access to, and other costs or obligations to use the water or water rights.
(e) Advertising which refers to gifts or benefits must disclose the terms and conditions of offers in them in conspicuous print.
(f) Advertising which makes reference to the use of vacation certificates must fully and conspicuously disclose the terms and conditions of offers in them.
(g) Advertising may contain the unqualified term "development" only to describe a subdivision which has a recorded plat.
(h) Advertising may not contain the terms "guarantee" or "guaranteed refund," unless the refund is unconditional.
(i) Advertising must disclose prominently if the property, or any portion of the property, requires irrigation or other application of water to maintain or create the conditions advertised.
(j) Advertising which forecasts a future event or population trend shall be by a qualified person and shall be pertinent to the offering.
History
- Authority: AS 34.55.014(3)AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.260 Submission of advertising material
(a) Advertising of a subdivision may not be made in this state prior to the effective date of the registration of the subdivision and the approval of the advertising by the department.
(b) All advertising material not accompanying the original application must be submitted to the department for approval prior to its use in this state. Within 15 days from the date of receipt of the proposed additional advertising, the department will enter an order approving or rejecting the advertising. If an order of rejection is not entered within 15 days from the date of receipt, the advertising will be considered approved unless the applicant has consented in writing to a delay.
History
- Authority: AS 34.55.010(a)AS 34.55.020
- Eff. 4/3/76, Register 58
Article 4 Protection of Purchasers
3 AAC 20.270 Right to rescind
(a) A contract or agreement for the disposition of a lot, parcel, unit or interest in a subdivision covered by the Act, where the property report has not been given to the purchaser in advance of the time of his signing, is voidable at the discretion of the purchaser. In addition, the purchaser has an unconditional right to rescind any contract, agreement or other evidence of indebtedness between the purchaser and the developer, or revoke any offer within five days from the date the purchaser actually receives a legible copy of the signed contract, agreement or other evidence of indebtedness or offer, and the property report as provided in the Act and this chapter. Predating a document does not defeat the time in which the right to rescind may be exercised. The burden of proof that the document was not predated is upon the developer. An act of the developer in assigning or pledging a contract or agreement may not waive the purchaser's right to void or rescind the contract or agreement as provided by this section. Each contract or agreement shall be prominently labeled and captioned that it is a document taken in connection with a sale or other disposition of lands under the Act.
(b) Each contract or agreement for the disposition of a lot, parcel, unit, or interest in a subdivision shall prominently contain upon its face the following notice, printed in type larger than the body of the document, stating:
YOU ARE ENTITLED TO CANCEL THIS AGREEMENT AT ANY TIME IF YOU HAVE NOT RECEIVED THE PROPERTY REPORT IN ADVANCE OF YOUR SIGNING OF THIS AGREEMENT. IN ADDITION, YOU ARE ENTITLED TO CANCEL THIS AGREEMENT FOR ANY REASON WITHIN 5 DAYS FROM THE DAY YOU ACTUALLY RECEIVE A LEGIBLE SIGNED COPY OF THIS DOCUMENT.
The contract or agreement shall contain sufficient space upon its face in immediate conjunction with the notice for the signature of each person obligated under the instrument, acknowledging that the person has read the notice. A third party who is unrelated to the developer may, in connection with the purchase of, or the making of a loan secured by the contracts or agreements, rely on a document furnished by the developer, and signed by a purchaser acknowledging receipt of a property report in advance of signing a contract or agreement.
(c) Rescission occurs when the purchaser gives written notice to the developer at the address stated in the contract or agreement. Notice of rescission if given by mail is effective when it is deposited in a mailbox, properly addressed, and postage prepaid. A notice of rescission given by the purchaser need not take a particular form and is sufficient if it indicates by any form of written expression the intention of the purchaser not to be bound by the contract or agreement.
(d) An act of a purchaser may not waive the right to rescind as provided in this section. However, the right of rescission for failure to receive a "property report" or "notice to purchaser" terminates three years after the date the purchaser signs the contract or agreement.
History
- Authority: AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.280 Assurances of completion
(a) A subdivision or a part of a subdivision on which construction of a promised improvement for public use, convenience or necessity has not been completed may not be registered for disposition. However, an incomplete improvement does not constitute an objection if the future completion of the improvement is assured by substantial completion, an irrevocable bank letter of credit, bond, or similar undertaking posted with a public authority and acceptable to the department, or by adequate reserves established and maintained in a trust or escrow account. In determining adequacy of the account, the department will be guided by the facts and circumstances of each individual case, but the account must comply with the following:
(1) funds shall be kept and maintained in an account separate and apart from the developer's personal funds;
(2) the account shall be established in a bank or trust company doing business in this state, or another state where the account is required to be maintained there by the laws of that state and approved by the department;
(3) statements shall be furnished to the department on a semiannual basis;
(4) the trust or escrow agreement shall state that its purpose is to protect the purchaser in case the owner fails to complete construction of promised improvements or to satisfy any obligations or liens encumbering the purchaser's title by reason of the construction, and shall authorize the department to inspect the records of the trustee relating to the agreement;
(5) the developer shall request the department to approve its escrow agreements and the developer must then indicate on the face of each agreement whether or not the department has, in fact, approved it.
(b) A subdivision or a part of a subdivision on which the construction of a promised improvement not for public use, convenience, or necessity has not been completed may not be registered for disposition to the public. However, the incompleted improvement may not constitute an objection if completion is assured by
(1) an adequate plan of development, including financial resources committed to carry out the plan of development, and which plan is subject to the department's continuing review and approval;
(2) in case of failure of a developer to establish an adequate plan or to adhere to the plan once established, the department will in its discretion require the establishment of a trust or escrow account under terms established by the department to assure completion of the promised improvement.
History
- Authority: AS 34.55.014(2)AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.290 Financial security of the developer
(a) The department will in its discretion require surety bonds, escrow accounts, irrevocable bank letters of credit, or any other financial security which it considers adequate in assuring that a plan of development has adequate safeguards and assurances. In determining the security required, the department will examine the status of improvements, the overall cost of improvements, the terms of the purchaser's contracts, the financial condition of the subdivider, and other data which it considers necessary. The department will consider whatever financial security has been posted with other governmental authorities in making its determination.
(b) A surety bond will not be approved by the department unless it is on a form approved by the department.
History
- Authority: AS 34.55.014(2)AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.300 Taxes and assessments
In a transaction for the sale of land under the Act in which taxes are to be paid by either party or assessments are to be levied against the purchaser, a developer shall
(1) certify that there are no taxes, other than current taxes, owing on the property involved at the date of filing the statement of record, a consolidated statement of record, or an amendment to either;
(2) provide a form of escrow accounting, satisfactory to the department, if any part of the purchaser's funds paid in or payable by the terms of the instruments disposing of the land is to be used for payment of taxes;
(3) place in the escrow account 100 percent of the payments, with which to pay taxes when due, if the developer apportions real property taxes and requires a purchaser to pay the taxes in a lump sum or on a periodic basis.
History
- Authority: AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.310 Blanket encumbrances - Conditions for sale
A developer may not sell lots, units, parcels, or interests within a subdivision subject to a blanket encumbrance unless one of the following conditions or the equivalent, as determined by this chapter, is met:
(1) all sums paid or advanced by purchasers are placed in an escrow or other depository acceptable to the department until the fee title contracted for is delivered to the purchaser by deed together with a complete release from all financial encumbrances; or
(2) the fee title to the subdivision is placed in trust under an agreement or trust acceptable to the department until a proper release from each blanket encumbrance, including all taxes, is obtained and title is delivered to the purchaser; or
(3) a blanket encumbrance contains provisions evidencing the subordination or release of the lien of the holder or holders of the blanket encumbrance to the rights of those persons purchasing from the subdivider, and further evidencing that the subdivider is able to secure releases from the blanket encumbrances with respect to the property upon full payment of the purchase price owing by that person.
History
- Authority: AS 34.55.010(a)AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.320 Blanket encumbrances - Subordination of liens
A blanket encumbrance must subordinate its lien to the rights of persons purchasing from the developer and provide that the developer is able to secure releases from the blanket encumbrance with respect to the property. The provisions must be acceptable to the department. For purposes of this section subordination of the lien is satisfied by a release clause which by its terms unconditionally provides for the release of contiguous and noncontiguous separate lots, units, or parcels being offered to purchaser, so that the purchaser or lessee of a lot, unit, or parcel obtains legal title, or other instrument contracted for, free and clear of the blanket encumbrance upon compliance with terms and conditions of the purchase or lease from the developer.
History
- Authority: AS 34.55.010(a)AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.330 Blanket encumbrances - Trust and escrow accounts
(a) If the encumbering instrument does not contain adequate release clauses, the lien, mortgage, or other encumbrances will be considered objectionable unless adequate reserves are maintained in a trust or escrow account. In determining the adequacy of the account, the department will be guided by the facts and circumstances of each individual case, but the account must comply with the following:
(1) funds shall be kept and maintained in an account separate and apart from the developer's personal funds;
(2) the account shall be established in a bank or trust company doing business in this state, or another state where the account is required to be maintained there by the laws of that state and approved by the department;
(3) statements shall be furnished to the department on a semiannual basis;
(4) the trust or escrow agreement shall state that its purpose is to protect the purchaser or prospective purchaser in case of default on a lien, mortgage or other encumbrance, and shall authorize the department to inspect the records of the trustee relating to the agreement, and that upon order of the department, or a court, the trustee shall release and pay over the funds to the department, or the holder of the blanket encumbrance.
(b) The department will execute an acknowledgment on the face of each agreement. This acknowledgment indicates approval of the form and content of the agreement, but will not make the department a party to the agreement.
History
- Authority: AS 34.55.010(a)AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.340 Instruments of sale
An instrument evidencing sale or disposition of an interest in a subdivision shall be executed in a recordable form in accordance with the laws of the state where the land is located. An applicant has the burden of an affirmative showing of this compliance.
History
- Authority: AS 34.55.020
- Eff. 4/3/76, Register 58
Article 5 General Provisions
3 AAC 20.350 Participation in subdivision by employees of the department
An officer or employee of the department having authority to pass on the application of a subdivision or any association, firm, or corporation with which that officer or employee is associated will not act as a broker of a subdivision, lot, parcel, unit or interest in them, or offer or dispose of a subdivision, lot, parcel, unit or interest in them that is required to be registered pursuant to the Act.
History
- Authority: AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.360 Responsibility of developer for acts of others
A developer is responsible for the acts of each broker, salesman, registered representative, and any other person he employs or engages to represent him which are performed within the scope of that employment or engagement.
History
- Authority: AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.370 Nonliability of news media
An owner, publisher, licensee or operator of any newspaper, magazine, television or radio broadcasting station or network of stations or the agents or employees of that owner, publisher, licensee or operator of that newspaper, magazine, station or network of stations is not liable under this chapter for any advertising of any subdivision, lot, parcel, or unit in any subdivision carried in that newspaper or magazine, or by that television or broadcasting station or network of stations; nor are any of them liable under this chapter for the contents of that advertisement.
History
- Authority: AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.380 Severability
If a provision of this chapter or its application to any person, thing or circumstance is held invalid, that invalidity does not affect other provisions or application of this chapter which can be given effect without the invalid provision or application, and accordingly the provisions of this chapter are severable.
History
- Authority: AS 34.55.020
- Eff. 4/3/76, Register 58
3 AAC 20.390 Definitions
As used in this chapter, the following words and terms shall have the following meanings unless the context requires otherwise in AS 34.55, or in the forms, instructions and orders of the department:
(1) "Act" means the Alaska Uniform Land Sales Practices Act;
(2) "advertising" means the publication or causing to be published of any matter by any means which offers any interest in the title to a subdivision or part thereof; causes or induces, directly or indirectly, any person to acquire any interest in the title to a subdivision or a part of it; or is used to induce prospective purchasers to attend land sales presentations;
(3) "blanket encumbrance" means a trust deed or mortgage or mechanics lien or any other lien or financial encumbrance, securing or evidencing money debt and affecting lands to be subdivided or affecting more than one lot, parcel, unit, or interest of subdivided land; or an agreement affecting more than one lot, parcel, unit, or interest by which the developer holds the subdivision under an option, contract to purchase, or trust agreement, except a lien or other encumbrance arising as a result of the imposition of a tax assessment by a public authority, so long as no portion of it is past due;
(4) "department" means the Department of Commerce, Community, and Economic Development;
(5) "developer" means a person, or his agent, who, directly or indirectly, offers subdivided land for disposition, or who advertises subdivided land for disposition;
(6) "offer" means every inducement, solicitation or attempt to encourage a person to acquire an interest in land, if undertaken for gain or profit;
(7) "person" means an individual, firm, company, association, corporation, government or any subdivision of government, business trust, estate, trust, partnership, unincorporated association or organization, joint ventures, or any other legal or commercial entity;
(8) "sale" means any sale, exchange, lease, assignment, or other transaction designed to convey a interest in any portion of a subdivision when undertaken for profit;
(9) "unit," as in a subdivision unit, means any group of parcels or interests within a clearly defined boundary which are being sold or offered for sale as part of a subdivision or common promotional plan, as the group of parcels or interests have been filed of record with any local government agency having jurisdiction.
History
- Authority: AS 34.55.020
- Eff. 4/3/76, Register 58
Part 2 Division of Insurance
Chapter 21 Insurer — Financial
Article 1 Insurance Holding Companies
3 AAC 21.010 Forms; general requirements
(a) Forms A - F are intended to be guides in the preparation of the statements required under AS 21.22. They are not intended to be blank forms that are to be filled in. A statement filed must contain the numbers and captions of all items indicated on a form, but the text of the items may be omitted if the answers to them are prepared to indicate the coverage of the items without the necessity of referring to the text of the items or the instructions to them. All instructions, whether appearing under the items of the form or elsewhere in it, are to be omitted. Unless expressly provided otherwise, if an item is not applicable or the answer to it is in the negative, an appropriate explanation to that effect must be made.
(b) A complete copy of a statement required under AS 21.22, including exhibits and all other papers and documents filed as a part of it, must be filed with the director electronically and one hard copy by personal delivery or mail addressed to: Director, division of insurance of the State of Alaska, 550 West 7th Avenue, Anchorage, Alaska 99501-3567. Each copy must be signed in the manner prescribed on the form. If the signature of a person is affixed under a power of attorney or other similar authority, a copy of the power of attorney or other authority must also be filed with the statement.
(c) A statement must be prepared in electronic form. A statement must be clear, easily readable, and suitable for review and reproduction. Debits in credit categories and credits in debit categories must be designated so they are clearly distinguishable on reproduced versions. A statement must be in the English language and monetary value must be stated in United States currency. If an exhibit or other paper or document filed with the statement is in a foreign language, it must be accompanied by a translation into the English language and a monetary value normally shown in a foreign currency must be converted into United States currency.
(d) Repealed 11/26/2015.
(e) If an applicant requests a hearing on a consolidated basis under AS 21.22.030, in addition to filing Form A with the director, the applicant must file a copy of Form A with the National Association of Insurance Commissioners in electronic form.
History
- Authority: AS 21.06.090; AS 21.22.130 AS 21.22.030; AS 21.96.080
- Eff. 6/30/77, Register 62; am 10/21/92, Register 124; am 1/12/95, Register 133; am 3/11/98, Register 145; am 11/26/2015, Register 216
3 AAC 21.020 Forms; incorporation by reference; summaries and omissions
(a) Information required by an item of Form A, B, D, E, or F may be incorporated by reference in answer or partial answer to another item. Information contained in a financial statement, annual report, proxy statement, statement filed with a governmental authority, or other document may be incorporated by reference in answer or partial answer to an item of Form A, B, D, E, or F if that document is filed as an exhibit to the statement. An excerpt of a document may be filed as an exhibit if the document is lengthy. A document already on file with the director, that was filed not later than three years before the due date of the form being filed, need not be attached as an exhibit. A reference to information contained in an exhibit or a document already on file must clearly identify by content and date the material and specifically indicate that the material is to be incorporated by reference in answer to an item. Material may not be incorporated by reference in a case where incorporation by reference would render the statement incomplete, unclear, or confusing.
(b) Where an item requires a summary or outline of the provisions of any document, only a brief statement of the most important provisions of the document is required. In addition to the brief statement, the summary or outline may incorporate by reference a particular part of an exhibit or document that has been filed with the director within the three years before the date of the form being filed and may be qualified in its entirety by that reference. In a case where two or more documents required to be filed as exhibits are substantially identical in all material respects except the parties to it, the dates of execution, or other details, a copy of only one of the documents need be filed with a schedule identifying the omitted documents and setting out the material details in which those documents differ from the documents filed.
History
- Authority: AS 21.06.090; AS 21.22.130
- Eff. 6/30/77, Register 62; am 10/21/92, Register 124; am 1/12/95, Register 133; am 11/26/2015, Register 216
3 AAC 21.030 Forms; information unknown or unavailable; extension of time to furnish
(a) Repealed 11/26/2015.
(b) If it is impractical to furnish any required information, document, or report at the time it is required to be filed, the person required to furnish the information, document, or report shall file with the director as a separate document an application
(1) identifying the information, document, or report in question;
(2) stating why filing at the time required is impractical; and
(3) requesting an extension of time for filing the information, document, or report to a specified date.
(c) The application for an extension under (b) of this section will be considered granted unless the director, within 30 days after receiving it, enters an order denying it.
History
- Authority: AS 21.06.090; AS 21.22.130
- Eff. 6/30/77, Register 62; am 11/26/2015, Register 216
3 AAC 21.040 Forms; additional information and exhibits
(a) In addition to the information expressly required to be included in Forms A - F, additional information must be provided if it is necessary to make the information contained in Forms A - F not misleading. A person may also file any exhibits in addition to those expressly required by the form. An exhibit must be clearly marked to indicate the subject matter to which it refers.
(b) A change to Form A, B, C, D, E, or F must include on the top of the cover page the phrase: "Change No ...to:" and must indicate the date of the amendment and not the date of the original filing.
History
- Authority: AS 21.06.090; AS 21.22.130
- Eff. 6/30/77, Register 62; am 10/21/92, Register 124; am 1/12/95, Register 133; am 11/26/2015, Register 216
3 AAC 21.050 Forms; amendments
An amendment must be filed in the format of the original form identifying only those items that are being amended. An amendment of Form A, B, C, D, or E must include on the top of the cover page the phrase: "Amendment No . . . . . . . to:" and must indicate the date of the amendment and not the date of the original filing.
History
- Authority: AS 21.06.090; AS 21.22.130
- Eff. 6/30/77, Register 62; am 10/21/92, Register 124; am 1/12/95, Register 133
3 AAC 21.060 Acquisition of control; statement filing; Form A
A person required to file a statement under AS 21.22.010 shall furnish the required information on Form A, made a part of this section in substantially the following form:
FORM A
STATEMENT REGARDING THE ACQUISITION OF CONTROL
OF OR MERGER WITH A DOMESTIC INSURER
Name of Domestic Insurer
By
Name of Acquiring Person (Applicant)
History
- Authority: AS 21.06.090; AS 21.22.130
- Eff. 6/30/77, Register 62; am 10/21/92, Register 124; am 11/26/2015, Register 216
3 AAC 21.070 Amendments of Form A
Each applicant shall promptly advise the director of any changes in the information furnished in Form A arising after the date upon which the information was furnished but before the director's disposition of the application.
History
- Authority: AS 21.06.090; AS 21.22.130
- Eff. 6/30/77, Register 62
3 AAC 21.080 Acquisition of AS 21.22.010(j) insurers
(a) If the person being acquired is a domestic insurer solely because of the provisions of AS 21.22.010(j), the name of the domestic insurer on the cover page must be indicated substantially as in the following example: "ABC Insurance Company, a subsidiary of XYZ Holding Company."
(b) Where an AS 21.22.010(j) insurer is being acquired, references to "the insurer" contained in Form A refer to both the domestic subsidiary insurer and the person being acquired.
History
- Authority: AS 21.06.090; AS 21.22.130
- Eff. 6/30/77, Register 62; am 11/26/2015, Register 216
3 AAC 21.090 Annual registration of insurers; statement filing; Form B
Except as provided in 3 AAC 21.110, an insurer required to file an annual registration statement under AS 21.22.060 shall furnish the required information on Form B, made part of this section in substantially the following form:
FORM B
INSURANCE HOLDING COMPANY SYSTEM ANNUAL
REGISTRATION STATEMENT
Filed with the Insurance Division/Department of the
History
- Authority: AS 21.06.090; AS 21.22.130
- Eff. 6/30/77, Register 62; am 10/21/92, Register 124; am 11/26/2015, Register 216
3 AAC 21.095 Annual registration of insurers
Repealed.
History
- Eff. 10/21/92, Register 124; repealed 11/26/2015, Register 216
3 AAC 21.100 Amendments to Form B
(a) An amendment to Form B must be filed with the division not later than 15 days after the end of any month in which there is a material change to the information provided in the annual registration statement.
(b) An amendment to Form B must be filed in the format of the original form identifying only those items that are being amended. An amendment to Form B must include on the top of the cover page the phrase: "Amendment No ...to:" and must indicate the date of the amendment and not the date of the original filing.
History
- Authority: AS 21.06.090; AS 21.22.060; AS 21.22.130
- Eff. 6/30/77, Register 62; am 10/21/92, Register 124; am 11/26/2015, Register 216
3 AAC 21.110 Alternative and consolidated registrations
(a) An authorized insurer may file a registration statement on behalf of an affiliated insurer that is required to register under AS 21.22.060. A registration statement may include information not required by AS 21.22 regarding an insurer in the insurance holding company system even if the insurer is not authorized to do business in this state. Instead of filing a registration statement on Form B, the authorized insurer may file a copy of the registration statement or similar report that it is required to file in its state of domicile if
(1) the statement or report contains information that is substantially similar to the information required to be furnished on Form B; and
(2) the authorized insurer making the filing is the principal insurance company in the insurance holding company system.
(b) An insurer filing a registration statement or report in place of Form B on behalf of an affiliated insurer shall provide a brief statement of facts that will substantiate the filing insurer's claim that it is the principal insurer in the insurance holding company system. The division will determine whether the filing insurer is the principal insurance company in the insurance holding company system as a question of fact.
(c) With prior approval of the director, an unauthorized insurer may follow any of the procedures that could be followed by an authorized insurer under (a) of this section.
(d) An insurer may take advantage of the consolidation and filing provisions of AS 21.22.060(g) or 21.22.060(h) without obtaining prior approval of the director. The director will, in the director's discretion, require individual filings if the director considers individual filings necessary for clarity, ease of administration, or the public good.
History
- Authority: AS 21.06.090; AS 21.22.130
- Eff. 6/30/77, Register 62; am 10/21/92, Register 124
3 AAC 21.120 Exemptions
Repealed.
History
- Eff. 6/30/77, Register 62; repealed 11/26/2015, Register 216
3 AAC 21.130 Disclaimers and termination of registration
(a) A disclaimer of affiliation or a request for termination of registration claiming that a person does not, or will not, upon taking some proposed action, control another person (referred to in this section as the "subject") must contain the following information:
(1) the number of authorized, issued, and outstanding voting securities of the subject;
(2) with respect to the person whose control is denied and all affiliates of that person, the number and percentage of shares of the subject's voting securities which are held of record or known to be beneficially owned, and the number of these shares concerning which there is a right to acquire, directly or indirectly;
(3) all material relationships and bases for affiliation between the subject and the person whose control is denied and all affiliates of that person;
(4) a statement explaining why the person should not be considered to control the subject.
(b) A request for termination of registration is considered to have been granted unless the director, within 30 days after he receives the request, notifies the registrant otherwise.
History
- Authority: AS 21.06.090; AS 21.22.130
- Eff. 6/30/77, Register 62
3 AAC 21.140 Extraordinary dividends and other distributions
(a) A request for approval of an extraordinary dividend or an extraordinary distribution to shareholders must include the following:
(1) the amount of the proposed dividend;
(2) the date established for payment of the dividend;
(3) a statement as to whether the dividend is to be in cash or other property and, if in property, a description of the property, its cost, and its fair market value together with an explanation of the basis for that valuation;
(4) a work paper showing the calculations used to determine whether the proposed dividend is extraordinary; the work paper must include the following information:
(A) the amounts, dates, and form of payment of all dividends and distributions, including regular dividends but excluding distributions of the insurer's own securities, paid or declared and unpaid within the period of 12 consecutive months ending on the date fixed for payment of the proposed dividend for which approval is sought and commencing on the day after the same day of the same month in the previous year;
(B) policyholder surplus as of the 31st day of the December preceding the date on which the request for dividend approval is submitted;
(C) if the insurer is a life insurer, the net gain from operations for the 12-month period ending the 31st day of the December preceding the date on which the request for dividend approval is submitted;
(D) if the insurer is not a life insurer, the net investment income for the 12-month period ending the 31st day of the December preceding the date on which the request for dividend approval is submitted and net income for each of the two preceding 12-month periods;
(E) if the insurer is not a life insurer, the dividends paid to stockholders, excluding distributions of the insurer's own securities, in the two calendar years preceding the calendar year in which the request for dividend approval is submitted;
(5) a balance sheet and statement of income for the period between the last annual statement filed with the director and the end of the month preceding the month in which the request for dividend approval is submitted;
(6) a brief statement as to the effect of the proposed dividend upon the insurer's surplus, the reasonableness of surplus in relation to the insurer's outstanding liabilities, and the adequacy of surplus relative to the insurer's financial needs.
(b) Subject to AS 21.22.100, a registered insurer shall report to the director all dividends and other distributions to shareholders not later than 15 business days following their declaration and shall include the information required in (a)(4) of this section. The report of a dividend or distribution that is not extraordinary may be in the form of a letter and is not subject to the requirements under 3 AAC 21.185. The report of an extraordinary dividend must meet the requirements of this section and 3 AAC 21.185.
History
- Authority: AS 21.06.090; AS 21.22.100; AS 21.22.130
- Eff. 6/30/77, Register 62; am 10/21/92, Register 124; am 6/11/2006, Register 178; am 11/26/2015, Register 216
3 AAC 21.150 Adequacy of surplus
The factors set forth in AS 21.22.090 are not intended to be an exhaustive list. In determining the adequacy and reasonableness of an insurer's surplus, no single factor listed in AS 21.22.090 is controlling. The director, instead, will consider the net effect of all of these factors plus other factors bearing on the financial condition of the insurer. In comparing the surplus maintained by other insurers, the director will consider the extent to which each of these factors varies from company to company; in determining the quality and liquidity of investments in subsidiaries, the director will consider the individual subsidiary and will, in the directors discretion, discount or disallow its valuation to the extent that the individual investments so warrant.
History
- Authority: AS 21.06.090; AS 21.22.130
- Eff. 6/30/77, Register 62; am 10/21/92, Register 124
3 AAC 21.160 Definitions
Repealed 10/21/92.
3 AAC 21.170 Subsidiaries of domestic insurers
Repealed.
History
- Eff. 10/21/92, Register 124; repealed 11/26/2015, Register 216
3 AAC 21.180 Summary of registration; statement filing; Form C
An insurer required to file a statement under AS 21.22.060 shall also furnish the required information on Form C, made a part of this section in substantially the following form:
FORM C
SUMMARY OF CHANGES TO REGISTRATION STATEMENT
History
- Authority: AS 21.06.090; AS 21.22.060; AS 21.22.130
- Eff. 10/21/92, Register 124; am 11/26/2015, Register 216
3 AAC 21.185 Transactions subject to prior notice; required or voluntary requests for approval or pre-approval; notice filing; Form D
(a) An insurer required to give notice of a proposed transaction under AS 21.22.080 - 21.22.105 or desiring voluntary approval or pre-approval of a transaction under AS 21 shall furnish the required information on Form D, made a part of this section in substantially the following form:
FORM D
PRIOR NOTICE OF A TRANSACTION
Filed with the Insurance Division/Department of the State of
By
(Name of Registrant)
On Behalf of the Following Insurance Companies
Name Address
Date: , 20
Name, Title, Address, Electronic Mail Address, and Telephone Number of Individual to Whom Notices and Correspondence Concerning This Statement Should be Addressed:
ITEM 1. IDENTITY OF PARTIES TO TRANSACTION
Furnish the following information for each party to the transaction:
(a) name:
(b) home office address;
(c) principal executive office address;
(d) the organizational structure (i.e., corporation, partnership, individual, trust, etc.);
(e) a description of the nature of the party's business operations;
(f) relationship, if any, the insurer filing the notice or requesting the approval of pre-approval may have with another party to the transaction, including any ownership or debtor/creditor interest another party to the transaction may have in the insurer or the insurer may have in another party to the transaction; and
(g) where the transaction is with a non-affiliate, the name of an affiliate that will receive, in whole or substantial part, the proceeds of the transaction.
ITEM 2. DESCRIPTION OF THE TRANSACTION
Furnish the following information for each transaction for which notice is being given:
(a) citation of the statute section, subsection, or paragraph under which the notice is being given or the request for approval or pre-approval, either required or voluntary, is being made;
(b) a list of any other statutes applicable to the transaction;
(c) a statement of the nature of the transaction;
(d) a statement of how the transaction meets the "fair and reasonable" standard of AS 21.22.080(1); and.
(e) the proposed effective date of the transaction.
ITEM 3. SALES, PURCHASES, EXCHANGES, LOANS, EXTENSIONS OF CREDIT, GUARANTEES, OR INVESTMENTS
Furnish a brief description of the amount and source of funds, securities, property, or other consideration involved in the sale, purchase, exchange, loan, extension of credit, guarantee, or investment related to the transaction, a statement of whether a provision exists for purchase by the insurer filing notice, by any party to the transaction, or by any affiliate of the insurer filing notice; a description of the terms of any securities being received; and a description of any other agreements relating to the transaction such as service contracts or consulting agreements. If the transaction involves consideration other than cash, furnish a description of the consideration, its cost, its fair market value, and an explanation of the basis for evaluation.
If the transaction involves a loan, extension of credit, or a guarantee, furnish a description of the maximum amount that the insurer will be obligated to make available under the loan, extension of credit, or guarantee; the date on which the credit or guarantee will terminate; and any provision for the accrual or deferral of interest.
If the transaction involves an investment, guarantee, or other arrangement, state the time period during which the investment, guarantee, or other arrangement will remain in effect, including any provision for an extension or renewal. Furnish a brief statement regarding the effect of the transaction upon the insurer's surplus.
Unless otherwise required by the director or required by statute, a notice is not required if, as of the last December 31st, the maximum amount that can be outstanding or for which the insurer can be legally obligated under the loan, extension of credit, or guarantee is less than
(a) for non-life insurers, either three percent of the insurer's admitted assets or 25 percent of surplus as regards policyholders, whichever is less, or
(b) for life insurers, three percent of the insurer's admitted assets.
ITEM 4. LOANS OR EXTENSIONS OF CREDIT TO A NON-AFFILIATE
If the transaction involves a loan or extension of credit to a person that is not an affiliate, furnish a brief description of the agreement or understanding in which the proceeds of the proposed transaction, in whole or substantial part, are to be used to make a loan or extension of credit to, purchase the assets of, or make an investment in, an affiliate of the insurer making the loan or extension of credit. Specify in what manner the proceeds are to be used to loan to, extend credit to, purchase assets of, or make investments in an affiliate. Describe the amount and source of funds, securities, property, or other consideration for the loan or extension of credit and, if the transaction involves consideration other than cash, furnish a description of the consideration, its cost, its fair market value, and an explanation of the basis for evaluation. Furnish a brief statement regarding the effect of the transaction upon the insurer's surplus.
Unless otherwise required by the director or required by statute, a notice is not required if, as of the last December 31st, the loan or extension of credit is less than
(a) for non-life insurers, either three percent of the insurer's admitted assets or 25 percent of surplus as regards policyholders, whichever is less, or
(b) for life insurers, three percent of the insurer's admitted assets.
ITEM 5. REINSURANCE
If the transaction is a reinsurance agreement or modification of it under AS 21.22.085(a)(3)(B) or a reinsurance pooling agreement or modification to it as described under AS 21.22.085(a)(3)(A), furnish a description of the known and estimated amounts of liability to be ceded or assumed in a calendar year, the period of time during which the agreement is in effect, and a statement regarding whether an agreement or understanding exists between the insurer and non-affiliate that provides that a portion of the assets serving as consideration for the agreement will be transferred to one or more of the insurer's affiliates. Furnish a brief description of the consideration involved in the transaction and a brief statement regarding the effect of the transaction upon the insurer's surplus.
Unless otherwise required by the director or required by statute, a notice is not required for a reinsurance agreement or modification to it if, as of the last December 31st, the reinsurance premium or a change in the insurer's liabilities or the projected reinsurance premium or change in the insurer's liabilities in any of the next three years, in connection with a reinsurance agreement or modification to it is less than five percent of the insurer's surplus as regards policyholders. Notice must be given for all reinsurance pooling agreements including modifications to it.
ITEM 6. MANAGEMENT AGREEMENTS, SERVICE CONTRACTS, AND COST SHARING ARRANGEMENTS
For a management agreement or service contract, furnish a brief description of the agreement, or contract including its duration, the managerial responsibilities or services to be performed, and the basis for and terms of payment of compensation.
For a cost-sharing arrangement, furnish.
(a) a brief description of the purpose of the agreement;
(b) a description of the period of time during which the agreement is to be in effect;
(c) a brief description of each party's expenses or costs covered by the agreement;
(d) a brief description of the accounting basis to be used in calculating each person's costs under the agreement;
(e) a brief statement as to the effect of the transaction upon the insurer's policyholder surplus;
(f) a statement regarding the cost allocation methods that specifies whether the proposed charges are based on "cost or market." If the proposed charges are market based, provide rationale for using market instead of cost, including justification for the company's determination that amounts are fair and reasonable; and
(g) a statement regarding compliance with the most recently adopted Accounting Practices and Procedure Manual issued by the National Association of Insurance Commissioners regarding expense allocation.
ITEM 7. OTHER APPROVALS OR PRE-APPROVALS
Furnish a brief description of the transaction and the circumstances under which it was or will be accomplished. Furnish information regarding valuation and pricing of the transaction and any other applicable information. If the transaction is an investment, provide the current purchase price, carrying value on the records of the holder of the investment, and current market value of the investment, along with information on how each value was determined.
Describe the action requested of the director. Provide a brief discussion concerning approval or disapproval of the requested action citing applicable law and alternate actions that may be taken if approval is not received.
ITEM 8. EXTRAORDINARY DIVIDENDS OR DISTRIBUTIONS
As required under 3 AAC 21.140, provide a description of the extraordinary dividend or distribution for which approval is requested. Provide a brief discussion concerning approval or disapproval giving consideration to AS 21.22.080(5) and 21.22.090.
ITEM 9. INVESTMENT IN SUBSIDIARIES AND INSURER ACQUISITIONS
Use this section if approval under 3 AAC 21.281(g) for a life and health insurer or under 3 AAC 21.370(g) for a property and casualty insurer is being sought.
Furnish the calculations required to determine that the thresholds under 3 AAC 21.28l(g) or 3 AAC 21.370(g) are met. Furnish discussion concerning the reason why, after the investment, the resultant policyholder surplus will be reasonable in relation to the organization's outstanding liabilities and adequate to the organization's financial need.
Furnish a schedule showing the effect on the surplus of the parties to the transaction and a discussion concerning the reason why, under AS 21.22.080, the resultant policyholder surplus will be reasonable in relation to the organization's outstanding liabilities and adequate to the organization's financial needs, giving consideration to AS 21.22.090.
Furnish a description of the material transaction in which the parties intend to engage, including the amount of fees to be charged and support for the reasonableness of those fees. Provide a statement affirming that the parties to the proposed transaction will comply with AS 21.22.080.
Furnish other information pertinent to the approval or pre-approval sought. If a Form A, an application for a certificate of authority, or another filing for the company or affiliate of the company is pending before the director, identify and describe the associated filing.
ITEM 10. SIGNATURE AND CERTIFICATION
Signature and certification are required as follows:
SIGNATURE
Under the requirements of AS 21.22.080 - 21.22.105, has caused this notice to be signed on its behalf in the City or Community of and State of on the day of , 20 .
(SEAL) (Name of Applicant)
By
(Name) (Title)
Attest:
(Signature of Officer)
(Title) CERTIFICATION
The undersigned deposes and says that the undersigned has duly executed the attached notice dated , 20 , for and on behalf of (Name of Applicant); that the undersigned is the (Title of Officer) of the company; and that the undersigned is authorized to execute and file the instrument. The undersigned further says that the undersigned is familiar with the instrument and the contents of it and that the facts stated in it are true to the best of the undersigned's knowledge, information, and belief.
(Signature)
(Type or print name below)
(b) Agreements for cost sharing services and management services must at a minimum and as applicable
(1) identify the person providing services and the nature of the services;
(2) set out the methods to allocate costs;
(3) require timely settlement, not less frequently than on a quarterly basis, and compliance with the requirements in the most recently adopted Accounting Practices and Procedures Manual issued by the National Association of Insurance Commissioners;
(4) prohibit advancement of funds by the insurer to the affiliate except to pay for services defined in the agreement;
(5) state that the insurer will maintain oversight for functions that the affiliate provides to the insurer and that the insurer will monitor services annually for quality assurance;
(6) define books and records of the insurer to include all books and records developed or maintained under or related to the agreement;
(7) specify that all books and records of the insurer are and remain the property of the insurer and are subject to control of the insurer;
(8) state that all funds and invested assets of the insurer are the exclusive property of the insurer, held for the benefit of the insurer, and subject to the control of the insurer;
(9) include standards for termination of the agreement with and without cause;
(10) include provisions for indemnification of the insurer in the event of gross negligence or willful misconduct on the part of the affiliate providing the services;
(11) specify that, if the insurer is placed in receivership or seized by the director under AS 21.78,
(A) all of the rights of the insurer under the agreement extend to the receiver or director; and
(B) all books and records shall immediately be made available to the receiver or the director, and shall be turned over to the receiver or director immediately upon the receiver or the director's request;
(12) specify that the affiliate has no automatic right to terminate the agreement if the insurer is placed in receivership under AS 21.78; and
(13) specify that the affiliate will continue to maintain any systems, programs, or other infrastructure notwithstanding a seizure by the director under AS 21.78, and will make them available to the receiver, for so long as the affiliate continues to receive timely payment for services rendered.
History
- Authority: AS 21.06.090; AS 21.22.080 AS 21.22.070; AS 21.22.130
- Eff. 10/21/92, Register 124; am 1/12/95, Register 133; am 6/11/2006, Register 178; am 11/26/2015, Register 216
3 AAC 21.186 Preacquisition notification; potential competitive impact; Form E
A domestic insurer including any person controlling a domestic insurer required to file notice under AS 21.22.010, and a nondomiciliary insurer licensed to do business in this state required to file notice under AS 21.22.065 of a proposed merger or acquisition shall furnish the required preacquisition notification information on Form E, made a part of this section in substantially the following form:
FORM E
PRE-ACQUISITION NOTIFICATION FORM REGARDING THE
POTENTIAL COMPETITIVE IMPACT OF A PROPOSED
MERGER OR ACQUISITION BY A NON-DOMICILIARY
INSURER DOING BUSINESS IN THIS STATE
OR BY A DOMESTIC INSURER
(Name of Applicant)
(Name of Other Person Involved in Merger or Acquisition)
History
- Authority: AS 21.06.090; AS 21.22.130 AS 21.22.065; AS 21.22.200
- Eff. 1/12/95, Register 133; am 11/26/2015, Register 216
3 AAC 21.187 Expert opinion on proposed merger or acquisition of insurer
In addition to the information required by 3 AAC 21.186, and if necessary to make a determination of the potential competitive impact of the proposed merger or acquisition, the director will, in the director's discretion, require an expert selected by the applicant and approved by the director to provide an expert opinion as to that impact. The expert opinion must be prepared at the expense of the applicant.
History
- Authority: AS 21.06.090; AS 21.22.130 AS 21.22.065; AS 21.22.200
- Eff. 1/12/95, Register 133
3 AAC 21.188 Enterprise risk report
The ultimate controlling person of an insurer required to file an enterprise risk report under AS 21.22.060(n) shall furnish the required information on Form F, made a part of this section in substantially the following form:
FORM F
ENTERPRISE RISK REPORT
History
- Authority: AS 21.06.090; AS 21.22.060; AS 21.22.130
- Eff. 11/26/2015, Register 216
3 AAC 21.195 Definitions
(a) In 3 AAC 21.010 - 3 AAC 21.195, unless the context requires otherwise,
(1) "executive officer" means a chief executive officer, chief operating officer, chief financial officer, treasurer, secretary, controller, and any other individual performing functions corresponding to those performed by these officers under whatever title;
(2) repealed 11/26/2015;
(3) "ultimate controlling person" means a person who is not controlled by another person.
(b) Unless the context requires otherwise, terms not defined in (a) of this section that are found in 3 AAC 21.010 - 3 AAC 21.195 or in AS 21.22 are used as defined in AS 21.22.200. Other terms are used as defined in AS 21 or in accordance with common industry usage if not defined in AS 21.
History
- Authority: AS 21.06.090; AS 21.22.130
- Eff. 6/30/77, Register 62; am 10/21/92, Register 124; am 11/26/2015, Register 216
Article 2 Investments
3 AAC 21.200 In-State deposit requirements
Repealed 6/16/82.
3 AAC 21.201 Purpose
The purpose of 3 AAC 21.201 - 3 AAC 21.399 is to protect the interests of insureds by promoting insurer solvency and financial strength, through a reasonable balance of the following objectives:
(1) preservation of principal;
(2) reasonable diversification as to type of investment, issuer, and credit quality;
(3) the allocation of investments by insurers in a manner consistent with principles of prudent investment management, to achieve an adequate return so that obligations to insureds are adequately met and financial strength is sufficient to cover reasonably foreseeable contingencies.
History
- Authority: AS 21.06.090; AS 21.21.020 AS 21.21.010; AS 21.21.420
- Eff. 12/28/2001, Register 160
3 AAC 21.203 Applicability
(a) The provisions of 3 AAC 21.201 - 3 AAC 21.399 apply to an investment and an investment practice of a domestic insurer and a United States branch of an alien insurer entered through this state. Except as provided in AS 21.42.315(c), the provisions of 3 AAC 21.201 - 3 AAC 21.399 do not apply to separate accounts of a life and health insurer.
(b) Any waiver or written consent granted by the director before December 28, 2001 is rescinded as of that date, if that waiver or written consent regards a requirement applicable to an investment or an investment practice of a domestic insurer or a United States branch of an alien insurer entered through this state.
History
- Authority: AS 21.06.090; AS 21.21.020 AS 21.21.010; AS 21.21.420
- Eff. 12/28/2001, Register 160
3 AAC 21.206 General investment qualifications
(a) An insurer may acquire, hold, or invest in an investment or engage in an investment practice as set out in 3 AAC 21.201 - 3 AAC 21.399. An investment that does not conform to 3 AAC 21.201 - 3 AAC 21.399 is not an admitted asset.
(b) Subject to (c) of this section, an insurer may not acquire, hold, or invest in an investment as an admitted asset unless, at the time of acquisition, the investment is
(1) eligible for the payment or accrual of interest or discount, whether in cash or other securities;
(2) eligible to receive dividends or other distributions;
(3) income producing; or
(4) acquired under 3 AAC 21.256(f), 3 AAC 21.261, 3 AAC 21.271, 3 AAC 21.286, 3 AAC 21.350(f), 3 AAC 21.355, 3 AAC 21.365, or 3 AAC 21.375, or under other authority of AS 21.
(c) An insurer may acquire, hold, or invest in as an admitted asset an investment that does not otherwise qualify under 3 AAC 21.201 - 3 AAC 21.399 if the insurer has not acquired the investment for the purpose of circumventing any limitations contained in 3 AAC 2 1.201 - 3 AAC 21.399, if the insurer complies with the provisions of AS 21.18.170 and 3 AAC 21.216 as to the investment, and if the insurer acquires the investment in one or more of the following circumstances:
(1) as payment on account of existing indebtedness or in connection with the refinancing, restructuring, or workout of existing indebtedness if taken to protect the insurer's interest in that investment;
(2) as realization on collateral for an obligation;
(3) in connection with an otherwise qualified investment or investment practice, as interest on or a dividend or other distribution related to the investment or investment practice, or in connection with the refinancing of the investment, in each case for no additional or only nominal consideration;
(4) under a lawful and bona fide agreement of recapitalization or voluntary or involuntary reorganization in connection with an investment held by the insurer;
(5) under a bulk reinsurance, merger, or consolidation transaction approved by the director if the assets constitute admitted assets for the ceding, merged, or consolidated companies.
(d) An investment or portion of an investment acquired, held, or invested in by an insurer under (c) of this section becomes a nonadmitted asset three years after the date of its acquisition, or five years after the date of its acquisition in the case of a mortgage loan and real estate, unless, within the applicable period, the investment has become a qualified investment under a provision of 3 AAC 21.201 - 3 AAC 21.399 other than (c) of this section. However, an investment acquired under an agreement of bulk reinsurance, merger, or consolidation may be qualified for a longer period if a longer period is provided in the plan for reinsurance, merger, or consolidation as approved by the director under AS 21.22.010 and AS 21.69.590 - 21.69.620. Upon application by an insurer and a showing, to the director's satisfaction, that the nonadmission of an asset held under (c) of this section would materially injure the interest of the insurer, the director will extend the period for admissibility for an additional reasonable period of time.
(e) Except as provided in (f) and (h) of this section, an investment qualifies under 3 AAC 21.201 - 3 AAC 21.399 if, on the date the insurer committed to acquire, hold, or make the investment or on the date of its acquisition, it would have qualified under 3 AAC 21.201 - 3 AAC 21.399. For the purposes of determining limitations contained in 3 AAC 21.201 - 3 AAC 21.399, an insurer shall give recognition to any commitments to acquire investments.
(f) On December 28, 2001,
(1) an investment held as an admitted asset by an insurer on the day before December 28, 2001 remains qualified as an admitted asset under 3 AAC 21.201 - 3 AAC 21.399; and
(2) each specific transaction constituting an investment practice of the type described in 3 AAC 21.201 - 3 AAC 21.399 that was lawfully entered into by an insurer and was in effect will continue to be permitted under 3 AAC 21.201 - 3 AAC 21.399 until its expiration or termination under its terms.
(g) Unless otherwise specified, an investment limitation computed on the basis of an insurer's admitted assets or an insurer's capital and surplus must relate to the amount required to be shown on the insurer's financial statement most recently required to be filed with the director under AS 21.09.200, AS 21.09.205, and 3 AAC 21.400. For purposes of computing any limitation based upon admitted assets, the insurer shall deduct from the amount of its admitted assets the amount of the liability recorded on that financial statement for the
(1) return of acceptable collateral received in a reverse repurchase transaction or a securities lending transaction;
(2) cash received in a dollar roll transaction; and
(3) amount reported as borrowed money to the extent not included in (1) and (2) of this subsection.
(h) An investment qualified, in whole or in part, for acquiring, holding, or investing in as an admitted asset may be qualified or requalified at the time of acquisition or a later date, in whole or in part, under any other provision of 3 AAC 21.201 - 3 AAC 21.399 if the relevant conditions contained in the other provision are satisfied at the time of qualification or requalification.
(i) An insurer shall maintain documentation demonstrating that investments were acquired, held, or invested as required by 3 AAC 21.201 - 3 AAC 21.399 and specifying the provision of 3 AAC 21.201 - 3 AAC 21.399 under which they were acquired, held, or invested.
(j) An insurer may not enter into an agreement to purchase a security in advance of its issuance for resale to the public as part of a distribution of the security by an issuer or otherwise guarantee the distribution, except that an insurer may acquire a privately placed security with registration rights.
(k) Notwithstanding the provisions of 3 AAC 21.201 - 3 AAC 21.399, the director may order an insurer to nonadmit, limit, dispose of, or withdraw from or discontinue an investment or investment practice if the director finds that the investment or investment practice is not consistent with the purposes of 3 AAC 21.201 - 3 AAC 21.399 as stated in 3 AAC 21.201.
(l) An insurance future or insurance future option is not considered an investment or investment practice for purposes of 3 AAC 21.201 - 3 AAC 21.399.
(m) Notwithstanding (f)(1) of this section, an insurer shall maintain the investment limitations imposed under 3 AAC 21.201 - 3 AAC 21.399 subsequent to December 28, 2001.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.210 Out-of-state deposit requirements
Repealed 6/16/82.
3 AAC 21.211 Authorization of investments by the board of directors
(a) The board of directors of an insurer shall adopt a written plan for acquiring, holding, and investing in an investment and for engaging in an investment practice. The written plan must specify guidelines as to the quality, maturity, and diversification of investments and must contain other specifications including investment strategies intended to ensure that an investment or investment practice is appropriate for the business conducted by the insurer, the insurer's liquidity needs, and the insurer's capital and surplus. The board of directors shall review and assess the insurer's technical investment and administrative capabilities and expertise before adopting a written plan concerning an investment strategy or investment practice.
(b) An investment acquired, held, and invested in under 3 AAC 21.201 - 3 AAC 21.399 must be acquired and held under the supervision and direction of the board of directors of the insurer. The board of directors shall evidence by formal resolution, at least annually, that it has determined that each investment has been made in accordance with delegations, standards, limitations, and investment objectives prescribed by the board of directors or a committee of the board of directors charged with the responsibility to direct its investments.
(c) On at least a quarterly basis, and more often if considered appropriate, an insurer s board of directors or committee of the board of directors shall
(1) receive and review a summary report on the insurer's investment portfolio, the insurer's investment activities, and the insurer's investment practices engaged in under delegated authority to determine whether the portfolio, activities, and practices are consistent with the written plan; and
(2) review and revise, as appropriate, the written plan.
(d) In discharging its duties under this section, the board of directors shall require that a record of any authorization or approval, other documentation as the board may require, and report of any action taken under authority delegated under the plan referred to in (a) of this section will be made available on a regular basis to the board of directors.
(e) In discharging a duty under this section, an individual director shall perform the duty in good faith and with that degree of care that ordinarily prudent individuals in like positions would use under similar circumstances.
(f) If an insurer does not have a board of directors, each reference to the board of directors in 3 AAC 21.201 - 3 AAC 21.399 shall be considered to be a reference to the governing body of the insurer having authority equivalent to that of a board of directors.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.213 Derivative instruments
(a) Before engaging in a derivative transaction, an insurer shall establish, and submit to the director for approval, written guidelines that will be used for effecting and maintaining derivative transactions. The guidelines must
(1) specify insurer objectives for engaging in derivative transactions and strategies and all applicable risk constraints, including credit risk limits;
(2) establish counterparty exposure limits and credit quality standards;
(3) identify permissible derivative transactions and the relationship of those transactions to insurer operations, including a precise identification of the risks being hedged by a derivative transaction; and
(4) require compliance with internal control procedures.
(b) An insurer shall have a written methodology and systems for determining whether a derivative instrument used for hedging has been effective.
(c) An insurer shall have written policies and procedures describing the credit risk management process and a credit risk management system for over-the-counter derivative transactions that measures credit risk exposure using the counterparty exposure amount.
(d) An insurer's board of directors shall, in accordance with 3 AAC 21.211,
(1) approve the written guidelines, methodology, policies, and procedures required under (a) - (c) of this section and the systems required under (b) and (c) of this section;
(2) determine whether the insurer has adequate professional personnel, technical expertise, and systems to implement investment practices involving derivatives;
(3) review whether derivative transactions have been made in accordance with the approved guidelines and consistent with stated objectives; and
(4) take action to correct any deficiencies in internal controls relative to derivative transactions.
(e) Before engaging in derivative transactions, an insurer shall submit to the director for approval written documentation explaining the insurer's internal guidelines and controls governing derivative transactions. If the insurer cannot demonstrate that the internal guidelines and controls would be adequate to manage the risks associated with the derivative transactions the insurer intends to engage in, the director will disapprove the proposed internal guidelines and controls. The insurer may not engage in derivative transactions without the director's approval of the insurer's internal guidelines and controls governing derivative transactions.
(f) An insurer shall maintain documentation and records relating to each derivative transaction including
(1) each purpose of the transaction;
(2) the assets or liabilities to which the transaction relates;
(3) the specific derivative instrument used in the transaction;
(4) for over-the-counter derivative instrument transactions, the
(A) name of the counterparty; and
(B) market value of the instrument; and
(5) for exchange-traded derivative instruments, the
(A) name of the exchange;
(B) name of the firm that handled the trade; and
(C) market value of the instrument.
(g) Each derivative instrument held must be
(1) traded on a qualified exchange;
(2) entered into with, or guaranteed by, a business entity;
(3) issued or written with the issuer of the underlying interest on which the derivative instrument is based; or
(4) entered into with a qualified foreign exchange.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 1/1/2011, Register 196
3 AAC 21.216 Prohibited investments
(a) An insurer may not, directly or indirectly
(1) acquire, hold, or invest in an obligation or security or make a guarantee for the benefit of or in favor of an officer or director of the insurer, except as provided in 3 AAC 21.221;
(2) acquire, hold, or invest in an obligation or security of, make a guarantee for the benefit of or in favor of, or make other investments in a business entity of which 10 percent or more of the voting securities or equity interests are owned directly or indirectly by or for the benefit of one or more officers or directors of the insurer, except as authorized in AS 21.22 or provided in 3 AAC 21.221;
(3) engage on its own behalf or through one or more affiliates in a transaction or series of transactions designed to evade the prohibitions in 3 AAC 21.201 - 3 AAC 21.399;
(4) invest in a partnership as a general partner, unless
(A) all other partners in the partnership are subsidiaries of the insurer;
(B) the investment is for the purpose of
(i) meeting cash calls committed to before December 28, 2001;
(ii) completing those specific projects or activities of the partnership in which the insurer was a general partner as of December 28, 2001 that have been undertaken as of that date; or
(iii) making capital improvements to property owned by the partnership on December 28, 2001 if the insurer was a general partner as of that date; or
(C) the investment complies with 3 AAC 21.206(c); or
(5) invest in or lend the insurer's money upon the security of shares of the insurer's own stock, except that an insurer may acquire shares of the insurer's own stock, but not as admitted assets of the insurer, for the following purposes:
(A) conversion of a stock insurer into a mutual or reciprocal insurer or a mutual or reciprocal insurer into a stock insurer;
(B) issuance to the insurer's officers, employees, or agents in connection with converting a publicly held insurer into a privately held insurer or in connection with other stock option and employee benefit plans;
(C) as required by any other plan approved by the director under AS 21.
(b) This section does not prohibit a subsidiary or other affiliate of an insurer from becoming a general partner.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.220 Certificate in place of deposit
Repealed 6/16/82.
3 AAC 21.221 Loans to officers and directors
(a) Except as provided in (d) of this section, and without the prior written approval of the director that will be given only if the transaction is consistent with the purposes of 3 AAC 21.201 - 3 AAC 21.399 as stated in 3 AAC 21.201 and is in the public interest, an insurer may not directly or indirectly
(1) make a loan to or other investment in an officer or director of the insurer or a person in which the officer or director has a direct or indirect financial interest;
(2) make a guarantee for the benefit of or in favor of an officer or director of the insurer or a person in which the officer or director has a direct or indirect financial interest; or
(3) enter into an agreement for the purchase or sale of property from or to an officer or director of the insurer or a person in which the officer or director has a direct or indirect financial interest.
(b) For purposes of (a) of this section, an officer or director is not considered to have a financial interest by reason of an interest that is held directly or indirectly through the ownership of equity interests representing less than two percent of all outstanding equity interests issued by a person that is a party to a transaction referenced in (a) of this section.
(c) The provisions of (a) of this section do not
(1) permit an investment that is prohibited by 3 AAC 21.216; and
(2) apply to a transaction between an insurer and a subsidiary or affiliate that is entered into in compliance with AS 21.22, except for a transaction between the insurer and its officers or directors.
(d) An insurer may make, without the prior written approval of the director,
(1) a policy loan in compliance with the terms of the policy or contract and 3 AAC 21.276;
(2) an advance to an officer or director for an expense reasonably expected to be incurred in the ordinary course of the insurer's business or a guarantee associated with a credit or charge card issued or credit extended for the purpose of financing these expenses;
(3) a loan secured by the principal residence of an officer of the insurer made in connection with the officer's relocation at the insurer's request, if the loan complies with the requirements of 3 AAC 21.256 or 3 AAC 21.350 and the terms and conditions are otherwise the same as those generally available from an unaffiliated third party;
(4) a secured loan to an officer of the insurer made in connection with the officer's relocation at the insurer's request, if the loan
(A) does not have a term exceeding two years;
(B) is required to finance mortgage loans outstanding at the same time on the prior and new residences of the officer;
(C) does not exceed an amount equal to the equity of the officer in the prior residence; and
(D) is required to be fully repaid upon the earlier of the end of the two-year period described in (A) of this paragraph or the sale of the prior residence; and
(5) a loan or advance to an officer or director made in compliance with state or federal law specifically related to the loan or advance by a regulated noninsurance subsidiary or affiliate of the insurer in the ordinary course of business and on terms that are not more favorable than those available to other customers of the entity.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.230 Reduced deposit requirements
Repealed 6/16/82.
3 AAC 21.231 General single issuer diversification, medium-grade investments and lower-grade investments, and Canadian investments for a life and health insurer
(a) Except as otherwise provided in 3 AAC 21.201 - 3 AAC 21.399, a life and health insurer may not acquire, hold, or invest in, directly or indirectly through an investment subsidiary, an investment under 3 AAC 21.201 - 3 AAC 21.399 if, as a result of and after giving effect to the investment, the life and health insurer would hold more than three percent of its admitted assets in investments of all kinds issued, assumed, accepted, insured, or guaranteed by a single person. However,
(1) the three percent limitation of this subsection does not apply to the aggregate amounts insured by a single financial guaranty insurer with the highest rating issued by a nationally recognized statistical rating organization; and
(2) an asset-backed security is not subject to the three percent limitation of this subsection, except that an insurer may not acquire, hold, or invest in an asset-backed security if, as a result of and after giving effect to the investment, the aggregate amount of asset-backed securities then held by the life and health insurer and secured by or evidencing an interest in a single asset or single pool of assets held by a trust or other business entity would exceed the life and health insurer's three percent limitation.
(b) A life and health insurer may not acquire, hold, or invest in, directly or indirectly through an investment subsidiary, an investment under 3 AAC 21.236, 3 AAC 21.251, or 3 AAC 21.266, or counterparty exposure under 3 AAC 21.271(e) if, as a result of and after giving effect to the investment the aggregate amount of
(1) medium-grade and lower-grade investments then held by the life and health insurer would exceed 20 percent of the life and health insurer's admitted assets;
(2) lower grade investments then held by the life and health insurer would exceed 10 percent of the life and health insurer's admitted assets;
(3) investments then held by the life and health insurer and rated five or six by the securities valuation office would exceed three percent of the life and health insurer's admitted assets;
(4) investments then held by the life and health insurer and rated six by the securities valuation office would exceed one percent of the life and health insurer's admitted assets;
(5) medium-grade and lower-grade investments then held by the life and health insurer that receive as cash income less than the equivalent yield for United States Treasury issues with a comparative average life would exceed one percent of the life and health insurer's admitted assets;
(6) medium-grade and lower-grade investments then held by the life and health insurer that are issued, assumed, guaranteed, accepted, or insured by one person or asset-backed securities that are secured by or evidencing an interest in a single asset or pool of assets would exceed one percent of the life and health insurer's admitted assets; or
(7) lower-grade investments then held by the life and health insurer that are issued, assumed, guaranteed, accepted, or insured by one person or asset-backed securities that are secured by or evidencing an interest in a single asset or pool of assets would exceed one-half of one percent of the life and health insurer's admitted assets.
(c) A life and health insurer may not acquire, hold, or invest in, directly or indirectly through an investment subsidiary, a Canadian investment authorized by 3 AAC 21.201 - 3 AAC 21.399 if, as a result of and after giving effect to the investment, the aggregate amount of Canadian investments then held by the life and health insurer would exceed 40 percent of the life and health insurer's admitted assets, or if the aggregate amount of Canadian investments then held by the life and health insurer that are not acquired under 3 AAC 21.236 would exceed 25 percent of the life and health insurer's admitted assets. However, for a life and health insurer that is authorized to do business in Canada or that has outstanding insurance, annuity, or reinsurance contracts, denominated in Canadian currency, and issued on lives or risks resident or located in Canada, the limitations of this subsection shall be increased by the greater of
(1) the amount the life and health insurer is required by Canadian law to invest in Canada or to be denominated in Canadian currency; or
(2) 115 percent of the amount of the life and health insurer's reserves and other obligations under contracts on lives or risks resident or located in Canada.
(d) Except as otherwise provided in 3 AAC 21.201 - 3 AAC 21.399, this section applies to investments and investment practices of life and health insurance companies subject to 3 AAC 21.201 - 3 AAC 21.399.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.236 Rated credit instruments for a life and health insurer
(a) Notwithstanding 3 AAC 21.231(a), a life and health insurer may
(1) acquire, hold, or invest in a rated credit instrument that is issued, assumed, guaranteed, or insured by
(A) the United States;
(B) a government-sponsored enterprise of the United States if the instrument of the government-sponsored enterprise is assumed, guaranteed, or insured by the United States or is otherwise backed or supported by the full faith and credit of the United States;
(C) Canada; or
(D) a government-sponsored enterprise of Canada, if the instrument of the government-sponsored enterprise is assumed, guaranteed, or insured by Canada or is otherwise backed or supported by the full faith and credit of Canada; and
(2) acquire a rated credit instrument, other than an asset-backed security, if the rated credit instrument is
(A) issued by a government money market mutual fund, a class one money market mutual fund, or a class one bond mutual fund;
(B) issued, assumed, guaranteed, or insured by a government-sponsored enterprise of the United States other than those eligible under (1)(A) or (B) of this subsection;
(C) issued, assumed, guaranteed, or insured by a state, and if the instrument is a general obligation of the state; or
(D) issued by a multilateral development bank.
(b) A life and health insurer may not acquire an instrument
(1) under (a)(1)(C) or (D) of this section if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the life and health insurer under this subsection would exceed 40 percent of the life and health insurer's admitted assets; or
(2) of any one fund, any one enterprise or entity, or any one state under (a)(2) of this section if, as a result of and after giving effect to the investment, the aggregate amount of investments then held in any one fund, enterprise, entity, or state under (a)(2) of this section would exceed 10 percent of the life and health insurer's admitted assets.
(c) A life and health insurer may acquire a preferred stock that is not a foreign investment and that meets the requirements for a rated credit instrument in 3 AAC 21.395 if, as a result of and after giving effect to the investment, the aggregate amount of preferred stocks then held by the life and health insurer under this subsection
(1) does not exceed 20 percent of the life and health insurer's admitted assets; and
(2) that are not sinking fund stocks or not rated P1 or P2 by the securities valuation office does not exceed 10 percent of the life and health insurer's admitted assets.
(d) In addition to an investment eligible under (a) - (c) of this section, a life and health insurer may acquire, hold, or invest in a rated credit instrument that is not a foreign investment. A life and health insurer may not acquire an instrument under this subsection if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the life and health insurer under this subsection would exceed 40 percent of the life and health insurer's admitted assets.
(e) A life and health insurer may not acquire a special rated credit instrument under this section if, as a result of and after giving effect to the investment, the aggregate amount of special rated credit instruments then held by the life and health insurer would exceed five percent of the life and health insurer's admitted assets.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.240 Securities eligible for deposit
Repealed 6/16/82.
3 AAC 21.241 Insurer investment pools for a life and health insurer
(a) A life and health insurer may acquire, hold, or make an investment in an investment pool that invests only in an investment
(1) that a life and health insurer may acquire under 3 AAC 21.201 - 3 AAC 21.399, if the life and health insurer's proportionate interest in the amount invested in that investment does not exceed the quantitative limitations of 3 AAC 21.201 - 3 AAC 21.399; or
(2) described in (b) of this section.
(b) For purposes of (a)(2) of this section, a life and health insurer may acquire, hold, or make an investment in an investment pool that invests only in
(1) an obligation that
(A) is rated one or two by the securities valuation office, or has an equivalent rating by a nationally recognized statistical rating organization; an obligation without a one or two rating or an equivalent rating must be issued by an issuer whose outstanding obligations are rated one or two by the securities valuation office, or whose obligations have an equivalent rating by a nationally recognized statistical rating organization; and
(B) has a remaining maturity of
(i) 397 days or less or a put that entitles the holder to receive the principal amount of the obligation that may be exercised through maturity at specified intervals not exceeding 397 days; or
(ii) three years or less and a floating interest rate that resets at least quarterly on the basis of a short term index of federal funds, of the prime rate, of treasury bills, of the London InterBank Offered Rate (LIBOR), or of commercial paper, and is not subject to a maximum limit if the obligations do not have an interest rate that varies inversely to market interest rate changes;
(2) a government money market mutual fund or class one money market mutual fund; or
(3) a security lending, repurchase, or reverse repurchase transaction that meets all the requirements of 3 AAC 21.261(a) - (c) and (e).
(c) A life and health insurer may not acquire, hold, or make an investment in an investment pool if the investment pool
(1) acquires a security issued, assumed, guaranteed, or insured by the life and health insurer or an affiliate of the life and health insurer;
(2) borrows money or incurs indebtedness for borrowed money, except as part of a securities lending or reverse repurchase transaction that meets all the requirements of 3 AAC 21.261(a) - (c) and (e); or
(3) permits the aggregate value of securities loaned or sold to, purchased from, or invested in any one business entity under this section to exceed 10 percent of the total assets of the investment pool.
(d) The limitations of 3 AAC 21.231(a) do not apply to a life and health insurer's investment in an investment pool. However, a life and health insurer may not acquire an investment in an investment pool under this section if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the life and health insurer under this section in
(1) any one investment pool would exceed 10 percent of the life and health insurer's admitted assets;
(2) all investment pools investing in investments permitted under (a)(1) of this section would exceed 25 percent of the life and health insurer's admitted assets; or
(3) all investment pools would exceed 35 percent of the life and health insurer's admitted assets.
(e) A life and health insurer may acquire, hold, or make an investment in an investment pool if the manager of the investment pool
(1) is organized under the laws of the United States or a state and designated as the pool manager in a pooling agreement;
(2) is
(A) the life and health insurer, an affiliated insurer, a business entity affiliated with the life and health insurer, a qualified bank, or a business entity registered under 15 U.S.C. 80b-1 - 80b-21 (Investment Advisors Act of 1940);
(B) in the case of a reciprocal life and health insurer or interinsurance exchange, its attorney-in-fact; or
(C) in the case of a United States branch of an alien life and health insurer, its United States manager or an affiliate or subsidiary of its United States manager;
(3) compiles and maintains detailed accounting records
(A) setting out the cash receipts and disbursements reflecting each participant's proportionate investment in the investment pool;
(B) describing completely each underlying asset of the investment pool, including the amount, interest rate, and maturity date, if any, of each asset; and
(C) allowing a third party, on a daily basis, to verify each participant's investment in the investment pool; and
(4) maintains the assets of the investment pool in one or more accounts, in the name of or on behalf of the investment pool, under a custody agreement with a qualified bank; the custody agreement must
(A) state and recognize the claims and rights of each participant;
(B) acknowledge that the underlying assets of the investment pool are held solely for the benefit of each participant in proportion to the aggregate amount of each participant's investments in the investment pool; and
(C) contain an agreement that the underlying assets of the investment pool may not be commingled with the general assets of the custodian qualified bank or any other person.
(f) The pooling agreement for each investment pool must be in writing and must provide that
(1) at all times, 100 percent of the interests in the investment pool shall be held by
(A) a life and health insurer or an affiliated insurer of the life and health insurer, except as provided in (B) and (C) of this paragraph;
(B) if the investment pool invests only in investments permitted under (a)(2) and (b) of this section, a life and health insurer and a
(i) subsidiary or affiliate of the life and health insurer; or
(ii) pension or profit sharing plan of a life and health insurer, or of a subsidiary or affiliate of the life and health insurer; or
(C) if the life and health insurer is the United States branch of an alien life and health insurer, an affiliate or subsidiary of the alien insurer's United States manager;
(2) the underlying assets of the investment pool may not be commingled with the general assets of the pool manager or any other person;
(3) in proportion to the aggregate amount of each pool participant's interest in the investment pool,
(A) each participant owns an undivided interest in the underlying assets of the investment pool; and
(B) the underlying assets of the investment pool are held solely for the benefit of each participant;
(4) a participant, or in the event of the participant's insolvency, bankruptcy, or receivership, its trustee, receiver, or other successor in interest, may withdraw all or any portion of its investment from the investment pool under the terms of the pooling agreement;
(5) withdrawals may be made on demand without penalty or other assessment on any business day, but settlement of funds must occur within a reasonable and customary period, not to exceed five business days, following the demand; in each case, distributions under this paragraph must be calculated net of all then applicable fees and expenses of the investment pool;
(6) the pool manager shall distribute to a participant, at the discretion of the pool manager,
(A) in cash, the then fair market value of the participant's pro rata share of each underlying asset of the investment pool;
(B) in kind, a pro rata share of each underlying asset; or
(C) in a combination of cash and in-kind distributions, a pro rata share in each underlying asset; and
(7) the pool manager shall make the records of the investment pool available for inspection by the director.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.246 Equity interests for a life and health insurer
(a) A life and health insurer may acquire, hold, or invest in an equity interest in a business entity organized under the laws of a domestic jurisdiction.
(b) A life and health insurer may not acquire an investment under this section if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the life and health insurer under this section would exceed, for
(1) a life and health insurer other than an accident and health insurer, 20 percent of the life and health insurer's admitted assets, or five percent of admitted assets for equity interests then held by the insurer that are not listed on a qualified exchange; or
(2) an accident and health insurer, the greater of 25 percent of the accident and health insurer' s admitted assets or 100 percent of its policyholder surplus.
(c) A life and health insurer may not acquire an investment under this section that the life and health insurer may acquire under 3 AAC 21.256.
(d) A life and health insurer may not short sell equity investments unless the life and health insurer covers the short sale by owning the equity investment or an unrestricted right to the equity instrument exercisable within six months after the short sale.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.250 Securities eligible for deposit by foreign insurers in another state
Repealed 6/16/82.
3 AAC 21.251 Tangible personal property under lease for a life and health insurer
(a) Subject to the requirements in (b) of this section, a life and health insurer may acquire, hold, or invest in tangible personal property or an equity interest located or used wholly or in part within a domestic jurisdiction either directly or indirectly through a limited partnership interest or general partnership interest not otherwise prohibited by 3 AAC 21.216, a joint venture, stock of an investment subsidiary or membership interest in a limited liability company, a trust certificate, or another similar instrument.
(b) A life and health insurer may acquire, hold, or invest in an investment under (a) of this section only if the
(1) property is subject to a lease or other agreement with a person whose rated credit instruments would be eligible to be acquired by the life and health insurer under 3 AAC 21.236 in the amount of the purchase price of the personal property; and
(2) lease or other agreement described in (1) of this subsection provides the life and health insurer the right to receive rental, purchase, or other fixed payments for the use or purchase of the property, and the aggregate value of the payments, together with the estimated residual value of the property at the end of its useful life and the estimated tax benefit to the life and health insurer resulting from ownership of the property, is adequate to return the cost of the life and health insurer' s investment in the property, plus a return considered adequate by the life and health insurer.
(c) The life and health insurer shall compute the amount of each investment under this section on the basis of the out-of-pocket purchase price and applicable related expenses paid by the life and health insurer for the investment, net of each borrowing made to finance the purchase price and expenses, to the extent the borrowing is without recourse to the life and health insurer.
(d) A life and health insurer may not acquire an investment under this section if, as a result of and after giving effect to the investment, the aggregate amount of all investments then held by the life and health insurer under this section would exceed
(1) two percent of the life and health insurer's admitted assets; or
(2) one-half of one percent of the life and health insurer's admitted assets as to any single item of tangible personal property.
(e) For purposes of determining compliance with the limitations of 3 AAC 21.231, a life and health insurer shall aggregate all investments acquired under this section with those acquired under 3 AAC 21.236, and each lessee of the property under a lease referred to in this section will be considered the issuer of an obligation in the amount of the investment of the life and health insurer in the property determined as provided in (c) of this section.
(f) This section does not apply to a tangible personal property lease arrangement between a life and health insurer and its subsidiaries and affiliates under a cost-sharing arrangement or agreement permitted under AS 21.22.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.256 Mortgage loans and real estate for a life and health insurer
(a) A life and health insurer may acquire, hold, or invest in an obligation secured by a mortgage on real estate situated within a domestic jurisdiction either directly or indirectly through a limited partnership interest or general partnership interest not otherwise prohibited by 3 AAC 21.216, a joint venture, stock of an investment subsidiary or a membership interest in a limited liability company, a trust certificate, or another similar instrument. A life and health insurer may not acquire, hold, or invest in a mortgage loan that is secured by other than a first lien unless the life and health insurer is the holder of the first lien. An obligation held by a life and health insurer and any obligation with an equal lien priority may not, at the time of acquisition of the obligation, exceed
(1) 90 percent of the fair market value of the real estate if the mortgage loan is secured by a purchase money mortgage or like security received by the life and health insurer upon disposition of the real estate;
(2) 80 percent of the fair market value of the real estate if the mortgage loan requires immediate scheduled payment in periodic installments of principal and interest, has an amortization period of 30 years or less, and has periodic payments made no less frequently than annually, subject to the following:
(A) each periodic payment must be sufficient to ensure that, at all times, the outstanding principal balance of the mortgage loan will not be greater than the outstanding principal balance would be under a mortgage loan with the same original principal balance, with the same interest rate and requiring equal payments of principal and interest with the same frequency over the same amortization period;
(B) a mortgage loan permitted under this paragraph is permitted notwithstanding that the loan provides for a payment of the principal balance before the end of the period of amortization of the loan;
(C) for a residential mortgage loan, the 80 percent limitation may be increased to 97 percent if acceptable private mortgage insurance has been obtained; or
(3) 75 percent of the fair market value of the real estate for a mortgage loan that does not meet the requirements of (1) or (2) of this subsection.
(b) For purposes of (a) of this section, the amount of an obligation required to be included in the calculation of the loan-to-value ratio may be reduced to the extent the obligation is insured by the United States Department of Housing and Urban Development, Federal Housing Administration or guaranteed by the United States Secretary of Veterans Affairs for the United States, or its successor.
(c) A mortgage loan that is held by a life and health insurer under 3 AAC 21.206(f) or acquired under this section and that is restructured in a manner that meets the requirements of a restructured mortgage loan in accordance with the National Association of Insurance Commissioners accounting practices and procedures manual continues to qualify as a mortgage loan under 3 AAC 21.201 - 3 AAC 21.399.
(d) A credit lease transaction that does not qualify for investment under 3 AAC 21.236 need not comply with a requirement of (a) of this section if
(1) it includes a loan amortized over the initial fixed lease term at least in an amount sufficient so that the loan balance at the end of the lease term does not exceed the original appraised value of the real estate;
(2) the lease payments cover or exceed the total debt service over the life of the loan;
(3) a tenant or its affiliated entity whose rated credit instruments are rated one or two by the securities valuation office or have an equivalent rating from a nationally recognized statistical rating organization, has a full faith and credit obligation to make the lease payments;
(4) the life and health insurer holds or is the beneficial holder of a first lien mortgage on the real estate;
(5) the expenses of the real estate, other than exterior, structural, parking, heating, ventilation, and air conditioning replacement expenses, are passed through to the tenant, unless annual escrow contributions from cash flows derived from the lease payments cover the expense shortfall; and
(6) a perfected assignment exists of the rent due under the lease to or for the benefit of the life and health insurer.
(e) A life and health insurer may acquire, manage, and dispose of real estate situated in a domestic jurisdiction either directly or indirectly through a limited partnership interest or general partnership interest not otherwise prohibited in 3 AAC 21.216, a joint venture, the stock of an investment subsidiary, a membership interest in a limited liability company, a trust certificate, or another similar instrument, subject to the following:
(1) the real estate must be income-producing or intended for improvement or development for an investment purpose under an existing plan of improvement or development, in which case the real estate is considered to be income-producing;
(2) the real estate may be subject to a mortgage, lien, or other encumbrance, the amount of which must be deducted, to the extent that the obligations secured by the mortgage, lien, or encumbrance is without recourse to the life and health insurer, from the amount of the investment of the life and health insurer in the real estate for purposes of determining compliance with (g)(2) and (3) of this section.
(f) A life and health insurer may acquire, manage, and dispose of real estate for the convenient accommodation of the business operations of the life and health insurer or its affiliates. For purposes of this subsection,
(1) real estate acquired may
(A) include excess space for rent to others if the excess space, valued at its fair market value, would otherwise be a permitted investment under (e) of this section and is so qualified by the life and health insurer; and
(B) be subject to a mortgage, lien, or other encumbrance, the amount of which must be deducted, to the extent that the obligation secured by the mortgage, lien, or encumbrance is without recourse to the insurer, from the amount of the investment of the life and health insurer in the real estate for purposes of determining compliance with (h) of this section; and
(2) business operations
(A) include home office, branch office, and field office operations; and
(B) do not include operations on that portion of real estate used for the direct provision of health care services by an accident and health insurer; a life and health insurer may acquire real estate used for the direct provision of health care services under (e) of this section.
(g) A life and health insurer may not acquire an investment
(1) under (a) - (d) of this section if, as a result of and after giving effect to the investment, the aggregate amount of all investments then held by the life and health insurer under (a) - (d) of this section would exceed
(A) one percent of the life and health insurer's admitted assets in mortgage loans covering any one secured location;
(B) one-quarter of one percent of the life and health insurer's admitted assets in construction loans covering any one secured location; or
(C) two percent of the life and health insurer's admitted assets in construction loans in the aggregate;
(2) under (e) of this section if, as a result of and after giving effect to the investment and any outstanding guarantees made by the life and health insurer in connection with the investment, the aggregate amount of investments then held by the life and health insurer under (e) of this section plus the guarantees then outstanding would exceed
(A) one percent of the life and health insurer's admitted assets in one parcel or group of contiguous parcels of real estate; however, the limitation in this subparagraph does not apply to that portion of real estate used for the direct provision by an accident and health insurer of health care services, including hospitals, medical clinics, medical professional buildings, or other health facilities used for the purpose of providing health services;
(B) 15 percent of the life and health insurer's admitted assets in the aggregate, but not more than five percent of its admitted assets as to properties that are to be improved or developed; or
(C) for an accident and health insurer, the lesser of 15 percent of the accident and health insurer's admitted assets or 40 percent of the accident and health insurer' s policyholder surplus; or
(3) under (a) - (e) of this section if, as a result of and after giving effect to the investment and any guarantees the life and health insurer has made in connection with the investment, the aggregate amount of all investments then held by the life and health insurer under (a) - (e) of this section plus the guarantees then outstanding would exceed 45 percent of the life and health insurer's admitted assets; however, a life and health insurer may exceed the limitation in this paragraph by not more than 30 percent of the life and health insurer's admitted assets if
(A) that increased amount is invested only in residential mortgage loans;
(B) the life and health insurer has not more than 10 percent of its admitted assets invested in mortgage loans other than residential mortgage loans;
(C) the loan-to-value ratio of each residential mortgage loan does not exceed 60 percent at the time the mortgage loan is qualified under this paragraph and the fair market value is supported by an appraisal not more than two years old prepared by an independent appraiser;
(D) a single mortgage loan qualified under this paragraph does not exceed one-half of one percent of the life and health insurer's admitted assets;
(E) the life and health insurer files with the director a plan that results in a portfolio of residential mortgage loans that is sufficiently geographically diversified, and the director approves the plan; and
(F) the life and health insurer agrees to file annually with the director records that demonstrate that its portfolio of residential mortgage loans is geographically diversified under the plan.
(h) The limitations of 3 AAC 21.231 do not apply to a life and health insurer's acquisition of real estate under (f) of this section. A life and health insurer may not acquire real estate under (f) of this section if, as a result of and after giving effect to the acquisition, the aggregate amount of real estate then held by the life and health insurer under (f) of this section would exceed 10 percent of the life and health insurer's admitted assets, unless the director gives prior written permission, upon finding the acquisition consistent with the purposes of 3 AAC 21.201 - 3 AAC 21.399 as stated in 3 AAC 21.201, for the insurer to acquire additional amounts of real estate under (f) of this section.
(i) For purposes of 3 AAC 21.201 - 3 AAC 21.399, real estate includes a leasehold estate only if it has an unexpired term, including renewal options exercisable at the option of the lessee, extending beyond the scheduled maturity date of the obligation that is secured by a mortgage on the leasehold estate by a period equal to at least 20 percent of the original term of the obligation or 10 years, whichever is greater.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.260 Rating of bonds
Repealed 6/16/82.
3 AAC 21.261 Securities lending, repurchase, reverse repurchase, and dollar roll transactions for a life and health insurer
(a) A life and health insurer may enter into a securities lending, repurchase, reverse repurchase, or dollar roll transaction with a business entity if the life and health insurer's board of directors adopts a written plan that is consistent with the requirements of the written plan in 3 AAC 21.211(a), and that specifies guidelines and objectives to be followed, including
(1) a description of how cash received will be invested or used for general corporate purposes of the life and health insurer;
(2) operational procedures to manage interest rate risk, counterparty default risk, the conditions under which proceeds from a reverse repurchase transaction may be used in the ordinary course of business, and the use of acceptable collateral in a manner that reflects the liquidity needs of the transaction; and
(3) the extent to which the life and health insurer may engage in these transactions.
(b) A life and health insurer shall enter into a written agreement for each transaction authorized in this section other than a dollar roll transaction. The written agreement must require that each transaction terminate not more than one year from the transaction's inception or upon the earlier demand of the life and health insurer. The agreement must be with a business entity counterparty, except that, for a securities lending transaction, the agreement may be with an agent acting on behalf of the life and health insurer if the agent is a qualified business entity and if the agreement
(1) requires the agent to enter into a separate agreement with each counterparty that is consistent with the requirements of this subsection; and
(2) prohibits a securities lending transaction under the agreement with the agent or its affiliates.
(c) A life and health insurer shall use cash received in a transaction under this section for a general corporate purpose of the life and health insurer or shall invest it in accordance with 3 AAC 21.201 - 3 AAC 21.399 and in a manner that recognizes the liquidity needs of the transaction. For as long as the transaction remains outstanding, acceptable collateral received by a life and health insurer in a transaction under this section, either physically or through the book entry systems of the Federal Reserve, Depository Trust Company, Participants Trust Company, or another securities depository of comparable quality in the United States and approved in advance by the director in writing, must be maintained by the life and health insurer through
(1) the possession of the acceptable collateral;
(2) a perfected security interest in the acceptable collateral; or
(3) if the collateral is located in a jurisdiction outside of the United States, the title to or rights of a secured creditor to the acceptable collateral.
(d) The limitations of 3 AAC 21.231 and 3 AAC 21.266 do not apply to a business entity counterparty exposure created by a transaction under this section. For purposes of calculations made to determine compliance with this subsection, a life and health insurer may not give effect to the life and health insurer's future obligation, in the case of a repurchase transaction, to resell a security or, in the case of a reverse repurchase transaction, to repurchase a security. A life and health insurer may not enter into a transaction under this section if, as a result of and after giving effect to the transaction, the aggregate amount of
(1) securities then loaned to, sold to, or purchased from any one business entity counterparty under this section would exceed five percent of the life and health insurer's admitted assets, except that, in calculating the amount sold to or purchased from a business entity counterparty under a repurchase or reverse repurchase transaction, a life and health insurer may give effect to the provisions under a master written agreement with the business entity counterparty that provides for the net settlement of all contracts between the insurer and the counterparty; or
(2) all securities then loaned to, sold to, or purchased from all business entities under this section would exceed 40 percent of the life and health insurer's admitted assets.
(e) A life and health insurer may not engage in a
(1) security lending transaction unless the life and health insurer receives acceptable collateral having a market value as of the transaction date at least equal to 102 percent of the market value of the securities loaned by the life and health insurer in the transaction as of that date; if, at any time, the market value of the acceptable collateral is less than the market value of the loaned securities, the business entity counterparty must be obligated under the transaction to deliver additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral then held in connection with the transaction, is at least equal to 102 percent of the market value of the loaned securities;
(2) reverse repurchase transaction, other than a dollar roll transaction, unless the life and health insurer receives acceptable collateral having a market value as of the transaction date at least equal to 95 percent of the market value of the securities transferred by the life and health insurer in the transaction as of that date; if, at any time, the market value of the acceptable collateral is less than 95 percent of the market value of the securities transferred, the business entity counterparty must be obligated under the transaction to deliver additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral then held in connection with the transaction, is at least equal to 95 percent of the market value of the transferred securities;
(3) dollar roll transaction unless the life and health insurer receives cash in an amount at least equal to the market value of the securities transferred by the life and health insurer in the transaction as of the transaction date; or
(4) repurchase transaction unless the life and health insurer receives as acceptable collateral transferred securities having a market value at least equal to 102 percent of the purchase price paid by the life and health insurer for the securities; if, at any time, the market value of the acceptable collateral is less than 100 percent of the purchase price paid by the life and health insurer, the business entity counterparty must be obligated under the transaction to provide additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral then held in connection with the transaction is at least equal to 102 percent of the purchase price; securities acquired by a life and health insurer in a repurchase transaction may not be sold in a reverse repurchase transaction, loaned in a securities lending transaction, or otherwise pledged.
(f) In this section, "acceptable collateral" has the meaning given in 3 AAC 21.399, except that "acceptable collateral" includes a letter of credit only if it has an expiration date that is beyond the term of the subject transaction.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.266 Foreign investments and foreign currency exposure for a life and health insurer
(a) Subject to the limitations in 3 AAC 21.231, a life and health insurer may acquire, hold, or invest in a foreign investment or engage in an investment practice with a person of or in a foreign jurisdiction, if
(1) the investment is of substantially the same type that a life and health insurer is permitted to acquire, hold, or invest in under 3 AAC 21.201 - 3 AAC 21.399, other than of the type permitted under 3 AAC 21.241; and
(2) as a result of and after giving effect to the investment, the aggregate amount of foreign investments then held by the life and health insurer under this subsection
(A) does not exceed 20 percent of the life and health insurer's admitted assets; and
(B) in a single foreign jurisdiction does not exceed
(i) 10 percent of the life and health insurer's admitted assets if that foreign jurisdiction has a sovereign debt rating of one from the securities valuation office; or
(ii) three percent of the life and health insurer's admitted assets, if that foreign jurisdiction is not one described in (i) of this subparagraph.
(b) Subject to the limitations in 3 AAC 21.231, a life and health insurer may acquire, hold, or make an investment, or engage in an investment practice denominated in foreign currency, regardless of whether the investment is acquired under (a) of this section, or acquire additional foreign currency exposure as a result of the termination or expiration of a hedging transaction with respect to an investment denominated in a foreign currency, if as a result of and after giving effect to the investment, the aggregate amount of investments then held by the life and health insurer under this subsection and denominated in
(1) all foreign currencies does not exceed 10 percent of the life and health insurer's admitted assets; and
(2) the foreign currency of a single foreign jurisdiction does not exceed
(A) 10 percent of the life and health insurer's admitted assets, if that foreign jurisdiction has a sovereign debt rating of one from the securities valuation office; or
(B) three percent of the life and health insurer's admitted assets, if that foreign jurisdiction is not one described in (A) of this paragraph.
(c) An investment will not be considered denominated in a foreign currency if the acquiring life and health insurer enters into one or more contracts in transactions permitted under 3 AAC 21.271 and the business entity counterparty agrees, under the contract or contracts, to exchange all payments made on the foreign currency denominated investment for United States currency at a rate that effectively insulates the investment cash flows against future changes in currency exchange rates during the period the contract or contracts are in effect.
(d) In addition to an investment permitted under (a) or (b) of this section, a life and health insurer, subject to the limitations in 3 AAC 21.231, may acquire a foreign investment respecting a foreign jurisdiction and may acquire an investment denominated in foreign currency of that jurisdiction, if the life and health insurer is authorized to do business in that foreign jurisdiction and has outstanding insurance, annuity, or reinsurance contracts, denominated in foreign currency of that jurisdiction, and issued on lives or risks resident or located in that foreign jurisdiction. An investment made under this subsection in an obligation of a foreign government, political subdivision of a foreign government, or government-sponsored enterprise of a foreign government is not subject to the limitations of 3 AAC 21.231 if the investment carries a securities valuation office rating of one or two. The aggregate amount of investments acquired by the life and health insurer under this subsection may not exceed the greater of
(1) the amount the life and health insurer is required by the law of the foreign jurisdiction to invest in the foreign jurisdiction; or
(2) 115 percent of the amount of the life and health insurer's reserves, net of reinsurance, and other obligations under the contracts on lives or risks resident or located in the foreign jurisdiction.
(e) In addition to an investment permitted under (a) or (b) of this section, a life and health insurer that is not authorized to do business in a foreign jurisdiction may acquire, subject to the limitations in 3 AAC 21.231, a foreign investment respecting a foreign jurisdiction and may acquire, subject to the limitations in 3 AAC 21.231, an investment denominated in foreign currency of that jurisdiction, if the insurer has outstanding insurance, annuity, or reinsurance contracts, denominated in foreign currency of that jurisdiction, and issued on lives or risks resident or located in that foreign jurisdiction. An investment made under this subsection in an obligation of a foreign government, political subdivision of a foreign government, or government-sponsored enterprise of a foreign government is not subject to the limitations of 3 AAC 21.231 if the investment carries a securities valuation office rating of one or two. The aggregate amount of investments acquired by the life and health insurer under this subsection may not exceed 105 percent of the amount of the life and health insurer's reserves, net of reinsurance, and other obligations under the contracts on lives or risks resident or located in the foreign jurisdiction.
(f) For purposes of determining compliance with the limitations, if any, contained in the other provisions of 3 AAC 21.201 - 3 AAC 21.399, a life and health insurer shall aggregate investments permitted to be acquired under this section with investments of the same types made under other provisions of 3 AAC 21.201 - 3 AAC 21.399, and in a similar manner.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.270 Registration of deposited securities
Repealed 6/16/82.
3 AAC 21.271 Derivative transactions for a life and health insurer
(a) A life and health insurer may, directly or indirectly through an investment subsidiary, engage in a derivative transaction under the following conditions:
(1) a life and health insurer may use a derivative instrument to engage in a hedging transaction or in an income generation transaction;
(2) a life and health insurer shall demonstrate to the director the intended hedging characteristics and the ongoing effectiveness of the derivative transaction or combination of the transactions through cash-flow testing or other appropriate analyses as required under 3 AAC 21.213.
(b) A life and health insurer may not enter into a hedging transaction if, as a result of and after giving effect to the transaction, the aggregate
(1) admitted asset value of options, caps, floors, and warrants not attached to another financial instrument purchased and used in hedging transactions exceeds seven and one-half percent of the life and health insurer's admitted assets;
(2) admitted asset value of options, caps, and floors written in hedging transactions exceeds three percent of the life and health insurer's admitted assets; or
(3) potential exposure of collars, swaps, forwards, and futures used in hedging transactions exceeds six and one-half percent of the life and health insurer's admitted assets.
(c) Except as otherwise provided in (d) of this section, a life and health insurer may not enter into an income generation transaction if, as a result of and after giving effect to the transaction, the aggregate admitted asset value of the fixed income assets that are subject to call or that generate the cash flows for payments under caps or floors, the face value of fixed income securities underlying a derivative instrument subject to call, and the amount of the purchase obligations under the puts exceeds 10 percent of the life and health insurer's admitted assets.
(d) A life and health insurer may only enter into income generation transactions of one or more of the following types:
(1) a sale of a covered call option on a
(A) noncallable fixed income security;
(B) callable fixed income security if the option expires by the option's terms before the end of the noncallable period; or
(C) derivative instrument based on a fixed income security;
(2) a sale of a covered call option on an equity security if the life and health insurer
(A) holds the equity security in the life and health insurer's portfolio; or
(B) through the exercise of an option, warrant, or conversion right already owned, has the right to acquire immediately the equity security subject to call during the complete term of the call option sold;
(3) a sale of a covered put on an investment that the life and health insurer is permitted to acquire under 3 AAC 21.201 - 3 AAC 21.399 if the life and health insurer has escrowed, or has entered into a custodian agreement segregating cash or cash equivalents with a market value equal to the amount of the life and health insurer's purchase obligations under the put during the complete term of the put option sold;
(4) a sale of a covered cap or floor if the life and health insurer holds in the life and health insurer's portfolio the investments generating the cash flow to make the required payments under the cap or floor during the complete term that the cap or floor is outstanding.
(e) A life and health insurer shall include all counterparty exposure amounts in determining compliance with the limitations of 3 AAC 21.231.
(f) A replication transaction is not permitted for other than a risk management purpose.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160; am 1/1/2011, Register 196
3 AAC 21.276 Policy loans for a life and health insurer
A life and health insurer may lend to a policyholder on the security of the cash surrender value of the policyholder's policy a sum not exceeding the legal reserve that the life and health insurer is required to maintain on the policy.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.280 Disapproval of securities
Repealed 6/16/82.
3 AAC 21.281 Investment transactions with affiliated or controlling persons for a life and health insurer
(a) Except as provided in this section, a life and health insurer may not, without first fulfilling the obligations imposed under this section,
(1) invest in an otherwise qualifying investment issued by or due from an affiliated party;
(2) purchase from an affiliated party an otherwise qualifying investment; or
(3) use the services of a broker or commissioned sales agent who is an affiliated or controlling person in securing an otherwise qualifying investment.
(b) Before completing an investment activity with or through an affiliated or controlling person or completing a transaction of the type listed in (f) of this section, a life and health insurer shall fully disclose and document in writing to its board of directors and the committee authorized by the board and charged with the supervision or making of the investment or loan involved the material facts concerning the affiliation or circumstances of control. A life and health insurer may not complete an investment activity with or through an affiliated or controlling person unless the board of directors, by specific board action, authorizes the transaction and concludes that the transaction complies with (c) and (d) of this section. The vote of the board authorizing the transaction must be recorded in the minutes on a member-by-member basis and must indicate each vote approving, disapproving, or abstaining on the transaction.
(c) A life and health insurer shall consummate an investment or loan with an affiliated or controlling person at current market transfer prices and under a fee structure and at interest or discount rates that are commercially reasonable in the area in which the transaction occurs.
(d) The life and health insurer's board of directors is responsible for determining that a transfer price is at current market and for determining the commercial reasonableness of the transaction with an affiliated or controlling person. The board of directors may rely on an independent third-party expert in making its determination.
(e) This section does not apply to a policy loan or to a circumstance in which the financial interest of the affiliated or controlling party is only nominal or so remote as not to give rise to a conflict of interest.
(f) A life and health insurer, either alone or in cooperation with one or more persons, may organize or acquire one or more subsidiaries engaged in the following kinds of business:
(1) insurance business authorized by AS 21;
(2) acting as an insurance producer or as an insurance agent for the life and health insurer's parent or for any of the life and health insurer's parent's insurer subsidiaries and controlled affiliates;
(3) investing, reinvesting, or trading in securities for the life and health insurer's own account, or an account of the life and health insurer's parent, a subsidiary of the life and health insurer's parent, an affiliate, or a subsidiary;
(4) management of an investment company subject to or registered under 15 U.S.C. 80a-1 - 80a-64 (Investment Company Act of 1940), including related sales and services;
(5) acting as a broker-dealer subject to or registered under 15 U.S.C. 78a - 78mm (Securities Exchange Act of 1934);
(6) rendering investment advice to a government, government agency, corporation, or other organization or group;
(7) rendering other services related to the operations of an insurance business, including actuarial, loss prevention, safety engineering, data processing, accounting, claims, appraisal, and collection services;
(8) ownership and management of assets that the parent corporation could own or manage;
(9) acting as administrative agent for a governmental instrumentality that is performing an insurance function;
(10) financing an insurance premium, agent, or other form of consumer financing;
(11) any other business activity determined by the director in writing using the standards set out in this section to be reasonably ancillary to an insurance business;
(12) owning a corporation engaged or organized to engage exclusively in one or more of the businesses specified in this section.
(g) A life and health insurer may also
(1) invest in securities described in 3 AAC 21.236 - 3 AAC 21.261 of a subsidiary in an amount that, in the aggregate with all other investments in subsidiaries, does not exceed the lesser of 10 percent of the life and health insurer's assets or 50 percent of the life and health insurer's policyholder surplus if, after the investment, the life and health insurer's policyholder surplus is reasonable in relation to the life and health insurer's outstanding liabilities and adequate to the life and health insurer's financial needs; in calculating the amount of the investment, a life and health insurer shall include the following:
(A) total net money or other consideration expended and all obligations assumed in the acquisition or formation of a subsidiary, including all organizational expenses and contributions to capital and surplus of the subsidiary if represented or not represented by the purchase of capital stock or issuance of other securities;
(B) all amounts expended in acquiring additional securities described in 3 AAC 21.236 - 3 AAC 21.261 and all contributions to the capital or surplus of a subsidiary subsequent to the subsidiary's acquisition or formation;
(2) invest an amount in a security described in 3 AAC 21.236 - 3 AAC 21.261 of a subsidiary engaged or organized to engage exclusively in the ownership and management of assets authorized as an investment for the life and health insurer if that subsidiary agrees to limit the subsidiary's investment in an asset in a way that the investment does not cause the amount of the total investment of the life and health insurer to exceed the limitations specified in (1) of this subsection or in 3 AAC 21.231 - 21.286; for the purpose of this paragraph, the total investment of the life and health insurer includes
(A) a direct investment by the life and health insurer in an asset; and
(B) the life and health insurer's proportionate share of an investment in an asset by a subsidiary of the life and health insurer calculated by multiplying the amount of the subsidiary's investment by the percentage of the ownership in the subsidiary; or
(3) with the prior written approval of the director, invest a greater amount in a security described in 3 AAC 21.236 - 3 AAC 21.261 of a subsidiary if after the investment the insurer's policyholder surplus is reasonable in relation to the life and health insurer's outstanding liabilities and adequate to the life and health insurer's financial needs.
(h) A life and health insurer shall determine if an investment meets the applicable requirements under (g) of this section before the investment is made by calculating the applicable limitations under 3 AAC 21.231 as though the investment had already been made and by taking into account the existing outstanding principal balance on all previous investments under 3 AAC 21.236 - 3 AAC 21.261, calculated at admitted asset value, giving effect to a return of capital invested and not giving effect to dividends.
(i) If a life and health insurer ceases to control a subsidiary, the life and health insurer shall dispose of an investment in the subsidiary made under this section within three years after cessation of control unless, at any time after the investment has been made, the investment meets the requirements for investment under another provision of 3 AAC 21.201 - 3 AAC 21.399 and the life and health insurer has notified the director regarding the application of another provision of 3 AAC 21.201 - 3 AAC 21.399 to the investment.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160; am 11/21/2004, Register 172
3 AAC 21.286 Additional investment authority for a life and health insurer
(a) Solely for the purpose of acquiring an investment that exceeds the quantitative limitations of 3 AAC 21.231 - 3 AAC 21.266, a life and health insurer may acquire, hold, or make an investment or engage in an investment practice described in 3 AAC 21.261. However, under this subsection, the life and health insurer may not acquire, hold, or make an investment or engage in an investment practice described in 3 AAC 21.261 if, as a result of and after giving effect to the transaction, the aggregate amount of investments then held by the life and health insurer under this subsection
(1) would exceed three percent of the life and health insurer's admitted assets; or
(2) as to one limitation in 3 AAC 21.231 - 3 AAC 21.266 would exceed one percent of the life and health insurer's admitted assets.
(b) In addition to the authority provided under (a) of this section, a life and health insurer may acquire, hold, or make an investment of any kind or engage in an investment practice described in 3 AAC 21.261 that is not specifically prohibited by 3 AAC 21.201 - 3 AAC 21.399, without regard to a requirement or limitation of 3 AAC 21.231 - 3 AAC 21.266 if, as a result of and after giving effect to the transaction, the aggregate amount of investments then held under this subsection would not exceed the lesser of
(1) 10 percent of the life and health insurer's admitted assets; or
(2) 75 percent of the life and health insurer's capital and surplus.
(c) In addition to an investment acquired under (a) and (b) of this section, a life and health insurer may acquire, hold, or make an investment of any kind or engage in an investment practice described in 3 AAC 21.261 that is not specifically prohibited by 3 AAC 21.201 - 3 AAC 21.399 without regard to the limitations of 3 AAC 21.231 - 3 AAC 21.266 if
(1) the director grants prior approval;
(2) the life and health insurer demonstrates that its investment is being made in a prudent manner and that the additional amount will be invested in a prudent manner; and
(3) as a result of and after giving effect to the transaction, the aggregate amount of investments then held by the life and health insurer under this subsection does not exceed the greater of
(A) 25 percent of the life and health insurer's capital and surplus; or
(B) 100 percent of capital and surplus less 10 percent of the life and health insurer's admitted assets.
(d) A life and health insurer may not acquire, hold, or make an investment or engage in an investment practice under this section if, as a result of and after giving effect to the transaction, the aggregate amount of all investments in any one person then held by the life and health insurer under this section would exceed three percent of the life and health insurer's admitted assets.
(e) A life and health insurer may not acquire, hold, or make an investment under this section that is prohibited under 3 AAC 21.216 or not permitted under 3 AAC 21.271 or acquired as an additional derivative instrument under 3 AAC 21.271.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.290 Deposit value of securities
Repealed 6/16/82.
3 AAC 21.300 Replacement of securities
Repealed 6/16/82.
3 AAC 21.310 Responsibility for loss due to transfers
Repealed 6/16/82.
3 AAC 21.320 Reserve requirements
(a) Subject to all other limitations and requirements of 3 AAC 21.201 - 3 AAC 21.399, a property and casualty insurer or an accident and health insurer shall maintain an amount at least equal to 100 percent of adjusted loss reserves and loss adjustment expense reserves, 100 percent of adjusted unearned premium reserves, and 100 percent of policy and contract reserves required by AS 21.18 in
(1) cash and cash equivalents;
(2) a bank certificate of deposit, subject to review by the director; if the director determines that the amount of the certificate of deposit purchased by an insurer in any one bank is excessive based on a finding that the diversification of the insurer's investment holdings is inadequate, the director will require the insurer to liquidate that portion found to be excessive;
(3) a share or savings account of a savings and loan or building and loan association, to the extent that the account is insured by the Federal Deposit Insurance Corporation;
(4) a high-grade investment or medium-grade investment that qualifies under 3 AAC 21.330 or 3 AAC 21.335;
(5) an equity interest that qualifies under 3 AAC 21.340 and that is traded on a qualified exchange;
(6) an investment of the type set out in 3 AAC 21.360 if the investment is rated in the highest rating category by a nationally recognized statistical rating organization recognized by the securities valuation office for rating foreign jurisdictions and if any foreign currency exposure is effectively hedged through the maturity date of the investment;
(7) a qualifying investment of the type set out in (4), (5), or (6) of this subsection that is acquired, held, or invested in under 3 AAC 21.375;
(8) interest and dividends receivable on a qualifying investment of the type set out in (1) - (7) of this subsection; or
(9) reinsurance recoverable on paid losses.
(b) For purposes of determining the amount of assets to be maintained under (a) of this section,
(1) the calculation of adjusted loss reserves and loss adjustment expense reserves, adjusted unearned premium reserves, and policy and contract reserves required by AS 21.18 must be based on the amounts reported as of the date of the most recently filed financial statement under AS 21.09.200, AS 21.09.205, and 3 AAC 21.400;
(2) with unpaid amounts determined net of anticipated salvage and subrogation and gross of any discount, adjusted loss reserves and loss adjustment expense reserves must be equal to the sum of the amounts derived by
(A) identifying each amount reported by the insurer as losses and loss adjustment expenses unpaid for each accident year for each individual line of business;
(B) multiplying each amount identified in (A) of this paragraph by the discount factor that is applicable to the line of business and accident year under 26 U.S.C. 846 (Internal Revenue Code) for the calendar year that corresponds to the insurer's most recently filed annual financial statement under AS 21.09.200; and
(C) from the product of the calculation in (B) of this paragraph, subtracting accrued retrospective premiums discounted by an average discount factor; the average discount factor is calculated by dividing the sum of the discounted losses and loss adjustment expenses unpaid, as calculated in (B) of this paragraph, by the sum of the insurer's loss and loss adjustment expense reserves determined before discounting, as identified in (A) of this paragraph;
(3) adjusted unearned premium reserves must be equal to the amount reported by the insurer, as of the date of the most recently filed financial statement under AS 21.09.200, AS 21.09.205, and 3 AAC 21.400, as unearned premium reserves minus the admitted asset amounts reported by the insurer as
(A) premiums and agents' balances in the course of collection, accident and health premiums due and unpaid, and uncollected premiums for accident and health premiums;
(B) premiums, agents' balances, and installments booked but deferred and not yet due; and
(C) bills receivable, taken for premium; and
(4) policy and contract reserves required by AS 21.18 must also include the amounts required by National Association of Insurance Commissioners accounting practices and procedures manual for additional or contingency reserves and for reserves in addition to loss reserves, loss adjustment expense reserves, and unearned premium reserves.
(c) A property and casualty insurer or accident and health insurer shall supplement the annual financial statement required by AS 21.09.200 with a reconciliation and summary of the insurer's assets and reserve requirements as required in (a) and (b) of this section. A reconciliation and summary showing that an insurer's assets as required in (a) and (b) of this section are greater than or equal to its undiscounted reserves referred to in (a) and (b) of this section will be considered sufficient to satisfy this requirement. Upon prior notification, and as the director determines necessary to confirm continued compliance with this section, the director will require an insurer to submit a reconciliation and summary with a quarterly statement filed under AS 21.09.205 and 3 AAC 21.400 during the calendar year.
(d) If a property and casualty or accident and health insurer has assets and reserves that do not comply with (a) and (b) of this section, the insurer shall notify the director immediately of the amount by which the reserve requirements exceed the annual admitted asset value of the qualifying assets, explain why the deficiency exists, and, within 30 days after the date of the notice, propose a plan of action to remedy the deficiency.
(e) If the director determines that a property and casualty insurer or accident and health insurer is not in compliance with (a) and (b) of this section, the director will require the insurer to eliminate the condition causing the noncompliance within a specified time from the date the notice of the director's requirement is mailed or delivered to the insurer. If an insurer fails to comply with the director's requirement, the insurer will be considered to be in hazardous financial condition, and the director will take one or more of the actions authorized by AS 21 as to an insurer in a hazardous financial condition.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160; am 11/21/2004, Register 172
3 AAC 21.325 General single issuer diversification, medium-grade investments and lower-grade investments, and Canadian investments for a property and casualty insurer
(a) Except as otherwise provided in 3 AAC 21.201 - 3 AAC 21.399, a property and casualty insurer may not acquire, hold, or invest in, directly or indirectly through an investment subsidiary, an investment under 3 AAC 21.201 - 3 AAC 21.399 if, as a result of and after giving effect to the investment, the property and casualty insurer would hold more than five percent of its admitted assets in investments of all kinds issued, assumed, accepted, insured, or guaranteed by a single person. However,
(1) the five percent limitation of this subsection does not apply to the aggregate amounts insured by a single financial guaranty insurer with the highest rating issued by a nationally recognized statistical rating organization; and
(2) an asset-backed security is not subject to the five percent limitation of this subsection, except that an insurer may not acquire, hold, or invest in an asset-backed security if, as a result of and after giving effect to the investment, the aggregate amount of asset-backed securities then held by the property and casualty insurer and secured by or evidencing an interest in a single asset or single pool of assets held by a trust or other business entity would exceed the property and casualty insurer's five percent limitation.
(b) A property and casualty insurer may not acquire, hold, or invest in, directly or indirectly through an investment subsidiary, an investment under 3 AAC 21.330, 3 AAC 21.345, or 3 AAC 21.360, or counterparty exposure under 3 AAC 21.365(e) if, as a result of and after giving effect to the investment the aggregate amount of
(1) medium-grade and lower-grade investments then held by the property and casualty insurer would exceed 20 percent of the property and casualty insurer's admitted assets;
(2) lower grade investments then held by the property and casualty insurer would exceed 10 percent of the property and casualty insurer's admitted assets;
(3) investments then held by the property and casualty insurer and rated five or six by the securities valuation office would exceed five percent of the property and casualty insurer's admitted assets;
(4) investments then held by the property and casualty insurer and rated six by the securities valuation office would exceed one percent of the property and casualty insurer's admitted assets;
(5) medium-grade and lower-grade investments then held by the property and casualty insurer that receive as cash income less than the equivalent yield for United States Treasury issues with a comparative average life would exceed one percent of the property and casualty insurer's admitted assets;
(6) medium-grade and lower-grade investments then held by the property and casualty insurer that are issued, assumed, guaranteed, accepted, or insured by one person or asset-backed securities that are secured by or evidencing an interest in a single asset or pool of assets would exceed one percent of the property and casualty insurer's admitted assets; or
(7) lower-grade investments then held by the property and casualty insurer that are issued, assumed, guaranteed, accepted, or insured by one person or asset-backed securities that are secured by or evidencing an interest in a single asset or pool of assets would exceed one-half of one percent of the property and casualty insurer's admitted assets.
(c) A property and casualty insurer may not acquire, hold, or invest in, directly or indirectly through an investment subsidiary, a Canadian investment authorized by 3 AAC 21.201 - 3 AAC 21.399 if, as a result of and after giving effect to the investment, the aggregate amount of Canadian investments then held by the property and casualty insurer would exceed 40 percent of the property and casualty insurer's admitted assets, or if the aggregate amount of Canadian investments then held by the property and casualty insurer that are not acquired under 3 AAC 21.330 would exceed 25 percent of the property and casualty insurer's admitted assets. However, for a property and casualty insurer that is authorized to do business in Canada or that has outstanding insurance, annuity, or reinsurance contracts, denominated in Canadian currency, and issued on lives or risks resident or located in Canada, the limitations of this subsection shall be increased by the greater of
(1) the amount the property and casualty insurer is required by Canadian law to invest in Canada or to be denominated in Canadian currency; or
(2) 125 percent of the amount of the property and casualty insurer's reserves and other obligations under contracts on lives or risks resident or located in Canada.
(d) Except as otherwise provided in 3 AAC 21.201 - 3 AAC 21.399, this section applies to each investment and investment practice of a property and casualty insurance company subject to 3 AAC 21.201 - 3 AAC 21.399.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.330 Rated credit instruments for a property and casualty insurer
(a) Notwithstanding 3 AAC 21.325(a), a property and casualty insurer may
(1) acquire, hold, or invest in a rated credit instrument that is issued, assumed, guaranteed, or insured by
(A) the United States;
(B) a government-sponsored enterprise of the United States if the instrument of the government-sponsored enterprise is assumed, guaranteed, or insured by the United States or is otherwise backed or supported by the full faith and credit of the United States;
(C) Canada; or
(D) a government-sponsored enterprise of Canada, if the instrument of the government-sponsored enterprise is assumed, guaranteed, or insured by Canada or is otherwise backed or supported by the full faith and credit of Canada; and
(2) acquire a rated credit instrument, other than an asset-backed security, if the rated credit instrument is
(A) issued by a government money market mutual fund, a class one money market mutual fund, or a class one bond mutual fund;
(B) issued, assumed, guaranteed, or insured by a government-sponsored enterprise of the United States other than those eligible under (1)(A) or (B) of this subsection;
(C) issued, assumed, guaranteed, or insured by a state, and if the instrument is a general obligation of the state; or
(D) issued by a multilateral development bank.
(b) A property and casualty insurer may not acquire an instrument
(1) under (a)(1)(C) or (D) of this section if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the property and casualty insurer under this subsection would exceed 40 percent of the property and casualty insurer's admitted assets; or
(2) of any one fund, any one enterprise or entity, or any one state under (a)(2) of this section if, as a result of and after giving effect to the investment, the aggregate amount of investments then held in any one fund, enterprise, entity, or state under (a)(2) of this section would exceed 10 percent of the property and casualty insurer's admitted assets.
(c) A property and casualty insurer may acquire a preferred stock that is not a foreign investment and that meets the requirements for a rated credit instrument in 3 AAC 21.395 if, as a result of and after giving effect to the investment, the aggregate amount of preferred stocks then held by the property and casualty insurer under this subsection
(1) does not exceed 20 percent of the property and casualty insurer's admitted assets; and
(2) that are not sinking fund stocks or not rated P1 or P2 by the securities valuation office does not exceed 10 percent of the property and casualty insurer's admitted assets.
(d) In addition to an investment eligible under (a) - (c) of this section, a property and casualty insurer may acquire, hold, or invest in a rated credit instrument that is not a foreign investment. A property and casualty insurer may not acquire an instrument under this subsection if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the property and casualty insurer under this subsection would exceed 40 percent of the property and casualty insurer's admitted assets.
(e) A property and casualty insurer may not acquire a special rated credit instrument under this section if, as a result of and after giving effect to the investment, the aggregate amount of special rated credit instruments then held by the property and casualty insurer would exceed five percent of the property and casualty insurer's admitted assets.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.020 AS 21.18.010; AS 21.18.170; AS 21.21.255 AS 21.18.030; AS 21.21.010; AS 21.21.420
- Eff. 12/28/2001, Register 160
3 AAC 21.335 Insurer investment pools for a property and casualty insurer
(a) A property and casualty insurer may acquire, hold, or make an investment in an investment pool that invests only in investments
(1) that a property and casualty insurer may acquire under 3 AAC 21.201 - 3 AAC 21.399, if the property and casualty insurer's proportionate interest in the amount invested in these investments does not exceed the quantitative limitations of 3 AAC 21.201 - 3 AAC 21.399; or
(2) described in (b) of this section.
(b) For purposes of (a)(2) of this section, a property and casualty insurer may acquire, hold, or make an investment in an investment pool that invests only in
(1) an obligation that
(A) is rated one or two by the securities valuation office, or has an equivalent rating by a nationally recognized statistical rating organization; an obligation without a one or two rating or an equivalent rating must be issued by an issuer whose outstanding obligations are rated one or two by the securities valuation office, or whose obligations have an equivalent rating by a nationally recognized statistical rating organization; and
(B) has a remaining maturity of
(i) 397 days or less or a put that entitles the holder to receive the principal amount of the obligation that may be exercised through maturity at specified intervals not exceeding 397 days; or
(ii) three years or less and a floating interest rate that resets at least quarterly on the basis of a short term index of federal funds, of the prime rate, of treasury bills, of the London InterBank Offered Rate (LIBOR), or of commercial paper, and is not subject to a maximum limit if the obligations do not have an interest rate that varies inversely to market interest rate changes;
(2) a government money market mutual fund or class one money market mutual fund; or
(3) a security lending, repurchase, or reverse repurchase transaction that meets all the requirements of 3 AAC 21.355(a) - (c) and (e).
(c) A property and casualty insurer may not acquire, hold, or make an investment in an investment pool if the investment pool
(1) acquires a security issued, assumed, guaranteed, or insured by the property and casualty insurer or an affiliate of the property and casualty insurer;
(2) borrows money or incurs indebtedness for borrowed money, except as part of a securities lending or reverse repurchase transaction that meets all the requirements of 3 AAC 21.355(a) - (c) and (e); or
(3) permits the aggregate value of securities loaned or sold to, purchased from, or invested in any one business entity under this section to exceed 10 percent of the total assets of the investment pool.
(d) The limitations of 3 AAC 21.325(a) do not apply to a property and casualty insurer's investment in an investment pool. However, a property and casualty insurer may not acquire an investment in an investment pool under this section if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the property and casualty insurer under this section in
(1) any one investment pool would exceed 10 percent of the property and casualty insurer's admitted assets;
(2) all investment pools investing in investments permitted under (a)(1) of this section would exceed 25 percent of the property and casualty insurer's admitted assets; or
(3) all investment pools would exceed 40 percent of the property and casualty insurer's admitted assets.
(e) A property and casualty insurer may acquire, hold, or make an investment in an investment pool if the manager of the investment pool
(1) is organized under the laws of the United States or a state and designated as the pool manager in a pooling agreement;
(2) is
(A) the property and casualty insurer, an affiliated insurer, a business entity affiliated with the property and casualty insurer, a qualified bank, or a business entity registered under 15 U.S.C. 80b-l - 80b-21 (Investment Advisors Act of 1940);
(B) in the case of a reciprocal property and casualty insurer or interinsurance exchange, its attorney-in-fact; or
(C) in the case of a United States branch of an alien property and casualty insurer, its United States manager or an affiliate or subsidiary of its United States manager;
(3) compiles and maintains detailed accounting records
(A) setting out the cash receipts and disbursements reflecting each participant's proportionate investment in the investment pool;
(B) describing completely each underlying asset of the investment pool, including the amount, interest rate, and maturity date, if any, of each asset; and
(C) allowing third parties, on a daily basis, to verify each participant's investment in the investment pool; and
(4) maintains the assets of the investment pool in one or more accounts, in the name of or on behalf of the investment pool, under a custody agreement with a qualified bank; the custody agreement must
(A) state and recognize the claims and rights of each participant;
(B) acknowledge that the underlying assets of the investment pool are held solely for the benefit of each participant in proportion to the aggregate amount of each participant's investments in the investment pool; and
(C) contain an agreement that the underlying assets of the investment pool may not be commingled with the general assets of the custodian qualified bank or any other person.
(f) The pooling agreement for each investment pool must be in writing and must provide that
(1) at all times, 100 percent of the interests in the investment pool shall be held by
(A) a property and casualty insurer or an affiliated insurer of the property and casualty insurer, except as provided in (B) and (C) of this paragraph;
(B) if the investment pool invests only in investments permitted under (a)(2) and (b) of this section, a property and casualty insurer and a
(i) subsidiary or affiliate of the property and casualty insurer; or
(ii) pension or profit sharing plan of a property and casualty insurer, or of a subsidiary or affiliate of the property and casualty insurer; or
(C) if the property and casualty insurer is the United States branch of an alien property and casualty insurer, an affiliate or subsidiary of the alien insurer's United States manager;
(2) the underlying assets of the investment pool may not be commingled with the general assets of the pool manager or any other person;
(3) in proportion to the aggregate amount of each pool participant's interest in the investment pool,
(A) each participant owns an undivided interest in the underlying assets of the investment pool; and
(B) the underlying assets of the investment pool are held solely for the benefit of each participant;
(4) a participant, or in the event of the participant's insolvency, bankruptcy, or receivership, its trustee, receiver, or other successor in interest, may withdraw all or any portion of its investment from the investment pool under the terms of the pooling agreement;
(5) withdrawals may be made on demand without penalty or other assessment on any business day, but settlement of funds must occur within a reasonable and customary period, not to exceed five business days, following the demand; in each case, distributions under this paragraph must be calculated net of all then applicable fees and expenses of the investment pool;
(6) the pool manager shall distribute to a participant, at the discretion of the pool manager,
(A) in cash, the then fair market value of the participant's pro rata share of each underlying asset of the investment pool;
(B) in kind, a pro rata share of each underlying asset; or
(C) in a combination of cash and in-kind distributions, a pro rata share in each underlying asset; and
(7) the pool manager shall make the records of the investment pool available for inspection by the director.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.340 Equity interests for a property and casualty insurer
(a) A property and casualty insurer may acquire, hold, or invest in an equity interest in a business entity organized under the laws of a domestic jurisdiction.
(b) A property and casualty insurer may not acquire an investment under this section if, as a result of and after giving effect to the investment, the aggregate amount of investments then held by the property and casualty insurer under this section would exceed the greater of 25 percent of the property and casualty insurer's admitted assets or 100 percent of its policyholder surplus.
(c) A property and casualty insurer may not acquire an investment under this section that the property and casualty insurer may acquire under 3 AAC 21.350.
(d) A property and casualty insurer may not short sell equity investments unless the property and casualty insurer covers the short sale by owning the equity investment or an unrestricted right to the equity instrument exercisable within six months after the short sale.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.345 Tangible personal property under lease for a property and casualty insurer
(a) Subject to the requirements in (b) of this section, a property and casualty insurer may acquire, hold, or invest in tangible personal property or an equity interest located or used wholly or in part within a domestic jurisdiction either directly or indirectly through a limited partnership interest or general partnership interest not otherwise prohibited by 3 AAC 21.216, a joint venture, stock of an investment subsidiary or membership interest in a limited liability company, a trust certificate, or another similar instrument.
(b) A property and casualty insurer may acquire, hold, or invest in an investment under (a) of this section only if the
(1) property is subject to a lease or other agreement with a person whose rated credit instruments would be eligible to be acquired by the property and casualty insurer under 3 AAC 21.330 in the amount of the purchase price of the personal property; and
(2) lease or other agreement described in (1) of this subsection provides the property and casualty insurer the right to receive rental, purchase, or other fixed payments for the use or purchase of the property, and the aggregate value of the payments, together with the estimated residual value of the property at the end of its useful life and the estimated tax benefit to the property and casualty insurer resulting from ownership of the property, is adequate to return the cost of the property and casualty insurer's investment in the property, plus a return considered adequate by the property and casualty insurer.
(c) The property and casualty shall compute the amount of each investment under this section on the basis of the out-of-pocket purchase price and applicable related expenses paid by the property and casualty insurer for the investment, net of each borrowing made to finance the purchase price and expenses, to the extent the borrowing is without recourse to the property and casualty insurer.
(d) A property and casualty insurer may not acquire an investment under this section if, as a result of and after giving effect to the investment, the aggregate amount of all investments then held by the property and casualty insurer under this section would exceed
(1) two percent of the property and casualty insurer's admitted assets; or
(2) one-half of one percent of the property and casualty insurer's admitted assets as to any single item of tangible personal property.
(e) For purposes of determining compliance with the limitations of 3 AAC 21.325, a property and casualty insurer shall aggregate all investments acquired under this section with those acquired under 3 AAC 21.330, and each lessee of the property under a lease referred to in this section will be considered the issuer of an obligation in the amount of the investment of the property and casualty insurer in the property determined as provided in (c) of this section.
(f) This section does not apply to a tangible personal property lease arrangement between a property and casualty insurer and its subsidiaries and affiliates under a cost-sharing arrangement or agreement permitted under AS 21.22.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.350 Mortgage loans and real estate for a property and casualty insurer
(a) A property and casualty insurer may acquire, hold, or invest in an obligation secured by a mortgage on real estate situated within a domestic jurisdiction either directly or indirectly through a limited partnership interest or general partnership interest not otherwise prohibited by 3 AAC 21.216, a joint venture, stock of an investment subsidiary or a membership interest in a limited liability company, a trust certificate, or another similar instrument. A property and casualty insurer may not acquire, hold, or invest in a mortgage loan that is secured by other than a first lien unless the property and casualty insurer is the holder of the first lien. An obligation held by a property and casualty insurer and any obligation with an equal lien priority may not, at the time of acquisition of the obligation, exceed
(1) 90 percent of the fair market value of the real estate if the mortgage loan is secured by a purchase money mortgage or like security received by the property and casualty insurer upon disposition of the real estate;
(2) 80 percent of the fair market value of the real estate if the mortgage loan requires immediate scheduled payment in periodic installments of principal and interest, has an amortization period of 30 years or less, and has periodic payments made no less frequently than annually, subject to the following:
(A) each periodic payment must be sufficient to ensure that, at all times, the outstanding principal balance of the mortgage loan will not be greater than the outstanding principal balance would be under a mortgage loan with the same original principal balance, with the same interest rate and requiring equal payments of principal and interest with the same frequency over the same amortization period;
(B) a mortgage loan permitted under this paragraph is permitted notwithstanding that the loan provides for a payment of the principal balance before the end of the period of amortization of the loan;
(C) for a residential mortgage loan, the 80 percent limitation may be increased to 97 percent if acceptable private mortgage insurance has been obtained; or
(3) 75 percent of the fair market value of the real estate for a mortgage loan that does not meet the requirements of (1) or (2) of this subsection.
(b) For purposes of (a) of this section, the amount of an obligation required to be included in the calculation of the loan-to-value ratio may be reduced to the extent the obligation is insured by the United States Department of Housing and Urban Development, Federal Housing Administration or guaranteed by the United States Secretary of Veterans Affairs for the United States, or its successor.
(c) A mortgage loan that is held by a property and casualty insurer under 3 AAC 21.206(f) or acquired under this section and that is restructured in a manner that meets the requirements of a restructured mortgage loan in accordance with the National Association of Insurance Commissioners accounting practices and procedures manual continues to qualify as a mortgage loan under 3 AAC 21.201 - 3 AAC 21.399.
(d) A credit lease transaction that does not qualify for investment under 3 AAC 21.330 need not comply with a requirement of(a) of this section if
(1) it includes a loan amortized over the initial fixed lease term at least in an amount sufficient so that the loan balance at the end of the lease term does not exceed the original appraised value of the real estate;
(2) the lease payments cover or exceed the total debt service over the life of the loan;
(3) a tenant or its affiliated entity, whose rated credit instruments are rated one or two by the securities valuation office or have an equivalent rating from a nationally recognized statistical rating organization, has a full faith and credit obligation to make the lease payments;
(4) the property and casualty insurer holds or is the beneficial holder of a first lien mortgage on the real estate;
(5) the expenses of the real estate, other than exterior, structural, parking, heating, ventilation, and air conditioning replacement expenses, are passed through to the tenant, unless annual escrow contributions from cash flows derived from the lease payments cover the expense shortfall; and
(6) a perfected assignment exists of the rent due under the lease to or for the benefit of the property and casualty insurer.
(e) A property and casualty insurer may acquire, manage, and dispose of real estate situated in a domestic jurisdiction either directly or indirectly through a limited partnership interest or general partnership interest not otherwise prohibited in 3 AAC 21.216, a joint venture, the stock of an investment subsidiary, a membership interest in a limited liability company, a trust certificate, or another similar instrument, subject to the following:
(1) the real estate must be income-producing or intended for improvement or development for an investment purpose under an existing plan of improvement or development, in which case the real estate is considered to be income-producing;
(2) the real estate may be subject to a mortgage, lien, or other encumbrance, the amount of which must be deducted, to the extent that the obligations secured by the mortgage, lien, or encumbrance is without recourse to the property and casualty insurer, from the amount of the investment of the property and casualty insurer in the real estate for purposes of determining compliance with (g)(2) and (3) of this section.
(f) A property and casualty insurer may acquire, manage, and dispose of real estate for the convenient accommodation of the business operations of the property and casualty insurer or its affiliates. For purposes of this subsection,
(1) real estate acquired may
(A) include excess space for rent to others if the excess space, valued at its fair market value, would otherwise be a permitted investment under (e) of this section and is so qualified by the property and casualty insurer; and
(B) be subject to a mortgage, lien, or other encumbrance, the amount of which must be deducted, to the extent that the obligation secured by the mortgage, lien, or encumbrance is without recourse to the insurer, from the amount of the investment of the property and casualty in the real estate for purposes of determining compliance with (h) of this section; and
(2) business operations
(A) include home office, branch office, and field office operations; and
(B) do not include operations on that portion of real estate used for the direct provision of health care services by a property and casualty insurer whose insurance premiums and reserves required by AS 21.18 for accident and health insurance constitute at least 95 percent of total premium considerations or total reserves required by AS 21.18, respectively; a property and casualty insurer may acquire real estate used for the direct provision of health care services under (e) of this section.
(g) A property and casualty insurer may not acquire an investment
(1) under (a) - (d) of this section if, as a result of and after giving effect to the investment, the aggregate amount of all investments then held by the property and casualty insurer under (a) - (d) of this section would exceed
(A) one percent of the property and casualty insurer's admitted assets in mortgage loans covering any one secured location;
(B) one-quarter of one percent of the property and casualty insurer's admitted assets in construction loans covering any one secured location; or
(C) one percent of the property and casualty insurer's admitted assets in construction loans in the aggregate;
(2) under (e) of this section if, as a result of and after giving effect to the investment and any outstanding guarantees made by the property and casualty insurer in connection with the investment, the aggregate amount of investments then held by the property and casualty insurer under (e) of this section plus the guarantees then outstanding would exceed
(A) one percent of the property and casualty insurer's admitted assets in one parcel or group of contiguous parcels of real estate; however, the limitation in this subparagraph does not apply to that portion of real estate used for the direct provision of health care services by a property and casualty insurer whose insurance premiums and reserves required by AS 21.18 for accident and health insurance constitute at least 95 percent of total premium considerations or total reserves required by AS 21.18, respectively; for purposes of this subparagraph, real estate used for the direct provision of health care services includes hospitals, medical clinics, medical professional buildings, or other health facilities used for the purpose of providing health services;
(B) the lesser of 10 percent of the property and casualty insurer's admitted assets or 40 percent of the property and casualty insurer's policyholder surplus; or
(C) for a property and casualty insurer whose insurance premiums and reserves required by AS 21.18 for accident and health insurance constitute at least 95 percent of total premium considerations or total reserves required by AS 21.18, respectively, the lesser of 15 percent of the property and casualty insurer's admitted assets or 40 percent of the property and casualty insurer's policyholder surplus; or
(3) under (a) - (e) of this section if, as a result of and after giving effect to the investment and any guarantees the property and casualty insurer has made in connection with the investment, the aggregate amount of all investments then held by the property and casualty insurer under (a) - (e) of this section plus the guarantees then outstanding would exceed 25 percent of the property and casualty insurer's admitted assets.
(h) The limitations of 3 AAC 21.325 do not apply to a property and casualty insurer's acquisition of real estate under (f) of this section. A property and casualty insurer may not acquire real estate under (f) of this section if, as a result of and after giving effect to the acquisition, the aggregate amount of real estate then held by the property and casualty insurer under (f) of this section would exceed 10 percent of the property and casualty insurer's admitted assets, unless the director gives prior written permission, upon finding the acquisition consistent with the purposes of 3 AAC 21.201 - 3 AAC 21.399 as stated in 3 AAC 21.201 for the insurer to acquire additional amounts of real estate under (f) of this section.
(i) For purposes of 3 AAC 21.201 - 3 AAC 21.399, real estate includes a leasehold estate only if it has an unexpired term, including renewal options exercisable at the option of the lessee, extending beyond the scheduled maturity date of the obligation that is secured by a mortgage on the leasehold estate by a period equal to at least 20 percent of the original term of the obligation or 10 years, whichever is greater.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.355 Securities lending, repurchase, reverse repurchase, and dollar roll transactions for a property and casualty insurer
(a) A property and casualty insurer may enter into a securities lending, repurchase, reverse repurchase, or dollar roll transaction with a business entity if the property and casualty insurer's board of directors adopts a written plan that is consistent with the requirements of the written plan in 3 AAC 21.211(a), and that specifies guidelines and objectives to be followed, including
(1) a description of how cash received will be invested or used for general corporate purposes of the property and casualty insurer;
(2) operational procedures to manage interest rate risk, counterparty default risk, the conditions under which proceeds from a reverse repurchase transaction may be used in the ordinary course of business, and the use of acceptable collateral in a manner that reflects the liquidity needs of the transaction; and
(3) the extent to which the property and casualty insurer may engage in these transactions.
(b) A property and casualty insurer shall enter into a written agreement for each transaction authorized in this section other than a dollar roll transaction. The written agreement must require that each transaction terminate not more than one year from the transaction's inception or upon the earlier demand of the property and casualty insurer. The agreement must be with a business entity counterparty, except that, for a securities lending transaction, the agreement may be with an agent acting on behalf of the property and casualty insurer if the agent is a qualified business entity and if the agreement
(1) requires the agent to enter into a separate agreement with each counterparty that is consistent with the requirements of this subsection; and
(2) prohibits a securities lending transaction under the agreement with the agent or its affiliates.
(c) A property and casualty insurer shall use cash received in a transaction under this section for a general corporate purpose of the property and casualty insurer or shall invest it in accordance with 3 AAC 21.201 - 3 AAC 21.399 and in a manner that recognizes the liquidity needs of the transaction. For as long as the transaction remains outstanding, acceptable collateral received by a property and casualty insurer in a transaction under this section, either physically or through the book entry systems of the Federal Reserve, Depository Trust Company, Participants Trust Company, or another securities depository of comparable quality in the United States and approved in advance by the director in writing, must be maintained by the property and casualty insurer through
(1) the possession of the acceptable collateral;
(2) a perfected security interest in the acceptable collateral; or
(3) if the collateral is located in a jurisdiction outside of the United States, the title to or rights of a secured creditor to the acceptable collateral.
(d) The limitations of 3 AAC 21.325 and 3 AAC 21.360 do not apply to a business entity counterparty exposure created by a transaction under this section. For purposes of calculations made to determine compliance with this subsection, a property and casualty insurer may not give effect to the property and casualty insurer's future obligation, in the case of a repurchase transaction, to resell a security or, in the case of a reverse repurchase transaction, to repurchase a security. A property and casualty insurer may not enter into a transaction under this section if, as a result of and after giving effect to the transaction, the aggregate amount of
(1) securities then loaned to, sold to, or purchased from any one business entity counterparty under this section would exceed five percent of the property and casualty insurer's admitted assets, except that, in calculating the amount sold to or purchased from a business entity counterparty under a repurchase or reverse repurchase transaction, a property and casualty insurer may give effect to the provisions under a master written agreement with the business entity counterparty that provides for the net settlement of all contracts between the insurer and the counterparty; or
(2) all securities then loaned to, sold to, or purchased from all business entities under this section would exceed 40 percent of the property and casualty insurer's admitted assets; however, the limitation of this paragraph does not apply to reverse repurchase transactions if the borrowing is used only to ensure operational liquidity under an emergency investment plan that is necessitated by an officially declared catastrophe and that is approved by the director.
(e) A property and casualty insurer may not engage in a
(1) security lending transaction unless the property and casualty insurer receives acceptable collateral having a market value as of the transaction date at least equal to 102 percent of the market value of the securities loaned by the property and casualty insurer in the transaction as of that date; if, at any time, the market value of the acceptable collateral is less than the market value of the loaned securities, the business entity counterparty must be obligated under the transaction to deliver additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral then held in connection with the transaction, is at least equal to 102 percent of the market value of the loaned securities;
(2) reverse repurchase transaction, other than a dollar roll transaction, unless the property and casualty insurer receives acceptable collateral having a market value as of the transaction date at least equal to 95 percent of the market value of the securities transferred by the property and casualty insurer in the transaction as of that date; if, at any time, the market value of the acceptable collateral is less than 95 percent of the market value of the securities transferred, the business entity counterparty must be obligated under the transaction to deliver additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral then held in connection with the transaction, is at least equal to 95 percent of the market value of the transferred securities;
(3) dollar roll transaction unless the property and casualty insurer receives cash in an amount at least equal to the market value of the securities transferred by the property and casualty insurer in the transaction as of the transaction date; or
(4) repurchase transaction unless the property and casualty insurer receives as acceptable collateral transferred securities having a market value at least equal to 102 percent of the purchase price paid by the property and casualty insurer for the securities; if, at any time, the market value of the acceptable collateral is less than 100 percent of the purchase price paid by the property and casualty insurer, the business entity counterparty must be obligated under the transaction to provide additional acceptable collateral, the market value of which, together with the market value of all acceptable collateral then held in connection with the transaction is at least equal to 102 percent of the purchase price; securities acquired by a property and casualty insurer in a repurchase transaction may not be sold in a reverse repurchase transaction, loaned in a securities lending transaction, or otherwise pledged.
(f) In this section, "acceptable collateral" has the meaning given in 3 AAC 21.399, except that "acceptable collateral" includes a letter of credit only if it has an expiration date that is beyond the term of the subject transaction.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.360 Foreign investments and foreign currency exposure for a property and casualty insurer
(a) Subject to the limitations in 3 AAC 21.325, a property and casualty insurer may acquire, hold, or invest in a foreign investment or engage in an investment practice with a person of or in a foreign jurisdiction, if
(1) the investment is of substantially the same type that a property and casualty insurer is permitted to acquire, hold, or invest in under 3 AAC 21.201 - 3 AAC 21.399, other than of the type permitted under 3 AAC 21.335; and
(2) as a result of and after giving effect to the investment, the aggregate amount of foreign investments then held by the property and casualty insurer under this subsection
(A) does not exceed 20 percent of the property and casualty insurer's admitted assets; and
(B) in a single foreign jurisdiction does not exceed
(i) 10 percent of the property and casualty insurer's admitted assets if that foreign jurisdiction has a sovereign debt rating of one from the securities valuation office; or
(ii) five percent of the property and casualty insurer's admitted assets, if that foreign jurisdiction is not one described in (i) of this subparagraph.
(b) Subject to the limitations in 3 AAC 21.325, a property and casualty insurer may acquire, hold, or make an investment, or engage in an investment practice denominated in foreign currency, regardless of whether the investment is acquired under (a) of this section, or acquire additional foreign currency exposure as a result of the termination or expiration of a hedging transaction with respect to an investment denominated in a foreign currency, if as a result of and after giving effect to the investment, the aggregate amount of investments then held by the property and casualty insurer under this subsection and denominated in
(1) all foreign currencies does not exceed 15 percent of the property and casualty insurer's admitted assets; and
(2) the foreign currency of a single foreign jurisdiction does not exceed
(A) 10 percent of the property and casualty insurer's admitted assets, if that foreign jurisdiction has a sovereign debt rating of one from the securities valuation office; or
(B) five percent of the property and casualty insurer's admitted assets, if that foreign jurisdiction is not one described in (A) of this paragraph.
(c) An investment will not be considered denominated in a foreign currency if the acquiring property and casualty insurer enters into one or more contracts in transactions permitted under 3 AAC 21.365 and the business entity counterparty agrees, under the contract or contracts, to exchange all payments made on the foreign currency denominated investment for United States currency at a rate that effectively insulates the investment cash flows against future changes in currency exchange rates during the period the contract or contracts are in effect.
(d) In addition to an investment permitted under (a) or (b) of this section, a property and casualty insurer, subject to the limitations in 3 AAC 21.325, may acquire a foreign investment respecting a foreign jurisdiction and may acquire an investment denominated in foreign currency of that jurisdiction, if the property and casualty insurer is authorized to do business in that foreign jurisdiction, and has outstanding insurance, annuity, or reinsurance contracts, denominated in foreign currency of that jurisdiction, and issued on lives or risks resident or located in that foreign jurisdiction. An investment made under this subsection in an obligation of a foreign government, political subdivision of a foreign government, or government-sponsored enterprise of a foreign government is not subject to the limitations of 3 AAC 21.325 if the investment carries a securities valuation office rating of one or two. The aggregate amount of investments acquired by the property and casualty insurer under this subsection may not exceed the greater of
(1) the amount the property and casualty insurer is required by the law of the foreign jurisdiction to invest in the foreign jurisdiction; or
(2) 125 percent of the amount of the property and casualty insurer's reserves, net of reinsurance, and other obligations under the contracts on lives or risks resident or located in the foreign jurisdiction.
(e) In addition to an investment permitted under (a) or (b) of this section, a property and casualty insurer that is not authorized to do business in a foreign jurisdiction may acquire, subject to the limitations in 3 AAC 21.325, a foreign investment respecting a foreign jurisdiction and may acquire, subject to the limitations in 3 AAC 21.325, an investment denominated in foreign currency of that jurisdiction, if the insurer has outstanding insurance, annuity, or reinsurance contracts, denominated in foreign currency of that jurisdiction, and issued on lives or risks resident or located in that foreign jurisdiction. An investment made under this subsection in an obligation of a foreign government, political subdivision of a foreign government, or government-sponsored enterprise of a foreign government is not subject to the limitations of 3 AAC 21.325 if the investment carries a securities valuation office rating of one or two. The aggregate amount of investments acquired by the property and casualty insurer under this subsection may not exceed 105 percent of the amount of the property and casualty insurer's reserves, net of reinsurance, and other obligations under the contracts on lives or risks resident or located in the foreign jurisdiction.
(f) For purposes of determining compliance with the limitations, if any, contained in the other provisions of 3 AAC 21.201 - 3 AAC 21.399, a property and casualty shall aggregate investments permitted to be acquired under this section with investments of the same types made under other provisions of 3 AAC 21.201 - 3 AAC 21.399, and in a similar manner.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.365 Derivative transactions for a property and casualty insurer
(a) A property and casualty insurer may, directly or indirectly through an investment subsidiary, engage in a derivative transaction under the following conditions:
(1) a property and casualty insurer may use a derivative instrument to engage in a hedging transaction or in an income generation transaction;
(2) a property and casualty insurer shall demonstrate to the director the intended hedging characteristics and the ongoing effectiveness of the derivative transaction or combination of the transactions through cash-flow testing or other appropriate analyses as required under 3 AAC 21.213.
(b) A property and casualty insurer may not enter into a hedging transaction if, as a result of and after giving effect to the transaction, the aggregate
(1) admitted asset value of options, caps, floors, and warrants not attached to another financial instrument purchased and used in hedging transactions exceeds seven and one-half percent of the property and casualty insurer's admitted assets;
(2) admitted asset value of options, caps, and floors written in hedging transactions exceeds three percent of the property and casualty insurer's admitted assets; or
(3) potential exposure of collars, swaps, forwards, and futures used in hedging transactions exceeds six and one-half percent of the property and casualty insurer's admitted assets.
(c) Except as otherwise provided in (d) of this section, a property and casualty insurer may not enter into an income generation transaction if, as a result of and after giving effect to the transaction, the aggregate admitted asset value of the fixed income assets that are subject to call or that generate the cash flows for payments under caps or floors, the face value of fixed income securities underlying a derivative instrument subject to call, and the amount of the purchase obligations under the puts exceeds 10 percent of the property and casualty insurer's admitted assets.
(d) A property and casualty insurer may only enter into income generation transactions of one or more of the following types:
(1) a sale of a covered call option on a
(A) noncallable fixed income security;
(B) callable fixed income security if the option expires by the option's terms before the end of the noncallable period; or
(C) derivative instrument based on a fixed income security;
(2) a sale of a covered call option on an equity security if the property and casualty insurer
(A) holds the equity security in the property and casualty insurer's portfolio; or
(B) through the exercise of an option, warrant, or conversion right already owned, has the right to acquire immediately the equity security subject to call during the complete term of the call option sold;
(3) a sale of a covered put on an investment that the property and casualty insurer is permitted to acquire under 3 AAC 21.201 - 3 AAC 21.399 if the property and casualty insurer has escrowed, or has entered into a custodian agreement segregating cash or cash equivalents with a market value equal to the amount of the property and casualty insurer's purchase obligations under the put during the complete term of the put option sold;
(4) a sale of a covered cap or floor if the property and casualty insurer holds in the property and casualty insurer's portfolio the investments generating the cash flow to make the required payments under the cap or floor during the complete term that the cap or floor is outstanding.
(e) A property and casualty insurer shall include all counterparty exposure amounts in determining compliance with the limitations of 3 AAC 21.325.
(f) A replication transaction is not permitted for other than a risk management purpose.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160; am 8/21/2005, Register 175; am 1/1/2011, Register 196
3 AAC 21.370 Investment transactions with affiliated or controlling persons for a property and casualty insurer
(a) Except as provided in this section, a property and casualty insurer may not, without first fulfilling the obligation imposed under this section,
(1) invest in an otherwise qualifying investment issued by or due from an affiliated party;
(2) purchase from an affiliated party an otherwise qualifying investment; or
(3) use the services of a broker or commissioned sales agent who is an affiliated or controlling person in securing an otherwise qualifying investment.
(b) Before completing an investment activity with or through an affiliated or controlling person or completing a transaction of the type listed in (f) of this section, a property and casualty insurer shall fully disclose and document in writing to its board of directors and the committee authorized by the board and charged with the supervision or making of the investment or loan involved the material facts concerning the affiliation or circumstances of control. A property and casualty insurer may not complete an investment activity with or through an affiliated or controlling person unless the board of directors, by specific board action, authorizes the transaction and concludes that the transaction complies with (c) and (d) of this section. The vote of the board authorizing the transaction must be recorded in the minutes on a member-by-member basis and must indicate each vote approving, disapproving, or abstaining on the transaction.
(c) A property and casualty insurer shall consummate an investment or loan with an affiliated or controlling person at current market transfer prices and under a fee structure and at interest or discount rates that are commercially reasonable in the area in which the transaction occurs.
(d) The property and casualty insurer's board of directors is responsible for determining that a transfer price is at current market and for determining the commercial reasonableness of the transaction with an affiliated or controlling person. The board of directors may rely on an independent third-party expert in making its determination.
(e) This section does not apply to a circumstance in which the financial interest of the affiliated or controlling party is only nominal or so remote as not to give rise to a conflict of interest.
(f) A property and casualty insurer, either alone or in cooperation with one or more persons, may organize or acquire one or more subsidiaries engaged in the following kinds of business:
(1) insurance business authorized by AS 21;
(2) acting as an insurance producer or as an insurance agent for the property and casualty insurer's parent or for any of the property and casualty insurer's parent's insurer subsidiaries and controlled affiliates;
(3) investing, reinvesting, or trading in securities for the property and casualty insurer's own account, or an account of the property and casualty insurer's parent, a subsidiary of the property and casualty insurer's parent, an affiliate, or a subsidiary;
(4) management of an investment company subject to or registered under 15 U.S.C. 80a-1 - 80a-64 (Investment Company Act of 1940), including related sales and services;
(5) acting as a broker-dealer subject to or registered under 15 U.S.C. 78a - 78mm (Securities Exchange Act of 1934);
(6) rendering investment advice to a government, government agency, corporation, or other organization or group;
(7) rendering other services related to the operations of an insurance business, including actuarial, loss prevention, safety engineering, data processing, accounting, claims, appraisal, and collection services;
(8) ownership and management of assets that the parent corporation could own or manage;
(9) acting as administrative agent for a governmental instrumentality that is performing an insurance function;
(10) financing an insurance premium, agent, or other form of consumer financing;
(11) any other business activity determined by the director in writing using the standards set out in this section to be reasonably ancillary to an insurance business;
(12) owning a corporation engaged or organized to engage exclusively in one or more of the businesses specified in this section.
(g) A property and casualty insurer may also
(1) invest in securities described in 3 AAC 21.330 - 3 AAC 21.355 of a subsidiary in an amount that, in the aggregate with all other investments in subsidiaries, does not exceed the lesser of 10 percent of the property and casualty insurer's assets or 50 percent of the property and casualty insurer's policyholder surplus if, after the investment, the property and casualty insurer's policyholder surplus is reasonable in relation to the property and casualty insurer's outstanding liabilities and adequate to the property and casualty insurer's financial needs; in calculating the amount of the investment, a property and casualty insurer shall include the following:
(A) total net money or other consideration expended and all obligations assumed in the acquisition or formation of a subsidiary, including all organizational expenses and contributions to capital and surplus of the subsidiary if represented or not represented by the purchase of capital stock or issuance of other securities;
(B) all amounts expended in acquiring additional securities described in 3 AAC 21.330 - 3 AAC 21.355 and all contributions to the capital or surplus of a subsidiary subsequent to the subsidiary's acquisition or formation;
(2) invest an amount in a security described in 3 AAC 21.330 - 3 AAC 21.355 of a subsidiary engaged or organized to engage exclusively in the ownership and management of assets authorized as an investment for the property and casualty insurer if that subsidiary agrees to limit the subsidiary's investment in an asset in a way that the investment does not cause the amount of the total investment of the property and casualty insurer to exceed the limitations specified in (1) of this subsection or in 3 AAC 21.325 - 3 AAC 21.395; for the purpose of this paragraph, the total investment of the property and casualty insurer includes
(A) a direct investment by the property and casualty insurer in an asset; and
(B) the property and casualty insurer's proportionate share of an investment in an asset by a subsidiary of the property and casualty insurer calculated by multiplying the amount of the subsidiary's investment by the percentage of the ownership in the subsidiary; or
(3) with the prior written approval of the director, invest a greater amount in a security described in 3 AAC 21.330 - 3 AAC 21.355 of a subsidiary if after the investment the insurer's policyholder surplus is reasonable in relation to the property and casualty insurer's outstanding liabilities and adequate to the property and casualty insurer's financial needs.
(h) A property and casualty insurer shall determine if an investment meets the applicable requirements under (g) of this section before the investment is made by calculating the applicable limitations under 3 AAC 21.325 as though the investment had already been made and by taking into account the existing outstanding principal balance on all previous investments under 3 AAC 21.330 - 3 AAC 21.355, calculated at admitted asset value, giving effect to a return of capital invested and not giving effect to dividends.
(i) If a property and casualty insurer ceases to control a subsidiary, the property and casualty insurer shall dispose of an investment in the subsidiary made under this section within three years after cessation of control unless, at any time after the investment has been made, the investment meets the requirements for investment under another provision of 3 AAC 21.201 - 3 AAC 21.399 and the property and casualty insurer has notified the director regarding the application of another provision of 3 AAC 21.201 - 3 AAC 21.399 to the investment.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160; am 11/21/2004, Register 172
3 AAC 21.375 Additional investment authority for a property and casualty insurer
(a) A property and casualty insurer may acquire, hold, or make an investment of any kind or engage in an investment practice that is not specifically prohibited by 3 AAC 21.201 - 3 AAC 21.399 without regard to a limitation in 3 AAC 21.325 - 3 AAC 21.360. However, the property and casualty insurer may not acquire, hold, or make an investment or engage in an investment practice under this section if, as a result of and after giving effect to the transaction, the aggregate amount of the investments then held by the property and casualty insurer under this section would exceed the greater of
(1) the property and casualty insurer's unrestricted surplus; or
(2) the lesser of
(A) 10 percent of the property and casualty insurer s admitted assets; or
(B) 50 percent of the property and casualty insurer' s policyholder surplus.
(b) A property and casualty insurer may not acquire, hold, or make an investment or engage in an investment practice under (a)(2) of this section if, as a result of and after giving effect to the transaction, the aggregate amount of all investments in any one person then held by the property and casualty insurer under this section would exceed five percent of the property and casualty insurer's admitted assets.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.395 Requirements for rated credit instruments and special rated credit instruments
(a) For an investment to be treated as a rated credit instrument under 3 AAC 21.201 - 3 AAC 21.399, the investment
(1) must consist of a contractual right to receive, from another entity, cash or a credit instrument, and
(A) if the instrument has a maturity at the time of issue of more than 397 days, must be rated, be required to be rated, or be exempt from rating under the requirements of the purposes and procedures manual of the securities valuation office;
(B) if the instrument has a maturity at the time of issue of 397 days or less, must be issued, guaranteed, or insured by an entity that is rated by, or that has another obligation that is rated by, the securities valuation office or by a nationally recognized statistical rating organization;
(C) if the instrument has a maturity at the time of issue of 90 days or less, must be issued by a qualified bank;
(D) must be a share of a class one bond mutual fund; or
(E) must be a share of a money market mutual fund; and
(2) may not include
(A) an instrument that is mandatorily or at the option of the issuer convertible to an equity interest;
(B) a security that has a par value and the terms of which provide that the issuer's net obligation to repay all or part of the security's par value is determined by reference to the performance of an equity, a commodity, a foreign currency, an index of equities, commodities, or foreign currencies, or a combination of equities, commodities, or foreign currencies.
(b) A rated credit instrument will be treated as a special rated credit instrument under 3 AAC 21.201 - 3 AAC 21.399, if the instrument is
(1) structured in a manner that, if it is held until retired by or on behalf of the issuer, the instrument's rate of return, based on its purchase cost and any cash flow stream possible under the structure of the transaction, may become negative due to reasons other than the credit risk associated with the issuer of the instrument; however, a rated credit instrument may not be treated as a special rated credit instrument under this paragraph if it is
(A) a share in a class one bond mutual fund;
(B) an instrument
(i) other than an asset-backed security;
(ii) with payments of par value fixed as to amount and timing, or callable;
(iii) payable only at par or greater; and
(iv) with interest and dividend cash flows that are based on either a fixed or variable rate determined by reference to a specified rate or index;
(C) an instrument
(i) other than an asset-backed security; and
(ii) that has a par value and is purchased at a price no greater than 110 percent of par;
(D) an instrument, including an asset-backed security, whose rate of return would become negative only as a result of a prepayment due to casualty, condemnation, or economic obsolescence of collateral or change of law;
(E) an asset-backed security relying on collateral that meets the requirements of (B) of this paragraph and has a par value that is permitted to be paid
(i) not sooner than one-half of the remaining term to maturity from the date of acquisition;
(ii) before maturity only at a premium sufficient to provide a yield to maturity for the investment, considering the amount prepaid and reinvestment rates at the time of early repayment, at least equal to the yield to maturity of the initial investment; or
(iii) before maturity at a premium at least equal to the yield of a treasury issue of comparable remaining life; or
(F) an asset-backed security that is not governed by (E) of this paragraph, and that relies on cash flows from assets that are not prepayable at any time at par, if the asset-backed security has a par value reflecting principal payments to be received if held until retired by or on behalf of the issuer and is purchased at a price not greater than 105 percent of the par amount; or
(2) an asset-backed security that
(A) relies on cash flows from assets that are prepayable at par at any time;
(B) does not make payments of par that are fixed as to amount and timing; and
(C) has a negative rate of return at the time of acquisition, if a prepayment threshold assumption is used; for purposes of this subparagraph,
(i) the prepayment threshold assumption is calculated as two times the prepayment expectation reported by a recognized, publicly available source as being the median of expectations contributed by broker-dealers or other entities, except insurers, engaged in the business of selling or evaluating the securities or assets; as the prepayment expectation used in this calculation, the insurer may use the prepayment expectation for pass through securities of the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, or the Government National Mortgage Association, or for other assets of the same type as the assets that underlie the asset-backed security; the prepayment expectation must have a gross weighted average coupon comparable to the gross weighted average coupon of the assets that underlie the asset-backed security; and
(ii) if the asset-backed security is purchased in combination with one or more other asset-backed securities that are supported by identical underlying collateral, the insurer may calculate the rate of return for these specific combined asset-backed securities in combination if the insurer maintains documentation demonstrating that the securities were acquired in and continue to be held in combination.
History
- Authority: AS 21.06.090; AS 21.18.040; AS 21.21.255 AS 21.18.010; AS 21.21.010; AS 21.21.420 AS 21.18.030; AS 21.21.020
- Eff. 12/28/2001, Register 160
3 AAC 21.399 Definitions
In 3 AAC 21.201 - 3 AAC 21.399, unless the context requires otherwise,
(1) "acceptable collateral" means, as to a
(A) securities lending transaction and for the purpose of calculating counterparty exposure amount,
(i) cash;
(ii) cash equivalents;
(iii) letters of credit;
(iv) direct obligations of, or securities that are fully guaranteed as to principal and interest by, the government of the United States, an agency of the United States, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation; or
(v) for any foreign securities to be lent, sovereign debt with a securities valuation office rating of one;
(B) repurchase transaction,
(i) cash;
(ii) cash equivalents; or
(iii) direct obligations of, or securities that are fully guaranteed as to principal and interest by, the government of the United States, an agency of the United States, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation; or
(C) reverse repurchase transaction,
(i) cash; or
(ii) cash equivalents;
(2) "acceptable private mortgage insurance" means insurance that
(A) is written by a private insurer protecting a mortgage lender against loss occasioned by a mortgage loan default;
(B) is issued by a mortgage insurance company authorized under AS 21.09;
(C) has a securities valuation office rating of one or a rating issued by a nationally recognized statistical rating organization equivalent to a securities valuation office rating of one; and
(D) covers losses to an 80 percent loan-to-value ratio;
(3) "accident and health insurance" means protection that provides payment of benefits for covered sickness or accidental injury; "accident and health insurance" does not include credit insurance, disability insurance, accidental death and dismemberment insurance, or long-term care insurance;
(4) "accident and health insurer" means an insurer
(A) that is a life or health insurer authorized under AS 21.09 or hospital medical service corporation authorized under AS 21.87; and
(B) whose insurance premiums and reserves required by AS 21.18 for accident and health insurance constitute at least 95 percent of total premium considerations or total reserves required by AS 21.18, respectively;
(5) "admitted assets" means assets permitted by AS 21.18.010 to be reported as admitted assets on the statutory financial statement of the insurer most recently required to be filed with the director under AS 21.09.200, AS 21.09.205, and 3 AAC 21.400; "admitted assets" does not include assets of separate accounts;
(6) "affiliate" has the meaning given in AS 21.22.200;
(7) "asset-backed security" means a security or other instrument that is not a mutual fund and that has the following features:
(A) an interest in or the right to receive payments from distributions that are made on an asset, a pool of assets, or specifically divisible cash flows, and that are legally transferred to a trust or another special purpose bankruptcy-remote business entity;
(B) the organization of a trust or business entity, as described in (A) of this paragraph, solely for the purpose of
(i) acquiring assets or rights to cash flows that consist solely of interest bearing obligations or other contractual obligations representing the right to receive payment from cash flows from the assets or rights; for the purposes of this sub-subparagraph, "obligations" include credit enhancements, including letters of credit and guarantees, and support features, including swap agreements;
(ii) issuing securities and other instruments representing an interest in or right to receive cash flows from those assets or rights acquired as described in (i) of this subparagraph; and
(iii) engaging in activities required to service the assets or rights acquired as described in (i) of this subparagraph and any credit enhancement or support features held by the trust or other business entity;
(8) "bank" means an organization organized under the laws of a state requiring the permission of either the United States Comptroller of the Currency or the state of domicile director of banking or equivalent state officer to both accept deposits of individuals and businesses and make commercial loans and whose deposits are insured by the Federal Deposit Insurance Corporation;
(9) "business entity" means a sole proprietorship, corporation, limited liability company, association, partnership, joint stock company, joint venture, mutual fund, trust, joint tenancy, or other similar form of business organization, whether organized for-profit or not for profit;
(10) "call option" or "call" means an agreement giving the buyer the right to buy or receive a security;
(11) "cap" means an agreement obligating the seller to make payments to the buyer, in which each payment is based on the amount by which a reference price or level or the performance or value of an underlying interest exceeds a predetermined number;
(12) "capital and surplus" means the sum of the capital and surplus of the insurer required to be shown on the insurer's financial statement most recently required to be filed with the director under AS 21.09.200, AS 21.09.205, and 3 AAC 21.400;
(13) "cash equivalents" means short-term, highly rated, and highly liquid investments or securities readily convertible to known amounts of cash without penalty and nearing maturity to the degree that they present insignificant risk of change in value; "cash equivalents" include government money market mutual funds and class one money market mutual funds; in this paragraph,
(A) "highly rated" means having a rating
(i) of "P-1" by Moody's Investors Service, Inc., or "A-1" by the Standard and Poor's division of The McGraw Hill Companies, Inc.; or
(ii) that is equivalent to a rating listed in (i) of this subparagraph, and that is issued by a nationally recognized statistical rating organization; and
(B) "short-term" means having a remaining term to maturity of 90 days or less;
(14) "class one bond mutual fund" means a mutual fund that, at all times, qualifies for investment using the bond class one reserve factor under the purposes and procedures manual of the securities valuation office;
(15) "class one money market mutual fund" means a money market mutual fund that, at all times, qualifies for investment using the bond class one reserve factor under the purposes and procedures manual of the securities valuation office;
(16) "collar" means an agreement to receive payments as the buyer of an option, cap, or floor and to make payments as the seller of a different option, cap, or floor;
(17) "construction loan" means a loan of less than three years in term that is made for financing the cost of construction of a building or other improvement to real estate and that is secured by the real estate;
(18) "control" has the meaning given in AS 21.22.200;
(19) "counterparty" means the party on the other side of an investment trade or transaction;
(20) "counterparty exposure amount" means the net amount of credit risk attributable to an over-the-counter derivative instrument, when the amount of credit risk equals
(A) the market value of the over-the-counter derivative instrument if the liquidation of the derivative instrument would result in a final cash payment to the insurer;
(B) zero if the liquidation of the derivative instrument would not result in a final cash payment to the insurer;
(C) if the over-the-counter derivative instrument is entered into by a written master agreement that provides for netting of payments owed by the respective parties and the domiciliary jurisdiction of the counterparty is either within the United States or, if not within the United States, within a foreign jurisdiction listed in the purposes and procedures manual of the securities valuation office as eligible for netting, the greater of zero or the net sum of
(i) the market value of the over-the-counter derivative instrument that, if liquidated, would result in a final cash payment to the insurer; and
(ii) the market value of the over-the-counter derivative instrument that, if liquidated, would result in a final cash payment by the insurer; or
(D) the amount calculated in (A) or (C) of this paragraph where the market value for an open transaction is determined at the end of the most recent quarter of the insurer's fiscal year reduced by the market value of acceptable collateral held by the insurer or placed in escrow;
(21) "covered" means for which an insurer
(A) owns or can immediately acquire, through the exercise of options, warrants, or conversion rights already owned, the underlying interest in order to fulfill or secure its obligations under a call option, cap, or floor it has written; or
(B) has set aside under a custodial or escrow agreement, cash or cash equivalents with a market value equal to the amount required to fulfill its obligations under a put option it has written, in an income generation transaction;
(22) "credit lease transaction" means a credit tenant loan that involves a lease for a specified period of time with specified rent payments at least sufficient to repay the related note and as more particularly defined in the purposes and procedure manual for the securities valuation office;
(23) "credit tenant loan" means a mortgage loan that is made primarily in reliance on the credit standing of a major tenant and that is structured with an assignment of the rental payments to the lender with real estate pledged as collateral in the form of a first lien;
(24) "derivative instrument"
(A) means an agreement, an option, an instrument, or a series or combination of agreements, options, and instruments
(i) to make or take delivery of, or assume or relinquish, a specified amount of one or more underlying interests, or to make a cash settlement in lieu of them; or
(ii) that has a price, performance, value, or cash flow based primarily upon the actual or expected price, level, performance, value, or cash flow of one or more underlying interests;
(B) includes an option, a warrant, a cap, a floor, a collar, a swap, a forward, a future, any substantially similar individual agreement, option, or instrument and any substantially similar series or combination of agreements, options, and instruments;
(C) does not include an investment authorized by 3 AAC 21.236 - 3 AAC 21.266, 3 AAC 21.276, or 3 AAC 21.330 - 3 AAC 21.360;
(25) "derivative transaction" means a transaction involving the use of a derivative instrument;
(26) "direct" or "directly," when used in connection with an obligation referenced under 3 AAC 21.201 - 3 AAC 21.399, means for which, or in a manner that, the designated obligor is primarily liable on the instrument representing the obligation;
(27) "dollar roll transaction" means two simultaneous transactions with different settlement dates not more than 96 days apart, in which, in the transaction with the earlier settlement date, an insurer sells to a business entity, and, in the later transaction, the insurer is obligated to purchase from the same business entity substantially similar securities of the following types:
(A) asset-backed securities issued, assumed, or guaranteed by the Government National Mortgage Association, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, or successors to those entities;
(B) asset-backed securities referred to in 15 U.S.C. 77r-1 (Secondary Mortgage Market Enhancement Act of 1984);
(28) "domestic jurisdiction" means the United States, a state, Canada, a province of Canada, or a political subdivision of the United States, a state, Canada, or a province of Canada;
(29) "equity interest" means any of the following that are not rated credit instruments:
(A) common stock;
(B) preferred stock;
(C) a trust certificate;
(D) an equity investment in an investment company other than a money market mutual fund or a class one bond mutual fund;
(E) an investment in a common trust fund of a bank regulated by a federal or state agency;
(F) an ownership interest in minerals, oil, or gas, the rights to which have been separated from the underlying fee interest in the real estate where the minerals, oil, or gas are located;
(G) an instrument that is mandatorily, or at the option of the issuer, convertible to equity;
(H) a limited partnership interest or general partnership interest authorized under 3 AAC 21.216(a)(4);
(I) a member interest in a limited liability company;
(J) a warrant or other right to acquire an equity interest that is created by the person that owns or would issue the equity to be acquired;
(K) an instrument that is a rated credit instrument but that does not meet the requirements of 3 AAC 21.395;
(30) "equivalent securities" means, in a
(A) securities lending transaction, securities that are
(i) identical to the loaned securities in all features including the amount of the loaned securities, except as to certificate numbers if the securities are held in physical form; or
(ii) different from the loaned securities and exchanged for them by recapitalization, merger, consolidation, or other similar corporate action;
(B) repurchase transaction, securities that are identical to the purchased securities in all features including the amount of the purchased securities, except as to the certificate numbers if the securities are held in physical form; or
(C) reverse repurchase transaction, securities that are identical to the sold securities in all features including the amount of the sold securities, except as to the certificate numbers if the securities are held in physical form;
(31) "floor" means an agreement obligating the seller to make payments to the buyer in which each payment is based on the amount by which a predetermined number exceeds a reference price, level, performance, or value of an underlying interest;
(32) "foreign currency" means a currency other than that of a domestic jurisdiction;
(33) "foreign investment" means an investment in a foreign jurisdiction or an investment in a person, real estate, or asset domiciled in a foreign jurisdiction that is substantially of the same type as those eligible for investment under 3 AAC 21.201 - 3 AAC 21.399, other than under 3 AAC 21.266 and 3 AAC 21.360; an investment is not foreign if the issuing person, qualified primary credit source, or qualified guarantor is a domestic jurisdiction or a person domiciled in a domestic jurisdiction, unless
(A) the issuing person is a shell business entity; and
(B) the investment is not assumed, accepted, guaranteed, insured, or otherwise backed by a domestic jurisdiction or a person that is not a shell business entity domiciled in a domestic jurisdiction;
(34) "foreign jurisdiction" means a jurisdiction other than a domestic jurisdiction;
(35) "forward" means an agreement, other than a future, to make or take delivery of or effect a cash settlement based on the actual or expected price, level, performance, or value of an underlying interest;
(36) "future" means an agreement, traded on a qualified exchange or qualified foreign exchange, to make or take delivery of or effect a cash settlement based on the actual or expected price, level, performance, or value of an underlying interest;
(37) "government money market mutual fund" means a money market mutual fund that, at all times
(A) invests only in obligations issued, guaranteed, or insured by the government of the United States, or in collateralized repurchase agreements composed of these obligations; and
(B) qualifies for investment without a reserve under the purposes and procedures manual of the securities valuation office;
(38) "government-sponsored enterprise" means a
(A) governmental agency; or
(B) entity or instrumentality organized under the laws of a domestic jurisdiction to accomplish a public policy or other governmental purpose;
(39) "guaranteed," when used in connection with an obligation acquired under 3 AAC 21.201 - 3 AAC 21.399, means for which the guarantor has agreed
(A) to perform or insure the obligation of the obligor or purchase the obligation; or
(B) to be unconditionally obligated until the obligation is repaid to maintain in the obligor a minimum net worth, fixed charge coverage, stockholders' equity, or sufficient liquidity to enable the obligor to pay the obligation in full;
(40) "hedging transaction" means a derivative transaction that is entered into and maintained to reduce
(A) the risk of a change in the value, yield, price, cash flow, or quantity of assets or liabilities that an insurer has acquired or incurred or anticipates acquiring or incurring; or
(B) the currency exchange rate risk or the degree of exposure as to assets or liabilities that an insurer has acquired or incurred or anticipates acquiring or incurring;
(41) "high grade investments" means rated credit instruments rated one or two by the securities valuation office;
(42) "income," as to a security, means interest, the accrual of discount, a dividend, or another distribution; "income" includes a right, tax or assessment credit, warrant, or distribution in kind;
(43) "income generation transaction" means a derivative transaction involving the writing of a covered call option, covered put option, covered cap, or covered floor that is intended to generate income or enhance return;
(44) "insurance future" means a future relating to an index or pool that is based on insurance-related items;
(45) "insurance future option" means an option on an insurance future;
(46) "investment company" has the meaning given in 15 U.S.C. 80a-3 (Investment Company Act of 1940);
(47) "investment company series" means an investment portfolio of an investment company that is organized as a series company and to which assets of the investment company have been specifically allocated;
(48) "investment practices" means transactions of the types described in 3 AAC 21.261, 3 AAC 21.271, 3 AAC 21.355, or 3 AAC 21.365;
(49) "investment subsidiary" means a subsidiary of an insurer engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the insurer;
(50) "investment strategy" means the techniques and methods used by an insurer to meet its investment objectives; "investment strategy" includes active bond portfolio management, passive bond portfolio management, interest rate anticipation, growth investing, and value investing;
(51) "letter of credit" means a clean, irrevocable, and unconditional letter of credit issued or confirmed by and payable and presentable at a financial institution on the list of financial institutions meeting the standards for issuing letters of credit under the purposes and procedures manual of the securities valuation office;
(52) "life and health insurer" means an insurer that transacts life insurance, annuities, or health insurance;
(53) "limited liability company" means a company organized under AS 10.50;
(54) "lower grade investments" means rated credit instruments rated four, five, or six by the securities valuation office;
(55) "market value" means, as to
(A) cash and letters of credit, the amount of cash or letters of credit; and
(B) a security as of any date,
(i) the price for the security on that date obtained from a source that is generally recognized by the financial services industry as credible and accurate or the most recent quotation from a source that is generally recognized by the financial services industry as credible and accurate; or
(ii) if a source that is generally recognized by the financial services industry as credible and accurate does not exist for determining the price of the security, the price as determined in good faith by the parties to a transaction, plus accrued but unpaid income on the security to the extent not included in the price as of that date;
(56) "medium grade investments" means rated credit instruments rated three by the securities valuation office;
(57) "money market mutual fund" means a mutual fund that meets the conditions required under 15 U.S.C. 80a-1 - 80a-64 (Investment Company Act of 1940);
(58) "mortgage loan" means an obligation secured by a mortgage, deed of trust, trust deed, or other consensual lien on real estate;
(59) "multilateral development bank" means an international development organization of which the United States is a member;
(60) "mutual fund" means an investment company or, in the case of an investment company that is organized as a series company, an investment company series, that is registered with the United States Securities and Exchange Commission under 15 U.S.C. 80a-1 - 80a-64 (Investment Company Act of 1940);
(61) "nationally recognized statistical rating organization" means an organization on the list of nationally recognized statistical rating organizations as established by the securities valuation office;
(62) "obligation" means a
(A) bond, note, debenture, trust certificate, production payment, negotiable bank certificate of deposit, bankers' acceptance, credit tenant loan, loan secured by financing net leases, or other evidence of indebtedness for the payment of money; for purposes of this subparagraph, "trust certificate" includes an equipment certificate; or
(B) participation, certificate, or other evidence of an interest in any of the sources listed in (A) of this paragraph, whether constituting a general obligation of the issuer or payable only from certain revenue or a certain fund pledged or otherwise dedicated for payment;
(63) "officially declared catastrophe" means a
(A) disaster emergency declared by the governor under AS 26.23;
(B) declaration of disaster or other catastrophe declared by the governor of a state or by the President of the United States; or
(C) catastrophe determined by the director under AS 21.06.080(d);
(64) "option" means
(A) a call option;
(B) a put option; or
(C) an agreement giving the buyer the right to enter into, extend, or terminate or effect a cash settlement based on the actual or expected price, level, performance, or value of an underlying interest;
(65) "over-the-counter derivative instrument" means a derivative instrument entered into with a business entity other than through a qualified exchange, through a qualified foreign exchange, or through clearance by a qualified clearinghouse;
(66) "person" has the meaning given in AS 21.97.900; "person" includes a business entity, a multilateral development bank, and a government or quasi-governmental body, including a political subdivision and a government-sponsored enterprise;
(67) "potential exposure" means the amount determined in accordance with the annual statement instructions of the National Association of Insurance Commissioners;
(68) "preferred stock" means preferred, preference, or guaranteed stock
(A) of a business entity authorized to issue the stock; and
(B) that has a preference in liquidation over the common stock of the business entity;
(69) "property and casualty insurer" means an insurer that transacts property insurance, casualty insurance, surety insurance, marine or wet marine and transportation insurance, or mortgage guaranty insurance;
(70) "put option" or "put" means an agreement giving the buyer the right to sell or deliver a security;
(71) "qualified bank" means
(A) a national bank, state bank, or trust company that, at all times, is not less than adequately capitalized as determined by United States banking regulators and that either is regulated by state banking laws or is a member of the Federal Reserve System; or
(B) a bank or trust company incorporated or organized under the laws of a country other than the United States that is regulated as a bank or trust company by that country's government or an agency of that country's government and that, at all times, is no less than adequately capitalized as determined by international banking authorities;
(72) "qualified business entity" means a business entity that is
(A) an issuer of
(i) obligations or preferred stock that is rated one or two by the securities valuation office; or
(ii) obligations, preferred stock, or derivative instruments that are rated with the equivalent of a one or two rating of the securities valuation office by a nationally recognized statistical rating organization; or
(B) a primary dealer in United States government securities, recognized by the Federal Reserve Bank of New York;
(73) "qualified clearinghouse" means a clearinghouse
(A) for and subject to the rules of a qualified exchange or a qualified foreign exchange; and
(B) that provides clearing services, including acting as a counterparty to each of the parties to a transaction in a manner that the parties no longer have credit risk as to each other;
(74) "qualified exchange" means
(A) a securities exchange registered as a national securities exchange or a securities market regulated under 15 U.S.C. 78 - 78mm (Securities Exchange Act of 1934);
(B) a board of trade or commodities exchange designated as a contract market by the Commodity Futures Trading Commission or any successor of that commission;
(C) the National Association of Securities Dealers' Private Offerings, Resales, and Trading Through Automated Linkages (PORTAL) trading system for unregistered securities in transactions exempt from the registration and prospectus delivery requirement of 15 U.S.C. 77a - 77bbbb (Securities Exchange Act of 1933);
(D) a designated offshore securities market as defined in 17 C.F.R. 230.902(b) (Rule 902(b) of Regulation 5); or
(E) a qualified foreign exchange;
(75) "qualified foreign exchange" means a foreign exchange, board of trade, or contract market that is located outside the United States, United States territories, and United States possessions, and
(A) that has been granted a petition for exemption under 17 C.F.R. 30.10 and 17 C.F.R. Part 30, App. C;
(B) that is or whose members are subject to the jurisdiction of a foreign futures authority that has received an exemption under 17 C.F.R. 30.10 and 17 C.F.R. Part 30, App. C, as to futures transactions in the jurisdiction where the exchange, board of trade, or contract market is located; or
(C) upon which foreign stock index futures contracts are listed that are the subject of no-action relief issued by the Commodity Futures Trading Commission's Office of General Counsel; under this subparagraph, an exchange, board of trade, or contract market is a "qualified foreign exchange" only for foreign stock index futures contracts that are the subject of no-action relief;
(76) "qualified guarantor" means a guarantor against which an insurer has a direct claim for full and timely payment, evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction;
(77) "qualified primary credit source" means the credit source to which an insurer looks for payment as to an investment and against which an insurer has a direct claim for full and timely payment, evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction;
(78) "quantitative limitation" means a requirement in 3 AAC 21.201 - 3 AAC 21.399 that is based upon a numerical calculation;
(79) "real estate" means
(A) real property;
(B) interests in real property, including leaseholds, minerals, and oil and gas that have not been separated from the underlying fee interest;
(C) improvements and fixtures located on or in real property; or
(D) the seller's equity in a contract providing for a deed of real estate;
(80) "replication transaction" means a derivative transaction that is intended to replicate the performance of one or more assets that an insurer is authorized to acquire under 3 AAC 21.201 - 3 AAC 21.399; "replication transaction" does not include a derivative transaction that is entered into as a hedging transaction;
(81) "repurchase transaction" means a transaction in which an insurer purchases securities from a business entity that is obligated to repurchase the purchased securities or equivalent securities from the insurer at a specified price, either within a specified period of time or upon demand;
(82) "required liabilities" means total liabilities required to be reported on the financial statement of the insurer most recently required to be filed with the director under AS 21.09.200, AS 21.09.205, and 3 AAC 21.400;
(83) "residential mortgage loan" means a loan primarily secured by a mortgage on real estate improved with a one- to four-family residence;
(84) "reverse repurchase transaction" means a transaction in which an insurer sells securities to a business entity and is obligated to repurchase the sold securities or equivalent securities from the business entity at a specified price, either within a specified period of time or upon demand;
(85) "savings and loan" means an organization that is organized under the laws of a state and that has qualified for the insurance protection provided by the Federal Deposit Insurance Corporation;
(86) "secured location" means the contiguous real estate owned by one person;
(87) "securities lending transaction" means a transaction in which securities are loaned by an insurer to a business entity that is obligated to return the loaned securities or equivalent securities to the insurer, either within a specified period of time or upon demand;
(88) "securities valuation office" means the organization designated by the National Association of Insurance Commissioners to rate securities and to determine the carrying or admitted asset value of obligations owned by an insurer;
(89) "series company" means an investment company that is organized as a series company under 15 U.S.C. 80a-1 - 80a-64 (Investment Company Act of 1940);
(90) "shell business entity" means a business entity having no economic substance except as a vehicle for owning interests in assets issued, owned, or previously owned by a person domiciled in a foreign jurisdiction;
(91) "sinking fund stocks" means preferred stocks that
(A) are subject to a mandatory sinking fund or similar arrangement that will provide for the redemption or open market purchase of the entire issue over a period not longer than 40 years after the date of acquisition; and
(B) provide for mandatory sinking fund installments or open-market purchases commencing not more than 10 1/2 years after the date of issue, with the sinking fund installments providing for the purchase or redemption, on a cumulative basis commencing 10 years after the date of issue, of at least two and one half percent a year of the original number of shares of that issue of preferred stock;
(92) "state" has the meaning given in AS 21.97.900;
(93) "subsidiary" has the meaning given in AS 21.22.200;
(94) "substantially similar securities" means securities that meet all criteria to be substantially the same as specified in the accounting practices and procedures manual of the National Association of Insurance Commissioners;
(95) "swap" means an agreement to exchange or to net payments based on the actual or expected price, level, performance, or value of an underlying interest;
(96) "trust company" means a financial institution licensed as a trust company
(A) that, at all times, is not less than adequately capitalized as determined by United States banking regulators and that either is regulated by state banking laws or is a member of the Federal Reserve System; or
(B) incorporated or organized under the laws of a country other than the United States that is regulated as a trust company by that country's government or an agency of that country's government and that, at all times, is not less than adequately capitalized as determined by international banking authorities;
(97) "underlying interest" means the assets, liabilities, or other interests, or a combination of assets, liabilities, or other interests underlying a derivative instrument; "underlying interest" includes a security, currency, rate, index, commodity, or derivative instrument;
(98) "unrestricted surplus" means the amount by which total admitted assets exceed 125 percent of the insurer's required liabilities;
(99) "warrant" means an instrument that gives the holder the right to purchase an underlying financial instrument at a given price and time or at a series of prices and times outlined in the warrant agreement; "warrant" includes a warrant issued alone or in connection with the sale of other securities, as part of a merger or recapitalization agreement or to facilitate divestiture of the securities of another business entity.
History
- Authority: AS 21.06.090; AS 21.18.170; AS 21.21.255 AS 21.18.010; AS 21.18.900; AS 21.21.420 AS 21.18.030; AS 21.21.010; AS 21.22.200 AS 21.18.040; AS 21.21.020; AS 21.97.900
- Eff. 12/28/2001, Register 160; am 1/1/2011, Register 196
Article 3 Record and Financial Reporting
3 AAC 21.400 Filing of quarterly statements
(a) A domestic insurer is required to file quarterly financial statements, as described in AS 21.09.205, with the director of insurance.
(b) Repealed 11/21/2004.
History
- Authority: AS 21.06.090; AS 21.09.205
- Eff. 9/27/91, Register 119; am 11/21/2004, Register 172
3 AAC 21.410 Filing of annual statements
Repealed.
History
- Eff. 9/27/91, Register 119; repealed 11/21/2004, Register 172
3 AAC 21.420 Waiver of requirement to file with National Association of Insurance Commissioners on electronic media
Repealed.
History
- Eff. 9/27/91, Register 119; repealed 11/21/2004, Register 172
3 AAC 21.460 Records of domestic insurer required
Each domestic insurer shall keep at its principal place of business in this state the following records of its assets, transactions, and affairs:
(1) items specified in AS 21.69.390(d);
(2) vouchers and affidavits required under AS 21.69.400;
(3) documentation that substantiates the information provided on reinsurance and the business activities conducted in each state as part of a filing made under AS 21.09.200, 21.09.205 or 3 AAC 21.400; and
(4) if applicable,
(A) a detailed trial balance that reconciles the items comprising the balance of a control account included in the general ledger account, as shown in a filing made under AS 21.09.200 or 21.09.205;
(B) a detailed record of the deposits required under AS 21.09.090(b); and
(C) documentation to support a filing made under AS 21.09.210.
History
- Authority: AS 21.06.090; AS 21.69.390
- Eff. 10/21/92, Register 124; am 11/21/2004, Register 172
3 AAC 21.470 Retention period
(a) Unless otherwise required by law or unless the director orders a longer retention period, a domestic insurer shall retain records required by AS 21.69.390 and 3 AAC 21.460, including records relating to losses and claims, for the following period of time after the date the record is considered to be an obsolete record:
(1) for records of reinsurance transactions, 10 years or until completion of a full examination, whichever is longer;
(2) for all other records, five years or until completion of a full examination, whichever is longer.
(b) In this section,
(1) "completion of a full examination" means completion of an examination under AS 21.06.120 in which the records in question were subject to examination, and includes resolution of any action taken based on the examination report;
(2) "obsolete record" means a record concerning which there will be no further activity regarding the subject or details of the record.
History
- Authority: AS 21.06.090; AS 21.06.120; AS 21.69.390
- Eff. 10/21/92, Register 124; am 4/27/2002, Register 162
3 AAC 21.480 Corporate minutes book
(a) As used in AS 21.69.390(d)(8), a "corporate minutes book" must include the minutes of all proceedings of shareholders, members, the board of directors, and each committee of the board of directors. The minutes of the board of directors must include all
(1) resolutions adopted and acts taken by the board of directors; and
(2) resolutions adopted by a committee of the board of directors that must be adopted or approved by the board under AS 21.
(b) In this section, "committee of the board of directors" means a committee in which a majority of the members of the committee are members of the board of directors.
History
- Authority: AS 21.06.090; AS 21.69.390
- Eff. 10/21/92, Register 124; am 8/20/2016, Register 219
3 AAC 21.485 Filings required for an automobile service corporation
(a) An automobile service corporation holding a certificate of authority under AS 21.59 shall file with the director
(1) annually on or before March 1 a full and true statement of the automobile service corporation's financial condition, transactions, and affairs as of the preceding December 31; unless the director waives the verification requirement in this paragraph for good cause, the filing must be verified by the oath of the automobile service corporation's president or vice-president and secretary, or like officers of the corporation;
(2) annually on or before June 1 an audited financial statement of the financial condition, transactions, and affairs of the automobile service corporation as of the preceding December 31; the audited financial statement must be submitted on or before March 1 in order to be substituted for the financial statement described in (1) of this subsection; and
(3) quarterly on or before 45 days after the end of the quarter to which it applies a quarterly financial statement of the automobile service corporation if required by the director to evaluate compliance with AS 21.59.
(b) The annual and quarterly financial statements required in (a) of this section must include a
(1) statement of financial condition; and
(2) statement of change in financial condition.
(c) Failure to comply with (a)(1) and (2) of this section is a violation of AS 21.09.200. Failure to comply with (a)(3) of this section is a violation of AS 21.09.205.
(d) An automobile service corporation holding a certificate of authority under AS 21.59 shall file with the director annually on or before June 1 evidence acceptable to the director that a bond required under AS 21.59.030(2) or 21.59.050(c) is in effect. Acceptable evidence includes documents prepared by the company issuing the bond or an agent of the company issuing the bond that state the amount of bond and the effective period of the bond. The director may request evidence acceptable to the director that the automobile service corporation has a bond in effect at any time.
History
- Authority: AS 21.06.090; AS 21.59.030; AS 21.59.070 AS 21.09.200; AS 21.59.040 AS 21.09.205; AS 21.59.050
- Eff. 8/21/2005, Register 175
3 AAC 21.490 Filings required for a multiple employer welfare arrangement
A self-funded multiple employer welfare arrangement holding a certificate of authority under AS 21.85, and meeting the requirements under AS 21.85.080(a)(4), shall file with the director annually on or before June 1 a certified financial statement of the financial condition, transactions, and affairs as of the preceding December 31. Failure to comply with this section is a violation of AS 21.09.200.
History
- Authority: AS 21.06.090; AS 21.85.080 AS 21.09.200; AS 21.85.100
- Eff. 8/21/2005, Register 175
Article 4 Definition of Standards and Director’s Authority for Companies Deemed to Be in an Impaired Financial Condition
3 AAC 21.500 Purpose
The purpose of 3 AAC 21.500 - 3 AAC 21.520 is to identify standards the director will, in the director's discretion, use to identify an insurer that is impaired, as defined in AS 21.97.900, or in imminent danger of becoming impaired, under AS 21.09.175.
History
- Authority: AS 21.06.090; AS 21.09.175
- Eff. 10/24/92, Register 124
3 AAC 21.510 Standards
(a) To determine whether an insurer is impaired or in imminent danger of becoming impaired, the director may consider one or more of the following:
(1) findings in financial condition and market conduct examination reports prepared by the division or another licensing jurisdiction, audit reports, and actuarial opinions, reports, or summaries;
(2) National Association of Insurance Commissioners' Insurance Regulatory Information System reports or other financial analysis reports;
(3) whether the insurer has made adequate provision, according to accepted actuarial standards of practice, for the anticipated cash flows required by the contractual obligations and related expenses of the insurer, when considered in light of the assets held by the insurer for reserves and related actuarial items including the investment earnings on those assets and the considerations anticipated to be received and retained under the contracts;
(4) the financial condition and ability of an assuming reinsurer to perform and, after taking into account the insurer's cash flow and the classes of business written, whether the insurer's reinsurance program provides sufficient protection for the insurer's remaining surplus;
(5) whether the insurer's operating results in the last 12 months or a shorter period of time, including any net capital gain or loss, a change in nonadmitted assets, and cash dividends paid to shareholders, would reduce by more than 50 percent the insurer's remaining policyholder surplus held in excess of the minimum policyholder surplus required under AS 21;
(6) whether the insurer's operating loss in the last 12 months or a shorter period of time, excluding net capital gains, is greater than 20 percent of the insurer's remaining policyholder surplus held in excess of the minimum policyholder surplus required under AS 21;
(7) whether a reinsurer, obligor, or any entity within the insurer's insurance holding company system, is insolvent, threatened with insolvency, or delinquent in payment of a monetary obligation, any of which in the opinion of the director may affect the solvency of the insurer;
(8) contingent liabilities, pledges, or guaranties that, individually or collectively, involve a total amount that the director determines may affect the solvency of the insurer;
(9) whether a controlling person of an insurer is delinquent in the transmission or payment of net premiums to the insurer;
(10) the age and collectability of receivables;
(11) whether the management of an insurer or any other person who directly or indirectly controls the operation of the insurer fails to possess and demonstrate the competence, fitness, and reputation considered necessary to serve the insurer in the position held;
(12) whether the management of an insurer fails to respond to an inquiry of the director relative to the condition of the insurer or gives the director false or misleading information concerning an inquiry;
(13) whether the insurer has failed to meet financial and holding company filing requirements in the absence of a reason satisfactory to the director;
(14) whether the management of an insurer files a false or misleading financial statement, releases a false or misleading financial statement to a lending institution or the public, makes a false or misleading entry, or omits an entry in the books of the insurer in a material amount or an amount that would place the insurer in a condition that might constitute impairment as defined in AS 21.97.900;
(15) whether the insurer has grown so rapidly and to such an extent that it lacks adequate financial and administrative capacity to meet its obligations in a timely manner;
(16) whether the insurer has experienced, or will experience in the next 60 months, negative cash flow or liquidity problems;
(17) whether management has established reserves that do not comply with minimum standards established by state insurance laws, regulations, statutory accounting standards, sound actuarial principles, and standards of practice;
(18) whether management persistently engages in material under reserving that results in adverse development;
(19) whether transactions among affiliates, subsidiaries, or controlling persons for which the insurer receives assets, capital gains, or both do not provide sufficient value, liquidity, or diversity to assure the insurer's ability to meet its outstanding obligations as they mature;
(20) any other condition that might constitute impairment as defined in AS 21.97.900.
(b) In determining an insurer's financial condition under 3 AAC 21.500 - 3 AAC 21.520, the director may take one or more of the following actions:
(1) disregard a credit or account receivable resulting from a transaction with a reinsurer that is insolvent, impaired, or otherwise subject to a delinquency proceeding;
(2) make appropriate adjustments, including disallowance, to asset values attributable to investments in or transactions with a parent, subsidiary, or affiliate that violates a provision of AS 21 or 3 AAC 21 - 3 AAC 31;
(3) refuse to recognize the stated value of an account receivable if the ability to collect the account receivable is highly speculative in view of the age of the account or the financial condition of the debtor;
(4) increase the insurer's liability in an amount equal to a contingent liability, a pledge, or a guarantee not otherwise included if a substantial risk exists that the insurer will be called upon to meet that obligation within the next 12 months;
(5) take whatever other action is necessary to accurately determine an insurer's actual financial condition.
History
- Authority: AS 21.06.090; AS 21.09.175
- Eff. 10/24/92, Register 124; am 7/9/93, Register 127; am 1/1/2010, Register 192
3 AAC 21.520 Remedial action
(a) If the director determines that an insurer is impaired or in imminent danger of becoming impaired, the director may order the insurer to take one or more of the following actions:
(1) reduce the total amount of present and potential liability for policy benefits by reinsurance;
(2) reduce, suspend, or limit the volume of business being accepted or renewed;
(3) reduce general insurance and commission expenses by specified methods;
(4) increase the insurer's capital and surplus;
(5) suspend or limit the declaration and payment of a dividend by an insurer to its stockholders or its policyholders;
(6) file a report in a form acceptable to the director concerning the market value of the insurer's assets;
(7) limit or withdraw from certain investments or discontinue certain investment practices to the extent the director considers necessary;
(8) document the adequacy of a premium rate in relation to the risk insured;
(9) file interim financial reports, in addition to the regular annual statements, on a form adopted by the National Association of Insurance Commissioners unless the director designates another form;
(10) correct corporate governance practice deficiencies, and adopt and use governance practices acceptable to the director;
(11) provide a business plan to the director in order to continue to transact business in this state;
(12) notwithstanding any other provision of AS 21 limiting the frequency or amount of premium rate adjustments, adjust the rate for any non-life insurance product written by the insurer that the director considers necessary to improve the financial condition of the insurer;
(13) any other remedial action designed to prevent impairment or diminish the imminent danger of impairment.
(b) An insurer who is aggrieved by an order under (a) of this section may request a hearing under AS 21.06.170 - 21.06.230. Unless an exception is granted under AS 21.06.210(h), a hearing is open to the public. An insurer may submit a written request to have all or part of a hearing closed to the public. The request must identify facts supporting why conducting a closed hearing is necessary to protect the insurer against unwarranted injury or is in the public interest. A hearing or part of a hearing may be closed to the public if the director or administrative law judge, upon review of the facts and law, finds that conducting the hearing in public will cause unwarranted injury to the insurer or is not in the public interest.
History
- Authority: AS 21.06.060; AS 21.09.175 AS 21.06.090; AS 21.39.130
- Eff. 10/24/92, Register 124; am 1/1/2010, Register 192
Article 5 Frequency and Method of Premium Tax Payments
3 AAC 21.550 Annual premium tax payment
Except as provided in 3 AAC 21.560, for a tax year ending December 31, an entity required to pay a tax under AS 21.09.210 or AS 21.66.110 shall pay the required tax to the director on or before March 1 of the following tax year.
History
- Authority: AS 21.06.090; AS 21.09.210; AS 21.66.110
- Eff. 2/6/98, Register 145; am 9/4/14, Register 211
3 AAC 21.560 Quarterly premium tax and filing fee payments
(a) An authorized insurer who pays the director $10,000 or more in one tax year under the requirements of AS 21.09.210 or AS 21.66.110 shall, in the following tax year, pay the premium tax in four payments. If required to pay premium tax in four payments, an authorized insurer shall, on or before May 31, August 31, and November 30, pay to the director one-fourth of the total annual premium tax it paid during the previous tax year, and shall, on or before March 1 of the following year, calculate its total annual tax on forms provided by the director, file the forms, and pay any balance due or request a refund or tax credit for any overpayment. However, the provisions of this subsection do not apply to the tax due on contracts described in AS 21.09.210(d).
(b) A surplus lines broker shall pay the director the premium tax under AS 21.34.180 and the filing fee under AS 21.34.190 for each corresponding three-month period as shown on the quarterly report required under AS 21.34.170 as follows:
Due dateQuarterly three-month period:June 1January, February, MarchSeptember 1April, May, JuneDecember 1July, August, SeptemberMarch 1 of the following yearOctober, November, December
(c) The director will refund an overpayment made by an authorized insurer or surplus lines broker within 60 days of receiving a refund request.
(d) If an authorized insurer required to pay premium tax in four payments under (a) of this section can demonstrate that the authorized insurer's premium receipts for a tax year are likely to decline to a level at which the authorized insurer will not pay at least $10,000 in premium tax in that year, the authorized insurer may apply to the director for a waiver from (a) of this section. The director may grant a waiver if the director finds that the authorized insurer will materially overpay the authorized insurer's premium tax for the tax year unless a waiver is granted.
(e) A quarterly tax payment made under (a) of this section must be reported on forms provided by the director, or the report may be filed electronically when the division notifies the payer that electronic filing is available. The report must be submitted on or before the date the corresponding quarterly tax payment is due.
History
- Authority: AS 21.06.090; AS 21.34.180; AS 21.96.080 AS 21.09.210; AS 21.34.190 AS 21.34.170; AS 21.66.110
- Eff. 2/6/98, Register 145; am 7/25/2008, Register 187; am; 9/4/2014, Register 211
3 AAC 21.570 Method of payment
(a) An authorized insurer or surplus lines broker shall pay by the Automated Clearing House debit or credit payment system
(1) all premium taxes required under AS 21.09.210, AS 21.34.180, AS 21.59.070 AS 21.66.110 or AS 21.85.100; and
(2) filling fees required under AS 21.34.190.
(b) In this section, "Automated Clearing House debit or credit payment system" means the network for the interbank clearing of electronic payments for participating depository financial institutions
History
- Authority: AS 21.06.090; AS 21.34.190; AS 21.85.100 AS 21.09.210; AS 21.59.070 AS 21.34.180; AS 21.66.110
- Eff. 2/6/98, Register 145; am 6/11/2006, Register 178
3 AAC 21.580 Definitions
In AS 21.09.210(m), "individual life insurance" means a life insurance policy on the life of one individual or the lives of more than one individual for estate planning purposes that
(1) may not be a key person insurance policy or part of a group life insurance policy;
(2) may not include the insured's employer as a beneficiary.
History
- Authority: AS 21.06.090; AS 21.09.210
- Eff. 6/5/2019, Register 230
Article 6 Reinsurance
3 AAC 21.600 Applicability
(a) The provisions of 3 AAC 21.610 - 3 AAC 21.630 apply to domestic insurers with authority to write life and health lines of business, to all other licensed life and health insurers that are not subject to a substantially similar regulation in their domiciliary state, and to the health business written by property and casualty insurers. The provisions of 3 AAC 21.610 - 3 AAC 21.630 do not apply to assumption reinsurance, yearly renewable term reinsurance, or nonproportional reinsurance. For purposes of this subsection, a regulation in a domiciliary state is substantially similar if the director determines that the regulation equals or exceeds the corresponding requirement in AS 21.12.020, this section, 3 AAC 21.610 - 3 AAC 21.630, 3 AAC 21.693, and 3 AAC 21.695.
(b) The provisions of 3 AAC 21.635 - 3 AAC 21.690 apply to all domestic insurers.
(c) The provisions of 3 AAC 21.693 and 3 AAC 21.695 apply to all insurers to which (a) or (b) of this section apply.
History
- Authority: AS 21.06.090; AS 21.12.020
- Eff. 10/21/92, Register 124; am 11/25/94, Register 132; am 4/20/97, Register 142; am 11/21/2004, Register 172
3 AAC 21.610 Accounting requirements
(a) A life or health insurer subject to 3 AAC 21.600 - 3 AAC 21.695 may not, for reinsurance ceded, reduce a liability or establish an asset in a statutory financial statement filed with the division if, by the terms of the reinsurance agreement, any of the following conditions exist in substance or effect:
(1) a renewal expense allowance provided or to be provided to the ceding insurer by the reinsurer in any accounting period is not sufficient to cover the anticipated allocable renewal expenses of the ceding insurer on the portion of the business reinsured, unless a liability is established for the present value of the shortfall using assumptions equal to the applicable statutory reserve basis on the business reinsured; renewal expenses may include commissions, premium taxes, and direct expenses, including billing, valuation, claims, and maintenance expected by the company at the time the business is reinsured;
(2) the ceding insurer may be deprived of surplus or assets at the reinsurer's option or automatically upon the occurrence of some event, such as the insolvency of the ceding insurer, but termination of the reinsurance agreement by the reinsurer for nonpayment of reinsurance premiums or other amounts due, such as modified coinsurance reserve adjustments, interest, and adjustments on funds withheld, and tax reimbursements, may not be considered a deprivation of surplus or assets;
(3) the ceding insurer is required to reimburse the reinsurer for negative experience under the reinsurance agreement, but neither offsetting experience refunds against current and prior years' losses nor payment by the ceding insurer of an amount equal to the current and prior years' losses upon voluntary termination of in-force reinsurance by the ceding insurer will be considered a reimbursement to the reinsurer for negative experience; voluntary termination does not include a situation where termination occurs because of an unreasonable provision that allows the reinsurer to reduce its risk under the agreement; an example of an unreasonable provision is the right of the reinsurer to increase to excessive levels reinsurance premiums or risk and expense charges, thereby forcing the ceding company to prematurely terminate the reinsurance agreement;
(4) the ceding insurer shall terminate or automatically recapture all or part of the reinsurance ceded, at times specified in the agreement;
(5) the reinsurance agreement involves the possible payment by the ceding insurer to the reinsurer of amounts other than income realized from the reinsured policies; for example, a ceding company may not pay reinsurance premiums or other fees or charges to a reinsurer that are greater than the direct premiums collected by the ceding company;
(6) the reinsurance agreement does not transfer all of the significant risk inherent in the business being reinsured; Appendix A of this section identifies the risks that are considered to be significant for a representative sampling of products or type of business; for products not specifically included, the risks determined to be significant must be consistent with Appendix A of this section;
(7) the credit quality, reinvestment, or disintermediation risk is significant for the business reinsured and the ceding company does not transfer the underlying assets to the reinsurer or legally segregate the underlying assets in a trust or escrow account or establish a mechanism satisfactory to the director that legally segregates by contract the underlying assets, unless reinsurance is for one of the following classes of insurance business:
(A) long term care or long term disability;
(B) traditional non-par permanent;
(C) traditional par permanent;
(D) adjustable premium permanent;
(E) indeterminate premium permanent; or
(F) universal life fixed premium with no dump-in premiums allowed;
(8) settlements are made less frequently than quarterly or payments due from the reinsurer are not made in cash within 90 days of a settlement date;
(9) the ceding insurer is required to make a representation or warranty not reasonably related to the insurance being reinsured;
(10) the ceding insurer is required to make a representation or warranty about the future performance of the insurance being reinsured; or
(11) the reinsurance agreement is entered into for the principal purpose of producing significant surplus aid for the ceding insurer, typically on a temporary basis, while not transferring all of the significant risks inherent in the insurance being reinsured and, in substance or effect, the expected potential liability to the ceding insurer remains basically unchanged.
(b) The formula for determining the reserve interest rate adjustment on the reserves held by the ceding insurer for a class of insurance business listed under (a)(7)(A) - (a)(7)(F) of this section must reflect the ceding insurer's investment earnings and incorporate all realized or unrealized gains or losses that are reflected in the ceding insurer's statutory financial statement.
(c) Notwithstanding (a) or (b) of this section, an insurer subject to 3 AAC 21.600 - 3 AAC 21.695 may, with the prior written approval of the director, take reserve credit or establish assets that the director determines are consistent with actuarial interpretations or the law in this state, including regulations adopted by the director.
APPENDIX ATYPE OF INSURANCE BUSINESS RISK CATEGORY a b c d e f* Health insurance - other thanlong term care or long termdisability+o+oooHealth insurance - long term careor long term disability+o+++oImmediate annuitieso+o++oSingle premium deferred annuitiesoo++++Flexible premium deferredannuitiesoo++++Guaranteed interest contractsoo++++Other annuity deposit businessooo+++Single premium whole lifeo+++++Traditional non-par permanento+++++Traditional non-par termo++oooTraditional par permanento+++++Traditional par termo++oooAdjustable premium permanento+++++Indeterminate premium permanento+++++Universal life flexible premiumo+++++Universal life fixed premiumo+++++Universal life fixed premium withdump-in premiums allowedo+++++KEY TO APPENDIX A *a - morbidity riskb - mortality riskc - lapse risk that a policy will voluntarily terminate before the recoupment of astatutory surplus strain experienced at issue of the policyd - credit quality risk that invested assets supporting the reinsured business willdecrease in value excluding market value declines due to changes in interest ratee - reinvestment risk that interest rates will fall and funds reinvested will earn lessthan expectedf - disintermediation risk that interest rates rise and policy loans and surrendersincrease or maturing contracts do not renew at anticipated rates of renewal"+" means significant risk, "o" means insignificant risk
History
- Authority: AS 21.06.090; AS 21.12.020
- Eff. 10/21/92, Register 124; am 7/9/93, Register 127; am 11/25/94, Register 132; am 4/20/97, Register 142; am 11/21/2004, Register 172
3 AAC 21.615 Term and universal life insurance reserve financing
(a) The purpose and intent of this section is to
(1) establish uniform, national standards governing reserve financing arrangements pertaining to
(A) life insurance policies containing
(i) guaranteed nonlevel gross premiums; and
(ii) guaranteed nonlevel benefits; and
(B) universal life insurance policies with secondary guarantees; and
(2) ensure that, with respect to each such financing arrangement, funds consisting of primary security and other security are held by or on behalf of ceding insurers in the forms and amounts required under this section.
(b) In general, reinsurance ceded for reserve financing purposes has one or more of the following characteristics, with respect to some or all of the assets used to secure the reinsurance treaty or to capitalize the reinsurer:
(1) the assets are issued by the ceding insurer or its affiliates;
(2) the assets are not unconditionally available to satisfy the general account obligations of the ceding insurer; or
(3) the assets create a reimbursement, indemnification or other similar obligation on the part of the ceding insurer or any of its affiliates, other than a payment obligation under a derivative contract acquired in the normal course and used to support and hedge liabilities pertaining to the actual risks in the policies ceded under the reinsurance treaty.
(c) This section applies to reinsurance treaties that cede liabilities pertaining to covered policies, as defined in 3 AAC 21.695(14), issued by a life insurance company domiciled in this state.
(d) The actuarial method to establish the required level of primary security for each reinsurance treaty subject to this section is VM-20, applied on a treaty-by-treaty basis, including all relevant definitions, from the valuation manual as then in effect, applied as follows:
(1) for covered policies described in 3 AAC 21.695(14)(A), the actuarial method is the greater of the deterministic reserve or the net premium reserve (NPR), regardless of whether the criteria for exemption testing can be met; however, if the covered policies do not meet the requirements of the stochastic reserve exclusion test in the valuation manual, then the actuarial method is the greatest of the deterministic reserve, the stochastic reserve, or the NPR; in addition, if the covered policies are reinsured in a reinsurance treaty that also contains covered policies described in 3 AAC 21.695(14)(B), the ceding insurer may elect to instead use (2) of this subsection as the actuarial method for the entire reinsurance agreement; whether this paragraph or (2) of this subsection is used, the actuarial method must comply with requirements or restrictions that the valuation manual imposes when aggregating these policy types for purposes of principle-based reserve calculations;
(2) for covered policies described in 3 AAC 21.695(14)(B), the actuarial method is the greatest of the deterministic reserve, the stochastic reserve, or the NPR, regardless of whether the criteria for exemption testing can be met;
(3) except as provided in (4) of this subsection, the actuarial method is to be applied on a gross basis to all risks with respect to the covered policies as originally issued or assumed by the ceding insurer;
(4) if the reinsurance treaty cedes less than 100 percent of the risk with respect to the covered policies, the required level of primary security may be reduced as follows:
(A) if a reinsurance treaty cedes only a quota share of some or all of the risks pertaining to the covered policies, the required level of primary security, as well as an adjustment under (C) of this paragraph, may be reduced to a pro rata portion in accordance with the percentage of the risk ceded;
(B) if the reinsurance treaty in a non-exempt arrangement cedes only the risks pertaining to a secondary guarantee, the required level of primary security may be reduced by an amount determined by applying the actuarial method on a gross basis to all risks, other than risks related to the secondary guarantee, pertaining to the covered policies, except that for covered policies for which the ceding insurer did not elect to apply the provisions of VM-20 to establish statutory reserves, the required level of primary security may be reduced by the statutory reserve retained by the ceding insurer on those covered policies, where the retained reserve of those covered policies must be reflective of a reduction according to the cession of mortality risk on a yearly renewable term basis in an exempt arrangement;
(C) if a portion of the covered policy risk is ceded to another reinsurer on a yearly renewable term basis in an exempt arrangement, the required level of primary security may be reduced by the amount resulting by applying the actuarial method including the reinsurance section of VM-20 to the portion of the covered policy risks ceded in the exempt arrangement, except that for covered policies issued before January 1, 2017, this adjustment is not to exceed [cx/ (2* number of reinsurance premiums per year)] where cx is calculated using the same mortality table used in calculating the NPR; and
(D) for other treaties ceding a portion of risk to a different reinsurer, including stop loss, excess of loss, and other non-proportional reinsurance treaties, there will be no reduction in the required level of primary security;
(5) for a reduction of the required level of primary security under (4) of this subsection, a combination of (4)(A) - (D) of this subsection may apply; the adjustments to the required level of primary security will be done in the sequence that accurately reflects the portion of the risk ceded by means of the treaty; the ceding insurer must document the rationale and steps taken to accomplish the adjustments to the required level of primary security due to the cession of less than 100 percent of the risk; the adjustments for other reinsurance will be made only with respect to reinsurance treaties entered into directly by the ceding insurer; the ceding insurer will make no adjustment as a result of a retrocession treaty entered into by the assuming insurers;
(6) the required level of primary security resulting from application of the actuarial method may not exceed the amount of statutory reserves ceded;
(7) if the ceding insurer cedes risks with respect to covered policies, including riders, in more than one reinsurance treaty subject to this section, the aggregate required level of primary security for those reinsurance treaties may not be less than the required level of primary security calculated using the actuarial method as if all risks ceded in those treaties were ceded in a single treaty subject to this section;
(8) if a reinsurance treaty subject to this section cedes risk on both covered and non-covered policies, credit for the ceded reserves shall be determined as follows:
(A) the actuarial method shall be used to determine the required level of primary security for the covered policies, and (e) - (h) of this section shall be used to determine the reinsurance credit for the covered policy reserves; and
(B) credit for the non-covered policy reserves shall be granted only to the extent that security, in addition to the security held to satisfy the requirements of (A) of this paragraph, is held by or on behalf of the ceding insurer in accordance with AS 21.12.020(a) - (f); the primary security used to meet the requirements of this subparagraph may not be used to satisfy the required level of primary security for the covered policies.
(e) For the purposes of both calculating the required level of primary security according to the actuarial method and determining the amount of primary security and other security, as applicable, held by or on behalf of the ceding insurer, the following shall apply:
(1) for assets, including assets held in trust, that would be admitted under the Accounting Practices and Procedures Manual of the National Association of Insurance Commissioners if they were held by the ceding insurer, the valuations are to be determined according to statutory accounting procedures as if the assets were held in the ceding insurer's general account and without taking into consideration the effect of the prescribed or permitted practices; and
(2) for all other assets, the valuations are to be those that were assigned to the assets for the purpose of determining the amount of reserve credit taken; in addition, the asset spread tables and asset default cost tables required by VM-20 shall be included in the actuarial method if adopted by the National Association of Insurance Commissioners' Life Actuarial (A) Task Force not later than the December 31 on or immediately preceding the valuation date for which the required level of primary security is being calculated; the tables of asset spreads and asset default costs shall be incorporated into the actuarial method in the manner specified in VM-20.
(f) Subject to the exemptions described in (j) of this section, and the provisions of (g) - (i) of this section, credit for reinsurance shall be allowed with respect to ceded liabilities pertaining to covered policies under AS 21.12.020(a) - (f) if, in addition to all other requirements imposed by law or regulation, the following requirements are met on a treaty-by-treaty basis:
(1) the ceding insurer's statutory policy reserves with respect to the covered policies are established in full and in accordance with the applicable requirements of AS 21.18.110 - 21.18.112 and related regulations and actuarial guidelines, and credit claimed for a reinsurance treaty subject to this section does not exceed the proportionate share of those reserves ceded under the contract;
(2) the ceding insurer determines the required level of primary security with respect to each reinsurance treaty subject to this section and provides support for its calculation as determined to be acceptable to the director;
(3) funds consisting of primary security, in an amount at least equal to the required level of primary security, are held by or on behalf of the ceding insurer, as security under the reinsurance treaty within the meaning of AS 21.12.020(c), on a funds withheld, trust, or modified coinsurance basis;
(4) funds consisting of other security, in an amount at least equal to the portion of the statutory reserves as to which primary security is not held under (3) of this subsection, are held by or on behalf of the ceding insurer as security under the reinsurance treaty within the meaning of AS 21.12.020(c);
(5) a trust used to satisfy the requirements of this subsection and (g) of this section shall comply with all of the conditions and qualifications of 3 AAC 21.665, except that
(A) funds consisting of primary security or other security held in trust, shall for the purposes identified in (e) of this section, be valued according to the valuation rules set out in (e) of this section, as applicable;
(B) there are no affiliate investment limitations with respect to the security held in a trust if the security is not needed to satisfy the requirements of (3) of this subsection;
(C) the reinsurance treaty must prohibit withdrawals or substitutions of trust assets that would leave the fair market value of the primary security within the trust, when aggregated with primary security outside the trust that is held by or on behalf of the ceding insurer in the manner required by (3) of this subsection, below 102 percent of the level required by (3) of this subsection at the time of the withdrawal or substitution; and
(D) the determination of reserve credit under 3 AAC 21.665(l) shall be determined according to the valuation rules set out in (e) of this section, as applicable; and
(6) the reinsurance treaty has been approved by the director.
(g) The requirements of (f) of this section must be satisfied as of the date that risks under covered policies are ceded and on an ongoing basis thereafter. A ceding insurer may not take or consent to an action or series of actions that would result in a deficiency under (f)(3) or (4) of this section with respect to a reinsurance treaty under which covered policies have been ceded, and if a ceding insurer becomes aware when a deficiency exists, it shall use its best efforts to arrange for the deficiency to be eliminated as expeditiously as possible.
(h) Before the due date of each quarterly or annual statement, each life insurance company that has ceded reinsurance within the scope of (c) of this section shall perform an analysis, on a treaty-by-treaty basis, to determine, as to each reinsurance treaty under which covered policies have been ceded, whether as of the end of the immediately preceding calendar quarter the requirements of (f)(3) or (4) of this section were satisfied. The ceding insurer shall establish a liability equal to the excess of the credit for reinsurance taken over the amount of primary security actually held under (f)(3) this section, unless either
(1) the requirements of (f)(3) or (4) of this section were fully satisfied as of the valuation date as to the reinsurance treaty; or
(2) a deficiency has been eliminated before the due date of the quarterly or annual statement to which the valuation date relates through the addition of primary security or other security, as the case may be, in the amount and in a form as would have caused the requirements of (f)(3) or (4) of this section to be fully satisfied as of the valuation date.
(i) Nothing in (h)(2) of this section allows a ceding company to maintain a deficiency under (f)(3) or (4) of this section for a period of time longer than is reasonably necessary to eliminate it.
(j) This section does not apply to the following situations:
(1) the reinsurance of
(A) policies that satisfy the criteria for exemption set out in 3 AAC 21.915(e) - (h), and that are issued before December 23, 2021;
(B) portions of policies that satisfy the criteria for exemption set out in 3 AAC 21.915(c) and that are issued before December 23, 2021;
(C) a universal life policy that meets all of the following requirements:
(i) any secondary guarantee period is five years or less;
(ii) specified premium for the secondary guarantee period is not less than the net level reserve premium for the secondary guarantee period based on the Commissioners Standard Ordinary valuation tables and valuation interest rate applicable to the issue year of the policy; and
(iii) the initial surrender charge is not less than 100 percent of the first year annualized specified premium for the secondary guarantee period;
(D) credit life insurance;
(E) a variable life insurance policy that provides for life insurance, the amount or duration of which varies according to the investment experience of the separate account or accounts; or
(F) a group life insurance certificate unless the certificate provides for a stated or implied schedule of maximum gross premiums required to continue coverage in force for a period in excess of one year;
(2) reinsurance ceded to an assuming insurer that meets the applicable requirements of AS 21.12.020(a)(4);
(3) reinsurance ceded to an assuming insurer that meets the applicable requirements of AS 21.12.020(a)(1) - (3), and that, in addition,
(A) prepares statutory financial statements in compliance with the Accounting Practices and Procedures Manual of the National Association of Insurance Commissioners (NAIC), without departures from NAIC statutory accounting practices and procedures pertaining to the admissibility or valuation of assets or liabilities that increase the assuming insurer's reported surplus and are material enough that they need to be disclosed in the financial statement of the assuming insurer according to Statement of Statutory Accounting Principles No. 1 ("SSAP 1"); and
(B) is not in a company action level event, regulatory action level event, authorized control level event, or mandatory control level event as those terms are defined in AS 21.14 when its risk-based capital is calculated in accordance with the life risk-based capital report including overview and instructions for companies, as the same may be amended by the National Association of Insurance Commissioners from time to time, without deviation;
(4) reinsurance ceded to an assuming insurer that meets the applicable requirements of AS 21.12.020(a)(1) - (3), and that, in addition,
(A) is not an affiliate, as that term is defined in AS 21.22.200, of:
(i) the insurer ceding the business to the assuming insurer; or
(ii) an insurer that directly or indirectly ceded the business to that ceding insurer;
(B) prepares statutory financial statements in compliance with the Accounting Practices and Procedures Manual;
(C) is both
(i) licensed or accredited in at least 10 states, including its state of domicile; and
(ii) not licensed in a state as a captive, special purpose vehicle, special purpose financial captive, special purpose life reinsurance company, limited purpose subsidiary, or other similar licensing regimes; and
(D) is not, or would not be, below 500 percent of the authorized control level risk based capital as that term is defined in AS 21.14.200 when its risk based capital is calculated in accordance with the life risk based capital report including overview and instructions for companies, as the same may be amended by the National Association of Insurance Commissioners from time to time, without deviation, and without recognition of departures from National Association of Insurance Commissioners statutory accounting practices and procedures pertaining to the admission or valuation of assets or liabilities that increase the assuming insurer's reported surplus;
(5) reinsurance ceded to an assuming insurer that meets the requirements of AS 21.12.020(g)(2)(D); or
(6) reinsurance not otherwise exempt under paragraphs (1) - (5) of this subsection if the director, after consulting with the National Association of Insurance Commissioners' Financial Analysis Working Group (FAWG) or other group of regulators designated by the National Association of Insurance Commissioners, as applicable, determines under all the facts and circumstances that all of the following apply:
(A) the risks are clearly outside of the intent and purpose of this section;
(B) the risks are included within the scope of this section only as a technicality; and
(C) the application of this section to those risks is not necessary to provide appropriate protection to policyholders; the director shall publicly disclose a decision made under this paragraph to exempt a reinsurance treaty from this section, as well as the general basis, including a summary description of the treaty.
(k) An insurer that has covered policies as to which this section applies as set out in (c) of this section may not take any action or series of actions, or enter into any transaction or arrangement or series of transactions or arrangements if the purpose of the action, transaction, arrangement, or series is to avoid the requirements of this section, or to circumvent its purpose and intent, as set out in (a) and (b) of this section.
(l) If any provision of this section is held invalid, the remainder is not affected.
History
- Authority: AS 21.06.090; AS 21.18.110 AS 21.12.020; AS 21.18.112
- Eff. 12/23/2021, Register 240
3 AAC 21.620 Written agreements
(a) A reinsurance agreement or an amendment to a reinsurance agreement may not be used to reduce a liability or to establish an asset in a statutory financial statement filed with the division unless the agreement, the amendment, or a binding letter of intent has been executed by both parties, or other binding written evidence of the agreement from the reinsurer is held by the ceding insurer, not later than the "as of date" of the statutory financial statement on which the entry will appear.
(b) A reinsurance agreement or an amendment to a reinsurance agreement must be executed within 90 days after the execution of a binding letter of intent or other written evidence of a binding reinsurance agreement in order for credit to be allowed for the reinsurance ceded.
History
- Authority: AS 21.06.090; AS 21.12.020
- Eff. 10/21/92, Register 124; am 11/25/94, Register 132
3 AAC 21.630 Existing agreements
(a) An insurer subject to 3 AAC 21.600 - 3 AAC 21.695 shall reduce to zero by December 31, 1995 a reserve credit or asset established by a reinsurance agreement entered into before January 1, 1995 which, under the provisions of 3 AAC 21.600 - 3 AAC 21.695, would not be allowed a reserve credit or asset.
(b) An agreement entered into after December 31, 1994 that involves the reinsurance of insurance business written before the effective date of the agreement, along with any subsequent amendments, must be filed by the ceding company with the director within 30 days of the date of execution. A filing must include data detailing the financial impact of the transaction. A ceding insurer's actuary who signs the statutory financial statement actuarial opinion with respect to valuation of reserves shall consider 3 AAC 21.600 - 3 AAC 21.695 and any applicable actuarial standards of practice when determining the proper credit in a statutory financial statement filed with the division. The actuary shall maintain adequate documentation and, upon request of the division, describe the actuarial work performed for inclusion in the statutory financial statement and demonstrate that the work conforms to 3 AAC 21.600 - 3 AAC 21.695.
(c) An increase in surplus net of federal income tax resulting from arrangements described in (b) of this section must be identified separately on the insurer's statutory financial statement as a surplus item, and recognition of the surplus increase as income must be reflected on a net of tax basis on the reinsurance ceded line of the statutory financial statement when earnings result from the insurance business reinsured.
History
- Authority: AS 21.06.090; AS 21.12.020
- Eff. 10/21/92, Register 124; am 11/25/94, Register 132
3 AAC 21.635 General provisions for a reinsurance agreement
(a) The director will not grant credit to a ceding insurer for reinsurance with an assuming insurer unless the reinsurance agreement between the ceding insurer and assuming insurer includes
(1) an insolvency clause stating that the assuming insurer will remain liable for a claim submitted under a reinsurance agreement by a ceding insurer even though the ceding insurer is in receivership or liquidation at the time the claim is submitted;
(2) repealed 11/21/2004;
(3) a provision requiring an unauthorized assuming insurer to submit to the jurisdiction of an alternative dispute resolution panel that is acceptable to the director or a court of competent jurisdiction within the United States, to comply with all requirements necessary to give the panel or court jurisdiction, to designate an agent upon whom service of process may be given, and to abide by the final decision of the panel or court;
(4) a provision that the reinsurance agreement and any related trust agreement or letter of credit constitute the entire contract between the parties with respect to the insurance being reinsured and that there are no understandings or agreements between the parties other than those expressed in these documents;
(5) a provision that a change or modification to the agreement is void unless it is made by a written amendment to the agreement and signed by both parties; and
(6) a proper reinsurance intermediary clause, if applicable, which stipulates that the credit risk for the intermediary is carried by the assuming insurer.
(b) Repealed 11/21/2004.
History
- Authority: AS 21.06.090; AS 21.12.020
- Eff. 11/25/94, Register 132; am 11/21/2004, Register 172; am 12/26/2019, Register 232
3 AAC 21.640 Licensed assuming insurer
The director will allow credit to be recorded on a domestic insurer's statutory financial statement for reinsurance ceded to an assuming insurer that is licensed and in good standing in this state no later than the "as of date" of the ceding insurer's statutory financial statement.
History
- Authority: AS 21.06.090; AS 21.12.020
- Eff. 11/25/94, Register 132
3 AAC 21.645 Accredited reinsurer
(a) The director will allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that is accredited as a reinsurer in this state no later than the "as of date" of the ceding insurer's statutory financial statement. An accredited reinsurer must
(1) file a properly executed certificate of assuming insurer in accordance with 3 AAC 21.655 as evidence of its submission to this state's jurisdiction and to this state's authority to examine its books and records;
(2) file with the director a certified copy of a certificate of authority or other acceptable evidence that it is licensed to transact insurance or reinsurance in at least one state, or, in the case of a United States branch of an alien assuming insurer, is entered through and licensed to transact insurance or reinsurance in at least one state;
(3) file annually with the director a copy of its annual statement filed with the insurance department of its state of domicile or, in the case of an alien assuming insurer, with the state through which it is entered and in which it is licensed to transact insurance or reinsurance, and a copy of its most recent audited financial statement; and
(4) maintain a surplus as regards policyholders in an amount not less than $20,000,000, or obtain the affirmative approval of the director upon a finding that it has adequate financial capacity to meet its reinsurance obligations and is otherwise qualified to assume reinsurance from domestic insurers.
(b) If the director determines that the assuming insurer has failed to meet or maintain any of these qualifications, the director may upon written notice and opportunity for hearing under AS 21.06.180 suspend or revoke the accreditation. Credit shall not be allowed a domestic ceding insurer under this section if the assuming insurer's accreditation has been revoked by the director, or if the reinsurance was ceded while the assuming insurer's accreditation was under suspension by the director.
History
- Authority: AS 21.06.090; AS 21.12.020
- Eff. 11/25/94, Register 132; am 12/26/2019, Register 232
3 AAC 21.650 Failure to meet criteria for accredited reinsurer
Repealed.
History
- Eff. 11/25/94, Register 132; repealed 12/26/2019, Register 232
3 AAC 21.655 Evidence of submission to jurisdiction
A reinsurer who is required to provide evidence of its submission to this state's jurisdiction and to this state's authority to examine its books and records must do so on a certificate of assuming insurer in substantially the following form:
CERTIFICATE OF ASSUMING INSURER
I, (name of officer) (title of officer)
of (name of assuming insurer), the assuming insurer under a
reinsurance agreement with one or more insurers domiciled in Alaska
certify that (name of assuming insurer) ("assuming insurer"):
(1) submits to the jurisdiction of any court of competent jurisdiction in Alaska for the adjudication of any issues arising out of the reinsurance agreement, agrees to comply with all requirements necessary to give such court jurisdiction, and will abide by the final decision of the court or any appellate court in the event of an appeal. Nothing in this paragraph constitutes or should be understood to constitute a waiver of the assuming insurer's rights to commence an action in any court of competent jurisdiction in the United States, to remove an action to a United States district court, or to seek a transfer of a case to another court as permitted by the laws of the United States or of any state. This paragraph is not intended to conflict with or override the obligation of the parties to the reinsurance agreement to arbitrate their disputes if an obligation is created in the agreement;
(2) designates the director of insurance of Alaska as its lawful attorney upon whom may be served any lawful process in any action, suit, or proceeding instituted by or on behalf of the ceding insurer, and arising from the reinsurance agreement, and attaches to this form the name and address for the forwarding of service received by the director;
(3) submits to the authority of the director of insurance of Alaska to examine its books and records, and agrees to bear the expense of any such examination; and
(4) submits with this form a current list of insurers domiciled in Alaska reinsured by the assuming insurer, and agrees to submit additions to or deletions from the list to the director of insurance of Alaska no less often than quarterly.
History
- Authority: AS 21.06.090; AS 21.12.020
- Eff. 11/25/94, Register 132; am 8/31/2008, Register 187
3 AAC 21.658 Reinsurer domiciled in another state
(a) The director will allow credit for reinsurance ceded by a domestic insurer to an authorized assuming insurer that meets the requirements of AS 21.12.020(a)(3) on or before the as of date of the ceding insurer's statutory financial statement if the authorized assuming insurer
(1) is domiciled in or, in the case of a United States branch of an alien assuming insurer, is entered through a state that employs standards regarding credit for reinsurance substantially similar to those applicable under AS 21.12.020;
(2) maintains a surplus as regards policyholders in an amount not less than $20,000,000; and
(3) files a properly executed Form AR-1 with the director as evidence of its submission to this state's authority to examine its books and records.
(b) The provisions of this section relating to surplus as regards policyholders do not apply to reinsurance ceded and assumed pursuant to pooling arrangements among insurers in the same holding company system. As used in this section, "substantially similar" means credit for reinsurance standards that the director determines equal or exceed the standards of AS 21.12.020 and 3 AAC 21.600 - 3 AAC 21.695.
History
- Authority: AS 21.06.090; AS 21.12.020
- Eff. 11/21/2004, Register 172; am 12/26/2019, Register 232
3 AAC 21.659 Reciprocal jurisdictions
(a) Under AS 21.12.020(a)(6), the director will allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that is licensed to write reinsurance by, and has its head office or is domiciled in, a reciprocal jurisdiction, and that meets the other requirements of this section.
(b) In addition to a jurisdiction within the meaning given in AS 21.12.020(i)(2)(A) and (B) and designated by the director under (d) of this section, a reciprocal jurisdiction includes a qualified jurisdiction, as determined by the director under AS 21.12.020(a)(5)(C) and 3 AAC 21.694(n) - (q), that is not otherwise described in AS 21.12.020(i)(2)(A) or (B), that is designated by the director under (d) of this section, and that the director determines meets all of the following additional requirements:
(1) provides that an insurer that has its head office or is domiciled in a qualified jurisdiction shall receive credit for reinsurance ceded to a United States-domiciled assuming insurer in the same manner as credit for reinsurance is received for reinsurance assumed by insurers domiciled in a qualified jurisdiction;
(2) does not require a United States-domiciled assuming insurer to establish or maintain a local presence as a condition for entering into a reinsurance agreement with a ceding insurer subject to regulation by the non-United States jurisdiction or as a condition to allow the ceding insurer to recognize credit for the reinsurance;
(3) recognizes the United States state regulatory approach to group supervision and group capital, by providing written confirmation by a competent regulatory authority, in a qualified jurisdiction, that insurers and insurance groups that are domiciled or maintain their headquarters in this state or another jurisdiction accredited by the National Association of Insurance Commissioners shall be subject only to worldwide prudential insurance group supervision including worldwide group governance, solvency and capital, and reporting, as applicable, by the director or the insurance supervisory official of the domiciliary state and will not be subject to group supervision at the level of the worldwide parent undertaking of the insurance or reinsurance group by the qualified jurisdiction; and
(4) provides written confirmation by a competent regulatory authority in a qualified jurisdiction that information regarding insurers and their parent, subsidiary, or affiliated entities, if applicable, shall be provided to the director in accordance with a memorandum of understanding or similar document between the director and a qualified jurisdiction, including the International Association of Insurance Supervisors Multilateral Memorandum of Understanding or other multilateral memoranda of understanding coordinated by the National Association of Insurance Commissioners.
(c) Credit shall be allowed when the reinsurance is ceded from an insurer domiciled in this state to an assuming insurer meeting each of the following conditions:
(1) the assuming insurer must be licensed to transact reinsurance by, and have its head office or be domiciled in, a reciprocal jurisdiction;
(2) the assuming insurer must have and maintain on an ongoing basis minimum capital and surplus, or its equivalent, calculated on at least an annual basis as of the preceding December 31 or at the annual date otherwise statutorily reported to the reciprocal jurisdiction, and confirmed as set out in (7) of this subsection according to the methodology of its domiciliary jurisdiction, in the following amounts:
(A) no less than $250,000,000; or
(B) if the assuming insurer is an association, including incorporated and individual unincorporated underwriters,
(i) minimum capital and surplus equivalents, net of liabilities, or own funds of the equivalent of at least $250,000,000; and
(ii) a central fund containing a balance of the equivalent of at least $250,000,000;
(3) the assuming insurer must have and maintain on an ongoing basis a minimum solvency or capital ratio, as applicable, as follows:
(A) if the assuming insurer has its head office or is domiciled in a reciprocal jurisdiction within the meaning given in AS 21.12.020(i)(2)(A), the ratio specified in the applicable covered agreement;
(B) if the assuming insurer is domiciled in a reciprocal jurisdiction within the meaning given in AS 21.12.020(i)(2)(B), a risk-based capital ratio of 300 percent of the authorized control level, calculated in accordance with the formula developed by the National Association of Insurance Commissioners; or
(C) if the assuming insurer is domiciled in a reciprocal jurisdiction within the meaning given in AS 21.12.020(i)(2)(C), after consultation with the reciprocal jurisdiction and considering recommendations published through the committee process of the National Association of Insurance Commissioners, a solvency or capital ratio as the director determines to be an effective measure of solvency;
(4) the assuming insurer must agree to and provide adequate assurance, in the form of a properly executed Form RJ-1, of its agreement to the following:
(A) the assuming insurer must agree to provide prompt written notice and explanation to the director if it falls below the minimum requirements set out in (2) or (3) of this subsection, or if a regulatory action is taken against it for serious noncompliance with applicable law;
(B) the assuming insurer must consent in writing to the jurisdiction of the courts of this state and to the appointment of the director as agent for service of process; the director may also require that consent be provided and included in each reinsurance agreement under the director's jurisdiction; nothing in this subparagraph limits or alters the capacity of parties to a reinsurance agreement to agree to alternative dispute resolution mechanisms, except to the extent the agreements are unenforceable under applicable insolvency or delinquency laws;
(C) the assuming insurer must consent in writing to pay all final judgments, wherever enforcement is sought, obtained by a ceding insurer, that have been declared enforceable in the territory where the judgment was obtained;
(D) each reinsurance agreement must include a provision requiring the assuming insurer to provide security in an amount equal to 100 percent of the assuming insurer's liabilities attributable to reinsurance ceded under that agreement if the assuming insurer resists enforcement of a final judgment that is enforceable under the law of the jurisdiction in which it was obtained or a properly enforceable arbitration award, whether obtained by the ceding insurer or by its legal successor on behalf of its estate, if applicable;
(E) the assuming insurer must confirm that it is not presently participating in a solvent scheme of arrangement, that involves this state's ceding insurers, and agrees to notify the ceding insurer and the director and to provide 100 percent security to the ceding insurer consistent with the terms of the scheme, should the assuming insurer enter into a solvent scheme of arrangement; the security must be in a form consistent with the provisions of AS 21.12.020(a)(5) and (c), 3 AAC 21.662, 3 AAC 21.664, 3 AAC 21.665, 3 AAC 21.670, and 3 AAC 21.685; in this subparagraph "solvent scheme of arrangement" means a foreign or alien statutory or regulatory compromise procedure
(i) subject to requisite majority creditor approval and judicial sanction in the assuming insurer's home jurisdiction either to finally commute liabilities of duly noticed classed members or creditors of a solvent debtor, or to reorganize or restructure the debts and obligations of a solvent debtor on a final basis; and
(ii) that may be subject to judicial recognition and enforcement of the arrangement by a governing authority outside the ceding insurer's home jurisdiction; and
(F) the assuming insurer must agree in writing to meet the applicable information filing requirements as set out in (5) of this subsection;
(5) the assuming insurer or its legal successor must provide, if requested by the director, on behalf of itself and its legal predecessors, the following documentation to the director:
(A) for the two years preceding entry into the reinsurance agreement and on an annual basis thereafter, the assuming insurer's annual audited financial statements, in accordance with the applicable law of the jurisdiction of its head office or domiciliary jurisdiction, as applicable, including the external audit report;
(B) for the two years preceding entry into the reinsurance agreement, the solvency and financial condition report or actuarial opinion, if filed with the assuming insurer's supervisor;
(C) before entry into the reinsurance agreement and not more than semiannually thereafter, an updated list of all disputed and overdue reinsurance claims outstanding for 90 days or more, regarding reinsurance assumed from ceding insurers domiciled in the United States; and
(D) before entry into the reinsurance agreement and not more than semiannually thereafter, information regarding the assuming insurer's assumed reinsurance by ceding insurer, ceded reinsurance by the assuming insurer, and reinsurance recoverable on paid and unpaid losses by the assuming insurer to allow for the evaluation of the criteria set out in (6) of this subsection;
(6) the assuming insurer must maintain a practice of prompt payment of claims under reinsurance agreements; the lack of prompt payment is evidenced if one or more of the following criteria are met:
(A) more than 15 percent of the reinsurance recoverables from the assuming insurer are overdue and in dispute as reported to the director;
(B) more than 15 percent of the assuming insurer's ceding insurers or reinsurers have overdue reinsurance recoverable on paid losses of 90 days or more that are not in dispute and that exceed for each ceding insurer or reinsurer $100,000, or as otherwise specified in a covered agreement; or
(C) the aggregate amount of reinsurance recoverable on paid losses that are not in dispute, but are overdue by 90 days or more, exceeds $50,000,000, or as otherwise specified in a covered agreement;
(7) the assuming insurer's supervisory authority must confirm to the director on an annual basis that the assuming insurer complies with the requirements set out in (2) and (3) of this subsection; and
(8) nothing in this subsection precludes an assuming insurer from providing the director with information on a voluntary basis.
(d) The director will timely create and publish a list of reciprocal jurisdictions considering the following:
(1) the director's list will include reciprocal jurisdictions within the meaning given in AS 21.12.020(i)(2)(A) and (B), and will consider other reciprocal jurisdictions included on the National Association of Insurance Commissioners' list of reciprocal jurisdictions; the director may approve a jurisdiction that does not appear on the list of reciprocal jurisdictions as provided by applicable law, regulation, or in accordance with criteria published through the committee process of the National Association of Insurance Commissioners; and
(2) the director may remove a jurisdiction from the list of reciprocal jurisdictions upon a determination that the jurisdiction no longer meets one or more of the requirements of a reciprocal jurisdiction, as provided by applicable law, regulation, or in accordance with a process published through the committee process of the National Association of Insurance Commissioners, except that the director will not remove from the list a reciprocal jurisdiction within the meaning given in AS 21.12.020(i)(2)(A) and (B); upon removal of a reciprocal jurisdiction from this list credit for reinsurance ceded to an assuming insurer domiciled in that jurisdiction will be allowed, if otherwise allowed under AS 21.12.020 or 3 AAC 21.600 - 3 AAC 21.695.
(e) The director shall timely create and publish a list of assuming insurers that have satisfied the following conditions set out in this section and to which cessions will be granted credit in accordance with this section:
(1) if a jurisdiction accredited by the National Association of Insurance Commissioners (NAIC) has determined that the conditions set out in (c) of this section have been met, the director may defer to that jurisdiction's determination and add an assuming insurer to the list of assuming insurers to which cessions shall be granted credit in accordance with this subsection, if
(A) the director accepts financial documentation filed with the NAIC or another jurisdiction accredited by the NAIC in satisfaction of the requirements of (c) of this section; or
(B) upon initial eligibility, the assuming insurer submits the information to the director required under AS 21.12.020(a)(6)(D) and complies with any additional requirements that the director may impose by regulations adopted under AS 44.62 (Administrative Procedure Act), except to the extent that they conflict with an applicable covered agreement; and
(2) when requesting that the director defer to another National Association of Insurance Commissioners accredited jurisdiction's determination, an assuming insurer must submit a properly executed Form RJ-1 and additional information as the director may require; the director will notify other states through the committee process of the National Association of Insurance Commissioners and provide relevant information with respect to the determination of eligibility.
(f) If the director determines that an assuming insurer no longer meets one or more of the requirements under AS 21.12.020(a)(6) and this section, the director may revoke or suspend the eligibility of the assuming insurer for recognition under AS 21.12.020(a)(6) and this section. In accordance with AS 21.12.020(h),
(1) while an assuming insurer's eligibility is suspended, a reinsurance agreement issued, amended, or renewed after the effective date of the suspension does not qualify for credit except to the extent that the assuming insurer's obligations under the contract are secured in accordance with AS 21.12.020(c) and 3 AAC 21.662; and
(2) if an assuming insurer's eligibility is revoked, a credit for reinsurance may not be granted after the effective date of the revocation with respect to any reinsurance agreement entered into by the assuming insurer, including a reinsurance agreement entered into before the date of revocation, except to the extent that the assuming insurer's obligations under the contract are secured in a form acceptable to the director and consistent with AS 21.12.020(c) and 3 AAC 21.662.
(g) Before denying statement credit or imposing a requirement to post security with respect to (f) of this section, or adopting similar requirements that will have substantially the same regulatory effect as security, the director
(1) will communicate with the ceding insurer, the assuming insurer, and the assuming insurer's supervisory authority that the assuming insurer no longer satisfies one of the conditions listed in (c) of this section;
(2) will provide the assuming insurer with 30 days from the date of the initial communication to submit a plan to remedy the defect, and 90 days from the date of the initial communication to remedy the defect, except in exceptional circumstances in which a shorter period is necessary for policyholder and other consumer protections;
(3) may impose the requirements as set out in this subsection, after the expiration of 90 days or less, as set out in (2) of this subsection, if the director determines that no or insufficient action was taken by the assuming insurer; and
(4) will provide a written explanation to the assuming insurer of the requirements set out in this subsection.
(h) If subject to a legal process of rehabilitation, liquidation, or conservation, as applicable, the ceding insurer, or its representative, may seek and, if determined appropriate by the court in which the proceedings are pending, may obtain an order requiring that the assuming insurer post security for all outstanding liabilities.
(i) Nothing in AS 21.12.020(h) limits or in any way alters the capacity of parties to any reinsurance agreement to renegotiate the agreement.
History
- Authority: AS 21.06.090; AS 21.12.020
- Eff. 12/23/2021, Register 240; am 8/23/2023, Register 247
3 AAC 21.660 Authorized assuming insurer maintaining a trust fund
(a) The director will allow credit for reinsurance ceded by a domestic insurer to an authorized assuming insurer that maintains a trust fund on or before the "as of" date of the ceding insurer's statutory financial statement. The director shall allow this credit for as long as credit for reinsurance is claimed by the domestic insurer and the trust fund is maintained in an amount and location as required under AS 21.12.020(a)(4). The assuming insurer shall report annually to the director substantially the same information as that required to be reported on the National Association of Insurance Commissioners annual statement form by licensed insurers, to enable the director to determine the sufficiency of the trust fund.
(b) The trust fund for a single assuming insurer shall consist of funds in trust in an amount not less than the assuming insurer's liabilities attributable to reinsurance ceded by United States domiciled insurers. In addition, the assuming insurer shall maintain a trusteed surplus of not less than $20,000,000, except as provided in (c) of this section.
(c) At any time after the assuming insurer has permanently discontinued underwriting new business secured by the trust for at least three full years, the insurance regulatory official with principal regulatory oversight of the trust may authorize a reduction in the required trusteed surplus, but only after a finding, based on an assessment of the risk, that the new required surplus level is adequate for the protection of United States ceding insurers, policyholders, and claimants in light of reasonably foreseeable adverse loss development. The risk assessment may involve an actuarial review, including an independent analysis of reserves and cash flows, and shall consider all material risk factors, including when applicable the lines of business involved, the stability of the incurred loss estimates and the effect of the surplus requirements on the assuming insurer's liquidity or solvency. The minimum required trusteed surplus may not be reduced to an amount less than 30 percent of the assuming insurer's liabilities attributable to reinsurance ceded by United States ceding insurers covered by the trust.
(d) The trust fund for a group including incorporated and individual unincorporated underwriters shall consist of:
(1) for reinsurance ceded under reinsurance agreements with an inception, amendment, or renewal date on or after January 1, 1993, funds in trust in an amount not less than the respective underwriters' several liabilities attributable to business ceded by United States domiciled ceding insurers to any underwriter of the group;
(2) for reinsurance ceded under reinsurance agreements with an inception date on or before December 31, 1992, and not amended or renewed after that date, notwithstanding the other provisions of 3 AAC 21.600 - 3 AAC 21.695, funds in trust in an amount not less than the respective underwriters' several insurance and reinsurance liabilities attributable to business written in the United States; and
(3) in addition to these trusts, the group shall maintain a trusteed surplus of which $100,000,000 shall be held jointly for the benefit of the United States domiciled ceding insurers of any member of the group for all the years of account.
(e) The incorporated members of a group may not be engaged in any business other than underwriting as a member of the group and shall be subject to the same level of regulation and solvency control by the group's domiciliary regulator as are the unincorporated members. The group shall, not later than 90 days after its financial statements are due to be filed with the group's domiciliary regulator, provide to the director
(1) an annual certification by the group's domiciliary regulator of the solvency of each underwriter member of the group; or
(2) if a certification is unavailable, a financial statement, prepared by independent public accountants, of each underwriter member of the group.
(f) The trust fund for a group of incorporated insurers under common administration, whose members possess aggregate policyholders surplus of $10,000,000,000, calculated and reported in substantially the same manner as prescribed by the annual statement instructions and Accounting Practices and Procedures Manual of the National Association of Insurance Commissioners, and which has continuously transacted an insurance business outside the United States for at least three years immediately prior to making application for accreditation, shall
(1) consist of funds in trust in an amount not less than the assuming insurers' several liabilities attributable to business ceded by United States domiciled ceding insurers to any members of the group pursuant to reinsurance contracts issued in the name of such group;
(2) maintain a joint trusteed surplus of which $100,000,000 shall be held jointly for the benefit of United States domiciled ceding insurers of any member of the group;
(3) file a properly executed Form AR-1 as evidence of the submission to this state's authority to examine the books and records of any of its members and shall certify that any member examined will bear the expense of any such examination; and
(4) not later than 90 days alter the statements are due to be filed with the group's domiciliary regulator, the group shall file with the director an annual certification of each underwriter member's solvency by the member's domiciliary regulators, and financial statements, prepared by independent public accountants, of each underwriter member of the group.
(g) Credit for reinsurance may not be granted unless the form of the trust and any amendments to the trust have been approved by either the insurance regulatory official of the state where the trust is domiciled or the insurance regulatory official of another state who, pursuant to the terms of the trust instrument, has accepted responsibility for regulatory oversight of the trust. The form of the trust and any trust amendments must be filed with the director of every state in which the ceding insurer beneficiaries of the trust are domiciled. The trust instrument must provide that
(1) contested claims shall be valid and enforceable out of funds in trust to the extent remaining unsatisfied 30 days after entry of the final order of any court of competent jurisdiction in the United States;
(2) legal title to the assets of the trust shall be vested in the trustee for the benefit of the grantor's United States ceding insurers, their assigns, and successors in interest;
(3) the trust shall be subject to examination as determined by the director;
(4) the trust shall remain in effect for as long as the assuming insurer, or any member or former member of a group of insurers, shall have outstanding obligations under reinsurance agreements subject to the trust; and
(5) no later than February 28 of each year, the trustee of the trust shall report to the director in writing setting forth the balance in the trust and listing the trust's investments at the preceding year-end, and shall certify the date of termination of the trust, if so planned, or certify that the trust will not expire prior to the following December 31.
(h) Notwithstanding any other provisions in the trust instrument, if the trust fund is inadequate because it contains an amount less than the amount required by this section or if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation, or similar proceedings under the laws of its state or country of domicile, the trustee shall comply with an order of the insurance regulatory official with regulatory oversight over the trust or with an order of a court of competent jurisdiction directing the trustee to transfer to the insurance regulatory official with regulatory oversight over the trust or other designated receiver all of the assets of the trust fund. The assets shall be distributed by and claims shall be filed with and valued by the insurance regulatory official with regulatory oversight over the trust in accordance with the laws of the state in which the trust is domiciled applicable to the liquidation of domestic insurance companies. If the insurance regulatory official with regulatory oversight over the trust determines that the assets of the trust fund or any part thereof are not necessary to satisfy the claims of the United States beneficiaries of the trust, the director with regulatory oversight over the trust shall return the assets, or any part thereof, to the trustee for distribution in accordance with the trust agreement. The grantor shall waive any right otherwise available to it under United States law that is inconsistent with this provision.
(i) Assets deposited in a trust fund established by an authorized assuming insurer must be valued according to fair market value and may only consist of
(1) cash in United States dollars;
(2) certificates of deposit issued by a qualified United States financial institution;
(3) clean, irrevocable, unconditional letters of credit containing an evergreen clause, issued or confirmed by a qualified United States financial institution; or
(4) investments of a type specified in (k) of this section.
(j) An investment in or issued by an entity controlling, controlled by, or under common control with either the grantor or beneficiary of the trust fund must not exceed five percent of the total of the trust fund. Not more than 20 percent of the total of the trust fund may be in foreign investments authorized in this section, and not more than 10 percent of the total of the trust fund may be in securities denominated in foreign currencies. A depository receipt denominated in United States dollars and representing rights conferred by a foreign security is classified as a foreign investment denominated in a foreign currency.
(k) The trust fund established by an authorized assuming insurer may only contain the following
(1) a valid and legally authorized government obligation that is not in default as to principal or interest that is issued, assumed, or guaranteed by
(A) the United States or by any agency or instrumentality of the United States;
(B) a state of the United States;
(C) a territory, possession, or other governmental unit of the United States;
(D) an agency or instrumentality of a governmental unit referred to in (B) or (C) of this paragraph, if the obligation is payable by law, as to both principal and interest, from taxes levied or required by law to be levied, or from adequate special revenues pledged or otherwise appropriated, or required by law to be provided for making these payments; the obligation may not be an obligation eligible for investment under this paragraph if the obligation is payable solely out of a special assessment on properties benefited by local improvements; or
(E) the government of any other country that is a member of the Organization for Economic Cooperation and Development and whose government obligations are rated high grade investments or the equivalent by a rating agency recognized by the Securities Valuation Office of the National Association of Insurance Commissioners;
(2) an obligation that
(A) is issued in the United States by a solvent United States institution, other than an insurance company, or that is assumed or guaranteed by that institution; or a non-United States market by a solvent United States institution, other than an insurance company, and that is dollar-denominated;
(B) is not in default as to principal or interest; and
(C) either
(i) is rated a high-grade investment or the equivalent by a rating agency recognized by the securities valuation office or, if not rated, is similar in structure and other material respects to other obligations of the same institution that are rated equivalent to a high-grade investment; or
(ii) is insured by at least one authorized insurer that is licensed to insure obligations in this state if, after considering the insurance, a rating agency recognized by the securities valuation office rates the obligation a high-grade investment or the equivalent; for purposes of this sub-subparagraph, an authorized insurer may not be the investing insurer or a parent, subsidiary, or affiliate of the investing insurer; or
(iii) has been designated as Class One or Class Two by the Securities Valuation Office of the National Association of Insurance Commissioners;
(3) an obligation issued, assumed, or guaranteed by a solvent non-United States institution chartered in a country that is a member of the Organization for Economic Cooperation and Development or obligations of United States corporations issued in a non-United States currency, provided that in either case the obligations are rated A or higher, or the equivalent, by a rating agency recognized by the Securities Valuation Office of the National Association of Insurance Commissioners;
(4) an equity investment in common shares or a partnership interest as described in (A) or (B) of this paragraph, if the investment in, or loan upon, any one institution's outstanding equity interests does not exceed one percent of the assets of the trust fund, or if the cost of the investment in equity interest made under this paragraph, when added to the aggregate cost of other investments in equity interest then held under this paragraph, does not exceed 10 percent of the assets of the trust fund; the equity investment may be made in
(A) a solvent United States institution if the
(i) obligation and preferred shares of the institution, if any, are eligible as investments under this subsection; and
(ii) equity interests of the institution, except an insurance company, are registered on a national securities exchange registered under 15 U.S.C. 78e - 78f, secs. 5 - 6 of the Securities Act of 1934, and price quotations are furnished through a nationwide automated quotations system approved by the Securities and Exchange Commission or the National Association of Securities Dealers; or
(B) a solvent institution organized under the laws of a member country of the Organization for Economic Cooperation and Development if the
(i) obligation is rated a high-grade investment or the equivalent by a rating agency recognized by the Securities Valuation Office of the National Association of Insurance Commissioners; and
(ii) equity interests of the institution arc registered on a securities exchange regulated by the government of a member country of the Organization for Economic Cooperation and Development;
(5) if a high-grade investment obligation or the equivalent by a rating agency recognized by the securities valuation office, an obligation issued, assumed, or guaranteed by a multinational development bank; for purposes of this paragraph, "multinational development bank" includes
(A) International Bank for Reconstruction and Development;
(B) European Bank for Reconstruction and Development;
(C) Inter-American Development Bank;
(D) Asian Development Bank;
(E) African Development Bank; and
(F) International Finance Corporation;
(6) a security of an investment company registered under 15 U.S.C. 80a-1 - 80a-64, Investment Company Act of 1940, if the
(A) investment company invests at least 90 percent of its assets in the types of securities that qualify as an investment
(i) under (1), (2), or (3) of this subsection or invests in securities that are determined by the director to be substantially similar; or
(ii) under (4)(A) of this subsection; and
(B) total investment in securities qualifying
(i) under (A)(i) of this paragraph does not exceed 10 percent of the assets of the trust fund and the total investment in qualifying investment companies does not exceed 25 percent of the assets of the trust fund; and
(ii) under (A)(ii) of this paragraph does not exceed five percent of the assets of the trust fund and the total investment in qualifying investment companies are included when calculating the permissible aggregate value of equity interests under (4)(A) of this subsection;
(7) a letter of credit that has the right and obligation of the trustee in a binding agreement, as approved by the director, to immediately draw down the full amount of the letter of credit and hold the proceeds in trust for the beneficiary of the trust fund if the letter of credit will otherwise expire without being renewed or replaced.
(l) An investment made under (k)(1), (2), or (3) of this section may not exceed
(1) five percent of the trust fund for the total of investments in or loans upon the obligations of an institution other than an institution that issues mortgage-related securities;
(2) five percent of the trust fund for an investment in any one mortgage-related security;
(3) 25 percent of the trust fund for the total of investments in mortgage-related security; or
(4) two percent of the trust fund for preferred or guaranteed shares issued or guaranteed by a solvent United States institution; in addition, an investment in preferred or guaranteed shares issued or guaranteed by a solvent United States institution is permitted only if all obligations of the institution are eligible as investments under (k)(2)(C)(i) or (iii) of this section.
(m) As used in this section,
(1) "mortgage-related security" means an obligation that is rated AA or higher, or the equivalent, by a securities rating agency recognized by the Securities Valuation Office of the National Association of Insurance Commissioners and that either
(A) represents ownership of one or more promissory notes or certificates of interest or participation in the notes, including any rights designed to assure servicing of, or the receipt or timeliness of receipt by the holders of the notes, certificates, or participation of amounts payable under, the notes, certificates, or participation, that
(i) are directly secured by a first lien on a single parcel of real estate, including stock allocated to a dwelling unit in a residential cooperative housing corporation, upon which is located a dwelling or mixed residential and commercial structure, or on a residential manufactured home as defined in 42 U.S.C. Section 5402(6), whether the manufactured home is considered real or personal property under the laws of the state in which it is located; and
(ii) were originated by a savings and loan association, savings bank, commercial bank, credit union, insurance company, or similar institution that is supervised and examined by a federal or state housing authority, or by a mortgage approved by the Secretary of Housing and Urban Development under 12 U.S.C. sections 1709 and 1715-b, or, where the notes involve a lien on the manufactured home, by an institution or by a financial institution approved for insurance by the Secretary of Housing and Urban Development pursuant to 12 U.S.C. section 1703; or
(B) is secured by one or more promissory notes, certificates of deposit or participation in the notes, with or without recourse to the insurer of the notes, and, by its terms, provides for payments of principal in relation to payments, or reasonable projections of payments, or notes meeting the requirements of items (A)(i) and (A)(ii) of this subsection;
(2) "promissory note," when used in connection with a manufactured home, includes a loan, an advance, or a credit sale as evidenced by a retail installment sales contract or other instrument.
History
- Authority: AS 21.06.090; AS 21.12.020
- Eff. 11/25/94, Register 132; am 11/21/2004, Register 172; am 12/26/2019, Register 232
3 AAC 21.661 Credit for reinsurance required by law
Under AS 21.12.020(a)(6), the director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of AS 21.12.020(a)(1) - (5) but only as to the insurance of risks located in jurisdictions where the reinsurance is required by the applicable law or regulation of that jurisdiction. As used in this section, "jurisdiction" means state, district, or territory of the United States and any lawful national government.
History
- Authority: AS 21.06.090; AS 21.12.020
- Eff. 12/26/2019, Register 232
3 AAC 21.662 Asset or reduction from liability
(a) Under AS 21.12.020(c), the director shall allow a reduction from liability for reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of AS 21.12.020(a) in an amount not exceeding the liabilities carried by the ceding insurer. The reduction shall be in the amount of funds held by or on behalf of the ceding insurer, including funds held in trust for the exclusive benefit of the ceding insurer, under a reinsurance contract with such assuming insurer as security for the payment of obligations under the reinsurance contract. The security shall be held in the United States subject to withdrawal solely by, and under the exclusive control of, the ceding insurer or, in the case of a trust, held in a qualified United States financial institution as defined in AS 21.12.020(c)(3)(A) - (C). This security may be in the form of any of the following
(1) cash;
(2) securities listed by the Securities Valuation Office of the National Association of Insurance Commissioners, including those deemed exempt from filing as defined by the Purposes and Procedures Manual of the Securities Valuation Office of the National Association of Insurance Commissioners, and qualifying as admitted assets;
(3) clean, irrevocable, unconditional, and "evergreen" letters of credit issued or confirmed by a qualified United States institution, as defined in AS 21.12.020(c)(3), effective no later than December 31 or the year for which filing is being made, and in the possession of, or in trust for, the ceding insurer on or before the filing date of its annual statement. Letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance, or confirmation will, notwithstanding the issuing or confirming institution's subsequent failure to meet applicable standards of issuer acceptability, continue to be acceptable as security until their expiration, extension, renewal, modification, or amendment, whichever first occurs; or
(4) any other form of security acceptable to the director.
(b) An admitted asset or a reduction from liability for reinsurance ceded to an unauthorized assuming insurer under this section shall be allowed only when the requirements of 3 AAC 21.635 and the applicable portions of 3 AAC 21.664, 3 AAC 21.665, and 3 AAC 21.685 have been satisfied.
History
- Authority: AS 21.06.090; AS 21.12.020
- Eff. 12/26/2019, Register 232
3 AAC 21.664 Letters of credit
(a) The letter of credit must be clean, irrevocable, unconditional, and issued or confirmed by a qualified United States financial institution as defined in AS 21.12.020(i). The letter of credit must contain an issue date and expiration date and must stipulate that the beneficiary need only draw a sight draft under the letter of credit and present it to obtain funds and that no other document need be presented. The letter of credit also must indicate that it is not subject to any condition or qualifications outside of the letter of credit. In addition, the letter of credit may not contain reference to any other agreements, documents, or entities, except as provided in (h)(1) of this section.
(b) The heading of the letter of credit may include a boxed section containing the name of the applicant and other appropriate notations to provide a reference for the letter of credit. The boxed section must be clearly marked to indicate that such information is for internal identification purposes only.
(c) The letter of credit must contain a statement to the effect that the obligation of the qualified United States financial institution under the letter of credit is in no way contingent upon reimbursement with respect thereto.
(d) The term of the letter of credit must be for at least one year and contain an "evergreen clause" that prevents the expiration of the letter of credit without due notice from the issuer. The "evergreen clause" must provide for a period of no less than 30-day's notice prior to the expiration date for nonrenewal.
(e) The letter of credit must state whether it is subject to and governed by the laws of this state or the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce Publication 600 (UCP 600) or International Standby Practices of the International Chamber of Commerce Publication 590 (ISP98), or any successor publication, and all drafts drawn thereunder shall be presentable at an office in the United States of a qualified United States financial institution.
(f) If the letter of credit is made subject to the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce Publication 600 (UCP 600) or International Standby Practices of the International Chamber of Commerce Publication 590 (ISP98), or any successor publication, then the letter of credit must specifically address and provide for an extension of time to draw against the letter of credit in the event that one or more of the occurrences specified in Article 36 of Publication 600 or any other successor publication, occur.
(g) If the letter of credit is issued by a financial institution authorized to issue letters of credit, other than a qualified United States financial institution as described in subsection (a) of this section, then the following additional requirements must be met
(1) the issuing financial institution shall formally designate the confirming qualified United States financial institution as its agent for the receipt and payment of the drafts; and
(2) the "evergreen clause" shall provide for 30-day notice prior to expiration date for nonrenewal.
(h) The reinsurance agreement in conjunction with which the letter of credit is obtained may contain provisions that
(1) require the assuming insurer to provide letters of credit to the ceding insurer and specify what the letters are to cover;
(2) stipulate that the assuming insurer and ceding insurer agree that the letter of credit provided by the assuming insurer under the provisions of the reinsurance agreement may be drawn upon at any time, notwithstanding any other provisions in the agreement, and shall be utilized by the ceding insurer or its successors in interest only for one or more of the following reasons
(A) to pay or reimburse the ceding insurer for
(i) the assuming insurer's share under the specific reinsurance agreement of premiums returned, but not yet recovered from the assuming insurers, to the owners of policies reinsured under the reinsurance agreement on account of cancellations of such policies;
(ii) the assuming insurer's share, under the specific reinsurance agreement, of surrenders and benefits or losses paid by the ceding insurer, but not yet recovered from the assuming insurers, under the terms and provisions of the policies reinsured under the reinsurance agreement; and
(iii) any other amounts necessary to secure the credit or reduction from liability for reinsurance taken by the ceding insurer;
(B) where the letter of credit will expire without renewal or be reduced or replaced by a letter of credit for a reduced amount and where the assuming insurer's entire obligations under the reinsurance agreement remain unliquidated and undischarged 10 days prior to the termination date, to withdraw amounts equal to the assuming insurer's share of the liabilities, to the extent that the liabilities have not yet been funded by the assuming insurer and exceed the amount of any reduced or replacement letter of credit, and deposit those amounts in a separate account in the name of the ceding insurer in a qualified United States financial institution apart from its general assets, in trust for such uses and purposes specified in (h)(2)(A) of this section as may remain after withdrawal and for any period after the termination date; all of the provisions of subsection (h) shall be applied without diminution because of insolvency on the part of the ceding insurer or assuming insurer.
(i) Nothing contained in subsection (h) shall preclude the ceding insurer and assuming insurer from providing for
(1) an interest payment, at a rate not in excess of the prime rate of interest, on the amounts held pursuant to (h)(2) of this section; or
(2) the return or any amounts drawn down on the letters of credit in excess of the actual amounts required for the above or any amounts that are subsequently determined not to be due.
History
- Authority: AS 21.06.090; AS 21.12.020
- Eff. 12/26/2019, Register 232
3 AAC 21.665 Conditions required for a trust agreement for an unauthorized assuming insurer
(a) The valid trust agreement shall
(1) be entered into between the beneficiary, the grantor, and a trustee which shall be a qualified United States financial institution as defined in AS 21.12.020(i);
(2) create a trust fund into which assets are deposited. All assets in the trust account shall be held by the trustee at the trustee's office in the United States.
(3) provide that
(A) the beneficiary shall have the right to withdraw assets from the trust account at any time, without notice to the grantor, subject only to written notice from the beneficiary to the trustee;
(B) no other statement or document is required to be pre- sented to withdraw assets, except that the beneficiary may be required to acknowledge receipt of withdrawn assets;
(C) it is not subject to any conditions or qualifications outside of the trust agreement; and
(D) it shall not contain references to any other agreements or documents except as provided for in (b) and (c) of this section;
(4) be established for the sole benefit of the beneficiary.
(5) require the trustee to
(A) receive assets and hold all assets in a safe place;
(B) determine that all assets are in such form that the beneficiary, or the trustee upon direction by the beneficiary, may whenever necessary negotiate any such assets, without consent or signature from the grantor or any other person or entity;
(C) furnish to the grantor and the beneficiary a statement of all assets in the trust account upon its inception and at intervals no less frequent than the end of each calendar quarter;
(D) notify the grantor and the beneficiary within 10 days of any deposits to or withdrawals from the trust account;
(E) upon written demand of the beneficiary, immediately take all steps necessary to transfer absolutely and unequivocally all right, title, and interest in the assets held in the trust account to the beneficiary and deliver physical custody of the assets to the beneficiary; and
(F) allow no substitutions or withdrawals of assets from the trust account, except on written instructions from the beneficiary, except that the trustee may, without the consent of but with notice to the beneficiary, upon call or maturity of any trust asset, withdraw such asset upon condition that the proceeds are paid into the trust account;
(6) provide that at least 30 days, but not more than forty-five days, prior to termination of the trust account, written notification of termination shall be delivered by the trustee to the beneficiary;
(7) be subject to and governed by the laws of the state in which the trust is domiciled;
(8) prohibit invasion of the trust corpus for the purpose of paying commission to, or reimbursing the expenses of, the trustee. In order for a letter of credit to qualify as an asset of the trust, the trustee shall have the right and the obligation pursuant to the deed of trust or some other binding agreement, as duly approved by the director, to immediately draw down the full amount of the letter of credit and hold the proceeds in trust for the beneficiaries of the trust if the letter of credit will otherwise expire without being renewed or replaced; and
(9) provide that the trustee is liable for its negligence, willful misconduct, or lack of good faith; the failure of the trustee to draw against the letter of credit in circumstances where such draw would be required shall be deemed to be negligence or willful misconduct.
(b) Notwithstanding other provisions of this section, when a trust agreement is established in conjunction with a reinsurance agreement covering risks other than life, annuities, and accident and health, where it is customary practice to provide a trust agreement for a specific purpose, the trust agreement may provide that the ceding insurer shall undertake to use and apply amounts drawn upon the trust account, without diminution because of the insolvency of the ceding insurer or the assuming insurer, only for the following purposes
(1) to pay or reimburse the ceding insurer for the assuming insurer's share under the specific reinsurance agreement regarding any losses and allocated loss expenses paid by the ceding insurer, but not recovered from the assuming insurer, or for unearned premiums due to the ceding insurer if not otherwise paid by the assuming insurer;
(2) to make payment to the assuming insurer of any amounts held in the trust account that exceed 102 percent of the actual amount required to fund the assuming insurer's obligations under the specific reinsurance agreement; or
(3) where the ceding insurer has received notification of termination of the trust account and where the assuming insurer's entire obligations under the specific reinsurance agreement remain unliquidated and undischarged 10 days before the termination date, to withdraw amounts equal to the obligations and deposit those amounts in a separate account, in the name of the ceding insurer in any qualified United States financial institution as defined in AS 21.12.020(i) apart from its general assets, in trust for the uses and purposes specified in (b)(1) and (2) of this section as may remain executory after such withdrawal and for any period after the termination date.
(c) Notwithstanding other provisions of this section, when a trust agreement is established to meet the requirements of 3 AAC 21.662 in conjunction with a reinsurance agreement covering life, annuities, or accident and health risks, where it is customary to provide a trust agreement for a specific purpose, the trust agreement may provide that the ceding insurer shall undertake to use and apply amounts drawn upon the trust account, without diminution because of the insolvency of the ceding insurer or the assuming insurer, only for the following purposes
(1) to pay or reimburse the ceding insurer for
(A) the assuming insurer's share under the specific reinsurance agreement of premiums returned, but not yet recovered from the assuming insurer, to the owners of policies reinsured under the reinsurance agreement on account of cancellations of the policies; and
(B) the assuming insurer's share under the specific reinsurance agreement of surrenders and benefits or losses paid by the ceding insurer, but not yet recovered from the assuming insurer, under the terms and provisions of the policies reinsured under the reinsurance agreement;
(2) to pay to the assuming insurer amounts held in the trust account in excess of the amount necessary to secure the credit or reduction from liability for reinsurance taken by the ceding insurer; or
(3) where the ceding insurer has received notification of termination of the trust and where the assuming insurer's entire obligations under the specific reinsurance agreement remain unliquidated and undischarged 10 days before the termination date, to withdraw amounts equal to the assuming insurer's share of liabilities, to the extent that the liabilities have not yet been funded by the assuming insurer, and deposit those amounts in a separate account, in the name of the ceding insurer in any qualified United States financial institution apart from its general assets, in trust for the uses and purposes specified in (c)(1) and (2) of this section as may remain executory after withdrawal and for any period after the termination date.
(d) Either the reinsurance agreement or the trust agreement must stipulate that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash in United States dollars, certificates of deposit issued by a United States bank and payable in United States dollars, and investments permitted by AS 21 or any combination of the above, provided investments in or issued by an entity controlling, controlled by, or under common control with either the grantor or the beneficiary of the trust shall not exceed five percent of total investments. The agreement may further specify the types of investments to be deposited. If the reinsurance agreement covers life, annuities or accident and health risks, then the provisions required by this subsection must be included in the reinsurance agreement.
(e) The trust agreement may provide that the trustee may resign upon delivery of a written notice of resignation, effective not less than 90 days after the beneficiary and grantor receive the notice and that the trustee may be removed by the grantor by delivery to the trustee and the beneficiary of a written notice of removal, effective not less than 90 days after the trustee and the beneficiary receive the notice, provided that no such resignation or removal shall be effective until a successor trustee has been duly appointed and approved by the beneficiary and the grantor and all assets in the trust have been duly transferred to the new trustee.
(f) The grantor may have the full and unqualified right to vote any shares of stock in the trust account and to receive from time to time payments of any dividends or interest upon any shares of stock or obligations included in the trust account. Any interest or dividends shall be either forwarded promptly upon receipt to the grantor or deposited in a separate account established in the grantor's name.
(g) The trustee may be given authority to invest, and accept substitutions of, any funds in the account, provided that no investment or substitution is made without prior approval of the beneficiary, unless the trust agreement specifies categories of investments acceptable to the beneficiary and authorizes the trustee to invest funds and to accept substitutions that the trustee determines are at least equal in current fair market value to the assets withdrawn and that are consistent with the restrictions in (j)(2) of this section.
(h) The trust agreement may provide that the beneficiary may at any time designate a party to which all or part of the trust assets are to be transferred. Transfer may be conditioned upon the trustee receiving, prior to or simultaneously, other specified assets.
(i) The trust agreement may provide that, upon termination of the trust account, all assets not previously withdrawn by the beneficiary shall, with written approval by the beneficiary, be delivered over to the grantor.
(j) A reinsurance agreement may contain provisions that
(1) require the assuming insurer to enter into a trust agreement and to establish a trust account for the benefit of the ceding insurer, and specifying what the agreement is to cover;
(2) require the assuming insurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, so that the ceding insurer, or the trustee upon the direction of the ceding insurer, may whenever necessary negotiate these assets without consent or signature from the assuming insurer or any other entity;
(3) require that all settlements of account between the ceding insurer and the assuming insurer be made in cash or its equivalent; and
(4) stipulate that the assuming insurer and the ceding insurer agree that the assets in the trust account, established pursuant to the provisions of the reinsurance agreement, may be withdrawn by the ceding insurer at any time, notwithstanding any other provisions in the reinsurance agreement, and shall be utilized and applied by the ceding insurer or its successors in interest by operation of law, including without limitation any liquidator, rehabilitator, receiver, or conservator of such company, without diminution because of insolvency on the part of the ceding insurer or the assuming insurer, only for the following purposes
(A) to pay or reimburse the ceding insurer for
(i) the assuming insurer's share under the specific reinsurance agreement of premiums returned, but not yet recovered from the assuming insurer, to the owners of policies reinsured under the reinsurance agreement because of cancellations of such policies;
(ii) the assuming insurer's share of surrenders and benefits or losses paid by the ceding insurer pursuant to the provisions of the policies reinsured under the reinsurance agreement; and
(iii) any other amounts necessary to secure the credit or reduction from liability for reinsurance taken by the ceding insurer; or
(B) to make payment to the assuming insurer of amounts held in the trust account in excess of the amount necessary to secure the credit or reduction from liability for reinsurance taken by the ceding insurer.
(k) The reinsurance agreement also may contain provisions that
(1) give the assuming insurer the right to seek approval from the ceding insurer, which may not be unreasonably or arbitrarily withheld, to withdraw from the trust account all or any part of the trust assets and transfer those assets to the assuming insurer, provided:
(A) the assuming insurer shall, at the time of withdrawal, replace the withdrawn assets with other qualified assets having a current fair market value equal to the market value of the assets withdrawn so as to maintain at all times the deposit in the required amount; or
(B) after withdrawal and transfer, the current fair market value of the trust account is no less than 102 percent of the required amount;
(2) provide for the return of any amount withdrawn in excess of the actual amounts required for (j)(4) of this subsection, and for interest payments at a rate not in excess of the prime rate of interest on such amounts; or
(3) permit the award by any arbitration panel or court of competent jurisdiction of:
(A) interest at a rate different from that provided in paragraph (k)(2) of this subsection;
(B) court or arbitration costs;
(C) attorney's fees; and
(D) any other reasonable expenses.
(l) A trust agreement may be used to reduce any liability for reinsurance ceded to an unauthorized assuming insurer in financial statements required to be filed with this department in compliance with 3 AAC 21.600 - 3 AAC 21.695 when established on or before the date of filing of the financial statement of the ceding insurer. Further, the reduction for the existence of an acceptable trust account may be up to the current fair market value of acceptable assets available to be withdrawn from the trust account at that time, but such reduction shall be no greater than the specific obligations under the reinsurance agreement that the trust account was established to secure.
(m) A trust agreement or underlying reinsurance agreement in existence before December 26, 2019 will continue to be acceptable until December 26, 2020, at which time the agreements will have to fully comply with 3 AAC 21.600 - 3 AAC 21.695 for the trust agreement to be acceptable.
(n) The failure of a trust agreement to specifically identify the beneficiary as defined in (o) of this section shall not be construed to affect any actions or rights that the director may take or possess pursuant to the provisions of the laws of this state.
(o) As used in this section
(1) "beneficiary" means the entity for whose sole benefit the trust has been established and any successor of the beneficiary by operation of law; if a court of law appoints a successor in interest to the named beneficiary, then the named beneficiary includes and is limited to the court appointed domiciliary receiver, including conservator, rehabilitator, or liquidator.
(2) "grantor" means the entity that has established a trust for the sole benefit of the beneficiary; when established in conjunction with a reinsurance agreement, the grantor is the unlicensed, unaccredited assuming insurer.
(3) "obligations" as used in (b) of this section means:
(A) reinsured losses and allocated loss expenses paid by the ceding company, but not recovered from the assuming insurer;
(B) reserves for reinsured losses reported and outstanding;
(C) reserves for reinsured losses incurred but not reported; and
(D) reserves for allocated reinsured loss expenses and unearned premiums.
History
- Authority: AS 21.06.090; AS 21.09.205 AS 21.09.200; AS 21.12.020
- Eff. 11/25/94, Register 132; am 11/21/2004, Register 172; am 12/26/2019, Register 232
3 AAC 21.670 Conditions permitted for an unauthorized assuming insurer
(a) In addition to meeting the requirements under 3 AAC 21.665, a trust agreement for a trust fund maintained by an unauthorized assuming insurer may provide that
(1) the trustee may resign upon delivery of a written notice of resignation, effective not less than 90 days after the notice is received by the beneficiary and grantor, or the trustee may be removed by the grantor upon delivery of a written notice of removal, effective not less than 90 days after the notice is received by the trustee and the beneficiary, but a resignation or removal under this paragraph may not be effective until a successor trustee has been approved and duly appointed by the beneficiary and the grantor and all assets in the trust fund have been duly transferred to the new trustee;
(2) the beneficiary may at any time designate a party to whom all or part of the trust assets are to be transferred; the transfer may be conditioned upon the trustee receiving, before or simultaneously with the transfer, other specified assets;
(3) before depositing an asset with the trustee, the grantor must execute an assignment or endorsement in blank or transfer legal title to the trustee of each share, obligation, or other asset requiring assignment, so the beneficiary or the trustee, upon the direction of the beneficiary, may negotiate the asset without further consent or signature of the grantor or any other entity;
(4) all assets not previously withdrawn by the beneficiary, upon termination of the trust fund and written approval of the beneficiary, will be delivered to the grantor; and
(5) specific types of investments allowed by law are to be deposited in the trust fund.
(b) If a trust agreement, for a trust fund maintained by an unauthorized assuming insurer, is established in conjunction with a reinsurance agreement that covers risks other than life, annuity, or health, and it is customary to provide a trust agreement for a specific purpose, the trust agreement may provide that a beneficiary must undertake to use and apply amounts drawn upon the trust, without diminution because of insolvency of the beneficiary or the grantor, for the purpose of
(1) payment or reimbursement to the beneficiary for the grantor's share under the reinsurance agreement regarding a loss or allocated loss expense paid by the beneficiary but not recovered from the grantor, or for unearned premium due to the beneficiary if not otherwise paid by the grantor;
(2) payment to the grantor of any amount held in the trust that exceeds 102 percent of the actual amount required to fund the grantor's obligation under the reinsurance agreement; or
(3) withdrawing an amount equal to the obligation and depositing that amount in a separate account in the name of the beneficiary in a qualified United States financial institution in trust for a purpose listed in (1) or (2) of this subsection, if the beneficiary has received notification of termination of the trust fund and if the grantor's obligation under the reinsurance agreement remains unliquidated and undischarged 10 days before the termination date.
(c) If a trust agreement, for a trust fund maintained by an unauthorized assuming insurer, is established in conjunction with a reinsurance agreement that covers life, annuity, or health risks, and it is customary to provide a trust agreement for a specific purpose, the trust agreement may provide that a beneficiary must undertake to use and apply amounts drawn upon the trust fund, without diminution because of insolvency of the beneficiary or the grantor, for the purpose of
(1) payment or reimbursement to the beneficiary for the grantor's share under the reinsurance agreement to policy owners reinsured under the reinsurance agreement on account of cancellations of the policies;
(2) payment or reimbursement of surrenders paid by the beneficiary but not yet recovered from the grantor under the terms and provisions of the policies reinsured under the reinsurance agreement;
(3) payment or reimbursement of benefits or losses paid by the beneficiary but not yet recovered from the grantor under the terms and provisions of the policies reinsured under the reinsurance agreement;
(4) payment to the grantor of amounts held in the trust fund in excess of the amount necessary to secure the credit or reduction from liability for reinsurance taken by the beneficiary; or
(5) withdrawing an amount equal to the unauthorized assuming insurer's share of liabilities to the extent that the liabilities have not yet been paid by the unauthorized assuming insurer and depositing that amount in a separate account in the name of the beneficiary in a qualified United States financial institution in trust for a purpose listed in (1) or (2) of this subsection, if the beneficiary has received notification of termination of the trust fund and if the grantor's obligation under the reinsurance agreement remains unliquidated and undischarged 10 days before the termination date.
(d) A reinsurance agreement between a ceding insurer and an unauthorized assuming insurer may provide that
(1) the unauthorized assuming insurer enter into a trust agreement, establishing a trust fund for the benefit of the ceding insurer and specifying what the trust agreement is to cover;
(2) the assets deposited in a trust fund must be valued according to their current fair market value and may only consist of cash in United States dollars, certificates of deposit issued by a United States bank and payable in United States dollars, investments permitted by AS 21.21.020, or any combination of these; but investments in or issued by an entity controlling, controlled by, or under common control with either the grantor or the beneficiary of the trust may not exceed five percent of the total investments;
(3) specific types of investments are to be deposited in the trust fund;
(4) before depositing an asset with the trustee, the grantor must execute an assignment or endorsement in blank or transfer legal title to the trustee of each share, obligation, or other asset requiring assignment, so the beneficiary or the trustee, upon the direction of the beneficiary, may negotiate the asset without further consent or signature of the grantor or any other entity;
(5) all settlements of accounts between the ceding insurer and the unauthorized assuming insurer must be made in cash or cash equivalent;
(6) the grantor and the beneficiary agree that the assets in the trust fund established by the provisions of the reinsurance agreement may be withdrawn by the beneficiary at any time, and must be used and applied by the beneficiary or its successors in interest by operation of law, including any liquidator, rehabilitator, receiver, or conservator, without diminution because of insolvency on the part of the beneficiary or the grantor, only for
(A) reimbursing the beneficiary for the grantor's share of premiums returned because of cancellations to the owners of policies reinsured under the reinsurance agreement;
(B) reimbursing the beneficiary for the grantor's share of surrenders paid by the beneficiary under the terms and provisions of the policies reinsured under the reinsurance agreement;
(C) reimbursing the beneficiary for the grantor's share of benefits or losses paid by the beneficiary under the terms and provisions of the policies reinsured under the reinsurance agreement;
(D) payment of any other amounts necessary to secure the credit or reduction of liability for reinsurance taken by the ceding insurer; or
(E) payment to the grantor of amounts held in trust fund in excess of the amount necessary to secure the credit or reduction of liability for credit taken by the ceding insurer;
(7) the unauthorized assuming insurer has the right to seek approval from the ceding insurer, which the ceding insurer may not unreasonably withhold, to withdraw any part or all of the trust assets and transfer those assets to the unauthorized assuming insurer, if
(A) the unauthorized assuming insurer, at the time of the withdrawal, replaces the withdrawn assets with other qualified assets having a market value equal to the market value of the assets withdrawn in order to maintain at all times the deposit in the required amount; or
(B) after withdrawal and transfer, the market value of the trust fund is not less than 102 percent of the required amount;
(8) any amount withdrawn in excess of the actual amounts required by (6) of this subsection is returned to the trust fund, and that interest payments are made to the trust fund at a rate not to exceed the prime rate of interest on the excess amounts held under (6) of this subsection; or
(9) to the extent allowable by law, an award by an arbitration panel or court of competent jurisdiction of any or all of the following is permitted:
(A) interest at a rate different from the prime rate of interest;
(B) court or arbitration costs;
(C) attorney's fees;
(D) other reasonable expenses.
(e) If a trust agreement is entered into in conjunction with a reinsurance agreement covering risks other than life, annuity, or health, the ceding insurer and unauthorized assuming insurer may include the provisions set out in (d)(1), (2), and (3) of this section in the trust agreement instead of including them in the reinsurance agreement.
(f) The grantor may have the full and unqualified right to vote any shares of stock in the trust fund and to promptly receive, in a manner determined by the grantor, payment of interest or dividends upon any shares of stock or obligations included in the trust. Upon receipt of any interest or dividends, the trustee shall promptly either forward the interest or dividend payments to the grantor or deposit them in a separate account established in the grantor's name.
(g) The trustee may be given authority to invest trust money or accept substitutions for any of the trust assets if the trust agreement specifies categories of investments acceptable to the beneficiary and authorizes the trustee to invest trust money and to accept substitutions that the trustee determines are at least equal in market value to the assets withdrawn and are consistent with the restrictions under 3 AAC 21.665(a)(12).
History
- Authority: AS 21.06.090; AS 21.12.020
- Eff. 11/25/94, Register 132; am 11/21/2004, Register 172
3 AAC 21.675 Letter of credit provisions for an unauthorized assuming insurer
(a) The letter of credit securing credit for reinsurance with an unauthorized assuming insurer must
(1) contain an issue date and date of expiration and stipulate that the ceding insurer need only draw a sight draft under the letter of credit and present it without other documentation to obtain funds;
(2) state that it is not subject to any condition or qualification outside of the letter of credit, except as provided in 3 AAC 21.600 - 3 AAC 21.695;
(3) contain no reference to any other agreement, document, or entity, except as provided in 3 AAC 21.600 - 3 AAC 21.695;
(4) state that the obligation of the qualified United States financial institution under the letter of credit is not contingent upon reimbursement;
(5) be for a term of no less than one year;
(6) contain an evergreen clause that provides for no less than 30 days notice of nonrenewal before the renewal date; and
(7) state that the letter of credit is governed by the laws of this state and that all drafts drawn will be presentable at an office in the United States of a qualified United States financial institution.
(b) The heading of a letter of credit may include a boxed section that contains the name of the applicant and other notations to provide a reference for the letter of credit. If used, the boxed section must be clearly marked that the information is for internal identification purposes only.
History
- Authority: AS 21.06.090; AS 21.12.020
- Eff. 11/25/94, Register 132
3 AAC 21.680 Reinsurance agreement secured by a letter of credit
(a) If a reinsurance agreement between a ceding insurer and an unauthorized assuming insurer is secured by a letter of credit, the reinsurance agreement, to the extent allowable by law, may provide that the ceding insurer may draw upon the letter of credit under the terms of the reinsurance agreement at any time. The ceding insurer or its successors in interest, without diminution because of insolvency on the part of the ceding insurer or unauthorized assuming insurer, may use a draw on the letter of credit only for
(1) reimbursing the ceding insurer for the unauthorized assuming insurer's share of premiums returned because of cancellation to the owners of policies reinsured under the reinsurance agreement;
(2) reimbursing the ceding insurer for the unauthorized assuming insurer's share of surrenders paid by the ceding insurer under the terms and provisions of the policies reinsured under the reinsurance agreement;
(3) reimbursing the ceding insurer for the unauthorized assuming insurer's share of benefits or losses paid by the ceding insurer under the terms and provisions of the policies reinsured under the reinsurance agreement; or
(4) paying other amounts necessary to secure the credit or reduction from liability taken by the ceding insurer under the reinsurance agreement.
(b) if a letter of credit is to expire without renewal or will be replaced by a letter of credit for a reduced amount and if the unauthorized assuming insurer's entire obligation under the specific reinsurance agreement remains unliquidated 10 days before the termination date, the ceding insurer may withdraw amounts equal to the unauthorized assuming insurer's share of liabilities, to the extent that the liabilities have not yet been paid by the unauthorized assuming insurer and exceed the amount of any replacement letter of credit. The ceding insurer may deposit those amounts in a separate account in the name of the ceding insurer in any qualified United States financial institution if they are held apart from the ceding insurer's general assets and in trust for the uses and purposes specified in (a) of this section, as exist after withdrawal and for any period after the termination date.
(c) Nothing in (a) or (b) of this section precludes the ceding insurer and unauthorized assuming insurer from providing for
(1) interest payment at a rate not to exceed the prime rate of interest on the amounts held under (a) or (b) of this section; or
(2) the return of any amounts drawn down on the letters of credit in excess of the actual amounts required under a reinsurance agreement and any amounts that are subsequently determined not to be due.
History
- Authority: AS 21.06.090; AS 21.12.020
- Eff. 11/25/94, Register 132; am 11/21/2004, Register 172
3 AAC 21.685 Other security for an unauthorized assuming insurer
Credit for reinsurance with an unauthorized assuming insurer may be secured by unencumbered funds withheld from the unauthorized assuming insurer by the ceding insurer and maintained in the United States, subject to withdrawal solely by the ceding insurer and under its exclusive control.
History
- Authority: AS 21.06.090; AS 21.12.020
- Eff. 11/25/94, Register 132
3 AAC 21.690 Contract affected
A new or renewal reinsurance transaction entered into after December 31, 1994 must conform to the requirements under 3 AAC 21.600 - 3 AAC 21.695 if credit is taken by the ceding insurer of the reinsurance transaction, but a trust agreement, letter of credit, or underlying reinsurance agreement that exists before January 1, 1995 will be acceptable in this state until December 31, 1995, at which time the agreement must comply fully with the requirements under 3 AAC 21.600 - 3 AAC 21.695.
History
- Authority: AS 21.06.090; AS 21.12.020
- Eff. 11/25/94, Register 132
3 AAC 21.693 Liabilities
For purposes of 3 AAC 21.600 - 3 AAC 21.695, liabilities are the assuming insurer's gross obligations that are attributable to reinsurance ceded by United States domiciled insurers, and that are not otherwise secured to the ceding insurer by the types of collateralization listed in AS 21.12.020(c). Liabilities must include
(1) for business ceded by domestic insurers authorized to write accident and health insurance or property and casualty insurance,
(A) losses and allocated loss expenses paid by the ceding insurer recoverable from the assuming insurer;
(B) reserves for losses reported and outstanding;
(C) reserves for losses incurred but not reported;
(D) reserves for allocated loss expenses; and
(E) unearned premiums;
(2) for business ceded by domestic insurers authorized to write life, health, and annuity insurance,
(A) aggregate reserves for life policies and contracts net of policy loans and net due and deferred premiums;
(B) aggregate reserves for accident and health policies;
(C) deposit fund and other obligations without life or disability contingencies; and
(D) obligations for policy and contract claims
History
- Authority: AS 21.06.090; AS 21.12.020
- Eff. 11/21/2004, Register 172
3 AAC 21.694 Credit for reinsurance-certified reinsurers
(a) Pursuant to AS 21.12.020(a)(5), the director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that has been certified as a reinsurer in this state at all times for which statutory financial statement credit for reinsurance is claimed under this section. The credit allowed shall be based upon the security held by or on behalf of the ceding; insurer in accordance with a rating assigned to the certified reinsurer by the director. The security shall be in a form consistent with the provisions of AS 21.12.020(a)(5) and AS 21.12.020(c) and 3 AAC 21.663, 3 AAC 21.664, and 3 AAC 21.685.
(b) The amount of security required in order for full credit to be allowed must correspond with the following requirements
(1)
Ratings Security Required Secure - 10%Secure - 210%Secure - 320%Secure - 450%Secure - 575%Vulnerable - 6100%
(2) affiliated reinsurance transactions shall receive the same opportunity for reduced security requirements as all other reinsurance transactions;
(3) the director shall require the certified reinsurer to post 100 percent security, for the benefit of the ceding insurer or its estate, upon the entry of an order of rehabilitation, liquidation or conservation against the ceding insurer;
(4) in order to facilitate the prompt payment of claims, a certified reinsurer shall not be required to post security for catastrophe recoverables for a period of one year from the date of the first instance of a liability reserve entry by the ceding company as a result of a loss from a catastrophic occurrence as recognized by the director; the one year deferral period is contingent upon the certified reinsurer continuing to pay claims in a timely manner; reinsurance recoverables for only the following lines of business as reported on the National Association of Insurance Commissioners annual financial statement related specifically to the catastrophic occurrence will be included in the deferral:
(A) Line 1: Fire
(B) Line 2: Allied Lines
(C) Line 3: Farm owners multiple peril
(D) Line 4: Homeowners multiple peril
(E) Line 5: Commercial multiple peril
(F) Line 9: Inland Marine
(G) Line 12: Earthquake
(H) Line 21: Auto physical damage;
(5) credit for reinsurance under this section applies only to reinsurance contracts entered into or renewed on or after the effective date of the certification of the assuming insurer; any reinsurance contract entered into prior to the effective date of the certification of the assuming insurer that is subsequently amended after the effective date of the certification of the assuming insurer, or a new reinsurance contract, covering any risk for which collateral was provided previously, shall only be subject to this section with respect to losses incurred and reserves reported from and after the effective date of the amendment or new contract; and
(6) nothing in this section shall prohibit the parties to a reinsurance agreement from agreeing to provisions establishing security requirements that exceed the minimum security requirements established for certified reinsurers under this section.
(c) The director shall post notice on the division of insurance Internet website promptly upon receipt of any application for certification, including instructions on how members of the public may respond to the application. The director may not take final action on the application until at least 30 days after posting the notice required by this section.
(d) The director shall issue written notice to an assuming insurer that has made application and been approved as a certified reinsurer. The notice must include the rating assigned the certified reinsurer in accordance with (d) of this section. The director shall publish a list of all certified reinsurers and their ratings.
(e) In order to be eligible for certification, the assuming insurer must meet the following requirements
(1) be domiciled and licensed to transact insurance or reinsurance in a Qualified Jurisdiction, as determined by the director pursuant to (l) - (o) of this section;
(2) maintain capital and surplus, or its equivalent, of no less than $250,000,000 calculated in accordance with (f)(8) of this subsection; this requirement may also be satisfied by an association including incorporated and individual unincorporated underwriters having minimum capital and surplus equivalents, net of liabilities, of at least $250,000,000 and a central fund containing a balance of at least $250,000,000;
(3) maintain financial strength ratings from two or more rating agencies deemed acceptable by the director; these ratings shall be based on interactive communication between the rating agency and the assuming insurer and shall not be based solely on publicly available information; these financial strength ratings will be one factor used by the director in determining the rating that is assigned to the assuming insurer; acceptable rating agencies include the following:
(A) Standard & Poor's;
(B) Moody's Investors Service;
(C) Fitch Ratings;
(D) A.M. Best Company; or
(E) any other nationally recognized statistical rating organization; and
(4) the certified reinsurer must comply with any other requirements reasonably imposed by the director.
(f) Each certified reinsurer shall be rated on a legal entity basis, with due consideration being given to the group rating where appropriate, except that an association including incorporated and individual unincorporated underwriters that has been approved to do business as a single certified reinsurer may be evaluated on the basis of its group rating. Factors that may be considered as part of the evaluation process include, but are not limited to, the following
(1) the certified reinsurer's financial strength rating from an acceptable rating agency; the maximum rating that a certified reinsurer may be assigned will correspond to its financial strength rating as outlined in the table below; the director shall use the lowest financial strength rating received from an approved rating agency in establishing the maximum rating of a certified reinsurer; a failure to obtain or maintain at least two financial strength ratings from acceptable rating agencies will result in loss of eligibility for certification:
Ratings Best S&P Moody's Fitch Secure - 1A++AAAAaaAAASecure - 2A+AA+, AA, AA-Aa1, Aa2, Aa3AA+, AA, AA-Secure - 3AA+, AA1, A2A+, ASecure - 4A-A-A3A-Secure - 5B++,BBB+, BBB,
BBB-Baa1, Baa2,
Baa3BBB+, BBB-Vulnerable 6B, B-C++,
C+, C, C-,
D, E, FBB+, BB, BB-,
B+, B, B-,
CCC, CC, C,
D, RBa1, Ba2,
Ba3, B1, B2,
B3, Caa, Ca,
CBB+, BB, BB-,
B+, B, B-,
CCC+, CC,
CCC-, DD
(2) the business practices of the certified reinsurer in dealing with its ceding insurers, including its record of compliance with reinsurance contractual terms and obligations;
(3) for certified reinsurers domiciled in the United States, a review of the most recent applicable the National Association of Insurance Commissioners Annual Statement Blank, either Schedule F for property/casualty reinsurers or Schedule S for life and health reinsurers;
(4) for certified reinsurers not domiciled in the United States, a review annually of Form CR-F for property/casualty reinsurers or Form CR-S for life and health reinsurers;
(5) the reputation of the certified reinsurer for prompt payment of claims under reinsurance agreements, based on an analysis of ceding insurer's Schedule F reporting of overdue reinsurance recoverables, including the proportion of obligations that are more than 90 days past due or are in dispute, with specific attention given to obligations payable to companies that are in administrative supervision or receivership;
(6) regulatory actions against the certified reinsurer;
(7) the report of the independent auditor on the financial statements of the insurance enterprise, on the basis described in (8) below;
(8) for certified reinsurers not domiciled in the United States, audited financial statements, regulatory filings, and actuarial opinion as filed with the non-United States jurisdiction supervisor, with a translation into English; upon the initial application for certification, the director will consider audited financial statements for the last two years filed with the reinsurer's non-United States jurisdiction supervisor;
(9) the liquidation priority of obligations to a ceding insurer in the certified reinsurer's domiciliary jurisdiction in the context of an insolvency proceeding;
(10) a certified reinsurer's participation in any solvent scheme of arrangement, or similar procedure, which involves United States ceding insurers; the director shall receive prior notice from a certified reinsurer that proposes partcipation by the certified reinsurer in a solvent scheme of arrangement; and
(11) any other information deemed relevant by the director.
(g) Based on the analysis conducted under (f)(5) of this section of a certified reinsurer's reputation for prompt payment of claims, the director may make appropriate adjustments in the security the certified reinsurer is required to post to protect its liabilities to United States ceding insurers, provided that the director shall, at a minimum, increase the security the certified reinsurer is required to post by one rating level under (f)(1) if the director finds that
(1) more than 15 percent of the certified reinsurer's ceding insurance clients have overdue reinsurance recoverables on paid losses of 90 days or more that are not in dispute and which exceed $100,000 for each cedent; or
(2) the aggregate amount of reinsurance recoverables on paid losses that are not in dispute that are overdue by 90 days or more exceeds $50,000,000.
(h) The assuming insurer must submit a properly executed Form CR-1 as evidence of its submission to the jurisdiction of this state, appointment of the director as an agent for service of process in this state, and agreement to provide security for 100 percent of the assuming insurer's liabilities attributable to reinsurance ceded by United States ceding insurers if it resists enforcement of a final United States judgment. The director may not certify any assuming insurer that is domiciled in a jurisdiction that the director has determined does not adequately and promptly enforce final United States judgments or arbitration awards.
(i) The certified reinsurer must agree to meet applicable information filing requirements as determined by the director, both with respect to an initial application for certification and on an ongoing basis. All information submitted by a certified reinsurer that is not otherwise public information subject to disclosure is exempt from disclosure under AS 40.25.110 -AS 40.25.220 and shall be withheld from public disclosure. The applicable information filing requirements are, as follows
(1) notification not later than 10 days after any regulatory actions taken against the certified reinsurer, any change in the provisions of its domiciliary license or any change in rating by an approved rating agency, including a statement describing such changes and the reasons therefore;
(2) annually, Form CR-F or CR-S, as applicable;
(3) annually, the report of the independent auditor on the financial statements of the insurance enterprise, on the basis described in (4) below;
(4) annually, the most recent audited financial statements, regulatory filings, and actuarial opinion, as filed with the certified reinsurer's supervisor, with a translation into English; upon the initial application for certification, the director will consider audited financial statements for the last two years filed with the reinsurer's non-United States jurisdiction supervisor;
(5) at least annually, an updated list of all disputed and overdue reinsurance claims regarding reinsurance assumed from United States domestic ceding insurers;
(6) a certification from the certified reinsurer's domestic regulator that the certified reinsurer is in good standing and maintains capital in excess of the jurisdiction's highest regulatory action level; and
(7) any other information that the director may reasonably require.
(j) In the case of a downgrade by a rating agency or other disqualifying circumstance, the director shall upon written notice assign a new rating to the certified reinsurer in accordance with the requirements of (f)(1) of this section.
(k) The director shall have the authority to suspend, revoke, or otherwise modify a certified reinsurer's certification at any time if the certified reinsurer fails to meet its obligations or security requirements under this section, or if other financial or operating results of the certified reinsurer, or documented significant delays in payment by the certified reinsurer, lead the director to reconsider the certified reinsurer's ability or willingness to meet its contractual obligations.
(l) If the rating of a certified reinsurer is upgraded by the director, the certified reinsurer may meet the security requirements applicable to its new rating on a prospective basis, but the director shall require the certified reinsurer to post security under the previously applicable security requirements as to all contracts in force on or before the effective date of the upgraded rating. If the rating of a certified reinsurer is downgraded by the director, the director shall require the certified reinsurer to meet the security requirements applicable to its new rating for all business it has assumed as a certified reinsurer.
(m) Upon revocation of the certification of a certified reinsurer by the director, the assuming insurer shall be required to post security in accordance with 3 AAC 21.662 in order for the ceding insurer to continue to take credit for reinsurance ceded to the assuming insurer. If funds continue to be held in trust in accordance with 3 AAC 21.660, the director may allow additional credit equal to the ceding insurer's pro rata share of such funds, discounted to reflect the risk of uncollectibility and anticipated expenses of trust administration. Notwithstanding the change of a certified reinsurer's rating or revocation of its certification, a domestic insurer that has ceded reinsurance to that certified reinsurer may not be denied credit for reinsurance for a period of three months for all reinsurance ceded to that certified reinsurer, unless the reinsurance is found by the director to be at high risk of uncollectibility.
(n) If, upon conducting an evaluation under this section with respect to the reinsurance supervisory system of any non-United States assuming insurer, the director determines that the jurisdiction qualifies to be recognized as a qualified jurisdiction, the director shall publish notice and evidence of such recognition in an appropriate manner. The director may establish a procedure to withdraw recognition of those jurisdictions that are no longer qualified.
(o) In order to determine whether the domiciliary jurisdiction of a non-United States assuming insurer is eligible to be recognized as a qualified jurisdiction, the director shall evaluate the reinsurance supervisory system of the non-United States jurisdiction, both initially and on an ongoing basis, and consider the rights, benefits and the extent of reciprocal recognition afforded by the non-United States jurisdiction to reinsurers licensed and domiciled in the United States. The director shall determine the appropriate approach for evaluating the qualifications of such jurisdictions, and create and publish a list of jurisdictions whose reinsurers may be approved by the director as eligible for certification. A qualified jurisdiction must agree to share information and cooperate with the director with respect to all certified reinsurers domiciled within that jurisdiction. Additional factors to be considered in determining whether to recognize a qualified jurisdiction, in the discretion of the director, include but are not limited to the following
(1) the framework under which the assuming insurer is regulated;
(2) the structure and authority of the domiciliary regulator with regard to solvency regulation requirements and financial surveillance;
(3) the substance of financial and operating standards for assuming insurers in the domiciliary jurisdiction;
(4) the form and substance of financial reports required to be filed or made publicly available by reinsurers in the domiciliary jurisdiction and the accounting principles used;
(5) the domiciliary regulator's willingness to cooperate with United States regulators in general and the director in particular;
(6) the history of performance by assuming insurers in the domiciliary jurisdiction;
(7) any documented evidence of substantial problems with the enforcement of final United States judgments in the domiciliary jurisdiction; a jurisdiction will not be considered to be a qualified jurisdiction if the director has determined that it does not adequately and promptly enforce final United States judgments or arbitration awards;
(8) any relevant international standards or guidance with respect to mutual recognition of reinsurance supervision adopted by the International Association of Insurance Supervisors or successor organization; and
(9) any other matters deemed relevant by the director.
(p) A list of qualified jurisdictions shall be published through the National Association of Insurance Commissioners Committee Process. The director shall consider this list in determining qualified jurisdictions. If the director approves a jurisdiction as qualified that does not appear on the list of qualified jurisdictions, the director shall provide thoroughly documented justification with respect to the criteria provided under (o) of this section.
(q) United States jurisdictions that meet the requirements for accreditation under the National Association of Insurance Commissioners financial standards and accreditation program shall be recognized as qualified jurisdictions.
(r) If an applicant for certification has been certified as a reinsurer in a National Association of Insurance Commissioners accredited jurisdiction, the director has the discretion to defer to that jurisdiction's certification, and to defer to the rating assigned by that jurisdiction, if the assuming insurer submits a properly executed Form CR-1 and such additional information as the director requires. The assuming insurer shall be considered to be a certified reinsurer in this state.
(s) Any change in the certified reinsurer's status or rating in the other jurisdiction shall apply automatically in this state as of the date it takes effect in the other jurisdiction. The certified reinsurer shall notify the director of any change in its status or rating within 10 days after receiving notice of the change.
(t) The director may withdraw recognition of the other jurisdiction's rating at any time and assign a new rating in accordance with this section.
(u) The director may withdraw recognition of the other jurisdiction's certification at any time, with written notice to the certified reinsurer. Unless the director suspends or revokes the certified reinsurer's certification in accordance with (k) of this section, the certified reinsurer's certification shall remain in good standing in this state for a period of three months, which shall be extended if additional time is necessary to consider the assuming insurer's application for certification in this state.
(v) In addition to the clauses required under 3 AAC 21.635, reinsurance contracts entered into or renewed under this section must include a proper funding clause, that requires the certified reinsurer to provide and maintain security in an amount sufficient to avoid the imposition of any financial statement penalty on the ceding insurer under this section for reinsurance ceded to the certified reinsurer.
(w) The director shall comply with all reporting and notification requirements that may be established by the National Association of Insurance Commissioners with respect to certified reinsurers and qualified jurisdictions.
History
- Authority: AS 21.06.090; AS 21.12.020
- Eff. 12/26/2019, Register 232; am 12/23/2021, Register 240
3 AAC 21.695 Definitions
In 3 AAC 21.600 - 3 AAC 21.695, unless the context requires otherwise,
(1) "as of date" means a specific measurement date for a set of statutory financial statements;
(2) "authorized assuming insurer" means an assuming insurer that meets the requirements of AS 21.12.020(a);
(3) "beneficiary" means a ceding insurer for whose sole benefit a trust or letter of credit has been established or a successor in interest of the ceding insurer by operation of law, including, without limitation, a liquidator, rehabilitator, receiver, or conservator of the ceding insurer;
(4) "deficiency reserves" means a supplemental reserve that a life insurer is required to show in the life insurer's balance sheet if the gross premium charged on a class of those insured is less than the net level premium reserve or modified reserve;
(5) "excess interest reserve" means a supplemental reserve for interest credited to an insured's contract in excess of the amount guaranteed by the terms of the contract;
(6) "grantor" means an assuming insurer that has established a trust for the sole benefit of a beneficiary;
(7) "negative experience" means the condition that results from a contract of reinsurance before its termination date when, considering only the cash flows under that contract adjusted for the time value of money using the discount factor inherent in the contract, the total amount paid out by the reinsurer in losses, commission, and expense allowance exceeds the amount the reinsurer has received in premiums from the ceding company;
(8) "obligation" means
(A) a reinsured loss or allocated loss expense paid by the ceding company, but not recovered from the assuming insurer;
(B) a reserve for a reinsured loss reported and outstanding;
(C) a reserve for a reinsured loss incurred but not reported; or
(D) a reserve for an allocated reinsured loss expense or unearned premium;
(9) "unauthorized assuming insurer" means an assuming insurer that does not meet the requirements of AS 21.12.020(a);
(10) "high grade investments" has the meaning given in 3 AAC 21.399;
(11) "qualified United States financial institution" means an institution that meets the requirements of AS 21.12.020(f);
(12) "securities valuation office" has the meaning given in 3 AAC 21.399;
(13) "actuarial method" means the methodology used to determine the required level of primary security, as described in 3 AAC 21.615(c);
(14) "covered policies"
(A) means
(i) life insurance policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits, except for flexible premium universal life insurance policies; or
(ii) flexible premium universal life insurance policies with provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period;
(B) does not include
(i) policies subject to an exemption under 3 AAC 21.615(j); or
(ii) grandfathered policies;
(15) "grandfathered policies" means covered policies that were
(A) issued before January 1, 2015; and
(B) ceded, as of December 31, 2014, as part of a reinsurance treaty that would not have met one of the exemptions set out in 3 AAC 21.615(j) had that subsection then been in effect;
(16) "non-covered policies" means policies that are not covered policies or grandfathered policies.
(17) "other security" means the security acceptable to the director other than primary security;
(18) "primary security" means the following forms of security:
(A) cash meeting the requirements of AS 21.12.020(c)(1);
(B) securities listed by the securities valuation office meeting the requirements of AS 21.12.020(c)(2), but excluding a synthetic letter of credit, contingent note, credit-linked note, or other similar security that operates in a manner similar to a letter of credit, and excluding the securities issued by the ceding insurer or its affiliates; and
(C) for security held in connection with funds-withheld and modified coinsurance reinsurance treaties:
(i) commercial loans in good standing of CM3 quality and higher;
(ii) policy loans; and
(iii) derivatives acquired in the normal course and used to support and hedge liabilities pertaining to the actual risks in the policies ceded under the reinsurance treaty;
(19) "required level of primary security" means the dollar amount determined by applying the actuarial method to the risks ceded with respect to covered policies, but not more than the total reserve ceded;
(20) "valuation manual" means the valuation manual adopted by the National Association of Insurance Commissioners as described in AS 21.18.112, with all amendments adopted by the National Association of Insurance Commissioners that are effective for the financial statement date on which credit for reinsurance is claimed;
(21) "VM-20" means "Requirements for Principle-Based Reserves for Life Products," including all relevant definitions, from the valuation manual.
History
- Authority: AS 21.06.090; AS 21.12.020
- Eff. 10/21/92, Register 124; am 11/25/94, Register 132; am 11/21/2004, Register 172; am 12/23/2021, Register 240
Article 7 Financial Examination of and Annual Audit Reporting Requirements for Admitted Insurers
3 AAC 21.700 Financial examination
The director will make a determination as to the financial condition of each non-domestic admitted insurer by conducting an examination under AS 21.06.120 at least once every five years.
History
- Authority: AS 21.06.090; AS 21.06.120; AS 21.09.175
- Eff. 10/24/92, Register 124
3 AAC 21.705 Annual audit of financial statements
(a) Except as provided in (b) and (c) of this section, the filing requirement of AS 21.09.200(g) constitutes a financial or organizational hardship on an insurer, and the insurer is exempt from the filing requirement if
(1) direct premiums written in the state are less than $1,000,000 as reported in the most recent calendar year; and
(2) the number of policyholders or certificate holders of direct written policies nationwide at the end of the most recent calendar year is less than 1,000.
(b) An insurer having assumed premium under contracts or treaties of reinsurance of $1,000,000 or more as reported at the end of the most recent calendar year is not eligible for exemption under (a) of this section.
(c) Notwithstanding (a) of this section, the director may make a specific finding that the exemption is not available to an insurer because the filing is necessary to carry out the director's regulatory responsibility.
(d) A foreign or alien insurer filing an annual audited financial report with the insurance regulatory official of another state under that state's requirements that are substantially similar to the requirements of AS 21.09.200(g) is exempt from the filing requirements under AS 21.09.200(g) if a
(1) copy of the annual audited financial report, the report on unremediated material weaknesses in internal control over financial reporting, and the accountant's letter of qualifications are filed with the other state in accordance with the due dates under AS 21.09.200(g) and (h);
(2) Canadian insurer files the accountant's reports required by the Office of the Superintendent of Financial Institutions, Canada; and
(3) copy of any notification of adverse financial condition report filed with the other state is filed with the director in accordance with 3 AAC 21.735.
History
- Authority: AS 21.06.060; AS 21.06.090; AS 21.09.200
- Eff. 8/31/2008, Register 187; am 12/31/2010, Register 196
3 AAC 21.710 Requirements regarding contents and filing of annual audited financial report
(a) The director may extend the due date of the annual audited financial report for 30-day periods if the insurer and its independent certified public accountant submit a request that gives the reasons for needing an extension and the director determines there is good cause to grant an extension. The request for extension must be submitted in writing not fewer than 10 days before the due date of the report and in sufficient detail to permit the director to make an informed decision with respect to the requested extension. If the director grants an extension, a similar extension is also granted for the filing of management's report of internal control over financial reporting.
(b) The annual audited financial report must report the financial position of the insurer as of the end of the most recent calendar year and the results of its operations, cash flows, and changes in capital and surplus for the year then ended in conformity with accounting practices prescribed or otherwise permitted by the insurance regulatory official of the insurer's state of domicile.
(c) The annual audited financial report must include the
(1) report of an independent certified public accountant;
(2) balance sheet reporting admitted assets, liabilities, capital, and surplus;
(3) statement of operations;
(4) statement of cash flow;
(5) statement of changes in capital and surplus; and
(6) notes to the financial statements that are required by the National Association of Insurance Commissioners' annual financial statement instructions and the National Association of Insurance Commissioners' accounting practices and procedures manual, including a reconciliation of any differences between the annual audited financial report and the statement of financial condition filed under AS 21.09.200(a) with a written description of the nature of these differences.
(d) The annual financial statements included with the audited financial report must be prepared in a form and using language and groupings substantially the same as the statement of financial condition filed under AS 21.09.200(a) and must be comparative by presenting the amounts as of December 31 of the current year and the amounts as of the immediately preceding December 31. In the first year in which an insurer is required to file an audited financial report, the comparative data may be omitted.
History
- Authority: AS 21.06.060; AS 21.06.090; AS 21.09.200
- Eff. 8/31/2008, Register 187; am 12/26/2019, Register 232
3 AAC 21.715 Designation of independent certified public accountant
(a) Within 60 days after the director notifies an insurer that the insurer is required to file an annual audited financial report, the insurer shall submit in writing to the director the name and address of the independent certified public accountant or accounting firm retained to conduct the annual audit.
(b) An insurer shall obtain a letter from the retained accountant that states that the accountant is aware of the provisions of the law of this state that relate to accounting and financial matters and affirms that the accountant will express the opinion on the financial statements in terms of their conformity with accounting practices prescribed or otherwise permitted by the insurance regulatory official of the state of domicile and that specifies exceptions that the accountant believes are appropriate. The insurer shall file a copy of the letter with the director.
(c) If the accountant who issued the last filed annual audited financial report is dismissed or resigns, the insurer shall notify the director within five working days after the date of the dismissal or resignation. Within 10 working days after the notification, the insurer shall furnish the director with a separate letter stating whether, in the two years preceding the date of the dismissal or resignation, any disagreements arose with the former accountant on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, and whether those disagreements, if not resolved to the satisfaction of the former accountant, would have caused the accountant to reference the subject matter of the disagreement in connection with the accountant's opinion. The disagreements that must be reported include those resolved to the former accountant's satisfaction and those not resolved to the former accountant's satisfaction and are disagreements that occurred at the decision-making level between personnel of the insurer responsible for presentation of its financial statements and personnel of the accountant responsible for issuing the audited financial report. The insurer shall request in writing that the former accountant furnish a letter addressed to the insurer stating whether the accountant agrees with the statements contained in the insurer's letter and, if not, stating the reasons why the accountant disagrees. The insurer shall furnish to the director the former accountant's letter together with the insurer's letter.
History
- Authority: AS 21.06.060; AS 21.06.090; AS 21.09.200
- Eff. 8/31/2008, Register 187
3 AAC 21.720 Qualifications of qualified independent certified public accountant
(a) The director will not recognize a person or firm as a qualified independent certified public accountant if the person or firm
(1) is not in good standing with the American Institute of Certified Public Accountants and in each state in which the person or firm is licensed to practice;
(2) if a Canadian or British firm, is not a chartered accountant; or
(3) has either directly or indirectly entered into an agreement of indemnity or release from liability with respect to the audit of the insurer.
(b) Except as otherwise provided in this section, the director will recognize an independent certified public accountant as qualified if the accountant conforms to the standards of the profession, as contained in the Code of Professional Conduct of the American Institute of Certified Public Accountants and 12 AAC 04.005 - 12 AAC 04.110 (Rules of Professional Conduct of the Board of Public Accountancy).
(c) An independent certified public accountant may enter into an agreement with an insurer to have disputes relating to an audit resolved by mediation or arbitration. If a delinquency proceeding is commenced against the insurer under AS 21.78, the mediation or arbitration provisions operate at the option of the statutory successor.
(d) The firm's lead or coordinating partner having primary responsibility for the audit may not act in that capacity for more than five consecutive years. The person will be disqualified from acting in that or a similar capacity for the same insurer or its insurance subsidiaries or affiliates for a period of five consecutive years. A domestic insurer may apply in writing to the director for relief from the requirements of this subsection on the basis of unusual circumstances. The application must be made at least 30 days before the end of the calendar year. An insurer, regardless of its state of domicile, shall file any grant of relief from the requirements of this subsection, or from substantially similar requirements in another state, with the insurer's annual statement filing in the states where the insurer is licensed or is doing business and with the National Association of Insurance Commissioners. The director may consider the following in determining if relief will be granted:
(1) the number of partners, expertise of the partners, or the number of insurance clients in the firm;
(2) the premium volume of the insurer;
(3) the number of jurisdictions in which the insurer transacts business.
(e) The director will not recognize as a qualified independent certified public accountant, or accept an annual audited financial report prepared by, in whole or in part, an accountant who has
(1) been convicted of fraud, bribery, a violation of 18 U.S.C. 1961 - 1968 (Racketeer Influenced and Corrupt Organizations Act), or any other dishonest conduct or practice under federal or state law;
(2) been found to have violated AS 21 or this chapter with respect to any previous report submitted under 3 AAC 21.705 - 3 AAC 21.799; or
(3) demonstrated a pattern or practice of failing to detect or disclose material information in previous reports filed with the division.
(f) The director may hold a hearing under AS 21.06.170 - 21.06.230 to determine if an independent certified public accountant is qualified and, after considering the evidence presented, may determine that the accountant is not qualified for purposes of expressing an opinion on the financial statements in the annual audited financial report. The director may order the insurer to replace the accountant with another accountant who meets the requirements of this section as a qualified independent certified public accountant.
(g) The director will not recognize as a qualified independent certified public accountant, or accept an annual audited financial report prepared by, in whole or in part, an accountant who provides to an insurer, contemporaneously with the audit, any of the following non-audit services:
(1) bookkeeping or other services related to the accounting records or financial statements of the insurer;
(2) financial information systems design and implementation;
(3) appraisal or valuation services, fairness opinions, or contribution-in-kind reports;
(4) actuarially-oriented advisory services involving the determination of amounts recorded in the financial statements; notwithstanding this paragraph,
(A) the accountant may assist an insurer in understanding the methods, assumptions, and inputs used to determine the amounts recorded in the financial statement, only if it is reasonable to conclude that the services provided will not be subject to audit procedures during an audit of the insurer's financial statements;
(B) an accountant's actuary may also issue an actuarial opinion or certification on an insurer's reserves if the
(i) accountant or the accountant's actuary has not performed any management function or made any management decision for the insurer;
(ii) the insurer has competent personnel, or engages a third-party actuary, to estimate the reserves for which management takes responsibility; and
(iii) the accountant's actuary tests the reasonableness of the reserves after the insurer's management has determined the amount of the reserves;
(5) internal audit outsourcing services;
(6) management or human resources functions;
(7) services that the accountant may not provide unless registered under 15 U.S.C. 78o (sec. 15 of the Securities Exchange Act of 1934) as a broker-dealer;
(8) services that the accountant may not provide unless registered under 15 U.S.C. 80b-3 (sec. 203 of the Investment Advisers Act of 1940) as an investment adviser;
(9) investment banking services;
(10) legal or expert services unrelated to the audit.
(11) Any other services that the director determines are impermissible.
(h) The director will not recognize as a qualified independent certified public accountant, or accept an annual audited financial report prepared by, in whole or in part, an accountant who
(1) functions in the role of management for the insurer;
(2) audits the accountant's own work; or
(3) serves in an advocacy role for the insurer.
(i) An insurer reporting direct written and assumed premiums of less than $100,000,000 nationwide in the most recent calendar year may request an exemption from (g) of this section for its accountant by filing with the director a written statement giving the reasons why the insurer's accountant should be exempt from (g) of this section. If, after review of the insurer's statement, the director finds that compliance with (g) of this section would constitute a financial or organizational hardship upon the insurer, the director will grant an exemption.
(j) A qualified independent certified public accountant who performs the audit may engage in other non-audit services for the insurer, including tax services, that are not described in (g) of this section and that do not result in a violation of (h) of this section.
(k) Audit services and non-audit services provided to an insurer by the qualified independent certified public accountant of the insurer must be preapproved by the board of directors or audit committee. The preapproval requirement of this subsection is waived with respect to non-audit services if the insurer is a SOX compliant entity, the insurer is a direct or indirect wholly-owned subsidiary of a SOX compliant entity, or the
(1) aggregate amount of all non-audit services provided to the insurer constitutes not more than five percent of the total amount of fees paid by the insurer to its qualified independent certified public accountant during the fiscal year in which the non-audit services are provided;
(2) services were not recognized by the insurer at the time of the engagement to be non-audit services; and
(3) services are promptly brought to the attention of the board of directors or audit committee and approved before the completion of the audit by the board of directors or audit committee or by one or more members of the board of directors or audit committee given authority to grant approvals by the board of directors or audit committee.
(l) The board of directors or audit committee may delegate to one or more designated members of the board of directors or audit committee the authority to grant the preapprovals required by (k) of this section. The decisions of any member to whom this authority is delegated must be presented to the full board of directors or audit committee at each of its scheduled meetings.
(m) The director will not recognize an independent certified public accountant as qualified for a particular insurer if a member of the board, president, chief executive officer, controller, chief financial officer, chief accounting officer, or any person serving in an equivalent position for that insurer was employed by the independent certified public accountant and participated in the audit of that insurer during the one-year period preceding the date that the most current annual audited financial report is due. The limitation in this subsection only applies to partners and senior managers involved in the audit. A domestic insurer may apply in writing to the director for relief from the limitation in this subsection on the basis of unusual circumstances. An insurer, regardless of its state of domicile, shall file any grant of relief from the limitation in this subsection, or from a substantially similar limitation in another state, with the insurer's annual statement filing in the states where the insurer is licensed or is doing business and with the National Association of Insurance Commissioners.
History
- Authority: AS 21.06.090; AS 21.09.200
- Eff. 8/31/2008, Register 187; am 1/1/2010, Register 192; am 12/26/2019, Register 232
3 AAC 21.725 Consolidated or combined audits
An insurer may apply in writing to the director for approval to file consolidated or combined audited financial statements instead of separate audited financial statements if the insurer is part of a group of insurance companies that uses a pooling or 100 percent reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer cedes all of its direct and assumed business to the pool. If approval is granted, a columnar consolidating or combining worksheet must be filed with the annual audited financial report showing
(1) the amounts in the consolidated or combined audited financial statements;
(2) the amounts for each insurer consolidated or combined in the audited financial statements;
(3) non-insurance operations combined or reported individually;
(4) an explanation of consolidating and eliminating entries; and
(5) a reconciliation of any differences between the amounts shown in the individual insurer columns of the worksheet and comparable amounts shown in the annual statements of the insurers filed under AS 21.09.200(a).
History
- Authority: AS 21.06.060; AS 21.06.090; AS 21.09.200
- Eff. 8/31/2008, Register 187
3 AAC 21.730 Scope of audit and report of independent certified public accountant
The audit of the insurer's financial statement must be conducted in accordance with generally accepted auditing standards and include an understanding of internal control sufficient to plan the audit. For those insurers required to file a report of internal control over financial reporting, the independent certified public accountant shall consider the most recently available report in planning and performing the audit of the financial statements. To the extent the independent certified public accountant deems necessary, consideration shall be given to the procedures in the National Association of Insurance Commissioners' Financial Condition Examiners Handbook.
History
- Authority: AS 21.06.060; AS 21.06.140 AS 21.06.090; AS 21.09.200
- Eff. 8/31/2008, Register 187
3 AAC 21.735 Notification of adverse financial condition
(a) The notification requirements of the independent certified public accountant and the insurer under AS 21.09.200( l) must be completed within five working days after the determination or notice of determination.
(b) If an independent certified public accountant becomes aware of facts after the filing date of the annual audited financial report that might have affected the report, the independent certified public accountant shall take action as prescribed in the American Institute of Certified Public Accountants' AU Section 561: Subsequent Discovery of Facts Existing at the Date of the Auditor's Report, dated July 9, 2007 and adopted by reference.
History
- Authority: AS 21.06.060; AS 21.06.090; AS 21.09.200
- Eff. 8/31/2008, Register 187
3 AAC 21.740 Communication of internal control related matters noted in an audit
(a) The report on any unremediated material weakness in internal control over financial reporting required under AS 21.09.200(h) must describe each unremediated material weakness noted by the independent certified public accountant during the course of the audit of the financial statements that existed as of the immediately preceding December 31 to coincide with the last filed annual audited financial report.
(b) The report required under AS 21.09.200(h) must include a description of the insurer's remedial actions taken or proposed to correct each unremediated material weakness if the insurer's actions have not been described in the accountant's report.
(c) If the audit does not note any unremediated material weaknesses in internal control over financial reporting that are required to be reported under AS 21.09.200(h), the insurer shall file a statement to that effect with the director or the director's designee.
History
- Authority: AS 21.06.060; AS 21.06.090; AS 21.09.200
- Eff. 8/31/2008, Register 187
3 AAC 21.745 Accountant's letter of qualifications
The independent certified public accountant shall furnish to the insurer for submission with the annual audited financial report a letter stating
(1) that the accountant is independent with respect to the insurer and conforms to the standards of the accountant's profession as contained in
(A) the Code of Professional Conduct and pronouncements of the American Institute of Certified Public Accountants; and
(B) rules of professional conduct adopted by the board of public accountancy of the state in which the certified public accountant is licensed;
(2) the background and experience in general, and the experience in audits of insurers, of the staff assigned to the engagement and whether each staff member is an independent certified public accountant;
(3) that the accountant understands that the
(A) annual audited financial report and opinion with respect to that report are in compliance with the laws of this state; and
(B) director will be relying on the report and opinion in monitoring and regulating the financial position of the insurer;
(4) that the accountant
(A) consents to the requirements of 3 AAC 21.750 regarding audit work papers; and
(B) agrees to make available for review by the director or the director's designee the work papers under 3 AAC 21.750;
(5) that the accountant
(A) holds the proper professional license by an appropriate state licensing authority; and
(B) is a member in good standing in the American Institute of Certified Public Accountants; and
(6) that the accountant meets the qualifications and requirements of 3 AAC 21.720.
History
- Authority: AS 21.06.060; AS 21.06.090; AS 21.09.200
- Eff. 8/31/2008, Register 187
3 AAC 21.750 Work papers
(a) An insurer required to file an annual audited financial report under AS 21.09.200(g) shall require the accountant to make available for review by division examiners all work papers prepared in the conduct of the accountant's audit and all communications related to the audit between the accountant and the insurer at the offices of the insurer, at the division, or at any other reasonable place designated by the director. The insurer shall require that the accountant retain the audit work papers and communications until the division has filed a report on examination covering the period of the audit but no longer than seven years after the filing date of the annual audited financial report.
(b) In a review by division examiners in the course of a division examination, the division may make and retain photocopies of audit work papers. Work papers and communications obtained during the course of an examination will be considered examination work papers of the division under AS 21.06.150.
(c) In this section, "work papers"
(1) means the records kept by the independent certified public accountant of the procedures followed, the tests performed, the information obtained, and the conclusions reached pertinent to the accountant's audit of the financial statements of an insurer; and
(2) includes audit planning documentation, work programs, analysis, memoranda, letters of confirmation and representation, abstracts of company documents, and schedules or commentaries prepared or obtained by the independent certified public accountant in the course of the audit of the financial statements of an insurer and that support the accountant's opinion.
History
- Authority: AS 21.06.060; AS 21.06.150 AS 21.06.090; AS 21.09.200
- Eff. 8/31/2008, Register 187
3 AAC 21.755 Conduct of an insurer in connection with the preparation of required reports and documents
Actions prohibited under AS 21.36.060 include actions taken to coerce, manipulate, mislead, or fraudulently influence an accountant
(1) to issue or reissue a report on an insurer's financial statement that is not warranted due to material violations of accounting practices prescribed, or otherwise permitted, by
(A) the insurance regulatory official of the state of domicile;
(B) generally accepted auditing standards; or
(C) other professional or regulatory standards;
(2) not to perform audit, review, or other procedures required by
(A) generally accepted auditing standards; or
(B) other professional standards;
(3) not to withdraw an issued report; or
(4) not to communicate matters to an insurer's board of directors or audit committee.
History
- Authority: AS 21.06.060; AS 21.09.200 AS 21.06.090; AS 21.36.060
- Eff. 8/31/2008, Register 187
3 AAC 21.760 Exemptions
Upon written application by an insurer, the director may grant an exemption from compliance with 3 AAC 21.705 - 3 AAC 21.799 if, after review of the application, the director finds that compliance with 3 AAC 21.705 - 3 AAC 21.799 would be a financial or organizational hardship for the insurer. The director will only consider an application for an exemption under this section if 3 AAC 21.705(a) does not provide an exemption to the insurer. The director may grant an exemption under this section at any time and for a specific period. Within 10 days after an insurer receives notification of the director's denial of the insurer's request for exemption, the insurer may request in writing a hearing on the denial. The hearing will be held under AS 21.06.170 - 21.06.230.
History
- Authority: AS 21.06.060; AS 21.06.090; AS 21.09.200
- Eff. 8/31/2008, Register 187
3 AAC 21.765 Canadian and British insurers
(a) For a Canadian or British insurer, the annual audited financial report required under AS 21.09.200(g) is the annual statement of total business on the form filed by the insurer with its supervisory authority duly audited by an independent chartered accountant.
(b) For a Canadian or British insurer, the letter required under 3 AAC 21.715(b) must state that the accountant is aware of the requirements relating to the annual audited financial report filed with the director or the director's designee under AS 21.09.200(g) and must affirm that the opinion expressed conforms with those requirements.
History
- Authority: AS 21.06.060; AS 21.06.090; AS 21.09.200
- Eff. 8/31/2008, Register 187
3 AAC 21.770 Audit committee
(a) The audit committee of an entity that
(1) controls an insurer may be the insurer's audit committee required under AS 21.09.200 at the election of the controlling person; or
(2) controls a group of insurers may be the audit committee required under AS 21.09.200 for one or more of the controlled insurers at the election of the controlling person.
(b) The provisions of (c) through (n) of this section do not apply to
(1) a foreign or alien insurer;
(2) an insurer that is a SOX compliant entity; or
(3) an insurer that is a direct or indirect wholly-owned subsidiary of a SOX compliant entity.
(c) The audit committee of an insurer shall
(1) be directly responsible for the appointment, compensation, and oversight of the work of an accountant engaged for the purpose of preparing or issuing the annual audited financial report or related work, including resolution of disagreements between management and the accountant regarding financial reporting; and
(2) require that accountant to report directly to the audit committee.
(d) Each member of the audit committee must be a member of the governing board of the insurer or a member of the governing board of an entity designated under (h) of this section.
(e) With the exception of actions taken in the capacity of a member of the audit committee, the board of directors, or any other board committee of the insurer, to be considered independent for purposes of this section, a member of the audit committee may not
(1) accept any consulting, advisory, or other compensatory fee from the insurer or a subsidiary of the insurer; or
(2) be an affiliated person of the insurer or a subsidiary of the insurer.
(f) If a law requires board participation by a non-independent member as described in (e) of this section, that member may participate in the audit committee and be designated as independent for audit committee purposes unless the non-independent member is an officer or employee of the insurer or an affiliate of the insurer.
(g) If a member of the audit committee ceases to be independent for reasons outside the member's reasonable control, the member may, with notice by the insurer to the director, remain on the audit committee until the earlier of the next annual meeting of the insurer or one year from the occurrence of the event that caused the member to be no longer independent.
(h) If the controlling person elects to designate the audit committee, the ultimate controlling person as defined in 3 AAC 21.195 shall provide written notice to the director. Notification must be made no more than 30 days after the election or 30 days before the issuance of the next annual audited financial report, whichever is earlier. The notice must include a description of the basis for the election made by the controlling person. The election can be changed through notice to the director by the insurer, which must include a description of the basis for the change. The election must remain in effect until it is rescinded.
(i) The audit committee shall require the accountant to timely report to the audit committee in accordance with generally accepted auditing standards, including the reporting of
(1) all significant accounting policies and material permitted practices;
(2) all material alternative treatments of financial information within accounting practices prescribed or otherwise permitted by the insurance regulatory official of the state of domicile that have been discussed with management officials of the insurer, ramifications of the use of the alternative disclosures and treatments, and the treatment preferred by the accountant; and
(3) other material written communications between the accountant and the management of the insurer, including any management letter or schedule of unadjusted differences.
(j) If an insurer is a member of an insurance holding company system, the reports required in (i) of this section may be provided to the audit committee on an aggregate basis, if any substantial differences among insurers in the system are identified to the audit committee separately.
(k) The minimum required proportion of independent audit committee members based on the amount of direct written and assumed premium from nonaffiliates reported for the prior year in the most recently filed annual financial statement of the insurer is as follows:
(1) if an insurer reports less than $300,000,000, a minimum number of independent audit committee members is not required;
(2) if an insurer reports $300,000,000 or more and $500,000,000 or less, 50 percent or more of the audit committee members must be independent;
(3) if an insurer reports more than $500,000,000, 75 percent or more of the audit committee members must be independent.
(l) The director may require the insurer's governing board to increase the proportion of independent audit committee members if the insurer
(1) is in a level event as defined in AS 21.14.200; or
(2) meets one or more of the standards in 3 AAC 21.510 for impairment.
(m) If an insurer has direct written and assumed premium from nonaffiliates in an amount less than $500,000,000, excluding premiums reinsured with the Federal Crop Insurance Corporation established under 7 U.S.C. 1501 - 1524 and the national flood insurance program established under 42 U.S.C. 4001 - 4129, the insurer may apply to the director for a waiver from this section based upon hardship. If the waiver is granted, the insurer shall include a copy of the waiver with its annual statement filing to
(1) the states in which the insurer is licensed or does business; and
(2) the National Association of Insurance Commissioners.
(n) An insurer that is not required to have independent audit committee members or only a simple majority of independent audit committee members because the total written and assumed premium is below the applicable threshold in (k) of this section but subsequently becomes subject to one of the minimum independent board member requirements under (k) of this section due to changes in premium has one calendar year following the year the threshold is exceeded to comply with those requirements. An insurer that becomes subject to one of those requirements as a result of a business combination has one calendar year following the date of acquisition or combination to comply with the independent board member requirement.
(o) The audit committee of an insurer or group of insurers shall be responsible for overseeing the insurer's Internal audit function and granting the person or persons performing the function suitable authority and resources to fulfill their responsibilities if required by 3 AAC 21.780 of this regulation.
History
- Authority: AS 21.06.090; AS 21.09.200
- Eff. 1/1/2010, Register 192; am 12/26/2019, Register 232
3 AAC 21.775 Management's report of internal control over financial reporting
(a) An insurer that is required to file an annual audited financial report, and that has annual direct written and assumed premium of $500,000,000 or more as reported in the last annual financial statement filed under AS 21.09.200(a), excluding premiums reinsured with the Federal Crop Insurance Corporation established under 7 U.S.C. 1501 - 1524 and the national flood insurance program established under 42 U.S.C. 4001 - 4129, shall prepare a report of the insurer's or group of insurers' internal control over financial reporting. The report must be filed with the report required in 3 AAC 21.740 on unremediated material weakness in internal control over financial reporting, and both reports must be as of the immediately preceding December 31.
(b) Notwithstanding (a) of this section, the director may require an insurer to file the report of internal control over financial reporting if the insurer
(1) is in a level event as defined in AS 21.14.200; or
(2) meets one or more of the standards in 3 AAC 21.510 for impairment.
(c) An insurer or group of insurers may file its or its parent's Section 404 report and an addendum to satisfy the requirements of this section, if the internal controls having a material impact on the preparation of the insurer's or group of insurers' annual audited financial report, including the items set out in 3 AAC 21.710(c)(2) - (6), were included in the scope of the Section 404 report. The addendum must be a positive statement by management that there are no material processes with respect to the preparation of the insurer's or group of insurers' audited statutory financial statements required under AS 21.09.200 and excluded from the Section 404 report. If there are internal controls of the insurer or group of insurers that have a material impact on the preparation of the insurer's or group of insurers' audited statutory financial statements and those internal controls were not included in the scope of the Section 404 report, the insurer or group of insurers may file either
(1) a report under this section; or
(2) the Section 404 report and a report under this section for those internal controls that have a material impact on the preparation of the insurer's or group of insurers' audited statutory financial statements not covered by the Section 404 report.
(d) The provisions of (c) of this section are available only to an insurer or a group of insurers that is
(1) directly subject to 15 U.S.C. 7262 (sec. 404 of the Sarbanes-Oxley Act of 2002 (SOX)) and 17 C.F.R. 229.308 (item 308 of Securities Exchange Commission Regulation S-K);
(2) part of a holding company system whose parent is directly subject to 15 U.S.C. 7262 and 17 C.F.R. 229.308;
(3) not directly subject to 15 U.S.C. 7262 and 17 C.F.R. 229.308 but is a SOX compliant entity; or
(4) a member of a holding company system whose parent is not directly subject to 15 U.S.C. 7262 and 17 C.F.R. 229.308 but is a SOX compliant entity.
(e) The report on internal control over financial reporting must include
(1) a statement that management is responsible for establishing and maintaining adequate internal control over financial reporting;
(2) a statement that management has established internal control over financial reporting and an assertion to the best of management's knowledge and belief, after diligent inquiry, as to whether its internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with accounting practices prescribed, or otherwise permitted, by the insurance regulatory official of the insurer's or group of insurers' state of domicile;
(3) a statement that describes the approach or processes by which management evaluated the effectiveness of its internal control over financial reporting;
(4) a statement that describes the scope of work that is included and whether any internal controls were excluded;
(5) a disclosure of any unremediated material weaknesses in the internal control over financial reporting identified by management as of the immediately preceding December 31;
(6) a statement regarding the inherent limitations of internal control systems; and
(7) signatures of the chief executive officer and the chief financial officer or equivalent positions.
(f) Management may not conclude that the internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles if there are one or more unremediated material weaknesses in its internal control over financial reporting.
(g) Management shall document and make available upon examination the basis upon which the assertions required in (e) of this section are made. Management may base its assertions, in part, upon its review, monitoring, and testing of internal controls undertaken in the normal course of its activities.
(h) Management has discretion as to the nature of the internal control framework and the nature and extent of documentation used in order to make its assertion in a cost-effective manner. Management may include assembly of or reference to existing documentation.
(i) If an insurer or group of insurers is not required to file a report from management of internal control over financial reporting because the total written and assumed premium is below the threshold set out in (a) of this section, and if the insurer or group of insurers subsequently becomes subject to the reporting requirements of this section, the insurer or group of insurers has two calendar years following the year the threshold is exceeded to comply with the reporting requirements of this section.
(j) A foreign or alien insurer that is required to file in another state a report from management of internal control over financial reporting is exempt from filing the report in this state if the other state has substantially similar reporting requirements and the report is in compliance with the other state's reporting requirements. The foreign or alien insurer shall notify the director of the use of the exemption in this subsection and of the state insurance supervisory official who will receive the report. The foreign or alien insurer shall notify the director of a change in the use of the exemption or a change in the recipient of the report no later than 30 days after the change.
History
- Authority: AS 21.06.060; AS 21.06.090; AS 21.09.200
- Eff. 12/31/2010, Register 196
3 AAC 21.780 Internal audit function requirements
(a) An insurer is exempt from the requirements of this section if the insurer
(1) has annual direct written and unaffiliated assumed premium, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $500,000,000; and,
(2) is a member of a group of insurers, and the group annual direct written and unaffiliated assumed premium including international direct and assumed premium, but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $1,000,000,000.
(b) The insurer or group of insurers shall establish an internal audit function providing independent, objective and reasonable assurance to the audit committee and insurer management regarding the insurer's governance, risk management, and internal controls. This assurance shall be provided by performing general and specific audits, reviews and tests and by employing other techniques deemed necessary to protect assets, evaluate control effectiveness and efficiency, and evaluate compliance with policies and regulations.
(c) To ensure that internal auditors remain objective, the internal audit function must be organizationally independent. Specifically, the internal audit function will not defer ultimate judgment on audit matters to others, and shall appoint an individual to head the internal audit function who will have direct and unrestricted access to the board of directors. Organizational independence does not preclude dual-reporting relationships.
(d) The head of the internal audit function shall report to the audit committee regularly, but no less than annually, on the periodic audit plan, factors that may adversely impact the Internal audit function's independence or effectiveness, material findings from completed audits and the appropriateness of corrective actions implemented by management as a result of audit findings.
(e) If an insurer is a member of an insurance holding company system or included in a group of insurers, the insurer may satisfy the internal audit function requirements set forth in this section at the ultimate controlling parent level, an intermediate holding company level or the individual legal entity level.
History
- Authority: AS 21.06.090; AS 21.09.200
- Eff. 12/26/2019, Register 232
3 AAC 21.785 Filing procedures
(a) An insurer, or the insurance group of which the insurer is a member, required to file a corporate governance annual disclosure under AS 21.09.400 - AS 21.09.460, shall, no later than June 1 of each calendar year, submit to the director a corporate governance annual disclosure that contains the information described in 3 AAC 21.790.
(b) The corporate governance annual disclosure must include a signature of the insurer's or insurance group's chief executive officer or corporate secretary attesting to the best of that individual's belief and knowledge that the insurer or insurance group has implemented the corporate governance practices and that a copy of the corporate governance annual disclosure has been provided to the insurer's or insurance group's board of directors or the appropriate committee.
(c) The insurer or insurance group shall have discretion regarding the appropriate format for providing the information required by these regulations and is permitted to customize the corporate governance annual disclosure to provide the most relevant information necessary to permit the director to gain an understanding of the insurer or insurance group's corporate governance structure, policies, and practices utilized by the insurer or insurance group.
(d) For purposes of completing the corporate governance annual disclosure, the insurer or insurance group may choose to provide information on governance activities that occur at the ultimate controlling parent level, an intermediate holding company level, or the individual legal entity level, depending upon how the insurer or insurance group has structured its system of corporate governance. The insurer or insurance group is encouraged to make the corporate governance annual disclosure at the level at which the insurer's or insurance group's risk appetite is determined, or at which the earnings, capital, liquidity, operations, and reputation of the insurer are overseen collectively and at which the supervision of those factors are coordinated and exercised, or the level at which legal liability for failure of general corporate governance duties would be placed. If the insurer or insurance group determines the level of reporting based on these criteria, it shall indicate which of the three criteria was used to determine the level of reporting and explain any subsequent changes in level of reporting.
(e) An insurer or insurance group may comply with this section by referencing other existing documents (e.g., Own Risk and Solvency Assessment (ORSA) Summary Report, Holding Company Form B or F Filings, Securities and Exchange Commission (SEC) Proxy Statements, or foreign regulatory reporting requirements,) if the documents provide information that is comparable to the information described in 3 AAC 21.790. The insurer or insurance group shall clearly reference the location of the relevant information within the corporate governance annual disclosure and attach the referenced document if it is not already filed or available to the regulator.
(f) Each year following the initial filing of the corporate governance annual disclosure, the insurer or insurance group shall file an amended version of the previously filed corporate governance annual disclosure indicating where changes have been made. If no changes were made in the information or activities reported by the insurer or insurance group, the filing should so state.
History
- Authority: AS 21.06.060; AS 21.09.400; AS 21.09.430 AS 21.06.090; AS 21.09.410 AS 21.09.200; AS 21.09.420
- Eff. 12/26/2019, Register 232
3 AAC 21.790 Contents of corporate governance annual disclosure
(a) The insurer or insurance group shall be as descriptive as possible in completing the corporate governance annual disclosure, with inclusion of attachments or example documents that are used in the governance process.
(b) The corporate governance annual disclosure must describe the insurer or insurance group's corporate governance framework and structure including consideration of the following
(1) the board of directors and any committees of the board ultimately responsible for overseeing the insurer or insurance group and the level at which that oversight occurs (e.g., ultimate control level, intermediate holding company, legal entity, etc.); the disclosure shall describe and discuss the rationale for the current board size and structure; and
(2) the duties of the board and each of its significant committees and how they are governed (e.g., bylaws, charters, informal mandates,), how the board's leadership is structured, and a discussion of the roles of chief executive officer and chairman of the board within the organization.
(c) The corporate governance annual disclosure must describe the policies and practices of the insurer's or insurance group's most senior governing entity and its significant committees, including a discussion of the following factors
(1) how the qualifications, expertise and experience of each board member meet the needs of the insurer or insurance group;
(2) how an appropriate amount of independence is maintained on the board and its significant committees;
(3) the number of meetings held by the board and its significant committees over the past year, as well as information on director attendance;
(4) how the insurer or insurance group identifies, nominates, and elects members to the board and its committees, the discussion should include,
(A) whether a nomination committee is in place to identify and select individuals for consideration.
(B) whether term limits are placed on directors.
(C) how the election and re-election processes function.
(D) whether a board diversity policy is in place and if so, how it functions; and
(5) the processes in place for the board to evaluate its performance and the performance of its committees, as well as any recent measures taken to improve performance (including any board or committee training programs that have been put in place).
(d) The corporate governance annual disclosure must describe the insurer's or insurance group's policies and practices for directing senior management, including a description of the following factors
(1) any processes or practices, i.e., suitability standards, to determine whether officers and key persons in control functions have the appropriate background, experience, and integrity to fulfill their prospective roles, including:
(A) identification of the specific positions for which suitability standards have been developed and a description of the standards employed; and
(B) any changes in an officer's or key person's suitability as outlined by the insurer's or insurance group's standards and procedures to monitor and evaluate such changes;
(2) the insurer's or insurance group's code of business conduct and ethics, the discussion of which considers
(A) compliance with laws, rules, and regulations; and
(B) proactive reporting of any illegal or unethical behavior;
(3) the insurer's or insurance group's processes for performance evaluation, compensation, and corrective action to ensure effective senior management throughout the organization, including a description of the general objectives of significant compensation programs and what the programs are designed to reward; the description shall include sufficient detail to allow the director to understand how the organization ensures that compensation programs do not encourage or reward excessive risk taking; elements to be discussed may include:
(A) the board's role in overseeing management compensation programs and practices;
(B) the various elements of compensation awarded in the insurer's or insurance group's compensation programs and how the insurer or insurance group determines and calculates the amount of each element of compensation paid;
(C) how compensation programs are related to both company and individual performance over time;
(D) whether compensation programs include risk adjustments and how those adjustments are incorporated into the programs for employees at different levels;
(E) any clawback provisions built into the programs to recover awards or payments if the performance measures upon which they are based are restated or otherwise adjusted; and
(F) any other factors relevant in understanding how the insurer or insurance group monitors its compensation policies to determine whether its risk management objectives are met by incentivizing its employees; and
(4) the insurer's or insurance group's plans for CEO and senior management succession.
(e) The corporate governance annual disclosure must describe the processes by which the insurer's or insurance group's board, its committees, and senior management ensure an appropriate amount of oversight to the critical risk areas impacting the insurer's or insurance group's business activities, including a discussion of:
(1) how oversight and management responsibilities are delegated between the board, its committees, and senior management;
(2) how the board is kept informed of the insurer's strategic plans, the associated risks, and steps that senior management is taking to monitor and manage those risks; and
(3) how reporting responsibilities are organized for each critical risk area; the description should allow the director to understand the frequency at which information on each critical risk area is reported to and reviewed by senior management and the board; this description may include the following critical risk areas of the insurer.
(A) risk management processes (An ORSA Summary Report filer may refer to its ORSA Summary Report pursuant to the Risk Management and Own Risk and Solvency Assessment Model Act.);
(B) actuarial function;
(C) investment decision-making processes;
(D) reinsurance decision-making processes;
(E) business strategy/finance decision-making processes;
(F) compliance function;
(G) financial reporting/internal auditing; and
(H) market conduct decision-making processes.
History
- Authority: AS 21.06.060; AS 21.09.400; AS 21.09.430 AS 21.06.090; AS 21.09.410 AS 21.09.200; AS 21.09.420
- Eff. 12/26/2019, Register 232
3 AAC 21.799 Definitions
In 3 AAC 21.705 - 3 AAC 21.799, unless the context requires otherwise,
(1) "accountant" or "independent certified public accountant" means an independent certified public accountant or accounting firm in good standing with the American Institute of Certified Public Accountants and in all states in which the accountant is licensed to practice; for a Canadian or British company, "accountant" or "independent certified public accountant" means a Canadian-chartered or British-chartered accountant;
(2) "group of insurers" means those authorized insurers included in the reporting requirements of AS 21.22, or a subset of those insurers as identified by company management for the purpose of assessing the effectiveness of internal control over financial reporting;
(3) "insurer" means an authorized insurer as defined in AS 21.97.900;
(4) "material weakness" has the meaning given in the American Institute of Certified Public Accountants' AU Section 325: Communicating Internal Control Related Matters Identified in an Audit; the definition of "material weakness" in the American Institute of Certified Public Accountants' AU Section 325: Communicating Internal Control Related Matters Identified in an Audit, dated July 7, 2007, is adopted by reference;
(5) "SOX compliant entity" means an entity that is voluntarily or required to be compliant with the
(A) preapproval requirements of 15 U.S.C. 78j - 1(i) (sec. 10A(i) of the Securities Exchange Act of 1934, as added by sec. 202 of the Sarbanes-Oxley Act of 2002 (SOX));
(B) audit committee independence requirements of 15 U.S.C. 78j-1(m)(3) (sec. 10A(m)(3) of the Securities Exchange Act of 1934, as added by sec. 301 of the Sarbanes-Oxley Act of 2002 (SOX)); and
(C) internal control over financial reporting requirements of 15 U.S.C. 7262 (sec. 404 of the Sarbanes-Oxley Act of 2002 (SOX)) and 17 C.F.R. 229.308 (item 308 of Securities Exchange Commission Regulation S-K);
(6) "working day" means a calendar day other than Saturday, Sunday, an official federal holiday, or an official holiday in this state;
(7) "affiliate" or "affiliated" has the meaning given in AS 21.22.200;
(8) "audit committee" means a committee established by the governing board of an entity for the purpose of overseeing the
(A) accounting and financial reporting processes of an insurer or group of insurers;
(B) external audits of financial statements of an insurer or group of insurers; and
(C) the internal audit function of an insurer or group of insurers, if applicable.
(9) "control," "controlling," "controlled by," and "under common control with," when used with respect to control of an insurer, has the meaning given in AS 21.22.200;
(10) "internal control over financial reporting"
(A) means a process effected by an entity's governing board, management, and other personnel designed to provide reasonable assurance regarding the reliability of the financial statements;
(B) includes those policies and procedures that
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of assets;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements, including assurance that receipts and expenditures are being made only in accordance with authorization of management and directors; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of assets that could have a material effect on the financial statements;
(11) "Section 404 report" means the report from management of internal control over financial reporting and the related attestation report of the independent certified public accountant filed under 15 U.S.C. 7262 (sec. 404 of the Sarbanes-Oxley Act of 2002 (SOX)) and 17 C.F.R. 229.308 (item 308 of Securities Exchange Commission Regulation S-K).
(12) "internal audit function" means a person or persons that provide independent, objective and reasonable assurance designed to add value and improve an organization's operations and accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes;
(13) "insurance group" means those insurers and affiliates included within an insurance holding company system as defined in AS 21.22.200(6);
(14) "senior management" means any corporate officer responsible for reporting information to the board of directors at regular intervals or providing this information to shareholders or regulators and shall include, for example and without limitation, the chief executive officer ("CEO"), chief financial officer ("CFO"), chief operations officer ("COO"), chief procurement officer ("CPO"), chief legal officer ("CLO"), chief information ofiicer ("CIO"), chief technology officer ("CTO"), chief revenue officer ("CRO"), chief visionary officer ("CVO"), or any other "C" level executive.
History
- Authority: AS 21.06.060; AS 21.09.400; AS 21.09.430 AS 21.06.090; AS 21.09.410 AS 21.09.200; AS 21.09.420
- Eff. 8/31/2008, Register 187; am 1/1/2010, Register 192; am 12/31/2010, Register 196; am 12/26/2019, Register 232
Article 8 Actuarial Opinion and Memorandum
3 AAC 21.800 Purpose
The purpose of 3 AAC 21.800 - 3 AAC 21.845 is to establish:
(1) requirements for a statement of actuarial opinion submitted under AS 21.18.110(m) and for a memorandum prepared under AS 21.18.110(q); and
(2) requirements and qualifications for the appointment of an appointed actuary.
History
- Authority: AS 21.06.090; AS 21.18.110; AS 21.18.160
- Eff. 9/1/96, Register 139; am 1/1/2005, Register 172
3 AAC 21.805 Applicability
(a) The provisions of 3 AAC 21.800 - 3 AAC 21.845 apply to all insurers and fraternal benefit societies transacting the business of life insurance, annuities, or health insurance in this state and to all insurers and fraternal benefit societies that reinsure life insurance, annuities, or health insurance in this state and are required to file an annual statement.
(b) Repealed 1/1/2005.
History
- Authority: AS 21.06.090; AS 21.18.160 AS 21.18.110; AS 21.84.335
- Eff. 9/1/96, Register 139; am 4/20/97, Register 142; am 1/1/2005, Register 172
3 AAC 21.810 Qualified actuary
(a) A "qualified actuary" is an individual who
(1) is a member in good standing of the American Academy of Actuaries;
(2) meets the qualification standards of the American Academy of Actuaries to sign statements of actuarial opinion for an annual statement of a company;
(3) is familiar with the valuation requirements under AS 21.18.080 - 21.18.086 and AS 21.18.110; and
(4) has not been disqualified by the director, after notice and hearing under AS 21.06.180, for
(A) a violation of AS 21, an insurance law of any state, or other law pertinent to the duties or responsibilities of a qualified actuary;
(B) conviction of a fraudulent act;
(C) conduct considered by the director to reflect incompetence or untrustworthiness;
(D) the submission to the director within the past five years of an actuarial opinion or memorandum that the director rejected because it failed to meet the requirements of 3 AAC 21.800 - 3 AAC 21.845 or the actuarial practice standards adopted by the Actuarial Standards Board required by AS 21.18.110(n);
(E) resignation or removal as an actuary with a company or a consulting firm within the past five years due to acts or omissions indicated in a report of examination or due to failure to adhere to generally accepted actuarial standards; or
(F) failure to notify the director of an action taken against the actuary by an insurance regulator of another state for grounds that are substantially the same as a provision under this paragraph.
(b) Repealed 1/1/2005.
(c) A qualified actuary who prepares the statement of actuarial opinion required under AS 21.18.110(m) shall be appointed or retained either directly by the board of directors of the company or by delegation of authority of the board of directors through an executive officer other than the qualified actuary. The company shall give the director written notice of the name, title, and manner of appointment or retention of each qualified actuary appointed or retained by the company before December 31 of the calendar year for which the opinion is rendered, and shall state in the notice that the individual meets the requirements for a qualified actuary. In the case of a consulting actuary, the company shall also provide the name of the consulting firm. Once notice of an appointment or retention is furnished to the director, further notice is not required, but the company shall give the director written notice within 30 days after board action if the actuary ceases to be appointed or retained by the company or fails to meet the requirements for a qualified actuary. If a company appoints or retains a qualified actuary to replace a previous appointment or retention, the company shall state this fact in a notice to the director and give the reason for replacement.
History
- Authority: AS 21.06.090; AS 21.18.082; AS 21.18.110 AS 21.06.180; AS 21.18.084; AS 21.18.160 AS 21.18.080; AS 21.18.086
- Eff. 9/1/96, Register 139; am 1/1/2005, Register 172
3 AAC 21.815 General requirements
(a) A company shall attach to the inside front cover of the annual statement filed each year, the statement of a qualified actuary entitled "statement of actuarial opinion" that expresses an opinion relating to reserves and related actuarial items held in support of policies and contracts in accordance with 3 AAC 21.830.
(b) Repealed 1/1/2005.
(c) Repealed 1/1/2005.
(d) Upon written request by a company, the director will, in the director's discretion, grant an extension of the date for submission of the statement of actuarial opinion.
(e) The appointed actuary shall retain on file for seven years documentation that is sufficient for the director to determine the procedures followed, the analyses performed, the bases for assumptions, and the results obtained in the development of the actuarial opinion and supporting memorandum.
History
- Authority: AS 21.06.090; AS 21.18.110; AS 21.18.160
- Eff. 9/1/96, Register 139; am 1/1/2005, Register 172
3 AAC 21.820 Exemption eligibility tests
Repealed.
History
- Eff. 9/1/96, Register 139; repealed 1/1/2005, Register 172
3 AAC 21.825 Statement of actuarial opinion without an asset adequacy analysis
Repealed.
History
- Eff. 9/1/96, Register 139; repealed 1/1/2005, Register 172
3 AAC 21.830 Statement of actuarial opinion
(a) A statement of actuarial opinion must contain the following:
(1) an opening paragraph, in substantially the following form, that identifies the appointed actuary, lists the actuary's qualifications, and indicates the relationship between the actuary and the company for whom the opinion is written:
[FOR A COMPANY ACTUARY]
History
- Authority: AS 21.06.090; AS 21.18.110 AS 21.09.200; AS 21.18.160
- Eff. 9/1/96, Register 139; am 1/1/2005, Register 172
3 AAC 21.835 Memorandum to support a statement of actuarial opinion
(a) An appointed actuary shall prepare a memorandum that describes the analysis done in support of the actuary's opinion regarding the reserves covered in an actuarial opinion prepared under 3 AAC 21.830. The memorandum must be made available for examination upon request of the director. The director will return the memorandum to the company after examination.
(b) In preparing a memorandum under this section, an appointed actuary may rely upon, and include as a part of the memorandum, a memorandum previously prepared and signed by another appointed or qualified actuary regarding the area that is being relied upon in the current memorandum.
(c) The qualified actuary engaged by the director under AS 21.18.110(r) may not be an employee of a consulting firm involved in the preparation of any prior actuarial opinion or memorandum for the company in the previous four years. Any information provided by the company to the actuary engaged by the director is subject to the confidentiality requirements of AS 21.18.110(s).
(d) An appointed actuary shall prepare a regulatory asset adequacy issues summary in compliance with (e) of this section. A company shall submit the regulatory asset adequacy issues summary to the director upon request, and the director will hold the regulatory asset adequacy issues summary confidential subject to the confidentiality requirements of AS 21.18.110(s).
(e) A memorandum prepared under this section must demonstrate that the analysis has been done according to the actuarial standards of practice adopted by the Actuarial Standards Board as required by AS 21.18.110(n) and the requirements under 3 AAC 21.800 - 3 AAC 21.845 and must provide the following:
(1) information about reserves that includes
(A) product descriptions, including market description, underwriting, and other aspects of a risk profile, and the specific risks that the appointed actuary considers significant;
(B) the source of liability in force;
(C) the reserve method and basis;
(D) the investment reserves;
(E) the reinsurance arrangements;
(F) identification of
(i) any explicit or implied guarantees made by the general account in support of benefits provided through a separate account or under a separate account policy or contract; and
(ii) the methods used by the appointed actuary to provide for the guarantees in the asset adequacy analysis; and
(G) documentation of assumptions to test reserves for
(i) base and excess lapse rates;
(ii) interest crediting rate strategy;
(iii) mortality;
(iv) policyholder dividend strategy;
(v) competitor or market interest rate;
(vi) annuitization rates;
(vii) commissions and expenses; and
(viii) morbidity;
(2) information about assets that includes
(A) portfolio descriptions, including a risk profile that discloses the quality, distribution, and types of assets;
(B) the investment and disinvestment assumption used by the actuary;
(C) the source of asset data;
(D) the asset valuation bases; and
(E) documentation of assumptions for
(i) default costs;
(ii) bond call function;
(iii) mortgage prepayment function;
(iv) determining market value for assets sold due to disinvestment strategy; and
(v) determining yield on assets acquired through the investment strategy;
(3) the basis upon which the analysis was performed that includes the
(A) methodology used;
(B) rationale for inclusion or exclusion of different blocks of business and how pertinent risks were analyzed;
(C) rationale for the degree of rigor in analyzing different blocks of business including the level of materiality used in determining how rigorously to analyze different blocks of business;
(D) criteria used for determining asset adequacy including the precise basis for determining whether assets are adequate to cover reserves; and
(E) whether the impact of federal income taxes was considered and the method of treating reinsurance in the asset adequacy analysis;
(4) a summary of material changes in methods, procedures, or assumptions from the prior year's asset adequacy analysis;
(5) a summary of results;
(6) a description of all conclusions formed by the analysis.
(f) Documentation of assumptions under (e) of this section must be in a manner that allows another actuary reviewing the actuarial assumptions to form a conclusion regarding the reasonableness of the assumptions.
(g) The regulatory asset adequacy issues summary required under (d) of this section must include
(1) a description of each scenario tested including whether the scenario is stochastic or deterministic;
(2) a description of the sensitivity testing done relative to the scenarios described under (1) of this subsection;
(3) a description of the tests and statement of the amounts of additional reserve necessary to eliminate negative aggregate surplus values, if negative ending surplus values result under any of the scenarios tested under (1) and (2) of this subsection;
(4) disclosure of the extent to which the appointed actuary uses assumptions in the asset adequacy analysis that are materially different than the assumptions used in the previous asset adequacy analysis;
(5) the amount of reserves and a description of each insurance product that was subject to asset adequacy analysis in the previous opinion but was not subject to asset adequacy analysis in the current opinion;
(6) disclosure of interim results that are of significant concern to the appointed actuary, including the impact of the insufficiency of assets to support the payment of benefits and expenses and the establishment of reserves required under AS 21.18 during one or more interim periods;
(7) a description of the methods used by the actuary to account for the impact of reinsurance under each of the scenarios tested under (1) and (2) of this subsection on the company's asset and liability cash flows;
(8) a statement by the appointed actuary relative to whether the actuary is satisfied that all options in any asset or liability, including options that affect cash flows in fixed income securities, and equity-like features in any investment are appropriately considered in the asset adequacy analysis;
(9) the name of the company for which the summary is being supplied; and
(10) the signature of and date the appointed actuary signed the opinion.
(h) The actuarial memorandum must include a statement in substantially the following form:
"The actuarial methods, considerations, and analyses used in the preparation of this memorandum conform to the appropriate standards of practice adopted by the Actuarial Standards Board as required by AS 21.18.110(n)."
History
- Authority: AS 21.06.090; AS 21.18.110; AS 21.18.160
- Eff. 9/1/96, Register 139; am 1/1/2005, Register 172; am 1/1/2011, Register 196
3 AAC 21.840 Additional considerations for analysis
(a) Repealed 1/1/2005.
(b) Repealed 1/1/2005.
(c) An appropriate allocation of assets equal to the interest maintenance reserve of the annual statement must be used in the asset adequacy analysis. The analysis of risks regarding asset default may include an appropriate allocation of assets supporting the asset valuation reserve. These asset valuation reserve assets may not be applied to any other risks with respect to reserve adequacy. The analysis of asset default risk and other risks may include assets supporting other mandatory or voluntary reserves available to the extent they are not used for risk analysis and reserve support. The total amount of assets used for the asset valuation reserve used must be disclosed in the actuarial opinion, and the memorandum must disclose the method used for selecting a particular asset or allocated portion of an asset.
(d) Repealed 1/1/2005.
(e) Repealed 1/1/2005.
History
- Authority: AS 21.06.090; AS 21.18.110; AS 21.18.160
- Eff. 9/1/96, Register 139; am 1/1/2005, Register 172
3 AAC 21.845 Definitions
In 3 AAC 21.800 - 3 AAC 21.845, unless the context requires otherwise,
(1) "actuarial opinion" means the opinion of an appointed actuary regarding the adequacy of the reserves and related actuarial items based on an asset adequacy test performed under 3 AAC 21.800 - 3 AAC 21.845;
(2) "Actuarial Standards Board" means the board established by the American Academy of Actuaries to develop and adopt standards of actuarial practice;
(3) "annual statement" means the statement required to be filed by an authorized insurer under AS 21.09.200;
(4) "appointed actuary" means a qualified actuary who is appointed or retained by a company to provide an actuarial opinion and prepare a supporting memorandum under AS 21.18.110;
(5) "company" means an insurer, a fraternal benefit society, or a reinsurer that is required to comply with 3 AAC 21.800 - 3 AAC 21.845;
(6) "director" means the director of insurance;
(7) repealed 1/1/2005.
History
- Authority: AS 21.06.090; AS 21.18.110 AS 21.09.200; AS 21.18.160
- Eff. 9/1/96, Register 139; am 1/1/2005, Register 172
Article 9 Custodian of Insurer Assets
3 AAC 21.865 Requirements for custodial agreements
(a) An agreement between an authorized insurer and a custodian must require that
(1) a security certificate held by the custodian for the insurer be held separate from other security certificates owned by the custodian or other customers of the custodian;
(2) a security held indirectly by the custodian or a security in a clearing corporation
(A) be separately identified on the custodian's official records as being owned by the insurer;
(B) have records identifying which security is held by the custodian or by its agent and which security is in a clearing corporation; and
(C) if the security is in a clearing corporation, have records that identify
(i) where the security is;
(ii) the name of the clearing corporation; and
(iii) if through an agent, the name of the agent;
(3) a custodied security that is registered
(A) be registered in the name of the insurer or its nominee;
(B) be registered in the name of the custodian or its nominee; or
(C) if in a clearing corporation, be registered in the name of the clearing corporation or its nominee;
(4) a custodied security be held subject to the instructions of the insurer and be withdrawable upon the demand of the insurer, except that a custodied security used to meet the deposit requirements of AS 21 that is under the control of the director may not be withdrawn by the insurer without the approval of the director under the requirements of AS 21.24;
(5) the custodian send or cause to be sent to the insurer an electronic or paper confirmation of each transfer of custodied securities to or from the account of the insurer;
(6) the custodian furnish the insurer no less than monthly electronic or paper reports of holdings of custodied securities containing information reasonably required by the insurer;
(7) the custodian's trust committee's electronic or paper annual reports of its review of the insurer's trust accounts be provided to the insurer;
(8) upon written instructions from an appropriate officer of the insurer, a representative of an appropriate regulatory body, an independent accountant selected by the insurer, or an officer or employee of the insurer be entitled to examine the custodian's records relating to custodied securities of the insurer on the premises of the custodian and during the custodian's regular business hours;
(9) the custodian and its agent send to the insurer
(A) reports received from a clearing corporation on their respective systems of internal accounting control; and
(B) reports that the insurer may reasonably request, prepared by outside auditors on the custodian's or its agent's internal accounting control over custodied securities;
(10) the custodian maintain records sufficient to determine and verify information relating to a custodied security that may be reported in the insurer's annual statement required under AS 21.09.200 and supporting schedules and information required in an examination or audit of the financial statements of the insurer;
(11) the custodian provide, upon written request from an appropriate officer of the insurer, the appropriate affidavits, substantially in the form under 3 AAC 21.875, 3 AAC 21.880, or 3 AAC 21.885 with respect to custodied securities;
(12) the custodian secure and maintain insurance protection in an adequate amount covering the duties and activities as a custodian for the insurer's assets and in an amount in compliance with the custodian's state or federal regulator;
(13) a custodian that is a broker-dealer secure and maintain insurance protection for each insurer's custodied securities in excess of that provided by the Securities Investor Protection Corporation and in an amount equal to or greater than the market value of each respective insurer's custodied securities;
(14) the custodian be obligated to indemnify the insurer for any loss of custodied securities by
(A) the negligence or dishonesty of the custodian's officers or employees;
(B) burglary;
(C) robbery;
(D) holdup;
(E) theft;
(F) mysterious disappearance;
(G) damage; or
(H) destruction; and
(15) if a loss of custodied securities occurs for which the custodian is obligated to indemnify the insurer, the custodian will replace promptly the
(A) securities or the value of the securities; and
(B) the value of any loss of rights or privileges resulting from the loss of securities.
(b) An agreement between an insurer and a custodian may provide that the custodian will not be liable for a failure to take an action required under the agreement if the taking of the action is prevented or delayed by
(1) war, whether declared or not, including existing wars;
(2) revolution, insurrection, riot, or civil commotion;
(3) an act of God;
(4) an accident, fire, or explosion;
(5) labor stoppages, strikes, or other differences with employees;
(6) laws, regulations, orders, or other acts of any governmental authority; or
(7) any other cause beyond the custodian's reasonable control.
(c) If the custodian gains entry in a clearing corporation through an agent, the custodian must have an agreement with the agent under which the agent will be subject to the same liability for loss of custodied securities as the custodian. This subsection does not apply if the agent is subject to regulation under the laws of a jurisdiction that are different from the laws that regulate the custodian, and the insurance regulatory official of the state of domicile of the insurer accepts a standard of liability applicable to the agent that is different from the standard of liability applicable to the custodian.
(d) The custodian shall provide written notification to the insurance regulatory official of the state of domicile of the insurer within three working days if the custodial agreement with the insurer has been terminated or if all the account assets in any one custody account have been withdrawn.
History
- Authority: AS 21.06.090; AS 21.21.410
- Eff. 8/31/2008, Register 187
3 AAC 21.870 Requirements for deposits with affiliates
(a) An insurer may deposit securities with an affiliated insurer if the securities are deposited in accordance with a written agreement authorized by the board of directors of the depositing insurer, or by an authorized committee of the board of directors of the depositing insurer, and if the affiliated insurer is organized under the laws of a state of the United States. If the states of domicile of the depositing insurer and the affiliated insurer are different, the depositing insurer shall give notice of the proposed deposit 30 days before the effective date of the deposit to the insurance regulatory official in the domiciliary state of the depositing insurer. If within 30 days after the receipt of the notice the insurance regulatory official objects to the deposit, the depositing insurer may not make the proposed deposit.
(b) The written agreement between the depositing insurer and the affiliated insurer must require the affiliated insurer receiving the deposit to
(1) maintain records adequate to identify and verify the securities belonging to the depositing insurer; and
(2) allow representatives of an appropriate regulatory body to examine records relating to securities held under the agreement.
(c) If the authorization is included in the written agreement with the affiliated insurer, the depositing insurer may authorize the affiliated insurer to
(1) hold the securities of the depositing insurer in bulk, in certificates issued in the name of the affiliated insurer or its nominee, and to commingle them with securities owned by other affiliates of the affiliated insurer receiving the deposit; and
(2) provide for the securities to be held by a custodian, including the custodian of securities of the affiliated insurer, or in a clearing corporation.
History
- Authority: AS 21.06.090; AS 21.21.410
- Eff. 8/31/2008, Register 187
3 AAC 21.875 Custodian affidavit when securities held by the custodian have not been redeposited elsewhere; Form A
A custodian required to produce an affidavit under 3 AAC 21.865(a)(11) when securities held by the custodian have not been redeposited elsewhere must use the following form, substituting the judicial district for the county if the affidavit is executed in this state:
FORM A
CUSTODIAN AFFIDAVIT
[For use by a custodian where securities entrusted to its care have not been redeposited elsewhere.]
STATE OF _______________ ))COUNTY OF _______________ ) _______________ )
I, (name of officer), being duly sworn depose and say that I am (title of officer) of (name of custodian), a corporation organized under and pursuant to the laws of the (state) with the principal place of business at (address) (hereinafter "corporation"):
That my duties involve supervision of activities as custodian and records relating thereto;
That the corporation is custodian for certain securities of (insurer) having a place of business at (address) (hereinafter "insurer") pursuant to an agreement between the corporation and the insurer;
That the schedule attached hereto is a true and complete statement of securities that were in the custody of the corporation for the account of the insurer as of the close of business on (date); that, unless otherwise indicated on the schedule, the next maturing and all subsequent coupons were then either attached to coupon bonds or in the process of collection; and that, unless otherwise shown on the schedule, all such securities were in bearer form or in registered form in the name of the insurer or its nominee or of the corporation or its nominee, or were in the process of being registered in such form;
That the corporation as custodian has the responsibility for the safekeeping of such securities as that responsibility is specifically set out in the agreement between the corporation as custodian and the insurer; and
That, to the best of my knowledge and belief, unless otherwise shown on the schedule, the securities were the property of the insurer and were free of all liens, claims, or encumbrances whatsoever.
_________ Vice President or _________ [other authorized corporation officer]
History
- Authority: AS 21.06.090; AS 21.21.410
- Eff. 8/31/2008, Register 187
3 AAC 21.880 Custodian affidavit when securities are on deposit with the depository trust company or like entity; Form B
A custodian required to produce an affidavit under 3 AAC 21.865(a)(11) when securities are on deposit with The Depository Trust Company or a similar entity must use the following form, substituting the judicial district for the county if the affidavit is executed in this state:
FORM B
CUSTODIAN AFFIDAVIT
[For use by a custodian where securities entrusted to its care are on deposit with The Depository Trust Company or other like holding entity.]
STATE OF _______________ ))COUNTY OF _______________ ) _______________ )
I, (name of officer), being duly sworn depose and say that I am (title of officer) of (name of custodian), a corporation organized under and pursuant to the laws of the (state) with the principal place of business at (address) (hereinafter "corporation"):
That my duties involve supervision of activities as custodian and records relating thereto;
That the corporation is custodian for certain securities of (insurer) having a place of business at (address) (hereinafter "insurer") pursuant to an agreement between the corporation and the insurer;
That the corporation has caused certain of the securities to be deposited with (holding entity name) and that the schedule attached hereto is a true and complete statement of the securities of the insurer of which the corporation was custodian as of the close of business on (date), which were so deposited on that date;
That the corporation as custodian has the responsibility for the safekeeping of the securities both in the possession of the corporation or deposited with (holding entity name) as is specifically set out in the agreement between the corporation as custodian and the insurer; and
That, to the best of my knowledge and belief, unless otherwise shown on the schedule, the securities were the property of the insurer and were free of all liens, claims, or encumbrances whatsoever.
_________ Vice President or _________ [other authorized corporation officer]
History
- Authority: AS 21.06.090; AS 21.21.410
- Eff. 8/31/2008, Register 187
3 AAC 21.885 Custodian affidavit when security ownership is evidenced by book entry at a federal reserve bank; Form C
A custodian required to produce an affidavit under 3 AAC 21.865(a)(11) when securities are evidenced by book-entry at a Federal Reserve Bank must use the following form, substituting the judicial district for the county if the affidavit is executed in this state:
FORM C
CUSTODIAN AFFIDAVIT
[For use by a custodian where security ownership is evidenced by book entry at a Federal Reserve Bank.]
STATE OF _______________ ))COUNTY OF _______________ ) _______________ )
I, (name of officer), being duly sworn depose and say that I am (title of officer) of (name of custodian), a corporation organized under and pursuant to the laws of the (state) with the principal place of business at (address) (hereinafter "corporation"):
That my duties involve supervision of activities as custodian and records relating thereto;
That the corporation is custodian for certain securities of (insurer) having a place of business at (address) (hereinafter "insurer") pursuant to an agreement between the corporation and the insurer;
History
- Authority: AS 21.06.090; AS 21.21.410
- Eff. 8/31/2008, Register 187
3 AAC 21.890 Limitation on foreign custodians
A foreign bank acting as a custodian, a United States custodian's foreign agent, or a foreign clearing corporation may only hold foreign securities or securities required by a foreign country in order for the insurer to do business in that country. A United States custodian must hold all other securities for the insurer.
History
- Authority: AS 21.06.090; AS 21.21.410
- Eff. 8/31/2008, Register 187
3 AAC 21.895 Noncompliance
(a) Failure to comply with 3 AAC 21.865 - 3 AAC 21.899 will result in the treatment of an insurer's securities as nonadmitted assets for purposes of each financial statement filed with the director.
(b) If an insurer entered into a custody agreement before August 31, 2008, the insurer shall bring that agreement into compliance with 3 AAC 21.865 - 3 AAC 21.899 on or before June 30, 2009.
History
- Authority: AS 21.06.090; AS 21.21.410
- Eff. 8/31/2008, Register 187
3 AAC 21.899 Definitions
In 3 AAC 21.865 - 3 AAC 21.899, unless the context requires otherwise,
(1) "affiliate" or "affiliated" has the meaning given in AS 21.22.200;
(2) "agent" means a national bank, state bank, trust company, or broker-dealer that maintains an account in its name in a clearing corporation or is a member of the Federal Reserve System and through which a custodian participates in a clearing corporation, including the Treasury/Reserve Automated Debt Entry System (TRADES) or Treasury Direct system; with respect to securities issued by institutions organized or existing under the laws of a foreign country or securities used to meet the deposit requirements under the laws of a foreign country as a condition of doing business there, "agent" also includes a corporation that
(A) is organized or exists under the laws of a foreign country; and
(B) is legally qualified under those laws to accept custody of securities;
(3) "clearing corporation"
(A) means an entity within the meaning given in AS 45.08.102 that is organized for the purpose of effecting transactions in securities by computerized book-entry; with respect to securities issued by institutions organized or existing under the laws of a foreign country or securities used to meet the deposit requirements under the laws of a foreign country as a condition of doing business there, "clearing corporation" also includes a corporation that
(i) is organized or exists under the laws of a foreign country; and
(ii) is legally qualified under those laws to effect transactions in securities by computerized book-entry;
(B) includes the Treasury/Reserve Automated Debt Entry System (TRADES) and Treasury Direct book-entry securities systems;
(4) "custodian" means
(A) a national bank, state bank, or trust company that, at all times during which it acts as a custodian under 3 AAC 21.865 - 3 AAC 21.899, is no less than adequately capitalized as determined by United States banking regulators, that either is regulated by state banking laws or is a member of the Federal Reserve System, and that is legally qualified to accept custody of securities; with respect to securities issued by institutions organized or existing under the laws of a foreign country or securities used to meet the deposit requirements under the laws of a foreign country as a condition of doing business there, "custodian" also includes a bank or trust company that
(i) is incorporated or organized under the laws of a country other than the United States;
(ii) is regulated by that country's government or an agency of it;
(iii) at all times during which it acts as a custodian under 3 AAC 21.865 - 3 AAC 21.899, is no less than adequately capitalized as determined by the standards adopted by international banking authorities; and
(iv) is legally qualified to accept custody of securities; or
(B) a broker-dealer that
(i) is registered under 15 U.S.C. 78o (sec. 15 of the Securities Exchange Act of 1934) with the United States Securities and Exchange Commission;
(ii) maintains membership in the Securities Investor Protection Corporation; and
(iii) has a tangible net worth equal to or greater than $250,000,000;
(5) "custodied securities" means securities held by the custodian or its agent or in a clearing corporation;
(6) "nonadmitted assets" means assets not included in the determination of the financial condition of an insurer;
(7) "tangible net worth" means shareholders' equity, less intangible assets, as reported in the broker-dealer's most recent annual or transition report required under 15 U.S.C. 78m or 78o(d) (sec. 13 or 15(d) of the Securities Exchange Act of 1934) filed with the Securities and Exchange Commission;
(8) "Treasury/Reserve Automated Debt Entry System (TRADES)" and "Treasury Direct" mean the book-entry securities systems established under 5 U.S.C. 301, 12 U.S.C. 391, 31 U.S.C. 3101 - 3130, and 31 C.F.R. Parts 357 and 363;
(9) "security" has the meaning given in AS 45.08.102;
(10) "state" has the meaning given in AS 21.97.900;
(11) "security certificate" has the meaning given in AS 45.08.102;
(12) "working day" means a calendar day other than Saturday, Sunday, an official federal holiday, or an official holiday in this state.
History
- Authority: AS 21.06.090; AS 21.21.410
- Eff. 8/31/2008, Register 187
Article 10 Valuation of Life Insurance Policies
3 AAC 21.900 Applicability
The provisions of 3 AAC 21.900 - 3 AAC 21.949 apply to a life insurance policy issued on or after January 1, 2011 except for
(1) an individual life insurance policy issued in accordance with and as a result of the exercise of a reentry provision contained in the original life insurance policy that was issued before January 1, 2011 or a subsequent policy issued as a result of the exercise of a reentry provision or derivation of a reentry provision in a subsequent policy in which
(A) the face amount of the policy is greater than or equal to the face amount of the original life insurance policy; and
(B) the original life insurance policy guarantees the premium rates of the new policy;
(2) a universal life policy that contains a secondary guarantee in which
(A) the secondary guarantee period is five years or less;
(B) the specified premium for the secondary guarantee period is greater than or equal to the net level reserve premium for the secondary guarantee period based on the 1980 CSO valuation tables and the applicable valuation interest rate under AS 21.18.110; and
(C) the initial surrender charge is not less than 100 percent of the first year annualized specified premium for the secondary guarantee period;
(3) a variable life insurance policy including a variable universal life insurance policy that provides life insurance in which the amount or duration varies according to the investment experience of a separate account; and
(4) a group life insurance certificate unless the certificate provides a stated or implied schedule of maximum gross premiums required in order to continue coverage in force for a period longer than one year.
History
- Authority: AS 21.06.090; AS 21.18.110; AS 21.18.160
- Eff. 1/1/2011, Register 196
3 AAC 21.905 Basic reserves and premium deficiency reserves
(a) An insurer,
(1) for policies issued before January 1, 2009, may elect to use the 1980 CSO valuation tables with select mortality factors or other valuation mortality tables under 3 AAC 28.600 - 3 AAC 28.690 as the minimum mortality standard for basic reserves for one or more specified types of life insurance policies;
(2) for policies issued on or after January 1, 2009, shall use valuation mortality tables under 3 AAC 28.600 - 3 AAC 28.690, as required under 3 AAC 28.620(c), as the minimum mortality standard for basic reserves for one or more specified types of life insurance policies.
(b) Except as provided in (c) of this section, an insurer may not use select mortality factors to determine basic reserves or deficiency reserves beyond the first segment.
Click to view TABLE
(c) In determining basic reserves or deficiency reserves, an insurer may use
(1) any select mortality factors in the first segment; and
(2) if the first segment is less than 10 years, the 10-year select mortality factors incorporated into the 1980 CSO valuation tables after the end of the first segment through the 10th policy year from the date of issue.
(d) If an insurer elects to use the select mortality factors to determine basic reserves as allowed under (a)(1) of this section, the factors must be
(1) the 10-year select mortality factors incorporated into the 1980 CSO valuation tables; or
(2) the select mortality factors in Appendix A of this section.
(e) An insurer shall calculate deficiency reserves for each policy to equal the larger of the following amounts:
(1) zero;
(2) the basic reserve calculated using guaranteed gross premiums instead of net premiums when guaranteed gross premiums are less than the corresponding net premiums minus the basic reserve.
(f) An insurer,
(1) for policies issued before January 1, 2009, may elect to use the 1980 CSO valuation tables with select mortality factors or other valuation mortality tables under 3 AAC 28.600 - 3 AAC 28.690 to determine deficiency reserves under (e) of this section for one or more specified types of life insurance policies;
(2) for policies issued on or after January 1, 2009, shall use valuation mortality tables under 3 AAC 28.600 - 3 AAC 28.690, as required under 3 AAC 28.620(c), as the minimum mortality standard to determine deficiency reserves under (e) of this section for one or more specified types of life insurance policies.
(g) If an insurer elects to use the select mortality factors under (f)(1) of this section, the factors must be
(1) the 10-year select mortality factors incorporated into the 1980 CSO valuation tables;
(2) the select mortality factors in Appendix A of this section; or
(3) during the first segment, X percent of the select mortality factors in Appendix A of this section, subject to the following:
(A) X may vary by policy year, policy form, underwriting classification, issue age, or any other policy factor expected to affect mortality experience;
(B) X must be determined so that using the valuation interest rate required under AS 21.18.110 for basic reserves, the actuarial present value of future death benefits calculated using the mortality rates resulting from application of X is greater than or equal to the actuarial present value of future death benefits calculated using the anticipated mortality experience without recognition of mortality improvement beyond the valuation date;
(C) X must be determined so that the mortality rates resulting from the application of X are greater than or equal to the anticipated mortality experience without recognition of mortality improvement beyond the date of valuation in each of the first five years after the valuation date;
(D) the appointed actuary shall increase X at a valuation date if needed in order to meet the requirements of this subsection;
(E) the appointed actuary may decrease X at a valuation date if X continues to meet all the requirements of this subsection;
(F) the appointed actuary shall specifically take into account the adverse effect on expected mortality and lapse of any anticipated or actual increase in gross premiums;
(G) if X is less than 100 percent at any duration for a policy,
(i) the appointed actuary shall annually prepare an actuarial opinion and memorandum for the company in compliance with 3 AAC 21.800 - 3 AAC 21.845;
(ii) the appointed actuary shall disclose, in the regulatory asset adequacy issues summary required under 3 AAC 21.835(g), the impact of the insufficiency of assets to support the payment of benefits and expenses and the establishment of statutory reserves during one or more interim periods;
(iii) the X factors must reflect anticipated future mortality, without recognition of mortality improvement beyond the valuation date, taking into account relevant emerging experience; and
(iv) the appointed actuary shall annually opine on whether the mortality rates resulting from the application of X meet the requirements of this subsection; the opinion must be supported by an actuarial report consistent with appropriate actuarial standards of practice as adopted by the Actuarial Standards Board.
(h) Guaranteed gross premiums without policy fees may be used to determine basic or deficiency reserves that use guaranteed gross premium only if the policy fee is a level dollar amount after the first policy year.
(i) Guaranteed gross premiums with policy fees may be used to determine deficiency reserves even if guaranteed gross premiums without policy fees are used to determine the basic reserves.
(j) For policies in which guaranteed gross premiums, guaranteed benefits, guaranteed charges, or guaranteed credits are changed unilaterally by the insurer after issue and for which the changes are effective for more than one year after the date of the change, reserves must be calculated as the largest of
(1) reserves calculated ignoring the guarantee;
(2) reserves assuming the guarantee was made at issue; or
(3) reserves assuming that the policy was issued on the date of the guarantee.
(k) The director may require a company to file documentation of the adequacy of reserves for specified blocks of insurance, including policies issued before January 1, 2011.
(l) Documentation under (k) of this section may include a demonstration of the extent to which aggregation with other blocks of business were relied upon in developing the actuarial opinion under 3 AAC 21.800 - 3 AAC 21.845.
History
- Authority: AS 21.06.090; AS 21.18.110; AS 21.18.160
- Eff. 1/1/2011, Register 196; am 12/7/2011, Register 200
3 AAC 21.910 Minimum valuation standard for policies with guaranteed non-level gross premiums or guaranteed non-level benefits
(a) Basic reserves for policies with guaranteed non-level gross premiums or guaranteed non-level benefits, other than universal life insurance policies, must be the larger of segmented reserves and unitary reserves subject to the following:
(1) segmented reserves and unitary reserves must use the same valuation mortality table and selection factor;
(2) in calculating segmented reserves and net premiums, the insurer may elect to either
(A) if the unitary reserve applicable at the end of each segment is greater than zero, treat that unitary reserve as a pure endowment and subtract the unitary reserve applicable at the beginning of each segment from the present value of guaranteed life insurance and endowment benefits for each segment; or
(B) if the guaranteed cash surrender value applicable at the end of each segment is greater than zero, treat that guaranteed cash surrender value as a pure endowment and subtract the guaranteed cash surrender value applicable at the beginning of each segment from the present value of guaranteed life insurance and endowment benefits for each segment.
(b) Deficiency reserves for policies with guaranteed non-level gross premiums or guaranteed non-level benefits, other than universal life insurance policies, in which the guaranteed gross premium at any duration is less than the corresponding modified net premium calculated by the method used to determine the basic reserves using the mortality table specified in 3 AAC 21.905(f) and (g) and the minimum interest rate required under AS 21.18.110 must be calculated
(1) on a unitary basis if the corresponding basic reserve under (a) of this section is a unitary reserve;
(2) on a segmented basis if the corresponding basic reserve under (a) of this section is a segmented reserve; or
(3) on a segmented basis if the segmented reserve is equal to the unitary reserve under (a) of this section.
(c) If deficiency reserves are calculated on a segmented basis under (b) of this section, then the minimum reserves used in determining the deficiency reserves must be calculated using segment lengths equal to the segment lengths used in determining basic segmented reserves.
(d) Basic reserves calculated under this section
(1) may not be less than the tabular cost of insurance for the balance of the policy year, if mean reserves are used; and
(2) may not be less than the tabular cost of insurance for the balance of the current modal period or, if later, the date to which premiums are paid, but not beyond that next policy anniversary, if mid-terminal reserves are used;
(e) In determining the tabular cost of insurance under (d) of this section, the insurer shall
(1) use the valuation mortality table and interest rates used to calculate the segmented reserves; and
(2) if select mortality factors are used, use the 10-year select mortality factors incorporated into the Commissioner's 1980 Standard Ordinary Mortality Table with 10-year Select Mortality Factors;
(f) Total reserves including basis reserves, deficiency reserves, and any reserves for supplemental benefits that expire upon contract termination may not be less than the amount that the policyholder would receive, including the cash surrender value of the supplemental benefits that expire upon termination of the policy, minus a deduction for policy loans.
History
- Authority: AS 21.06.090; AS 21.18.110; AS 21.18.160
- Eff. 1/1/2011, Register 196
3 AAC 21.915 Additional valuation standard for policies with guaranteed non-level gross premiums or guaranteed non-level benefits
(a) For a policy with guaranteed non-level gross premiums or guaranteed non-level benefits, other than a universal life policy, and with an unusual pattern of guaranteed cash surrender values,
(1) the reserves held before the first unusual guaranteed cash surrender value may not be less than the reserves calculated by treating the first unusual guaranteed cash surrender value as a pure endowment and treating the policy as a term policy plus an endowment equal to the unusual cash surrender value, where the term of the policy is the number of years from the date of issue to the date the unusual cash surrender value is scheduled; or
(2) the reserves held after an unusual guaranteed cash surrender value may not be less than the reserves calculated by treating the policy as a term policy plus a pure endowment equal to the next unusual guaranteed cash surrender value and treating any unusual guaranteed cash surrender value at the end of the previous segment as a net single premium in which
(A) the term of the policy is the number of years from the date of the last unusual guaranteed cash surrender value before the valuation date to the earlier of
(i) the date of the next unusual guaranteed cash surrender value, if any, that is scheduled after the valuation date; or
(ii) the mandatory expiration date of the policy; or
(B) the net premium for a given year during the term of the policy is equal to the respective gross premium multiplied by the net-to-gross ratio; for purposes of this subparagraph, the net-to-gross ratio is calculated by adding together the present value at the beginning of the term of the policy of death benefits payable during the term of the policy and the present value at the beginning of the term of the policy of the next unusual guaranteed cash surrender value, if any, subtracting from that figure the amount of the last unusual guaranteed cash surrender value, if any, scheduled at the beginning of the term of the policy, and dividing the resulting figure by the present value at the beginning of the term of the policy of the scheduled gross premiums payable during the term of the policy.
(b) For purposes of this section, a policy with an unusual pattern of cash surrender values is a policy in which any future guaranteed cash surrender value exceeds the previous year's guaranteed cash surrender value by more than the sum of
(1) 1.1 times the scheduled gross premium for that year;
(2) 1.1 times one year's accrued interest on the sum of the guaranteed cash surrender value in the previous year and the scheduled gross premium using the nonforfeiture interest rate used in calculating policy guaranteed cash surrender values; and
(3) .05 times the first policy year surrender charge, if any.
(c) An insurer may elect to calculate reserves for yearly renewable term reinsurance in which only mortality risk is reinsured by
(1) setting the valuation net premium for each future policy year equal to the tabular cost of insurance for that year;
(2) setting basic reserves to an amount not less than the tabular cost of insurance for the period as described in 3 AAC 21.910(d);
(3) setting deficiency reserves equal to the present value at the date of valuation of the greater of the following amounts:
(A) zero;
(B) the valuation net premium minus the maximum guaranteed gross premium in each policy year;
(4) using the maximum valuation interest rate and the Commissioner's 1980 Standard Ordinary Mortality Tables with or without 10-year Select Mortality Factors; or
(5) using the mortality table specified in 3 AAC 21.905(f) and (g) and minimum interest rate required under AS 21.18.110.
(d) An insurer that elects to calculate reserves under (c) of this section may not take a reinsurance reserve credit for an amount greater than the amount of reserve held by the assuming insurer for the same insurance policies.
(e) An insurer may elect to calculate reserves for an attained-age-based yearly renewable term life insurance policy by
(1) setting the valuation net premium for each future policy year equal to the tabular cost of insurance for that year;
(2) setting basic reserves to an amount not less than the tabular cost of insurance for the appropriate period as described in 3 AAC 21.910(d);
(3) setting deficiency reserves equal to the present value at the date of valuation of the greater of the following amounts:
(A) zero;
(B) the valuation net premium minus the maximum guaranteed gross premium in each policy year; and
(4) using the maximum valuation interest rate and the Commissioner's 1980 Standard Ordinary Mortality Tables with or without 10-year Select Mortality Factors, or using the mortality table specified in 3 AAC 21.905(f) and (g) and minimum interest rate specified in AS 21.18.110.
(f) If a policy becomes an attained-age-based yearly renewable term life insurance policy after an initial period of coverage, an insurer may elect to calculate reserves under (e) of this section if
(1) the initial period is constant for all insureds of the same gender, risk class, and plan of insurance; or
(2) the initial period runs to a common attained age for all insureds of the same gender, risk class, and plan of insurance.
(g) In (e) of this section, a life insurance policy is an "attained-age-based yearly renewable term" life insurance policy if
(1) the premium rates on both the initial current premium scale and the guaranteed maximum premium scale are based on the attained age of the insured such that the premium rate for each policy and attained age is independent of the year the policy was issued; and
(2) the premium rates on both the initial current premium scale and the guaranteed maximum premium scale are equal to the premium rates for policies covering insureds of the same gender, risk class, plan of insurance, and attained age.
(h) An insurer is not required to calculate unitary basic reserves and unitary deficiency reserves for a renewable term life insurance policy if
(1) the policy contains a series of equal length periods, except for the final period; the final period may be truncated or extended as needed to meet the expiration date, if
(A) the final period is less than 10 years and less than twice the length of the previous periods; and
(B) for each period, the premium rates on both the initial current premium scale and the guaranteed maximum premium scale are level;
(2) the guaranteed gross premiums in all periods are not less than the corresponding net premiums based on the Commissioner's 1980 Standard Ordinary Mortality Tables with or without 10-year Select Mortality Factors; and
(3) the policy does not develop cash surrender values in any policy year.
(i) An insurer is not required to calculate unitary basic reserves and unitary deficiency reserves for a juvenile life insurance policy if, based upon the initial current premium scale at issue,
(1) the insured is under 25 years of age at issue;
(2) until the insured reaches the end of the juvenile period, at or before 25 years of age,
(A) the gross premiums and death benefits are level; and
(B) the policy does not develop cash surrender values; or
(3) after the end of the juvenile period, at or before 25 years of age,
(A) gross premiums are level for the remainder of the premium payment period; and
(B) death benefits are level for the remainder of the life of the policy.
History
- Authority: AS 21.06.090; AS 21.18.110; AS 21.18.160
- Eff. 1/1/2011, Register 196
3 AAC 21.920 Minimum valuation standard for a universal life insurance policy with a secondary guarantee
(a) Basic reserves for a secondary guarantee in a universal life insurance policy with a secondary guarantee must equal the segmented reserves for the secondary guarantee period in the policy and, in calculating the segments and the segmented reserves,
(1) the segments are determined according to the contract segmentation method; and
(2) the gross premiums are set equal to the specified premiums in the policy, if any, or to the minimum premiums that keep the policy in force for a policy without specified premiums.
(b) Deficiency reserves for a secondary guarantee in a universal life insurance policy with a secondary guarantee must be calculated for the secondary guarantee period as described in 3 AAC 21.910(b) with gross premiums equal to
(1) the specified premiums in the policy, if any; or
(2) the minimum premiums that keep the policy in force.
(c) Minimum reserves
(1) during the secondary guarantee period are the larger of basic reserves for the secondary guarantee plus the deficiency reserve for the secondary guarantee and the minimum reserves required by other law; and
(2) are the largest of the minimum reserves calculated as of the valuation date of each secondary guarantee that has not expired, if a policy contains more than one secondary guarantee.
(d) If a secondary guarantee can be unilaterally changed by the insurer after issue, then the insurer must calculate reserves under this section assuming that the secondary guarantee was made at the issue date of the policy.
(e) In this section,
(1) "minimum premium" means the amount paid into a life insurance policy with a zero account value at the beginning of the policy year that results in a zero account value at the end of the policy year and calculated using guaranteed
(A) policy cost factors including mortality charges, loads, and expense charges; and
(B) interest credit rates;
(2) "one-year valuation premium" means the net one-year premium based upon the original schedule of benefits that
(A) is calculated at issue for all policy years;
(B) is calculated without using select mortality factors as described under 3 AAC 21.905(g)(2) - (4); and
(C) reflects the frequency of fund processing and using the same assumption for the distribution of death that is used to calculate the monthly mortality charges assessed the fund;
(3) "policy with a secondary guarantee" means
(A) a policy with a guarantee that the policy will remain in force at the original schedule of benefits subject only to the payment of specified premiums;
(B) a policy in which the minimum premium at any duration is less than the corresponding one-year valuation premium calculated using the maximum valuation interest rate and
(i) for policies issued before January 1, 2009, the Commissioner's 1980 Standard Ordinary Mortality Tables with or without 10-year Select Mortality Factors or other valuation mortality tables under 3 AAC 28.600 - 3 AAC 28.690; or
(ii) for policies issued on or after January 1, 2009, valuation mortality tables under 3 AAC 28.600 - 3 AAC 28.690, as required under 3 AAC 28.620(c); or
(C) a policy with any combination of elements set out in (A) and (B) of this paragraph;
(4) "secondary guarantee period" means the time period for which the policy is guaranteed to remain in force subject only to a secondary guarantee;
(5) "specified premiums" means the premiums specified in the policy guaranteeing that, if paid, the policy will remain in force at the original schedule of benefits even if the premiums are insufficient to keep the policy in force assuming that maximum mortality charges, maximum expense charges, minimum interest rate credits, and applicable surrender charges are made.
History
- Authority: AS 21.06.090; AS 21.18.110; AS 21.18.160
- Eff. 1/1/2011, Register 196
3 AAC 21.925 Segment and contract segmentation method defined
(a) For purposes of 3 AAC 21.900 - 3 AAC 21.949, the contract segmentation method
(1) is the method in which the amount of time from issuance of a policy to the mandatory expiration of a policy is divided into successive segments, with the length of each segment determined under (b) of this section;
(2) makes all calculations using
(A) for policies issued before January 1, 2009, the 1980 CSO valuation tables or other valuation mortality tables under 3 AAC 28.600 - 3 AAC 28.690;
(B) for policies issued on or after January 1, 2009, valuation mortality tables under 3 AAC 28.600 - 3 AAC 28.690, as required under 3 AAC 28.620(c); and
(3) if elected by the insurer, uses the minimum mortality standard for deficiency reserves under 3 AAC 21.905(e) and (f).
(b) Subject to (c) of this section, the length of a segment is equal to the minimum value of t for which Gt is greater than Rt.
(c) If Gt is never greater than Rt, the length of the segment is the number of years from the beginning of the segment to the mandatory expiration of the policy.
(d) In this section,
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(A) if GPx+k+t is greater than zero and GPx+k+t-1 is equal to zero, Gt is 1,000; or
(B) if GPx+k+t and GPx+k+t-1 are equal to zero, Gt is zero;
(2) GPx+k+t-1 is the guaranteed gross premium per $1,000 of face value for the year t of a segment, not including policy fees if the policy fees are level for the entire premium paying period of the policy;
(3) k is the number of years from the date the policy was issued to the beginning of the segment;
(4) qx+k+t-1 is the valuation mortality rate for deficiency reserves in policy year k+t using the select mortality factors in 3 AAC 21.905(g)(2) if the insurer elects to use the select mortality factors in 3 AAC 21.905(g)(3) to calculate deficiency reserves;
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(6) t is one in the first duration of the segment, two in the second year of the segment, three in the third year of the segment, and for each successive segment the whole number that corresponds to the ordinal number of the year of the segment;
(7) x is original issue age.
History
- Authority: AS 21.06.090; AS 21.18.110; AS 21.18.160
- Eff. 1/1/2011, Register 196
3 AAC 21.930 Segmented reserves
(a) Segmented reserves are equal to the present value of all future guaranteed benefits minus the present value of all future net premiums to the mandatory expiration date of a policy subject to the following:
(1) the reserves must be calculated using segments produced by the contract segmentation method;
(2) net premiums within each segment must be a uniform percentage of the respective guaranteed gross premiums within the segment;
(3) the uniform percentage for each segment at the beginning of the segment must be determined so that the present value of the net premiums within the segment is equal to (PVDB) + (PVUCV) - (UGCV) + (NP), where
(A) (PVDB) is the present value of death benefits within the segment;
(B) (PVUCV) is the present value of any unusual guaranteed cash value as set out in 3 AAC 21.915(b) at the end of the segment;
(C) (UGCV) is any unusual guaranteed cash value as set out in 3 AAC 21.915(b) at the beginning of the segment;
(D) (NP) is, for the first segment only, the greater of zero and (NLP) (OYTP), where
(i) (NLP) is a net level annual premium equal to the present value at the date of issue of the benefits provided for in the first segment after the first policy year divided by the present value at the date of issue of an annuity of one per year payable on the first and each subsequent anniversary date of the policy within the first segment on which a premium is due, where the NLP may not exceed the NLP for a 19-year premium whole life plan of insurance with the same renewal year equivalent level amount at an age one year higher than the age at issue of the policy; and
(ii) (OYTP) is a net one-year term premium for benefits provided in the first policy year;
(4) the interest rate used in determining the present value for any policy may not be greater than the maximum valuation interest rate determined with a guarantee duration equal to the sum Of the lengths of all segments of the policy.
(b) Basic reserves and deficiency reserves calculated under (a) of this section must include future benefits and net premiums in all segments.
History
- Authority: AS 21.06.090; AS 21.18.110; AS 21.18.160
- Eff. 1/1/2011, Register 196
3 AAC 21.949 Definitions
In 3 AAC 21.900 - 3 AAC 21.949,
(1) "basic reserves" means reserves calculated in accordance with AS 21.18.110(b)(2);
(2) "deficiency reserves" means the larger of the following amounts:
(A) zero;
(B) minimum reserves calculated in accordance with AS 21.18.110(b)(4), minus basic reserves;
(3) "guaranteed gross premiums" means the premiums under a life insurance policy that are guaranteed and determined at issue;
(4) "maximum valuation interest rates" means the interest rates defined in AS 21.18.110(c) that are used to determine the minimum reserves of a life insurance policy;
(5) "1980 CSO valuation tables" means the Commissioner's 1980 Standard Ordinary Mortality Table without 10-year selection factors and variations of the Commissioner's 1980 Standard Ordinary Mortality Table approved by the National Association of Insurance Commissioners;
(6) "scheduled gross premium" means
(A) for a life insurance policy that is not a universal life policy, the smallest illustrated gross premium at issue date of the policy;
(B) for a universal life policy,
(i) the smallest specified premium defined under 3 AAC 21.920(e)(5); or
(ii) if the policy does not have a specified premium, the minimum premium defined under 3 AAC 21.920(e)(1);
(7) "segment" means a subdivision of the period from issue to mandatory expiration of a policy, determined under the contract segmentation method set out in 3 AAC 21.925;
(8) "tabular cost of insurance" means the net single premium at the beginning of a policy year for one-year term insurance in the amount of the guaranteed death benefit in that policy year;
(9) "unitary reserves" means the present value of all future guaranteed benefits minus the present value of all future modified net premiums in which
(A) guaranteed benefits and modified net premiums are considered to the mandatory expiration of the policy;
(B) modified net premiums are a uniform percentage of the respective guaranteed gross premiums, with the uniform percentage determined so that at issue the present value of the net premiums equals the present value of all death benefits and pure endowments, plus the greater of zero and (NLP) - (OYTP) where
(i) (NLP) is a net level annual premium equal to the present value at the date of issue of the benefits provided for after the first policy year divided by the present value at the date of issue of an annuity of one per year payable on the first and each subsequent anniversary date of the policy on which a premium is due, where the NLP may not exceed the NLP for a 19-year premium whole life plan of insurance with the same renewal year equivalent level amount at an age one year higher than the age at issue of the policy; and
(ii) (OYTP) is a net one-year term premium for benefits provided in the first policy year; and
(C) the interest rate used in determining the present value for any policy is not greater than the maximum valuation interest rate determined with a guarantee duration equal to the length of time from the date of issue to the mandatory expiration of the policy;
(10) "universal life insurance policy" means an individual life insurance policy that provides for separately identified interest credits other than in connection with dividend accumulations, premium deposit funds, or other supplementary accounts, when separately identified mortality and expense charges are made to the policy.
History
- Authority: AS 21.06.090; AS 21.18.110; AS 21.18.160
- Eff. 1/1/2011, Register 196
Chapter 23 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
Article 1 Licensing Requirements
3 AAC 23.010 Fingerprinting required
(a) Every applicant for license by the division of insurance shall furnish his or her fingerprints to the director of the division.
(b) Every applicant shall be fingerprinted by a qualified, duly authorized person. The fee, if any, charged for this service must be paid by the applicant.
(c) Permanent license will be issued only after the application, with fees and fingerprint card, has been received, the application and fees reviewed and approved, and the fingerprint card forwarded to the appropriate agency for processing and search. The fee, if any, charged by the agency for fingerprint processing and search must be paid by the applicant.
History
- Authority: AS 21.06.090; AS 21.27.040
- Eff. 6/30/73, Register 46; am 9/28/89, Register 112
3 AAC 23.020 Fingerprinting - Exception
Repealed.
History
- Eff. 6/30/73, Register 46; repealed 3/11/98, Register 145
3 AAC 23.030 Broker - qualifications
Repealed 11/5/92.
3 AAC 23.040 Appointment of agents
Repealed 11/5/92.
3 AAC 23.050 Producing general agents
Repealed 7/1/89.
3 AAC 23.060 Licensing by credentials
Repealed 11/5/92.
3 AAC 23.070 Examination scores valid for one year
(a) An examination score is valid for one year after the date of the examination for a license applicant who has not completed the application process and who has not obtained licensure.
(b) After one year from the date of the examination, an applicant described in (a) of this section must retake the required examination.
History
- Authority: AS 21.06.090; AS 21.27.060
- Eff. 7/1/89, Register 110
3 AAC 23.080 Reexamination required
An applicant for licensure who previously held a license issued by the director which was revoked for any reason must take any required examination for the type of license for which the applicant has applied as the director does not consider the applicant to be fully qualified and competent.
History
- Authority: AS 21.06.090; AS 21.27.060
- Eff. 7/1/89, Register 110
3 AAC 23.090 Licensing certain nonresident adjustors
Expired.
History
- In effect 6/21/89 - 10/18/89 by em adop., Register 111
3 AAC 23.093 Pharmacy benefits manager registration
(a) A person applying to be a pharmacy benefits manager shall apply on the forms provided by the director.
(b) To qualify for issuance or renewal of a registration, an applicant or registrant
(1) must be a trustworthy person in accordance with AS 21.27.020(b)(4);
(2) may not have committed an act that is a cause for denial, nonrenewal, suspension, or revocation of a registration or license in this state, another state, or another jurisdiction;
(3) must disclose to the director
(A) information in accordance with AS 21.27.040(a) for each owner, officer, director, or partner, including identity, professional history, professional experience, and a curriculum vitae or resume;
(B) each administrative action taken against an owner, officer, director, or partner by a governmental agency of the state or of another state or jurisdiction, or by a financial industry regulatory authority sanction or arbitration proceeding, if applicable;
(C) a criminal prosecution of an owner, officer, director, or partner in this state or another state or jurisdiction, including
(i) the criminal complaint;
(ii) the calendaring order; and
(iii) other relevant legal documents; and
(4) must submit the following with an application as set out in (a) of this section:
(A) the application fee required under 3 AAC 31.020(a);
(B) all basic organizational documents of the pharmacy benefits manager, including articles of incorporation, articles of association, partnership agreement, trade name certificate, trust agreement, shareholder agreement, and other applicable documents and all endorsements to the required documents;
(C) the name and address of the pharmacy benefits manager agent for service of process in this state;
(D) the bylaws, rules, regulations, or similar documents regulating the internal affairs of the pharmacy benefits manager;
(E) the names, electronic mailing addresses, physical addresses, official positions, and curricula vitae or resumes of persons who are responsible for the conduct of affairs of the pharmacy benefits manager, including each
(i) member of the board of directors;
(ii) member of the board of trustees;
(iii) member of the executive committee or other governing board or committee;
(iv) principal officer in the case of a corporation;
(v) partner or member in the case of a partnership, limited liability company, limited liability partnership, or association;
(vi) shareholder that holds directly or indirectly 10 percent or more of the voting securities of the pharmacy benefits manager; or
(vii) other person who exercises control or influence over the affairs of the pharmacy benefits manager;
(F) certified financial statements for the preceding two years, or for each year and partial year that the applicant has been in business if less than two years; the certified financial statements must
(i) be prepared by an independent certified public accountant;
(ii) establish that the applicant is solvent;
(iii) establish that the applicant's system of accounting, internal control, and procedure is operating effectively to provide reasonable assurance that money is promptly accounted for and paid to the person entitled to the money; and
(iv) provide any other information that the director may require to review the current financial condition of the applicant; and
(G) written notification from a pharmacy benefits manager or applicant to the director not later than 30 days after
(i) a change in the information contained within the pharmacy benefits manager or applicant's registration, place of business, electronic mailing address, physical mailing address, or telephone number;
(ii) the final disposition of an administrative action taken against the registrant or an owner, officer, director, or partner of the registrant by a governmental agency of this state or of another state, by a governmental agency of another jurisdiction, or by a financial industry regulatory authority sanction or arbitration proceeding; in addition, a registrant shall submit to the director documents relating to the final disposition on the action, including the final order and other relevant legal documents; or
(iii) the conviction of a misdemeanor or felony of the pharmacy benefits manager, or any of its officers, directors, partners, or owners.
(c) Failure to disclose information required under (b)(4)(G) of this section during the 30-day period is cause for denial, revocation, or suspension of registration.
History
- Authority: AS 21.06.090; AS 21.27.901
- Eff. 7/13/2025, Register 255
3 AAC 23.096 Pharmacy benefits manager structure and operation requirements
A pharmacy benefits manager shall maintain complete books, including records of claim reimbursements, appeal outcomes, and reimbursement methodologies, about each insurer for which the pharmacy benefits manager provides pharmacy benefits management services to record storage schedules in accordance with AS 21.27.350. The director shall have access to the books and records maintained by a pharmacy benefits manager for the purposes of examining the pharmacy benefits manager's affairs. A pharmacy benefits manager shall provide books and records to the director upon request and not later than 10 calendar days after receiving the director's request. A pharmacy benefits manager shall maintain records for the duration of the agreement between the pharmacy benefits manager and the insurer, and for three years after the pharmacy benefits manager ceases to provide pharmacy benefits management services to the insurer.
History
- Authority: AS 21.06.090; AS 21.27.953
- Eff. 7/13/2025, Register 255
3 AAC 23.099 Penalties
In addition to other penalties provided under the laws of this state, a pharmacy benefits manager that is found to have violated AS 21.27.901(d), 21.27.952, applicable provisions of 3 AAC 23.093 or 3 AAC 23.096, or other applicable provisions of AS 21 or 3 AAC 21 - 3 AAC 31 is subject to
(1) a civil penalty of not more than $10,000 for each violation;
(2) a civil penalty of not more than $25,000 for each violation if the director determines that the pharmacy benefits manager willfully violated the provisions addressed in this section; or
(3) suspension or revocation of registration.
History
- Authority: AS 21.06.090; AS 21.27.952 AS 21.27.901; AS 21.27.953
- Eff. 7/13/2025, Register 255
3 AAC 23.100 Continuing education as a qualification for license renewal
(a) In order to renew a license under AS 21.27.380, a licensee must satisfy the continuing education requirements under 3 AAC 23.100 - 3 AAC 23.208 unless the licensee is exempt under AS 21.27.020(f) or seeks
(1) renewal of a temporary license under AS 21.27.390;
(2) renewal of a limited lines license under AS 21.27.150; or
(3) a temporary license under AS 14.43.148 or AS 25.27.244.
(b) In order to qualify for license renewal, a licensee who has held a license for a full two-year period must have 24 continuing education credit hours, of which at least three credit hours must include the topic of insurance ethics. A person holding a license issued by the director under AS 21.27 for more than one class of authority is not required to complete a greater number of credit hours than is required of a person holding a license for one class of authority. For purposes of this subsection, an expiration or a lapse in licensure or cancellation or suspension of a license will be considered part of a full two-year license period. Credit hours acquired by a licensee that conform with 3 AAC 23.100 - 3 AAC 23.208 may be applied to the continuing education requirement for license renewal. Credit hours will be allowed only within the renewal period in which the course is completed, unless the credit hours are carry-over credit hours permitted under AS 21.27.020(f).
(c) A licensee may earn credit hours only if a licensee completes continuing education courses that meet the criteria under 3 AAC 23.105 - 3 AAC 23.208.
(d) If a licensee fails to meet the continuing education requirements in (b) of this section because of reasonable cause or excusable neglect, the licensee may submit a written request for an extension of time to the director before the licensee's renewal date. The director may request the continuing education advisory committee appointed under AS 21.27.020(g) to review the request and recommend to the director whether an extension of time should be granted for the licensee to comply with (b) of this section. The director will notify the licensee by certified mail of the director's decision to grant or deny an extension of time.
(e) If a licensee fails to comply with the credit hour requirements in (b) of this section, the director will consider the licensee no longer qualified under AS 21.27.020 and the license expires or lapses, unless the licensee is granted an extension of time to comply with the continuing education requirements under (d) of this section. An expired or lapsed license may be reinstated and renewed under AS 21.27.380. In addition to any other requirements to reinstate an expired or lapsed license, a licensee must complete the continuing education credit hour requirements.
History
- Authority: AS 21.06.090; AS 21.27.150; AS 21.27.390 AS 21.27.020; AS 21.27.380
- Eff. 9/26/96, Register 139; am 7/25/2008, Register 187; am 1/1/2014, Register 208
3 AAC 23.105 Credit for continuing education
(a) A contact class course or self-study course will be accepted for continuing education credit if the course
(1) meets the requirements of 3 AAC 23.188; and
(2) is in the general subject area of
(A) insurance technical or product information;
(B) risk management;
(C) insurance law and regulation;
(D) mathematics, statistics, and probability;
(E) economics;
(F) business law;
(G) finance;
(H) taxation directly related to insurance products;
(I) business insurance ethics;
(J) licensee professional liability;
(K) management, marketing, and sales training; or
(L) securities specific to insurance products.
(b) The director will not approve more than eight credit hours in the general subject area of management, marketing, and sales training during the two-year license period.
History
- Authority: AS 21.06.090; AS 21.27.020
- Eff. 9/26/96, Register 139; am 1/1/2014, Register 208
3 AAC 23.110 Academic and nonacademic program criteria
Repealed.
History
- Eff. 9/26/96, Register 139; repealed 1/1/2014, Register 208
3 AAC 23.115 Computation of academic continuing education credit hours
Repealed.
History
- Eff. 9/26/96, Register 139; repealed 1/1/2014, Register 208
3 AAC 23.120 Computation of continuing education credit hours
(a) The director will determine the number of credit hours to be assigned to each continuing education course based on
(1) presentation hours for a contact class course; or
(2) the word count of the course study material for a self-study course.
(b) A licensee may earn credit hours for a course only if the licensee successfully completes the course and the course meets the requirements under 3 AAC 23.188.
(c) Credit hours for a course will not be considered by the director when determining whether a licensee has met the continuing education requirements under AS 21.27.020(f) and 3 AAC 23.100 - 3 AAC 23.208 until
(1) a continuing education provider has submitted a complete course roster or other evidence to the director that the licensee has successfully completed the course and the licensee's successful completion of the course appears on the licensee's online transcript on file with the director;
(2) the licensee has paid the processing fee under 3 AAC 31.060 and submitted to the director a request to have the director manually process any continuing education provider-sponsored continuing education course successfully completed by the licensee; or
(3) the licensee has paid the processing fee under 3 AAC 31.060 and submitted to the director a request to have the director consider, approve, and manually process a continuing education course completed under 3 AAC 23.204.
(d) Compliance by a licensee in meeting the continuing education requirements of AS 21.27.020(f) and 3 AAC 23.100 - 3 AAC 23.208 will be determined based on the completion date of each course. The director will review a licensee's transcript on file with the director to determine whether the licensee has met the continuing education requirements. A licensee is responsible for monitoring the licensee's continuing education transcript on file with the director to ensure that the licensee's transcript is current and accurate. The licensee shall notify the director of any discrepancies in the transcript.
History
- Authority: AS 21.06.090; AS 21.27.020
- Eff. 9/26/96, Register 139; am 1/1/2014, Register 208
3 AAC 23.125 Nonacademic continuing education programs
Repealed.
History
- Eff. 9/26/96, Register 139; repealed 1/1/2014, Register 208
3 AAC 23.130 Credit for instructing an education program
Repealed
History
- Eff. 9/26/96, Register 139; repealed 1/1/2014, Register 208
3 AAC 23.135 Publication credit
Repealed.
History
- Eff. 9/26/96, Register 139; repealed 1/1/2014, Register 208
3 AAC 23.140 Continuing education credit not allowed
The director will not allow continuing education credit for the following items:
(1) committee service in a professional organization or for the division under 3 AAC 23.145;
(2) credit hours taken and claimed for credit more than once in any two-year license period;
(3) credit hours completed before the effective date of the person's current license, except as allowed in AS 21.27.020(f)(3) or 3 AAC 23.100(e);
(4) credit hours taken but not listed for carry-over credit on the licensee's previous license period application as provided under AS 21.27.020(f)(3);
(5) a review, quiz, or examination;
(6) a course about or that includes automation, computer training, office skills, social networking, time management, or similar general education topics;
(7) a course about or that includes business succession planning, estate planning, financial planning, retirement planning, or risk management unless the continuing education provider or licensee can demonstrate to the satisfaction of the director that the course is direct and specific to insurance products or ethics for insurance licensees.
History
- Authority: AS 21.06.090; AS 21.27.020
- Eff. 9/26/96, Register 139; am 12/28/2008, Register 188; am 1/1/2014, Register 208
3 AAC 23.145 Continuing education advisory committee
(a) In accordance with AS 21.27.020(g), the director will appoint a four-member continuing education advisory committee to provide recommendations on continuing education compliance and advise the director on continuing education matters.
(b) Members of the continuing education advisory committee shall serve staggered three-year terms at the pleasure of the director. The director will, in the director's discretion,
(1) reappoint a committee member to additional three-year terms;
(2) remove or replace a committee member as appropriate; or
(3) appoint alternates to substitute for committee members on an as-needed basis, so long as the representation requirements of AS 21.27.020(g) are met.
(c) A person seeking specific action from the director concerning continuing education may request the director to schedule a meeting of the continuing education advisory committee to consider the specific action. The request must describe the proposed action and explain why the proposed action is necessary. Upon receipt of the request, the director will either make an independent decision regarding the request or schedule a meeting of the continuing education advisory committee to consider the request and submit a recommendation to the director about the requested action.
History
- Authority: AS 21.06.090; AS 21.27.020
- Eff. 9/26/96, Register 139; am 1/1/2014, Register 208
3 AAC 23.150 Affidavit of compliance
(a) At the time a licensee applies for license renewal, a licensee shall submit a notarized affidavit stating that the license has complied with the continuing education requirements of 3 AAC 23.100 - 3 AAC 23.208, on a form supplied by the director.
(b) If an affidavit of compliance is not received by the director by the license renewal date, the license lapses.
(c) The licensee is responsible for maintaining adequate and detailed records of all continuing education credit hours claimed on the affidavit and shall make the records available to the director upon request. The licensee shall retain these records for two years from the license renewal date for which the continuing education credits are submitted and for four years if the credits are to be applied to the next license renewal period.
History
- Authority: AS 21.06.090; AS 21.27.020
- Eff. 9/26/96, Register 139; am 1/1/2014, Register 208
3 AAC 23.155 Audit of continuing education compliance
(a) The director will audit a sample of the affidavits submitted by licensees under 3 AAC 23.150 to verify compliance with 3 AAC 23.100 - 3 AAC 23.208. The director may request the assistance of the continuing education advisory committee to audit the sample and provide recommendations to the director. If the director requests the assistance of the committee, the director will solicit suggestions from the committee as to a plan of audit procedures, including a method for selecting affidavits to be audited and for verifying information on the affidavits. The director will establish the plan of audit and notify the committee, if utilized, of the appropriate procedures. Upon the request of the director, the committee will meet to conduct its activities under this section. The committee meetings are subject to the open meeting requirements of AS 44.62.310 - 44.62.312.
(b) The director will notify a licensee of an audit by mail at the mailing address on file with the division no later than six months after the license renewal date. If a committee member is selected for audit and the director requests the assistance of the committee on the audit, that committee member may not participate in providing recommendations on the audit.
(c) If audited, a licensee who refuses to cooperate with the director may be considered untrustworthy under AS 21.27.020 and subject to administrative action.
(d) If the director or the committee, at the request of the director, cannot verify information listed in an affidavit of compliance, the director will notify the licensee by certified mail that additional information is needed to verify compliance with the continuing education requirements. The licensee shall have 30 days from the date of receipt of the notification to provide verification. The director will, in the director's discretion, deny continuing education credit for the failure to provide sufficient verification requested under this section.
(e) If the committee is requested to assist in the audit, the committee shall submit findings and recommendations to the director regarding the licensee's compliance or noncompliance with the continuing education requirements. The director will accept, reject, or modify the committee's recommendations and will notify the licensee of the director's decision by certified mail.
(f) The director will, in the director's discretion, grant a licensee 60 days in which to replace continuing education credits that are found to be unacceptable under the audit. The replacement continuing education credits will be audited under AS 21.27.020 and this section.
(g) A licensee may submit a written request for a hearing under AS 21.06.180 regarding the director's decision under (e) of this section.
History
- Authority: AS 21.06.090; AS 21.06.180; AS 21.27.020
- Eff. 9/26/96, Register 139; am 1/1/2014, Register 208
3 AAC 23.157 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.157. Exemption from 3 AAC 23.150 and 3 AAC 23.155. The provisions of 3 AAC 23.150 and 3 AAC 23.155 do not apply to a licensee once the licensee's current continuing education records become available on the licensee's online transcript on file with the director.
History
- Authority: AS 21.06.090; AS 21.06.180
- Eff. 1/1/2014, Register 208
3 AAC 23.160 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.160. Noncompliance. If a licensee fails to comply with 3 AAC 23.100 - 3 AAC 23.208, the license lapses or expires.
History
- Authority: AS 21.06.090; AS 21.27.020
- Eff. 9/26/96, Register 139; am 1/1/2014, Register 208
3 AAC 23.164 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.164. Continuing education provider qualifications. (a) In order to offer, sponsor, or advertise a continuing education course to a licensee in this state, a person must (1) submit an application on a form prescribed by the director; (2) pay an application fee under 3 AAC 31.060; (3) be approved and assigned an identifying number as a continuing education provider by the director; and (4) agree to participate in the division's online continuing education system provided by the National Association of Insurance Commissioners, known as State Based Systems. (b) The director's approval of a continuing education provider expires on December 31 of the fourth year after the date of the approval. The continuing education provider may apply for renewal under 3 AAC 23.172.
History
- Authority: AS 21.06.090; AS 21.27.020
- Eff. 1/1/2014, Register 208
3 AAC 23.168 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.168. Continuing education provider requirements. (a) In addition to meeting the qualifications under 3 AAC 23.164, an approved continuing education provider shall (1) ensure that each contact class course is conducted or facilitated by an instructor qualified under 3 AAC 23.184; (2) obtain approval of the director for each course the continuing education provider offers in this state; (3) ensure that each course offered follows the course outline and criteria approved by the director; (4) obtain approval of the director for a course when there has been a substantial change to a previously approved course before the course is offered in this state; (5) notify the director in writing not later than 30 days after a change in the provider's primary or alternate contact person, electronic mail address, mailing address, telephone number, or facsimile transmission number; (6) notify the director in writing of any administrative action taken against the continuing education provider by a governmental agency of another state and submit to the director the final order or other relevant legal documents in the action not later than 30 days after the final disposition of the action; (7) if the capability to monitor attendance exists, prepare and issue, not later than 30 days after the course completion date, a certificate of completion to each licensee who successfully completes the course if the licensee arrives by the time the course begins and stays until the conclusion of the course; the certificate of completion must include the (A) licensee's name; (B) licensee's national producer number that identifies the licensee in the producer database (PDB) of the National Association of Insurance Commissioners (NAIC); (C) provider's name; (D) provider's identification number assigned under 3 AAC 23.164; (E) course number; (F) date of completion of the course; (G) number of credit hours earned by the licensee; and (H) date and signature of the authorized designee of the provider; (8) if the capability to monitor attendance does not exist, prepare and issue, not later than 30 days after the course completion date, a certificate of completion to each licensee who successfully completes the course and include in the certificate the same information required under (7) of this subsection; (9) file on the division's online continuing education system, not later than 10 days after the course completion date, a course roster containing the (A) names of the licensees who have successfully completed the course; (B) the licensees' national producer numbers that identify the licensees in the producer database (PDB) of the National Association of Insurance Commissioners (NAIC); (C) provider's identification number assigned under 3 AAC 23.164; (D) course number; (E) number of credit hours earned by each licensee; and (F) for a contact class course, the (i) date of the course; (ii) location of the course; and (iii) name of the instructor; (10) for a contact class course, (A) monitor and record the amount of time each licensee spent on the course through attendance registers, use of the Internet, or other verifiable means; (B) designate an instructor who is responsible for verification of class attendance and course content completion; and (C) use an attendance register that includes the (i) provider's name; (ii) provider's identification number assigned under 3 AAC 23.164; (iii) course number; (iv) licensees' names; (v) licensees' national producer numbers that identify the licensees in the producer database (PDB) of the National Association of Insurance Commissioners (NAIC); (vi) licensees' signatures; and (vii) initials of a licensee indicating each time the licensee arrived at or left the course site; (11) for a self-study course, if the capability exists, monitor and record the amount of time each licensee spends on the course through use of the Internet, or other verifiable means; (12) upon completion of a course, provide each licensee with an opportunity to complete a confidential evaluation of the course and the course instructor, if applicable; (13) supervise the continuing education provider's instructors, disinterested third parties, other employees, contractors, or any other person having contact with or access to a licensee or the records, equipment, or facilities of the continuing education provider; (14) assist the director and cooperate in any audit the director may conduct to determine compliance with AS 21.27.020 and 3 AAC 23.100 - 3 AAC 23.208, with the cost of the audit borne by the continuing education provider; and (15) maintain records and documents in accordance with the following retention schedule: (A) records relating to a continuing education instructor - four years from the date of termination of the continuing education instructor's employment or contract with the continuing education provider; (B) records relating to a course - four years from the date the course was offered; (C) all other records - four years. (b) A continuing education provider shall make available to the director, not later than 10 working days after the director's request, continuing education records in sufficient detail to enable the director to determine whether the continuing education provider has met the requirements of AS 21.27.020 and 3 AAC 23.100 - 3 AAC 23.208. In addition to the records prepared under this section, the records a continuing education provider must maintain in accordance with the retention schedule under (a)(15) of this section are the documents prepared, developed, or required under 3 AAC 23.164, 3 AAC 23.172, 3 AAC 23.184, 3 AAC 23.188, 3 AAC 23.192, and 3 AAC 23.196. (c) The continuing education provider may request the director to accept an examination score, grade report, or other evidence of the successful completion of a course instead of a certificate of completion. (d) The continuing education provider shall pay a late fee under 3 AAC 31.060 if (1) the course roster is received by the director more than 10 days after the course completion date; or (2) the certificate of completion is not issued to the licensee within 30 days after the completion date of the course. (e) Failure to meet any of the requirements of this section is cause for the suspension or revocation of a continuing education provider's approval under 3 AAC 23.164.
History
- Authority: AS 21.06.090; AS 21.27.020
- Eff. 1/1/2014, Register 208
3 AAC 23.170 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.170. Definitions. Repealed.
History
- Eff. 9/26/96, Register 139; repealed 1/1/2014, Register 208
3 AAC 23.172 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.172. Continuing education provider renewal. (a) During the 60-day period the last day of which is the expiration date of a person's approval as a continuing education provider, a person seeking to renew the approval for a four-year period must submit to the director an application for renewal on a form prescribed by the director and pay a renewal application fee under 3 AAC 31.060. (b) The director's approval of a continuing education provider expires on December 31 of the fourth year after the date of the last approval. (c) If the director does not receive the continuing education provider's renewal application and fee payment during the period set out in (a) of this section, the director's approval of the continuing education provider becomes inactive. A continuing education provider may not advertise, sponsor, or provide a continuing education course to a licensee unless the continuing education provider is approved by the director as a continuing education provider under 3 AAC 23.164. (d) An inactive continuing education provider may apply for reinstatement not later than 60 days after the expiration date of the director's approval by completing the requirements under (a) of this section and remitting a late reinstatement fee under 3 AAC 31.060.
History
- Authority: AS 21.06.090; AS 21.27.020
- Eff. 1/1/2014, Register 208
3 AAC 23.176 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.176. Suspension or revocation of a continuing education provider. The director may suspend or revoke the director's approval of a continuing education provider if the director determines the continuing education provider has violated the requirements of 3 AAC 23.100 - 3 AAC 23.208, Under this section, the director will not set a period of suspension that exceeds 12 months. In a suspension or revocation under this section, the director will set out the length of time during which the continuing education provider may not reapply for approval under 3 AAC 23.164.
History
- Authority: AS 21.06.090; AS 21.27.020
- Eff. 1/1/2014, Register 208
3 AAC 23.180 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.180. Referrals to a continuing education provider. A person that is subject to AS 21 may not accept a rebate, refund, fee, commission, or discount for the referral of a licensee to a continuing education provider without making full disclosure of the acceptance of the rebate, refund, fee, commission, or discount to the licensee and the director.
History
- Authority: AS 21.06.090; AS 21.27.020
- Eff. 1/1/2014, Register 208
3 AAC 23.184 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.184. Continuing education instructor qualifications. (a) A continuing education provider shall ensure that each of the continuing education provider's contact class courses is taught or presented by a continuing education instructor who is trustworthy and meets at least one of the following qualifications: (1) has three years' experience teaching or presenting the course or related subject matter within the five years before teaching or presenting the course; (2) is currently licensed for the subject matter being taught or presented and has been licensed in good standing under AS 21.27 for three of the last five years; (3) possesses a college degree in the subject matter being taught or presented; (4) possesses a recognized professional designation in the subject matter being taught or presented. (b) A continuing education instructor must be in good standing in any state in which the individual currently holds an insurance license. If the individual had an insurance license suspended or revoked, the continuing education provider must document the reason for the suspension or revocation and include proof that the individual is now considered in good standing in that particular state. (c) A continuing education provider shall collect and maintain documentation sufficient to demonstrate that each continuing education instructor meets the minimum qualifications under this section. (d) The director may review existing records of continuing education instructors and may direct the continuing education provider to cease using a continuing education instructor who does not meet the qualifications of this section or fails to comply with all applicable requirements under 3 AAC 23.100 - 3 AAC 23.208.
History
- Authority: AS 21.06.090; AS 21.27.020
- Eff. 1/1/2014, Register 208
3 AAC 23.188 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.188. Continuing education course requirements. (a) A continuing education provider seeking approval of a continuing education course must submit to the director, at least 30 days before the first date the course is to be offered for credit, an application for course approval on a form prescribed by the director and pay an application fee under 3 AAC 31.060. A course may not be advertised before the course has been approved by the director. (b) An application for course approval for a contact class course must include (1) a course content outline or summary of the course, including a list of topics to be covered and an estimate of the time to be spent on each topic; (2) the name and contact information of each instructor; (3) the grading, evaluation, and course completion criteria; and (4) the course instruction method. (c) An application for course approval for a self-study course must include (1) a course content outline or summary of the course; (2) any study guide, document, or material to be proved to the course participants; (3) the grading, evaluation, and course completion criteria; (4) sample examinations; and (5) the course instruction method. (d) In addition to the applicable requirements under (b) or (c) of this section, an application for course approval for a contact class course or a self-study course that is offered online must include documentation that the course has (1) reference materials, graphics, and interactivity; (2) specific instructions on how to register for, navigate, and complete the course; (3) technical support available during business hours; (4) a process to authenticate the participant's identity; and (5) a method that prevents access to the examination until the course has been completed. (e) In accordance with the National Association of Insurance Commissioners' NAIC Uniform Declaration Regarding Continuing Education Reciprocity Course Approval Guidelines, revised as of September 1, 2009 and adopted by reference, the director will approve a continuing education course on terms that are reciprocal with those of the continuing education provider's home state if the general content meets the requirements of this section and 3 AAC 23.105. (f) A continuing education provider may cancel and remove a course from the director's list of approved courses if the cancellation of the course is not backdated. (g) The director may conduct unannounced audits of any approved course to monitor the continuing education provider's compliance with 3 AAC 23.100 - 3 AAC 23.208. (h) The director's approval of a continuing education course expires on September 1 of the second year after the date of the approval. A continuing education provider shall submit a new application for course approval and pay an application fee under 3 AAC 31.060 whenever a substantial change to a previously approved course has occurred. The continuing education provider may apply for renewal of a course approval under 3 AAC 23.196.
History
- Authority: AS 21.06.090; AS 21.27.020
- Eff. 1/1/2014, Register 208
3 AAC 23.192 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.192. Continuing education course advertising requirements. A continuing education course may not be advertised, sponsored, or offered in this state unless the director has approved the course and the advertisement includes (1) the continuing education provider's name as approved by the director; (2) the course title as approved by the director; (3) a brief description of the content of the course; (4) the number of credit hours approved by the director; and (5) for a contact class course, (A) the time and date the course will be offered; and (B) the location where the course will be offered.
History
- Authority: AS 21.06.090; AS 21.27.020
- Eff. 1/1/2014, Register 208
3 AAC 23.196 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.196. Continuing education course renewal. (a) A continuing education provider seeking renewal of a continuing education course for a two-year period shall submit an application for course renewal on a form prescribed by the director and pay a renewal fee under 3 AAC 31.060. (b) The director's approval of a continuing education course expires on September 1 of the second year after the date of the last approval. (c) If the director does not receive the course renewal application and fee payment before the close of business on the course expiration date, the course approval becomes inactive. (d) A provider may reinstate an inactive course approval not later than 60 days after the expiration date of that approval by completing the renewal requirements under (a) of this section and remitting a late reinstatement fee under AAC 31.060.
History
- Authority: AS 21.06.090; AS 21.27.020
- Eff. 1/1/2014, Register 208
3 AAC 23.200 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.200. Revocation of a continuing education course. (a) The director may revoke the director's approval of a continuing education course if the director determines that the continuing education course violates the requirements of 3 AAC 23.100 - 3 AAC 23.208. (b) The director may reinstate approval of a course that has been revoked if the director receives satisfactory proof that the conditions responsible for the revocation have been corrected and the possibility of reoccurrence of the violation has been eliminated.
History
- Authority: AS 21.06.090; AS 21.27.020
- Eff. 1/1/2014, Register 208
3 AAC 23.204 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.204. Request for credit for non-approved course from a non-approved provider. (a) A licensee may request credit for completion of an insurance-related course organized and conducted by an entity that is not approved by the director as a continuing education provider. The director will consider the educational value of the course. (b) A request to the director to consider and manually process a continuing education course for credit under this section must include (1) documentation signed by an instructor or other person in charge verifying the licensee's successful completion of the course; (2) documentation of the course content in sufficient detail to enable the director to determine the amount of credit, if any, the licensee merits for successfully completing the course; and (3) proof that the licensee has paid the processing fee under 3 AAC 31.060.
History
- Authority: AS 21.06.090; AS 21.27.020
- Eff. 1/1/2014, Register 208
3 AAC 23.208 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.208. Definitions. In 3 AAC 23.100 - 3 AAC 23.208, unless the context requires otherwise, (1) "certificate of completion" means a document signed by an authorized designee of a continuing education provider attesting to the successful completion of a continuing education course by a licensee and confirming the number of credits earned for the continuing education course; (2) "contact class course" means a classroom presentation, webinar, workshop, seminar, lecture, teleconference, or virtual class that has monitored attendance and an instructor available either in person or by means of the Internet or another technological medium that enables a licensee and the instructor to communicate and exchange information during the course; (3) "contact person" means an individual designated by a continuing education provider to be responsible for the continuing education provider's compliance with 3 AAC 23.100 - 3 AAC 23.208; the continuing education provider may designate a primary and an alternate contact person; (4) "course number" means the identifying number assigned by the director to an approved continuing education course; (5) "course outline" means (A) a list of topics to describe the content of a continuing education course; and (B) the amount of time allotted to each topic; (6) "credit hour" means an amount of work represented in intended learning outcomes and verified by evidence of student achievement that is established by the director and for each credit hour is at least 50 minutes of continuous instruction for contact class courses or at least 50 minutes of self-study for a self-study course; (7) "disinterested third party" means a person who is (A) not related to the examinee; (B) not an immediate supervisor or employee of the examinee; and (C) not concerned, with respect to possible gain or loss, about the result of a pending course final examination; (8) "home state" means (A) the state where the continuing education provider maintains the continuing education provider's principal place of residence or principal place of business; or (B) the state that the continuing education provider elects to recognize as the home state for the purpose of filing courses in order for the continuing education provider to obtain the maximum credit hours allowed for a course; (9) "online course" means a course taken on the Internet with an internal testing program that ensures that a licensee cannot take the final examination without completing the course; (10) "self-study course" means a course that (A) does not have an instructor available to communicate and exchange information during the course; and (B) provides study materials in text, video, audio, or electronic form.
History
- Authority: AS 21.06.090; AS 21.27.020
- Eff. 1/1/2014, Register 208; am 11/23/2022, Register 244
Article 2 Premium Financing
3 AAC 23.210 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.210. Premiums financed by licensee. (a) A licensee under AS 21.27 may, if acting in the licensee's own name, finance premiums or extend credit to a person whose insurance coverage has been placed through that licensee. A licensee under AS 21.27 may not, except through an affiliate or subsidiary, finance premiums or extend credit to a person to whom the licensee has not directly provided the insurance for which premiums are financed or credit is extended. (b) If an affiliate or subsidiary of a licensee under AS 21.27 finances premiums or extends credit for insurance premiums, the affiliate or subsidiary must be licensed under AS 06.40.010. (c) Except through an affiliate or subsidiary properly licensed under AS 06.40.010, a licensee may not finance premiums or extend credit to a person to whom the licensee has not directly provided the insurance for which premiums are financed or credit is extended.
History
- Authority: AS 06.40.010; AS 21.06.090 AS 06.40.020; AS 21.36.490
- Eff. 4/22/79, Register 70; am 3/11/98, Register 145
3 AAC 23.220 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.220. Limitation on licensees' financing policies. Repealed.
History
- Eff. 4/22/79, Register 70; repealed 3/11/98, Register 145
3 AAC 23.230 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.230. Revocation and suspension of the right to finance premiums or extend credit. Repealed.
History
- Eff. 4/22/79, Register 70; repealed 3/11/98, Register 145
3 AAC 23.240 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.240. Compliance with Federal Truth in Lending Act. A licensee who finances premiums or extends credit under 3 AAC 23.210 - 3 AAC 23.380 shall make the disclosures required by 15 U.S.C. 1601 - 1693 (Federal Truth in Lending Act) and Regulation Z, 12 C.F.R. 226, as revised as of January 1, 1997.
History
- Authority: AS 21.06.090; AS 21.36.490
- Eff. 4/22/79, Register 70; am 3/11/98, Register 145
3 AAC 23.250 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.250. Credit and loans considered premium financing. (a) When a licensee extends credit beyond the date premiums are required to be remitted to the insurer, or loans funds to a person whose coverage has been placed through the licensee, the extension of credit or making a loan is premium financing and the terms of the financing must comply with 3 AAC 23.210 - 3 AAC 23.380. (b) A licensee is not required to comply with 3 AAC 23.210 - 3 AAC 23.380 if the licensee (1) does not charge the insured a service charge for the extension of credit or loan of funds to pay a premium; however, a licensee may charge the licensee's standard late fee; and (2) notifies the insured, by a regular monthly statement or separate written notice within 30 days after extending credit, of the amount of credit or loan and for what purpose the credit or loan has been extended. (c) A licensee who completes a transaction through an extension of credit or loan of funds in compliance with (b) of this section must (1) take the risk of extending credit or loaning funds; and (2) if notified by the insured that the extension of credit for the payment of premium is not desired, reverse the extension of credit from the insured's records effective to the date the credit was extended.
History
- Authority: AS 21.06.090; AS 21.36.490
- Eff. 4/22/79, Register 70; am 8/4/94, Register 131; am 3/11/98, Register 145
3 AAC 23.260 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.260. Contents of premium finance agreement; cancellation if default. (a) A licensee's premium finance agreement or agreement to extend credit must (1) be dated and signed by the borrower, and the printed portion of it must be in at least eight-point type; (2) contain a power of attorney enabling the licensee to cancel the insurance policy listed in the agreement in the name of the borrower if a payment under the agreement is in default; (3) contain the name and place of business of the licensee negotiating the related insurance policy, the name and residence or the place of business of the borrower as specified by the borrower, the name and place of business of the licensee to whom payments are to be made, an identification of the insurance policy involved, and the amount of the premium charged for the policy; and (4) set out all of the following items that apply: (A) the total amount of the premiums; (B) the amount of the down payment; (C) the principal balance, calculated as the difference between (A) and (B) of this paragraph; (D) the annual percentage rate of interest; and (E) the number of payments required, the amount of each payment expressed in dollars, the payment due date, and the total period of the loan. (b) The power of attorney required in (a)(2) of this section must provide that, if a payment under the agreement is in default, (1) the licensee shall give the borrower at least 10 days' written notice, by certified mail addressed to the borrower's last known address, of the licensee's intent to cancel the insurance policy unless the default is cured within that 10-day period; (2) after expiration of the 10-day period specified in (1) of this subsection, the licensee may, in the name of the borrower, cancel the insurance policy by notifying the borrower, at the borrower's last known address, and the insurer of the cancellation by certified mail; and (3) all statutory, regulatory, and contractual restrictions providing that the insurance policy may not be canceled unless notice is given to a governmental agency, mortgagee, or other third party will apply if cancellation is effected under this section. (c) If a licensee requests cancellation under (b)(2) of this section, the insurance policy must be canceled as if the notice of cancellation had been submitted by the borrower, but the return of the insurance policy is not required. (d) If a statute, regulation, or contractual provision requires notice of cancellation to a governmental agency, mortgagee, or other third party, an insurer shall give notice on behalf of itself or the borrower no later than the fifth business day after the insurer receives the notice of cancellation from the licensee. The insurer shall determine the effective date of cancellation taking into consideration the number of days' notice required by statute, regulation, or contractual provision to complete the cancellation. (e) The premium finance agreement or agreement to extend credit is not required to set out the items listed in (a) of this section in the order in which they are listed, but may use any logical sequence. The premium finance agreement or agreement to extend credit may include additional items to explain the computations made in determining the amount to be paid by the insured. (f) The repayment schedule relating to personal insurance, as that term is defined in AS 21.36.310, must be arranged so that the total amount due the licensee at any time does not exceed the unearned premium on the policy being financed at that time. A deficiency balance may not be established or collected from the borrower. This section does not preclude the licensee from establishing or collecting a deficiency balance to the extent the insurer offsets unearned premiums on the policy financed by premiums earned by reason of endorsements to that same policy not paid for by the insured or financed by the licensee. (g) The licensee shall deliver a complete copy of the premium finance agreement or agreement to extend credit to the borrower at the time the agreement is executed.
History
- Authority: AS 21.06.090; AS 21.36.490
- Eff. 4/22/79, Register 70; am 3/11/98, Register 145
3 AAC 23.270 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.270. Delivery of agreement. Repealed.
History
- Eff. 4/22/79, Register 70; repealed 3/11/98, Register 145
3 AAC 23.280 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.280. Operating funds to finance premiums. A licensee may use only operating funds to finance premiums. By the close of business on the day the loan is made, the licensee shall deposit the amount loaned to a borrower and the down payment paid by the borrower in the licensee's fiduciary account. The licensee may not deliver loan proceeds to the borrower.
History
- Authority: AS 21.06.090; AS 21.36.490
- Eff. 4/22/79, Register 70; am 3/11/98, Register 145
3 AAC 23.290 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.290. Records required. (a) A licensee shall maintain books, accounts, and records relating to premium finance transactions and agreements to extend credit in accordance with accepted accounting practices. A licensee shall keep the required books, accounts, and records at the licensee's place of business, and in a manner that will make them readily available for inspection, examination, and audit by the director. (b) During normal business hours, the director will, in the director's discretion, require a licensee to bring the books, accounts, and records required under (a) of this section to the director's office for examination. (c) A licensee shall preserve the books, accounts, and records required under (a) of this section for at least five years following the year in which the final entry relating to a premium finance agreement or agreement to extend credit was made.
History
- Authority: AS 21.06.090; AS 21.36.490
- Eff. 4/22/79, Register 70; am 3/11/98, Register 145
3 AAC 23.300 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.300. Loan amount. Repealed.
History
- Eff. 4/22/79, Register 70; repealed 3/11/98, Register 145
3 AAC 23.310 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.310. Service charge; maximum interest rate. (a) A licensee entering into a premium finance agreement or agreement to extend credit may charge, contract for, receive, or collect a service charge only as permitted by this section. (b) The service charge may not exceed a simple interest equivalent annual rate of 15 percent, plus an additional, nonrefundable charge of no more than $10 per premium finance agreement or agreement to extend credit. Unless computed under (c) of this section, the service charge must be computed on the balance of the premiums due, after subtracting the down payment made by the borrower, from the effective date of the insurance coverage for which the premiums are being advanced, to and including the date when the final payment of the premium finance agreement or agreement to extend credit is payable. (c) If the service charge is computed monthly, the interest rate may not exceed 1.25 percent per month on the unpaid principal balance. The unpaid principal balance does not include the unpaid interest balance or any other unpaid charges.
History
- Authority: AS 21.06.090; AS 21.36.490
- Eff. 4/22/79, Register 70; am 3/11/98, Register 145
3 AAC 23.315 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.315. Refund on prepayment. (a) A borrower may prepay the outstanding balance due under a premium finance agreement or agreement to extend credit in full at any time before the due date of the final payment, and is entitled to receive a refund credit of interest, computed from the date the prepayment is received by the licensee. A refund must be computed on the total amount of precomputed charges, except that the nonrefundable charge of a maximum of $10 per premium finance agreement or agreement to extend credit must be excluded from the refund computation since interest may not be calculated on that charge. (b) If a premium finance agreement or agreement to extend credit is terminated because of a borrower's default, the borrower is entitled to receive a refund credit of interest as though a prepayment had occurred. A refund credit allowed by this subsection must be computed from the date of cancellation of the insurance policy for which the premium loan was made. (c) A refund credit of interest must be computed in accordance with the sum-of-the-digits method, commonly known as the Rule of 78's.
History
- Authority: AS 21.06.090; AS 21.36.490
- Eff. 3/11/98, Register 145
3 AAC 23.320 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.320. Adjustment for cancellation or prepayment. Repealed.
History
- Eff. 4/22/79, Register 70; repealed 3/11/98, Register 145
3 AAC 23.330 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.330. Cutoff date for computing refunds. Repealed.
History
- Eff. 4/22/79, Register 70; repealed 3/11/98, Register 145
3 AAC 23.340 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.340. Late charge. A premium finance agreement or agreement to extend credit may require the borrower to pay a late charge for any payment that is not made within 10 days after it is due. A late charge may be imposed for each month or fraction of a month that the payment is late. The charge allowed is a minimum of $1 and a maximum of, (1) for a delinquent payment of less than $250, five percent of the payment or $5, whichever is less; or (2) for a delinquent payment of $250 or more, two percent of the payment.
History
- Authority: AS 21.06.090; AS 21.36.490
- Eff. 4/22/79, Register 70; am 3/11/98, Register 145
3 AAC 23.350 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.350. Cancellation of policy requirements. Repealed.
History
- Eff. 4/22/79, Register 70; repealed 3/11/98, Register 145
3 AAC 23.360 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.360. Security for financed premiums. The only allowable security for financed premiums is the unearned premium or cash surrender value of the policy being financed, except that notes may be used to secure audit premiums that are financed after expiration of the policy or where the premium is fully earned before policy expiration.
History
- Authority: AS 21.06.090; AS 21.36.490
- Eff. 4/22/79, Register 70; am 3/11/98, Register 145
3 AAC 23.370 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.370. Delegation of payment. A payment made as required by a premium finance agreement or agreement to extend credit must be attributed only to the policy or policies financed under that agreement.
History
- Authority: AS 21.06.090; AS 21.36.490
- Eff. 4/22/79, Register 70; am 3/11/98, Register 145
3 AAC 23.380 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.380. Exemption. 3 AAC 23.210 - 3 AAC 23.380 do not apply to credit life or credit disability insurance as defined in AS 21.57.
History
- Authority: AS 21.06.090; AS 21.36.490
- Eff. 4/22/79, Register 70; am 3/11/98, Register 145
3 AAC 23.390 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.390. Statement fees. Repealed.
History
- Eff. 4/22/79, Register 70; repealed 3/11/98, Register 145
Article 4 Fiduciary Responsibilities of Licensees
3 AAC 23.500 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.500. Purpose. The purpose of 3 AAC 23.500 - 3 AAC 23.730 is to implement the statutes under which a licensee receives money in a fiduciary capacity.
History
- Authority: AS 21.06.090; AS 21.27.350; AS 21.27.360
- Eff. 8/29/90, Register 115; am 3/30/2003, Register 165
3 AAC 23.510 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.510. Generally accepted accounting principles. (a) Generally accepted accounting principles for a licensee accepting money in a fiduciary capacity are those accounting rules, conventions, and procedures that follow, or that have substantial authoritative support because they are adopted by the following authorities, listed by order of precedence with the highest shown first: (1) AS 21; (2) 3 AAC 23.500 - 3 AAC 23.730 and 3 AAC 23.999; (3) the Financial Accounting Standards Board or its successor organization; (4) the American Institute of Certified Public Accountants. (b) Deviation from generally accepted accounting principles is a violation of AS 21.27.350(d).
History
- Authority: AS 21.06.090; AS 21.27.350
- Eff. 8/29/90, Register 115; am 3/11/98, Register 145; am 3/30/2003, Register 165
3 AAC 23.520 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.520. Records. (a) A licensee who accepts money in a fiduciary capacity shall maintain records for the following types of financial information: (1) fiduciary money; (2) accounts receivable from insurance customers; (3) accounts payable to insurers. (b) Repealed 3/30/2003. (c) Repealed 3/30/2003. (d) Repealed 3/30/2003. (e) Repealed 3/30/2003. (f) Failure to comply with (a) of this section is a violation of AS 21.27.350 and 21.27.360.
History
- Authority: AS 21.06.090; AS 21.27.350; AS 21.27.360
- Eff. 8/29/90, Register 115; am 8/4/94, Register 131; am 3/11/98, Register 145; am 3/30/2003, Register 165
3 AAC 23.530 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.530. Periodic trial balances and reconciliations. Repealed.
History
- Eff. 8/29/90, Register 115; repealed 3/30/2003, Register 165
3 AAC 23.540 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.540. Storage of records. Offsite storage by a licensee of records of a transaction required to be available and open to the inspection of the director under AS 21.27.350(b) is permitted under AS 21.27.350(b) if the records are accessible within two business days after a request by the director.
History
- Authority: AS 21.06.090; AS 21.27.350
- Eff. 8/29/90, Register 115
3 AAC 23.550 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.550. Premium finance accounting and records. (a) Advances of a premium by a licensee must be recorded and held as fiduciary money until forwarded to the insurer. Refunds of premium money must be recorded and held as fiduciary money until forwarded to the insured. (b) If under AS 21.27.360(d), a licensee commingles with premium money additional money for the purpose of advancing premiums, an accounting entry must reclassify the money as fiduciary money. (c) Failure to comply with (a) or (b) of this section is a violation of AS 21.27.350.
History
- Authority: AS 21.06.090; AS 21.27.350; AS 21.36.490
- Eff. 8/29/90, Register 115; am 8/9/94, Register 131; am 3/30/2003, Register 165
3 AAC 23.560 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.560. Estimated billings. (a) If a licensee estimates a billing, and the estimate differs from the insurer's invoice, the adjustment of a licensee's estimated billing must occur within a reasonable amount of time, not to exceed 31 business days after the licensee's receipt of notice of actual billing. (b) Failure to comply with (a) of this section is a violation of AS 21.27.350 and 21.27.360.
History
- Authority: AS 21.06.090; AS 21.27.350; AS 21.27.360
- Eff. 8/29/90, Register 115
3 AAC 23.570 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.570. Frequency of financial statements. (a) A licensee who accepts money in a fiduciary capacity shall prepare financial statements under AS 21.27.350(c) and 3 AAC 23.500 - 3 AAC 23.720 on a basis no less frequent than annually. (b) A licensee's financial statements shall be maintained for the period specified in AS 21.27.350(b). (c) Failure to comply with (a) or (b) of this section is a violation of AS 21.27.350 and 21.27.360.
History
- Authority: AS 21.06.090; AS 21.27.350; AS 21.27.360
- Eff. 8/29/90, Register 115; am 3/30/2003, Register 165
3 AAC 23.580 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.580. Identification of money as fiduciary assets. (a) Money required to be held in a fiduciary capacity is considered to be clearly identified in a licensee's financial statement if the financial statement identifies that the money is held in a fiduciary capacity. (b) Exempt from the clear identification requirement of this section are financial statements of a licensee that are (1) prepared for internal use only; (2) marked conspicuously with the words "For Internal Use Only"; and (3) used only for purposes internal to the licensee's business. (c) Money required to be held in a fiduciary capacity that is maintained in an account in a financial institution must be clearly identified as a fiduciary account. (d) Repealed 3/30/2003. (e) Repealed 3/30/2003. (f) Failure to comply with (a) or (c) of this section is a violation of AS 21.27.350 and 21.27.360.
History
- Authority: AS 21.06.090; AS 21.27.350; AS 21.27.360
- Eff. 8/29/90, Register 115; am 8/4/94, Register 131; am 3/30/2003, Register 165
3 AAC 23.590 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.590. Receipt of fiduciary money. (a) Within 24 hours after receipt, a licensee who receives money in a fiduciary capacity shall document that money in sufficient detail to determine, at a minimum, the date received, name of the payee, and amount. If the licensee receives cash, the licensee shall give the payer a detailed receipt at the time of payment. The detailed receipt must include the date received, amount received, payer name, payee name, and purpose of payment, and any other information important to the transaction. (b) A licensee shall maintain detailed receipt records as records of a transaction under the requirements of AS 21.27.350(b). (c) Repealed 3/30/2003. (d) Repealed 3/30/2003. (e) Failure to comply with (a) of this section is a violation of AS 21.27.350 and 21.27.360. (f) Repealed 3/30/2003.
History
- Authority: AS 21.06.090; AS 21.27.350; AS 21.27.360
- Eff. 8/29/90, Register 115; am 8/4/94, Register 131; am 3/30/2003, Register 165
3 AAC 23.600 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.600. Timely disbursal of premiums. (a) After the receipt of money in a fiduciary capacity, a licensee shall (1) return the money received as a premium deposit to the client if coverage is not obtained within 10 working days; (2) complete the processing of a refund received from the insurer within the time limits outlined in AS 21.36.220(c)(1) and 21.36.255(a)(2)(A) and (B) by either (A) disbursing money to the insured to whom it is owed; or (B) notifying the insured of the application of a refund under 3 AAC 23.680; or (3) investigate fiduciary money held for more than 120 days and pay the money to the person entitled to the money. (b) Failure to comply with (a) of this section is a violation of AS 21.27.350 and 21.27.360.
History
- Authority: AS 21.06.090; AS 21.27.360; AS 21.36.255 AS 21.27.350; AS 21.36.220
- Eff. 8/29/90, Register 115; am 8/4/94, Register 131; am 3/30/2003, Register 165
3 AAC 23.610 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.610. Direct deposit of money required. Repealed.
History
- Eff. 8/29/90, Register 115; repealed 3/30/2003, Register 165
3 AAC 23.620 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.620. Earning of commissions. (a) A licensee who receives money in a fiduciary capacity, part of which consists of commissions due the licensee, may remove commission amounts from money held in a fiduciary capacity only after they are earned. (b) Unless a contract between the licensee and the insurer provides for a commission to be earned at a different time, a commission is earned no earlier than the date on which the licensee receives the money and the insurance coverage is bound. On or after that date, the licensee may remove the commission amounts from fiduciary care. (c) Commission amounts that are removed from money held in a fiduciary capacity must be documented as to (1) the specific calculation of the appropriate commission amount; and (2) the date on which the amount calculated was considered commission. (d) Premium refunds paid to an insured must include a ratable amount of commission, originally collected by the licensee, and refunded to the insured if a contract of insurance is terminated early. (e) This section does not establish a generally accepted accounting principal for the purpose of the preparation of a financial statement of a licensee. (f) Failure to comply with (a), (b), (c), or (d) of this section is a violation of AS 21.27.360. (g) For purposes of this section, "ratable" means a proportionate part of premium.
History
- Authority: AS 21.06.090; AS 21.27.360; AS 21.36.220
- Eff. 8/29/90, Register 115; am 8/4/94, Register 131; am 3/30/2003, Register 165
3 AAC 23.630 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.630. Personal use of fiduciary money. (a) The following are prohibited diversions or appropriations for personal use of money held in a fiduciary capacity: (1) use of fiduciary money, to which a licensee is not lawfully entitled, to pay (A) the personal or business expenses of a licensee; (B) the personal or business expenses of a firm of licensees or members of the firm; (C) a premium of an insured for whom the licensee has not complied with 3 AAC 23.210 - 3 AAC 23.380 concerning premium financing; (D) the return premium due of another insured; (2) use of money held in a fiduciary capacity for any purpose other than the one for which the money is being held. (b) A licensee's money held or to be received in a fiduciary capacity may not be (1) pledged as collateral to secure an amount owing; (2) used to guarantee a contract of surety; or (3) assigned. (c) Each of the prohibited activities listed in (a) and (b) of this section is a violation of AS 21.27.360.
History
- Authority: AS 21.06.090; AS 21.27.360; AS 21.36.490 AS 21.27.350; AS 21.36.100
- Eff. 8/29/90, Register 115; am 3/11/98, Register 145; am 3/30/2003, Register 165
3 AAC 23.640 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.640. Commingling. (a) Money other than that allowed by AS 21.27.360(d) may not be commingled with money held in a fiduciary capacity under AS 21.27.350. (b) Service charges may be periodically withdrawn by the financial institution from a licensee's fiduciary account if sufficient money for that purpose, belonging to the licensee as allowed by AS 21.27.360(d), is maintained in that fiduciary account. (c) The maintenance in a fiduciary account of money not allowed by AS 21.27.360(d) is a violation of AS 21.27.360. (d) In the absence of an arrangement to pay financial institution service charges from a source other than the fiduciary account, not maintaining in a fiduciary account money that is the property of the licensee in an amount sufficient to pay the monthly service charges of the financial institution is a violation of AS 21.27.360(b) and (d).
History
- Authority: AS 21.06.090; AS 21.27.360
- Eff. 8/29/90, Register 115; am 3/30/2003, Register 165
3 AAC 23.650 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.650. Premium financing money flow. (a) The advance of a premium by a licensee in the name of the insured who is purchasing a contract of insurance, if the insured has not yet paid the premium, (1) must be documented in a premium finance agreement under 3 AAC 23.210 - 3 AAC 23.380 unless the advance of a premium meets the requirements of 3 AAC 23.250(b); and (2) may not be made from money received in a fiduciary capacity and held for payment to others. (b) The documents used to execute the advance of a premium by a licensee are records of a particular transaction, that must be maintained for the period specified in AS 21.27.350(c). (c) Repealed 3/30/2003. (d) Failure to comply with (a)(1) of this section is a violation of AS 21.27.350 and 21.27.360. (e) Failure to comply with (a)(2) of this section is a violation of AS 21.27.360. (f) Failure to comply with (b) of this section is a violation of AS 21.27.350. (g) Repealed 3/30/2003.
History
- Authority: AS 21.06.090; AS 21.27.360; AS 21.36.490 AS 21.27.350; AS 21.36.100
- Eff. 8/29/90, Register 115; am 8/4/94, Register 131; am 3/11/98, Register 145; am 3/30/2003, Register 165
3 AAC 23.660 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.660. Broker's fee compensation. Repealed.
History
- Eff. 8/29/90, Register 115; am 3/11/98, Register 145; repealed 3/30/2003, Register 165
3 AAC 23.670 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.670. Interest earned on trust money account. Repealed.
History
- Eff. 8/29/90, Register 115; repealed 3/30/2003, Register 165
3 AAC 23.680 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.680. Offsets. (a) If a licensee receives a refund payable to an insured, the licensee may apply that refund to the payment of amounts due from that insured for insurance premium, an extension of credit, or a loan if the licensee notifies the insured in writing within the 45 day period required for the processing of refunds under 3 AAC 23.600. (b) If notified by the insured that the use of a refund to pay an outstanding amount was not desired, the licensee must return the full refund to the insured or dispose of the full refund according to the instructions of the insured within 45 days. (c) Failure to comply with (a) or (b) of this section is a violation of AS 21.27.350 and 21.27.360.
History
- Authority: AS 21.06.090; AS 21.27.350; AS 21.27.360
- Eff. 8/29/90, Register 115; am 8/4/94, Register 131
3 AAC 23.690 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.690. Advance of premium refunds. (a) The advance of a refund of a premium by a licensee in the name of an insurer that has not yet paid the refund (1) may be made from a reserve established under AS 21.27.360(d); and (2) may not be made from money representing premiums or return premiums held by the licensee. (b) The advance of a refund of a premium by a licensee in the name of an insurer that has not yet paid the refund may be made under the following circumstances without violating AS 21.27.360(b): (1) the insured is purchasing the same insurance coverage as the insurance coverage being canceled to produce the refund being advanced, or additional coverage of another type; (2) the licensee has received advice of credit from the insurer whose contract has been canceled, or has the authority to generate the advice of credit from the insurer whose contract has been canceled; (3) the insured has provided to the licensee a written assignment that allows the licensee to use the premium being refunded for the purpose of paying for the replacement coverage or for coverage of another type; and (4) the licensee is able to carry the burden of proof to document that the licensee, on the day of the premium is being paid for the relevant replacement insurance coverage or for coverage of another type, was holding sufficient money of the insurer being canceled against which the advance of premium refund can be made. (c) Repealed 3/30/2003. (d) The record of the advance of a premium refund by a licensee is a record of a particular transaction, which must be maintained for the period specified in AS 21.27.350(b). (e) Failure to comply with (a) or (b) of this section is a violation of AS 21.27.360.
History
- Authority: AS 21.06.090; AS 21.27.350; AS 21.27.360
- Eff. 8/29/90, Register 115; am 3/30/2003, Register 165
3 AAC 23.700 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.700. Nonresident licensees. (a) A nonresident licensee shall hold in a fiduciary capacity, under AS 21.27.360 and 3 AAC 23.500 - 3 AAC 23.690, money for contracts of insurance written and delivered in this state or insurance risks domiciled in this state. (b) Failure to comply with (a) of this section is a violation of AS 21.27.360.
History
- Authority: AS 21.06.090; AS 21.27.350; AS 21.27.360
- Eff. 8/29/90, Register 115; am 3/30/2003, Register 165
3 AAC 23.710 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.710. Responsible persons in firm. (a) The individual designated as compliance officer of a firm under AS 21.27.020(c)(3) is the person responsible for the firm's (1) compliance with the insurance statutes and regulations of this state; (2) maintenance of adequate records; and (3) proper handling of all money received by the firm in a fiduciary capacity. (b) Repealed 3/30/2003. (c) Repealed 3/30/2003. (d) Repealed 3/30/2003.
History
- Authority: AS 21.06.090; AS 21.27.140 AS 21.27.020; AS 21.27.350
- Eff. 8/29/90, Register 115; am 8/4/94, Register 131; am 3/30/2003, Register 165
3 AAC 23.720 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.720. Fiduciary money exempt from attachment. (a) Unless required by a court order, a licensee may not authorize a financial institution to withhold issue of money from a fiduciary account. (b) Unless required by a court order, a licensee may not authorize a financial institution to seize fiduciary money from an account. (c) Failure to comply with (a) or (b) of this section is a violation of AS 21.27.360.
History
- Authority: AS 21.06.090; AS 21.27.360
- Eff. 8/29/90, Register 115; am 3/30/2003, Register 165
3 AAC 23.730 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.730. Definitions. In 3 AAC 23.500 - 3 AAC 23.730, unless the context requires otherwise, (1) "accessible" means capable of being reviewed by the director or the director's appointed or employed representatives; (2) "accounts payable" means the amount due to insurers that has been received or will be received in the future in a fiduciary capacity, and is currently being carried as an accounts receivable from customers who are purchasing contracts of insurance; (3) "accounts receivable" means the amount due from customers who are purchasing contracts of insurance; (4) "advice of credit" means a written notice normally prepared and transmitted by an insurer notifying a licensee; (A) that an amount is owed by the insurer to the insured as a result of a policy cancellation before the end of the full policy term; (B) of a decrease or discount in the amount of premium for a contract of insurance; or (C) of any other downward adjustment of an amount owed or paid by an insured to an insurer arising from a contract of insurance; (5) "American Institute of Certified Public Accountants" means the body established by practicing certified public accountants that functions as their national professional organization and publishes auditing and accounting guides that expand upon the opinions of the Financial Accounting Standards Board and its successor organizations; (6) "fiduciary" means the relationship of a licensee (A) regarding the receipt of money held in a caretaker capacity representing a premium or return premium in connection with the sale of a contract of insurance; and (B) of such a character that the insurance customer must repose trust and confidence in the licensee and the licensee must exercise a corresponding degree of fairness and good faith; (7) "fiduciary account" means a deposit account at a financial institution into which money being held in a fiduciary capacity is placed; (8) "Financial Accounting Standards Board" means the body (A) established by the American Institute of Certified Public Accountants or its successor national professional organization of practicing certified public accountants; and (B) charged with the responsibility of determining and enforcing financial accounting standards; (9) "financial institution" means a bank, savings and loan, savings bank, or credit union (A) insured by an agency of the United States government, or by an organization bearing the full faith and credit of the United States government; and (B) that both accepts deposits and makes either commercial or consumer loans; (10) "financial statement" means a report that summarizes, analyzes, quantifies, and classifies the economic activities of a licensee and that is reported as information of the following two basic types: (A) a balance sheet that shows the financial position that relates to a specific time; (B) a statement of earnings or excess of revenues over expenses that shows the changes in financial position that relate to a period of time; (11) "insurance customer" means a customer of a licensee who is in the act of purchasing a contract of insurance; "insurance customer" does not include a customer who is in the act of purchasing a product that is not an insurance contract; (12) "licensee" means a person licensed under AS 21.27; (13) "periodically" means accomplished on a frequency occurring at least as often as internal financial statements are prepared by a licensee; (14) "records of a particular transaction" means all information, whether in written, electronic, or other form, dealing with the sale of a contract of insurance and the completion of that contract; "records of a particular transaction" includes all related accounting and banking records; (15) "return premium" means money being returned to an insured through a licensee for the purpose of reimbursing that insurance customer for the early cancellation of a contract of insurance or other adjustment of a premium; (16) "working day" means a calendar day other than Saturday, Sunday, an official federal holiday, or an official holiday of this state.
History
- Authority: AS 21.06.090
- Eff. 8/29/90, Register 115; am 3/30/2003, Register 165
Article 5 Bail Bonds
3 AAC 23.745 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.745. Applicability. Under AS 21.27.150, the director of the division of insurance is authorized to license a person as a bail bond limited producer. In addition to whatever court rules might apply, a bail bond limited producer is subject to (1) the applicable licensing and record keeping requirements, fiduciary responsibilities, and disciplinary actions of AS 21.27 as they relate to an insurance producer; and (2) the trade practices and fraud provisions of AS 21.36.
History
- Authority: AS 21.06.090; AS 21.27.150 AS 21.27.010; AS 21.36.125
- Eff. 12/18/92, Register 124
3 AAC 23.750 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.750. Bail bond limited producer license required. (a) A person may not act in the capacity of a bail bond limited producer or perform any of the functions of a bail bond limited producer unless the person is licensed for and meets the requirements of AS 21.27.150 and acts on behalf of a surety insurer or limited surety insurer. Except for clerical and administrative duties, an unlicensed person may not perform the duties of a licensed bail bond limited producer. (b) To avoid unfair competition in accordance with AS 21.36.900(d), law enforcement personnel, adjudication and prosecution officials and their employees, officials authorized to admit bail, and state, borough, and city officers may not be licensed to execute bail bonds or receive any benefits from the execution of any bail bond. (c) The provisions of AS 21.27, AS 21.36, and 3 AAC 23.745 - 3 AAC 23.859 do not apply to a person who is licensed as and performing the duties of an attorney at law.
History
- Authority: AS 21.06.090; AS 21.27.150 AS 21.27.010; AS 21.36.900
- Eff. 12/18/92, Register 124
3 AAC 23.760 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.760. Premium only charge permitted. (a) Except as provided in (b) of this section, a bail bond limited producer may not charge, collect, or receive any fee or consideration in other than a premium that is based upon the effective rate on file with the director. (b) A licensee may charge for reimbursement of travel, lodging, per diem, and any other expenses incurred at the time the bond is executed. A licensee shall retain a record of all expenses incurred for three years. (c) After execution of a bail bond, an additional premium may not be charged unless the (1) amount of the bond has increased; or (2) additional premium is based on the effective rate on file with the director. (d) A licensee shall refund any premium received above the minimum premium for a bond if a court finds that the surety had no liability under the bond because the defendant did not come under the jurisdiction of the court to which the defendant was thought to be returnable.
History
- Authority: AS 21.06.090; AS 21.39.030 AS 21.36.360; AS 21.39.040
- Eff. 12/18/92, Register 124
3 AAC 23.770 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.770. Written notice of bail bond transaction. (a) A licensee or surety shall, at the time of obtaining the release of a defendant on bail, deliver to the defendant and to any other person with whom bail negotiations were conducted, a prenumbered document that describes the bail bond transaction, including the (1) name of the surety; (2) name and address of the licensee; (3) name of the defendant; (4) date the defendant is released from the bond; (5) date, time, and place of the defendant's required court appearance; (6) amount of bail; (7) offenses with which the defendant is charged; (8) premium charged for the bail bond; (9) premium amount received on account; and (10) unpaid balance, if any, and payment terms. (b) A licensee shall provide the surety with a copy of the written notice of each bail bond transaction within 30 working days. (c) A licensee shall make available at the licensee's office a copy of each form signed by the person who posts bail or, upon request, mail or deliver a copy of each form to that person within ten working days of that person's signature.
History
- Authority: AS 21.06.090; AS 21.27.350; AS 21.27.360
- Eff. 12/18/92, Register 124
3 AAC 23.780 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.780. Records. (a) A licensee shall maintain the following records for five years after the liability of the surety is terminated: (1) a daily register containing the permanent record of all bail bonds and bail bond transactions executed by the licensee including the (A) power of attorney form number; (B) date a bail bond was executed; (C) court in which a bail bond was posted; (D) name of defendant; (E) amount of a bail bond; (F) premium charged; (G) premium reported to the surety; (H) collateral received; (I) indemnity agreements; (J) disposition of collateral; and (K) date of disposition of each bail bond; (2) a list of every outstanding or unpaid forfeiture and court judgment; (3) the name of the court in which each outstanding or unpaid forfeiture and court judgment is recorded; (4) a list of all collateral held and any current disputes or suits filed over the return of the collateral; and (5) a separate file for each defendant for whom a bail bond has been made that includes (A) the original application for a bail bond; (B) a copy of the written notice of a bail bond transaction required by 3 AAC 23.770; (C) an affidavit of receipt of collateral; (D) a description of where the collateral is located; (E) a receipt or release executed by each person who posted collateral that the collateral has been returned; and (F) a copy of any indemnity agreement. (b) Records required under this section must be open to examination by the director or the director's representative upon request. The director will, in the director's discretion, require a licensee to furnish a copy of the records required under this section. Any records not stored at the licensee's principal place of business must be made available within two working days after a request by the director or the director's representative. (c) Records required under this section may be stored electronically or on other media equipment.
History
- Authority: AS 21.06.090; AS 21.27.350; AS 21.27.360
- Eff. 12/18/92, Register 124
3 AAC 23.790 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.790. Prohibited bail bond activities. (a) In accordance with the applicable provisions of AS 21.27, AS 21.36, and court rules, a bail bond limited producer or surety may not (1) pay, rebate, give, or promise anything of value to a jailer, peace officer, magistrate, or any other person who has power to arrest or hold a person in custody, or to any public official or public employee for the purpose of securing a settlement, compromise, remission, or reduction of the amount of bail bond, or to secure delay or other advantage; this section does not prohibit public reward paid for the return of a fugitive; (2) pay, rebate, give or promise anything of value to an attorney in a bail bond matter, except in defense of an action on a bail bond, collateral, or indemnification agreement; (3) pay, rebate, give, or promise anything of value to a defendant or anyone acting on the defendant's behalf in exchange for a referral of bail bond business; (4) also act as the defendant's attorney at a trial or hearing if the licensee or surety has also posted the defendant's bail bond; (5) accept anything of value from a defendant except a premium, collateral, or reimbursement for expenses as provided for in 3 AAC 23.760(b); (6) recommend a particular attorney to represent a defendant; (7) solicit business where a prisoner is confined in or near a courtroom if otherwise prohibited by court order or law; (8) sign or countersign a bail bond that the licensee did not execute; or (9) delegate to a person the authority to sign the name of the licensee to bail bond. (b) A single bail amount as ordered by a magistrate or judge may not be divided or reduced by the licensee for multiple charges or cases involving the same defendant. The surety is liable for the full amount of the bond for the duration of the case. (c) If a magistrate or judge orders a separate bail amount for each charge against a defendant, the licensee or surety must execute a separate bond for each amount. (d) A violation of this section is an unfair or deceptive act or practice in accordance with AS 21.36.900(d) and subjects the licensee to suspension or revocation of the licensee under AS 21.27.410.
History
- Authority: AS 21.06.090; AS 21.27.550(f), (g)AS 21.36.100 AS 21.27.410; AS 21.36.080; AS 21.36.900
- Eff. 12/18/92, Register 124
3 AAC 23.800 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.800. Collateral; fiduciary relations. (a) A licensee or surety who receives collateral in connection with a bail bond transaction shall receive the collateral in a fiduciary capacity. Until the forfeiture of bail, the licensee or surety must keep the collateral separate from any other funds or assets of the licensee or surety. (b) Cash collateral must be maintained in accordance with AS 21.27.360 and 3 AAC 23.500 - 3 AAC 23.730. (c) If a licensee or surety receives as collateral a document that conveys title to a lien on real property, that document must state on its face that it is executed as part of a security transaction. If that document is recorded, a conveyance of the property, executed in such a manner that it may also be recorded, must be delivered by the licensee or surety to the person executing the original conveyance or to that person's heir, legal representative, or successor in interest. Within 10 working days after notice of the exoneration of the bond in writing by the court, the licensee shall make the document available at the licensee's principal place of business or mail it upon request.
History
- Authority: AS 21.06.090; AS 21.27.360
- Eff. 12/18/92, Register 124
3 AAC 23.810 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.810. Collateral; custody. (a) If a licensee transfers collateral to another bail bond limited producer or surety, the recipient of the collateral shall hold it in a fiduciary capacity, return it, and otherwise handle it in accordance with 3 AAC 23.745 - 3 AAC 23.859. (b) Collateral may only be transferred from one licensee to another licensee or surety and may not be removed from the state.
History
- Authority: AS 21.06.090; AS 21.27.360
- Eff. 12/18/92, Register 124
3 AAC 23.820 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.820. Collateral; receipt. (a) A licensee who receives collateral in connection with a bail bond transaction shall provide a prenumbered receipt to the person providing the collateral. (b) The receipt for the collateral must state the (1) date of receipt; (2) name of the surety; (3) bail bond number; (4) number of the power of attorney form; (5) name of the defendant; (6) amount of the bond; (7) full description of the collateral; (8) amount of money or value of the collateral received; (9) name of the individual making payment or giving the collateral; and (10) conditions for return of the collateral or excess collateral upon forfeiture to the person who paid the collateral, or to that person's heir, legal representative, or successor in interest. (c) The receipt for the collateral must contain the legend "A complaint or dispute regarding the taking, use, or release of this collateral may be reported to the Department of Commerce, Community, and Economic Development, division of insurance, [insert division's Anchorage office address], if the complaint or dispute is not resolved in 45 working days." (d) A receipt must be issued and maintained in numerical order. The original receipt book must remain permanently at the principal place of business of the licensee or surety. A duplicate receipt book may be kept in a location other than the principal place of business. A duplicate receipt book must be clearly identified as a duplicate. (e) A willful misstatement on or an intentional omission from a receipt for collateral concerning the amount of collateral given or pledged, is a fraudulent insurance act under AS 21.36.360(f). (f) A licensee shall send a copy of the receipt for collateral to the surety within 30 working days of execution of a receipt.
History
- Authority: AS 21.06.090; AS 21.36.125 AS 21.27.350; AS 21.36.360
- Eff. 12/18/92, Register 124; am 4/27/2002, Register 162
3 AAC 23.830 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.830. Return of collateral. (a) Within 10 days after receiving written notification from the court that a bail bond and the surety have been exonerated, a bail bond limited producer shall make any collateral deposited to secure the obligation of that bail bond available for return to the person who deposited the collateral, or to that person's heir, legal representative, or successor in interest. The licensee shall verify with the court that the obligation has been exonerated before returning the bail bond. (b) If collateral was deposited as security for unpaid premium, if the premium remains unpaid at the time of surrender, exoneration, or forfeiture of the bond, and if a demand has been made by the licensee in custody of the collateral, the surety acting by itself, or through its agent, may dispose of the collateral in the manner provided for in AS 34.45.030 - 34.45.080 of the Uniform Property Act and the proceeds may be applied against the unpaid premium. (c) The licensee or surety may not return collateral until the person receiving the collateral provides a written receipt that identifies the bond, describes the collateral returned, shows the signature of the person to whom the collateral was returned, and shows the date returned.
History
- Authority: AS 21.06.090; AS 21.27.350; AS 21.36.125
- Eff. 12/18/92, Register 124
3 AAC 23.840 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.840. Forfeitures. A licensee shall notify the surety of a bail bond forfeiture within 60 working days following the receipt of notice of the judgement of forfeiture from the clerk of the court.
History
- Authority: AS 21.06.090; AS 21.36.125
- Eff. 12/18/92, Register 124
3 AAC 23.850 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.850. Unclaimed collateral; excess collateral; excess payment of premium. If collateral, excess collateral on forfeiture, or excess payment of premium being held by a licensee or surety is not claimed or taken away within one year after the termination of liability under the bail bond, the licensee or surety shall treat the collateral, excess collateral, or excess payment, in the manner provided in AS 34.45, the Uniform Unclaimed Property Act.
History
- Authority: AS 21.06.090; AS 21.36.120; AS 21.36.360 AS 21.27.360; AS 21.36.125
- Eff. 12/18/82, Register 124
3 AAC 23.859 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.859. Definitions. As used in 3 AAC 23.745 - 3 AAC 23.859, (1) "bail" means property that is deposited with a judicial officer to secure or continue the release from custody of the defendant in a judicial proceeding; "bail" includes a bail bond, a bail bond transaction, and any pledge or deposit of collateral; (2) "bail bond limited producer" means a person who is licensed under AS 21.27.150 to transact surety or limited surety, and who is appointed by an authorized insurer to transact, execute or countersign bail bond transactions in connection with judicial proceedings in return for money or other things of value; (3) "collateral" means additional security given to assure the performance of the defendant's obligation; (4) "defendant" means the individual whose performance is guaranteed by the execution of a bail bond; (5) "fiduciary capacity" means the duty of a licensee and surety to receive and maintain collateral with fairness and good faith as custodian of the collateral; (6) "licensee" means a bail bond limited producer licensed under AS 21.27.150; (7) "limited surety" means insurance as defined in AS 21.12.080(2); (8) "surety" means an authorized insurer as defined by AS 21.97.900.
History
- Authority: AS 21.06.090; AS 21.27.010; AS 21.27.150
- Eff. 12/18/92, Register 124
Article 6 General Provisions
3 AAC 23.860 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.860. Biennial license renewal. 3 AAC 23.860 took effect 7/1/92 as an emergency regulation. Due to changes made by the regulations attorney in reviewing the "permanent" regulation for filing the permanent regulation, as it was first published in Register 124 (January 1993), differed from the emergency regulation even though the section's history note did not reflect an amendment. (a) The biennial renewal date for an individual licensee is based upon the individual's birth month, as follows: (1) if the individual licensee's birth year is an odd number, the renewal date is the last day of the month in the individual's birth month every odd-numbered year; (2) if the individual licensee's birth year is an even number, the renewal date is the last day of the month in the individual's birth month every even-numbered year. (b) The biennial renewal date for a firm licensee is based upon the firm's initial license date, as follows: (1) if the firm's initial license was issued in an odd-numbered year, the renewal date is the initial license date every odd-numbered year; (2) if the firm's initial license was issued in an even-numbered year, the renewal date is the initial license date every even-numbered year. (c) To renew a license issued under AS 21.27, a licensee shall submit an application for license renewal on the form provided or in a format prescribed by the division. In addition to the license renewal application, a nonresident licensee must be currently licensed and in good standing in the licensee's home state. The director may verify the licensee's licensing status through the producer licensing database records maintained by the National Association of Insurance Commissioners or its affiliates or subsidiaries. The license renewal application form for (1) an individual license must be signed by the licensee; (2) repealed 10/13/2011; (3) a firm license must be signed by the compliance officer listed on the firm's license. (d) If the license renewal application form and payment of the fee are not received by the director before the close of business on the license renewal date, the license lapses. A licensee may not conduct business with a lapsed license in accordance with AS 21.27.380(b). (e) Repealed 10/13/2011. (f) Repealed 10/13/2011. (g) Repealed 10/13/2011. (h) Repealed 10/13/2011. (i) Repealed 10/13/2011.
History
- Authority: AS 21.06.090; AS 21.27.380
- Eff. 7/1/92, Register 123; am 12/26/93, Register 128; am 3/11/98, Register 145; am 3/30/2003, Register 165; am 10/13/2011, Register 200; am 8/20/2016, Register 219
3 AAC 23.900 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.900. Definitions. Repealed.
History
- Eff. 4/22/79, Register 70; repealed 3/11/98, Register 145
3 AAC 23.999 Producers, Managing General Agents, Surplus Lines Brokers, Reinsurance Intermediary Managers, Reinsurance Intermediary Brokers, Third Party Administrators, and Independent Adjusters
3 AAC 23.999. Definitions. Unless the context indicates otherwise, in this chapter, (1) "premium finance agreement" or "agreement to extend credit" means an agreement by which a borrower or prospective borrower promises to pay to a licensee the amount advanced or to be advanced under the agreement to an insurer in payment of premiums on an insurance policy together with a service charge; as security for the advanced sums, the licensee receives an assignment of the unearned premium; (2) "service charge" means the total cost charged by a licensee, including all charges, fees, interest, or cost differentials, for financing premiums or extending credit; "service charge" does not include a late charge permitted under 3 AAC 23.340.
History
- Authority: AS 21.06.090; AS 21.36.490
- Eff. 3/11/98, Register 145
Chapter 24 Risk Retention Groups and Purchasing Groups
Article 1 Risk Retention Groups
3 AAC 24.010 Purpose
The purpose of 3 AAC 24.010 - 3 AAC 24.290 is to establish, consistent with 15 U.S.C. 3901 - 3906, as amended as of October 27, 1986 (Liability Risk Retention Act), a procedure for the registration of risk retention groups that seek to transact the business of insurance in Alaska, or relative to a subject or risk that is resident, located, or to be performed in Alaska, and to provide for the payment of fees for the administrative cost of the registration process.
History
- Authority: AS 21.03.010; AS 21.06.090
- Eff. 8/23/89, Register 111
3 AAC 24.015 Compliance
A person transacting the business of insurance as or on behalf of a risk retention group formed under and in compliance with 15 U.S.C. 3901 - 3906, as amended as of October 27, 1986 (Liability Risk Retention Act), shall, at all times, transact business in compliance with federal and state insurance law. Failure to comply with federal or state insurance law is an unfair and deceptive act under AS 21.36.900.
History
- Authority: AS 21.03.010; AS 21.06.090; AS 21.36.900
- Eff. 10/24/92, Register 124
3 AAC 24.020 Filing of registration forms
(a) Before transacting the business of insurance in this state, a risk retention group shall submit to the director
(1) a completed registration form that shall include the following information:
(A) each state in which the risk retention group is chartered or licensed to do business as a liability insurer;
(B) the date of its charter or license;
(C) the state in which it is domiciled;
(D) the complete physical address and mailing address of
(i) its offices in its state of domicile;
(ii) its principal place of business; and
(iii) its directors and principal officers;
(E) the complete name, firm name, physical address, and mailing address of all persons acting, or offering to act, as an agent, broker, or surplus lines broker for the risk retention group, and identification of all types of licenses held by each person and firm, including the state in which each license is held;
(F) all classes or lines of insurance the risk retention group intends to offer; and
(G) such other information, including information concerning its membership, that the director requires to establish its qualification as a risk retention group to transact business in Alaska;
(2) a copy of its plan of operation and the feasibility study submitted to its state of domicile, including all revisions;
(3) a complete copy of the financial statement submitted to its state of domicile, certified by an independent public accountant, including a statement of opinion on its reserves for loss and its reserves for loss adjustment expenses prepared by a member of the American Academy of Actuaries or by another qualified specialist in such reserves;
(4) a copy of each examination of the risk retention group, certified by the commissioner or other public officer conducting the examination, except that if no examination has been conducted or if one is pending, a statement to that effect, signed by an officer of the risk retention group, shall be submitted in its place;
(5) upon a form prescribed by the director, a statement appointing the director as its agent for the purpose of receiving service of legal documents or process; and
(6) such other information as the director requires to verify its qualification and continuing qualification as a risk retention group transacting or seeking to transact business in Alaska.
(b) A risk retention group shall notify the director within 30 days in writing of any change to the information submitted under (a) of this section.
History
- Authority: AS 21.03.010; AS 21.06.090; AS 21.96.090
- Eff. 8/23/89, Register 111; am 7/25/2008, Register 187
3 AAC 24.030 Payment of fee
The initial registration fee set by 3 AAC 31.060(a) must accompany each registration form. The annual continuation fee set by 3 AAC 31.060(a) must accompany each continuation application.
History
- Authority: AS 21.03.010; AS 21.06.090; AS 21.06.250
- Eff. 8/23/89, Register 111
3 AAC 24.040 Operations
(a) A risk retention group may only transact the business of liability insurance.
(b) At least 30 days before a domestic risk retention group may transact business in this state, any other state, or upon a subject or risk that is resident, located, or to be performed in this or any other state, a plan of operation or feasibility study must be filed with and approved by the director in writing. At least 30 days before a domestic risk retention group implements a material change or revision to a previously approved plan of operation or feasibility study the domestic risk retention group must file those changes with and secure the written approval of the director. A domestic risk retention group may not transact an additional kind or class of liability insurance in this state, another state, or upon a subject or risk that is resident, located, or to be performed in this or any other state, before a change or revision to the plan of operation or feasibility study has been approved by the director.
History
- Authority: AS 21.03.010; AS 21.06.090
- Eff. 8/23/89, Register 111; am 10/24/92, Register 124
3 AAC 24.050 Term of initial registration
The initial registration is valid until December 31 of the year in which it was made. An annual continuation application must be filed with the director in accordance with 3 AAC 24.060 to maintain the registration in force.
History
- Authority: AS 21.03.010; AS 21.06.090
- Eff. 4/12/91, Register 118
3 AAC 24.060 Continuation of registration
(a) A registration is valid from January 1 through December 31 of each year. In order to continue the registration for the next year, the following must be filed with the director by December 31:
(1) continuation application on a form prescribed by the director;
(2) the annual continuation fee established in 3 AAC 31.060(a); and
(3) other information the director may require.
(b) Failure to submit the continuation application and fee by January 31 of the year for which registration is sought will result in the discontinuation of the registration as of the prior December 31. A registrant that submits the continuation application and fee after January 31 will be required to reapply as a new registrant under 3 AAC 24.020 and pay the initial registration fee set out in 3 AAC 31.060(a).
(c) A risk retention group that is not in compliance with 15 U.S.C. 3901 - 3906, as amended as of October 27, 1986 (Liability Risk Retention Act), is not eligible for registration or annual continuation of its registration.
History
- Authority: AS 21.03.010; AS 21.06.090
- Eff. 4/12/91, Register 118; am 10/24/92, Register 124
3 AAC 24.290 Definitions
As used in 3 AAC 24.010 - 3 AAC 24.290,
(1) "risk retention group" means any entity meeting the definition of a risk retention group in 15 U.S.C. 3901(a)(4), as amended as of October 27, 1986 (Liability Risk Retention Act);
(2) "domestic risk retention group" means a risk retention group that has been issued a certificate of authority from the director and is in compliance with all provisions of 15 U.S.C. 3901 - 3906, as amended as of October 27, 1986 (Liability Risk Retention Act);
(3) "transact" means the same as in AS 21.97.900;
(4) "transacting insurance" means to transact as defined in AS 21.97.900 relative to a subject or risk that is resident, located, or to be performed in this state;
(5) "liability" means legal liability for damages, including costs of defense, legal costs and fees, and other claims expenses, because of injury to another person, damage to property, or other damage or loss to a person resulting from or arising out of a business, trade, product, service, including a professional service, premises, or operation; or any activity of a state or local government, or an agency or political subdivision of a state or local government; "liability" does not include personal risk liability or employer's liability with respect to its employees other than legal liability under the Federal Employers' Liability Act (45 U.S.C. 51);
(6) "personal risk liability" means liability for damages because of injury to a person, damage to property, or other loss or damage resulting from a personal, familial, or household responsibility or activity, rather than from a responsibility or activity referred to in (5) of this section.
History
- Authority: AS 21.03.010; AS 21.06.090
- Eff. 8/23/89, Register 111; am 10/24/92, Register 124
Article 2 Purchasing Groups
3 AAC 24.300 Purpose
The purpose of 3 AAC 24.300 - 3 AAC 24.590 is to establish, consistent with 15 U.S.C. 3901 - 3906, as amended as of October 27, 1986 (Liability Risk Retention Act), a procedure for the registration of purchasing groups that seek to transact the business of insurance in Alaska, or relative to a subject or risk that is resident, located, or to be performed in Alaska, and to provide for the payment of fees for the administrative cost of the registration process.
History
- Authority: AS 21.03.010; AS 21.06.090
- Eff. 8/23/89, Register 111
3 AAC 24.305 Compliance
A person transacting the business of insurance as or on behalf of a purchasing group formed under and in compliance with 15 U.S.C. 3901 - 3906, as amended as of October 27, 1986 (Liability Risk Retention Act), shall, at all times, transact business in compliance with federal and state insurance law. Failure to comply with federal or state insurance law is an unfair and deceptive act under AS 21.36.900.
History
- Authority: AS 21.03.010; AS 21.06.090; AS 21.36.900
- Eff. 10/24/92, Register 124
3 AAC 24.310 Filing of registration forms
(a) Before transacting the business of insurance in this state, a purchasing group shall submit to the director
(1) a completed registration form that shall include the following information:
(A) the state of domicile;
(B) the dates of its incorporation and formation as a purchasing group;
(C) the complete physical address and mailing address of;
(i) its offices in its state of domicile;
(ii) its principal place of business;
(iii) its directors and principal officers;
(iv) all persons acting, or offering to act, as an agent, broker, or surplus lines broker for the purchasing group, including all types of licenses held by each person and the states in which each license is held;
(D) all classes or lines of insurance the purchasing group intends to purchase;
(E) the insurance company or risk retention group from which it intends to purchase insurance; and
(F) such other information including information concerning its membership, that the director requires to establish its qualification and continuing qualification as a purchasing group;
(2) upon a form prescribed by the director, a statement appointing the director as the purchasing group's agent for the purpose of receiving service of legal documents or process (except where exempted by 15 U.S.C. 3903(e), as amended as of October 27, 1986).
(b) The registration requirements set out in (a) of this section do not apply to a purchasing group which is excepted under Section 4(e) of the Product Liability Risk Retention Act of 1981, as amended October 27, 1986 by P.L. 99-563, (15 U.S.C. 3903(e)) from the registration requirement of that subsection.
(c) A purchasing group shall notify the director within 30 days in writing of any change to the information submitted under (a) of this section.
History
- Authority: AS 21.03.010; AS 21.06.090; AS 21.96.090
- Eff. 8/23/89, Register 111; am 4/12/91, Register 118; am 7/25/2008, Register 187
3 AAC 24.320 Payment of fee
The initial registration fee set by 3 AAC 31.060(a) must accompany the registration forms. The annual continuation fee set by 3 AAC 31.060(a) must accompany each continuation application.
History
- Authority: AS 21.03.010; AS 21.06.090; AS 21.06.250
- Eff. 8/23/89, Register 111
3 AAC 24.330 Existing operation; compliance
A purchasing group transacting insurance before 8/23/89 on a risk or subject resident, located or to be performed in Alaska, has 30 days after that date in which to comply with 3 AAC 24.300 - 3 AAC 24.590.
History
- Authority: AS 21.03.010; AS 21.06.090
- Eff. 8/23/89, Register 111
3 AAC 24.340 Term of initial registration
The initial registration is valid until December 31 of the year in which it was made. An annual continuation application must be filed with the director in accordance with 3 AAC 24.350 to maintain the registration in force.
History
- Authority: AS 21.03.010; AS 21.06.090
- Eff. 4/12/91, Register 118
3 AAC 24.350 Continuation of registration
(a) A registration is valid from January 1 through December 31 of each year. In order to continue the registration for the next year, the following must be filed with the director by December 31:
(1) continuation application on a form prescribed by the director;
(2) the annual continuation fee established in 3 AAC 31.060(a); and
(3) other information the director may require.
(b) Failure to submit the continuation application and fee by January 31 of the year for which registration is sought will result in the discontinuation of the registration as of the prior December 31. A registrant that submits the continuation application and fee after January 31 will be required to reapply as a new registrant under 3 AAC 24.340 and pay the initial registration fee set out in 3 AAC 31.060(a).
(c) A purchasing group that is not in compliance with 15 U.S.C. 3901 - 3906, as amended as of October 27, 1986 (Liability Risk Retention Act), is not eligible for registration or annual continuation of its registration.
History
- Authority: AS 21.03.010; AS 21.06.090
- Eff. 4/12/91, Register 118; am 10/24/92, Register 124
3 AAC 24.590 Definitions
As used in 3 AAC 24.300 - 3 AAC 24.590,
(1) "purchasing group" means any entity meeting the definition of a purchasing group in 15 U.S.C. 3901(a)(5), as amended as of October 27, 1986 (Liability Risk Retention Act);
(2) "transact" means the same as in AS 21.97.900;
(3) "transacting insurance" means to transact as defined in AS 21.97.900 relative to a subject or risk that is resident, located, or to be performed in this state.
History
- Authority: AS 21.03.010; AS 21.06.090
- Eff. 8/23/89, Register 111; am 10/24/92, Register 124
Chapter 25 Surplus Lines — Unauthorized Insurers
3 AAC 25.010 Conditions for procurement of surplus lines coverage
(a) Insurance may be procured through a surplus lines broker from an eligible nonadmitted insurer only if the producing broker
(1) determines through a diligent search that the particular policy terms or conditions that are material to the insured cannot be obtained from an insurer that is admitted to do business in this state;
(2) completes the search before the surplus lines broker binds the insurance contract; and
(3) provides documentation of the search to the surplus lines broker not later than 15 days after the binding of the insurance contract; the documentation must meet the requirements of 3 AAC 25.035.
(b) Insurance may be procured through a surplus lines broker from a nonadmitted insurer that does not appear on the current published eligible list under AS 21.34.050 or on the list described in AS 21.34.040(c)(7) only if
(1) the producing broker complies with (a) of this section; and
(2) the surplus lines broker has documentation that
(A) the director has the nonadmitted insurer's current annual statement required by AS 21.34.040(d); and
(B) the portion of the risk to be placed with the nonadmitted insurer cannot be obtained from a nonadmitted insurer that appears on the eligible list under AS 21.34.050 or on the list described in AS 21.34.040(c)(7).
History
- Authority: AS 21.06.090; AS 21.34.040; AS 21.34.250 AS 21.34.020; AS 21.34.060
- Eff. 8/28/91, Register 119; am 6/11/2006, Register 178; am 9/4/2014, Register 211
3 AAC 25.020 Prohibited procurement of surplus lines coverage
(a) Workers' compensation insurance required by statute may be procured only from an insurer holding a valid certificate of authority to write workers' compensation insurance in this state.
(b) Upon written application by the insured to the director, stating the specific reasons, the director will, in the director's discretion, give written approval to a specific risk for an exception to (a) of this section if the director determines that an exception is in the best interest of the insured and is not detrimental to the public interest.
(c) This section does not apply to the coverages included on the surplus lines placement list under 3 AAC 25.040.
History
- Authority: AS 21.06.090; AS 21.34.020; AS 21.34.250 AS 21.34.010; AS 21.34.030
- Eff. 8/28/91, Register 119
3 AAC 25.030 Due diligence; documentation
Repealed.
History
- Eff. 8/28/91, Register 119; am 10/21/92, Register 124; am 4/3/94, Register 129; repealed 6/11/2006, Register 178
3 AAC 25.035 Documentation
(a) A producing broker and the surplus lines broker shall retain in the insured's file an acceptable form of documentation to establish that the producing broker and the surplus lines broker have complied with AS 21.34.020 and 3 AAC 25.010(a). An acceptable form of documentation required by this subsection includes
(1) documentation of declinations from admitted insurers;
(2) evidence that the full amount, kind, or class of insurance could not be obtained from admitted insurers;
(3) affirmation that the coverage is on the director's current surplus lines placement list under 3 AAC 25.040; or
(4) an exception from the director under AS 21.34.020(a)(4).
(5) documentation that
(A) the broker procuring or placing the surplus lines insurance has disclosed to an exempt commercial purchaser that insurance may be available from the admitted market that may provide greater protection with more regulatory oversight; and
(B) the exempt commercial purchaser has requested in writing that the broker procure or place the insurance from a nonadmitted insurer.
(b) A declination from an insurer for a class of insurance may be cited for other insureds for no more than 180 days.
(c) To be an acceptable form of documentation under (a)(1) of this section, an oral declination must be documented in writing and include the name, business location, and phone number of the insurer, the name and position of the person contacted, the date of contact, and the reason for the declination.
(d) A producing broker shall include in the documentation required under (a) of this section a description of the kind of insurance that is adequate for the director to determine whether insurance coverage is available in the admitted market to cover the kind of insurance.
History
- Authority: AS 21.06.090; AS 21.34.020; AS 21.34.250 AS 21.27.350; AS 21.34.060; AS 21.36.195
- Eff. 6/11/2006, Register 178; am 9/4/2014, Register 211
3 AAC 25.040 Surplus lines placement list
(a) After a hearing held under AS 21.06.180 - 21.06.230, the director will issue an order that lists the kinds of insurance that may be placed with a nonadmitted insurer that appears on the eligible list published under AS 21.34.050.
(b) The director will hold a hearing and issue an order at least once every 12 months.
(c) A person may request a hearing under AS 21.06.180 to add a kind of insurance to the list or to delete a kind of insurance from the list.
(d) Only those kinds of insurance for which insureds generally are unable to secure coverage from admitted insurers will be included on the surplus lines placement list.
History
- Authority: AS 21.06.090; AS 21.34.020; AS 21.34.250
- Eff. 8/28/91, Register 119
3 AAC 25.050 Required notice of nonrenewal and premium increase
(a) An eligible surplus lines insurer shall include in each policy an Alaska surplus lines policyholder notice regarding nonrenewal and premium increase, in a format approved by the director.
(b) A licensed surplus lines broker shall ensure that the required notice is part of each policy.
History
- Authority: AS 21.06.090; AS 21.34.100; AS 21.34.250
- Eff. 8/28/91, Register 119; am 6/11/2006, Register 178; am 7/25/2008, Register 187; am 9/4/2014, Register 211
3 AAC 25.060 Evidence of insurance
The prompt delivery of the evidence of insurance required by AS 21.34.100 means not later than 30 days after the date coverage is bound. Evidence of insurance includes subsequent endorsements and company audits related to a policy.
History
- Authority: AS 21.06.090; AS 21.34.100; AS 21.34.250
- Eff. 8/28/91, Register 119; am 9/4/2014, Register 211; am 8/20/2016, Register 219
3 AAC 25.070 Notice
(a) A nonadmitted insurer may not issue a notice of cancellation for nonpayment of premium until after the written notice requirement of AS 21.34.110 has been satisfied.
(b) The written notice requirement of AS 21.34.110 may be satisfied by the surplus lines broker providing to the producing broker a pre-printed notice that contains the information required by AS 21.34.110, and the producing broker then providing the pre-printed notice to the insured at the time evidence of insurance is required by AS 21.34.100.
History
- Authority: AS 21.06.090; AS 21.34.110; AS 21.34.250 AS 21.34.100; AS 21.34.130
- Eff. 8/28/91, Register 119; am 6/11/2006, Register 178
3 AAC 25.080 Taxes and filing fees
The surplus lines tax required by AS 21.34.180 and the filing fee required by AS 21.34.190 must be collected for the full amount of premium charged for a policy that includes any portion of coverage procured through a surplus lines broker from a nonadmitted insurer unless the surplus lines broker has unequivocal documentation that identifies those risks, locations or operations, and premiums that are not subject to AS 21.34.
History
- Authority: AS 21.06.090; AS 21.34.190 AS 21.34.180; AS 21.34.250
- Eff. 8/28/91, Register 119; am 3/11/98, Register 145
3 AAC 25.090 Report of insurance transactions
(a) Repealed 6/11/2006.
(b) In addition to the information required by AS 21.34.080, a surplus lines broker shall include the following information in the report of each surplus lines insurance transaction on a form prescribed by the director:
(1) the policy term and policy number;
(2) identification of the type of insurance as it is required to be reported in the annual statement that must be filed with the director by an admitted insurer;
(3) the gross premiums written for each type of insurance identified under (2) of this subsection;
(4) if the National Association of Insurance Commissioners has not assigned the company number referenced in AS 21.34.080, an identifying number for that company that has been obtained from the division;
(5) the name and firm license number issued under AS 21.27.010(a) of the producing broker;
(6) the name and firm license number issued under AS 21.27.010(a) of the surplus lines broker.
(c) Repealed 9/4/2014.
(d) Late reporting of a transaction is subject to a penalty under 3 AAC 25.100(e).
(e) In AS 21.34.080(a)(1), "insured" means the "First Named Insured" for the transaction described in the report.
History
- Authority: AS 21.06.090; AS 21.34.080; AS 21.34.250
- Eff. 8/28/91, Register 119; am 10/21/92, Register 124; am 6/11/2006, Register 178; am 7/25/2008, Register 187; am 9/4/2014, Register 211; am 12/20/2020, Register 236
3 AAC 25.100 Quarterly report
(a) The quarterly report required of a surplus lines broker by AS 21.34.170 shall be filed electronically in the location required by the director. Filing of the quarterly report must occur on or before the corresponding due date under AS 21.34.170. The quarterly report must be signed by the surplus lines broker. The signature may be an electronic signature. If no transactions took place during the period, a report is not required for that period.
(b) The quarterly report must include
(1) the name of the surplus lines broker;
(2) the surplus lines broker's license number; and
(3) the quarterly period's total gross premiums written, less any return premium or any exempt premium, and the quarterly period's total resulting taxes and fees for all coverage where this state is the home state of the insured.
(c) The quarterly report must include the initial placement of coverage as well as changes in coverage during that period that result in an increase or decrease of premiums, taxes, or fees. The surplus lines broker shall use the effective date for the initial placement of coverage. Initial placement of coverage includes new and renewal transactions.
(d) A surplus lines broker shall use the date the endorsement is invoiced as the transaction date for an endorsement that generates an increase or decrease in premium.
(e) A surplus lines broker shall pay a penalty to the division for the late filing of a quarterly report according to the following rate schedule for filing after the due date requirement in AS 21.34.170 and (a) of this section:
(1) one through 30 days late, $100;
(2) 31 through 60 days late, $200;
(3) more than 60 days late, $300.
(f) The penalty in (e) of this section does not apply to the filing of amended reports under 3 AAC 25.105, except for the filing of a new transaction not previously reported.
History
- Authority: AS 21.06.090; AS 21.34.170; AS 21.34.190 AS 21.34.080; AS 21.34.180; AS 21.34.250
- Eff. 8/28/91, Register 119; am 3/11/98, Register 145; am 6/11/2006, Register 178; am 7/25/2008, Register 187; am 12/28/2008, Register 188; am 9/4/2014, Register 211; am 12/20/2020, Register 236; am 12/23/2021, Register 240
3 AAC 25.105 Amended quarterly reports
(a) If new information exists that will change a previously filed quarterly report under AS 21.34.170, the surplus lines broker shall file an amended quarterly report for the period in which the transaction occurred.
(b) A surplus lines broker who files an amended quarterly report for a period for which taxes and filing fees have already been paid shall pay any additional taxes and filing fees owing for that period on the next payment due date after the amended quarterly report is filed under (a) of this section.
(c) If a payment of additional taxes and filing fees is not received by the director by the next scheduled payment due date, the surplus lines broker is subject to late payment fees under AS 21.34.180 and 21.34.190.
History
- Authority: AS 21.06.090; AS 21.34.170; AS 21.34.190 AS 21.34.080; AS 21.34.180; AS 21.34.250
- Eff. 6/11/2006, Register 178; am 9/4/2014, Register 211
3 AAC 25.110 Annual tax payment report
Repealed.
History
- Eff. 8/28/91, Register 119; am 6/11/2006, Register 178; repealed 9/4/2014, Register 211
3 AAC 25.120 Risk retention groups
(a) Insurance may be procured through an Alaska licensed surplus lines broker from a risk retention group, as defined in 3 AAC 24.290, that does not hold a certificate of authority from this state only if the risk retention group is currently properly registered with the division.
(b) A surplus lines placement with a risk retention group that is in compliance with other statutes and regulations is not subject to 3 AAC 25.010, 3 AAC 25.035, 3 AAC 25.040, and 3 AAC 25.050.
(c) The notice required by AS 21.34.110 shall include the following federally mandated language in 10-point type:
NOTICE
This policy is issued by your risk retention group. Your risk retention group may not be subject to all of the insurance laws and regulations of your state. State insurance insolvency funds are not available for your risk retention group.
History
- Authority: AS 21.06.090; AS 21.34.110; AS 21.34.250
- Eff. 8/28/91, Register 119; am 6/11/2006, Register 178
3 AAC 25.130 Vessel tonnage
For the purpose of determining whether insurance on a vessel is wet marine and transportation insurance under AS 21.34 or surplus lines insurance, the division will accept file documentation of a vessel's gross registered tons as evidence of displacement tons.
History
- Authority: AS 21.06.090; AS 21.34.250; AS 21.34.900
- Eff. 8/28/91, Register 119; am 3/11/98, Register 145
3 AAC 25.140 Eligibility requirements for surplus lines insurers
(a) The director will place a foreign surplus lines insurer on the list of eligible surplus lines insurers if the insurer
(1) meets the requirements of AS 21.34.040(c)(1) or (2); and
(2) provides certification to the director that the insurer is authorized to write the kind of insurance in its domiciliary jurisdiction that the insurer intends to write in this state.
(b) The director will approve an alien insurer's application for eligibility if the alien insurer
(1) is not listed on the list described in AS 21.34.040(c)(7);
(2) meets the requirements under AS 21.34.040;
(3) pays the fee required under 3 AAC 31.060(a)(8); and
(4) submits on forms approved by the director
(A) a completed application;
(B) the appointment of the director to receive service of legal process; and
(C) the designation of a contact person for the insurer.
History
- Authority: AS 21.06.090; AS 21.34.040; AS 21.34.250
- Eff. 6/11/2006, Register 178; am 9/4/2014, Register 211
3 AAC 25.150 Publication of the list of eligible surplus lines insurers
Publication of the list of eligible surplus lines insurers required under AS 21.34.050 may be accomplished by placing the most current list on the division's Internet website.
History
- Authority: AS 21.06.090; AS 21.34.050; AS 21.34.250
- Eff. 6/11/2006, Register 178
3 AAC 25.900 Definitions
In this chapter,
(1) "exempt commercial purchaser" has the meaning given in AS 21.34.900;
(2) "home state" has the meaning given in AS 21.34.900;
(3) "surplus lines broker" means
(A) a firm or agency licensed under AS 21.27.790; or
(B) an individual that is
(i) licensed under AS 21.27.790; and
(ii) not employed by a firm or agency licensed under AS 21.27.790.
History
- Authority: AS 21.06.090; AS 21.34.250; AS 21.97.900
- Eff. 8/28/91, Register 119; am 6/11/2006, Register 178; am 7/25/2008, Register 187; am 9/4/2014, Register 211; am 12/20/2020, Register 236
Chapter 26 Trade Practices
Article 1 Unfair Claims Settlement Acts or Practices
3 AAC 26.010 Purpose
(a) The purpose of 3 AAC 26.010 - 3 AAC 26.300 is to define minimum standards for claim settlement acts and practices.
(b) Violation of a standard is an unfair or deceptive act and is prohibited.
(c) Violation of a standard with such frequency as to indicate a general business practice is an unfair or deceptive practice and is prohibited.
(d) Violation of a standard by a person who knew or should have known an act or practice violated the standard is subject to an additional penalty under AS 21.36.910(e).
History
- Authority: AS 21.06.090; AS 21.36.125; AS 21.36.910 AS 21.36.010; AS 21.36.900
- Eff. 5/6/89, Register 110
3 AAC 26.020 Scope
3 AAC 26.010 - 3 AAC 26.300 apply to all persons transacting a business of insurance who participate in the investigation, adjustment, negotiation, or settlement of a claim under all types of insurance.
History
- Authority: AS 21.03.010; AS 21.36.125; AS 21.87.020 AS 21.06.090; AS 21.75.310; AS 21.88.010 AS 21.33.011; AS 21.76.020 AS 21.36.020; AS 21.84.050
- Eff. 5/6/89, Register 110
3 AAC 26.030 File and record documentation
(a) Any person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a claim under any type of insurance must document each action taken on a claim. The documentation must contain all notes, work papers, documents and similar material. The documentation must be in sufficient detail that relevant events, the dates of those events, and all persons participating in those events can be identified. The documentation may include legible copies of originals and may be stored in the form of microfilm or electronic media. The documentation is subject to examination and copying by the director or persons acting on the director's behalf.
(b) A person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a claim under any type of insurance shall respond to inquiries from the director related to the claim not later than 10 days from the date of the director's inquiry. The response must include all documentation within the person's possession, custody, or control, or in the possession, custody, or control of other persons or entities acting on behalf of that person in relation to the claim, that is responsive to the director's inquiry.
(c) The director may assess a penalty under AS 21.36.910 of not more than $2,500 for each violation or $25,000 for engaging in a general business practice that violates (b) of this section.
History
- Authority: AS 21.06.090; AS 21.36.090; AS 21.36.910 AS 21.06.120; AS 21.36.125 AS 21.06.130; AS 21.36.410
- Eff. 5/6/89, Register 110; am 6/6/2015, Register 214
3 AAC 26.040 Required claim communication
(a) Any person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a first-party claim must:
(1) within 10 working days after receipt of notification of a claim, give written acknowledgement to the first-party claimant identifying the person handling the claim, including the person's name, address, telephone number, the firm name, and the file number; payment of the claim within 10 working days after notification is satisfactory acknowledgement; provision of necessary claim forms, written instructions, and assistance as required in (3) of this subsection is satisfactory acknowledgement; notification of a claim to an agent constitutes notification to the principal;
(2) within 15 working days after receipt, make an appropriate reply to all other communications from a first-party claimant which reasonably indicates that a response is expected; receipt of a communication by an agent constitutes receipt by the principal;
(3) upon receipt of notification of a claim, promptly provide necessary claim forms, instructions, and assistance so that the first-party claimant is able to comply with legal, policy, or contract provisions and other reasonable requirements.
(b) Any person transacting a business of insurance who participates in the investigations, adjustment, negotiation, or settlement of a third-party claim must:
(1) within 10 working days after notification of the claim from a third-party claimant, give written acknowledgement to the third-party claimant, identifying the person handling the claim, including the person's name, address, phone number, the firm name, and the file number; payment of the claim within 10 working days after notification is satisfactory acknowledgement; provision of necessary claim forms, written instructions, and assistance as required in (3) of this subsection is satisfactory acknowledgement; notification of a claim to an agent constitutes notification to the principal;
(2) within 15 working days after receipt, make an appropriate reply to all other communications from a third-party claimant which reasonably indicates that a response is expected; receipt of a communication by an agent constitutes receipt by the principal;
(3) upon receipt of notification of a claim from a third-party, promptly provide necessary claim forms, instructions and assistance that is reasonable so that the third-party claimant is able to comply with any reasonable requirement;
(4) within 10 working days after notification of a claim received from or on behalf of an insured, give written acknowledgement to the insured, identifying the person handling the claim, including the person's name, mailing address, telephone number, the firm name, and the file number; notification of a claim to an agent constitutes notification to the principal.
(c) If notification of a claim is received in the form of a suit, a demand for arbitration, application for adjudication, or other pleading, any person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a claim shall comply with the rules of that particular forum rather than this section only so long as the claim is pending in that forum.
(d) This section does not apply to an insurance claim subject to AS 21.36.495 or other health insurance claim for which the insurer complies with AS 21.36.495.
History
- Authority: AS 21.06.090; AS 21.36.125; AS 21.36.495
- Eff. 5/6/89, Register 110; am 9/15/2004, Register 171; am 8/20/2016, Register 219
3 AAC 26.050 Standards for prompt investigation of claims
(a) Any person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a claim shall promptly undertake the investigation of a claim after notification of the claim is received, and shall complete the investigation within 30 working days, unless the investigation cannot reasonably be completed using due diligence.
(b) Unless the notification of a claim is in the form of a suit, demand for arbitration, application for adjudication, or other pleading, or the claim becomes the subject of such litigation within 30 working days, the person transacting the business of insurance shall give written notification to the claimant that specifically states the need and reasons for additional investigative time and also specifies the additional time required to complete the investigation. That notification shall be given no later than the 30th working day after notification of the claim is first received.
(c) This section does not apply to an insurance claim subject to AS 21.36.495 or other health insurance claim for which the insurer complies with AS 21.36.495.
History
- Authority: AS 21.06.090; AS 21.36.125; AS 21.36.495
- Eff. 5/6/89, Register 110; am 9/15/2004, Register 171; am 8/20/2016, Register 219
3 AAC 26.060 Disclosure and representation of coverage provisions
Any person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a claim:
(1) shall fully disclose to a first-party claimant all relevant benefits and other provisions of coverage under which a claim may be covered;
(2) may not deny a claim on the ground that the first-party claimant failed to exhibit the property without written proof of demand and the unwarranted delay or refusal by the first-party claimant to do so;
(3) may not, except where there is a time limit specified in the coverage document, make statements, written or otherwise, requiring a first-party claimant to give written notice of loss, statement of claim, proof of loss, or similar affidavit within a specified time limit;
(4) may not request a first-party claimant to agree to a compromise or enter into a release that extends beyond the subject matter that gives rise to the claim payment; and
(5) may not issue a check, draft, warrant or other claim payment in partial settlement of a loss or claim under a specified coverage, which contains language that releases or compromises the issuer or its principal from any other liability.
History
- Authority: AS 21.06.090; AS 21.36.125
- Eff. 5/6/89, Register 110
3 AAC 26.070 Standards for prompt, fair, and equitable settlements
(a) Any person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a first-party claim:
(1) shall advise a first-party claimant in writing of the acceptance or denial of the claim within 15 working days after receipt of a properly executed statement of claim, proof of loss, or other acceptable evidence of loss unless another time limit is specified in the insurance policy, insurance contract, or other coverage document; payment of the claim within this time limit constitutes written acceptance; a written denial of the claim must state the specific provisions, conditions, exclusions, and facts upon which the denial is based; if additional time is needed to determine whether the claim should be accepted or denied, written notification giving the reasons that more time is needed shall be given to the first-party claimant within the deadline. While the investigation remains incomplete, additional written notification shall be provided 45 working days from the initial notification, and no more than every 45 working days thereafter giving the reasons that additional time is necessary to complete the investigation; if there is a reasonable basis supported by specific information for suspecting that a first-party claimant has fraudulently caused or wrongfully contributed to the loss, and the basis is documented in the claim file, this reason need not be included in the written request for additional time to complete the investigation or the written denial; however, within a reasonable time for completion of the investigation and after receipt of a properly executed statement of claim, proof of loss, or other acceptable evidence of loss, the first-party claimant shall be advised in writing of the acceptance or denial of the claim;
(2) shall, within 30 working days after receipt of a properly executed statement of claim, proof of loss, or other acceptable evidence of loss, pay those portions of the claim not in dispute;
(3) may not fail to settle first-party claims on the basis that responsibility for payment must be assumed by others, except as may be expressly provided by provisions of the insurance policy, insurance contract, or other coverage document.
(b) A person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a third-party claim may not make any statement that indicates that the rights of a third-party claimant may be impaired if a form, compromise, release, or similar document is not completed within a given period of time, unless the statement is given for the purpose of notifying the third-party claimant of an applicable statute of limitation.
(c) Any person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a claim may not continue negotiations for settlement of the claim directly with any claimant who is neither an attorney nor represented by an attorney to a time when the claimant's rights might be affected by a statute of limitation, coverage provision, or other time limit, unless written notice is given to the claimant clearly stating the time limit that might be expiring and its effect upon the claim; such a written notice shall be given at least 60 calendar days before the date on which the time limit might expire.
(d) A person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a claim shall pay a judgment or settlement of the claim including advances, partial settlements, or similar payments
(1) with a negotiable check payable in cash to the payee upon presentation to a bank located in this state; if the check is not drawn upon a bank having a physical location in this state, the check must be payable in cash upon presentation to at least one bank having a physical location in this state;
(2) by electronic funds transfer; or
(3) by prepaid card product, if approved by the director.
(e) The provisions of (a), (b), and (c) of this section do not apply to an insurance claim subject to AS 21.36.495 or other health insurance claim for which the insurer complies with AS 21.36.495.
History
- Authority: AS 21.06.090; AS 21.36.495 AS 21.36.125; AS 21.96.030
- Eff. 5/6/89, Register 110; am 9/15/2004, Register 171; am 8/20/2016, Register 219
3 AAC 26.075 Arbitration
An insurer may include an arbitration provision in an insurance contract subject to the following:
(1) the insurer and the insured must agree to the arbitration provision;
(2) the arbitration provision must describe the manner for
(A) initiating the arbitration process; and
(B) appointing the arbitrator; the descriptions required in (A) of this paragraph and this subparagraph may be accomplished by reference to a specific arbitration entity or arbitration rules;
(3) the insurer and the insured must agree to the venue of an arbitration proceeding before the proceeding begins; if no agreement on the venue of an arbitration proceeding is reached, the insurer, insured, or both jointly may request the director to make the venue determination after a hearing;
(4) a participant in an arbitration proceeding must have the option of participating by telephone;
(5) except as otherwise provided in AS 21.96.020(f), AS 09.43 must govern the agreement to arbitrate; and
(6) the insurer must retain in the insurer's records documentation to establish the insurer or the insurer's agent specifically informed the insured, before the insured entering into the insurance contract, of
(A) the arbitration provision in the insurance contract; and
(B) the right of a participant in an arbitration proceeding to participate by telephone; the insurer shall retain the documentation required under this paragraph for the longer of four years or until the arbitration provision is no longer in effect or contested.
History
- Authority: AS 21.06.090; AS 21.42.120 AS 21.36.125; AS 21.42.130
- Eff. 8/20/2016, Register 219
3 AAC 26.080 Additional standards for prompt, fair, and equitable settlements of motor vehicle claims
(a) A person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a first-party or third-party motor vehicle claim shall
(1) apply one of the following settlement methods if coverage provides for the adjustment of a motor vehicle total loss on the basis of actual cash value or replacement with a vehicle of like kind and quality:
(A) offer a comparable and available replacement motor vehicle, with all applicable taxes, license fees, destination or delivery charges, and other fees incident to transfer of ownership of the motor vehicle paid, at no cost to the claimant other than the deductible amount, if any, as stated in the coverage; the offer of a replacement motor vehicle shall be made in writing if rejected by the claimant; or
(B) make a cash settlement based upon the actual cost to purchase a comparable motor vehicle, including all applicable taxes, license fees, destination or delivery charges, and other fees incident to transfer of ownership, less the deductible amount, if any, as stated in the coverage; the cost shall be determined by
(i) the cost of a comparable motor vehicle in the local market area to the claimant, if that motor vehicle is available in that area or was available during the last 90 days;
(ii) the average of two or more cost quotations obtained for a comparable motor vehicle from two or more licensed dealers located within the local market area, if a comparable motor vehicle is not available in that area; if quotes from two or more licensed dealers are not available from the local market area, the search area may be expanded to areas surrounding the local market area in 25-mile increments until two quotes are obtained;
(iii) a computerized database valuation service that produces statistically valid fair market values under (i) of this section;
(iv) the average retail value of a comparable motor vehicle, if that value is obtained from two industry sources published on a regular basis, at least once every two months, that contain the average retail, wholesale, and finance values for all makes and models for at least each of the last five model years, as well as a listing for all major options; cost may be determined under this sub-subparagraph only if (i) - (iii) of this subparagraph do not identify any comparable motor vehicles, and only with the consent of the claimant; or
(v) the cost of a comparable motor vehicle using a basis that is allowable under the coverage, if supported by documentation in the claim file and fully explained to the claimant; cost may be determined under this sub-subparagraph only if (i) - (iv) of this subparagraph do not identify any comparable motor vehicles;
(2) provide to a claimant a reasonable written explanation of the valuation of damages to the motor vehicle;
(3) include the first-party claimant's deductible, if any, in a subrogation demand unless the first-party claimant requests that it not be included or unless the deductible has been otherwise recovered by the first-party claimant; no deduction for expense may be made from any deductible recovered unless an outside attorney or other outside expert witnesses have been retained and any deduction is no more than a pro rata share of their cost less any attorney fees and costs recovered; any recovery of prejudgement or postjudgement interest shall be shared pro rata.
(b) Any person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a third-party motor vehicle claim
(1) repealed 6/6/2015;
(2) may not recommend that a third-party claimant make a claim under the claimant's own coverage in order to delay or avoid paying a claim where liability and damages are reasonably clear.
(c) A claimant may not be required to travel unreasonably either to inspect a replacement motor vehicle, obtain a repair estimate, or have the motor vehicle repaired at a specific facility.
(d) Any estimate or appraisal of the cost of repair of a motor vehicle must be in a fair and appropriate amount that the claimant may reasonably be expected to be charged for repairs at one or more conveniently located repair facilities.
(e) If the amount claimed as damage to the motor vehicle is reduced on the basis of betterment or depreciation, the person adjusting or settling the claim shall itemize each deduction and explain the basis for each reduction in writing to the claimant.
(f) If a person adjusting or settling a claim elects to have repaired a claimant's motor vehicle and chooses a specific facility for the repairs, that person shall guarantee the repairs and cause the damaged motor vehicle to be restored to its condition before the loss, at no additional cost to the claimant, and cause the repairs to be completed within a reasonable time.
(g) If the claimant's motor vehicle is determined to be economically unrepairable and, therefore, a total loss, the person adjusting or settling the claim may not reduce the salvage value of the vehicle by charges for cleaning.
(h) An insurer may reduce the value of the motor vehicle on the basis of betterment. Any deductions must be measurable, be itemized, have specific dollar amounts, and be documented in the claim file. Betterment deductions may be made only if the deductions
(1) reflect a measurable decrease in market value attributable to the poorer condition of the vehicle or damage to the vehicle that existed before the current claim;
(2) apply to parts normally subject to repair and replacement during the useful life of the vehicle;
(3) reflect missing parts and the deductions are not more than the replacement cost of the parts.
(i) A source for determining fair market values under (a)( l )(B)(iii) of this section must meet the following criteria:
(1) the source must give primary consideration to the values of comparable motor vehicles in the local market area that are currently available or were available during the last 90 days;
(2) the source must produce values applicable in this state for at least 85 percent of all makes and models for the last 15 model years taking into account the values of all major options for these vehicles;
(3) if at least two comparable motor vehicles are not found in the local market area during the last 90 days, the search may be expanded up to the last 180 days in 30-day increments until two or more comparable motor vehicles are located;
(4) if at least two comparable motor vehicles are not found in the local market area after expanding the search period as provided under (3) of this subsection, the search area may be expanded to areas surrounding the local market area in 25-mile increments for comparable motor vehicles that are currently available or were available during the last 90 days; if at least two comparable motor vehicles are not found in the expanded search area, the search area or time period in 30-day increments may be expanded further with the agreement of the claimant.
(j) If the claimant notifies the insurer not later than 60 days after receipt of the claim payment that the claimant cannot purchase a comparable vehicle for the amount determined under (a)(l)(B) of this section, the insurer shall, if the appraisal section of the policy has not been exercised, reopen the insurer's claim file and determine a new settlement amount using one of the following procedures:
(1) the insurer may locate a comparable motor vehicle available through a licensed dealer for the value determined by the insurer at the time of settlement, along with all applicable taxes, license fees, destination or delivery charges, and other fees incident to transfer of ownership of the motor vehicle, at no cost to the claimant other than the deductible amount, if any, as stated in the coverage;
(2) if the claimant has located a comparable motor vehicle of like kind and quality, the insurer may
(A) pay the difference between the value determined by the insurer at the time of settlement and the cost of the comparable motor vehicle; or
(B) negotiate and effect the purchase of the comparable motor vehicle for the claimant;
(3) for a first-party claimant, the insurer may conclude the loss settlement using the appraisal provisions of the policy.
(k) An insurer is not required to take action under (j) of this section if
(1) the insurer provided documentation to the claimant at the time of settlement of the location of a specific comparable motor vehicle available for purchase for the agreed settlement amount and the claimant did not purchase this vehicle not later than 10 working days after the date final payment is sent to the claimant, lienholder, or both; or
(2) the appraisal section of the policy has been exercised.
(l) If comparable motor vehicles cannot be found under the procedures described in this section, the insurer may consider vehicles by other manufacturers that otherwise fall within the definition of "comparable motor vehicle" under 3 AAC 26.300 in the valuation processes described in this section.
(m) This section does not prohibit an insurer from issuing a stated policy insuring against physical damage, where the amount of damages to be paid in the event of a total loss is a specified dollar amount.
History
- Authority: AS 21.06.090; AS 21.36.125
- Eff. 5/6/89, Register 110; am 6/6/2015, Register 214
3 AAC 26.090 Additional standards for prompt, fair, and equitable settlements of property claims
(a) A person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a first-party or third-party property claim shall
(1) apply one of the following settlement methods if coverage provides for the adjustment of a claimant's property loss on the basis of actual cash value or replacement with other property of like kind and quality;
(A) offer specific comparable and available replacement property with all applicable taxes, charges, and other fees incident to the transfer of ownership of the property at no cost to the claimant other than the deductible amount, if any, as stated in the coverage; the offer of replacement property must be in writing if rejected by the claimant.
(B) make a cash settlement based upon the actual cost of comparable property, including all applicable taxes, charges and other fees incident to transfer of ownership, less the deductible amount, if any, as stated in the coverage; the cost shall be determined by
(i) the cost of comparable property in the local market area to the claimant, if comparable property is available in that area or was available during the last 90 days; or
(ii) the average of two or more cost quotations obtained for comparable property from two or more licensed dealers, suppliers, or contractors located within the local market area, if comparable property is not available in that area;
(iii) repealed 6/6/2015;
(2) provide to a claimant a reasonable written explanation of the valuation of the damages to the property;
(3) include the first-party claimant's deductible, if any, in a subrogation demand unless the first-party claimant requests that it not be included or unless the deductible has been otherwise recovered by the first-party claimant; no deduction for expense may be made from any deductible recovered unless an outside attorney or other outside expert witnesses have been retained and deduction may be for no more than a pro rata share of their cost less attorney fees and costs recovered; any recovery of prejudgement or postjudgement interest shall be shared pro rata.
(b) Any person transacting the business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a third-party property claim
(1) repealed 6/6/2015;
(2) may not recommend that a third-party claimant make a claim under the claimant's own coverage in order to delay or avoid paying a claim where liability and damages are reasonably clear.
(c) Any person settling or adjusting a property claim may not require a claimant to travel unreasonably either to inspect replacement property, obtain a repair estimate, or have the property repaired at a specific facility.
(d) Any estimate of the costs of the repair of the property must be a fair and appropriate amount for which the damage can be reasonably expected to be repaired at one or more conveniently located repair facilities, dealers, or contractors.
(e) Any person who reduces the amount claimed as damage to property on the basis of betterment or depreciation shall itemize each deduction. The basis for the reduction shall be documented in the claim file.
(f) If a person adjusting or settling a claim elects to have repaired a claimant's property and chooses a specific repair facility, dealer, or contractor, that person shall guarantee the repairs and cause the damaged property to be restored to its condition before the loss, at no additional cost to the claimant, and cause the repairs to be completed within a reasonable period of time.
(g) If no comparable property is found in the local market area, the search may be expanded up to the last 180 days in 30-day increments until a comparable property is located.
(h) If no comparable property is found in the local market area after expanding the search period as provided under (g) of this section, the search area may be expanded to areas surrounding the local market area that include two additional licensed dealers, suppliers, or contractors for property that is currently available or that was available during the last 90 days.
(i) If no comparable property is found in the expanded search area or time period allowed under (g) and (h) of this section, the search area may be further expanded or the time period may be expanded in 30-day increments.
(j) If the claimant notifies the insurer not later than 60 days after receipt of the claim payment that the claimant cannot purchase replacement property for the amount determined under (a)(l)(B) of this section, the insurer shall, if the appraisal section of the policy has not been exercised, reopen the insurer's claim file and determine a new settlement amount using one of the following procedures:
(1) the insurer may locate comparable property through a licensed dealer, supplier, or contractor for the value determined by the insurer at the time of settlement;
(2) if the claimant has located comparable property of like kind and quality, the insurer may
(A) pay the difference between the value determined by the insurer at the time of settlement and the cost of the comparable property; or
(B) negotiate and effect the purchase of the comparable property for the claimant;
(3) for a first-party claimant, the insurer may conclude the loss settlement using the appraisal provisions of the policy.
(k) An insurer is not required to take action under (j) of this section if
(1) the insurer provided documentation to the claimant at the time of settlement of the location of specific comparable property available for purchase for the agreed settlement amount and the claimant did not purchase this property not later than 10 working days after the date final payment is sent to the claimant, lienholder, or both; or
(2) the appraisal section of the policy has been exercised.
(l) Any person adjusting, negotiating, or settling a property claim on the basis of replacement cost
(1) shall include in the repair or replacement of the property or part of the property any consequential physical damage incurred in making the repair or replacement that is not otherwise excluded by the policy; the claimant is not required to pay for betterment or any other cost except for the applicable deductible;
(2) for a loss that requires replacement of property, and if the replacement property does not match in quality, color or size, shall replace the property in the area to provide for a reasonably uniform appearance; this paragraph applies to interior and exterior losses; the claimant is not required to pay for betterment or any other cost except for the applicable deductible.
History
- Authority: AS 21.06.090; AS 21.36.125
- Eff. 5/6/89, Register 110; am 6/6/2015, Register 214
3 AAC 26.100 Additional standards for prompt, fair, and equitable settlements of workers' compensation claims
Any person transacting a business of insurance who participates in the investigation, adjustment, negotiation, or settlement of a workers' compensation claim:
(1) may not require a claimant to travel unreasonably for medical care, rehabilitation services, or any other purpose;
(2) shall provide necessary claim forms, written instructions, and assistance that is reasonable so that any claimant not represented by an attorney is able to comply with the law and reasonable claims handling requirements;
(3) shall promptly make all payments or denials of payments as required by statute or regulation.
History
- Authority: AS 21.06.090; AS 21.36.125
- Eff. 5/6/89, Register 110
3 AAC 26.110 Additional standards for prompt, fair, and equitable settlements of health claims
(a) A person who provides coverage in this state for health care services or supplies on an expense incurred basis for which benefits are based on an amount that is less than the actual amount billed for the health care services or supplies shall
(1) for a vaccine covered by an insurance policy that is an included vaccine and purchased by a provider instead of obtained from the state under the statewide immunization program established under AS 18.09.200, determine the final payment for the covered vaccine at an amount equal to or greater than the cost of the state-purchased vaccine under the statewide immunization program; in this paragraph, "included vaccine" has the meaning given in AS 18.09.990;
(2) provide an explanation of the basis of payments in clear and simple terms with any claim payment and document the provided explanation in the claim file; and
(3) provide an explanation of the basis of payments in the health insurance policy, including any payments for which a covered individual may be responsible, and include on any schedule or summary of benefits page accompanying the policy a statement regarding whether the covered individual is responsible for any amount billed for a health care service or supply item that exceeds the final payment.
(b) This section does not apply to workers' compensation claims.
(c) If a person who is required to include a coordination of benefits provision under AS 21.42.205 provides coverage on a secondary basis,
(1) absent evidence of fraud, the secondary insurer must accept the primary insurer's precertification, utilization review, or other managed care requirement determination and may not deny, delay, or reduce benefits under its policy for a covered person who has met the primary insurer's precertification, utilization review, or other managed care requirement; and
(2) the secondary insurer must calculate its covered benefits at no greater cost to the covered person than if the health care services were obtained from the secondary insurer's participating provider if
(A) the secondary policy provides benefits through a provider network but the primary insurer's policy does not provide coverage through a provider network;
(B) both the primary policy and the secondary policy provide benefits through provider networks but the covered person obtains health care services from a provider that is in the provider network of the primary insurer but not the provider network of the secondary insurer; or
(C) both the primary policy and the secondary policy provide benefits through provider networks but the covered person obtains health care services from a provider that is not part of the provider network of the primary insurer or the secondary insurer because no provider in the primary insurer's provider network is able to meet the particular health need of the covered person.
(d) A health care insurer shall give written notice to a health care provider, health care facility, or consumer at least 30 calendar days before the insurer seeks recovery of an overpayment. The notice must include adequate information for the health care provider, health care facility, or consumer to identify the specific claim and the specific reason for the recovery. A health care insurer may not initiate recovery of an overpayment more than 365 days after the date the original payment was made to a health care provider, health care facility, or consumer, or its agents, unless the health care insurer has clear and documented reason to believe that the health care provider, the health care facility, or consumer, or its agents has committed fraud or other intentional misconduct.
(e) A health care insurer shall provide a health care provider, health care facility, or consumer with an opportunity to challenge the recovery of an overpayment, including sharing of claims information, and shall establish written policies and procedures for a health care provider, health care facility, or consumer to follow in order to challenge the recovery of an overpayment.
(f) If a health insurance policy provides in-network and out-of-network benefits, the policy must provide at a minimum the in-network benefit level for the following:
(1) emergency services;
(2) services or supplies provided by an out-of-network health care provider or health care facility, if an in-network health care provider or health care facility is not reasonably accessible as defined in the policy;
(3) services provided by an out-of-network health care provider as part of a covered stay at an in-network health care facility when a covered individual does not have or is not given a choice of health care provider.
(g) An insurer may require a covered individual to purchase specialty drugs from a specific in-network health care provider in order to receive benefits under a health insurance policy, unless the specialty drug is not available from the health care provider when needed and a delay in receiving the drug would threaten the efficacy of treatment or the life of the covered individual.
(h) An insurer may require a covered individual to receive transplant services from an in-network health care provider in order to receive benefits under a health insurance policy, unless transplant services are not available from a network health care provider when needed and a delay in receiving the transplant services would threaten the efficacy of treatment or the life of the covered individual.
(i) An insurer may not process claims based on a procedure code that differs from the procedure code specified in the claim unless agreed upon by the health care provider that provided the service or supply.
(j) If an insurer provides benefits to a domestic partner, then the insurer may not unfairly discriminate on the basis of gender and must provide benefits to both same and opposite gender domestic partners.
(k) If an insurer, for purposes of negotiating discounts with a health care provider, delays payment of an otherwise clean claim beyond the timeframes under AS 21.36.495, the insurer is subject to the 15 percent interest penalty under AS 21.36.495(c) or (d).
(l) An insurer may not reduce the payment on a current claim for an overpayment on a previous claim unless the reduction
(1) is determined to be in compliance with (d) and (e) of this section; and
(2) does not result in a reduction on the amount allowed on any other claims of the covered individual.
History
- Authority: AS 21.06.090; AS 21.36.495 AS 21.36.125; AS 21.42.205
- Eff. 5/6/89, Register 110; am 4/20/97, Register 142; am 1/2/98, Register 145; am 9/15/2004, Register 171; am 10/16/2011, Register 200; am 12/16/2015, Register 216; am 8/20/2016, Register 219; am 1/1/2024, Register 248
3 AAC 26.300 Definitions
In this chapter,
(1) "claim" means notice that an event, act or omission has occurred which may result in injury or damage for which an insured may be legally obligated to pay;
(2) "claimant" means a first-party claimant, a third-party claimant, or both, and includes the claimant's legal representative and includes a member of the claimant's immediate family if authorized by the claimant;
(3) repealed 8/20/2016;
(4) "destination or delivery charges" means the charges for shipping a motor vehicle to a primary residence of the claimant or to where the motor vehicle is primarily operated;
(5) "first-party claimant" means a person asserting a right to payment under his or her own coverage;
(6) "frequency as to indicate a general business practice" means violation of any one standard committed on one or more percent of claims handled within a 12-month period, or the repeated violation of a single standard without reasonable explanation;
(7) "local market area" means the geographical area, in the closest proximity to the claimant's residence, in which two or more licensed dealers are located;
(8) "outside attorney" means an attorney who is in private practice and not an employee of a person transacting a business of insurance under AS 21;
(9) repealed 8/20/2016;
(10) "third-party claimant" means any person asserting a claim against any other person;
(11) repealed 9/15/2004;
(12) "working days" means all calendar days except Saturdays, Sundays, all official federal holidays, and all official Alaska holidays.
(13) "comparable motor vehicle" means a motor vehicle by the same manufacturer, of the same or newer model year, and with similar body style, similar options, and similar mileage as the loss vehicle, and in as good or better condition;
(14) "licensed," when used with reference to a dealer, supplier, or contractor, means in possession of a current business license under AS 43.70 and 12 AAC 12;
(15) "similar mileage" means having mileage that does not exceed the mileage of the loss vehicle on the date of loss by more than 4,000 miles or 10 percent of the mileage of the loss vehicle, whichever is greater.
(16) "clean claim" has the meaning given in AS 21.36.495;
(17) "electronic funds transfer" means a paperless or cardless transfer of funds initiated by an insurer to authorize a financial institution to credit a claimant's account using the insurer's funds in order to pay a judgment or settlement of a claim;
(18) "emergency medical condition" means a medical condition manifesting itself by acute symptoms of sufficient severity, including severe pain, that a prudent person who possesses an average knowledge of health and medicine could reasonably expect that the absence of immediate medical attention would result in serious impairment of bodily functions, serious dysfunction of a bodily organ or part, or would place the person's health or, with respect to a pregnant woman, the health of the woman or her unborn child, in serious jeopardy.
(19) "emergency services" means medical care services or items furnished or required to evaluate and treat an emergency medical condition;
(20) "health care insurance" has the meaning given in AS 21.12.050;
(21) "prepaid card product" means a reloadable card issued by a financial institution in the name of the claimant that is loaded with funds from an insurer to pay a judgment or settlement of a claim;
(22) "procedure code" means a universal code used by a health care provider to identify the services or supplies provided to an insured under a health care insurance policy.
History
- Authority: AS 21.06.090; AS 21.36.125 AS 21.12.050; AS 21.36.495
- Eff. 5/6/89, Register 110; am 4/20/97, Register 142; am 9/15/2004, Register 171; am 6/6/2015, Register 214; am 8/20/2016, Register 219
Article 2 Unfair Discrimination
3 AAC 26.410 Unfair discrimination; blindness or partial blindness
(a) The following acts constitute unfair discrimination between individuals of the same class when based solely on blindness or partial blindness:
(1) refusing to insure;
(2) refusing to continue to insure;
(3) limiting the amount, extent, or kind of insurance coverage available; or
(4) charging an individual a different rate for the same coverage.
(b) With respect to all other conditions, including the underlying cause of the blindness or partial blindness, this section may not be interpreted to prohibit the refusal to insure, the limitation of insurance coverage, or a rate differential if that act is based on sound actuarial principles or is related to actual, demonstrated experience or to experience that can be reasonably anticipated.
(c) For the purpose of this section, the term "refusing to insure" includes declining to insure an individual who is blind or partially blind because the insurance policy for which application is made contains a provision that presumes either total, permanent, or partial disability in the event that an insured person becomes blind or partially blind and would result in a valid claim under the policy. However, an insurer may, by policy provision, written rider, or endorsement, exclude from coverage disabilities consisting solely of blindness or partial blindness if either condition is in existence at the time the policy is issued.
History
- Authority: AS 21.06.090; AS 21.36.090
- Eff. 3/29/90, Register 113
Article 3 Military Sales Practices
3 AAC 26.430 Applicability
(a) The provisions of 3 AAC 26.430 - 3 AAC 26.449 apply to a solicitation or sale of a life insurance or annuity product by an insurer or insurance producer to an active duty service member of the United States armed forces, except for a solicitation or sale involving
(1) consumer credit insurance; in this paragraph, "consumer credit insurance" has the meaning given in AS 21.57.160;
(2) a group life insurance policy or group annuity contract
(A) in which in-person, face-to-face solicitation of individuals by an insurance producer does not take place; or
(B) if the contract or certificate does not include a side fund;
(3) an application to an insurer that issued an existing life insurance policy or annuity contract to
(A) exercise a contractual change or conversion privilege;
(B) replace the existing policy or contract by the same insurer under a program filed with and approved by the director; or
(C) exercise a term conversion privilege among corporate affiliates;
(4) an individual stand-alone health insurance policy, including a disability income policy;
(5) a contract offered by Servicemembers' Group Life Insurance or Veterans' Group Life Insurance, as authorized by 38 U.S.C. 1965 - 1980A;
(6) a life insurance contract offered through or by a nonprofit military association qualifying under 26 U.S.C. 501(c)(23) (Internal Revenue Code) and that is not underwritten by an insurer; or
(7) a life insurance policy or annuity contract that is used to fund
(A) an employee pension or welfare benefit plan covered under 29 U.S.C. 1001 - 1461 (Employee Retirement Income Security Act of 1974);
(B) a plan described in 26 U.S.C. 401(a) or (k), 26. U.S.C. 403(b), or 26 U.S.C. 408(k) or (p) (Internal Revenue Code), if the plan is established or maintained by an employer;
(C) a governmental or church plan defined in 26 U.S.C. 414 (Internal Revenue Code), including a governmental or church welfare benefit plan;
(D) a deferred compensation plan of a state or local government or tax exempt organization under 26 U.S.C. 457 (Internal Revenue Code);
(E) a nonqualified deferred compensation arrangement under 26 U.S.C. 409A (Internal Revenue Code) established or maintained by an employer or plan sponsor;
(F) a settlement of or assumption of liabilities associated with personal injury litigation or a dispute or claim resolution process; or
(G) a formal prepaid funeral contract.
(b) Nothing in 3 AAC 26.430 - 3 AAC 26.449 abrogates the ability of an organization to educate members of the United States armed forces in accordance with the United States Department of Defense's DoD Instruction 1344.07 - Personal Commercial Solicitation on DoD Installations or successor directive.
(c) Except as provided in (d) of this section, for purposes of 3 AAC 26.430 - 3 AAC 26.449, solicitation does not include
(1) a general advertisement;
(2) direct mail;
(3) Internet marketing; or
(4) telephone marketing, if the caller explicitly and conspicuously discloses that the subject matter of the call is life insurance and does not make a statement that avoids a clear and unequivocal statement that life insurance is the subject matter of the solicitation.
(d) Notwithstanding (c) of this section, and for purposes of 3 AAC 26.430 - 3 AAC 26.449, a solicitation includes an in-person, face-to-face meeting established by an insurer or insurance producer using one or more of the methods listed in (c) of this section.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.36.050 AS 21.36.020; AS 21.36.040; AS 21.36.900
- Eff. 12/28/2008, Register 188
3 AAC 26.435 Unfair or deceptive acts or practices on a military installation
An insurer or insurance producer engages in an unfair or deceptive act or practice if the insurer or insurance producer conducts on a military installation an in-person, face-to-face solicitation of life insurance for which the insurer or insurance producer
(1) knowingly solicits the purchase of a life insurance product door-to-door, or does not establish a specific appointment before each meeting with a prospective purchaser;
(2) solicits service members in a required group gathering;
(3) knowingly makes appointments with or solicits service members during the members' normally scheduled duty hours;
(4) makes appointments with or solicits service members in barracks, day rooms, unit areas, transient personnel housing, or other areas where the installation commander has prohibited solicitation;
(5) solicits the sale of life insurance without first obtaining permission from the installation commander or the commander's designee;
(6) posts unauthorized bulletins, notices, or advertisements;
(7) fails to present DD Form 2885, Personal Commercial Solicitation Evaluation, to solicited service members or encourages solicited service members not to complete or submit DD Form 2885;
(8) knowingly accepts an application for life insurance or issues a policy of life insurance on the life of an enlisted member of the United States armed forces without first obtaining and retaining in the insurer's or insurance producer's files a completed copy of any form required by regulations, directives, or rules of the United States Department of Defense or a branch of the United States armed forces that confirms that the applicant has received counseling or fulfilled any other similar requirement for the sale of life insurance;
(9) uses United States Department of Defense personnel to act as representatives or agents in an official or business capacity with respect to the solicitation or sale of life insurance to service members; or
(10) participates in a United States armed forces-sponsored education or orientation program.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.36.050 AS 21.36.020; AS 21.36.040; AS 21.36.900
- Eff. 12/28/2008, Register 188
3 AAC 26.440 Unfair or deceptive acts or practices regardless of location
An insurer or insurance producer engages in an unfair or deceptive act or practice if the insurer or insurance producer
(1) submits, processes, or assists in the submission or processing of an allotment form or similar device used by the United States armed forces in order to direct a service member's pay to a third party for the purchase of life insurance, including using or assisting in using a service member's MyPay account or other similar Internet or electronic medium for those purposes, except for assisting a service member by providing insurer or premium information necessary to complete an allotment form;
(2) knowingly receives money from a service member for the payment of premium from a depository institution with which the service member does not have a formal banking relationship; for purposes of this paragraph, a formal banking relationship is established when the depository institution
(A) provides the service member a deposit agreement and periodic statements and makes the disclosures required by 12 U.S.C. 4301 - 4313 (Truth in Savings Act); and
(B) permits the service member to make deposits and withdrawals unrelated to the payment or processing of insurance premiums;
(3) employs a device or method or enters into an agreement in which money received from a service member by allotment for the payment of insurance premiums is identified on the service member's Leave and Earnings Statement or equivalent or successor form as "savings" or "checking" and for which the service member has no formal banking relationship as described in (2) of this section;
(4) enters into an agreement with a depository institution for the purpose of receiving money from a service member in which the depository institution agrees to accept direct deposits from a service member with whom it does not have a formal banking relationship as described in (2) of this section;
(5) uses United States Department of Defense personnel to act as representatives or agents in a solicitation or sale of life insurance to a service member who is junior in rank or grade or to a family member of the service member;
(6) offers or gives anything of value to United States Department of Defense personnel to procure their assistance in encouraging, assisting, or facilitating the solicitation or sale of life insurance to another service member;
(7) knowingly offers or gives anything of value to a service member in a pay grade of E-4 or below to attend an event where an application for life insurance is solicited;
(8) advises a service member in a pay grade of E-4 or below to change the service member's income tax withholding or state of legal residence for the sole purpose of increasing disposable income to purchase life insurance;
(9) makes a representation, or uses a device, title, descriptive name, or identifier that has the tendency or capacity to confuse or mislead a service member to believe that the insurer, insurance producer, or insurance product offered is affiliated, connected, or associated with, or endorsed, sponsored, sanctioned, or recommended by the United States government, the United States armed forces, a state or federal agency, or a government entity; the use of a professional designation awarded after the successful completion of a course of instruction in the business of insurance by an accredited institution of higher learning is permissible;
(10) through the use of or in conjunction with a third party organization that promotes the welfare of or assists members of the United States armed forces, solicits the purchase of a life insurance product in a manner that has the tendency or capacity to confuse or mislead a service member to believe that the insurer, insurance producer, or insurance product offered is affiliated, connected, or associated with, or endorsed, sponsored, sanctioned, or recommended by the United States government or the United States armed forces;
(11) uses or describes the credited interest rate on a life insurance policy in a manner that implies that the credited interest rate is a net return on premium paid;
(12) except for individually issued annuities, misrepresents the mortality costs of a life insurance product, including stating or implying that the product is free;
(13) makes a representation that is false, misleading, or deceptive regarding the availability, suitability, amount, or cost of, or exclusions or limitations to coverage provided to a service member or a service member's dependents by Servicemembers' Group Life Insurance or Veterans' Group Life Insurance;
(14) makes a representation that is false, misleading, or deceptive regarding conversion requirements, including the costs of coverage or exclusions or limitations to coverage, of Servicemembers' Group Life Insurance or Veterans' Group Life Insurance;
(15) suggests, recommends, or encourages a service member to cancel or terminate the service member's Servicemembers' Group Life Insurance policy or issues a life insurance policy that replaces an existing Servicemembers' Group Life Insurance policy unless the replacement policy will take effect on or after the service member's separation from the United States armed forces;
(16) deploys, uses, or contracts for lead-generating materials that are designed exclusively for use with service members, and that do not clearly and conspicuously disclose, if true, that the recipient will be contacted by an insurance producer for the purpose of soliciting the purchase of life insurance;
(17) when establishing a specific appointment for an in-person, face-to-face meeting with a prospective purchaser, fails to disclose that a solicitation for the sale of life insurance will be made;
(18) except for individually issued annuities, fails to clearly and conspicuously disclose that the product being sold is life insurance;
(19) fails to make, at the time of sale or offer to an individual known to be a service member, the written disclosures required by sec. 10, P.L. 109-290 (Military Personnel Financial Services Protection Act);
(20) except for individually issued annuities, when the sale is conducted in-person, face-to-face with an individual known to be a service member, at the time the application is taken, fails to provide the service member
(A) an explanation of a free look period with instructions on how to cancel if a policy is issued; and
(B) either a copy of the application or a written disclosure that clearly and concisely describes the type of life insurance, the death benefit applied for, and its expected first year cost; a basic illustration that complies with the requirements of 3 AAC 28.820 meets the requirement for a written disclosure in this subparagraph;
(21) except for individually issued annuities, recommends the purchase of a life insurance product that includes a side fund to a service member in a pay grade of E-4 or below unless the insurer has reasonable grounds to believe that the life insurance death benefit, on its own, is suitable;
(22) offers for sale or sells a life insurance product that includes a side fund to a service member in a pay grade of E-4 or below who is currently enrolled in Servicemembers' Group Life Insurance, unless, after the completion of a needs assessment, the insurer or insurance producer demonstrates that the service member's Servicemembers' Group Life Insurance death benefit, together with other military survivor benefits, savings, investments, survivor income, and other life insurance are insufficient to meet the service member's insurable needs for life insurance; for purposes of this paragraph,
(A) "insurable needs" are the risks associated with premature death, taking into consideration the financial obligations and immediate and future cash needs of the service member's estate, survivors, and dependents; and
(B) "other military survivor benefits" include
(i) a death gratuity under 10 U.S.C. 1475;
(ii) funeral reimbursement under 10 U.S.C. 1482 or 38 U.S.C. 2301 - 2308;
(iii) transition assistance;
(iv) survivor and dependents' educational assistance under 38 U.S.C. 3500 - 3566;
(v) dependency and indemnity compensation under 38 U.S.C. 1301 - 1323;
(vi) TRICARE health care benefits under 10 U.S.C. 1071 - 1110 for survivors;
(vii) survivor housing benefits and allowances;
(viii) federal income tax forgiveness; and
(ix) social security survivor benefits under 42 U.S.C. 401 - 434;
(23) except for individually issued annuities, offers for sale or sells a life insurance contract that includes a side fund
(A) unless interest credited accrues from the date of deposit to the date of withdrawal and permits withdrawals without limit or penalty;
(B) unless the insurer or insurance producer provides the service member a schedule of effective rates of return, based upon cash flows of the combined product in which the effective rate of return includes all premiums and cash contributions made by the policyholder and all cash accumulations and cash surrender value available to the policyholder in addition to life insurance coverage; the insurer or insurance producer must provide a schedule for each year of the first 10 policy years and every fifth policy year thereafter ending at age 100, policy maturity, or final expiration, whichever occurs last; and
(C) that, by default, diverts or transfers money accumulated in the side fund to pay, reduce, or offset any premium due;
(24) except for individually issued annuities, offers for sale or sells a life insurance contract that, after considering all policy benefits, including endowment, and return of premium, does not comply with AS 21.45.300 (standard nonforfeiture law for life insurance);
(25) sells, to an individual known to be a service member, a life insurance product that excludes coverage if the insured's death is related to declared or undeclared war or an act related to military service, except for accidental death coverage.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.36.050 AS 21.36.020; AS 21.36.040; AS 21.36.900
- Eff. 12/28/2008, Register 188
3 AAC 26.449 Definitions
In 3 AAC 26.430 - 3 AAC 26.449, unless the context requires otherwise,
(1) "active duty" means full-time duty in the active military service of the United States and includes members of the reserve component while serving under published orders for active duty or full-time training; "active duty" does not include members of the reserve component who are performing active duty or active duty for training under military calls or orders specifying periods of fewer than 31 calendar days;
(2) "United States Department of Defense personnel" means all active duty service members and all civilian employees, including non-appropriated fund employees and special government employees, of the United States Department of Defense;
(3) "door-to-door" means a solicitation or sales method in which an insurer or insurance producer proceeds randomly or selectively from household to household without a prior specific appointment;
(4) "general advertisement" means an advertisement having as its sole purpose the promotion of the reader's or viewer's interest in the concept of insurance, or the promotion of the insurer or insurance producer;
(5) "known" or "knowingly" means that the insurer or insurance producer had actual awareness, or in the exercise of ordinary care should have been aware at the time of the act or practice that the person solicited was
(A) a service member; or
(B) a service member in a pay grade of E-4 or below;
(6) "life insurance" has the meaning given in AS 21.12.040 and, unless specifically excluded, includes an annuity as defined in AS 21.12.055 that is individually issued;
(7) "military installation" means a federally owned, leased, or operated base, reservation, post, camp, building, or other facility to which service members are assigned for duty; "military installation" includes barracks, transient housing, and family quarters;
(8) "MyPay" means the Defense Finance and Accounting Service Internet-based system that enables service members to process certain discretionary pay transactions or provide updates to personal information data elements without using paper forms;
(9) "service member" means
(A) an active duty commissioned or warrant officer of the United States armed forces; or
(B) an active duty enlisted member of the United States armed forces;
(10) "service member in a pay grade of E-4 or below" means
(A) for the Air Force, a rank of senior airman or lower enlisted rank;
(B) for the Army, a rank of corporal or specialist or lower enlisted rank;
(C) for the Marines, a rank of corporal or lower enlisted rank; and
(D) for the Navy and Coast Guard, a rank of petty officer third class or lower enlisted rank;
(11) "Servicemembers' Group Life Insurance" means the group life insurance authorized under 38 U.S.C. 1965 - 1980A for service members;
(12) "side fund" means a fund or reserve that is part of or otherwise attached to a life insurance policy by a rider, endorsement, or other mechanism that accumulates premium or deposits with interest or by other means; "side fund" does not include
(A) a fund or reserve within the meaning given in this paragraph but part of or otherwise attached to an individually issued annuity;
(B) accumulated value, cash value, or secondary guarantees provided by a universal life policy;
(C) cash values provided by a whole life policy that are subject to AS 21.45.300 (standard nonforfeiture law for life insurance); or
(D) a premium deposit fund that
(i) contains only premiums paid in advance that accumulate at interest;
(ii) does not impose a penalty for withdrawal;
(iii) does not permit funding beyond future required premiums;
(iv) is not marketed or intended as an investment; and
(v) does not carry a paid or calculated commission;
(13) "specific appointment" means a prearranged appointment agreed upon by both parties and definite as to place and time;
(14) "United States armed forces" means all components of the United States Army, Navy, Air Force, Marine Corps, and Coast Guard;
(15) "Veterans' Group Life Insurance" means the group life insurance authorized under 38 U.S.C. 1965 - 1980A for veterans.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.36.050 AS 21.36.020; AS 21.36.040; AS 21.36.900
- Eff. 12/28/2008, Register 188
Article 4 Coverage for Attorney Fees Taxable as Costs Against an Insured According to Alaska Rule of Civil Procedure 82
3 AAC 26.500 Minimum standards
Minimum acceptable standards for limitation of coverage for attorney fees taxable against an insured under Alaska Rule of Civil Procedure 82 and disclosure are established under 3 AAC 26.510 - 3 AAC 26.559 for all policies written on risks in this state or relative to a subject resident, located or to be performed in this state.
History
- Authority: AS 21.06.090; AS 21.36.900
- Eff. 7/1/96, Register 138; am 12/20/2020, Register 236
3 AAC 26.510 Policy with a right or duty to defend
A policy under which an insurer has a right or duty to provide a defense for an insured for liability for which the policy provides coverage must provide coverage for the payment of attorney fees taxable as costs against the insured under Alaska Rule of Civil Procedure 82,
(1) except as provided in 3 AAC 26.525 and 3 AAC 26.535; and
(2) subject to the following minimum limits:
(A) as an additional amount of coverage, a policy that provides a defense in addition to an applicable limit of liability must provide for payment of attorney fees awarded as costs against an insured under Alaska Rule of Civil Procedure 82 that is not less than the amount calculated by applying the schedule for contested cases in Alaska Rule of Civil Procedure 82(b)(1) to the limit of liability of the applicable coverage;
(B) as an additional amount of coverage, a policy that provides a defense within an applicable limit of liability less than $1,000,000 must provide for payment of attorney fees awarded as costs against an insured under Alaska Rule of Civil Procedure 82 that is not less than the greater of
(i) the amount calculated by applying the schedule for contested cases in Alaska Rule of Civil Procedure 82(b)(1) to the limit of liability of the applicable coverage; or
(ii) $10,000;
(C) a policy that provides a defense within an applicable limit of liability of $1,000,000 or more may include within its applicable limit of liability coverage for attorney fees awarded as costs against an insured under Alaska Rule of Civil Procedure 82.
History
- Authority: AS 21.06.090; AS 21.42.120; AS 21.42.160 AS 21.36.900; AS 21.42.130
- Eff. 7/1/96, Register 138; am 12/20/2020, Register 236
3 AAC 26.520 Policy with no right or duty to defend
(a) A policy under which an insurer has neither a right nor a duty to provide a defense but agrees to indemnify an insured for the costs of defense for liability for which the policy also provides coverage must provide coverage to indemnify an insured for the payment of attorney fees taxed as costs against the insured under Alaska Rule of Civil Procedure 82,
(1) except as provided in 3 AAC 26.525 and 3 AAC 26.535; and
(2) subject to the following minimum limits:
(A) as an additional amount of coverage, a policy that indemnifies an insured for the costs of defense in addition to an applicable limit of liability must provide for payment of attorney fees awarded as costs against an insured under Alaska Rule of Civil Procedure 82 that is not less than the amount calculated by applying the schedule for contested cases in Alaska Rule of Civil Procedure 82(b)(1) to the limit of liability of the applicable coverage;
(B) as an additional amount of coverage, a policy that indemnifies an insured for the costs of defense within an applicable limit of liability less than $1,000,000 must provide for payment of attorney fees awarded as costs against an insured under Alaska Rule of Civil Procedure 82 that is not less than the greater of
(i) an amount calculated by applying the schedule for contested cases in Alaska Rule of Civil Procedure 82(b)(1) to the limit of liability of the applicable coverage; or
(ii) $10,000;
(C) a policy that indemnifies an insured for the costs of defense within an applicable limit of liability of $1,000,000 or more may include within its applicable limit of liability coverage for attorney fees awarded as costs against an insured under Alaska Rule of Civil Procedure 82.
(b) A policy under which an insurer has neither a right nor duty to provide and has not agreed to indemnify the insured for the costs of defense against a liability for which the policy also provides coverage is not required to provide coverage for the payment of attorney fees awarded as costs against an insured under Alaska Rule of Civil Procedure 82, except as required in 3 AAC 26.535.
History
- Authority: AS 21.06.090; AS 21.42.120; AS 21.42.160 AS 21.36.900; AS 21.42.130
- Eff. 7/1/96, Register 138; am 12/20/2020, Register 236
3 AAC 26.525 Defense-only coverage
A policy providing defense-only coverage is not required to provide coverage for the payment of attorney fees awarded as costs against an insured under Alaska Rule of Civil Procedure 82.
History
- Authority: AS 21.06.090; AS 21.42.120; AS 21.42.160 AS 21.36.900; AS 21.42.130
- Eff. 12/20/2020, Register 236
3 AAC 26.530 Policy with no defense cost obligation
Repealed.
History
- Eff. 7/1/96, Register 138; repealed 12/20/2020, Register 236
3 AAC 26.535 Cost sharing provisions
(a) A cost-sharing provision that affects the amount of coverage for defense costs may be extended to apply specifically to coverage for attorney fees awarded as costs against an insured under Alaska Rule of Civil Procedure 82. A cost-sharing provision may not apply specifically to coverage for attorney fees awarded as costs against an insured under Alaska Rule of Civil Procedure 82 unless the application is at least as favorable with respect to that coverage as it is with respect to defense costs coverage in general.
(b) For purposes of this section,
(1) a cost-sharing provision is
(A) a policy provision relating to a deductible;
(B) a policy provision relating to policyholder retention;
(C) a policy provision relating to a policyholder loss reimbursement obligation; or
(D) another policy provision for the sharing of costs between the policyholder and insurer;
(2) a provision that limits coverage for defense costs to a specific dollar or percentage amount is a provision relating to sharing of defense costs between the policyholder and insurer, except for a provision that
(A) makes coverage for defense costs subject to an applicable limit of liability; or
(B) applies to defense-only coverage;
(3) a policy provision that establishes an insurer's right to participate in the defense of its insured at its own cost is a provision relating to the sharing of defense costs between the policyholder and insurer; and
(4) a provision is at least as favorable with respect to coverage for attorney fees, awarded as costs against an insured under Alaska Rule of Civil Procedure 82, as the provision is with respect to defense costs coverage in general if the proportion of attorney fees, awarded as costs against an insured under Alaska Rule of Civil Procedure 82 and covered after application of the limitation allowed under (a) of this section, to the minimum amount of coverage for the attorney fees that would be required by 3 AAC 26.510 and 3 AAC 26.520 if no limitation existed, is at least as great as the proportion of those defense costs, that are either covered by the policy or incurred by the insurer through its participating in or providing a defense, after application of a limitation allowed under (a) of this section, to the total incurred defense costs.
History
- Authority: AS 21.06.090; AS 21.42.120; AS 21.42.160 AS 21.36.900; AS 21.42.130
- Eff. 12/20/2020, Register 236
3 AAC 26.540 No additional premium charge for minimum coverage
An insurer may not charge a separate premium for the minimum coverage required under 3 AAC 26.510 or 3 AAC 26.520. An insurer may charge a separate premium for coverage in excess of the minimum required. An admitted insurer shall secure from the director prior approval for premiums charged as required under AS 21.39.040.
History
- Authority: AS 21.06.090; AS 21.39.020; AS 21.39.040 AS 21.36.900; AS 21.39.030
- Eff. 7/1/96, Register 138
3 AAC 26.550 Required notice
(a) A policy issued by an insurer that limits coverage as permitted under 3 AAC 26.510 - 3 AAC 26.535 must include a policyholder notice regarding Alaska Rule of Civil Procedure 82.
(b) The notice required by (a) of this section must
(1) conform with the division's
(A) Attorney Fees Coverage Notice A, dated March 29, 1996, and hereby adopted by reference, for a policy with a right or duty to defend in addition to an applicable limit of liability;
(B) Attorney Fees Coverage Notice B, dated March 29, 1996, and hereby adopted by reference, for a policy with a right or duty to defend within an applicable limit of liability;
(C) Attorney Fees Coverage Notice C, dated March 29, 1996, and hereby adopted by reference, for an indemnity policy that covers defense costs within an applicable limit of liability;
(D) Attorney Fees Coverage Notice D, dated March 29, 1996, and hereby adopted by reference, for a policy with no defense cost obligations;
(E) Attorney Fees Coverage Notice E, dated August 14, 2020, and hereby adopted by reference, for an indemnity policy that covers defense costs in addition to an applicable limit of liability; or
(F) Attorney Fees Coverage Notice F, dated August 14, 2020, and hereby adopted by reference, for a policy providing defense-only coverage; or
(2) be approved in writing by the director upon a determination that the proposed notice
(A) is substantially equivalent to the division's Attorney Fees Coverage Notice A, B, C, D, E, or F; or
(B) provides notice similar in detail and format to the division's Attorney Fees Coverage Notices, but with terms related to the coverage for attorney fees taxable as costs against the insured under Alaska Rule of Civil Procedure 82 that
(i) reflect the application of cost-sharing provisions permitted under 3 AAC 26.535; or
(ii) are more favorable than the terms described in the division's notices.
History
- Authority: AS 21.06.090; AS 21.42.120; AS 21.42.160 AS 21.36.900; AS 21.42.130
- Eff. 7/1/96, Register 138; am 12/20/2020, Register 236
3 AAC 26.559 Definition
In 3 AAC 26.500 - 3 AAC 26.559, "defense-only coverage" means liability insurance covering defense costs but not settlements or indemnity payments related to events that give rise to the covered defense costs.
History
- Authority: AS 21.06.090; AS 21.42.120; AS 21.42.160 AS 21.36.900; AS 21.42.130
- Eff. 12/20/2020, Register 236
Article 5 Privacy of Consumer Financial and Health Information
3 AAC 26.605 Purpose, applicability, and scope
(a) The purpose of 3 AAC 26.610 - 3 AAC 26.749 is to protect the public by providing standards for the treatment by licensees of nonpublic personal information.
(b) The provisions of 3 AAC 26.610 - 3 AAC 26.675 apply only to nonpublic personal financial information.
(c) The provisions of 3 AAC 26.680 and 3 AAC 26.685 apply only to nonpublic personal health information.
(d) The provisions of 3 AAC 26.605 and 3 AAC 26.690 - 3 AAC 26.749 apply to both nonpublic personal financial and nonpublic personal health information.
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172
3 AAC 26.610 Initial privacy notice to consumers
(a) A licensee shall provide a clear and conspicuous notice that accurately reflects the licensee's privacy policies and practices to a
(1) customer not later than when the licensee establishes a customer relationship, except as provided in (d) of this section; and
(2) consumer before the licensee discloses nonpublic personal financial information about the consumer to a nonaffiliated third party, unless the disclosure is authorized under 3 AAC 26.665 and 3 AAC 26.670.
(b) A licensee is not required to provide an initial notice to a consumer under (a) of this section if the
(1) licensee does not disclose nonpublic personal financial information about the consumer to a nonaffiliated third party except as authorized under 3 AAC 26.665 and 3 AAC 26.670 and the licensee does not have a customer relationship with the consumer; or
(2) initial notice is provided under (a) of this section by an affiliate that is a licensee, and the notice
(A) identifies each licensee to whom the notice applies; and
(B) accurately states the privacy policies and practices of each licensee.
(c) If an existing customer seeks to obtain or obtains a new insurance product or service that is to be used primarily for personal, family, or household purposes from a licensee, the licensee meets the requirements of (a) of this section if the
(1) licensee provides a revised policy notice in compliance with 3 AAC 26.630 covering the new insurance product or service; or
(2) most recent notice given to the customer by the licensee is accurate with respect to the new insurance product or service.
(d) A licensee may provide the initial notice under (a)(1) of this section within a reasonable time after the licensee establishes a customer relationship if
(1) establishing the customer relationship is not at the customer's election, including when a licensee acquires or is assigned a customer's policy from another financial institution or residual market mechanism and the customer does not have a choice about the acquisition or assignment; or
(2) providing the notice not later than when the licensee establishes a customer relationship as required under (a)(1) of this section would substantially delay the customer's transaction and the customer agrees to receive the notice at a later time.
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172
3 AAC 26.615 Annual privacy notice to customers
(a) At least once in each 12 consecutive month period in which a customer relationship exists, a licensee shall provide clear and conspicuous notice to each customer that accurately reflects the licensee's privacy policies and practices.
(b) A licensee is not required to provide an annual notice to an individual who is no longer a customer.
(c) A licensee that provides nonpublic personal information to nonaffiliated third parties only in accordance with 3 AAC 26.660 - 3 AAC 26.670, and that has not changed its policies and practices with regard to disclosing nonpublic personal information from the policies and practices that were disclosed in the most recent disclosure sent to consumers in accordance with this section or 3 AAC 26.610, is not required to provide an annual disclosure under this section until the time when the licensee fails to comply with the criteria described in this subsection.
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172; am 12/20/2020, Register 236
3 AAC 26.620 Information included in privacy notices
(a) In a privacy notice required under 3 AAC 26.610, 3 AAC 26.615, and 3 AAC 26.630, a licensee shall include the following:
(1) the categories of nonpublic personal financial information that the licensee collects;
(2) the categories of nonpublic personal financial information that the licensee discloses;
(3) except for persons to whom the licensee discloses information as allowed under 3 AAC 26.665 and 3 AAC 26.670, the categories of affiliates and nonaffiliated third parties to which the licensee discloses a consumer's nonpublic personal financial information;
(4) except for persons to whom the licensee discloses information as allowed under 3 AAC 26.665 and 3 AAC 26.670, the categories of nonpublic personal financial information that the licensee discloses about a consumer who is no longer a customer of the licensee;
(5) except for persons to whom the licensee discloses information as allowed under 3 AAC 26.665 and 3 AAC 26.670, the categories of affiliates and nonaffiliated third parties to whom the licensee discloses nonpublic personal financial information about a consumer who is no longer a customer of the licensee;
(6) if the licensee discloses nonpublic personal financial information to a nonaffiliated third party under 3 AAC 26.660 and an exception in 3 AAC 26.665 or 3 AAC 26.670 does not apply to the disclosure, a separate description of the categories of information that the licensee discloses and the categories of nonaffiliated third parties with whom the licensee has contracted;
(7) an explanation of the consumer's right under 3 AAC 26.645 to opt out of the disclosure of nonpublic personal financial information to nonaffiliated third parties, including the methods by which the consumer may opt out;
(8) a disclosure that the licensee makes under 15 U.S.C. 1681a(d)(2)(A)(iii) (Fair Credit Reporting Act) regarding the ability of a consumer to opt out of disclosures of information among affiliates;
(9) a description of the licensee's policies and practices regarding the protection of the confidentiality and security of nonpublic personal financial information;
(10) a disclosure that the licensee makes under (b) of this section.
(b) If a licensee discloses nonpublic personal financial information as allowed under 3 AAC 26.665 or 3 AAC 26.670, the licensee
(1) is not required to list the persons subject to the exceptions in a notice required under 3 AAC 26.610 or 3 AAC 26.615; and
(2) shall state in a notice required under 3 AAC 26.610 or 3 AAC 26.615 that the licensee makes disclosures to other affiliates or nonaffiliated third parties as allowed by law.
(c) A licensee meets the requirements of 3 AAC 26.610(a)(2) and 3 AAC 26.625(d) for a consumer who is not a customer if the
(1) licensee prepares a privacy notice containing the information required in (a) of this section;
(2) licensee, upon the consumer's request, provides the privacy notice to the consumer;
(3) consumer may obtain a copy of the privacy notice by at least one of the following means:
(A) calling a toll-free number provided by the licensee;
(B) sending a written request to a mailing address provided by the licensee;
(C) making an in-person request at the licensee's office for immediate provision of a copy;
(D) another means that the director determines to be a reasonable means for the consumer to obtain a copy; and
(4) licensee provides, at the same time that the opt out notice required under 3 AAC 26.625 is provided, a short-form initial notice to the consumer that
(A) is clear and conspicuous;
(B) states that the licensee's privacy notice is available upon request; and
(C) explains how the consumer may obtain the privacy notice.
(d) A licensee may include in the notices required under 3 AAC 26.610, 3 AAC 26.615, and 3 AAC 26.630 the following:
(1) the categories of nonpublic personal financial information that the licensee does not currently disclose, and that the licensee reserves the right to disclose in the future;
(2) the categories of affiliates or nonaffiliated third parties to whom the licensee does not currently disclose nonpublic personal financial information, but to whom the licensee may disclose nonpublic personal financial information in the future;
(3) other information that applies to the licensee and to the consumer.
(e) A licensee, including a group of financial holding company affiliates that use a common privacy notice, may use the following sample statements to comply with the applicable requirements of this section regarding content of privacy notices, if each statement used is accurate for each institution that uses the notice:
(1) categories of information a licensee collects (all institutions): a licensee may use the following statement to meet the requirement of 3 AAC 26.620(a)(1) to describe the categories of nonpublic personal financial information the licensee collects:
We collect nonpublic personal financial information about you from the following sources:
* Information we receive from you on applications or other forms;
* Information about your transactions with us, our affiliates, or any others; and
* Information we receive from a consumer-reporting agency.
(2) categories of information a licensee discloses (institutions that disclose outside of the exceptions): a licensee may use one of the following statements, if applicable, to meet the requirement of 3 AAC 26.620(a)(2) to describe the categories of nonpublic personal financial information the licensee discloses; a licensee may use the following statements if the licensee discloses nonpublic personal financial information other than as allowed by the exceptions in 3 AAC 26.660 - 3 AAC 26.670:
Alternative 1:
We may disclose the following kinds of nonpublic personal financial information about you:
* Information we receive from you on applications or other forms, such as [provide illustrative examples, such as "your name, address, social security number, assets, income, and beneficiaries"];
* Information about your transactions with us, our affiliates, or any others, such as [provide illustrative examples, such as "your policy coverage, premiums, and payment history"]; and
* Information we receive from a consumer-reporting agency, such as [provide illustrative examples, such as "your creditworthiness and credit history"].
Alternative 2:
We may disclose all of the information that we collect, as described [describe location in the notice, such as "above" or "below"].
(3) categories of information a licensee discloses and persons to whom the licensee discloses (institutions that do not disclose outside of the exceptions): a licensee may use the following statement to meet the requirements of 3 AAC 26.620(a)(2), (3), (4), and (5) to describe the categories of nonpublic personal financial information about customers and former customers that the licensee discloses and the categories of affiliates and nonaffiliated third parties to whom the licensee discloses; a licensee may use the following statement if the licensee does not disclose nonpublic personal financial information to any person, other than as allowed by the exceptions in 3 AAC 26.665 and 3 AAC 26.670:
We do not disclose any nonpublic personal financial information about our customers or former customers to anyone, except as allowed by law.
(4) categories of parties to whom a licensee discloses (institutions that disclose outside of the exceptions): a licensee may use the following statement to meet the requirement of 3 AAC 26.620(a)(3) to describe the categories of affiliates and nonaffiliated third parties to whom the licensee discloses nonpublic personal financial information; the following statement may be used if the licensee discloses nonpublic personal financial information other than as allowed by the exceptions in 3 AAC 26.660 - 3 AAC 26.670, as well as when allowed by the exceptions in 3 AAC 26.665 and 3 AAC 26.670:
We may disclose nonpublic personal financial information about you to the following types of third parties:
* Financial service providers, such as [provide illustrative examples, such as "life insurers, automobile insurers, mortgage bankers, securities broker-dealers, and insurance agents"];
* Non-financial companies, such as [provide illustrative examples, such as "retailers, direct marketers, airlines, and publishers"]; and
* Others, such as [provide illustrative examples, such as "non-profit organizations"].
We may also disclose nonpublic personal financial information about you to nonaffiliated third parties as allowed by law.
(5) service provider/joint marketing exception: a licensee may use one of the following statements to meet the requirements of 3 AAC 26.620(a)(6) related to the exception in 3 AAC 26.660 for provision of nonpublic personal financial information to a nonaffiliated third party to act as a service provider or to perform joint marketing services; if a licensee discloses nonpublic personal financial information under the exception in 3 AAC 26.660, the licensee shall describe the categories of nonpublic personal financial information the licensee discloses and the categories of third parties with which the licensee has contracted:
Alternative 1:
We may disclose the following information to companies that perform marketing services on our behalf or to other financial institutions with which we have joint marketing agreements:
* Information we receive from you on applications or other forms, such as [provide illustrative examples, such as "your name, address, social security number, assets, income, and beneficiaries"];
* Information about your transactions with us, our affiliates, or any others, such as [provide illustrative examples, such as "your policy coverage, premium, and payment history"]; and
* Information we receive from a consumer-reporting agency, such as [provide illustrative examples, such as "your creditworthiness and credit history"].
Alternative 2:
We may disclose all of the information we collect, as described [describe location in the notice, such as "above" or "below"] to companies that perform marketing services on our behalf or to other financial institutions with which we have joint marketing agreements.
(6) explanation of opt out right (institutions that disclose outside of the exceptions): a licensee may use the following statement to meet the requirement of 3 AAC 26.620(a)(7) to provide an explanation of the consumer's right to opt out of the disclosure of nonpublic personal financial information to nonaffiliated third parties, including the method by which the consumer may exercise that right; the licensee may use this statement if the licensee discloses nonpublic personal financial information other than as allowed under 3 AAC 26.660 - 3 AAC 26.670:
If you prefer that we not disclose nonpublic personal financial information about you to nonaffiliated third parties, you may opt out of those disclosures, that is, you may direct us not to make those disclosures, other than disclosures allowed by law. If you wish to opt out of disclosures to nonaffiliated third parties, you may [describe a reasonable means of opting out, such as "call the following toll-free number: (insert number)"].
(7) confidentiality and security (all institutions): a licensee may use the following statement to meet the requirement of 3 AAC 26.620(a)(9) to describe the licensee's policies and practices with respect to protecting the confidentiality and security of nonpublic personal financial information:
We restrict access to nonpublic personal financial information about you to [provide an appropriate description, such as "those employees who need to know that information to provide products or services to you"]. We maintain physical, electronic, and procedural safeguards that comply with federal regulations to guard your nonpublic personal financial information.
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172
3 AAC 26.625 Opt out notices and methods
(a) If a licensee is required to provide an opt out notice under 3 AAC 26.645, the licensee shall provide to each of the licensee's consumers a clear and conspicuous opt out notice that accurately explains the consumer's right to opt out under 3 AAC 26.645.
(b) The opt out notice required in (a) of this section must state
(1) that the licensee discloses or reserves the right to disclose nonpublic personal financial information about a consumer to a nonaffiliated third party;
(2) that the consumer has the right to opt out of disclosure; and
(3) the means provided under 3 AAC 26.645(a)(3) for a consumer to opt out.
(c) A licensee may provide the opt out notice required under 3 AAC 26.645 at the same time and in the same written or electronic form as the initial notice required under 3 AAC 26.610 is provided.
(d) If a licensee provides an opt out notice to a consumer after the initial notice required under 3 AAC 26.610 is provided, the licensee shall provide the consumer the opt out notice and a copy of the initial notice
(1) in writing; or
(2) electronically, if the consumer agrees to receive that information electronically.
(e) If two or more consumers jointly obtain an insurance product or service from a licensee,
(1) the licensee may provide a single opt out notice;
(2) the licensee shall provide an explanation in the opt out notice of how the licensee will treat a direction by a consumer to opt out;
(3) each consumer may individually opt out either by
(A) one consumer opting out as applying to all of the consumers who jointly obtain an insurance product or service from the licensee; or
(B) each consumer opting out as applying only to that consumer; and
(4) a licensee may not require all consumers to opt out before the licensee implements a direction by one consumer to opt out.
(f) If a consumer opts out, the licensee shall comply with the opt out direction as soon as reasonably practicable after the licensee receives the opt out direction from the consumer.
(g) A consumer may opt out of disclosure at any time.
(h) A consumer's opt out direction continues in effect unless revoked by the consumer
(1) in writing; or
(2) electronically, if the consumer agrees to receive information electronically.
(i) When a customer relationship terminates, the customer's opt out direction remains in effect for all nonpublic personal financial information that the licensee collected during or related to that customer relationship. The customer's former opt out direction does not apply to a new customer relationship established after termination of the previous customer relationship.
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172
3 AAC 26.630 Revised privacy notice
Except as otherwise allowed under 3 AAC 26.605 - 3 AAC 26.749, a licensee may not directly or through an affiliate disclose nonpublic personal financial information about a consumer to a nonaffiliated third party other than as described in the initial notice provided to the consumer under 3 AAC 26.610 unless the consumer does not opt out after the licensee has provided the consumer a
(1) clear and conspicuous revised notice that accurately describes the licensee's privacy policies and practices;
(2) new opt out notice that complies with 3 AAC 26.625; and
(3) reasonable opportunity under 3 AAC 26.645(a)(3) to opt out before disclosing information to a nonaffiliated third party.
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172
3 AAC 26.635 Privacy notices to group policyholders
(a) Unless a licensee provides the privacy notices required under 3 AAC 26.610, 3 AAC 26.615, and 3 AAC 26.630 directly to an individual described in 3 AAC 26.715(d), the licensee shall provide the privacy notices to the plan sponsor, group or blanket insurance policyholder, group annuity contract holder, or workers' compensation policyholder in the manner described in 3 AAC 26.610 - 3 AAC 26.630.
(b) The privacy notice provided under (a) of this section must describe the licensee's privacy practices with respect to nonpublic personal financial information about individuals covered under the policies, contracts, or plans.
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172
3 AAC 26.640 Provision of privacy notices
(a) A licensee shall provide a notice required under 3 AAC 26.610 - 3 AAC 26.749 to a consumer in a manner that is reasonably expected to result in receipt of the notice by the consumer.
(b) For annual notices, a licensee may comply with the requirements of (a) of this section by
(1) making the licensee's current privacy notice available to the customer upon request, if a customer has directed the licensee to refrain from sending the customer information regarding the customer relationship; or
(2) continuously posting the licensee's current privacy notice in a clear and conspicuous manner on the licensee's web site, if the customer uses the licensee's web site to access insurance products or services and the customer has agreed to receive notices on the web site.
(c) A licensee does not meet the requirements of (a) of this section by orally explaining the notice.
(d) A licensee shall provide notices required under 3 AAC 26.610, 3 AAC 26.615, and 3 AAC 26.630 in a manner that allows the customer to retain the notice or to obtain a written notice in the future, and that may include
(1) hand-delivering a printed copy of the notice to the consumer;
(2) mailing a printed copy of the notice to the last known address of the customer; or
(3) for a customer who obtains an insurance product or service electronically and agrees to receive notice on the licensee's web site, continuously publishing the licensee's current privacy notice on the web site.
(e) A licensee may provide a joint privacy notice from the licensee from any of the licensee's affiliates identified in the notice, and from any other financial institutions identified in the notice, if the notice accurately reflects the privacy policies and practices of the licensee, the licensee's affiliates, and the other financial institutions.
(f) A licensee may provide a notice on behalf of another financial institution.
(g) If two or more consumers jointly obtain an insurance product or service from a licensee, the licensee may comply with the notice requirements in 3 AAC 26.610, 3 AAC 26.615, and 3 AAC 26.630 by providing a single notice to the consumers.
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172
3 AAC 26.645 Limitation on disclosure of nonpublic personal financial information
(a) Except as allowed under 3 AAC 26.605 - 3 AAC 26.749, a licensee may not directly or through an affiliate disclose to a nonaffiliated third party nonpublic personal financial information unless the consumer does not opt out after the licensee has provided the consumer
(1) the initial notice required under 3 AAC 26.610;
(2) the opt out notice required under 3 AAC 26.625; and
(3) a reasonable opportunity to opt out by a means that may include the following:
(A) mailing the notices to the consumer and allowing the consumer to opt out by mailing a form, calling a toll-free telephone number, or other reasonable means within 45 days after the date the licensee mailed the notices;
(B) if a customer opens an online account with the licensee and agrees to receive the notices electronically, allowing the customer to opt out by any reasonable means within 30 days after the date the customer acknowledges receipt of the notices sent in conjunction with opening the account;
(C) for an isolated transaction with a consumer, by providing the notices at the time of the transaction and requesting that the consumer decide whether to opt out before completing the transaction.
(b) A licensee may allow a consumer to opt out of disclosure
(1) of certain nonpublic personal financial information; or
(2) to certain nonaffiliated third parties.
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172
3 AAC 26.650 Limitation on redisclosure and reuse of nonpublic personal financial information
(a) If a licensee receives, under an exception in 3 AAC 26.665 or 3 AAC 26.670, nonpublic personal financial information from a financial institution that is not an affiliate, the licensee may only disclose or use the information by
(1) disclosing the information to the affiliates of the nonaffiliated third party from which the licensee received the information;
(2) disclosing the information to the licensee's affiliates only if the affiliates agree to disclose and use the information only to the extent that the licensee may disclose and use the information; or
(3) disclosing and using the information under an exception in 3 AAC 26.665 or 3 AAC 26.670 in the ordinary course of business to carry out the activity for which the licensee received the information.
(b) If a licensee receives, other than under an exception in 3 AAC 26.665 or 3 AAC 26.670, nonpublic personal financial information from a financial institution that is not an affiliate, the licensee may disclose the information only
(1) to an affiliate of the nonaffiliated financial institution;
(2) to an affiliate of the licensee if the affiliate agrees to disclose the information only to the extent that the licensee is allowed by law to disclose the information; or
(3) to any other person, if the disclosure is allowed by law when made directly to the person by the nonaffiliated financial institution.
(c) If a licensee discloses nonpublic personal financial information to a nonaffiliated third party under an exception in 3 AAC 26.665 or 3 AAC 26.670, the nonaffiliated third party may disclose and use the information only by
(1) disclosing the information to the licensee's affiliates;
(2) disclosing the information to the nonaffiliated third party's affiliates but only if those affiliates agree to disclose and use the information only to the extent that the nonaffiliated third party may disclose and use the information; and
(3) using the information under an exception in 3 AAC 26.665 or 3 AAC 26.670 in the ordinary course of business to carry out the purpose for which the nonaffiliated third party received the information.
(d) If a licensee discloses nonpublic personal financial information to a nonaffiliated third party other than under an exception in 3 AAC 26.665 or 3 AAC 26.670, the nonaffiliated third party may disclose the information only
(1) to an affiliate of the licensee;
(2) to an affiliate of the nonaffiliated third party, if the affiliate agrees to disclose the information only to the extent that the nonaffiliated third party is allowed by law to disclose the information; or
(3) to any other person, if the disclosure is allowed by law when made directly to the person by the nonaffiliated third party.
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172
3 AAC 26.655 Limitation on sharing account number information for marketing purposes
(a) Except as provided in (b) of this section, a licensee may not disclose directly or through an affiliate a policy number or similar form of access number or access code for a consumer's policy or transaction account to a nonaffiliated third party for use in marketing by telephone or facsimile transmission, direct mail marketing, or electronic mail marketing to a consumer.
(b) A licensee may disclose a policy number or similar form of access number or access code for a consumer's policy or transaction account to a
(1) consumer-reporting agency;
(2) licensee's service provider for the sole purpose of marketing the licensee's own products or services only if the service provider is not authorized to directly initiate charges to the account;
(3) licensee who is an insurance producer for the sole purpose of marketing the licensee's own products or services; or
(4) participant in an affinity program or similar program if the participants in the program are identified to the customer at the time the customer enters into the program.
(c) For purposes of this section, a policy number or similar form of access number or access code for a consumer's policy or transaction account does not include a number or code that is in an encrypted form, unless the licensee provides the recipient with a means to decode the number or code.
(d) In this section, "consumer's policy or transaction account"
(1) means an account other than a deposit account or a credit card account; and
(2) does not include an account to which a third party cannot initiate charges.
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172
3 AAC 26.660 Exceptions to notice and opt out requirements for service providers and joint marketing
(a) A licensee is not subject to the requirements in 3 AAC 26.625 and 3 AAC 26.645 if the licensee provides nonpublic personal financial information to a nonaffiliated third party to act as a service provider or to perform joint marketing services for the licensee or on behalf of the licensee, if the licensee
(1) has provided the initial notice as required under 3 AAC 26.610; and
(2) enters into a contractual agreement with the nonaffiliated third party that prohibits the nonaffiliated third party from disclosing or using the information, including using the information under an exception in 3 AAC 26.665 or 3 AAC 26.670, other than to carry out the purpose for which the licensee disclosed the information.
(b) In this section,
(1) "joint marketing services" means marketing the licensee's own products or services or marketing financial products or services offered under a joint agreement;
(2) "joint agreement" means a written contract under which a licensee and one or more financial institutions offer, endorse, or sponsor a financial product or service.
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172
3 AAC 26.665 Exceptions to notice and opt out requirements for disclosure of nonpublic personal financial information for processing and servicing transactions
(a) A licensee is not subject to the requirements for initial notice in 3 AAC 26.610(a)(2), the opt out requirements in 3 AAC 26.625 and 3 AAC 26.645, or the requirements in 3 AAC 26.660 if the licensee discloses nonpublic personal financial information to a nonaffiliated third party and the information is
(1) necessary to effect, administer, or enforce a transaction that a consumer requests or authorizes; or
(2) used in connection with
(A) servicing or processing an insurance product or service that a consumer requests or authorizes;
(B) maintaining or servicing a consumer's account with the licensee or with another entity as part of a private label credit card program or other extension of credit on behalf of the entity;
(C) a proposed or actual securitization, secondary market sale including the sale of servicing rights, or similar transaction related to a transaction of a consumer;
(D) reinsurance, stop-loss insurance, or excess loss insurance; or
(E) soliciting insurance quotes on behalf of a consumer from an insurance producer.
(b) For purposes of this section, a disclosure of information is necessary to effect, administer, or enforce a transaction if the disclosure is
(1) required in order to enforce a licensee's rights or the rights of another person engaged in carrying out the financial transaction or providing the product or service;
(2) required in order to
(A) carry out a transaction or service business of which the transaction is a part, and to record, service, or maintain the consumer's account in the ordinary course of providing an insurance product or service;
(B) administer or service benefits or claims relating to a transaction or a product or service business of which the transaction is a part;
(C) provide a confirmation, statement, or other record of a transaction or information on the status or value of an insurance product or service to the consumer or the consumer's insurance producer;
(D) accrue or recognize incentives or bonuses associated with the transaction that are provided by a licensee or other person;
(E) underwrite insurance at the consumer's request or for the following purposes in relation to a consumer's insurance:
(i) account administration;
(ii) reporting;
(iii) investigating or preventing fraud or material misrepresentation;
(iv) processing premium payments;
(v) processing insurance claims;
(vi) administering insurance benefits, including utilization review activities;
(vii) participating in research projects;
(viii) as required or specifically allowed by federal or state law; or
(3) made in connection with
(A) the authorization, settlement, billing, processing, clearing, transferring, reconciling, or collection of amounts charged, debited, or otherwise paid by using a debit, credit, or other payment card, check or account number, or other means of payment;
(B) the transfer of receivables, accounts, or interest in the receivables or accounts; or
(C) the audit of debit, credit, or other payment information.
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172
3 AAC 26.670 Other exceptions to notice and opt out requirements for disclosure of nonpublic personal financial information
A licensee is not subject to the requirements for initial notice in 3 AAC 26.610(a)(2), the opt out requirements in 3 AAC 26.625 and 3 AAC 26.645, or the requirements in 3 AAC 26.660 if the licensee discloses nonpublic personal financial information
(1) with the consent or at the direction of the consumer, unless the consumer has revoked the consent or directive;
(2) to protect the confidentiality or security of the licensee's records pertaining to the consumer, service, product, or transaction;
(3) to protect against or to prevent fraud or unauthorized transactions;
(4) for required institutional risk control;
(5) for resolving
(A) disputes with the consumer who is the subject of the nonpublic personal financial information; or
(B) inquiries to the licensee from the consumer who is the subject of the nonpublic personal financial information;
(6) to a person holding a legal or beneficial interest related to the consumer;
(7) to a person acting in a fiduciary or representative capacity on behalf of the consumer;
(8) to provide information to
(A) a rating or advisory organization regulated under AS 21.39, or to a similar insurance rate advisory organization in another state;
(B) a guaranty association regulated under AS 21.79 or AS 21.80, or to a similar guaranty fund or agency in another state;
(C) an agency that rates the licensee;
(D) a person assessing the licensee's compliance with industry standards; or
(E) the licensee's attorney, accountant, or auditor;
(9) to the extent specifically permitted or required under other provisions of law and in accordance with 12 U.S.C. 3401 - 3422 (Right to Financial Privacy Act of 1978),
(A) to law or regulatory enforcement agencies, including the following:
(i) the Federal Reserve Board;
(ii) the United States Department of the Treasury, Office of the Comptroller of the Currency;
(iii) the Federal Deposit Insurance Corporation;
(iv) the United States Department of the Treasury, Office of Thrift Supervision;
(v) the National Credit Union Administration;
(vi) the United States Securities and Exchange Commission;
(vii) the United States Secretary of the Treasury, with respect to 31 U.S.C. 5311 - 5332 (Records and Reports on Monetary Instruments and Transactions) and 12 U.S.C. 1951 - 1959 (Financial Recordkeeping);
(viii) a state insurance authority;
(ix) the Federal Trade Commission;
(B) to a self-regulatory organization; or
(C) for an investigation of a matter related to public safety;
(10) to a consumer-reporting agency in accordance with 15 U.S.C. 1681 - 1681x (Fair Credit Reporting Act);
(11) from a consumer report reported by a consumer-reporting agency under 15 U.S.C. 1681 - 1681x (Fair Credit Reporting Act) to a nonaffiliated third party;
(12) in connection with a proposed or actual sale, merger, transfer, or exchange of all or a portion of a business or operating unit, if the disclosure of nonpublic personal financial information concerns only consumers of the business or unit;
(13) to comply with federal, state, or local laws or other applicable legal requirements;
(14) to comply with a properly authorized civil, criminal, or regulatory investigation or a subpoena or summons issued by a federal, state, or local authority;
(15) to respond to judicial process or a government regulatory authority that has jurisdiction over a licensee for examination, compliance, investigation, or other purposes authorized by law; or
(16) for a purpose related to the replacement of a group benefit plan, group health plan, group welfare plan, or workers' compensation plan.
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172
3 AAC 26.675 Exceptions for surplus line brokers, surplus lines insurers, and employees, agents, or other representatives of a licensee
(a) A person licensed, registered, or authorized under AS 21 is not subject to the notice and opt out requirements in 3 AAC 26.610 - 3 AAC 26.670, if the
(1) person is an employee or other representative of another licensee;
(2) licensee for whom the person is acting as an employee or other representative complies with and provides the notices required in 3 AAC 26.610 - 3 AAC 26.670; and
(3) person does not disclose nonpublic personal financial information to anyone other than the licensee for whom the person is acting as an employee or other representative or that licensee's affiliate, except as allowed under 3 AAC 26.660 - 3 AAC 26.670.
(b) A surplus lines broker or surplus lines insurer is not subject to the notice and opt out requirements under 3 AAC 26.610 - 3 AAC 26.670 if the surplus lines broker or surplus lines insurer
(1) does not disclose nonpublic personal information of a consumer to a service provider or nonaffiliated third party for any purpose, including joint marketing services under 3 AAC 26.660, except as permitted under 3 AAC 26.665 or 3 AAC 26.670; and
(2) delivers to the consumer a notice
(A) at the time a customer relationship is established; and
(B) that states in 16-point type the following:
"PRIVACY NOTICE:
Neither the U.S. broker that handled this insurance nor the insurer that has underwritten this insurance will disclose nonpublic personal information concerning the buyer to a non-affiliated broker or insurer except as permitted by law."
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172
3 AAC 26.680 Disclosure of nonpublic personal health information
(a) Except as provided in (b) of this section or in 3 AAC 26.695(a), a licensee may not disclose nonpublic personal health information about a consumer unless authorization that complies with 3 AAC 26.685 is obtained from the consumer whose nonpublic personal health information the licensee seeks to disclose.
(b) A licensee may disclose a consumer's nonpublic personal health information without obtaining authorization from the consumer if the disclosure is
(1) required by federal or state law or regulation or is otherwise allowed by law;
(2) in response to an order issued by a governmental regulatory authority with jurisdiction over a licensee for examination, investigation, compliance, or other purposes authorized by law;
(3) compelled by a subpoena, search warrant, or other order issued by a court or administrative agency of competent jurisdiction;
(4) for detection, investigation, or reporting of fraud, misrepresentation, or another violation of law;
(5) for the performance of the following insurance functions by or on behalf of the licensee:
(A) claims administration;
(B) claims adjustment or management;
(C) underwriting;
(D) policy placement or issuance;
(E) loss control;
(F) rate development;
(G) guaranty fund functions;
(H) reinsurance, stop-loss insurance, or excess loss insurance;
(I) risk management;
(J) case management;
(K) disease management;
(L) quality assurance or improvement;
(M) performance evaluation;
(N) verification of provider credentials;
(O) utilization review;
(P) peer review activities;
(Q) actuarial, scientific, medical, or public policy research;
(R) grievance procedures;
(S) internal administration of compliance, managerial, and information systems;
(T) policyholder service functions;
(U) auditing;
(V) reporting;
(W) database security;
(X) administration of consumer disputes and inquiries;
(Y) external accreditation standards;
(Z) replacement of a group benefit plan or workers' compensation policy or program;
(AA) activities in connection with the sale, merger, transfer, or exchange of all or part of a business or operating unit;
(6) required to enforce the licensee's rights or the rights of other licensees engaged in carrying out an insurance transaction or providing an insurance product or service that a consumer or customer requests or authorizes; or
(7) allowed without requiring authorization under 45 C.F.R. Parts 160 and 164.
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172
3 AAC 26.685 Authorization to disclose nonpublic personal health information
(a) Authorization to disclose nonpublic personal health information under 3 AAC 26.680 must be in written or electronic form and must contain
(1) the identity of the consumer who is the subject of the nonpublic personal health information;
(2) a general description of the types of nonpublic personal health information that may be disclosed;
(3) a general description of the person to whom the licensee intends to disclose nonpublic personal health information, the purpose of the disclosure, and how the recipient of the information will use the information;
(4) the signature of the consumer who is the subject of the nonpublic personal health information or an individual who is legally empowered to grant authority for the consumer and the date signed; the consumer or individual who is legally empowered to grant authority for the consumer may agree to provide an electronic signature subject to AS 09.80;
(5) the length of time for which the authorization is valid; and
(6) a statement to the effect that the consumer may revoke the authorization at any time along with a clear and easy-to-follow description of how the consumer may revoke the authorization.
(b) The duration of an authorization under (a) of this section may be no more than 24 months.
(c) A consumer may revoke an authorization at any time but the revocation may not take effect before the date the licensee receives the revocation.
(d) A licensee shall retain the authorization or a copy of the authorization in the licensee's records of the consumer.
(e) A licensee is not required to deliver an authorization form to a consumer or to include an authorization form in any other notice unless the licensee intends to disclose nonpublic personal health information under 3 AAC 26.680.
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172; am 7/25/2008, Register 187
3 AAC 26.690 Access to and correction, amendment, or deletion of nonpublic personal information
(a) Except as provided in (h) of this section and 3 AAC 26.695(a), within 30 working days after the date a licensee or insurance support organization receives a written request from a consumer for recorded nonpublic personal information about the consumer that adequately describes the information requested, if the licensee or insurance support organization can reasonably locate and retrieve the information, the licensee or insurance support organization or an agent authorized to act on behalf of the licensee or insurance support organization shall
(1) provide to the consumer a description of the nature and substance of the requested information in writing or in electronic form, if the consumer agrees to receive that information electronically;
(2) as directed by the consumer,
(A) send the requested information, including the source of the information, to the consumer by mail or electronically; or
(B) allow the consumer to see and copy the requested information in person;
(3) provide to the consumer
(A) if the nonpublic personal information was recorded, a listing of the identities of each person to whom the licensee or insurance support organization has disclosed nonpublic personal information within the two years before the date of the consumer's request; or
(B) if the nonpublic personal information was received but not recorded, a listing of the names of the persons to whom the information is normally disclosed; and
(4) provide to the consumer a summary of the procedure the consumer may use to request correction, amendment, or deletion of recorded nonpublic personal information.
(b) Nonpublic personal information provided under (a) of this section must identify the source of the information if the source of the information is other than
(1) an agent of the licensee or insurance support organization;
(2) the individual who is the subject of the information; or
(3) an individual who is acting in a personal not business or professional capacity.
(c) A licensee or insurance support organization may charge a fee sufficient to cover the costs of providing a copy of the nonpublic personal information to the consumer under (a) of this section.
(d) Except as provided in (h) of this section and 3 AAC 26.695(a), within 30 working days after the date a licensee or insurance support organization receives a written request from a consumer to correct, amend, or delete any recorded nonpublic personal information about the consumer that is in the possession of the licensee or insurance support organization, the licensee or insurance support organization shall
(1) correct, amend, or delete the portion of the information as requested; or
(2) notify the consumer
(A) that the licensee or insurance support organization refuses to make the requested correction, amendment, or deletion;
(B) why the licensee or insurance support organization refuses to make the requested correction, amendment, or deletion; and
(C) of the consumer's right to file a statement as provided under (f) of this section.
(e) If a licensee or insurance support organization corrects, amends, or deletes recorded nonpublic personal information under (d) of this section, the licensee or insurance support organization shall provide written or electronic notification that includes the correction, amendment, or deletion to
(1) a person specifically designated by the consumer who may have received the recorded nonpublic personal information within the two years before the date the licensee or insurance support organization made the correction, amendment, or deletion;
(2) an insurance support organization whose primary source of nonpublic personal information is the licensee
(A) if the insurance support organization systematically received recorded nonpublic personal information from the licensee within seven years before the date the licensee made the correction, amendment, or deletion; and
(B) except if the insurance support organization no longer maintains recorded nonpublic personal information about the consumer; and
(3) an insurance support organization that provided to the licensee the nonpublic personal information that the licensee corrected, amended, or deleted.
(f) If a consumer disagrees with a licensee or insurance support organization's refusal to correct, amend, or delete recorded nonpublic personal information, the consumer may submit to the licensee or insurance support organization one or both of the following statements:
(1) a statement listing the information the consumer believes is the correct, relevant, or fair information;
(2) a statement of the reasons why the consumer disagrees with the licensee's or insurance support organization's refusal to correct, amend, or delete recorded nonpublic personal information.
(g) If a consumer submits a statement under (f) of this section, the licensee or insurance support organization shall
(1) file the statement with the disputed nonpublic personal information and ensure that anyone who reviews the disputed nonpublic personal information is aware of and has access to the statement;
(2) when disclosing disputed nonpublic personal information to a person, clearly identify the information in dispute and provide the consumer's statement to the person; and
(3) provide the consumer's statement to the persons listed and in the manner specified in (e) of this section.
(h) A licensee or insurance support organization is not required to comply with this section with respect to any information about a consumer that relates to and is collected in connection with, or in reasonable anticipation of, a claim or a civil or criminal proceeding involving the consumer.
(i) In this section, "insurance support organization" means a person who regularly engages in the practice of assembling or collecting information about an individual to provide the information to a licensee for purposes of transacting insurance including
(1) providing to a licensee consumer reports or investigative consumer reports within the meaning given in 15 U.S.C. 1681a(d) - (e); and
(2) collecting information from a licensee or another insurance support organization to detect or prevent fraud, material misrepresentation, or material nondisclosure.
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172
3 AAC 26.695 Relationship to federal privacy laws
(a) If a licensee complies with all the requirements of 45 C.F.R. Parts 160 and 164 even though the licensee is not required to comply, the licensee is not required to comply with 3 AAC 26.680, 3 AAC 26.685, and 3 AAC 26.690 with respect to health information.
(b) Nothing in 3 AAC 26.605 - 3 AAC 26.749 modifies, limits, or supersedes 15 U.S.C. 1681 - 1681x (Fair Credit Reporting Act) or creates an inference regarding whether information is transaction or experience information under 15 U.S.C. 1681 - 1681x.
(c) Nothing in 3 AAC 26.605 - 3 AAC 26.749 modifies, limits, or supersedes 15 U.S.C. 6801 - 6809 (Gramm-Leach-Bliley Act).
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172; am 12/20/2020, Register 236
3 AAC 26.700 Nondiscrimination
(a) A licensee may not unfairly discriminate against a consumer because the consumer opts out of disclosure of nonpublic personal financial information under 3 AAC 26.645.
(b) A licensee may not unfairly discriminate against a consumer because the consumer has not authorized the disclosure of nonpublic personal health information under 3 AAC 26.680.
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172
3 AAC 26.705 Customer information security program
A licensee shall develop and implement a comprehensive written customer information security program that
(1) includes administrative, technical, and physical safeguards for the protection of customer information;
(2) is appropriate for the size and complexity of the licensee and the nature and scope of the licensee's activities; and
(3) is designed to
(A) ensure the security and confidentiality of customer information;
(B) protect against any anticipated threats or hazards to the security or integrity of the customer information; and
(C) protect against unauthorized access to or use of customer information that could result in substantial harm or inconvenience to a customer.
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172
3 AAC 26.715 Consumers
(a) For purposes of 3 AAC 26.605 - 3 AAC 26.749, an individual is a consumer if
(1) the individual seeks to obtain, obtains, has obtained, or is a claimant or beneficiary of an insurance product or service that provides coverage primarily for personal, family, or household purposes, including employee job-related injury and disease; and
(2) a licensee has nonpublic personal information about the individual.
(b) For purposes of (a) of this section, a consumer includes
(1) a legal representative of the individual;
(2) an individual who provides nonpublic personal information to the licensee in connection with obtaining or seeking to obtain financial, investment, or economic advisory services relating to an insurance product or service, regardless of whether the licensee establishes an ongoing advisory relationship;
(3) an applicant for insurance before the effective date of insurance coverage; and
(4) an individual
(A) about whom the licensee discloses nonpublic personal financial information to a nonaffiliated third party or nonpublic personal health information other than as allowed under 3 AAC 26.660 - 3 AAC 26.670 and 3 AAC 26.680; and
(B) who is
(i) a beneficiary of a life insurance policy underwritten by the licensee;
(ii) a claimant under an insurance policy issued by the licensee;
(iii) an insured under an insurance policy issued by the licensee;
(iv) an annuitant under an annuity contract issued by the licensee; or
(v) a mortgagor of a mortgage covered under a mortgage insurance policy.
(c) For purposes of (a) of this section, a consumer does not include an individual
(1) who is a consumer of another financial institution for which the licensee
(A) acts solely as an agent of the financial institution; or
(B) provides only processing or other services to the financial institution;
(2) whose sole relationship with the licensee is that of a beneficiary of a trust for which the licensee is a trustee; or
(3) whose sole relationship with the licensee is due to the individual designating the licensee as a trustee for a trust.
(d) If a licensee provides the notices required under 3 AAC 26.610, 3 AAC 26.615, and 3 AAC 26.630 to a plan sponsor, group or blanket insurance policyholder, group annuity contract holder, or workers' compensation policyholder, and the licensee does not disclose nonpublic personal information about an individual described in this subsection to a nonaffiliated third party except as allowed under 3 AAC 26.660 - 3 AAC 26.670, the individual is not a consumer for purposes of (a) of this section or a customer solely because the individual is
(1) a participant or beneficiary of an employee benefit plan that the licensee administers or sponsors or for which the licensee acts as a trustee, insurer, or fiduciary;
(2) covered under a group or blanket insurance policy or group annuity contract issued by the licensee; or
(3) a claimant under a workers' compensation plan.
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172
3 AAC 26.749 Definitions
In 3 AAC 26.605 - 3 AAC 26.749, unless the context requires otherwise,
(1) "affiliate" means a company that controls, is controlled by, or is under common control with another company;
(2) "affinity program" means a relationship between a financial institution and an unaffiliated third party in which the unaffiliated third party
(A) facilitates the financial institution's efforts to market the financial institution's products or services to the unaffiliated third party's customers or members; or
(B) endorses the financial institution's products or services;
(3) "clear and conspicuous" means reasonably understandable and designed to call attention to the nature and significance of the information;
(4) "collect" means to obtain information that is organized or can be retrieved by the name of a consumer or by a number, symbol, or other identifier assigned to the consumer;
(5) "company" means a corporation, limited liability company, business trust, general or limited partnership, association, sole proprietorship, or other similar organization;
(6) "consumer-reporting agency" has the meaning given in 15 U.S.C. 1681a(f) (Fair Credit Reporting Act);
(7) "control" means the
(A) ownership of, authority over, or power to vote at least 25 percent of the outstanding shares of any class of voting security of a company;
(B) authority in any manner over the election of a majority of the board of directors, trustees, general partners, or other individuals exercising similar functions of the company; or
(C) authority or power to influence the management or policies of a company as determined by the director;
(8) "customer" means a consumer who has a customer relationship with a licensee; "customer" does not include an individual described under 3 AAC 26.715(d);
(9) "customer information systems" means the electronic or physical methods used to access, collect, store, use, transmit, protect, or dispose of customer information;
(10) "customer relationship" means a continuing relationship between a consumer and a licensee under which the licensee provides one or more insurance products or services to the consumer;
(11) "financial institution" means a business that engages in an activity that is financial in nature or an activity incidental to a financial activity under 12 U.S.C. 1843(k) (Bank Holding Company Act of 1956); "financial institution" does not include
(A) with respect to a financial activity, a person that is subject to the Commodity Futures Trading Commission under 7 U.S.C. 1 - 27f (Commodity Exchange Act);
(B) the Federal Agricultural Mortgage Corporation or any person charged and operating under 12 U.S.C. 2001 - 2279cc (Farm Credit Act); or
(C) a business chartered by the United States Congress specifically to engage in securitization of assets, secondary market sales, sales of servicing rights, or similar transactions related to a transaction of a consumer, when the business does not sell or transfer nonpublic personal information to a nonaffiliated third party;
(12) "financial product or service" means a product or service that a financial holding company could offer by engaging in an activity that is financial in nature or an activity incidental to a financial activity under 12 U.S.C. 1843(k) (Bank Holding Company Act of 1956); "financial product or service" includes evaluation or brokerage of information that a financial institution collects in connection with a request or an application from a consumer for a financial product or service;
(13) "health care" means
(A) preventive, diagnostic, therapeutic, rehabilitative, maintenance, or palliative care, services, procedures, tests, or counseling that
(i) relates to the physical, mental, or behavioral condition of an individual; or
(ii) affects the structure or function of the human body or any part of the human body, including the banking of blood, sperm, organ, or any other bodily tissue; or
(B) prescribing, dispensing, or furnishing to an individual drugs, biologicals, medical devices, or health care equipment or supplies;
(14) "health care provider" means
(A) an individual licensed, accredited, or certified in any state to provide health care services; and
(B) a health care facility that is or is not licensed, accredited, or certified to provide health care services;
(15) "health information"
(A) means oral or recorded information or data that is created by or derived from a health care provider or consumer, and that relates to
(i) the past, present, or future physical, mental, or behavioral health or condition of an individual;
(ii) the provision of health care to an individual; or
(iii) payment for the provision of health care to an individual; and
(B) does not include an individual's age or gender;
(16) "licensee" means a person licensed or required to be licensed, authorized or required to be authorized, or registered or required to be registered under AS 21; "licensee" includes a surplus lines insurer or surplus lines broker;
(17) "nonaffiliated third party" means a
(A) person that is not
(i) an affiliate of a licensee; or
(ii) employed jointly by a licensee and a company that is not an affiliate of a licensee; or
(B) company that is an affiliate of the company because of the direct or indirect ownership or control of the company by the licensee or its affiliate in conducting merchant banking or investment banking activities described in 12 U.S.C. 1843(k)(4)(H) (Bank Holding Company Act) or insurance company investment activities described in 12 U.S.C. 1843(k)(4)(I) (Bank Holding Company Act);
(18) "nonpublic personal information" means nonpublic personal financial information and nonpublic personal health information;
(19) "nonpublic personal financial information"
(A) means
(i) personally identifiable financial information; or
(ii) a list, description, or other grouping of consumers and publicly available information pertaining to the consumers that is derived using personally identifiable financial information that is not publicly available; and
(B) does not include
(i) health information;
(ii) publicly available information, unless included in a list described in (A)(ii) of this paragraph; or
(iii) a list, description, or other grouping of consumers and publicly available information pertaining to the consumers that is derived without using personally identifiable financial information that is not publicly available;
(20) "nonpublic personal health information" means health information
(A) that identifies an individual who is the subject of the information; or
(B) in which a reasonable basis exists to believe that the information could be used to identify an individual;
(21) "opt out" means to direct a licensee not to disclose nonpublic personal financial information about a consumer to a nonaffiliated third party, except as allowed under 3 AAC 26.660 - 3 AAC 26.670;
(22) "personally identifiable financial information" means information a consumer provides to a licensee to obtain an insurance product or service from the licensee, information about a consumer resulting from a transaction between a licensee and a consumer involving an insurance product or service, or information a licensee obtains about a consumer in connection with providing an insurance product or service to the consumer;
(23) "publicly available information" means information that a licensee has a reasonable basis to believe is lawfully made available to the general public from
(A) federal, state, or local government records, including information from government real estate and security interest filings;
(B) widely distributed media, including information from a telephone book, a television or radio program, or a newspaper that is available to the general public on an unrestricted basis or from a web site that is available to the general public regardless of whether a fee or password is required to access the web site; or
(C) disclosures to the general public that are required to be made by federal, state, or local law;
(24) "service provider" means a person that maintains, processes, or otherwise is allowed access to customer information due to the service the person furnishes directly to a licensee;
(25) "working day" means a calendar day other than Saturday, Sunday, an official federal holiday, or an official holiday in this state.
History
- Authority: AS 21.06.090; AS 21.36.510
- Eff. 1/1/2005, Register 172
Article 6 Annuity Contract Disclosures
3 AAC 26.750 Applicability
(a) The provisions of 3 AAC 26.750 - 3 AAC 26.769 apply to a group or individual annuity contract except
(1) a registered or non-registered variable annuity contract or other registered product; in this paragraph, "registered" means subject to the registration and prospectus delivery requirements under 15 U.S.C. 77e (sec. 5 of the Securities Act of 1933);
(2) an immediate or deferred annuity that does not contain a non-guaranteed element;
(3) an annuity that is not subject to (b) of this section and is used to fund
(A) an employee pension plan covered under 29 U.S .C. 1001 - 1461 (Employee Retirement Income Security Act of 1974);
(B) a plan described in 26 U.S.C. 401(a) or (k) or 26 U.S.C. 403(b) (Internal Revenue Code), if the plan, for purposes of 29 U.S.C. 1001 - 1461, is established or maintained by an employer;
(C) a governmental or church plan defined in 26 U.S.C. 414 (Internal Revenue Code);
(D) a deferred compensation plan of a state or local government or tax-exempt organization under 26 U.S.C. 457 (Internal Revenue Code); or
(E) a nonqualified deferred compensation arrangement under 26 U.S.C. 409A (Internal Revenue Code) established or maintained by an employer or plan sponsor;
(4) a settlement of or assumption of liabilities associated with personal injury litigation or any dispute or claim resolution process;
(5) a qualified charitable gift annuity as defined in AS 21.03.070(h); or
(6) an insurance contract that provides guaranteed principal repayment and interest payments for a predetermined period of time.
(b) Notwithstanding (a)(3) of this section, the provisions of 3 AAC 26.750 - 3 AAC 26.769 apply to an annuity used to fund a plan or arrangement
(1) that is funded solely by contributions an employee elects to make on a before-tax or after-tax basis;
(2) for which the insurer has received notification that plan participants may choose from among two or more insurers' annuity contracts; and
(3) for which an insurance producer directly solicits employees to purchase the annuity contract; for purposes of this paragraph, a meeting held by an insurance producer solely for the purpose of educating or enrolling employees in the plan or arrangement is not considered a direct solicitation
History
- Authority: AS 21.06.090; AS 21.06.030; AS 21.06.050 AS 21.36.020; AS 21.36.040; AS 21.36.900
- Eff. 7/25/2008, Register 187
3 AAC 26.755 Disclosure document and buyer's guide
(a) If an application for an annuity contract is taken in a face-to-face meeting, the insurer or licensee shall at or before the time of application give the applicant a copy of
(1) the disclosure document described in (g) of this section; and
(2) the buyer's guide.
(b) Except as provided in (c) and (d) of this section, if an application for an annuity contract is taken by a means other than in a face-to-face meeting, the insurer or licensee, no later than five working days after receiving the completed application, shall send the applicant copies of the documents described in (a)(1) - (2) of this section.
(c) An insurer or licensee that receives an annuity application as a result of direct solicitation through the mail has complied with the requirements in (b) of this section if the insurer or licensee provided a copy of the documents described in (a)(1) - (2) of this section in the mailing that invited the prospective applicant to apply for an annuity contract.
(d) If an insurer or licensee receives an annuity application by means of the Internet, the insurer or licensee may comply with the requirements in (b) of this section by making the documents described in (a)(1) - (2) of this section available for viewing and printing on the insurer's or licensee's website.
(e) A solicitation other than a face-to-face solicitation for an annuity contract must include a statement that an applicant may contact the division or the insurer or licensee for a free buyer's guide.
(f) If the documents described in (a)(1) - (2) of this section are not provided as required under (a) - (d) of this section, the insurer or licensee must include in the annuity contract the right for the applicant to return the annuity contract without penalty within 15 days of the applicant's receipt of the annuity contract.
(g) The disclosure document referenced in this section must include at a minimum the following information:
(1) a statement that the contract is an annuity, including
(A) the form number of the annuity contract;
(B) the generic name of the contract; and
(C) the company product name, if different from the generic name;
(2) the insurer's or licensee's name and address;
(3) a description of the contract and the benefits provided by the contract that emphasizes the long-term nature of the contract including examples of the following, if appropriate:
(A) guaranteed, non-guaranteed, and determinable elements of the contract, and their limitations, if any, and an explanation of how each of the elements operates, including the impact on the benefits of the contract;
(B) the initial crediting rate specifying any bonus, the durations of the initial crediting rate and any bonus, and a statement that the rates may change and are not guaranteed;
(C) periodic income options both on a guaranteed and non-guaranteed basis, including a description of
(i) how the amount available to purchase income options is determined; and
(ii) generally when the income options will be available;
(D) the cash value, including partial withdrawals, available before, on, and after the maturity date of the contract and how the cash value will be calculated, including a description of any value reduction;
(E) the death benefit, if available, and how it is calculated;
(F) how to access the values in the contract, including cash value, income options, partial withdrawals, and death benefits;
(G) a federal tax status summary and any potential penalties applicable upon withdrawal of values from the contract;
(H) the impact on any annuity values of a benefit rider;
(4) the specific dollar amount or percentage of charges and fees with an explanation of how the charges and fees apply to the contract;
(5) information about the current guaranteed interest rate for new contracts with a clear statement that the rate is subject to change.
(h) An insurer or licensee shall define the terms used in the disclosure statement described in (g) of this section in language that facilitates understanding by a typical person within the segment of the public to which the annuity contract is marketed or sold.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.36.050 AS 21.36.020; AS 21.36.040; AS 21.36.900
- Eff. 7/25/2008, Register 187; am 8/20/2016, Register 219
3 AAC 26.760 Report to contract owners
For an annuity in a payout period with changes in non-guaranteed elements and for the entire accumulation period of a deferred annuity the insurer shall provide each contract owner a report at least annually that contains the status of the contract including at a minimum the following:
(1) the beginning and ending dates of the current report period;
(2) the accumulation and cash surrender value, if any, at the end of
(A) the previous report period; and
(B) the current report period;
(3) during the current report period, the total amounts, if any,
(A) credited to the contract value;
(B) charged to the contract value; or
(C) paid;
(4) the amount of outstanding loans, if any, as of the end of the current report period.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.36.050 AS 21.36.020; AS 21.36.040; AS 21.36.900
- Eff. 7/25/2008, Register 187
3 AAC 26.769 Definitions
In 3 AAC 26.750 - 3 AAC 26.769, unless the context requires otherwise,
(1) "buyer's guide" means the National Association of Insurance Commissioners' Buyer's Guide for Deferred Annuities Fixed, dated 2013 and adopted by reference;
(2) "contract owner" means the owner named in the annuity contract or, in the case of a group annuity, the contract certificate holder;
(3) "determinable elements" means values or amounts derived from processes or methods that are guaranteed at issue, that are not subject to company discretion, and that may not be determined until some time after issue; "determinable elements" includes
(A) premiums, credited interest rates, bonuses, benefits values, non-interest based credits, charges, or elements of formulas used to determine any of these; and
(B) a value or amount calculated from
(i) underlying determinable elements only; or
(ii) both determinable and guaranteed elements;
(4) repealed 8/20/2016;
(5) "generic name" means a short title descriptive of the annuity contract;
(6) "guaranteed elements" means the premiums, credited interest rates, bonuses, benefits, values, non-interest based credits, charges, or elements of formulas used to determine any of these, that are guaranteed and determined at issue; "guaranteed elements" includes a value or amount calculated from only guaranteed elements;
(7) "insurance producer" has the meaning given in AS 21.27.900;
(8) "non-guaranteed elements" means the premiums, credited interest rates, bonuses, benefits, values, non-interest based credits, charges, or elements of formulas used to determine any of these, that are subject to discretion by the insurer and are not guaranteed at issue; "non-guaranteed elements" includes a value or amount calculated from at least one non-guaranteed element;
(9) "working day" means a calendar day other than Saturday, Sunday, an official federal holiday, or an official holiday in this state.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.36.050 AS 21.36.020; AS 21.36.040; AS 21.36.900
- Eff. 7/25/2008, Register 187; am 8/20/2016, Register 219
Article 7 Suitability in Annuity Contract Transactions
3 AAC 26.770 Applicability
(a) Except as provided in (b) of this section, 3 AAC 26.770 - 3 AAC 26.789 apply to any sale or recommendation of an annuity.
(b) Unless a provision of 3 AAC 26.770 - 3 AAC 26.789 specifically includes that recommendation, 3 AAC 26.770 - 3 AAC 26.789 do not apply to a transaction involving a
(1) direct-response solicitation if the recommendation is not based on information collected from the consumer under 3 AAC 26.770 - 3 AAC 26.789; or
(2) contract used to fund
(A) an employee pension or welfare benefit plan that is covered under 29 U.S.C. 1001 - 1461 (Employee Retirement Income Security Act of 1974);
(B) a plan described in 26 U.S.C. 401(a) or (k), 26 U.S.C. 403(b), or 26 U.S.C. 408(k) or (p) (Internal Revenue Code) if the plan is established or maintained by an employer;
(C) a governmental or church plan defined in 26 U.S.C. 414 (Internal Revenue Code), including a governmental or church welfare benefit plan;
(D) a deferred compensation plan of a state or local government or tax-exempt organization under 26 U.S.C. 457 (Internal Revenue Code);
(E) a nonqualified deferred compensation arrangement under 26 U.S.C. 409A (Internal Revenue Code) established or maintained by an employer or plan sponsor;
(F) a settlement of or assumption of liabilities associated with personal injury litigation or other dispute or claim resolution process; or
(G) a formal prepaid funeral contract.
(c) Nothing in 3 AAC 26.770 - 3 AAC 26.789 means that an officer, director, or employee of an insurer that transacts insurance, including making a recommendation to a consumer regarding the suitability of an annuity contract, does not need to be licensed under AS 21.27.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.36.050 AS 21.36.020; AS 21.36.040; AS 21.36.900
- Eff. 7/25/2008, Register 187; am 10/16/2011, Register 200; am 11/23/2022, Register 244
3 AAC 26.775 Duties of a producer and an insurer
(a) When making a recommendation of an annuity, a producer shall act in the best interest of the consumer under the circumstances known at the time the recommendation is made, without placing the producer's or the insurer's financial interest ahead of the consumer's interest. A producer has acted in the best interest of the consumer if the producer has satisfied the following obligations regarding care, disclosure, conflict of interest, and documentation:
(1) the producer, in making a recommendation,
(A) shall exercise reasonable diligence, care, and skill to
(i) know the consumer's financial situation, insurance needs, and financial objectives;
(ii) understand the available recommendation options after making a reasonable inquiry into options available to the producer;
(iii) have a reasonable basis to believe the recommended option effectively addresses the consumer's financial situation, insurance needs, and financial objectives over the life of the product, as evaluated in light of the consumer profile information;
(iv) communicate the basis or bases of the recommendation; and
(v) make reasonable efforts to obtain consumer profile information from the consumer before the recommendation of an annuity;
(B) complies with the requirements of (A) of this paragraph as follows:
(i) the producer shall consider the types of product that the producer is authorized to recommend or sell that address the consumer's financial situation, insurance needs, and financial objectives; the producer is not required to analyze or consider any products outside the authority and license of the producer or other possible alternative products or strategies available in the market at the time of the recommendation; a producer shall be held to the standards applicable to producers with similar authority and licensure;
(ii) the requirements of (A) of this paragraph do not create a fiduciary obligation or relationship and only create a regulatory obligation as established in 3 AAC 26.770 - 3 AAC 26.789;
(iii) the consumer profile information, characteristics of the insurer, and product costs, rates, benefits, and features are those factors generally relevant in making a determination whether an annuity effectively addresses the consumer's financial situation, insurance needs, and financial objectives, but the level of importance of each factor under the care obligation required under (A) of this paragraph may vary depending on the facts and circumstances of a particular case; however, each factor may not be considered in isolation;
(iv) the requirements under (A) of this paragraph include having a reasonable basis to believe that the consumer would benefit from certain features of the annuity, such as annuitization, death or living benefit, or other insurance-related features;
(v) the requirements under (A) of this paragraph apply to the particular annuity as a whole and the underlying subaccounts to which funds are allocated at the time of purchase or exchange of an annuity, and riders and similar product enhancements, if any;
(vi) the requirements under (A) of this paragraph do not mean that the annuity with the lowest one-time or multiple occurrence compensation structure shall necessarily be recommended;
(vii) the requirements under (A) of this paragraph do not mean that the producer has ongoing monitoring obligations under the care obligation under (A) of this paragraph, although those obligations may be separately owed under the terms of a fiduciary, consulting, investment advising, or financial planning agreement between the consumer and the producer;
(viii) in the case of an exchange or replacement of an annuity, the producer shall consider the whole transaction; the requirements of this sub-subparagraph include taking into consideration whether the consumer will incur a surrender charge, be subject to the commencement of a new surrender period, lose existing benefits, such as death, living, or other contractual benefits, or be subjected to increased fees, investment advisory fees, or charges for riders and similar product enhancements, whether the replacing product would substantially benefit the consumer in comparison to the replaced product over the life of the product, and whether the consumer has had another annuity exchange or replacement and, in particular, an exchange or replacement within the preceding 60 months;
(ix) nothing in 3 AAC 26.770 - 3 AAC 26.789 requires a producer to obtain any license other than a producer license with the appropriate line of authority to sell, solicit, or negotiate insurance in this state, including any securities license, in order to fulfill those obligations contained in this section, if the producer does not give advice or provide services that are otherwise subject to securities laws or engage in any other activity requiring other professional licenses;
(2) before the recommendation or sale of an annuity,
(A) the producer shall furnish the required information on Form 1, made part of this section in substantially the following form:
FORM 1
INSURANCE AGENT (PRODUCER) DISCLOSURE FOR ANNUITIES
Do Not Sign Unless You Have Read and Understand the Information in this Form
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.36.050 AS 21.36.020; AS 21.36.040; AS 21.36.900
- Eff. 7/25/2008, Register 187; am 10/16/2011, Register 200; am 11/23/2022, Register 244
3 AAC 26.778 Producer annuity training requirement
(a) A producer may not solicit the sale of an annuity product unless the producer has adequate knowledge of the product to recommend the annuity and the producer is in compliance with the insurer's standards for product training. A producer may rely on insurer-provided product-specific training standards and materials to comply with this subsection.
(b) A producer who engages in the sale of an annuity product shall complete a one-time minimum four credit-hour annuity training course approved by the director and provided in accordance with AS 21.27.020 and 3 AAC 23.100 - 3 AAC 23.208 covering the course material listed in (c) of this section.
(c) The annuity training required under (b) of this section must include at a minimum the following topics:
(1) the types of and various classifications of annuities;
(2) identification of the parties to an annuity;
(3) how specific annuity contract provisions affect the consumer;
(4) the application of income taxation of qualified and non-qualified annuities;
(5) the primary uses of an annuity; and
(6) the appropriate standard of conduct, sales practices, replacement, and disclosure requirements that are consistent with 3 AAC 26.750 - 3 AAC 26.825.
(d) The annuity training required under (b) of this section may not include the following topics:
(1) marketing information;
(2) sales techniques;
(3) specific information about a particular insurer's products.
(e) The annuity training required under (b) of this section must comply with the applicable requirements under AS 21.27.020 and 3 AAC 23.100 - 3 AAC 23.208 and include a certificate of completion to a producer who successfully completes the annuity training.
(f) The annuity training required under (b) of this section may be conducted and completed by classroom or self-study that meets the applicable requirements under AS 21.27.020 and 3 AAC 23.100 - 3 AAC 23.208.
(g) A producer meets the training requirements in (b) of this section, if the insurance producer has satisfied substantially similar training requirements of another state.
(h) The annuity training required under (b) of this section may be used to fulfill the credit hour requirements under AS 21.27.020 and 3 AAC 23.100 - 3 AAC 23.208.
(i) An insurer shall verify that a producer has completed the annuity training required under this section before allowing the producer to sell an annuity product for the insurer.
(j) A producer who has completed an annuity training course, that the director approved before January 15, 2023, shall complete before July 15, 2023 either
(1) a new four credit-hour training course approved by the director after July 15, 2022; or
(2) an additional one-time one credit-hour training course approved by the director and provided in accordance with AS 21.27.020 and 3 AAC 23.100 - 3 AAC 32.208 on appropriate sales practices, replacement, and disclosure requirements under 3 AAC 26.770 - 3 AAC 26.789, as those provisions are set out on November 23, 2022.
(k) The satisfaction of the components of the training requirements of any course or courses with components substantially similar to the provisions of this section also satisfies the training requirements of this section in this state.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.36.050 AS 21.36.020; AS 21.36.040; AS 21.36.900
- Eff. 10/16/2011, Register 200; am 1/1/2014, Register 208; am 11/23/2022, Register 244
3 AAC 26.780 Records
(a) A producer or insurer shall comply with the requirements of AS 21.27.320 and AS 21.27.350 with respect to all information collected from a consumer and other information used in making a recommendation that was the basis for an annuity contact transaction.
(b) An insurer, general agent, independent agency, or producer shall maintain or be able to make available to the director records of the information collected from the consumer, disclosures made to the consumer, including summaries of oral disclosures, and other information used in making the recommendations that were the basis for transactions after the transactions were completed by the insurer consistent with AS 21.27.350. An insurer is permitted, but is not required, to maintain documentation on behalf of a producer.
History
- Authority: AS 21.06.090; AS 21.36.020; AS 21.36.050 AS 21.09.320; AS 21.36.030; AS 21.36.900 AS 21.27.350; AS 21.36.040
- Eff. 7/25/2008, Register 187; am 10/16/2011, Register 200; am 11/23/2022, Register 244
3 AAC 26.785 Compliance mitigation; penalties; enforcement
(a) An insurer is responsible for compliance with 3 AAC 26.770 - 3 AAC 26.789. If a violation occurs, either because of the action or inaction of the insurer or its producer, the director may order
(1) an insurer to take reasonably appropriate corrective action for any consumer harmed by a failure to comply with 3 AAC 26.770 - 3 AAC 26.789 by the insurer, by an entity contracted to perform the insurer's supervisory duties, or by the producer;
(2) a general agency, independent agency, or the producer to take reasonably appropriate corrective action for any consumer harmed by the producer's violation of 3 AAC 26.770 - 3 AAC 26.789;
(3) appropriate penalties and sanctions.
(b) Any applicable penalty under AS 21.36.910 may be reduced or eliminated by the director if corrective action for the consumer was taken promptly after a violation was discovered or the violation was not part of a pattern or practice.
(c) The authority to enforce compliance with of 3 AAC 26.770 - 3 AAC 26.789 is vested exclusively with the director.
History
- Authority: AS 21.06.090; AS 21.36.040; AS 21.36.910 AS 21.36.020; AS 21.36.050 AS 21.36.030; AS 21.36.900
- Eff. 11/23/2022, Register 244
3 AAC 26.786 Private cause of action
(a) Nothing in 3 AAC 26.770 - AAC 26.789 creates or implies a private cause of action for a violation of 3 AAC 26.770 - AAC 26.789 or subjects a producer to civil liability under the best interest standard of care set out in 3 AAC 26.775 or under standards governing the conduct of a fiduciary or a fiduciary relationship.
History
- Authority: AS 21.03.060; AS 21.36.030; AS 21.36.900 AS 21.06.090; AS 21.36.040 AS 21.36.020; AS 21.36.050
- Eff. 11/23/2022, Register 244
3 AAC 26.789 Definitions
In 3 AAC 27.770 - 3 AAC 26.789,
(1) "annuity" has the meaning given in AS 21.12.055 with respect to an insurance product that is individually solicited, whether the product is classified as an individual or group annuity;
(2) "cash compensation" means any discount, concession, fee, service fee, commission, sales charge, loan, override, or cash benefit received by a producer in connection with the recommendation or sale of an annuity from an insurer, intermediary, or directly from the consumer;
(3) "consumer profile information" means information that is reasonably appropriate to determine whether a recommendation addresses the consumer's financial situation, insurance needs, and financial objectives, including at a minimum the following:
(A) age;
(B) annual income;
(C) financial situation and needs, including debts and other obligations;
(D) financial experience;
(E) financial objectives;
(F) intended use of the annuity;
(G) financial time horizon;
(H) existing assets or financial products, including investment, annuity, and insurance holdings;
(I) liquidity needs;
(J) liquid net worth;
(K) risk tolerance, including willingness to accept non-guaranteed elements in the annuity;
(L) tax status;
(M) financial resources used to fund the annuity; and
(N) insurance needs;
(4) "continuing education credit hour" has the meaning given in 3 AAC 23.208;
(5) "direct-response solicitation" means a solicitation solely through mail, telephone, the Internet, or other mass communication media;
(6) "FINRA" means the Financial Industry Regulatory Authority or a succeeding agency;
(7) "insurer" means a company required to be licensed under AS 21.12.055 to provide insurance products, including annuities;
(8) "intermediary" means an entity contracted with an insurer or with another entity contracted with an insurer to facilitate the sale of the insurer's annuities by producers;
(9) "material conflict of interest" means
(A) a financial interest of the producer in the sale of an annuity that a reasonable person would expect to influence the impartiality of a recommendation;
(B) does not include cash compensation or non-cash compensation;
(10) "non-cash compensation" means any form of compensation that is not cash compensation, including health insurance, office rent, office support, and retirement benefits.
(11) "non-guaranteed elements" means the premiums, credited interest rates including any bonus, benefits, values, dividends, non-interest-based credits, charges, or elements of formulas used to determine any of these, that are subject to company discretion and are not guaranteed at issue; for purposes of this paragraph an element is considered non-guaranteed if any of the underlying non-guaranteed elements are used in its calculation;
(12) "producer" has the meaning given to "insurance producer" in AS 21.27.990, including for purposes of 3 AAC 26.770 - 3 AAC 26.789 an insurer where no producer is involved;
(13) "recommendation" means
(A) advice provided by a producer to an individual consumer that was intended to result or does result in a purchase, exchange, or replacement of an annuity in accordance with that advice;
(B) does not include general communication to the public, generalized customer services assistance, or administrative support, general educational information and tools, prospectuses, or other product and sales material;
(14) "replacement" means a transaction in which a new annuity is to be purchased, and it is known or should be known to the proposing producer, or to the proposing insurer, regardless of whether a producer is involved, that by reason of the transaction, an existing annuity or other insurance policy has been or is to be any of the following:
(A) lapsed, forfeited, surrendered, or partially surrendered, assigned to the replacing insurer, or otherwise terminated;
(B) converted to reduced paid up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other policy values;
(C) amended so as to effect either a reduction in
(i) benefits; or
(ii) the term for which coverage would otherwise remain in force or for which benefits would be paid;
(D) reissued with any reduction in cash value; or
(E) used in a financed purchase;
(15) "SEC" means the United States Securities and Exchange Commission.
History
- Authority: AS 21.06.090; AS 21.27.990; AS 21.36.030 AS 21.27.350; AS 21.36.020; AS 21.36.040
- Eff. 7/25/2008, Register 187; am 10/16/2011, Register 200; am 1/1/2014, Register 208; am 11/23/2022, Register 244
Article 8 Life Insurance Policy and Annuity Contract Replacements
3 AAC 26.790 Applicability
(a) The provisions of 3 AAC 26.790 - 3 AAC 26.819 apply to all life insurance policies and annuity contract transactions except for the following, unless a provision of 3 AAC 26.790 - 3 AAC 26.819 specifically includes the otherwise exempted transaction:
(1) credit life insurance;
(2) a group life insurance policy or group annuity contract transaction in which the direct solicitation of individuals by an insurance producer does not take place; for purposes of this paragraph, the following group meetings held by an insurance producer are not considered direct solicitations of individuals:
(A) a group meeting held solely for the purpose of educating or enrolling individuals;
(B) a group meeting that an individual member of the group requests for assistance with the selection of investment options offered by a single insurer in connection with enrolling the individual;
(3) a group life insurance policy or group annuity contract used to fund prepaid funeral contracts;
(4) an application to the insurer that issued the existing life insurance policy or annuity contract to exercise a contractual change, a conversion privilege, or a term conversion exercised among corporate affiliates;
(5) an existing life insurance policy or annuity contract that is replaced under a program of replacement of existing life insurance policies or annuity contracts that is filed with and approved by the director;
(6) a proposed life insurance policy to replace life insurance under a binding or conditional receipt issued by the same company;
(7) a life insurance policy or annuity contract that is not subject to (b) of this section and is used to fund
(A) an employee pension or welfare benefit plan that is covered under 29 U.S.C. 1001 - 1461 (Employee Retirement Income Security Act of 1974);
(B) a plan described in 26 U.S.C. 401(a) or (k) or 26 U.S.C. 403(b) (Internal Revenue Code), if the plan is established or maintained by an employer;
(C) a governmental or church plan defined in 26 U.S.C. 414 (Internal Revenue Code), including a governmental or church welfare benefit plan;
(D) a deferred compensation plan of a state or local government or tax-exempt organization under 26 U.S.C. 457 (Internal Revenue Code); or
(E) a nonqualified deferred compensation arrangement under 26 U.S.C. 409A (Internal Revenue Code) established or maintained by an employer or plan sponsor;
(8) when new coverage is provided under a life insurance policy and the cost of the policy is paid solely by the insured's employer or by an association of which the insured is a member;
(9) an existing life insurance policy that is a non-convertible term life insurance policy with a term of five years or less that cannot be renewed;
(10) an immediate annuity that is purchased with proceeds from an existing annuity contract;
(11) a structured settlement.
(b) Notwithstanding (a)(7) of this section, the provisions of 3 AAC 26.790 - 3 AAC 26.819 apply to a life insurance policy or annuity contract used to fund a plan or arrangement
(1) that is funded solely by contributions an employee elects to make on a before-tax or after-tax basis;
(2) for which the insurer has been notified that plan participants may choose from among two or more insurers; and
(3) for which an insurance producer directly solicits an individual employee for the purchase of the contract or policy; for purposes of this paragraph, the following activities are not considered direct solicitations:
(A) a group meeting held by an insurance producer solely for the purpose of educating or enrolling individuals;
(B) when initiated by an individual member of a group, an insurance producer assisting with the selection of investment options offered by a single insurer in connection with enrolling an individual.
(c) A registered contract is exempt from 3 AAC 26.805(a)(3) and 3 AAC 26.810(2) with respect to the provision of illustrations or policy summaries if premium or contract contribution amounts and identification of the appropriate prospectus or offering circular is provided.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.36.050 AS 21.36.020; AS 21.36.040; AS 21.36.900
- Eff. 7/25/2008, Register 187
3 AAC 26.795 Duties of an insurance producer
(a) An insurance producer who initiates a new application shall submit to the insurer, with or as part of the application, a statement as to whether the applicant has an existing life insurance policy or annuity contract. The statement must be signed by both the applicant and the insurance producer.
(b) If an applicant has an existing life insurance policy or annuity contract, before or at the time of taking an application, the insurance producer shall provide to the applicant a copy of the notice regarding replacements that
(1) conforms with Appendix A of this section;
(2) conforms with Appendix A of this section, but is amended to delete references that are not applicable to the product being sold or replaced; or
(3) is substantially similar to Appendix A of this section and has been approved by the director.
(c) The insurance producer shall read aloud to the applicant the notice provided under (b) of this section before or at the time of application, unless the applicant declines to have the notice read aloud. The applicant and the insurance producer must sign the notice certifying that either the notice was read aloud to the applicant by the insurance producer or that the applicant declined to have the notice read aloud. The insurance producer shall give the applicant a copy of the signed notice. If the notice is presented and signed electronically, the insurer shall mail the applicant a copy of the notice within three working days after the insurer receives the application.
(d) In connection with a replacement, the insurance producer shall give the applicant at the time of application for a new life insurance policy or annuity contract a copy of all sales material used in connection with the replacement. In the case of a direct-response solicitation or electronically presented sales material, the insurance producer or insurer shall provide the life insurance policy holder or annuity contract owner a printed copy of all sales material used in connection with the replacement before or at the time of delivery of the life insurance policy or annuity contract.
(e) In connection with a replacement, except as provided in (f) of this section, an insurance producer shall submit to the replacing insurer with the application for a life insurance policy or annuity contract
(1) a statement identifying any preprinted or electronically presented sales material approved by the replacing insurer and used by the insurance producer; and
(2) copies of any individualized sales material used by the insurance producer, including any illustrations related to the specific life insurance policy or annuity contract purchased.
(f) If a replacing insurer prohibits an insurance producer from using sales material other than the sales material approved by the replacing insurer, the insurance producer shall
(1) submit to the replacing insurer with the application for a life insurance policy or annuity contract a statement that
(A) the insurance producer used only the sales material approved by the replacing insurer; and
(B) copies of all sales material were provided to the applicant as required by (d) of this section; and
(2) retain copies of the statement and sales material required in (1) of this subsection for at least five years after termination or expiration of the life insurance policy or annuity contract.
APPENDIX A IMPORTANT NOTICE:
REPLACEMENT OF LIFE INSURANCE OR ANNUITY
CONTRACT
This document must be signed by the applicant and the insurance producer and a copy left with the applicant.
You are contemplating the purchase of a life insurance policy or annuity contract. In some cases, this purchase may involve discontinuing or changing an existing life insurance policy or annuity contract. If so, a replacement is occurring. Financed purchases are also considered replacements.
A replacement occurs when a new life insurance policy or annuity contract is purchased and, In connection with the sale, you discontinue making premium payments on the existing life insurance policy or annuity contract, or an existing life insurance policy or annuity contract is surrendered, forfeited, assigned to the replacing insurer, or otherwise terminated or used in a financed purchase.
A financed purchase occurs when the purchase of a new life insurance policy or annuity contract involves the use of funds obtained by the withdrawal or surrender of or by borrowing some or all of the policy values, including accumulated dividends, of an existing life insurance policy or annuity contract to pay all or part of any premium or payment due on the new policy. A financed purchase is a replacement.
You should carefully consider whether a replacement is in your best interests. You will pay acquisition costs and there may be surrender costs deducted from your life insurance policy or annuity contract. You may be able to make changes to your existing life insurance policy or annuity contract to meet your insurance needs at less cost. A financed purchase will reduce the value of your existing policy and may reduce the amount paid upon the death of the insured.
We want you to understand the effects of replacements before you make your purchase decision and ask that you answer the following questions and consider the questions on the back of this form.
1. Are you considering discontinuing making premium payments, surrendering, forfeiting, assigning to the insurer, or otherwise terminating your existing life insurance policy or annuity contract? _______________ YES _______________ NO
2. Are you considering using funds from your existing life insurance policy or annuity contract to pay premiums due on the new life insurance policy or annuity contract?
_______________ YES _______________ NO
If you answered "yes" to either of the above questions, list each existing life insurance policy or annuity contract you are contemplating replacing (including the name of the insurer, the insured or annuitant, and the policy or contract number if available) and whether each life insurance policy or annuity contract will be replaced or used as a source of financing:
INSURER
NAMECONTRACT
OR POLICY #INSURED OR
ANNUITANTREPLACED (R) OR
FINANCING (F)1.2.3.
Make sure you know the facts. Contact your existing company or its insurance producer for information about the old life insurance policy or annuity contract. If you request one, an in force illustration, policy summary, or available disclosure documents must be sent to you by the existing insurer. Ask for and retain all sales material used by the insurance producer in the sales presentation. Be sure that you are making an informed decision.
The existing life insurance policy or annuity contract is being replaced because _________ .
I certify that the responses herein are, to the best of my knowledge, accurate.
The insurance producer (check one) _______________ did _______________ did not read aloud this notice to the applicant.
Applicant's Signature and Printed Name Date
Insurance Producer's Signature and Printed Name Date
I do not want this notice read aloud to me. _________ (Applicant must initial only if applicant does not want the notice read aloud.)
A replacement may not be in your best interest, or your decision could be a good one. You should make a careful comparison of the costs and benefits of your existing life insurance policy or annuity contract and the proposed life insurance policy or annuity contract. One way to do this is to ask the company or insurance producer that sold you your existing life insurance policy or annuity contract to provide you with information concerning your existing life insurance policy or annuity contract. This may include an illustration of how your existing life insurance policy or annuity contract is working now and how it would perform in the future based on certain assumptions. Illustrations should not, however, be used as a sole basis to compare policies or contracts. You should discuss the following with your insurance producer to determine whether replacement or financing your purchase makes sense:
PREMIUMS:Are they affordable?Could they change?You're older - are premiums higher for the proposed new
policy?How long will you have to pay premiums on the new policy? On
the old policy?POLICY VALUES:New policies usually take longer to build cash values and to pay
dividends.Acquisition costs for the old policy may have been paid. You will
incur costs for the new one.What surrender charges do the policies have?What expense and sales charges will you pay on the new policy?Does the new policy provide more insurance coverage?INSURABILITY:If your health has changed since you bought your old policy, the
new one could cost you more, or you could be turned down.You may need a medical exam for a new policy.Claims on most new policies for up to the first two years can be
denied based on inaccurate statements.Suicide limitations may begin anew on the new coverage.IF YOU ARE KEEPING THE OLD POLICY AS WELL AS THE NEW POLICY:How are premiums for both policies being paid?How will the premiums on your existing policy be affected?Will a loan be deducted from death benefits?What values from the old policy are being used to pay
premiums?IF YOU ARE SURRENDERING AN ANNUITY CONTRACT OR INTEREST-SENSITIVE LIFE PRODUCT:Will you pay surrender charges on your old contract?What are the interest rate guarantees for the new contract?Have you compared the contract charges or other policy
expenses?OTHER ISSUES TO CONSIDER FOR ALL TRANSACTIONS:What are the tax consequences of buying the new policy?Is this a tax-free exchange? (See your tax advisor.)Is there a benefit from favorable "grandfathered" treatment of
the old policy under the federal tax code?Will the existing insurer be willing to modify the old policy?How does the quality and financial stability of the new company
compare with your existing company?
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.36.050 AS 21.36.020; AS 21.36.040; AS 21.36.900
- Eff. 7/25/2008, Register 187; am 12/28/2008, Register 188
3 AAC 26.800 Duties of an insurer that uses an insurance producer
An insurer shall
(1) maintain a system of supervision and control designed to ensure compliance with the requirements of 3 AAC 26.790 - 3 AAC 26.819 that at a minimum includes
(A) informing the insurer's insurance producers of the requirements of 3 AAC 26.790 - 3 AAC 26.819 and incorporating the requirements of 3 AAC 26.790 - 3 AAC 26.819 into all relevant insurance producer training manuals prepared by the insurer;
(B) providing each of the insurer's insurance producers with a written statement of the insurer's position with respect to the acceptability of replacements and providing guidance to its insurance producers relative to the appropriateness of replacements;
(C) implementing a system to review the appropriateness of each replacement that the insurance producer does not indicate is in accordance with the insurer's position in (B) of this paragraph;
(D) implementing procedures to confirm that the requirements of 3 AAC 26.790 - 3 AAC 26.819 are met;
(E) implementing procedures to detect transactions that are replacements but are not reported as replacements by the applicant or insurance producer; those procedures may include
(i) systematic customer surveys;
(ii) interviews;
(iii) confirmation letters; and
(iv) programs of internal monitoring;
(2) have the capacity to monitor each of its insurance producer's life insurance policy and annuity contract replacements and, upon request, provide to the director a report for each insurance producer showing the number of
(A) life insurance policy replacements and financed purchases as a percentage of the insurance producer's total annual life insurance sales;
(B) lapses of life insurance policies sold by the insurance producer as a percentage of the insurance producer's total annual sales of life insurance policies;
(C) annuity contract replacements as a percentage of the insurance producer's total annual sales of annuity contracts;
(D) unreported replacements by the existing insurer detected by the insurer's monitoring system under (1)(E) of this section; and
(E) replacements indexed by the replacing insurance producer and existing insurer;
(3) require with or as part of each application for a life insurance policy or an annuity contract a signed statement by both the applicant and the insurance producer indicating whether the applicant has an existing life insurance policy or annuity contract;
(4) require with each application for a life insurance policy or an annuity contract that indicates the applicant has an existing life insurance policy or annuity contract a completed notice regarding replacements that conforms with Appendix A of 3 AAC 26.795;
(5) for an applicant with an existing life insurance policy or annuity contract, retain for at least five years after termination or expiration of a proposed life insurance policy or annuity contract copies of
(A) any sales material required under 3 AAC 26.795;
(B) the basic illustration and any supplemental illustrations related to the specific policy or contract that is purchased; and
(C) the insurance producer's and applicant's signed statements with respect to financing and replacement;
(6) assure that the sales material and illustrations required under 3 AAC 26.795 meet the requirements of 3 AAC 26.790 - 3 AAC 26.819 and are complete and accurate for the proposed life insurance policy or annuity contract;
(7) if an application does not meet the requirements of 3 AAC 26.790 - 3 AAC 26.819,
(A) notify the insurance producer and the applicant that the application does not meet the requirements; and
(B) modify the application to meet the requirements; and
(8) maintain records in a manner that accurately reproduces the actual document.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.36.050 AS 21.36.020; AS 21.36.040; AS 21.36.900
- Eff. 7/25/2008, Register 187
3 AAC 26.805 Duties of a replacing insurer that uses an insurance producer
(a) In connection with a replacement, a replacing insurer shall
(1) verify that
(A) the replacing insurer has received the forms required under 3 AAC 26.795(e) and (f); and
(B) the forms received are in compliance with 3 AAC 26.795(e) and (f);
(2) notify any other existing insurer that may be affected by the proposed replacement of that proposed replacement within five working days
(A) after receipt of a completed application that includes a statement as required under 3 AAC 26.795(a) that an applicant has an existing life insurance policy or annuity contract; or
(B) after receipt of other information indicating that an applicant has an existing life insurance policy or annuity contract;
(3) mail a copy of the available illustration or policy summary for the proposed life insurance policy or the available disclosure document for the proposed annuity contract to an existing insurer within five working days after receipt of a request from an existing insurer;
(4) retain copies of the notifications regarding replacement required under 3 AAC 26.795(b) indexed by insurance producer for at least five years and, upon request, provide copies of the notifications to the director;
(5) include in the life insurance policy or annuity contract the right to return the life insurance policy or annuity contract within 30 days after the delivery of the life insurance policy or annuity contract, and
(A) for a life insurance policy or annuity contract other than a variable or market value-adjusted life insurance policy or annuity contract, the right to receive an unconditional full refund of all premiums or considerations paid, including any fees or charges imposed under the life insurance policy or annuity contract;
(B) for a variable or market value-adjusted life insurance policy or annuity contract, the right to receive payment of the cash surrender value provided under the life insurance policy or annuity contract plus the fees or other charges deducted from the gross premiums or considerations or otherwise imposed under the life insurance policy or annuity contract; and
(6) provide the life insurance policy or annuity contract owner notice of the owner's rights under (5) of this subsection.
(b) In a transaction in which the replacing insurer is the same as the existing insurer or the insurers are subsidiaries or affiliates under common ownership or control, the replacing insurer shall, subject to (c) of this section, reduce the incontestability and suicide periods in the new life insurance policy or annuity contract by the amount of time that has elapsed under the replaced life insurance policy's or annuity contract's incontestability and suicide periods up to the amount of the replaced life insurance policy or annuity contract.
(c) For a financed purchase of a life insurance policy or annuity contract, the reduction in the incontestability and suicide periods under (b) of this section may be limited to the amount by which the amount of the replaced life insurance policy or annuity contract is reduced by the use of policy values to finance the new life insurance policy or annuity contract.
(d) If a replacing insurer prohibits an insurance producer from using sales material other than the sales material approved by the replacing insurer, the replacing insurer shall within 10 days after issuance of the new life insurance policy or annuity contract
(1) notify the applicant that the insurance producer has represented to the replacing insurer that copies of all sales material have been left with the applicant;
(2) provide the applicant a toll-free telephone number to contact the compliance personnel of the replacing insurer if the applicant did not receive a copy of all sales material; and
(3) notify the applicant of the importance of retaining copies of the sales material.
(e) A replacing insurer shall maintain copies of the notification required in (d) of this section for at least five years after termination or expiration of the life insurance policy or annuity contract.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.36.050 AS 21.36.020; AS 21.36.040; AS 21.36.900
- Eff. 7/25/2008, Register 187
3 AAC 26.810 Duties of an existing insurer
In connection with a replacement, an existing insurer shall
(1) retain the notifications required from replacing insurers under 3 AAC 26.805(a)(2) indexed by replacing insurer for at least five years and, upon request, provide copies of the notifications to the director;
(2) provide notification to the life insurance policy or annuity contract owner of the right to receive information regarding the existing life insurance policy or annuity contract values, including, if available, an in force illustration or policy summary;
(3) provide the life insurance policy or annuity contract owner the information requested under (2) of this section within five working days after receipt of the request;
(4) upon receipt of a request by the life insurance policy owner to borrow, surrender, or withdraw any life insurance policy values, send the life insurance policy owner a notice advising the life insurance policy owner that borrowing, surrendering, or withdrawing insurance policy values may affect the guaranteed elements, non-guaranteed elements, face amount, or surrender value of the life insurance policy;
(5) send the notice required under (4) of this section
(A) separate from the payment of the life insurance policy values, if the payment is sent to a person other than the life insurance policy owner; and
(B) only at the time of the first loan in the case of consecutive automatic premium loans.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.36.050 AS 21.36.020; AS 21.36.040; AS 21.36.900
- Eff. 7/25/2008, Register 187
3 AAC 26.815 Duties of an insurer with respect to a direct-response solicitation
(a) An insurer shall require, with or attached to an application resulting from a direct-response solicitation, a statement from the applicant regarding whether the applicant intends to replace, discontinue, or change an existing life insurance policy or annuity contract.
(b) If the statement by the applicant under (a) of this section is that the applicant does not intend to replace, discontinue, or change an existing life insurance policy or annuity contract, or if the applicant fails to provide a statement, the insurer shall send the applicant a notice regarding replacement that
(1) conforms with Appendix A of this section; or
(2) is substantially similar to Appendix A of this section and has been approved by the director.
(c) If an insurer proposes a replacement or the statement from an applicant under (a) of this section indicates that the applicant intends to replace, discontinue, or change an existing life insurance policy or annuity contract, the insurer shall provide the applicant or prospective applicant a notice that
(1) conforms with Appendix A of this section;
(2) conforms with Appendix B of this section with references to an insurance producer and other references deleted, if those references are not applicable to the life insurance policy or annuity contract; or
(3) is substantially similar to Appendix B of this section and has been approved by the director.
(d) An insurer shall make a diligent effort to obtain the applicant's signature on the notice provided to the applicant under (c) of this section. The mailing of the notice along with a self-addressed postage paid envelope with instructions for the return of the signed notice will be considered a diligent effort.
(e) An insurer that solicits a life insurance policy or annuity contract subject to 3 AAC 26.790 - 3 AAC 26.819 through a direct-response solicitation must also comply with 3 AAC 26.805(a)(2) - (5) and 3 AAC 26.805(b).
APPENDIX A
NOTICE REGARDING REPLACEMENT
REPLACING OF YOUR LIFE INSURANCE POLICY OR ANNUITY
CONTRACT
Are you thinking about buying a new life insurance policy or annuity contract and discontinuing or changing an existing one? If you are, your decision could be a good one, or a mistake. You will not know for sure unless you make a careful comparison of your existing benefits and the proposed life insurance policy's or annuity contract's benefits.
Make sure you understand the facts. You should ask the company or insurance producer that sold you your existing policy or contract to give you information about it.
Hear both sides before you decide. This way you can be sure you are making a decision that is in your best interest.
APPENDIX B
IMPORTANT NOTICE:
REPLACEMENT OF LIFE INSURANCE OR ANNUITY
CONTRACT
You are contemplating the purchase of a life insurance policy or annuity contract. In some cases this purchase may involve discontinuing or changing an existing life insurance policy or annuity contract. If so, a replacement is occurring. Financed purchases are also considered replacements.
A replacement occurs when a new life insurance policy or annuity contract is purchased and, in connection with the sale, you discontinue making premium payments on the existing life insurance policy or annuity contract, or an existing life insurance policy or annuity contract is surrendered, forfeited, assigned to the replacing insurer, or otherwise terminated or used in a financed purchase.
A financed purchase occurs when the purchase of a new life insurance policy involves the use of funds obtained by the withdrawal or surrender of or by borrowing some or all of the policy values, including accumulated dividends, of an existing policy, to pay all or part of any premium or payment due on the new policy. A financed purchase is a replacement.
You should carefully consider whether a replacement is in your best interests. You will pay acquisition costs and there may be surrender costs deducted from your life insurance policy or annuity contract. You may be able to make changes to your existing life insurance policy or annuity contract to meet your insurance needs at less cost. A financed purchase will reduce the value of your existing policy and may reduce the amount paid upon the death of the insured.
We want you to understand the effects of replacements and ask that you answer the following questions and consider the questions on the back of this form.
1. Are you considering discontinuing making premium payments, surrendering, forfeiting, assigning to the insurer, or otherwise terminating your existing life insurance policy or annuity contract? _______________ YES _______________ NO
2. Are you considering using funds from your existing life insurance policy or annuity contract to pay premiums due on the new life insurance policy or annuity contract? _______________ YES _______________ NO
Please list each existing life insurance policy or annuity contract you are contemplating replacing (including the name of the insurer, the insured, and the policy or contract number if available) and whether each life insurance policy or annuity contract will be replaced or used as a source of financing:
INSURER
NAMECONTRACT
OR POLICY #INSURED OR
ANNUITANTREPLACED (R) OR
FINANCING (F)1.2.3.
Make sure you know the facts. Contact your existing company or its insurance producer for information about the old life insurance policy or annuity contract. If you request one, an in force illustration, policy summary, or available disclosure documents must be sent to you by the existing insurer. Ask for and retain all sales material used by the insurance producer in the sales presentation. Be sure that you are making an informed decision. I certify that the responses herein are, to the best of my knowledge, accurate:
Applicant's Signature and Printed NameDate
PREMIUMS:Are they affordable?Could they change?You're older - are premiums higher for the proposed new policy?How long will you have to pay premiums on the new policy? On the old policy?POLICY VALUES:New policies usually take longer to build cash values and to pay dividends.Acquisition costs for the old policy may have been paid. You will incur costs for the new one.What surrender charges do the policies have?What expense and sales charges will you pay on the new policy?Does the new policy provide more insurance coverage?INSURABILITY:If your health has changed since you bought your old policy, the new one could cost you more, or you could be turned down.You may need a medical exam for a new policy.Claims on most new policies for up to the first two years can be denied based on inaccurate statements.Suicide limitations may begin anew on the new coverage.IF YOU ARE KEEPING THE OLD POLICY AS WELL AS THE NEW POLICY:How are premiums for both policies being paid?How will the premiums on your existing policy be affected?Will a loan be deducted from death benefits?What values from the old policy are being used to pay premiums?IF YOU ARE SURRENDERING AN ANNUITY CONTRACT OR INTEREST-SENSITIVE LIFE PRODUCT:Will you pay surrender charges on your old contract?What are the interest rate guarantees for the new contract?Have you compared the contract charges or other policy expenses?OTHER ISSUES TO CONSIDER FOR ALL TRANSACTIONS:What are the tax consequences of buying the new policy?Is this a tax-free exchange? (See your tax advisor.)Is there a benefit from favorable "grandfathered" treatment of the old policy under the federal tax code?Will the existing insurer be willing to modify the old policy?How does the quality and financial stability of the new company compare with your existing company?
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.36.050 AS 21.36.020; AS 21.36.040; AS 21.36.900
- Eff. 7/25/2008, Register 187
3 AAC 26.819 Definitions
In 3 AAC 26.790 - 3 AAC 26.819, unless the context requires otherwise,
(1) "credit life insurance" has the meaning given in AS 21.57.160;
(2) "direct-response solicitation" means a solicitation solely through mail, telephone, the Internet, or other mass communication media;
(3) "existing insurer" means the insurer whose life insurance policy or annuity contract is or will be changed or affected by a replacement;
(4) "existing life insurance policy or annuity contract" means an individual life insurance policy or annuity contract in force; "existing life insurance policy or annuity contract" includes
(A) a life insurance policy under a binding or conditional receipt; and
(B) a life insurance policy or annuity contract that is within an unconditional refund period;
(5) "financed purchase" means the purchase of a new life insurance policy involving the actual or intended use of money obtained by the withdrawal or surrender of or by borrowing from values of an existing life insurance policy to pay all or part of any premium due on the new life insurance policy; "financed purchase" includes using withdrawn, surrendered, or borrowed life insurance policy values of an existing life insurance policy within four months before or 13 months after the effective date of a new life insurance policy to pay premiums on the new life insurance policy, if the new life insurance policy is owned by the same policyholder and issued by the same insurer;
(6) "guaranteed elements" means the premiums, credited interest rates, bonuses, benefits, values, non-interest based credits, charges, or elements of formulas used to determine any of these, that are guaranteed and determined at issue; 'guaranteed elements" includes a value or amount calculated from only guaranteed elements;
(7) "illustration" means a presentation or depiction that includes non-guaranteed elements of a policy of life insurance over a period of years as prescribed in 3 AAC 28.800 - 3 AAC 28.849;
(8) "insurance producer" has the meaning given in AS 21.27.900;
(9) "non-guaranteed elements" means the premiums, credited interest rates, bonuses, benefits, values, non-interest based credits, charges, or elements of formulas used to determine any of these, that are subject to discretion by the insurer and are not guaranteed at issue; "non-guaranteed elements" includes a value or amount calculated from at least one nonguaranteed element;
(10) "policy summary" means
(A) for other than universal life policies, a written statement regarding a life insurance policy or annuity contract that contains, to the extent applicable, the
(i) current death benefit;
(ii) annual contract premium;
(iii) current cash surrender value;
(iv) current dividend;
(v) application of the current dividend; and
(vi) amount of any outstanding loan;
(B) for universal life policies, a written statement that contains at least the
(i) beginning and ending date of the current reporting period;
(ii) policy value at the end of the previous reporting period and at the end of the current reporting period;
(iii) total amounts by type of credit or debit that have been credited or debited to the policy value during the current reporting period;
(iv) current death benefit at the end of the current reporting period on each life covered by the policy;
(v) net cash surrender value of the policy at the end of the current reporting period; and
(vi) amount of outstanding loans, if any, at the end of the current reporting period;
(11) "registered contract" means a variable annuity contract or a variable life insurance policy that is subject to the registration and prospectus delivery requirements under 15 U.S.C. 77e (sec. 5 of the Securities Act of 1933);
(12) "replacement" means a transaction involving the purchase of a new life insurance policy or annuity contract in which, by reason of the transaction, the insurance producer or the replacing insurer, if no insurance producer is involved, knows or should have known that an existing life insurance policy or annuity contract was or will be
(A) lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing insurer, or otherwise terminated;
(B) converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other policy values;
(C) amended in a manner that results in a reduction in benefits or in the term of the coverage or benefits;
(D) reissued with any reduction in cash value; or
(E) used in a financed purchase;
(13) "replacing insurer" means the insurer that issues or proposes to issue a new life insurance policy or annuity contract that replaces an existing life insurance policy or annuity contract or is a financed purchase;
(14) "sales material" means the illustration and any other written, printed, or electronically presented information created, completed, or provided by the insurer or insurance producer and is used in the presentation to the life insurance policy or annuity contract owner related to a life insurance contract or annuity contract purchase;
(15) "universal life insurance policy" means a life insurance policy in which separately identified interest credits and charges, including mortality and expense charges, are applied to the life insurance policy;
(16) "working day" means a calendar day other than Saturday, Sunday, an official federal holiday, or an official holiday in this state.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.36.050 AS 21.36.020; AS 21.36.040; AS 21.36.900
- Eff. 7/25/2008, Register 187
Article 9 Use of Senior-Specific Certifications and Professional Designations
3 AAC 26.820 Applicability
The provisions of 3 AAC 26.820 - 3 AAC 26.825 apply to a solicitation for, the sale or purchase of, or advice made in connection with, a life insurance or annuity product by an insurance producer.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.36.900 AS 21.36.020; AS 21.36.040
- Eff. 6/28/2009, Register 190
3 AAC 26.825 Prohibited uses of senior-specific certifications and professional designations
(a) An insurance producer engages in an unfair or deceptive act or practice if the insurance producer uses a senior-specific certification or professional designation in a manner that could mislead a purchaser or prospective purchaser to believe that the insurance producer has special certification or training in advising or servicing seniors in connection with the solicitation, sale, or purchase of a life insurance or annuity product, or in the provision of advice as to the value of or the advisability of purchasing or selling a life insurance or annuity product, either directly or indirectly by
(1) publications or writings;
(2) oral statements or representation; or
(3) issuing analyses or reports related to a life insurance or annuity product.
(b) Uses of a senior-specific certification or professional designation that are prohibited under (a) of this section include use of
(1) a certification or professional designation by an insurance producer who has not actually earned or is otherwise ineligible to use that certification or designation;
(2) a nonexistent or self-conferred certification or professional designation;
(3) a certification or professional designation that indicates or implies a level of occupational qualifications obtained through education, training, or experience that the insurance producer using the certification or professional designation does not have; or
(4) a certification or professional designation that was obtained from a certifying or designating organization that
(A) is primarily engaged in the business of instruction in sales or marketing;
(B) does not have reasonable standards or procedures for assuring the competency of the recipients of the organization's certificates or designations;
(C) does not have reasonable standards or procedures for monitoring and disciplining the holders of the organization's certificates or designations for improper or unethical conduct; or
(D) does not have reasonable continuing education requirements for the holders of the organization's certificates or designations in order to maintain the certificate or designation.
(c) A certifying or designating organization is not disqualified solely for purposes of (b)(4) of this section if the certification or designation issued by the organization does not primarily apply to sales or marketing and if the organization or the certification in question has been accredited by
(1) the American National Standards Institute;
(2) the National Commission for Certifying Agencies; or
(3) an accrediting agency that the United States Secretary of Education recognizes under 34 C.F.R. Part 602.
(d) In determining whether a combination of words or an acronym standing for a combination of words constitutes a certification or professional designation that could mislead a person to believe that an insurance producer has a special certification or training in advising or servicing seniors, the director will, in addition to other factors, consider
(1) whether the insurance producer uses one or more words such as "senior," "retirement," "elder," or similar words combined with one or more words such as "certified," "registered," "chartered," "advisor," "specialist," "consultant," "planner," or similar words, in the name of the certification or professional designation; and
(2) the manner in which those words are combined.
(e) Unless it is used in a manner that would confuse or mislead a reasonable consumer, a job title within an organization that is licensed or registered by a state or federal financial services regulatory agency is allowable and is not considered a certification or professional designation, if the job title indicates
(1) seniority or standing within the organization;
(2) an individual's area of specialization within the organization.
(f) For purposes of this section, "financial services regulatory agency" includes an agency that regulates
(1) insurers;
(2) insurance producers;
(3) broker-dealers;
(4) investment advisers as defined in 15 U.S.C. 80a-2(a)(20) (sec. 2(a)(20) of the Investment Company Act of 1940); or
(5) investment companies as defined in 15 U.S.C. 80a-3 (sec. 3 of the Investment Company Act of 1940).
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.36.900 AS 21.36.020; AS 21.36.040
- Eff. 6/28/2009, Register 190
Article 10 Retained Asset Accounts
3 AAC 26.850 Applicability
3 AAC 26.850 - 3 AAC 26.865 apply to a retained asset account.
History
- Authority: AS 21.06.090; AS 21.96.030
- Eff. 12/7/2011, Register 200
3 AAC 26.855 Retained asset account defined
For purposes of 3 AAC 26.850 - 3 AAC 26.865, a retained asset account is any mechanism in which proceeds of a life insurance policy are deposited into an account with beneficiary check-writing or draft-writing privileges, where the proceeds are retained by the insurer under a supplementary contract not involving insurance benefits other than the life insurance proceeds to be deposited into the account.
History
- Authority: AS 21.06.090; AS 21.96.030
- Eff. 12/7/2011, Register 200
3 AAC 26.860 Disclosure of settlement options
(a) An insurer shall provide to the beneficiary, at the time a claim is made, a written description of settlement options available under the policy and how to obtain specific details regarding the options.
(b) The insurer shall provide the following written disclosures to the beneficiary about retained asset accounts before the retained asset account option is selected:
(1) a statement that payment of the full benefit amount is accomplished by delivery of a draft book or check book;
(2) a statement that one draft or check may be written to access the entire amount, including interest, of the retained asset account at any time;
(3) whether other settlement options are preserved until the entire balance is withdrawn or the balance drops below the insurer's minimum balance requirements;
(4) a statement identifying the account as either a checking or a draft account and an explanation of how the account works;
(5) a description of the account services provided and contact information where the beneficiary may request and obtain more details about the account services;
(6) a description of any fees charged, if applicable;
(7) the frequency of statements showing
(A) the current retained asset account balance;
(B) the interest credited;
(C) withdrawals; and
(D) any other account activity;
(8) the minimum interest rate credited to the retained asset account and how actual interest is determined;
(9) a statement that the interest earned on the account may be taxable;
(10) a statement that retained asset account funds are not guaranteed by the Federal Deposit Insurance Corporation but are guaranteed by the state guaranty association;
(11) a description of the insurer's policy regarding retained asset accounts that become inactive.
History
- Authority: AS 21.06.090; AS 21.96.030
- Eff. 12/7/2011, Register 200
3 AAC 26.865 Supplemental contract required
If an insurer settles benefits through a retained asset account, the insurer shall provide the beneficiary with a supplemental contract that clearly discloses the rights of the beneficiary and the obligations of the insurer under the contract.
History
- Authority: AS 21.06.090; AS 21.96.030
- Eff. 12/7/2011, Register 200
Article 11 Consumer Payment Clauses
3 AAC 26.875 Purpose and applicability
The purpose of 3 AAC 26.875 - 3 AAC 26.899 is to preserve for consumers the benefits of being able to use alternative forms of payment for insurance transactions while preventing potential unfair practices. The provisions of 3 AAC 26.875 - 3 AAC 26.899 apply to all insurers authorized under AS 21.09.
History
- Authority: AS 21.06.090; AS 21.36.090; AS 21.36.120
- Eff. 12/20/2020, Register 236
3 AAC 26.880 Credit, charge, or debit card payments
An insurer may accept a credit, charge, or debit card for a premium payment transaction, either directly or through a third-party payment processor, subject to the following restrictions:
(1) the credit, charge, or debit card option for payment of premiums must be made available to all insureds without arbitrary or unfair discrimination;
(2) a fee associated with a policyholder's payment of premium by credit, charge, or debit card is subject to the requirements of 3 AAC 26.885;
(3) a refund of unearned premium must be made directly to the credit, charge, or debit card holder or as a credit to the insured's credit, charge, or debit card account, unless the insurance producer has a lien against the unearned premium;
(4) the insurance may be canceled only by the named insured, policyholder, insurer, or in the case of health insurance, the health care exchange; the insurance may not be canceled by the credit, charge, or debit card company or a payment processor;
(5) failure of the insured to pay credit, charge, or debit card charges may not cause coverage to be canceled by the insurer unless the credit, charge, or debit card has been canceled or the charge or credit limit has been exceeded;
(6) the election to pay by credit, charge, or debit card at the time of application for insurance must be treated the same as paying the premium in cash where immediate coverage is provided, unless the credit, charge, or debit card has been canceled or the charge or credit limit has been exceeded; and
(7) an insurance producer who accepts a credit, charge, or debit card in payment of insurance premium must deal with the funds when they are actually received in accordance with the provisions of the statute addressing the fiduciary responsibility of the insurance producer.
History
- Authority: AS 21.06.090; AS 21.36.090; AS 21.36.120
- Eff. 12/20/2020, Register 236
3 AAC 26.885 Payment plans and other fees
(a) Fees associated with premium payment transactions, including late payment fees, insufficient funds fees, installment fees, and convenience fees, are allowable subject to the following requirements, regardless of whether the fees are associated with payments made under a payment plan:
(1) fees must be reasonably related to the cost of providing the service to the applicable policyholders, may not be applied in a way that results in arbitrary or unfair discrimination, and may not duplicate costs already reflected in rates;
(2) for types of insurance subject to AS 21.39.040, fees may not be charged until they have been filed in accordance with the rate filing requirements;
(3) rate filings made in accordance with (2) of this subsection must include documentation to demonstrate compliance with (1) of this subsection;
(4) rate filings not specifically related to the fees described in this subsection must clearly account for fees that the insurer has collected within the experience period covered by the expense information required to be included in support of the rate by 3 AAC 31.230(2) or 3 AAC 31.235; and
(5) this subsection does not apply to cancellation fees.
(b) A policyholder's choice of payment plan or payment method may not affect premiums unless the applicable rates and rules have been filed in accordance with the rate filing requirements in AS 21.39.040, 3 AAC 31.235, or 3 AAC 28.472(b) and the rate filing includes documentation sufficient to demonstrate that the differences in premiums comply with 3 AAC 29.250(c), 3 AAC 31.235, or 3 AAC 28.472(b).
(c) A payment plan must allow for a policyholder to pay the remainder of the policyholder's outstanding premium at any time without incurring additional fees.
(d) A payment plan is not required to be filed if it does not have fees associated with it, except as required elsewhere in AS 21 or 3 AAC 21 - 3 AAC 31.
History
- Authority: AS 21.06.090; AS 21.36.090; AS 21.36.120
- Eff. 12/20/2020, Register 236
3 AAC 26.890 Insurer options for accepting premium payments
(a) Except to the extent that an insurer's filed rating plans or policy forms dictate otherwise, nothing in 3 AAC 26.880 or 3 AAC 26.885 requires an insurer to
(1) accept payment of premium by a particular method;
(2) offer a premium payment plan;
(3) charge a fee specifically in connection with
(A) a premium payment plan;
(B) providing another service; or
(C) accepting premium payments by a particular method; or
(4) consider a policyholder's choice of payment plan or payment method as a risk characteristic in rating.
(b) An insurer that does not charge fees described in (a)(3) of this section does not violate AS 21.36.090 or 21.36.120 solely because the insurer does not pass on incurred expenses on an itemized basis.
History
- Authority: AS 21.06.090; AS 21.36.090; AS 21.36.120
- Eff. 12/20/2020, Register 236
3 AAC 26.899 Definitions
In 3 AAC 26.875 - 3 AAC 26.899,
(1) "convenience fee" means a fee
(A) charged by a third-party vendor or payment processor; and
(B) associated with a premium payment transaction;
(2) "payment plan" means an arrangement or plan by which an insurer offers its policyholders an alternative to advance payment of the entire premium;
(3) "payment method" means the way in which a policyholder pays the policyholder's premium, including electronic fund transfers, automated clearing house (ACH) transactions, direct billing, cash, checks, a credit, charge, or debit card, or a third-party payment processor;
(4) "premium payment transaction" means a payment made in consideration for insurance, including a payment related to acquiring, issuing, maintaining, modifying, servicing, or reinstating a policy;
(5) "rate" and "rate filing" includes
(A) a loss cost adjustment; and
(B) a loss cost adjustment filing.
History
- Authority: AS 21.06.090
- Eff. 12/20/2020, Register 236
Chapter 27 Title Insurance
Article 1 Title Insurance
3 AAC 27.301 Applicability
3 AAC 27.301 - 3 AAC 27.399 apply to all persons transacting title insurance business in this state.
History
- Authority: AS 21.06.090; AS 21.66.410
- Eff. 4/15/2000, Register 154
3 AAC 27.310 General ratemaking components
(a) When determining title insurance rates, a title insurance company shall base the rates on the following:
(1) amounts paid to or retained by title insurance limited producers;
(2) operating expenses;
(3) payment of claims and claim related expenses;
(4) investment income;
(5) reasonable profit;
(6) premium taxes;
(7) any other relevant factors.
(b) A title insurance company shall include statistical and financial data as described in 3 AAC 27.320 to support each item in (a) of this section in the title insurance rate filing required under AS 21.66.370 and 21.66.380.
History
- Authority: AS 21.06.090; AS 21.66.380; AS 21.66.410 AS 21.66.370; AS 21.66.390
- Eff. 4/15/2000, Register 154
3 AAC 27.320 Minimum ratemaking standards
(a) A title insurance company shall use at least five years of statistical and financial data to support a title insurance rate filing. All data must be shown separately for owner's policies and for loan policies for each year and for all years combined.
(b) Statistical data for title insurance rates must include the number of policies written, policy amounts, written premium, frequency of claims, salvage and subrogation, paid and reserved losses, and paid and reserved loss adjustment expenses. A title insurance company shall
(1) group statistical data by the size of the risk;
(2) include a title insurance limited producer's deductible as part of a loss; and
(3) state in a rate filing whether the data are compiled on a policy-year or a calendar-year basis.
(c) Financial data for title insurance rates must include the following:
(1) an income exhibit that lists premiums written, including title insurance limited producers' commissions, and any non-operating returns, such as investment income and realized capital gains;
(2) an expense exhibit that lists losses and loss adjustment expenses incurred, commissions, and other operating expenses by category; if any expense component of the exhibit differs from the five-year average required in (a) of this section, the title insurance company shall provide an explanation of the selected expense amount;
(3) an exhibit that shows the allocation of commission to expenses incurred by title insurance limited producers; the expense categories for title insurance limited producers must include the producers' share of losses paid and reserved, and other operating expenses;
(4) detailed attachments for the items required in (1) - (3) of this subsection that show how the individual components have been developed; this supporting information must be the actual income and expenses of the title insurance company for this state to the extent that data is available; if the title insurance company's record-keeping system does not allocate actual income and expense amounts to this state, the title insurance company shall explain its method of allocation of nationwide results to individual states.
(d) Statistical and financial data used to support title insurance rates may not include data related to escrow income or expenses. The title insurance company shall include a detailed explanation showing how the expenses are allocated between the title operations and escrow operations of the producer or insurer.
(e) If trending for frequency or severity of losses is used to develop title insurance rates, the title insurance company shall include in the filing exhibits that demonstrate how the trend factors were developed.
History
- Authority: AS 21.06.090; AS 21.66.380; AS 21.66.410 AS 21.66.370; AS 21.66.390
- Eff. 4/15/2000, Register 154
3 AAC 27.330 Required reports and rate filing
(a) No later than March 1, 2001, a title insurance company shall submit a report to the director that shows how the title insurance company intends to comply with 3 AAC 27.310 and 3 AAC 27.320. The initial report must include at least one year of data required by 3 AAC 27.320. This report must be updated annually until four years of data are submitted.
(b) A title insurance company shall make a filing under AS 21.66.370 that complies with 3 AAC 27.310 and 3 AAC 27.320 no later than March 1, 2005.
(c) Wilful failure to comply with (a) or (b) of this section is a violation under AS 21.66.420.
History
- Authority: AS 21.06.090; AS 21.66.370; AS 21.66.420 AS 21.66.120; AS 21.66.410
- Eff. 4/15/2000, Register 154
3 AAC 27.340 Other requirements
A title insurance limited producer shall provide the title insurance company with all data necessary for the title insurance company to comply with the requirements under 3 AAC 27.320(c)(3).
History
- Authority: AS 21.06.090; AS 21.66.410; AS 21.66.420
- Eff. 4/15/2000, Register 154
3 AAC 27.350 Short-term rates
A title insurance company may offer a short-term rate if a short-term rate schedule has been filed with the director under AS 21.66.370. The requirements of 3 AAC 27.360 do not apply to these short-term rate schedule filings.
History
- Authority: AS 21.06.090; AS 21.66.390 AS 21.66.370; AS 21.66.410
- Eff. 4/15/2000, Register 154
3 AAC 27.360 Discounts
A title insurance company wishing to offer a discount for a particular type of policy or to a particular type of insured shall file a rate discount schedule with the director in accordance with AS 21.66.370 and 21.66.380. The filing must include the
(1) insurer's loss and expense data that demonstrate how the expected losses differ for the particular type of policy or insured from non-discounted policies or insureds; and
(2) data that show how the expenses of a title insurance limited producer differ for the particular type of policy or insured from non-discounted policies or insureds.
History
- Authority: AS 21.06.090; AS 21.66.380; AS 21.66.410 AS 21.66.370; AS 21.66.390
- Eff. 4/15/2000, Register 154
3 AAC 27.370 Charges for services
(a) A title insurance company or title insurance limited producer shall charge for any class of service delivered or provided in this state that relies in whole or in part upon documents contained in the title plant or public record. This charge must be commensurate with the cost of delivering or providing the class of service. The title insurance company or title insurance limited producer shall bill for the class of service when the service is provided and collect the amount due within 30 days of the first billing. A payment for a class of service may be credited to the subsequent issue of a title insurance policy in accordance with the insurer's filed rate schedule, as provided in (e) of this section.
(b) When issuing a title insurance policy, a title insurance company or title insurance limited producer shall clearly reference within the examination file the rating schedule rule used for an order and provide the calculation of the final rate applied.
(c) A title insurance company or title insurance limited producer shall bill and collect an amount for their services equal to the rates on file with the director for a preliminary commitment that is issued, for the amount of insurance ordered on a policy that is issued, or for a cancelled order.
(d) A title insurance company or title insurance limited producer shall bill and collect an amount equal to the cancellation charge on file with the director for an order of title insurance that does not result in the issuance of a policy within 12 months, that is not replaced with a subsequent order, or that is cancelled.
(e) In accordance with an insurer's filed rate schedule, a title insurance company or title insurance limited producer shall credit a cancellation charge collected under (d) of this section to the charge for a title insurance policy it subsequently issues, in the following amounts:
(1) the full amount of the cancellation charge if, within 12 months of the date of a cancelled order, a policy is issued or a cancelled order is replaced with another order for title insurance on the same property;
(2) up to 50 percent of the cancellation charge if, after 12 months but within 24 months of the date of a cancelled order, a policy is issued or a cancelled order is replaced with another order for title insurance on the same property;
(3) no portion of a cancellation charge may be credited to a title insurance policy or subsequent order for title insurance 24 months after the date of the cancelled order.
(f) The director will, in the director's discretion, consider the following practices to be a rebate or inducement under AS 21.66.310:
(1) the failure of a title insurance company or title insurance limited producer to bill for a class of service;
(2) the pattern of a title insurance company or title insurance limited producer of writing off charges that have been billed but not collected.
History
- Authority: AS 21.06.090; AS 21.66.370; AS 21.66.390 AS 21.66.310; AS 21.66.380; AS 21.66.410
- Eff. 4/15/2000, Register 154
3 AAC 27.380 Preliminary commitment
(a) If, at the time a preliminary commitment is issued, the liability or amount of coverage for a preliminary commitment is unknown, the issuing title insurance company or title insurance limited producer shall indicate that fact by the words "Not Disclosed" or "Not Known."
(b) The premium listed on the preliminary commitment must be stated as not less than the minimum charge indicated in the insurer's schedule of rates that is filed with the director under AS 21.66.370, followed by the words "Minimum Charge."
(c) A preliminary commitment for title insurance must include the following explanatory statements. "This commitment is tentative until we are advised of the final amount of insurance or the proposed insured. In the event of a cancellation, our fee is the minimum charge shown above."
History
- Authority: AS 21.06.090; AS 21.66.370; AS 21.66.390
- Eff. 4/15/2000, Register 154
3 AAC 27.390 Listing package or property profile
A listing package or property profile must clearly disclose that it is not a representation of the condition of title to a property.
History
- Authority: AS 21.06.090
- Eff. 4/15/2000, Register 154
3 AAC 27.399 Definitions
In 3 AAC 27.301 - 3 AAC 27.399, unless the context otherwise requires,
(1) "class of service" means a type of service provided by a title insurance company or title insurance limited producer, apart from escrow services, that includes a title insurance policy, preliminary commitment, listing package, or property profile that is delivered or provided in this state by a title insurance company or title insurance limited producer that relies in whole or in part upon documents contained in a title plant or public records; a listing package on a single property or a copy of an individual document or map is not considered a class of service;
(2) "commission" means all amounts paid to or retained by a title insurance limited producer from the title insurance premium to cover the maintenance of title plants, the costs necessary to search and examine the title of property, marketing expense, the producers' share of losses, other operating expenses, and the profit of the title insurance limited producer;
(3) "listing package" means one or more public record, including the last deed of record, given to a real estate agent or broker by a title insurance company or title insurance limited producer so that the real estate agent or broker may determine the owner of record and the correct property description for listing a property;
(4) "preliminary commitment" means
(A) a written report prepared in connection with an application for title insurance for specific real or personal property that offers to issue a title insurance policy subject to stated exceptions, conditions, stipulations, or matters incorporated by reference in the report; and
(B) a preliminary report of title;
(5) "property profile" means a listing package;
(6) "public record" means a document recorded under AS 40.17 for the purpose of imparting constructive notice of matters relating to real property to purchasers for value and without knowledge;
(7) "short-term rate" means a discounted rate for an owner's title insurance policy that has been issued by a title insurance company or title insurance limited producer within 24 months of the last title insurance policy issued.
History
- Authority: AS 21.06.090; AS 21.66.410
- Eff. 4/15/2000, Register 154
Chapter 28 Life, Health, Variable, and Related Insurance
Article 1 Variable Contracts
3 AAC 28.010 Variable contract applicability
3 AAC 28.020 - 3 AAC 28.290 apply to insurance companies, including fraternal beneficiary associations, societies or companies which operate on a legal reserve basis, delivering or issuing for delivery in this state variable contracts as defined in 3 AAC 28.190.
History
- Authority: AS 21.06.090; AS 21.42.315
- Eff. 11/8/73, Register 48
3 AAC 28.020 Qualification of insurance companies to issue variable contracts
(a) No company shall deliver or issue for delivery in this state, variable contracts, unless
(1) it is authorized to do a life insurance or annuity business in this state; and
(2) the director is satisfied that its condition or method of operation in connection with the issuance of such contracts will not render its operation hazardous to the public or its policyholders in this state.
(b) In connection with (a) of this section, the director shall consider among other things
(1) the history and financial condition of the company;
(2) the character, responsibility and fitness of the officers and directors of the company; and
(3) the law and regulation under which the company is authorized in the state of domicile to issue variable contracts.
History
- Authority: AS 21.06.090; AS 21.42.315
- Eff. 11/8/73, Register 48
3 AAC 28.030 Qualification exceptions
(a) If the company is a subsidiary of an authorized life insurance company, or affiliated with such company by common management or ownership, it may be deemed by the director to have satisfied the provision of 3 AAC 28.020(a)(2) if either it or such authorized life insurance company satisfies the provisions.
(b) Notwithstanding (a) of this section, companies authorized and having a satisfactory record of doing business in this state for a period of at least three years may be deemed to have satisfied 3 AAC 28.020(a)(2).
History
- Authority: AS 21.06.090; AS 21.42.315
- Eff. 11/8/73, Register 48
3 AAC 28.040 Variable contract filing required
(a) Before any company shall deliver or issue for delivery variable contracts within this state, it shall submit a general description of the kinds of variable contracts it intends to issue to the director and comply with the filing procedure outlined in 3 AAC 28.200.
(b) The director may request
(1) a copy of the statutes and regulations of its state of domicile under which it is authorized to issue variable contracts; and
(2) biographical data in the NAIC uniform biographical data form with respect to officers and directors of the company.
History
- Authority: AS 21.06.090; AS 21.42.315
- Eff. 11/8/73, Register 48
3 AAC 28.050 Capital surplus minimum
(a) No company may be authorized to issue or deliver variable contracts unless its capital and surplus exceeds $5,000,000.
(b) The director may waive any or all of the requirements set forth in (a) of this section if by reason of a company's capital structure, surplus, amount of business in force and plan of operations, it substantially conforms to such requirements, or, in the opinion of the director, otherwise affords adequate protection to contract holders.
History
- Authority: AS 21.06.090; AS 21.42.315
- Eff. 11/8/73, Register 48
3 AAC 28.060 Separate account or separate accounts
(a) A domestic company issuing variable contracts shall establish one or more separate accounts subject to the provisions of (b) - (g) of this section.
(b) Except as may be provided with respect to reserves for guaranteed benefits and funds referred to in (c) of this section
(1) amounts allocated to any separate account and accumulations thereon may be invested and reinvested without regard to any requirements or limitations prescribed by the laws of this state governing the investments of life insurance companies; and
(2) the investments in such separate account or accounts shall not be taken into account in applying the investment limitations otherwise applicable to the investments of the company.
(c) Reserves for benefits guaranteed as to dollar amount and duration and reserves for funds guaranteed as to principal amount or stated rate of interest may be maintained in a separate account if a portion of the assets of the separate account at least equal to the reserve liability is invested according to the laws and regulations of this state governing the investments of life insurance companies. That portion of the assets also may not be taken into account in applying the investment limitations otherwise applicable to the investments of the company. If a variable contract includes incidental minimum guarantees as referred to in 3 AAC 28.140(d)(3), this subsection applies only to the reserve for any excess of those minimum guarantees over the reserves for the benefits that would be payable under the contract if there were no minimum guarantees.
(d) With respect to 75 percent of the market value of the total assets in a separate account, no company shall purchase or otherwise acquire the securities of any issuer, other than securities issued or guaranteed as to principal or interest by the United States, if immediately after such purchase or acquisition the market value of such investment, together with prior investments of the separate account in this security taken at market value would exceed 10 percent of the market value of the assets of the separate account; provided, however, that the director may waive such limitation if, in his opinion, such waiver will not render the operation of such separate account hazardous to the public or the policyholders in this state.
(e) Unless otherwise permitted by law or approved by the director, no company shall purchase or otherwise acquire for its separate accounts the voting securities of any issuer if as a result of such acquisition the insurance company and its separate accounts, in the aggregate, will own more than 10 percent of the total issued and outstanding voting securities of such issuer; provided that the foregoing shall not apply with respect to securities held in separate accounts, the voting rights in which are exercisable only in accordance with instructions from persons having interests in such accounts.
(f) The same separate account may not be used for both variable annuities and variable life insurance.
(g) The limitations provided in (d), (e) and (f) of this section shall not apply to the investment with respect to a separate account in the securities of an investment company registered under the Investment Company Act of 1940, provided that the investments of such investment company comply in substance with (d) and (e) of this section.
History
- Authority: AS 21.06.090; AS 21.42.315
- Eff. 11/8/73, Register 48; am 3/31/82, Register 81
3 AAC 28.070 Valuation of assets in separate account
(a) Unless otherwise approved by the director, assets allocated to a separate account shall be valued at their market value on the date of valuation, or if there is no readily available market, then as provided under the terms of the contract or the rules or other written agreement applicable to such separate account.
(b) Notwithstanding (a) of this section and unless otherwise approved by the director, the portion, if any, of the assets of such separate account equal to the company's reserve liability with regard to the benefits and funds referred to in 3 AAC 28.060(b) shall be valued in accordance with the rules otherwise applicable to the company's assets.
History
- Authority: AS 21.06.090; AS 21.42.315
- Eff. 11/8/73, Register 48
3 AAC 28.080 Insulation of assets in separate account
If and to the extent so provided under the applicable contracts that portion of the assets of any such separate account equal to the reserves and other contract liabilities with respect to such account shall not be chargeable with liabilities arising out of any other business the company may conduct.
History
- Authority: AS 21.06.090; AS 21.42.315
- Eff. 11/8/73, Register 48
3 AAC 28.090 Voting rights and management of assets in separate account
(a) Notwithstanding any other provisions of law, a company may
(1) with respect to any separate account registered with the Securities and Exchange Commission as a unit investment trust, exercise voting rights in connection with any securities of a regulated investment company registered under the Investment Company Act of 1940 and held in such separate accounts in accordance with instructions from persons having interests in such accounts ratably determined by the company; or
(2) with respect to any separate account registered with the Securities and Exchange Commission as a management investment company, establish for such account a committee, board, or other body, the members of which may or may not be otherwise affiliated with such company and may be elected to such membership by the vote of persons having interests in such account ratably as determined by the company. Such committee, board or other body may have the power, exercisable alone or in conjunction with others, to manage such separate account and the investment of its assets.
(b) A company, committee, board or other body may make such other provisions in respect to any such separate account as may be deemed appropriate to facilitate compliance with requirements of any federal or state law now or hereafter in effect; provided that the director approves such provisions as not hazardous to the public or the company's policyholders in this state.
History
- Authority: AS 21.06.090; AS 21.42.315
- Eff. 11/8/73, Register 48
3 AAC 28.100 Transfer of assets
No sale, exchange or other transfer of assets may be made by a company between any of its separate accounts or between any other investment account and one or more of its separate accounts unless, in case of a transfer into a separate account, such transfer is made solely to establish the account or to support the operation of the contracts with respect to the separate account to which the transfer is made, and unless such transfer, whether into or from a separate account, is made by a transfer of cash, or by a transfer of securities having a valuation which could be readily determined in the marketplace, provided that such transfer of securities is approved by the director. The director may authorize other transfers among such accounts if, in his opinion, such transfers would not be inequitable.
History
- Authority: AS 21.06.090; AS 21.42.315
- Eff. 11/8/73, Register 48
3 AAC 28.110 Maintenance of value
The company shall maintain in each such separate account assets with a value at least equal to the reserves and other contract liabilities with respect to such account, except as may otherwise be approved by the director.
History
- Authority: AS 21.06.090; AS 21.42.315
- Eff. 11/8/73, Register 48
3 AAC 28.120 Rules applicable to persons managing separate account
Rules under any provision of the insurance law of this state or any regulation applicable to the officers and directors of insurance companies with respect to conflicts of interest shall also apply to members of any separate account's committee, board or other similar body. No officer or director of such company nor any member of the committee, board or body of a separate account shall receive directly or indirectly any commission or any other compensation with respect to the purchase or sale of assets of such separate account.
History
- Authority: AS 21.06.090; AS 21.42.315
- Eff. 11/8/73, Register 48
3 AAC 28.130 Filing of contracts
The filing requirements applicable to variable contracts shall be those filing requirements otherwise applicable under existing statutes and regulations of this state with respect to individual and group life insurance and annuity contract form filings, to the extent appropriate.
History
- Authority: AS 21.06.090; AS 21.42.315
- Eff. 11/8/73, Register 48
3 AAC 28.140 Contracts providing for variable benefits
(a) Any variable contract providing benefits payable in variable amounts delivered or issued for delivery in this state shall contain a statement of the essential features of the procedures to be followed by the insurance company in determining the dollar amount of such variable benefits. Any such contract, including a group contract and any certificate of variable benefits issued thereunder, shall state that such dollar amount will vary to reflect investment experience and shall contain on its first page a clear statement to the effect that the benefits thereunder are on a variable basis.
(b) Illustrations of benefits payable under any variable contract shall not include projections of past investment experience into the future or attempted predictions of future investment experience; provided that nothing contained herein is intended to prohibit use of hypothetical assumed rates of return to illustrate possible levels of benefits.
(c) No individual variable annuity contract calling for the payment of periodic stipulated payments shall be delivered or issued for delivery in this state unless it contains in substance the following provisions or provisions which in the opinion of the director are more favorable to the holders of such contracts:
(1) a provision that there shall be a period of grace of 30 days or of one month, within which any stipulated payment to the insurer falling due after the first may be made, during which period of grace the contract shall continue in force. The contract may include a statement of the basis for determining the date as of which any such payment received during the period of grace shall be applied to produce the values under the contract arising therefrom;
(2) a provision that, at any time within one year from the date of default, in making periodic stipulated payments to the insurer during the life of the annuitant and unless the cash surrender value has been paid, the contract may be reinstated upon payment to the insurer of such overdue payments as required by the contract, and of all indebtedness to the insurer on the contract, including interest. The contract may include a statement of the basis for determining the date as of which the amount to cover such overdue payments and indebtedness shall be applied to produce the values under the contract arising therefrom;
(3) a provision specifying the options available in the event of default in a periodic stipulated payment. Such options may include an option to surrender the contract for a cash value as determined by the contract, and shall include an option to receive a paid-up annuity if the contract is not surrendered for cash, the amount of such paid-up annuity being determined by applying the value of the contract at the annuity commencement date in accordance with the terms of the contract.
(d) No individual variable life insurance policy may be delivered or issued for delivery in this state unless it contains in substance the following provisions or provisions which, in the opinion of the director, are more favorable to a holder of a policy;
(1) a provision that there must be a period of grace of 30 days or of one month, within which payment of any premium after the first may be made and the policy must continue in force, but if a claim arises under the policy during the grace period before the overdue premiums or the deferred premiums of the current policy year, if any, are paid, the amount of premiums, together with interest not in excess of eight percent per annum, may be deducted from any amount payable under the policy in settlement. The policy may contain a statement of the basis for determining any variation in benefits that may occur as a result of the payment of premium during the grace period;
(2) a provision that the policy will be reinstated at any time within three years from the date of default, unless the cash surrender value has been paid or unless the period of extended insurance has expired, upon application of the insured, production of evidence satisfactory to the insurer of insurability and good health of the insured, and payment of an amount not exceeding the greater of
(A) all overdue premiums and the payment of any other indebtedness of the insurer on the policy with interest at a rate not exceeding eight percent per annum compounded annually; or
(B) 110 percent of the increase in cash surrender value resulting from reinstatement;
(3) a provision for cash surrender values and paid-up insurance benefits available as nonforfeiture options under the policy in the event of default in a premium payment after premiums have been paid for a specified period. If the policy does not include a table of figures for the options available, the policy must provide that the company will furnish at least once in each policy year a statement showing the cash value as of a date no earlier than the prior policy anniversary. The method of computation of cash values and other nonforfeiture benefits, as described either in the policy or in a statement filed with the insurance commissioner of the state in which the policy is delivered, must be in accordance with actuarial procedures that recognize the variable nature of the policy. If the net investment return credited to the contract at all times from the date of issue should be equal to the assumed investment increment factor if the contract provides for such a factor, or five and one-half percent if not, with premiums and benefits determined accordingly under the terms of the policy, the resulting cash values and other nonforfeiture benefits must be at least equal to the minimum values required by AS 21.45.300 for a fixed-dollar policy with the same premiums and benefits. The method of computation may disregard incidental minimum guarantees as to the dollar amounts payable. Incidental minimum guarantees include a guarantee under a policy which provides for an assumed investment increment factor that the amount payable at death or maturity shall be at least equal to the amount that otherwise would have been payable if the net investment return credited to the contract at all times from the date of issue had been equal to that factor.
(e) Any variable annuity contract delivered or issued for delivery in this state shall stipulate the investment increment factors to be used in computing the dollar amounts of variable benefits or other variable contractual payments or values thereunder, and may guarantee that expense and/or mortality results, shall not adversely affect such dollar amounts. In the case of an individual variable annuity contract under which the expense and mortality results may adversely affect the dollar amount of benefits, the expense and mortality factors shall be stipulated in the contract. "Expense," as used in this subsection may exclude some or all taxes, as stipulated in the contract.
(f) In computing the dollar amount of variable benefits or other contractual payments or values under an individual variable annuity contract
(1) the annual net investment increment assumption shall not exceed 5 percent except with the approval of the director;
(2) to the extent that the level of benefits may be affected by future mortality results, the mortality factor shall be determined from the Annuity Mortality Table for 1949, Ultimate, or any modification of that table not having a lower life expectancy at any age, or, if approved by the director from another table.
(g) Any individual variable life insurance policy delivered or issued for delivery in this state must stipulate the investment increment factor to be used in computing the dollar amount of variable benefits or other variable contractual payments or values under the policy and must guarantee that expense and mortality results may not adversely affect those dollar amounts.
(h) The reserve liability for variable contracts shall be established pursuant to the requirements of the standard valuation law in accordance with actuarial procedures that recognize the variable nature of the benefits provided and any mortality guarantees.
History
- Authority: AS 21.06.090; AS 21.42.315
- Eff. 11/8/73, Register 48; am 3/31/82, Register 81
3 AAC 28.150 Required reports
(a) Any company issuing individual variable contracts must mail the following statements to the contractholder at least once in each contract year after the first at the last address known to the company
(1) a statement or statements reporting the investments held in the separate account;
(2) in the case of an annuity contract under which payments have not yet commenced, a statement reporting as of a date not more than four months before the date of mailing,
(A) the number of accumulation units credited to the contract and the dollar value of a unit; or
(B) the value of the contractholder's account; and
(C) in the case of a life insurance policy, a statement of the dollar amount of the death benefit.
(b) The company shall submit annually to the director a statement of the business of its separate account or accounts in such form as may be prescribed by the NAIC.
History
- Authority: AS 21.06.090; AS 21.42.315
- Eff. 11/8/73, Register 48; am 3/31/82, Register 81
3 AAC 28.160 Foreign companies
If the law or regulation in the place of domicile of a foreign company provides a degree of protection to the policyholders and the public which is substantially equal to that provided by these regulations, the director, to the extent deemed appropriate by him, may consider compliance with such law or regulation as compliance with these regulations.
History
- Authority: AS 21.06.090; AS 21.42.315
- Eff. 11/8/73, Register 48
3 AAC 28.170 Examination of agents and other persons
(a) No agent shall be eligible to sell or offer for sale a variable contract unless prior to making any solicitation or sale of such a contract, he also be licensed as a variable contract agent.
(b) Any agent who participates only in the sale or offering for sale of variable contracts that are not registered under the Federal Securities Act of 1933 need not be licensed as a variable contract agent.
(c) Any agent applying for a license as a variable contract agent shall do so by filing with the division of insurance, "Uniform Form AP for Securities Salesmen, Variable Contract Salesmen and Other Associated Persons."
(d) The licensing as a variable contract agent of any agent complying with (c) of this section, shall not become effective until such agent shall have satisfactorily passed a written examination upon securities and variable contracts. Such examination shall be divided into two parts. Part I shall be on securities generally. Part II shall deal with variable contracts and shall be composed of at least 15 questions, but not more than 50 questions, concerning the history, purpose, regulation, and sale of contracts on a variable basis.
(e) Part I of the examination shall be one of the following and shall be administered by the agency inferred:
(1) any state securities sales examination accepted by the Securities and Exchange Commission;
(2) the National Association of Securities Dealers, Inc. Examination for Principals, or Examination for Qualification as a Registered Representative;
(3) the various securities examinations required by the New York Stock Exchange, the American Stock Exchange, Pacific Stock Exchange, or any other registered national securities exchange;
(4) the Securities and Exchange Commission test given pursuant to sec. 15(b)(8) of the Securities Exchange Act of 1934;
(5) the examination recommended for the testing of variable contract agents by the NAIC when adopted by the insurance department of any state or territory of the United States and approved for use by such department by the Securities and Exchange Commission.
(f) Part II of the examination will be given in such places and at such times as the director shall from time to time designate. Upon application for license as a variable contract agent, the applicant shall be notified of the date of the next examination.
(g) The examination recommended for the testing of variable contract agents by the NAIC is hereby adopted for use in this state in its present form, or as it may be amended, and it shall be used in all tests given pursuant to this regulation.
(h) Any applicant for license as a variable contract agent shall not be required to take Part I of the NAIC examination if, at the time of application, evidence is presented that the applicant
(1) has previously passed an examination as defined in (e) of this section; or
(2) is currently registered with the federal Securities and Exchange Commission as a broker-dealer, or is currently associated with a broker-dealer and has met qualification requirements with respect to such association.
(i) Every applicant applying for license as a variable contract agent shall satisfactorily complete Part I of the examination required by (d) of this section with a grade determined by the administrator of the test to be passing, before a license may be issued.
(j) Every applicant applying for license as a variable contract agent shall satisfactorily complete Part II of the examination required by (d) of this section, with a grade of at least 70 percent, or shall present evidence of successful completion of either a variable contract examination given under the supervision of an insurance department of any state or territory of the United States which has adopted Part II of the examination recommended for the testing of variable contract agents by the NAIC or has been examined and licensed by any such department prior to its adoption of the NAIC Model Regulation.
(k) Any applicant failing to pass Part II of the examination may take Part II again 20 days after the first and any subsequent examination.
(l) Every application for a license as a variable contract agent shall be accompanied by an examination fee of $10. A fee of $10 will be charged for each re-examination administered to an applicant.
(m) Report of the results of any examination given pursuant to this regulation shall be made by the division of insurance on a form designated by the director.
(n) Except as modified by these regulations, the regulations of this division governing the licensing of life insurance agents including examinations therefor shall apply hereto.
(o) Results of the examination administered pursuant to (d) of this section will be reported by this division to the applicant's company. In addition, examination results will be reported by this division to any other state insurance department requesting confirmation of the examination grade, either upon request of such department or upon request of the applicant or his company.
(p) A charge of $5 shall be made for the second and each subsequent report of examination results.
(q) Records of the examination grade of each applicant upon an examination administered by this division or upon an examination administered by another agency or authority and reported to this division will be retained in the file pertaining to said applicant.
(r) Any person licensed in this state as a variable contract agent shall immediately report to the director
(1) any suspension or revocation of his variable contract agent's license or life insurance agent's license in any other state or territory of the United States,
(2) the imposition of any disciplinary sanction (including suspension or expulsion from membership, suspension or revocation of or denial of registration) imposed upon him by any national securities exchange, or national securities association, or any federal, or state or territorial agency with jurisdiction over securities or contracts on a variable basis;
(3) any judgment or injunction entered against him on the basis of conduct deemed to have involved fraud, deceit, misrepresentation, or violation of any insurance or securities law or regulation.
(s) The director may reject any application or suspend or revoke or refuse to renew any variable contract agent's license upon any ground that would bar such applicant or such agent from being licensed to sell life insurance contracts in this state. The rules governing any proceeding relating to the suspension or revocation of a life insurance agent's license shall also govern any proceeding for suspension or revocation of a variable contract agent's license.
(t) Renewal of a variable contract agent's license shall follow the same procedure established for renewal of an agent's license to sell life insurance contracts in this state.
History
- Authority: AS 21.06.090; AS 21.42.315
- Eff. 11/8/73, Register 48
3 AAC 28.180 Information to applicant required of insurance company
(a) The following information must be furnished to an applicant for a contract of variable life insurance before the application is completed:
(1) a summary description of the insurance company and its principal activities;
(2) a summary explanation in nontechnical terms of the principal variable features of the contract and of the manner in which the variable benefits reflect the investment experience of a separate account;
(3) a brief description of the investment policy for the separate account with respect to the contract;
(4) a list of investments in the separate account as of a date not earlier than the end of the last year for which an annual statement has been filed;
(5) summary financial statements of the insurance company and its separate accounts based on the last annual statement filed, except that, for a period of four months after filing any annual statement the summary statements may be based on the annual statements immediately preceding the last annual statements filed;
(6) any additional information which the insurance company considers appropriate.
(b) A statement containing the information required by (a) of this section must be filed before the information is used. The statement is subject to disapproval if it is found to be inaccurate or misleading.
(c) In this section, "filed" means filed with the commissioner or director of insurance of the domiciliary state of the insurance company.
History
- Authority: AS 21.06.090; AS 21.42.315
- Eff. 3/31/82, Register 81
3 AAC 28.190 Definitions
In 3 AAC 28.010 - 3 AAC 28.180
(1) "agent" means any person, corporation, partnership, or other legal entity which under the laws of this state is licensed as a life insurance agent, solicitor, general agent, broker, or life insurance broker;
(2) "director" means the director of the division of insurance;
(3) "division" means the division of insurance, Department of Commerce;
(4) "NAIC" means the National Association of Insurance Commissioners;
(5) "variable contract" shall mean any policy or contract which provides for insurance or annuity benefits which may vary according to the investment experience of any separate account or accounts maintained by the insurer as to such policy or contract;
(6) "variable contract agent" shall mean an agent who shall sell or offer to sell any variable contract.
History
- Authority: AS 21.06.090; AS 21.42.315
- Eff. 11/8/73, Register 48; am 3/31/82, Register 81
Article 2 Filing of Forms
3 AAC 28.200 Form filing requirements
Repealed.
History
- Eff. 11/8/73, Register 48; am 12/14/77, Register 64; am 3/26/82, Register 81; repealed 12/4/94, Register 132
3 AAC 28.210 Form approval, acknowledgment and retention
Repealed 12/14/77.
3 AAC 28.211 Filing acknowledgments and retention
Repealed.
History
- Eff. 12/14/77, Register 64; repealed 12/4/94, Register 132
Article 3 Filing of Rates
3 AAC 28.220 Rate filings when required
Repealed.
History
- Eff. 11/8/73, Register 48; am 7/1/92, Register 122; am 4/20/97, Register 142; repealed 3/11/98, Register 145
3 AAC 28.230 Rate filings by hospital or medical service corporations
Repealed.
History
- Eff. 11/8/73, Register 48; repealed 12/4/94, Register 132
Article 4 Consumer Credit Insurance
3 AAC 28.310 Purpose
The purpose of 3 AAC 28.310 - 3 AAC 28.405 is to protect the public by providing rate, policy form, and operating standards for consumer credit insurance as defined in AS 21.57.160.
History
- Authority: AS 21.06.090; AS 21.57.130
- Eff. 3/29/81, Register 77; am 7/2/2001, Register 158
3 AAC 28.320 Rights and treatment of debtors
(a) A creditor that offers more than one plan of consumer credit insurance for the same type of loan transaction shall inform each debtor of all applicable plans.
(b) A group consumer credit insurance policy under which an insured debtor pays a single premium to the insurer must provide that, if the group policy is terminated, insurance coverage must continue for the insured debtor's contract period.
(c) A group consumer credit insurance policy under which an insured debtor pays premiums on a monthly outstanding-balance basis must provide that, if the group policy is terminated for any reason, the insurer, or the creditor at the option of the insurer, will notify the insured debtor that coverage will be discontinued 30 days after the date the notice is mailed. The notice is not required if replacement coverage is provided by the same or another insurer in the same or greater amount without lapse of coverage.
(d) If an insured debtor prepays the indebtedness from sources other than benefits from a policy of consumer credit insurance, the consumer credit insurance covering the indebtedness must be terminated and the unearned premium refunded to the debtor in accordance with AS 21.57.090 and 3 AAC 28.360. If a claim under the credit disability insurance or credit unemployment insurance coverage is in progress at the time of prepayment, the claim must continue as if the debt was not prepaid.
(e) If a debtor prepays the indebtedness by the proceeds of a credit life insurance policy covering that debtor, by a lump sum payment of a disability claim under a credit disability insurance policy covering that debtor, or a lump sum payment of an unemployment claim under a credit unemployment insurance policy covering that debtor, the insurer shall, in accordance with AS 21.57.090 and 3 AAC 28.360, pay to the debtor, to the beneficiary named by the debtor other than the creditor, or to the debtor's estate the amount of the benefits in excess of the amount required to repay the indebtedness after crediting any unearned interest or finance charges, and the following unearned premiums:
(1) the credit disability insurance premium and the credit unemployment premium if the prepayment is from the proceeds of a credit life insurance policy;
(2) the credit life insurance premium and the credit unemployment premium if the prepayment is from the proceeds of a credit disability policy;
(3) the credit life insurance premium and the credit disability premium if the prepayment is from the proceeds of a credit unemployment policy.
(f) If a creditor adds insurance charges or premiums for consumer credit insurance to the indebtedness, and the creditor makes any direct or indirect finance, carrying credit, or service charge to the debtor on those insurance charges or premiums, the creditor shall remit and the insurer shall collect those insurance charges or premiums within 60 days after they are added to the indebtedness.
(g) The effective date of insurance coverage on renewed, refinanced, or consolidated indebtedness, up to the amount of indebtedness immediately before the date of renewal, refinance, or consolidation, is the effective date of the insurance coverage on the indebtedness immediately before renewal, refinance, or consolidation. If the renewed, refinanced, or consolidated indebtedness is larger than the indebtedness immediately before the date of renewal, refinance, or consolidation, the insurer may set the effective date of insurance coverage on the difference to be the date of renewal, refinance, or consolidation.
(h) A provision in a policy or certificate that sets a maximum limit on total payments must apply only to that policy or certificate.
(i) If a creditor has opened a line of credit for a debtor and, in accordance with AS 21.57.040(a)(1), the amount of insurance exceeds the amount of debt, the amount payable in the event of the death of the debtor must be the total amount on which the last premium or insurance charge was computed less the total amount of payments that have been applied against the debt since the date the last premium or insurance charge was debited to the account.
History
- Authority: AS 21.06.090; AS 21.57.090 AS 21.57.040; AS 21.57.130
- Eff. 3/29/81, Register 77; am 6/6/93, Register 126; am 7/2/2001, Register 158
3 AAC 28.325 Disclosure to debtors
An insurer must disclose the information required by AS 21.57.055 in clear and understandable language printed in a conspicuous place in at least 8-point bold face type if coverage is offered on a direct mail basis and at least 10-point bold face type if coverage is offered on any other basis. A verbatim statement of AS 21.57.055 is not required.
History
- Authority: AS 21.06.090; AS 21.57.055; AS 21.57.130
- Eff. 7/2/2001, Register 158
3 AAC 28.327 Consumer credit insurance written in connection with lease contracts
(a) For purposes of meeting the maximum amount of insurance requirements under AS 21.57.040 for consumer credit insurance on lease contracts, the maximum amount of insurance is the sum of the remaining lease payments including, if applicable, the payment of the fixed residual value.
(b) Credit disability and credit unemployment insurance may not be provided on the fixed residual value.
(c) Prima facie rates for consumer credit insurance on lease contracts are the actuarial equivalent of the premium rates established in 3 AAC 28.340 - 3 AAC 28.352.
History
- Authority: AS 21.06.090; AS 21.57.040; AS 21.57.130
- Eff. 7/2/2001, Register 158
3 AAC 28.328 Multiple consumer credit insurance benefits issued as a package
If multiple consumer credit insurance benefits are issued only as a package and not separately, and if a benefit is exhausted, the insurer shall reduce the premium rate by removing any charges for the exhausted benefits.
History
- Authority: AS 21.06.090; AS 21.57.080; AS 21.57.130
- Eff. 7/2/2001, Register 158
3 AAC 28.330 Determination of reasonableness of benefits in relation to premium charge for credit life and credit disability insurance
(a) The benefits provided by a credit life or credit disability insurance policy must be reasonable in relation to the premium charged. The director will consider the rate charged reasonable
(1) for a credit life or credit disability insurance policy with standard coverage as described in 3 AAC 28.335 if the premium rate charged complies with 3 AAC 28.340 and 3 AAC 28.350; and
(2) for a credit life or credit disability insurance policy with coverage that would be standard coverage except that evidence of individual insurability is required or requested within 30 days after the date the debtor becomes eligible, if the premium rate charged is the applicable rate in 3 AAC 28.340 and 3 AAC 28.350 multiplied by 0.9.
(b) An insurer shall file each rate the insurer intends to use in accordance with 3 AAC 31.200 - 3 AAC 31.240, and shall include in each rate filing a full description of the benefits provided and any other information the director may require to determine whether the rates are reasonable in relation to the benefits provided. Except as provided in (a) of this section, an insurer shall demonstrate to the satisfaction of the director that a premium rate to be charged will not be excessive in relation to the benefits provided. A premium rate must reflect the benefit level and the expected term of the benefits to be provided under a policy. An insurer may file a composite premium rate for approval if the rate is computed to reflect the actual distribution by benefit level and the expected term of benefits to be provided under the policy.
(c) An insurer may not file a rate for approval for a credit life or credit disability insurance policy with standard coverage that is higher than the applicable prima facie rates shown in 3 AAC 28.340 and 3 AAC 28.350 unless the insurer demonstrates to the satisfaction of the director that the ratio of expected claims to prima facie premiums exceeds 50 percent. The rates must be applied
(1) uniformly to all accounts of the insurer;
(2) on an equitable basis approved by the director to only one or more accounts of the insurer for which the experience has been less favorable than expected; or
(3) according to a case-rating procedure approved by the director as being based upon commonly accepted actuarial assumptions and being in conformance with sound actuarial principles.
(d) The director will approve a deviated rate for a period of time as follows:
(1) an insurer may have a deviated rate in effect for no longer than the experience period used to establish the rate; an insurer may file for a new rate before the end of the rate period, but not more often than once during any 12-month period;
(2) if the insurer for an account changes, the succeeding insurer shall use the rate approved for the former insurer's use on that account for each insured debtor for the remainder of the existing rate period or until the succeeding insurer files and obtains the director's approval of a new rate.
APPENDIX A Alaska Credit Insurance Claim Costs
Repealed 5/11/2007.
History
- Authority: AS 21.06.090; AS 21.57.080; AS 21.57.130
- Eff. 3/29/81, Register 77; am 6/6/93, Register 126; am 7/2/2001, Register 158; am 5/11/2007, Register 182
3 AAC 28.335 Standard coverage
(a) Standard coverage for credit life insurance is coverage that an insurer offers to all eligible debtors, without requiring or requesting evidence of individual insurability on or within 30 days before or after the date the debtor becomes eligible, and that contains the following provisions:
(1) coverage for death by any cause, except that the insurer may exclude coverage for death resulting from
(A) war, or an act of war;
(B) suicide within 12 months after the effective date of the coverage; or
(C) a preexisting condition for which the insured received medical advice, diagnosis, or treatment within six months before the effective date of the insured's coverage and that caused or contributed to the death of the insured within six months after the effective date of coverage;
(2) for the exclusions listed under (1)(B) and (C) of this subsection, a provision setting the effective date of coverage for each part of the insurance attributable to a different advance or charge to the plan account as the date on which the advance or charge is posted to the plan account;
(3) at the option of the insurer and instead of a preexisting condition exclusion on insurance written in connection with open-end consumer credit, a provision to limit the amount of insurance payable on death due to natural causes to the balance as it existed six months before the date of death if
(A) at least one increase occurs in the outstanding balance during the six months before the date of death, other than an increase due to the accrual of interest or late charges; and
(B) evidence of individual insurability is not required during the six months before the date of death;
(4) an age restriction providing that credit life insurance will not become effective for a debtor on or after the attainment of age 66 and that all credit life insurance will terminate once a debtor reaches the age of 66.
(b) Standard coverage for credit disability insurance is coverage that an insurer offers to all eligible debtors, without requiring or requesting evidence of individual insurability on or within 30 days before or after the date the debtor becomes eligible, and that
(1) contains the following provisions:
(A) coverage for disability by any cause, except that the insurer may exclude coverage for disabilities resulting from
(i) a normal pregnancy;
(ii) war or an act of war;
(iii) elective surgery;
(iv) intentionally self-inflicted injury;
(v) sickness or injury caused by or resulting from the use of alcoholic beverages or narcotics, including hallucinogens, unless they are administered on the advice of a physician other than the debtor;
(vi) flight in an aircraft other than a commercial scheduled aircraft; or
(vii) a preexisting condition for which the insured received medical advice, diagnosis, or treatment within six months before the effective date of the insured's coverage and that caused a loss within the six months after the effective date of coverage; the effective date of coverage for each part of the insurance attributable to a different advance or charge to the plan account is the date on which the advance or charge is posted to the plan account;
(B) a definition of disability providing that
(i) for the first 12 months of disability, total disability is defined as the insured's inability to perform the essential functions of the insured's own occupation; and
(ii) after the first 12 months of disability, total disability is defined as the insured's inability to perform the essential functions of any occupation for which the insured is reasonably suited by virtue of education, training, or experience;
(C) an age restriction providing that credit disability insurance will not become effective for a debtor on or after the attainment of age 66 and that all credit disability insurance will terminate once a debtor reaches the age of 66;
(D) a daily benefit of not less than one-thirtieth of the monthly benefit payable under the policy; and
(2) does not contain an employment requirement more restrictive than one requiring that the debtor be employed and actively at work full-time on the effective date of coverage; for purposes of this paragraph, a debtor is
(A) at work full-time if the debtor works a regular work week of not less than 30 hours; and
(B) actively at work if absence from work is due solely to a regular day off, holiday, or paid vacation.
(c) An application form for which any underwriting questions have been answered or filled in is evidence of individual insurability. An application form for which all underwriting questions have been left unanswered, and for which other evidence of underwriting questions being answered by the debtor does not exist, will be considered coverage offered without evidence of individual insurability for purposes of (a) and (b) of this section if coverage is issued based on the application.
History
- Authority: AS 21.06.090; AS 21.57.050; AS 21.57.130 AS 21.57.040; AS 21.57.080
- Eff. 7/2/2001, Register 158; am 4/4/2002, Register 162
3 AAC 28.337 Underwriting standards and requirements
An insurer shall file for approval by the director any form that will be used if the creditor or insurer requests or requires evidence of individual insurability. An insurer shall develop and maintain in its files underwriting standards that include the type of underwriting questions that will be asked and the class of proposed insureds that will be requested or required to respond to those questions as a condition of obtaining credit insurance. The underwriting standards may not unfairly discriminate among individuals of the same class. An insurer shall inform all group policyholders, creditors, and other insurance producers of the applicable underwriting standards and ensure that these standards are followed by the group policyholders, creditors, and other producers.
History
- Authority: AS 21.06.090; AS 21.57.080; AS 21.57.130
- Eff. 7/2/2001, Register 158
3 AAC 28.340 Credit life insurance rates
(a) The prima facie rates for credit life insurance with standard coverage written on the insured portion of a debt are as follows:
(1) if the premium is payable on a monthly outstanding balance basis, $.67 per month per $1,000 of outstanding insured net debt on single life and $1.06 per month per $1,000 of outstanding insured net debt on joint life;
(2) if the premium is payable on a single premium basis, the rate must be computed according to the following formula or according to a formula approved by the director that produces rates substantially the same as those produced by the following formula:
Click to view
Click to view FORMULA
where Sn is the single premium per $100 of initial outstanding insured net debt, Opis the prima facie credit life insurance premium rate for monthly outstanding balance coverage that is not written on an open-end consumer credit basis under (1) of this subsection, and n is the number of months in the term of the insurance.
(b) The rates must be adjusted to be actuarially consistent with the rates in (a) of this section if
(1) rates are applied to or benefits are for an amount other than the outstanding insured net debt;
(2) benefits are not those described in 3 AAC 28.335 for standard coverage; or
(3) benefits are for a term that differs from the term of the loan.
History
- Authority: AS 21.06.090; AS 21.57.080; AS 21.57.130
- Eff. 3/29/81, Register 77; am 6/6/93, Register 126; am 7/2/2001, Register 158; am 7/4/2001, Register 158; am 5/11/2007, Register 182
3 AAC 28.350 Credit disability insurance rates
(a) The prima facie rates for credit disability insurance with standard coverage written on the insured portion of a debt that is repayable in equal monthly installments and decreases uniformly by the amount of the monthly installments paid, are as follows:
(1) if premiums are payable on a single-premium basis, the prima facie rate per $100 of initial outstanding insured gross debt for single life credit disability insurance is as set out in the following table:
14 Day30 DayOriginal Number
of Equal Monthly
Installments14 Day
Retroactive
PoliciesNon-retro-
active
Policies30 Day
Retroactive
PoliciesNon-retro-
active
Policies61.151.031.020.87121.351.221.201.03241.561.431.411.21361.731.591.561.34481.871.741.701.47602.011.881.831.59722.142.011.961.70842.282.152.091.82962.422.292.221.941082.562.432.352.071202.712.582.492.19
(2) if premiums are payable on the basis of a premium rate per month per $1,000 of outstanding insured gross debt, premiums must be computed according to the following formula:
Click to view
where OPn is the monthly outstanding balance premium rate per $1,000 of outstanding insured gross debt, SPn is the single premium rate per $100 of initial outstanding insured gross debt repayable in n equal monthly installments as shown in (1) of this subsection, and n is the number of months in the term of the insurance.
(b) If rates are applied to an amount other than the outstanding insured gross debt or benefits differ from those stated in (a) of this section, the rates must be adjusted to be actuarially consistent with the rates in (a) of this section.
(c) If the coverage provided is a constant maximum indemnity for a given period of time, the rates must be adjusted to be actuarially consistent with the rates in (a) of this section.
(d) If the coverage provided is a combination of a constant maximum indemnity for a given period of time, after which the maximum indemnity begins to decrease in even amounts per month, each rate must be an appropriate combination of the premium rate
(1) in (c) of this section for a constant maximum indemnity for a given period of time; and
(2) in (a) of this section for a maximum indemnity that decreases in even amounts per month.
(e) The prima facie rates for credit disability insurance with standard coverage written on an open-end consumer credit basis with premiums payable on the basis of a premium rate per month, and with a monthly benefit equal to a constant percentage of the outstanding insured debt on the date of disability and a maximum benefit equal to the net debt on the date of disability, are determined by calculating the term of coverage as n equals 1.0 divided by the minimum payment percentage on the account and then applying n to the formula specified in (a)(2) of this section.
(f) If the rates in (e) of this section are applied to an amount other than the outstanding insured debt or benefits differ from those stated in (e) of this section, the rates must be adjusted to be actuarially consistent with the rates in (e) of this section.
(g) If the disability benefit is sold on a joint basis, the rate for the joint coverage must be 1.6 times the single rate.
History
- Authority: AS 21.06.090; AS 21.57.080; AS 21.57.130
- Eff. 3/29/81, Register 77; am 6/6/93, Register 126; am 7/2/2001, Register 158; am 5/11/2007, Register 182
3 AAC 28.352 Credit unemployment insurance rates and benefits
(a) The benefits provided by a credit unemployment insurance policy must be reasonable in relation to the premium charged.
(b) An insurer shall include in a credit unemployment insurance rate filing the appropriate formula and statistics upon which the rates are based. The statistics must include historical company loss and expense experience, to the extent that experience is available, and unemployment statistics for the state as published by the United States Department of Labor, Bureau of Labor Statistics, or similar unemployment statistics from another organization, if the director approves that organization's statistics for credibility and accuracy. An insurer may include as anticipated losses an amount for fluctuation in loss due to catastrophe based on the experience of at least the most recent nine years of data. The amount of fluctuation in loss due to a catastrophe used to develop premium rates may not be higher than the 75th percentile of the state's unemployment rates over that experience period.
(c) A credit unemployment insurance policy must contain benefits at least as favorable to a debtor as the following provisions:
(1) coverage for unemployment for any reason, except that coverage may be excluded for
(A) voluntary forfeiture of salary, wage, or other employment income;
(B) resignation;
(C) retirement;
(D) a general strike;
(E) an illegal walk-out;
(F) war or an act of war;
(G) separation from the military;
(H) wilful or criminal misconduct;
(I) unlawful behavior; or
(J) disability caused by injury, sickness, or pregnancy;
(2) monthly benefits must start after a waiting period of no more than 30 days;
(3) benefits need not be retroactive to the first day of unemployment;
(4) the maximum benefit period may not be less than six months.
(d) A credit unemployment insurance policy may not contain eligibility requirements more restrictive than the following:
(1) an exclusion from coverage of
(A) self-employed individuals;
(B) workers in seasonal or temporary jobs designed to last no more than six months; and
(C) workers who have been notified of a layoff or employment termination within 60 days before the effective date of coverage;
(2) a requirement that a debtor must be employed full-time on the effective date of coverage and for at least 12 consecutive months before the effective date; for purposes of this paragraph, a debtor is employed full-time if the debtor works a regular work week of not less than 30 hours;
(3) an age restriction providing that credit unemployment insurance will not become effective for a debtor on or after the attainment of age 66 and that all credit unemployment insurance will terminate once a debtor reaches the age of 66.
History
- Authority: AS 21.06.090; AS 21.57.080; AS 21.57.130
- Eff. 7/2/2001, Register 158
3 AAC 28.355 Limitations on compensation
(a) An insurer selling a credit life insurance policy that has been filed and approved at rates higher than the prima facie rates may not pay an insurance producer compensation in excess of 30 percent of the net written prima facie premium established in 3 AAC 28.340. Compensation is not limited on a policy written at or below the prima facie rate.
(b) An insurer selling a credit disability insurance policy that has been filed and approved at a rate higher than the prima facie rate may not pay an insurance producer compensation in excess of the prima facie rate multiplied by the percentages given in the table below. Compensation is not limited on a policy written at or below the prima facie rate.
Type of Plan Percent of Prima Facie Premium 14-day retroactive2614-day non-retroactive2830-day retroactive3030-day non-retroactive34
(c) An insurer may not pay insurance producer compensation in excess of 30 percent of the premium charged for a credit unemployment insurance policy.
History
- Authority: AS 21.06.090; AS 21.57.080; AS 21.57.130
- Eff. 6/6/93, Register 126; am 7/2/2001, Register 158
3 AAC 28.360 Refund formulas
(a) An insurer may not charge a premium for consumer credit insurance for a loan month in which the policy is terminated within the first 15 days. An insurer may charge a full month's premium if a consumer credit insurance policy is terminated on or after the 16th day of the loan month.
(b) As part of a rate filing an insurer shall file the formula to be used in computing refunds. The method of computing refunds must be clearly stated in a group policy, group certificate, or individual policy.
(c) An insurer is not required to make a refund of $5 or less unless an existing debt is refinanced or consolidated.
History
- Authority: AS 21.06.090; AS 21.57.090 AS 21.57.060; AS 21.57.130
- Eff. 3/29/81, Register 77; am 6/6/93, Register 126; am 7/2/2001, Register 158
3 AAC 28.370 Experience reports and adjustment of prima facie rates
Repealed.
History
- Eff. 3/29/81, Register 77; am 6/6/93, Register 126; am 7/2/2001, Register 158; am 4/4/2002, Register 162; repealed 8/20/2016, Register 219
3 AAC 28.380 Deviations from prima facie rates
Repealed.
History
- Eff. 3/29/81, Register 77; am 6/6/93, Register 126; repealed 7/2/2001, Register 158
3 AAC 28.385 Supervision of consumer credit insurance operations
(a) An insurer transacting consumer credit insurance in this state shall conduct a thorough review of each creditor with which the insurer does business every 24 months beginning no later than 12 months after July 2, 2001 to ensure compliance with applicable state law.
(b) An insurer's review under (a) of this section must include a determination that
(1) premiums the creditor charged to a debtor are the approved charges for use in this state;
(2) the creditor accurately calculated and made refunds;
(3) the creditor promptly filed and properly handled each claim;
(4) each person representing the insurer in the transaction of consumer credit insurance in the state held the appropriate insurance license under AS 21.27; and
(5) each debtor received the disclosure statements required under AS 21.57.055 before the purchase of consumer credit insurance.
(c) An insurer shall maintain documentation of its reviews for five years for inspection by the director.
(d) An insurer shall respond within 20 working days to a request by the director for documentation of a review done under this section.
History
- Authority: AS 21.06.090; AS 21.57.125 AS 21.57.055; AS 21.57.130
- Eff. 7/2/2001, Register 158
3 AAC 28.390 Prohibited transactions
(a) A consumer credit insurer may not
(1) offer or grant any special favor or advantage, or any valuable consideration or inducement not set out in the insurance contract other than the payment of producers' commissions;
(2) offer to deposit or deposit with a bank or other financial institution, money or securities of the insurer or of any affiliate of the insurer with the design or intent that the deposit of money or securities serve as a compensating balance or offsetting deposit for a loan or other advance;
(3) deposit money or securities with a bank or financial institution without interest or at a lesser rate of interest than is currently being paid other depositors on similar deposits with the bank or financial institution; however, the insurer may maintain demand deposits that are reasonably necessary for use in the ordinary course of business;
(4) sell or offer to sell any capital stock or other security or certificate of debt of the insurer, employee of the insurer, or stockholder of the insurer as an inducement to the sale or placement of consumer credit insurance;
(5) pay or offer to pay any part of the premium for any insurance on the life, health, income, or property of the creditor, an employee of the creditor, or stockholder of the creditor as an inducement to the sale or placement of consumer credit insurance;
(6) extend credit to the creditor by remitting premiums after the grace period of a group policy or beyond 45 days after the effective date of an individual policy; or
(7) engage in any other practices that involve the use of the resources of the insurer for the benefit of the creditor.
(b) A creditor may not collect the insurance premium from the debtor on a single-premium basis and remit that premium to the insurer on any basis other than a single-premium basis.
History
- Authority: AS 21.06.090; AS 21.36.100; AS 21.57.130
- Eff. 3/29/81, Register 77; am 6/6/93, Register 126; am 7/2/2001, Register 158
3 AAC 28.395 Review
Repealed.
History
- Eff. 6/6/93, Register 126; repealed 7/2/2001, Register 158
3 AAC 28.397 Renewal date
Unless otherwise specifically stated in a policy of insurance, the renewal date of a consumer credit insurance group policy is the policy anniversary date. A certificate of insurance issued under a group policy must have a renewal date consistent with the group policy.
History
- Authority: AS 21.06.090; AS 21.57.050; AS 21.57.130
- Eff. 7/2/2001, Register 158
3 AAC 28.400 Compliance date
Unless otherwise provided by law, the compliance date of a change under an individual or group insurance policy or any related notice of proposed insurance, insurance disclosure notice, application for insurance, endorsement, rider, or premium rates as a result of a change to this chapter is the issue date for a new policy or the renewal date for a renewal policy.
History
- Authority: AS 21.06.090; AS 21.57.130
- Eff. 3/29/81, Register 77; am 6/6/93, Register 126; am 7/2/2001, Register 158; am 4/4/2002, Register 162
3 AAC 28.405 Definitions
In 3 AAC 28.310 - 3 AAC 28.405, unless the context requires otherwise,
(1) "evidence of individual insurability" means a statement furnished by a debtor, as a condition of consumer credit insurance becoming effective, that relates specifically to the debtor's
(A) health status;
(B) medical condition, including physical and mental illnesses;
(C) claims experience;
(D) receipt of health care; or
(E) medical history;
(2) "fixed residual value" means for a lease contract the contractual amount for which the leased property may be purchased at the end of the lease.
History
- Authority: AS 21.06.090; AS 21.57.130; AS 21.57.160
- Eff. 6/6/93, Register 126; am 7/2/2001, Register 158
Article 5 Health Insurance Marketed as Medicare Supplements
3 AAC 28.410 Purpose
The purpose of 3 AAC 28.410 - 3 AAC 28.510 is to protect the public by
(1) standardizing and simplifying the terms and benefits of medicare supplement policies;
(2) eliminating policy or contract provisions that are misleading or confusing;
(3) providing for full disclosure in the sale of health insurance coverage to persons eligible for medicare; and
(4) facilitating public understanding and comparison of medicare supplement policies.
History
- Authority: AS 21.06.090; AS 21.42.120; AS 21.87.140 AS 21.36.020; AS 21.42.130; AS 21.87.150 AS 21.36.030; AS 21.86.220; AS 21.87.160 AS 21.36.040; AS 21.87.020; AS 21.87.170 AS 21.36.050; AS 21.87.120; AS 21.87.180 AS 21.42.090; AS 21.87.130; AS 21.96.060
- Eff. 3/26/82, Register 81; am 8/8/90, Register 115; am 7/1/92, Register 122; am 4/20/97, Register 142
3 AAC 28.420 Applicability and scope
Repealed.
History
- Eff. 3/26/82, Register 81; am 8/8/90, Register 115; am 7/1/92, Register 122; am 6/4/93, Register 126; am 7/12/96, Register 139; am 4/21/99, Register 150; am 7/12/2000, Register 155; repealed 9/19/2009, Register 191
3 AAC 28.430 Policy definitions and terms
(a) A medicare supplement policy or certificate using the following terms or their equivalent must contain terms and definitions as follows:
(1) "accident," "accidental injury," or "accidental means" must use "result" language and may not include words that establish an accidental-means test or use words characterizing the accident or injury as "external, violent, or visible wounds" or similar words of description or characterization; the definition may not be more restrictive than "injury or injuries for which benefits are provided means accidental bodily injury sustained by the insured person that is the direct result of an accident, independent of disease, bodily infirmity, or other cause, and occurs while insurance coverage is in force"; the definition may provide that injuries must not include injuries for which benefits are provided or available under a workers' compensation, employer's liability, or similar law or a motor vehicle no-fault plan, unless prohibited by law;
(2) "benefit period" or "medicare benefit period" may not be more restrictively defined than in the medicare program;
(3) "convalescent nursing home," "extended care facility," or "skilled nursing facility" may not be more restrictively defined than in the medicare program;
(4) repealed 7/1/92;
(5) "hospital" may be defined in relation to its status, facilities, and available services or to reflect its accreditation by the Joint Commission on Accreditation of Hospitals, but not more restrictively than as defined in the medicare program;
(6) repealed 7/1/92;
(7) "medicare" means Title I, Part I of Public Law 89-97, as enacted by the Eighty-Ninth Congress of the United States of America, including subsequent amendments, (popularly known as the Health Insurance for the Aged Act) and each policy or certificate must include this or a substantively equivalent definition;
(8) "injury or injuries for which benefits are provided" means accidental bodily injury sustained by the insured person that is the direct result of an accident, independent of disease or bodily infirmity or any other cause, and occurs while the insurance coverage is in force; however, injuries for which benefits are provided under any workers compensation, employer's liability or similar law may be excluded;
(9) "medicare eligible expenses" must include expenses of the kind covered by medicare Parts A and B, to the extent recognized as reasonable and medically necessary by medicare;
(10) repealed 7/1/92;
(11) repealed 7/1/92;
(12) if the terms "qualified physician" or "licensed physician" are used, the insurer must accept, to the extent of its obligation under the policy, all services provided that are within the scope of the provider's licensed authority, and the terms must not be defined more restrictively than as defined in the medicare program;
(13) "sickness" must be defined to include any disease or illness of a covered person which first manifests itself after the effective date of coverage and while the coverage is in force, but may exclude disease or illness for which benefits are provided under any workers compensation, occupational disease, employer's liability, or similar law;
(14) "health care expenses" must mean, for purposes of 3 AAC 28.468, expenses of a health maintenance organization associated with the delivery of health care services that are analogous to incurred losses of insurers.
(b) Repealed 7/1/92.
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 3/26/82, Register 81; am 8/8/90, Register 115; am 7/1/92, Register 122; am 6/4/93, Register 126; am 9/4/2005, Register 175
3 AAC 28.440 Policy provisions
(a) Except for permitted preexisting condition clauses described in 3 AAC 28.450, 3 AAC 28.453, and 3 AAC 28.454, a policy or certificate may not be advertised, solicited, or issued for delivery in this state as a medicare supplement policy if that policy or certificate contains limitations or exclusions on coverage that are more restrictive than those of medicare.
(b) A medicare supplement policy or certificate in force in this state may not contain benefits that duplicate benefits provided by medicare.
(c) A medicare supplement policy or certificate may not exclude, limit, or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions.
(d) Reserved.
(e) A medicare supplement policy or certificate may not contain the terms "Medicare Supplement," or "Medigap," or words of similar import, unless the policy or certificate is issued in compliance with 3 AAC 28.410 - 3 AAC 28.510.
(f) Subject to 3 AAC 28.450(a)(6) and (7), (d), (f), and (i), and 3 AAC 453(b)(4) and (5), an issuer shall renew, at the option of the policyholder, a medicare supplement policy that includes benefits for outpatient prescription drugs and that was issued before January 1, 2006, if the policyholder does not enroll in medicare Part D.
(g) After December 31, 2005, an issuer may not issue a medicare supplement policy that includes benefits for outpatient prescription drugs.
(h) After December 31, 2005, an issuer may not renew a medicare supplement policy that includes benefits for outpatient prescription drugs if the policyholder enrolls in medicare Part D unless the
(1) policy is modified to remove coverage for outpatient prescription drug expenses incurred by the policyholder after the effective date of policyholder's coverage under medicare Part D; and
(2) premium for the modified policy is adjusted to reflect the removal of the outpatient prescription drug coverage.
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 3/26/82, Register 81; am 8/8/90, Register 115; am 7/1/92, Register 122; am 9/4/2005, Register 175; am 9/19/2009, Register 191
3 AAC 28.450 Minimum benefit standards for pre-standardized medicare supplement policies or certificates issued before 7/1/1992
(a) A medicare supplement policy or certificate issued before 7/1/92 may not be advertised, solicited, or issued for delivery in this state, unless it meets the following minimum policy or certificate standards:
(1) a loss incurred more than six months after the effective date of coverage for a preexisting condition must be covered;
(2) "preexisting condition" may not be more restrictively defined than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage;
(3) limitations of coverage with respect to preexisting conditions must appear as a separate paragraph in the policy or certificate and be labeled as "Preexisting Condition Limitations";
(4) a sickness may not be covered on a different basis than a loss resulting from an accident;
(5) benefits designed to cover cost-sharing amounts under medicare must be changed automatically to coincide with any changes in the applicable medicare deductible, copayment, or coinsurance amounts, and the premiums charged may be changed to correspond with these changes;
(6) cancellation or nonrenewal may not be based solely on deterioration of health;
(7) other than for the nonpayment of premium, coverage provided to the spouse of the named insured through the same policy or certificate may not be cancelled or nonrenewed solely because of an occurrence or event that results in the termination of the named insured's coverage;
(8) renewal, continuation, or nonrenewal provisions must be contained in the policy or certificate;
(9) except for a rider or an endorsement by which the insurer effectuates a request made in writing by an insured who exercises a specifically reserved right under a medicare supplement policy or certificate, or a rider or an endorsement that is required to reduce or eliminate benefits to avoid duplication of medicare benefits, a rider or an endorsement added to a medicare supplement policy or certificate after the date of issue or at reinstatement or renewal that reduces or eliminates benefits or coverage in the policy or certificate requires a signed acceptance by the insured; after the date of policy issuance, a rider or an endorsement that increases benefits or coverage with a concomitant increase in premium during the policy term must be agreed to in written form, signed by the insured, unless the benefits are required by the minimum standards for a medicare supplement insurance policy or certificate, or the increased benefits or coverage are required by law; if a separate, additional, premium is charged for benefits provided in connection with a rider or an endorsement, that premium charge shall be set out in the policy or certificate;
(10) termination must be without prejudice to any continuous loss that commenced while coverage was in force, but the extension of benefits beyond the period during which the policy or certificate is in force may be predicated upon the continuous total disability of the insured and may be limited to the duration of the benefit period for payment of the maximum benefits; receipt of medicare Part D benefits may not be considered in determining a continuous loss;
(11) if benefits are based on standards described as "usual and customary," "reasonable and customary," or words of similar import, the terms must be defined in the policy or certificate;
(12) the first page must notify the purchaser that the policy or certificate may be unconditionally returned within 30 days after its delivery and the premium will be refunded;
(13) repealed 8/8/90.
(b) A medicare supplement policy issued before 7/1/92 may not be advertised, solicited, or issued for delivery in this state unless it meets the following minimum benefit standards:
(1) coverage of medicare Part A eligible expenses for hospitalization to the extent not covered by medicare from the 61st day through the 90th day in any medicare benefit period;
(2) coverage of medicare Part A eligible expenses incurred as daily hospital charges during use of medicare's lifetime hospital inpatient reserve days;
(3) upon exhaustion of all medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 90 percent of all medicare Part A eligible expenses for hospitalization not covered by medicare, subject to a lifetime maximum benefit of an additional 365 days;
(4) coverage of 20 percent of the amount of medicare eligible expenses under Part B regardless of hospital confinement, subject to a maximum calendar-year out-of-pocket deductible of $200 of these expenses and to a maximum benefit of at least $5,000 per calendar year;
(5) coverage for either all or none of the medicare Part A inpatient hospital deductible amount;
(6) coverage under medicare Part A for the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations), unless replaced in accordance with federal regulations or already paid for under medicare Part B;
(7) coverage for the coinsurance amount, or in the case of hospital outpatient department services paid under a prospective payment system, the copayment amount, of the medicare-eligible expenses under medicare Part B, regardless of hospital confinement of medicare-eligible expenses under medicare Part B, regardless of hospital confinement, subject to a maximum calendar year out-of-pocket amount equal to the medicare Part B deductible; and
(8) coverage under medicare Part B for the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations), unless replaced in accordance with federal regulations or already paid for under Part A, subject to the medicare deductible amount.
(c) The standards enumerated in (a) and (b) of this section are required minimum standards and do not prohibit additional provisions or benefits that are not inconsistent with these standards.
(d) Except as authorized by the director of insurance, an insurer shall neither cancel nor nonrenew a medicare supplement policy for any reason other than nonpayment of premium or material misrepresentation.
(e) Payment by insurers of benefits for medicare-eligible expenses may be conditioned upon the same less restrictive payment conditions, including determinations of medical necessity, as are applicable to medicare claims.
(f) If a group policyholder terminates its group medicare supplement insurance policy and does not replace the group policy as described in (h) of this section, the issuer shall offer each certificate holder in the group an individual medicare supplement policy. The issuer shall offer the certificate holder an individual medicare supplement policy that, at the option of the certificate holder,
(1) provides for continuation of the benefits contained in the group policy; or
(2) provides only the benefits that are required to meet the minimum standards listed in 3 AAC 28.454(m).
(g) If a certificate holder's coverage in a group medicare supplement insurance policy is terminated, the issuer shall
(1) offer the certificate holder the option to convert to an individual policy that meets the minimum standards listed in (a) of this section; or
(2) at the option of the group policyholder, offer the certificate holder continuation of coverage under the group policy.
(h) If a group policyholder replaces its group medicare supplement policy with another group medicare supplement policy, the issuer of the replacement policy shall offer coverage to all persons covered under the old group policy on its date of termination. The issuer of the replacement policy may not exclude coverage under the new group policy for a preexisting condition that would have been covered under the group policy that is being replaced.
(i) If an issuer modifies a medicare supplement policy to remove an outpatient prescription benefit as a result of requirements imposed by P.L. 108 - 173 (Medicare Prescription Drug, Improvement, and Modernization Act of 2003), the issuer's renewal of the modified policy satisfies the guaranteed renewal requirements in this section.
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 3/26/82, Register 81; am 8/8/90, Register 115; am 7/1/92, Register 122; am 9/17/2003, Register 167; am 9/4/2005, Register 175; am 9/19/2009, Register 191
3 AAC 28.451 Termination by group policyholder; conversion
Repealed.
History
- Eff. 8/8/90, Register 115; am 7/1/92, Register 122; am 7/12/96, Register 139; repealed 9/4/2005, Register 175
3 AAC 28.452 Compliance with 42 U.S.C. 1395ss (Omnibus Budget Reconciliation Act of 1990)
(a) A person who transacts the business of insurance and who provides medicare supplement policies shall comply with all provisions of 42 U.S.C. 1395ss, as amended by the Omnibus Budget Reconciliation Act of 1990.
(b) Certification of compliance with the requirements of (a) of this section must be in the form set out at the end of this subsection. The form must be completed in accordance with the following instructions:
MEDICARE SUPPLEMENT INSURANCE EXPERIENCE
EXHIBIT
For the year ended December 31, 20 _________
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 8/8/90, Register 115; am 7/1/92, Register 122
3 AAC 28.453 Minimum benefit standards for 1990 standardized medicare supplement benefit policies or certificates issued in this state on or after 7/1/1992 and with an effective date of coverage before 6/1/2010
(a) A medicare supplement policy or certificate delivered or issued for delivery on or after July 1, 1992 and with an effective date of coverage before June 1, 2010 may not be advertised, solicited, delivered, or issued for delivery in this state as a medicare supplement policy or certificate unless it meets the requirements in this section and all other applicable requirements in 3 AAC 28.410 - 3 AAC 28.510.
(b) A medicare supplement policy or certificate issued under this section may not exclude or limit benefits for a loss incurred more than six months after the effective date of coverage because the loss involved a preexisting condition. The policy or certificate may not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage.
(c) A medicare supplement policy or certificate issued under this section may not indemnify against losses resulting from sickness on a different basis than losses resulting from accidents.
(d) A medicare supplement policy or certificate issued under this section must provide that benefits designed to cover cost-sharing amounts under medicare will be changed automatically to coincide with any changes in applicable medicare deductible, copayment, or coinsurance amounts. Premiums may be modified to correspond with the changes.
(e) A medicare supplement policy or certificate issued under this section may not provide for termination of coverage of a spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than the nonpayment of premium.
(f) A medicare supplement policy or certificate issued under this section must be guaranteed renewable and
(1) the issuer may not cancel or nonrenew the policy solely on the ground of health status of the individual;
(2) the issuer may not cancel or nonrenew the policy for any reason other than nonpayment of premium or material misrepresentation by the individual;
(3) if the medicare supplement policy or certificate is terminated by the group policyholder and is not replaced under (5) of this subsection, the issuer shall offer each certificate holder an individual medicare supplement policy that, at the option of the certificate holder, provides for
(A) continuation of the benefits contained in the group policy; or
(B) benefits that otherwise meet the requirements of (a) - (m) of this section;
(4) if an individual is a certificate holder in a group medicare supplement policy and the individual terminates membership in the group, the issuer shall
(A) offer the certificate holder an opportunity to convert the group policy under (3) of this subsection; or,
(B) at the option of the group policyholder, offer the certificate holder continuation of coverage under the group policy;
(5) if a group medicare supplement policy is replaced by another group medicare supplement policy purchased by the same policyholder, the issuer of the replacement policy shall offer coverage to all individuals covered under the old group policy on its date of termination; coverage under the new policy may not result in any exclusion for preexisting conditions that would have been covered under the group policy that is being replaced; and
(6) if an issuer modifies a medicare supplement policy to remove an outpatient prescription benefit as a result of requirements imposed by P.L. 108 - 173 (Medicare Prescription Drug, Improvement, and Modernization Act of 2003), the issuer's renewal of the modified policy satisfies the guaranteed renewal requirements under this subsection.
(g) The termination of a medicare supplement policy or certificate issued under this section must be without prejudice to a continuous loss that commenced while that policy was in force, but the extension of benefits beyond the period during which that policy was in force may be conditioned upon the continuous total disability of the insured, limited to the duration of the policy benefit period, if any, or the payment of the maximum benefits. Receipt of medicare Part D benefits may not be considered in determining a continuous loss.
(h) A medicare supplement policy or certificate issued under this section must provide that benefits and premiums under the policy or certificate will be suspended at the request of the policyholder or certificate holder for the period, not to exceed 24 months, in which the policyholder or certificate holder has applied for and is determined to be entitled to medicaid under 42 U.S.C. 1396 - 1396w-2 (Title XIX of the Social Security Act), but only if that policyholder or certificate holder notifies the issuer of the policy or certificate within 90 days after the date that policyholder or certificate holder becomes entitled to the assistance.
(i) If a suspension occurs under (h) of this section and if the policyholder or certificate holder loses entitlement to medicaid, the policy or certificate must be automatically reinstated as of the date of the termination of that entitlement if the policyholder or certificate holder provides notice of loss of that entitlement within 90 days after the date of the loss and pays the premium attributable to the period, calculated from the date of termination of the entitlement to medicaid.
(j) Reinstatement of the coverage described in (i) and (k) of this section
(1) may not provide for any waiting period with respect to the treatment of preexisting conditions;
(2) must provide for the resumption of coverage that is substantially equivalent to coverage in effect before the date of the suspension, but may not include coverage for outpatient prescription drugs if the medicare supplement policy that was suspended included that coverage and the policyholder or certificate holder is enrolled in medicare Part D; and
(3) must provide for classification of premiums on terms at least as favorable to the policyholder or certificate holder as the premium classification terms that would have applied to the policyholder or certificate holder had the coverage not been suspended.
(k) A medicare supplement policy or certificate issued under this section must provide that benefits and premiums under the policy or certificate will be suspended at the request of the policyholder or certificate holder if the policyholder or certificate holder is entitled to benefits under 42 U.S.C. 426(b) (sec. 226(b) of the Social Security Act), and is covered under a group health plan as defined in 42 U.S.C. 1395y(b)(1)(A)(v) (sec. 1862(b)(1)(A)(v) of the Social Security Act).
(l) If suspension occurs under (k) of this section and if the policyholder or certificate holder loses coverage under the group health plan, the policy must be automatically reinstated as of the date of loss of coverage if the policyholder or certificate holder provides notice of loss of coverage within 90 days after the date of the loss and pays the premium attributable to the period as of the date of termination of enrollment in the group health plan.
(m) If an issuer makes a written offer to a medicare supplement policyholder or certificate holder to allow the policyholder or certificate holder during a specified period to exchange the policyholder's or certificate holder's 1990 plan with a 2010 plan,
(1) except in the case when an issuer replaces a 1990 plan with issue age rates with a 2010 plan with issue age rates at the insured's original issue age, an issuer that replaces a 1990 plan with issue age rates at the time of the written offer with a 2010 plan shall
(A) recognize the policy reserve buildup inherent in 1990 plan issue age rates in the rates charged for the 2010 plan; and
(B) file with the director for approval before use, in compliance with 3 AAC 28.470, the method the issuer proposes to use to recognize the policy reserve buildup;
(2) the issuer shall use the rating class for the 2010 plan that is closest to the rating class of the insured's 1990 plan;
(3) the issuer may not apply a new preexisting condition limitation or a new incontestability period to the 2010 plan for a benefit contained in the insured's 1990 plan;
(4) the issuer may apply a preexisting condition limitation of no more than six months to a benefit that is in the 2010 plan but is not in the 1990 plan;
(5) the issuer may offer a policyholder or certificate holder the option to exchange only selected 1990 plans with selected 2010 plans, if the issuer offers the same selected 2010 plans to all policyholders or certificate holders with the same 1990 plan, unless the offer or issue would violate state or federal law.
(n) An issuer shall make available a policy or certificate including only the basic core benefits to a prospective insured. An issuer may make available to a prospective insured medicare supplement insurance benefit plans "A" - "J" in addition to the basic core benefits, but not instead of them. The basic core benefits must contain
(1) coverage of medicare Part A eligible expenses for hospitalization to the extent not covered by medicare from the 61st day through the 90th day in any medicare benefit period;
(2) coverage of medicare Part A eligible expenses incurred for hospitalization to the extent not covered by medicare for each medicare lifetime inpatient reserve day used;
(3) upon exhaustion of the medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100 percent of the medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days;
(4) coverage under medicare Parts A and B for the reasonable cost of the first three pints of blood, or equivalent quantities of packed red blood cells, as provided under federal regulations, unless replaced in accordance with federal regulations; and
(5) coverage for the coinsurance amount, or in the case of hospital outpatient department services paid under a prospective payment system, the copayment amount, of medicare eligible expenses under medicare Part B regardless of hospital confinement, subject to the medicare Part B deductible.
(o) The following additional benefits must be included only in medicare supplement benefit plans "B" - "J", that are set out in 3 AAC 28.455(f):
(1) coverage for 100 percent of the medicare Part A inpatient hospital deductible amount per benefit period;
(2) coverage for the actual billed charges up to the coinsurance amount from the 21st day through the 100th day in a medicare benefit period for post-hospital skilled nursing facility care eligible under medicare Part A;
(3) coverage for 100 percent of the medicare Part B deductible amount per calendar year regardless of hospital confinement;
(4) coverage for 80 percent of the difference between the actual medicare Part B charge as billed, not to exceed any charge limitation established by the medicare program or state law and the medicare-approved Part B charge;
(5) coverage for all of the difference between the actual medicare Part B charge as billed, not to exceed any charge limitation established by the medicare program or state law and the medicare-approved Part B charge;
(6) coverage for 50 percent of outpatient prescription drug charges, after a $250 calendar year deductible, to a maximum of $1,250 in benefits received by the insured per calendar year, to the extent not covered by medicare; but this benefit may not be included in a medicare supplement policy issued after December 31, 2005;
(7) coverage for 50 percent of outpatient prescription drug charges, after a $250 calendar year deductible, to a maximum of $3,000 in benefits received by the insured per calendar year, to the extent not covered by medicare; this benefit may not be included in a medicare supplement policy issued after December 31, 2005;
(8) coverage to the extent not covered by medicare for 80 percent of the billed charges for medicare-eligible expenses for medically necessary emergency hospital, physician, and medical care received in a foreign country, if the care would have been covered by medicare if provided in the United States and if the care began during the first 60 consecutive days of each trip outside the United States, subject to a calendar year deductible of $250 and a lifetime maximum benefit of $50,000; for purposes of this benefit, "emergency care" means care needed immediately because of an injury or an illness of sudden and unexpected onset;
(9) coverage for the following preventative health services not covered by medicare:
(A) an annual clinical preventive medical history and physical examination that may include tests and services set out in (B) of this paragraph and patient education to address preventive health care measures;
(B) preventive screening tests or preventive services, the selection and frequency of which is determined to be medically appropriate by the attending physician;
(C) reimbursement for preventive health services; reimbursement under this subparagraph must be for the actual charges up to 100 percent of the medicare-approved amount for each service, as though medicare were to cover the service as identified in American Medical Association Current Procedural Terminology (AMA CPT) codes, to a maximum of $120 annually under the benefit; this benefit may not include payment for any procedure covered by medicare;
(10) coverage for services by a care provider to provide short term at-home assistance with activities of daily living for those recovering from an illness, injury, or surgery, as follows:
(A) at-home recovery services provided must be primarily services that assist in activities of daily living;
(B) the insured's attending physician shall certify that the specific type and frequency of at-home recovery services are necessary because of a condition for which a home care plan of treatment was approved by medicare;
(C) coverage is limited to
(i) no more than the number and type of at-home recovery visits certified as necessary by the insured's attending physician; the total number of at-home recovery visits may not exceed the number of medicare approved home health care visits under a medicare approved home care plan of treatment;
(ii) the actual charges for each visit up to a maximum reimbursement of $40 per visit;
(iii) $1,600 per calendar year;
(iv) seven visits in one week;
(v) care furnished on a visiting basis in an insured's home;
(vi) services provided by a care provider;
(vii) at-home recovery visits while an insured is covered under the policy or certificate and not otherwise excluded; and
(viii) at-home recovery visits received during the period an insured is receiving medicare approved home care services or no more than eight weeks after the service date of the last medicare approved home health care visit;
(D) coverage is excluded for
(i) home care visits paid by medicare or other government programs; and
(ii) care provided by family members, unpaid volunteers, or providers who are not care providers;
(E) for purposes of the benefit described in this paragraph, the following definitions apply:
(i) "activities of daily living" include bathing, dressing, personal hygiene, transferring, eating, ambulating, assistance with drugs that are normally self-administered, and changing bandages or other dressings;
(ii) "at-home recovery visit" means the period of a visit required to provide at-home recovery care, without limit on the duration of the visit, except that each consecutive four hours in a 24-hour period of services provided by a care provider is considered one visit;
(iii) "care provider" means a duly qualified or licensed home health aide or homemaker, personal care aide, or nurse provided through a licensed home health care agency or referred by a licensed referral agency or licensed nurses' registry;
(iv) "home" means a place used by an insured as a place of residence, if the place would qualify as a residence for home health care services covered by medicare; a hospital or skilled nursing facility may not be considered an insured's place of residence.
(p) Standardized medicare supplement benefit plan "K" must consist of the following benefits:
(1) coverage of 100 percent of the medicare Part A hospital coinsurance amount for each day used from the 61st through the 90th day in any medicare benefit period;
(2) coverage of 100 percent of the medicare Part A hospital coinsurance amount for each medicare lifetime inpatient reserve day used from the 91st through the 150th day in any medicare benefit period;
(3) upon exhaustion of the medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100 percent of the medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate or other appropriate medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days;
(4) coverage for 50 percent of the medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as set out in (10) of this subsection;
(5) coverage for 50 percent of the coinsurance amount for each day used from the 21st day through the 100th day in a medicare benefit period for post-hospital skilled nursing facility care eligible under medicare Part A until the out-of-pocket limitation is met as set out in (10) of this subsection;
(6) coverage for 50 percent of cost sharing for all medicare Part A eligible expenses and respite care until the out-of-pocket limitation is met as described in (10) of this subsection;
(7) coverage for 50 percent under medicare Part A or Part B of the reasonable cost of the first three pints of blood, or an equivalent quantity of packed red blood cells as defined under federal regulations, unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as set out in (10) of this subsection;
(8) except for coverage provided under (9) of this subsection, coverage for 50 percent of the cost sharing otherwise applicable under medicare Part B after the policyholder pays the Part B deductible until the out-of-pocket limitation is met as set out in (10) of this subsection;
(9) coverage of 100 percent of the cost sharing for medicare Part B preventive services after the policyholder pays the Part B deductible;
(10) coverage of 100 percent of all cost sharing under medicare Part A and Part B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under medicare Part A and Part B of $4,000 in 2006, indexed each year by the appropriate inflation adjustment specified by the secretary.
(q) Standardized medicare supplement benefit plan "L" must consist of the benefits set out in
(1) the provisions of (p)(1), (2), (3), and (9) of this section;
(2) the provisions of (p)(4), (5), (6), (7), and (8) of this section, but substituting 75 percent for 50 percent in each of those paragraphs; and
(3) the provisions of (p)(10) of this section, but substituting $2,000 for $4,000 in that paragraph.
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 7/1/92, Register 122; am 7/12/96, Register 139; am 7/12/2000, Register 155; am 9/17/2003 Register 167; am 9/4/2005, Register 175; am 9/19/2009, Register 191
3 AAC 28.454 Minimum benefit standards for 2010 standardized medicare supplement benefit policies or certificates issued with an effective date of coverage on or after 6/1/2010
(a) A medicare supplement policy or certificate issued with an effective date of coverage on or after June 1, 2010 may not be advertised, solicited, or issued for delivery in this state unless it meets the requirements in this section and all other applicable requirements of 3 AAC 28.410 - 3 AAC 28.510.
(b) A medicare supplement policy or certificate issued under this section may not exclude or limit coverage for a loss due to a preexisting condition, if the loss was incurred more than six months after the effective date of coverage. The policy or certificate may not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage.
(c) A medicare supplement policy or certificate issued under this section may not indemnify against losses resulting from sickness on a different basis than losses resulting from accidents.
(d) A medicare supplement policy or certificate issued under this section may provide that benefits designed to cover cost sharing amounts under medicare will be changed automatically to coincide with any changes in the applicable medicare deductible, copayment, or coinsurance amounts. Premiums may be modified to correspond with the changes.
(e) A medicare supplement policy or certificate issued under this section may not provide for termination of coverage of a spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than the nonpayment of premium.
(f) A medicare supplement policy or certificate issued under this section must be guaranteed renewable and
(1) the issuer may not cancel or nonrenew the policy solely on the ground of health status of the individual;
(2) the insurer may not cancel or nonrenew the policy for any reason other than nonpayment of premium or material misrepresentation by the individual;
(3) if the medicare supplement policy or certificate is terminated by the group policyholder and is not replaced under (5) of this subsection, the issuer shall offer each certificate holder an individual medicare supplement policy that, at the option of the certificate holder provides for
(A) continuation of the benefits contained in the group policy; or
(B) benefits that otherwise meet the requirements of (a) - ( l) of this section;
(4) if an individual is a certificate holder in a group medicare supplement policy and the individual terminates membership in the group, the issuer shall
(A) offer the certificate holder an opportunity to convert the group policy under (3) of this subsection; or
(B) at the option of the group policyholder, offer the certificate holder continuation of coverage under the group policy; and
(5) if a group medicare supplement policy is replaced by another group medicare supplement policy purchased by the same policyholder, the issuer of the replacement policy shall offer coverage to all individuals covered under the old group policy on its date of termination; coverage under the new policy may not result in any exclusion for preexisting conditions that would have been covered under the group policy that is being replaced.
(g) The termination of a medicare supplement policy or certificate issued under this section must be without prejudice to a continuous loss that commenced while that policy was in force, but the extension of benefits beyond the period during which the policy was in force may be conditioned upon the continuous total disability of the insured, limited to the duration of the policy benefit period, if any, or the payment of the maximum benefits. Receipt of medicare Part D benefits may not be considered in determining a continuous loss.
(h) A medicare supplement policy or certificate issued under this section must provide that benefits and premiums under the policy or certificate will be suspended at the request of the policyholder or certificate holder for the period, not to exceed 24 months, in which the policyholder or certificate holder has applied for and is determined to be entitled to medicaid under 42 U.S.C. 1396 - 1396w-2 (Title XIX of the Social Security Act), but only if that policyholder or certificate holder notifies the issuer of the policy or certificate within 90 days after the date that the policyholder or certificate holder becomes entitled to the assistance.
(i) If a suspension occurs under (h) of this section and if the policyholder or certificate holder loses entitlement to medicaid, the policy or certificate must be automatically reinstated as of the date of the termination of that entitlement if the policyholder or certificate holder provides notice of loss of that entitlement within 90 days after the date of the loss and pays the premium attributable to the period, calculated from the date of termination of the entitlement to medicaid.
(j) A medicare supplement policy or certificate issued under this section must provide that benefits and premiums under the policy or certificate will be suspended at the request of the policyholder or certificate holder if the policyholder or certificate holder is entitled to benefits under 42 U.S.C. 426(b) (sec. 226(b) of the Social Security Act), and is covered under a group health plan as defined in 42 U.S.C. 1395y(b)(1)(A)(v) (sec. 1862(b)(1)(A)(v) of the Social Security Act).
(k) If an issuer suspends a policy under (j) of this section and if the policyholder or certificate holder subsequently loses coverage under the group health plan, the policy or certificate must be automatically reinstated as of the date of loss of group coverage if the policyholder provides notice of loss of coverage within 90 days after the date of the loss and pays the premium attributable to the period starting from the effective date of the termination of enrollment in the group health plan.
(l) Reinstatement of the coverage described in (i) and (k) of this section
(1) may not provide for any waiting period with respect to the treatment of preexisting conditions;
(2) must provide for the resumption of coverage that is substantially equivalent to coverage in effect before the date of the suspension; and
(3) must provide for classification of premiums on terms at least as favorable to the policyholder or certificate holder as the premium classification terms that would have applied to the policyholder or certificate holder had the coverage not been suspended.
(m) An issuer shall make available a policy or certificate including only the basic core benefits to a prospective insured. An issuer may make available to a prospective insured medicare supplement insurance benefit plans "A" - "D", plan "F," high deductible plan "F," and plans "G," "M" and "N" in addition to the basic core benefits, but not instead of them. The basic core benefits must contain
(1) coverage of medicare Part A eligible expenses for hospitalization to the extent not covered by medicare from the 61st day through the 90th day in any medicare benefit period;
(2) coverage of medicare Part A eligible expenses incurred for hospitalization to the extent not covered by medicare for each medicare lifetime inpatient reserve day used;
(3) upon exhaustion of the medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100 percent of the medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days;
(4) coverage under medicare Parts A and B for the reasonable cost of the first three pints of blood, or equivalent quantities of packed red blood cells, as provided under federal regulations, unless replaced in accordance with federal regulations;
(5) coverage for the coinsurance amount, or in the case of hospital outpatient department services paid under a prospective payment system, the copayment amount, of medicare eligible expenses under medicare Part B regardless of hospital confinement, subject to the medicare Part B deductible; and
(6) coverage of cost sharing for all medicare Part A eligible hospice care and respite care expenses.
(n) The following additional benefits must be included in medicare supplement insurance benefit plans "B" - "D," plan "F," high deductible plan "F," and plans "G," "M," and "N," as set out in 3 AAC 28.456:
(1) coverage for 100 percent of the medicare Part A inpatient hospital deductible amount per benefit period;
(2) coverage for 50 percent of the medicare Part A inpatient hospital deductible amount per benefit period;
(3) coverage for the actual billed charges up to the coinsurance amount from the 21st day through the 100th day in a medicare benefit period for post-hospital skilled nursing facility care eligible under medicare Part A;
(4) coverage for 100 percent of the medicare Part B deductible amount per calendar year regardless of hospital confinement;
(5) coverage for 100 percent of the difference between the actual medicare Part B charges as billed, not to exceed any charge limitation established by the medicare program or state law, and the medicare-approved Part B charge;
(6) coverage to the extent not covered by medicare for 80 percent of the billed charges for medicare-eligible expenses for medically necessary emergency hospital, physician, and medical care received in a foreign country, if the care would have been covered by medicare if provided in the United States and if the care began during the first 60 consecutive days of each trip outside the United States, subject to a calendar year deductible of $250 and a lifetime maximum benefit of $50, 000; for purposes of this benefit, "emergency care" means care needed immediately because of an injury or an illness of sudden and unexpected onset.
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 9/19/2009, Register 191
3 AAC 28.455 Standard medicare supplement benefit plans for 1990 standardized medicare supplement benefit policies or certificates issued after 7/1/1992 and with an effective date of coverage before 6/1/2010
(a) A medicare supplement policy or certificate delivered or issued for delivery on or after July 1, 1992 and with an effective date of coverage before June 1, 2010 may not be advertised, solicited, delivered, or issued for delivery in this state as a medicare supplement policy or certificate unless it complies with the benefit requirements of this section.
(b) An issuer shall make available to each prospective policyholder and certificate holder a policy form or certificate form containing only the basic core benefits as set out in 3 AAC 28.453(n).
(c) An issuer may not offer for sale in this state a group, package, or combination of medicare supplement benefits other than those listed in this section, except as may be permitted under (f)(15) of this section.
(d) Medicare supplement benefit plans must be uniform in structure, language, designation, and format to the standardized benefit plans "A" - "L" listed in this section and conform to the definitions under 3 AAC 28.430 and 3 AAC 28.510. For standardized benefit plans "A" - "J," a benefit must be structured in accordance with the format under 3 AAC 28.453(n) and (o) and list the benefits in the order shown. For standardized benefit plan "K," a benefit must be structured in accordance with the format under 3 AAC 28.453(p), and list the benefits in the order shown. For standardized benefit plan "L," a benefit must be structured in accordance with the format under 3 AAC 28.453(q), and list the benefits in the order shown. For purposes of this subsection, "structure, language, and format" means style, arrangement, and overall content of a benefit.
(e) An issuer may use, in addition to the benefit plan designations required in (d) of this section, other designations to the extent permitted by law.
(f) The 1990 standardized medicare supplement benefit plans must adhere to the following requirements:
(1) standardized medicare supplement benefit plan "A" must be limited to the basic core benefits common to all benefit plans, as set out in 3 AAC 28.453(n);
(2) standardized medicare supplement benefit plan "B" must consist of the core benefit as set out in 3 AAC 28.453(n) plus the medicare Part A deductible as set out in 3 AAC 28.453(o)(1);
(3) standardized medicare supplement benefit plan "C" must consist of the core benefit as set out in 3 AAC 28.453(n) plus the medicare Part A deductible, skilled nursing facility care, medicare Part B deductible, and medically necessary emergency care provided in a foreign country as set out in 3 AAC 28.453(o)(1) - (3) and (8);
(4) standardized medicare supplement benefit plan "D" must consist of the core benefit as set out in 3 AAC 28.453(n) plus the medicare Part A deductible, skilled nursing facility care, medically necessary emergency care provided in a foreign country, and the at-home recovery benefit as set out in 3 AAC 28.453(o)(1), (2), (8), and (10);
(5) standardized medicare supplement benefit plan "E" must consist of the core benefit as described in 3 AAC 28.453(n) plus the medicare Part A deductible, skilled nursing facility care, medically necessary emergency care provided in a foreign country, and preventive medical care as set out in 3 AAC 28.453(o)(1), (2), (8), and (9);
(6) standardized medicare supplement benefit plan "F" must consist of the core benefit as described in 3 AAC 28.453(n) plus the medicare Part A deductible, skilled nursing facility care, the medicare Part B deductible, 100 percent of the medicare Part B excess charges, and medically necessary emergency care provided in a foreign country as set out in 3 AAC 28.453(o)(1) - (3), (5), and (8);
(7) standardized medicare supplement benefit high deductible plan "F" must consist of 100 percent of the covered expenses following the payment of the annual high deductible plan "F" deductible subject to the following:
(A) the covered expenses include the basic core benefit as described in 3 AAC 28.453(n) plus the medicare Part A deductible, skilled nursing facility care, the medicare Part B deductible, 100 percent of the medicare Part B excess charges, and medically necessary emergency care provided in a foreign country as set out in 3 AAC 28.453(o)(1) - (3), (5), and (8);
(B) the annual high deductible plan "F" deductible must consist of out-of-pocket expenses, other than premiums, for services covered by the medicare supplement plan "F" policy, and must be in addition to any other specific benefit deductibles;
(C) the annual high deductible plan "F" deductible must be $1,500 for 1999, based on the calendar year, to be adjusted annually after that by the secretary to reflect the change in the consumer price index for all urban consumers for the 12-month period ending with August of the preceding year, rounded to the nearest multiple of $10;
(8) standardized medicare supplement benefit plan "G" must consist of the core benefit as set out in 3 AAC 28.453(n) plus the medicare Part A deductible, skilled nursing facility care, 80 percent of the medicare Part B excess charges, medically necessary emergency care provided in a foreign country, and the at-home recovery benefit as set out in 3 AAC 28.453(o)(1), (2), (4), (8), and (10);
(9) standardized medicare supplement benefit plan "H" must consist of the core benefit as set out in 3 AAC 28.453(n) plus the medicare Part A deductible, skilled nursing facility care, basic prescription drug benefit, and medically necessary emergency care provided in a foreign country as set out in 3 AAC 28.453(o)(1), (2), (6), and (8); the outpatient prescription drug benefit may not be included in a medicare supplement policy issued after December 31, 2005;
(10) standardized medicare supplement benefit plan "I" must consist of the core benefit as set out in 3 AAC 28.453(n) plus the medicare Part A deductible, skilled nursing facility care, 100 percent of the medicare Part B excess charges, basic prescription drug benefit, medically necessary emergency care provided in a foreign country, and the at-home recovery benefit as set out in 3 AAC 28.453(o)(1), (2), (5), (6), (8), and (10); the outpatient prescription drug benefit may not be included in a medicare supplement policy issued after December 31, 2005;
(11) standardized medicare supplement benefit plan "J" must consist of the core benefit as set out in 3 AAC 28.453(n) plus the medicare Part A deductible, skilled nursing facility care, medicare Part B deductible, 100 percent of the medicare Part B excess charges, extended prescription drug benefit, medically necessary emergency care provided in a foreign country, preventive medical care, and the at-home recovery benefit as set out in 3 AAC 28.453(o)(1) - (3), (5), and (7) - (10); the outpatient prescription drug benefit may not be included in a medicare supplement policy issued after December 31, 2005;
(12) standardized medicare supplement benefit high deductible plan "J" must consist of 100 percent of the covered expenses following the payment of the annual high deductible plan "J" deductible subject to the following:
(A) the covered expenses include the basic core benefit as set out in 3 AAC 28.453(n) plus the medicare Part A deductible, skilled nursing facility care, the medicare Part B deductible, 100 percent of the medicare Part B excess charges, extended outpatient prescription drug benefit, medically necessary emergency care provided in a foreign country, preventive medical care, and at-home recovery benefit as set out in 3 AAC 28.453(o)(1) - (3), (5), and (7) - (10);
(B) the annual high deductible plan "J" deductible must consist of out-of-pocket expenses, other than premiums, for services covered by the medicare supplement plan "J" policy, and must be in addition to any other specific benefit deductibles;
(C) the annual high deductible plan "J" deductible must be $1,500 for 1999, based on the calendar year, to be adjusted annually after that by the secretary to reflect the change in the consumer price index for all urban consumers for the 12-month period ending with August of the preceding year, rounded to the nearest multiple of $10;
(D) the outpatient prescription drug benefit may not be included in a medicare supplement policy issued after December 31, 2005;
(13) standardized medicare supplement plan "K" must consist of the benefits described in 3 AAC 28.453(p);
(14) standardized medicare supplement plan "L" must consist of the benefits described in 3 AAC 28.453(q);
(15) an issuer may, with the prior approval of the director, offer a medicare supplement policy or certificate under this section that contains new or innovative benefits, in addition to the standardized benefits required in a policy or certificate issued under this section that otherwise complies with the applicable standards; the new or innovative benefits may include only benefits that are appropriate to medicare supplement insurance, new or innovative, not otherwise available, cost-effective, and offered in a manner that is consistent with the goal of simplification of medicare supplement policies; after December 31, 2005, a new or innovative benefit may not include outpatient prescription drug coverage.
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 7/1/92, Register 122; am 7/12/96, Register 139; am 4/21/99, Register 150; am 9/4/2005, Register 175; am 9/19/2009, Register 191
3 AAC 28.456 Standard medicare supplement benefit plans for 2010 standardized medicare supplement benefit policies or certificates issued with an effective date of coverage on or after 6/1/2010
(a) A medicare supplement policy or certificate delivered or issued for delivery with an effective date of coverage on or after June 1, 2010 may not be advertised, solicited, delivered, or issued for delivery in this state as a medicare supplement policy or certificate unless it complies with the benefit requirements of this section.
(b) An issuer shall make available to each prospective policyholder and certificate holder a policy form or certificate form containing only the basic core benefits, as set out in 3 AAC 28.454(m).
(c) If an issuer makes available any of the additional benefits as set out in 3 AAC 28.454(n), or offers standardized benefit plans "K" or "L" as set out in (g)(8) and (9) of this section, the issuer shall make available to each prospective policyholder and certificate holder, in addition to a policy form or certificate form with only the basic core benefits as set out in 3 AAC 28.454(m), a policy form or certificate form containing either standardized benefit plan "C" as set out in (g)(3) of this section or standardized benefit plan "F" as set out in (g)(5) of this section.
(d) An issuer may not offer for sale in this state a group, package, or combination of medicare supplement benefits other than those listed in this section, except as may be permitted under (h) of this section.
(e) Medicare supplement benefit plans must be uniform in structure, language, designation, and format to the standardized benefit plans listed in (g) of this section and conform to the definitions under 3 AAC 28.430 and 3 AAC 28.510. Each benefit must be structured in accordance with the format provided in 3 AAC 28.454(m) and (n), or, in the case of plans "K" or "L," in (g)(8) or (9) of this section, and list the benefits in the order shown. For purposes of this section, "structure, language, and format" means style, arrangement, and overall content of a benefit.
(f) An issuer may use, in addition to the benefit plan designations required in (e) of this section, other designations to the extent permitted by law.
(g) The 2010 standardized medicare supplement benefit plans must adhere to the following requirements:
(1) standardized medicare supplement benefit plan "A" must be limited to the basic core benefits as set out in 3 AAC 28.454(m);
(2) standardized medicare supplement benefit plan "B" must consist of the core benefit as set out in 3 AAC 28.454(m) plus the medicare Part A deductible as set out in 3 AAC 28.454(n)(1);
(3) standardized medicare supplement benefit plan "C" must consist of the core benefit as set out in 3 AAC 28.454(m) plus the medicare Part A deductible, skilled nursing facility care, medicare Part B deductible, and medically necessary emergency care provided in a foreign country as set out in 3 AAC 28.454(n)(1), (3), (4), and (6);
(4) standardized medicare supplement benefit plan "D" must consist of the core benefit as set out in 3 AAC 28.454(m) plus the medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care provided in a foreign country as set out in 3 AAC 28.454(n)(1), (3), and (6);
(5) standardized medicare supplement plan "F" must consist of the core benefit as set out in 3 AAC 28.454(m) plus the medicare Part A deductible, skilled nursing facility care, the medicare Part B deductible, 100 percent of the medicare Part B excess charges, and medically necessary emergency care provided in a foreign country as set out in 3 AAC 28.454(n)(1) and (3) - (6);
(6) standardized medicare supplement high deductible plan "F" must consist of all of the covered expenses following the payment of the annual high deductible plan "F" deductible subject to the following:
(A) the covered expenses include the basic core benefit as set out in 3 AAC 28.454(m) plus the medicare Part A deductible, skilled nursing facility care, the medicare Part B deductible, 100 percent of the medicare Part B excess charges, and medically necessary emergency care provided in a foreign country as set out in 3 AAC 28.454(n)(1) and (3) - (6);
(B) the annual high deductible plan "F" deductible must consist of out-of-pocket expenses, other than premiums, for services covered by the medicare supplement plan "F" policy, and must be in addition to any other specific benefit deductibles;
(C) the annual high deductible plan "F" deductible must be $1,500 for 1999, based on the calendar year, to be adjusted annually after that by the secretary to reflect the change in the consumer price index for all urban consumers for the 12-month period ending with August of the preceding year, rounded to the nearest multiple of $10;
(7) standardized Medicare supplement benefit plan "G" must consist of the core benefit as set out in 3 AAC 28.454(m) plus the Medicare Part A deductible, skilled nursing facility care, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care provided in a foreign country as set out in 3 AAC 28.454(n)(1), (3), (5), and (6); on or after January 1, 2020, an issuer may offer a standardized benefit plan under 3 AAC 28.461(g)(8) to a person who was eligible for Medicare before January 1, 2020.
(8) standardized medicare supplement plan "K;" must consist of the following benefits:
(A) coverage of 100 percent of the medicare Part A hospital coinsurance amount for each day used from the 61st through the 90th day in any medicare benefit period;
(B) coverage of 100 percent of the medicare Part A hospital coinsurance amount for each medicare lifetime inpatient reserve day used from the 91st through the 150th day in any medicare benefit period;
(C) upon exhaustion of the medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100 percent of the medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate or other appropriate medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days;
(D) coverage for 50 percent of the medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as set out in (J) of this paragraph;
(E) coverage for 50 percent of the coinsurance amount for each day used from the 21st day through the 100th day in a medicare benefit period for post-hospital skilled nursing facility care eligible under medicare Part A until the out-of-pocket limitation is met as set out in (J) of this paragraph;
(F) coverage for 50 percent of cost sharing for all medicare Part A eligible expenses and respite care until the out-of-pocket limitation is met as set out in (J) of this paragraph;
(G) coverage for 50 percent under medicare Part A or Part B of the reasonable cost of the first three pints of blood, or an equivalent quantity of packed red blood cells as defined under federal regulations, unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as set out in (J) of this paragraph;
(H) except for coverage provided under (I) of this paragraph, coverage for 50 percent of the cost sharing otherwise applicable under medicare Part B after the policyholder pays the Part B deductible until the out-of-pocket limitation is met as set out in (J) of this paragraph;
(I) coverage of 100 percent of the cost sharing for medicare Part B preventive services after the policyholder pays the Part B deductible;
(J) coverage of 100 percent of all cost sharing under medicare Part A and Part B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under medicare Part A and Part B of $4,000 in 2006, indexed each year by the appropriate inflation adjustment specified by the secretary;
(9) standardized medicare supplement plan "L" and must consist of the benefits set out in
(A) the provisions of (8)(A), (B), (C), and (I) of this subsection;
(B) the provisions of (8)(D), (E), (F), (G), and (H) of this subsection, but substituting 75 percent for 50 percent in each of those subparagraphs; and
(C) the provisions of (8)(J) of this subsection, but substituting $2,000 for $4,000 in that subparagraph;
(10) standardized medicare supplement plan "M" must consist of the core benefit as set out in 3 AAC 28.454(m), plus 50 percent of the medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care provided in a foreign country as set out in 3 AAC 28.454(n)(2), (3), and (6);
(11) standardized medicare supplement plan "N" must consist of the core benefit as set out in 3 AAC 28.454(m) plus 100 percent of the medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care provided in a foreign country as set out in 3 AAC 28.454(n)(1), (3), and (6), with copayments of
(A) the lesser of $20 or the medicare Part B coinsurance or copayment for each covered health care provider office visit, including visits to medical specialists; and
(B) the lesser of $50 or the medicare Part B coinsurance or copayment for each covered emergency room visit; this copayment will be waived if the insured is admitted to any hospital and the emergency visit is subsequently covered as a medicare Part A expense.
(h) An issuer may, with prior approval of the director, offer a medicare supplement policy or certificate under this section that contains new or innovative benefits, in addition to the standard benefits required in a policy or certificate issued under this section that otherwise complies with the applicable standards. The new or innovative benefits may include only benefits that are appropriate to medicare supplement insurance, are new or innovative, are not otherwise available, and are cost-effective and offered in a manner that is consistent with the goal of simplification of medicare supplement policies. New or innovative benefits may not include an outpatient prescription drug benefit. New or innovative benefits may not be used to change or reduce benefits, including a change of any cost-sharing provision, in any standardized medicare supplement plan.
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 9/19/2009, Register 191; am 3/28/2019, Register 229
3 AAC 28.457 Open enrollment
(a) An issuer may not deny or condition the issuance or effectiveness of a medicare supplement policy or certificate available for sale in this state or discriminate in the pricing of a policy or certificate because of the health status, claims experience, receipt of health care, or medical condition of an individual applying, when an application for that policy or certificate is submitted before or during the six-month period beginning with the first day of the first month in which that individual is both 65 years of age or older and is enrolled for benefits under medicare Part B. A medicare supplement policy or certificate currently available from an insurer must be made available at the time of application to all applicants who qualify under this subsection without regard to age of the applicant. Except as provided in (b) of this section, 3 AAC 28.462, and 3 AAC 28.507, this section may not be construed to prevent the exclusion of benefits under a policy during the first six months based on a preexisting condition for which the policyholder or certificate holder received treatment or was otherwise diagnosed during the six months before the coverage became effective.
(b) If an applicant qualifies under (a) of this section, submits an application during the time period referenced in (a) of this section, and, as of the date of the application,
(1) has had a continuous period of creditable coverage of at least six months, the issuer may not exclude benefits based on a preexisting condition; or
(2) has had a continuous period of creditable coverage of less than six months, the issuer shall reduce the period of any preexisting condition exclusion by the total of the period of creditable coverage applicable to the applicant as of the enrollment date in a manner specified by the secretary.
(c) Effective January 1, 2020, an issuer may not make plan "C," plan "F," or high deductible plan "F" available to a newly eligible Medicare beneficiary.
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 7/1/92, Register 122; am 7/12/96, Register 139; am 4/21/99, Register 150; am 9/4/2005, Register 175; am 3/28/2019, Register 229
3 AAC 28.458 Standards for claims payment
Repealed.
History
- Eff. 7/1/92, Register 122; repealed 4/21/99, Register 150
3 AAC 28.459 Minimum benefit standards for 2020 standardized Medicare supplement benefit policies or certificates issued with an effective date of coverage on or after January 1, 2020
(a) A Medicare supplement policy or certificate issued with an effective date of coverage on or after January 1, 2020 may not be advertised, solicited, or issued for delivery in this state, unless it meets the requirements in this section and all other applicable requirements of 3 AAC 28.410 - 3 AAC 28.510.
(b) A Medicare supplement policy or certificate issued under this section may not exclude or limit coverage for a loss due to a preexisting condition, if the loss was incurred more than six months after the effective date of coverage. The policy or certificate may not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage.
(c) A Medicare supplement policy or certificate issued under this section may not indemnify against losses resulting from sickness on a different basis than losses resulting from accidents.
(d) A Medicare supplement policy or certificate issued under this section may provide that benefits designed to cover cost sharing amounts under Medicare will be changed automatically to coincide with any changes in the applicable Medicare deductible, copayment, or coinsurance amounts. Premiums may be modified to correspond with the changes.
(e) A Medicare supplement policy or certificate issued under this section may not provide for termination of coverage of a spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than the nonpayment of premium.
(f) A Medicare supplement policy or certificate issued under this section must be guaranteed renewable and
(1) the issuer may not cancel or nonrenew the policy solely on the ground of health status of the individual;
(2) the insurer may not cancel or nonrenew the policy for any reason other than nonpayment of premium or material misrepresentation by the individual;
(3) if the Medicare supplement policy or certificate is terminated by the group policyholder and is not replaced under (5) of this subsection, the issuer shall offer each certificate holder an individual Medicare supplement policy that, at the option of the certificate holder provides for
(A) continuation of the benefits contained in the group policy; or
(B) benefits that otherwise meet the requirements of (a) - ( l) of this section;
(4) if an individual is a certificate holder in a group Medicare supplement policy and the individual terminates membership in the group, the issuer shall
(A) offer the certificate holder an opportunity to convert the group policy under (3) of this subsection; or
(B) at the option of the group policyholder, offer the certificate holder continuation of coverage under the group policy; and
(5) if a group Medicare supplement policy is replaced by another group Medicare supplement policy purchased by the same policyholder, the issuer of the replacement policy shall offer coverage to all individuals covered under the old group policy on its date of termination; coverage under the new group policy may not result in any exclusion for preexisting conditions that would have been covered under the group policy that is being replaced.
(g) The termination of a Medicare supplement policy or certificate issued under this section must be without prejudice to a continuous loss that commenced while that policy was in force, but the extension of benefits beyond the period during which the policy was in force may be conditioned upon the continuous total disability of the insured, limited to the duration of the policy benefit period, if any, or the payment of the maximum benefits. Receipt of Medicare Part D benefits may not be considered in determining a continuous loss.
(h) A Medicare supplement policy or certificate issued under this section must provide that benefits and premiums under the policy or certificate will be suspended at the request of the policyholder or certificate holder for the period, not to exceed 24 months, in which the policyholder or certificate holder has applied for and is determined to be entitled to Medicaid under 42 U.S.C. 1396 - 1396w-2, but only if that policyholder or certificate holder notifies the issuer of the policy or certificate within 90 days after the date that the policyholder or certificate holder becomes entitled to the assistance.
(i) If a suspension occurs under (h) of this section and if the policyholder or certificate holder loses entitlement to Medicaid, the policy or certificate must be automatically reinstated as of the date of the termination of that entitlement if the policyholder or certificate holder provides notice of loss of that entitlement within 90 days after the date of the loss and pays the premium attributable to the period, calculated from the date of termination of the entitlement to Medicaid.
(j) A Medicare supplement policy or certificate issued under this section must provide that benefits and premiums under the policy or certificate will be suspended at the request of the policyholder or certificate holder if the policyholder or certificate holder is entitled to benefits under 42 U.S.C. 426(b) and is covered under a group health plan as defined in 42 U.S.C. 1395y(b)(1)(A)(v).
(k) If an issuer suspends a policy under (j) of this section and if the policyholder or certificate holder subsequently loses coverage under the group health plan, the policy or certificate must be automatically reinstated as of the date of loss of group coverage if the policyholder provides notice of loss of coverage within 90 days after the date of the loss and pays the premium attributable to the period starting from the effective date of the termination of enrollment in the group health plan.
(l) Reinstatement of the coverage described in (i) and (k) of this section
(1) may not provide for any waiting period with respect to the treatment of preexisting conditions;
(2) must provide for the resumption of coverage that is substantially equivalent to coverage in effect before the date of the suspension; and
(3) must provide for classification of premiums on terms at least as favorable to the policyholder or certificate holder as the premium classification terms that would have applied to the policyholder or certificate holder had the coverage not been suspended.
(m) An issuer shall make available a policy or certificate including only the basic core benefits to a prospective insured. An issuer may make available to a prospective insured Medicare supplement insurance benefit plans "A" - "D," plan "F," high deductible plan "F," plan "G," high deductible plan "G", and plans "M," and "N" in addition to the basic core benefits, but not instead of them. The basic core benefits must contain
(1) coverage of Medicare Part A eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period;
(2) coverage of Medicare Part A eligible expenses incurred for hospitalization to the extent not covered by Medicare for each Medicare lifetime inpatient reserve day used;
(3) upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days;
(4) coverage under Medicare Parts A and B for the reasonable cost of the first three pints of blood, or equivalent quantities of packed red blood cells, as provided under federal regulations, unless replaced in accordance with federal regulations;
(5) coverage for the coinsurance amount, or in the case of hospital outpatient department services paid under a prospective payment system, the copayment amount, of Medicare eligible expenses under Medicare Part B regardless of hospital confinement, subject to the Medicare Part B deductible; and
(6) coverage of cost sharing for all Medicare Part A eligible hospice care and respite care expenses.
(n) The following additional benefits must be included in Medicare supplement insurance benefit plans "B" - "D," plan "F," high deductible plan "F," plan "G," high deductible plan "G," and plans "M," and "N," as set out in 3 AAC 28.461:
(1) coverage for 100 percent of the Medicare Part A inpatient hospital deductible amount per benefit period;
(2) coverage for 50 percent of the Medicare Part A inpatient hospital deductible amount per benefit period;
(3) coverage for the actual billed charges up to the coinsurance amount from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A;
(4) coverage for 100 percent of the Medicare Part B deductible amount per calendar year regardless of hospital confinement;
(5) coverage for 100 percent of the difference between the actual Medicare Part B charges as billed, not to exceed any charge limitation established by the Medicare program or state law, and the Medicare-approved Part B charge;
(6) coverage to the extent not covered by Medicare for 80 percent of the billed charges for Medicare-eligible expenses for medically necessary emergency hospital, physician, and medical care received in a foreign country, if the care would have been covered by Medicare if provided in the United States and if the care began during the first 60 consecutive days of each trip outside the United States, subject to a calendar year deductible of $250 and a lifetime maximum benefit of $50,000; for purposes of this benefit, "emergency care" means care needed immediately because of an injury or an illness of sudden and unexpected onset.
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 3/28/2019, Register 229
3 AAC 28.460 Loss ratio standards and refund or credit of premium
Repealed.
History
- Eff. 3/26/82, Register 81; am 8/8/90, Register 115; am 7/1/92, Register 122; am 6/4/93, Register 126; am 7/12/96, Register 139; repealed 4/21/99, Register 150
3 AAC 28.461 Standard Medicare supplement benefit plans for 2020 standardized Medicare supplement benefit policies or certificates issued with an effective date of coverage on or after January 1, 2020
(a) A Medicare supplement policy or certificate delivered or issued for delivery with an effective date of coverage on or after January 1, 2020 may not be advertised, solicited, delivered, or issued for delivery in this state as a Medicare supplement policy or certificate unless it complies with the benefit requirements of this section.
(b) An issuer shall make available to each prospective policyholder and certificate holder a policy form or certificate form containing only the basic core benefits, as set out in 3 AAC 28.459(m).
(c) If an issuer makes available any of the additional benefits as set out in 3 AAC 28.459(n), or offers standardized benefit plans "K" or "L" as set out in (g)(9) and (10) of this section, the issuer shall make available to each prospective policyholder and certificate holder, in addition to a policy form or certificate form with only the basic core benefits as set out in 3 AAC 28.459(m), a policy form or certificate form containing either standardized benefit plan "D" as set out in (g)(4) of this section or standardized benefit plan "G" as set out in (g)(7) of this section.
(d) An issuer may not offer for sale in this state a group, package, or combination of Medicare supplement benefits other than those listed in this section, except as may be permitted under (h) of this section.
(e) Medicare supplement benefit plans must be uniform in structure, language, designation, and format to the standardized benefit plans listed in (g) of this section and conform to the definitions under 3 AAC 28.430 and 3 AAC 28.510. Each benefit must be structured in accordance with the format provided in 3 AAC 28.454(m) and (n), or, in the case of plans "K" or "L," in (g)(9) or (10) of this section, and list the benefits in the order shown. For purposes of this section, "structure, language, and format" means style, arrangement, and overall content of a benefit.
(f) An issuer may use, in addition to the benefit plan designations required in (e) of this section, other designations to the extent permitted by law.
(g) The 2020 standardized Medicare supplement benefit plans must adhere to the following requirements:
(1) standardized Medicare supplement benefit plan "A" must be limited to the basic core benefits, as set out in 3 AAC 28.459(m);
(2) standardized Medicare supplement benefit plan "B" must consist of the core benefit as set out in 3 AAC 28.459(m), plus the Medicare Part A deductible as set out in 3 AAC 28.459(n)(1);
(3) standardized Medicare supplement benefit plan "C" must consist of the core benefit as set out in 3 AAC 28.459(m), plus the Medicare Part A deductible, skilled nursing facility care, Medicare Part B deductible, and medically necessary emergency care provided in a foreign country as set out in 3 AAC 28.459(n)(1), (3), (4), and (6);
(4) standardized Medicare supplement benefit plan "D" must consist of the core benefit as set out in 3 AAC 28.459(m), plus the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care provided in a foreign country as set out in 3 AAC 28.459(n)(1), (3), and (6);
(5) standardized Medicare supplement plan "F" must consist of the core benefit as set out in 3 AAC 28.459(m), plus the Medicare Part A deductible, skilled nursing facility care, the Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care provided in a foreign country as set out in 3 AAC 28.459(n)(1) and (3) - (6);
(6) standardized Medicare supplement high deductible plan "F" must consist of all of the covered expenses following the payment of the annual high deductible plan "F"deductible subject to the following:
(A) the covered expenses include the basic core benefit as set out in 3 AAC 28.459(m), plus the Medicare Part A deductible, skilled nursing facility care, the Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care provided in a foreign country as set out in 3 AAC 28.459(n)(1) and (3) - (6);
(B) the annual high deductible plan "F" deductible must consist of out-of-pocket expenses, other than premiums, for services covered by the Medicare supplement plan "F" policy, and must be in addition to any other specific benefit deductibles;
(C) the annual high deductible plan "F" deductible must be $1,500 for 1999, based on the calendar year, to be adjusted annually after that by the secretary to reflect the change in the consumer price index for all urban consumers for the 12-month period ending with August of the preceding year, rounded to the nearest multiple of $10;
(7) standardized Medicare supplement benefit plan "G" must consist of the core benefit as set out in 3 AAC 28.459(m), plus the Medicare Part A deductible, skilled nursing facility care, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care provided in a foreign country as set out in 3 AAC 28.459(n)(1), (3), (5), and (6);
(8) standardized Medicare supplement high deductible plan "G" must consist of all of the covered expenses following the payment of the annual high deductible plan "G" deductible subject to the following:
(A) the covered expenses include the basic core benefit as set out in 3 AAC 459(m), plus the Medicare Part A deductible, skilled nursing facility care, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care provided in a foreign country as set out in 3 AAC 28.459(n)(1), (3), (5) and (6);
(B) the annual high deductible plan "G" deductible must consist of out-of-pocket expenses, other than premiums, for services covered by the Medicare supplement plan "G" policy and must be in addition to any other specific benefit deductibles;
(C) the annual high deductible plan "G" deductible must be $2,200 for 2017, based on the calendar year, to be adjusted annually after that by the secretary to reflect the change in the consumer price index for all urban consumers for the 12-month period ending with August of the preceding year, rounded to the nearest multiple of $10;
(9) standardized Medicare supplement plan "K" must consist of the following benefits:
(A) coverage of 100 percent of the Medicare Part A hospital coinsurance amount for each day used from the 61st through the 90th day in any Medicare benefit period;
(B) coverage of 100 percent of the Medicare Part A hospital coinsurance amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period;
(C) upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days;
(D) coverage for 50 percent of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as set out in (J) of this paragraph;
(E) coverage for 50 percent of the coinsurance amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation is met as set out in (J) of this paragraph;
(F) coverage for 50 percent of cost sharing for all Medicare Part A eligible expenses and respite care until the out-of-pocket limitation is met as set out in (J) of this paragraph;
(G) coverage for 50 percent under Medicare Part A or Part B of the reasonable cost of the first three pints of blood, or an equivalent quantity of packed red blood cells as defined under federal regulations, unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as set out in (J) of this paragraph;
(H) except for coverage provided under (I) of this paragraph, coverage for 50 percent of the cost sharing otherwise applicable under Medicare Part B after the policyholder pays the Part B deductible until the out-of-pocket limitation is met as set out in (J) of this paragraph;
(I) coverage of 100 percent of the cost sharing for Medicare Part B preventive services after the policyholder pays the Part B deductible;
(J) coverage of 100 percent of all cost sharing under Medicare Part A and Part B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Part A and Part B of $4,000 in 2006, indexed each year by the appropriate inflation adjustment specified by the secretary;
(10) standardized Medicare supplement plan "L" and must consist of the benefits set out in
(A) the provisions of (9)(A) - (C), and (I) of this subsection;
(B) the provisions of (9)(D) - (H) of this subsection, but substituting 75 percent for 50 percent in each of those subparagraphs; and
(C) the provisions of (9)(J) of this subsection, but substituting $2,000 for $4,000 in that subparagraph;
(11) standardized Medicare supplement plan "M" must consist of the core benefit as set out in 3 AAC 28.459(m), plus 50 percent of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care provided in a foreign country as set out in 3 AAC 28.459(n)(2), (3), and (6);
(12) standardized Medicare supplement plan "N" must consist of the core benefit as set out in 3 AAC 28.459(m), plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care provided in a foreign country as set out in 3 AAC 28.459(n)(1), (3), and (6), with copayments of
(A) the lesser of $20 or the Medicare Part B coinsurance or copayment for each covered health care provider office visit, including visits to medical specialists; and
(B) the lesser of $50 or the Medicare Part B coinsurance or copayment for each covered emergency room visit; this copayment will be waived if the insured is admitted to any hospital and the emergency visit is subsequently covered as a Medicare Part A expense.
(h) An issuer may, with prior approval of the director, offer a Medicare supplement policy or certificate under this section that contains new or innovative benefits, in addition to the standard benefits required in a policy or certificate issued under this section that otherwise complies with the applicable standards. The new or innovative benefits may include only benefits that are appropriate to Medicare supplement insurance, are new or innovative, are not otherwise available, and are cost-effective and offered in a manner that is consistent with the goal of simplification of Medicare supplement policies. New or innovative benefits may not include an outpatient prescription drug benefit. New or innovative benefits may not be used to change or reduce benefits, including a change of any cost-sharing provision, in any standardized Medicare supplement plan.
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 3/28/2019, Register 229
3 AAC 28.462 Guaranteed issue for eligible persons
(a) Except as provided in (h) of this section, an eligible person is an individual described in (c) of this section who seeks to enroll under the policy during the period specified in (d) of this section, and who submits evidence of the date of the termination, date of withdrawal from enrollment, date of enrollment in medicare Part D, or date of substantial reduction of supplemental health benefits with the application for a medicare supplement policy.
(b) With respect to an eligible person, an issuer
(1) may not deny or condition the issuance or effectiveness of a medicare supplement policy that is offered and is available for issuance to a new enrollee by the issuer;
(2) may not discriminate in the pricing of that medicare supplement policy because of health status, claims experience, receipt of health care, or medical condition; and
(3) may not impose an exclusion of benefits based on a preexisting condition under that medicare supplement policy.
(c) For purposes of this section, an eligible person is
(1) an individual who is enrolled under an employee welfare benefit plan that provides health benefits that supplement the benefits provided under medicare and whose plan terminates or ceases to provide substantially all of the supplemental health benefits to the individual, or an individual who is enrolled under an employee welfare benefit plan that is primary to medicare and whose plan terminates or ceases to provide all health benefits to the individual because the individual leaves the plan;
(2) an individual who is enrolled with a medicare advantage organization under a medicare advantage plan under Part C of medicare if any of the following circumstances apply:
(A) the organization's or plan's certification under Part C of medicare has been terminated or the organization has terminated or otherwise discontinued providing the plan in the area in which the individual resides;
(B) the individual is no longer eligible to elect the plan because of a change in the individual's place of residence or other change in circumstances specified by the secretary, excluding termination of the individual's enrollment on the basis described in 42 U.S.C. 1395w-21 (sec. 1851(g)(3)(B) of the Social Security Act), if the individual has not paid premiums on a timely basis or has engaged in disruptive behavior as specified in standards under 42 U.S.C. 1395w-26 (sec. 1856 of the Social Security Act), or if the plan is terminated for all individuals within a residence area;
(C) the individual demonstrates under guidelines established by the secretary that
(i) the organization offering the plan substantially violated a material provision of the organization's contract under Part C of medicare in relation to the individual, including the failure to provide an enrollee on a timely basis medically necessary care for which benefits are available under the plan or the failure to provide covered care in accordance with applicable quality standards; or
(ii) the organization, its agent, or another entity acting on the organization's behalf, materially misrepresented the plan's provisions in marketing the plan to the individual;
(D) the individual meets other exceptional conditions that the secretary may provide;
(3) an individual who is enrolled with any of the following and whose enrollment ceases under any of the circumstances that would permit discontinuance of an individual's election of coverage under (2) of this subsection:
(A) an eligible organization under a contract under 42 U.S.C. 1395mm (sec. 1876 of the Social Security Act);
(B) a similar organization operating under demonstration project authority, effective for periods before April 1, 1999;
(C) an organization under an agreement under 42 U.S.C. 1395l(a)(1)(A) (sec. 1833(a)(1)(A) of the Social Security Act);
(D) an organization under a medicare select policy as defined in 42 U.S.C. 1395ss(t) (sec. 1882(t) of the Social Security Act);
(4) an individual who is enrolled under a medicare supplement policy and whose enrollment ceases because
(A) of the insolvency of the issuer or bankruptcy of the nonissuer organization or other involuntary termination of coverage or enrollment under the policy;
(B) the issuer of the policy substantially violated a material provision of the policy; or
(C) the issuer or an agent or other entity acting on the issuer's behalf materially misrepresented the policy's provisions in marketing the policy to the individual;
(5) an individual
(A) who was enrolled under a medicare supplement policy and terminates enrollment and subsequently enrolls, for the first time, with any medicare advantage organization under a medicare advantage plan under Part C of medicare, any eligible organization under a contract under 42 U.S.C. 1395mm (sec. 1876 of the Social Security Act), any similar organization operating under demonstration project authority, or a medicare select policy; and
(B) whose subsequent enrollment is terminated by the enrollee within the first 12 months of this subsequent enrollment, during which the enrollee is permitted to terminate this subsequent enrollment under 42 U.S.C. 1395w-21(e) (sec. 1851(e) of the Social Security Act);
(6) an individual who, upon first becoming enrolled in medicare Part B for benefits at age 65 or older, enrolls in a medicare advantage plan under Part C of medicare and who withdraws from the plan not later than 12 months after the effective date of enrollment; or
(7) an individual who enrolls in a medicare Part D plan during the initial enrollment period, and who
(A) at the time of enrollment in the medicare Part D plan, was enrolled under a medicare supplement policy that covers outpatient prescription drugs;
(B) terminates enrollment in the medicare supplement policy; and
(C) provides evidence of enrollment in the medicare Part D plan along with the application for a policy described in (d) of this section.
(d) A guaranteed issue time period in the case of an individual described
(1) in (c)(1) of this section, begins on the later of the following dates and ends 63 days after that date:
(A) the date the individual receives a notice of termination or cessation of all supplemental health benefits or, if the individual does not receive that notice, a notice that a claim has been denied because of a termination or cessation;
(B) the date that the applicable coverage terminates or ceases;
(2) in (c)(2), (c)(3), (c)(5), or (c)(6) of this section, whose enrollment is terminated involuntarily, begins on the date that the individual receives a notice of termination and ends 63 days after the date the coverage is terminated;
(3) in (c)(4)(A) of this section, begins on the earlier of the following dates and ends 63 days after that date:
(A) the date the individual receives a notice of termination, a notice of the issuer's bankruptcy or insolvency, or other similar notice;
(B) the date that the applicable coverage terminates or ceases;
(4) in (c)(2), (c)(4)(B), (c)(4)(C), (c)(5), or (c)(6) of this section, who voluntarily withdraws from the plan, begins on the date that is 60 days before the effective date of the withdrawal and ends 63 days after the effective date;
(5) in (c) of this section, but not described in (1),(2),(3), or (4) of this subsection, begins on the effective date of an individual's withdrawal and ends 63 days after the effective date; or
(6) in (c)(7) of this section,
(A) begins on the date the individual receives notice under 42 U.S.C. 1395ss(v)(2)(B) (sec. 1882(v)(2)(B) of the Social Security Act) from the medicare supplement issuer during the 60-day period immediately preceding the initial Part D enrollment period; and
(B) ends 63 days after the effective date of the individual's coverage under medicare Part D.
(e) Access to enrollment for a medicare supplement policy may be extended for an interrupted trial period. For purposes of (c)(5) and (c)(6) of this section, an enrollment of an individual with an organization or provider described in (c)(5)(A) of this section or with a plan or in a program described in (c)(6) of this section, may not be deemed to be an initial enrollment under this subsection after the two-year period beginning on the date on which the individual first enrolled with the organization, provider, or plan, or in the program. A subsequent enrollment may be deemed to be an initial enrollment as follows:
(1) in the case of an individual described in (c)(5) of this section, whose enrollment with an organization or provider described in (c)(5)(A) of this section is involuntarily terminated within the first 12 months of enrollment and who, without an intervening enrollment, enrolls with another organization or provider, the subsequent enrollment is deemed to be an initial enrollment as described in (c)(5) of this section;
(2) in the case of an individual described in (c)(6) of this section, whose enrollment with a plan or in a program described in (c)(6) of this section is involuntarily terminated within the first 12 months of enrollment, and who enrolls with another plan or in another program, the subsequent enrollment is deemed to be an initial enrollment as described in (c)(6) of this section.
(f) The medicare supplement policy to which an eligible person is entitled
(1) for individuals eligible for medicare on or before December 31, 2019, under (c)(1) - (4) of this section is a medicare supplement policy that has a benefit package classified as plan "A," "B," "C," "F" high deductible "F," high deductible "G," "K," or "L," offered by any issuer;
(2) under (c)(5) of this section is the same medicare supplement policy in which the individual was most recently previously enrolled if available from the same issuer, or if that policy is not available, a policy described in (1) of this subsection;
(3) under (c)(6) of this section is any medicare supplement policy offered by any issuer;
(4) after December 31, 2005, if the individual was most recently enrolled in a medicare supplement policy with an outpatient prescription drug benefit, is
(A) a medicare supplement policy available from the same issuer but modified to remove outpatient prescription drug coverage; or
(B) at the election of the individual, a medicare supplement policy that has a benefit package classified as plan "A," "B," "C," "F," high deductible "F," high deductible "G," K," or "L" and that is offered by any issuer;
(5) for individuals eligible for medicare on or before December 31, 2019, under (c)(7) of this section is a medicare supplement policy that has a benefit package classified as plan "A," "B," "C," "F," high deductible "F," high deductible "G," "K," or "L" and that is offered and available for issue to new enrollees by the same issuer that issued the individual's medicare supplement policy with outpatient prescription drug coverage;
(6) for individuals newly eligible for medicare on or after January 1, 2020 under (c)(1) - ( 4) of this section is a medicare supplement policy that has a benefit package classified as plan "A," "B," "D," "G" high deductible "G," "K," or "L," offered by any issuer; and
(7) for individuals newly eligible for medicare on or after January 1, 2020, under (c)(7) of this section is a medicare supplement policy that has a benefit package classified as plan "A," "B," "D," "G," high deductible "G," "K," or "L" and that is offered and available for issue to new enrollees by the same issuer that issued the individual's medicare supplement policy with outpatient prescription drug coverage.
(g) When an individual becomes an eligible person under (c) of this section because the individual loses coverage or benefits due to the termination of a contract or agreement, policy, or plan, the organization terminating the contract or agreement, the issuer terminating the policy, or the administrator of the terminated plan, respectively, shall, contemporaneously with the notification of termination, notify the eligible person of the eligible person's rights under this section and of the obligations of issuers of medicare supplement policies under (b) of this section.
(h) When an individual becomes an eligible person under (c) of this section because the individual loses coverage or benefits due to the cessation of substantially all of the supplemental health benefits under an employee welfare health benefit contract or agreement, policy, or plan, the organization that substantially reduced the contract or agreement, the issuer that substantially reduced the policy, or the administrator of the substantially reduced plan, respectively, shall, contemporaneously with the notification of the substantial cessation of benefits, notify the eligible person of the eligible person's rights under this section and of the obligations of issuers of medicare supplement policies under (b) of this section.
(i) When an individual becomes an eligible person under (c) of this section because the individual withdraws enrollment under a contract or agreement, policy, or plan, the organization offering the contract or agreement, regardless of the basis for the withdrawal of enrollment, the issuer offering the policy, or the administrator of the plan, respectively, shall, within 10 working days of the date that the issuer receives notification of the withdrawal, notify the eligible person of the eligible person's rights under this section and of the obligations of issuers of medicare supplement policies under (b) of this section.
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 4/21/99, Register 150; am 9/17/2003, Register 167; am 9/4/2005, Register 175; am 12/26/2019, Register 232
3 AAC 28.466 Standards for claim payment
(a) An issuer shall comply with 42 U.S.C. 1395ss(c) (sec. 1882(c)(3) of the Social Security Act, as enacted by sec. 4081(b)(2)(C) of the Ominbus Budget Reconciliation Act of 1987 (OBRA) 1987, Pub. L. No. 100-203), by
(1) accepting a notice from a medicare carrier on dually assigned claims submitted by participating physicians and suppliers as a claim for benefits in place of any other claim form otherwise required and making a payment determination on the basis of the information contained in that notice;
(2) notifying of the payment determination
(A) the participating physician or supplier; and
(B) the beneficiary;
(3) paying the participating physician or supplier directly;
(4) furnishing, at the time of enrollment, each enrollee with a card listing the policy name, number, and a central mailing address to which notices from a medicare carrier may be sent;
(5) paying user fees for claim notices that are transmitted electronically or otherwise; and
(6) providing at least annually to the secretary a central mailing address to which all claims may be sent by medicare carriers.
(b) The issuer shall certify compliance with the requirements of (a) of this section on the medicare supplement insurance experience reporting form.
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 4/21/99, Register 150
3 AAC 28.468 Loss ratio standards; refund or credit of premium
(a) A medicare supplement policy form or certificate form may not be delivered or issued for delivery in this state unless the policy or certificate form can be expected, as estimated for the entire period for which rates are computed to provide coverage, to return to policyholders and certificate holders in the form of aggregate benefits, not including anticipated refunds or credits, provided under the policy or certificate form of a percentage calculated on the basis of incurred claims experience or incurred health care expenses when coverage is provided by a health maintenance organization on a service, rather than reimbursement basis and earned premiums for the period, and in accordance with accepted actuarial principles and practices, that is
(1) at least 75 percent of the aggregate amount of premiums earned in the case of group policies; or
(2) at least 65 percent of the aggregate amount of premiums earned in the case of individual policies.
(b) Filings of rates and rating schedules must demonstrate that expected claims, in relation to premiums, comply with the requirements of this section when combined with actual experience to date. Filings of rate revisions must also demonstrate that the anticipated loss ratio over the entire future period for which the revised rates are computed to provide coverage are expected to meet the appropriate loss ratio standards.
(c) For purposes of applying (a) of this section and 3 AAC 28.472(d) only, a policy issued as a result of a solicitation of individuals through the mail or by mass media advertising, including both print and broadcast advertising, will be considered by the director to be an individual policy.
(d) For policies issued before July 1, 1992, expected claims in relation to premiums must meet the following requirements:
(1) the originally filed anticipated loss ratio when combined with the actual experience since inception;
(2) the appropriate loss ratio requirement from (a) of this section when combined with actual experience beginning with July 12, 1996 to date; and
(3) the appropriate loss ratio requirement from (a) of this section over the entire future period for which the rates are computed to provide coverage.
(e) An issuer shall collect and file with the director by May 31 of each year the data contained in the applicable reporting form contained in Appendix A in this section for each type in a standard medicare supplement benefit plan.
(f) If on the basis of the experience as reported the benchmark ratio since inception (ratio 1) exceeds the adjusted experience ratio since inception (ratio 3), then a refund or credit calculation is required. The refund calculation must be done on a statewide basis for each type in a standard medicare supplement benefit plan. For purposes of the refund or credit calculation, experience on policies issued within the reporting year must be excluded.
(g) For purposes of this section, for policies or certificates issued before July 1, 1992 and for experience after July 12, 1996, the issuer shall make the refund or credit calculation separately for the aggregate of all policies that are subject to an individual loss ratio standard when issued; and the aggregate of all other policies.
(h) A refund or credit must be made only when the benchmark loss ratio exceeds the adjusted experience loss ratio and the amount to be refunded or credited exceeds $1. The refund may include interest from the end of the calendar year to the date of the refund or credit at a rate specified by the secretary, but in no event may it be less than the average rate of interest for 13-week notes issued by the United States Treasury. A refund or credit against premiums due must be made by September 30 following the experience year upon which the refund or credit is based.
(i) For purposes of applying (a) of this section, incurred health care expenses when coverage is provided by a health maintenance organization do not include
(1) home office and overhead costs;
(2) advertising costs;
(3) commissions and other acquisition costs;
(4) taxes;
(5) capital costs;
(6) administrative costs; or
(7) claims processing costs.
Appendix A
MEDICARE SUPPLEMENT REFUND CALCULATION FORM
FOR CALENDAR YEAR _________
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 4/21/99, Register 150; am 9/4/2005, Register 175
3 AAC 28.470 Filings
(a) An issuer of medicare supplement policies and certificates shall file annually its forms, rates, rating schedule, and supporting documentation, including ratios of incurred losses to earned premiums by policy duration, for approval by the director. Supporting documentation must demonstrate in accordance with accepted actuarial practices and using reasonable assumptions that the appropriate loss ratio standards under 3 AAC 28.468 can be expected to be met over the entire period for which rates are computed, excluding active life reserves. An expected third-year loss ratio that is greater than or equal to the applicable percentage will be demonstrated for policies or certificates in force less than three years.
(b) As soon as practicable, but before the effective date of enhancements in medicare benefits, an issuer of medicare supplement policies or certificates in this state shall file with the director appropriate premium adjustments necessary to produce loss ratios as anticipated for the current premium for the applicable policies or certificates. The supporting documents necessary to justify the adjustment to produce loss ratios required by 3 AAC 28.468(a) must accompany the filing. An issuer shall make premium adjustments necessary to produce an expected loss ratio under a policy or certificate that will conform with 3 AAC 28.468 and that are expected to result in a loss ratio at least as great as that originally anticipated in the rates used to produce current premiums by the issuer for the medicare supplement policies or certificates. A premium adjustment that would modify the loss ratio experience under the policy other than the adjustments described in this section may not be made with respect to a policy at any time other than upon its renewal date or anniversary date. Any rider, endorsement, or policy form needed to accomplish the medicare supplement policy or certificate modification necessary to eliminate benefit duplication with medicare shall also be filed with the director in a manner that provides a clear description of the medicare supplement benefits provided by the policy or certificate.
(c) If an issuer fails to make premium adjustments acceptable to the director, the director will, in the director's discretion, order premium adjustments, refunds, or premium credits considered necessary by the director to achieve the loss ratio required by this section.
(d) The director will, in the director's discretion, conduct a public hearing on an increase in a rate for a policy form or certificate form if the experience of the form for the prior reporting period is not in compliance with the applicable loss ratio standard. The determination of compliance will be made by the director without consideration of any refund or credit for the reporting period. Notice of a hearing will be published in a newspaper of general circulation and given in accordance with AS 21.06.200.
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060 AS 21.06.200; AS 21.84.300 AS 21.42.120; AS 21.87.180
- Eff. 3/26/82, Register 81; am 8/8/90, Register 115; am 7/1/92, Register 122; am 6/4/93, Register 126
3 AAC 28.471 Filing requirements for out-of-state group policies
Repealed 7/1/92.
3 AAC 28.472 Filing and approval of policies, certificates, and premium rates
(a) An issuer may not deliver or issue for delivery a policy or certificate to a resident of this state unless the policy or certificate form has been filed with and approved by the director.
(b) An issuer may not use or change premium rates for a medicare supplement policy or certificate unless the rates, rating schedule, and supporting documentation have been filed with and approved by the director.
(c) An issuer may not file for approval more than one form of a policy or certificate of each type for each standard medicare supplement benefit plan except that with the approval of the director, an issuer may offer up to four additional policy forms or certificate forms of the same type for the same standard medicare supplement benefit plan, one for each of the following:
(1) the inclusion of new or innovative benefits;
(2) the addition of either direct response or agent marketing methods;
(3) the addition of either guaranteed issue or underwritten coverage; and
(4) the offering of coverage to individuals eligible for medicare by reason of disability.
(d) For purposes of this section, a "type" means an individual policy, a group policy, an individual medicare select policy, or a group medicare select policy.
(e) Except as provided in (f) of this section, an issuer shall continue to make available for purchase any policy or certificate form issued after 7/1/92 that has been approved by the director. A policy or certificate form must be considered to be available for purchase if the issuer has actively offered it for sale in this state in the previous 12 months.
(f) An issuer may discontinue the availability of a policy or certificate form if the issuer provides to the director in writing its decision at least 30 days before discontinuing the availability of the form of the policy or certificate. After receipt by the director of the notice, the issuer may no longer offer for sale the policy or certificate form in this state.
(g) An issuer that discontinues the availability of a policy or certificate form under (f) of this section may not file for approval a new policy or certificate form of the same type for the same standard medicare supplement benefit plan as the discontinued form for a period of five years after the issuer provides notice of the discontinuance to the director. The period of discontinuance will, in the director's discretion, be reduced if the director determines that a shorter period is appropriate.
(h) The sale or other transfer of a medicare supplement business to another issuer must be considered a discontinuance for purposes of this section.
(i) A change in the rating structure or methodology must be considered a discontinuance under this section unless the issuer
(1) provides an actuarial memorandum, in a form and manner set by the director, describing the manner in which the revised rating methodology and resultant rates differ from the existing rating methodology and existing rates; and
(2) does not subsequently put into effect a change of rates or rating factors that would cause the percentage differential between the discontinued and subsequent rates as described in the actuarial memorandum to change, but the director will, in the director's discretion, approve a change to the differential that is in the public interest.
(j) Except as provided in (k) of this section, the experience of all policy or certificate forms of the same type in a standard medicare supplement benefit plan must be combined for purposes of the refund or credit calculation required under 3 AAC 28.468.
(k) Forms assumed under an assumption reinsurance agreement may not be combined with the experience of other forms for purposes of the refund or credit calculation.
(l) An issuer shall file with the director any rider or amendment to a policy or certificate issued to a resident in this state deleting outpatient prescription drug benefits.
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 7/1/92, Register 122; am 7/12/96, Register 139; am 9/17/2003, Register 167; am 9/4/2005, Register 175
3 AAC 28.480 Loss ratio determinations
(a) A rate credit or dividend paid may be used only in the loss ratio determinations if it directly inures to the benefit of the person who actually pays the premium for the coverage provided.
(b) A rate credit reserve on dividend liability may be used only in the loss ratio determinations if the accrued rate credit or dividend will directly inure to the benefit of the person who actually pays the premium for the coverage provided.
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 3/26/82, Register 81
3 AAC 28.490 Required disclosure provisions
(a) Medicare supplement policies and certificates must include a renewal or continuation provision. The language or specifications of the provisions must be consistent with the type of contract issued. The provisions must be appropriately captioned, must appear on the first page of the policy, and must include any reservation by the issuer of the right to change premiums and any automatic renewal premium increases based on the policyholder's age.
(b) Except for riders or endorsements by which the issuer fulfills a request made in writing by the insured, exercises a specifically reserved right under a Medicare supplement policy, or is required to reduce or eliminate benefits to avoid duplication of Medicare benefits, all riders or endorsements added to a Medicare supplement policy after the date of issue or at reinstatement or renewal that reduce or eliminate benefits or coverage in the policy must require a signed acceptance by the insured. After the date of a policy or certificate issue, a rider or an endorsement that increases benefits or coverage with a concomitant increase in premium during the policy term must be agreed to in writing and signed by the insured, unless the benefits are required by the minimum standards for Medicare supplement policies or if the increased benefits or coverage are required by law. If a separate additional premium is charged for benefits provided in connection with a rider or an endorsement, the premium charge must be set out in the policy.
(c) A Medicare supplement policy or certificate may not provide for the payment of benefits based on standards described as "usual and customary," "reasonable and customary," or words of similar import.
(d) If a Medicare supplement policy or certificate contains a limitation with respect to a preexisting condition, the limitation must appear as a separate paragraph of the policy and be labeled "preexisting condition limitation."
(e) A Medicare supplement policy or certificate must have a notice prominently printed on the first page of the policy or certificate or attached to it stating in substance that the policyholder or certificate holder shall have the right to return the policy or certificate within 30 days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the insured person is not satisfied for any reason.
(f) An issuer of accident and sickness policies or certificates that provide hospital or medical expense coverage on an expense incurred or indemnity basis to a person eligible for Medicare must provide to the applicant a Guide to Health Insurance for People with Medicare in the form developed jointly by the National Association of Insurance Commissioners and the Centers for Medicare and Medicaid Services and in a type size no smaller than 12-point type. Delivery of the Guide must be made regardless of whether the policies or certificates are advertised, solicited, or issued as Medicare supplement policies or certificates under 3 AAC 28.410 - 3 AAC 28.510. Except for a direct response issuer, delivery of the Guide must be made to the applicant at the time of application and acknowledgment of receipt of the Guide must be obtained by the issuer. A direct response issuer shall deliver the Guide to the applicant upon request, but not later than at the time the policy is delivered.
(g) As soon as practicable, but not later than 30 days before the annual effective date of a Medicare benefit change, an issuer shall notify its policyholders and certificate holders of modifications that the issuer has made to Medicare supplement insurance policies or certificates in a format acceptable to the director. The notice must
(1) include a description of revisions to the Medicare program and a description of each modification made to the coverage provided under the Medicare supplement policy or certificate; and
(2) inform the policyholder or certificate holder when a premium adjustment is to be made due to changes in Medicare.
(h) The notice of benefit modifications and premium adjustments must be in outline format, in clear and simple terms, to facilitate comprehension.
(i) The notice may not contain or be accompanied by any solicitation.
(j) An issuer shall provide an outline of coverage to an applicant at the time the application is presented to the prospective applicant and, except for direct response policies, shall obtain an acknowledgment of receipt of the outline from the applicant.
(k) If an outline of coverage is provided at the time of application and the Medicare supplement policy or certificate is issued on a basis that would require revision of the outline, a substitute outline of coverage properly describing the policy or certificate must accompany the policy or certificate when it is delivered and contain the following statement, in no smaller than 12-point type, immediately above the company name:
"NOTICE: Read this outline of coverage carefully. It is not identical to the outline of coverage provided upon application and the coverage originally applied for has not been issued."
(l) For a Medicare supplement policy or certificate sold with an effective date of coverage before June 1, 2010, the outline of coverage provided to an applicant under this section consists of four parts: a cover page, premium information, disclosure pages, and charts displaying the features of each benefit plan offered by the issuer. The outline of coverage must be in the language and format set out in (t) of this section in no smaller than 12-point type. Plans "A" - "L" must be shown on the cover page and the plans offered by the issuer must be prominently identified. Premium information for plans that are offered must be shown on the cover page or immediately following the cover page and must be prominently displayed. The premium and mode must be stated for each plan that is offered to the prospective applicant. Each possible premium for the prospective applicant must be illustrated.
(m) For a Medicare supplement policy or certificate sold with an effective date of coverage before June 1, 2010, as provided in 42 U.S.C. 1395e(b)(2), the dollar amount of the inpatient hospital deductible and all coinsurance amounts for plans "A" - "L" are determined annually by the secretary between September 1 and September 15 of the year preceding the year to which they will apply. As provided in 42 U.S.C. 1395l(b) and 1395r(a)(1), the dollar amount of the Medicare Part B deductible for plans "A" - "L" are determined annually by the secretary. Once determined, the figures are published in the Federal Register and may be obtained from the division.
(n) For a Medicare supplement policy or certificate sold with an effective date of coverage on or after June 1, 2010, the outline of coverage provided to an applicant under this section consists of four parts: a cover page, premium information, disclosure pages, and charts displaying the features of each benefit plan offered by the issuer. The outline of coverage must be in the language and format set out in (u) of this section in no smaller than 12-point type. Plans "A" - "D," plan "F," high deductible plan "F," and plans "G," "K," "L," "M," and "N" must be shown on the cover page and the plans offered by the issuer must be prominently identified. Premium information for plans that are offered must be shown on the cover page or immediately following the cover page and must be prominently displayed. The premium and mode must be stated for each plan that is offered to the prospective applicant. Each possible premium for the prospective applicant must be illustrated.
(o) For a Medicare supplement policy or certificate sold with an effective date of coverage on or after June 1, 2010, as provided in 42 U.S.C. 1395e(b)(2), the dollar amount of the inpatient hospital deductible and all coinsurance amounts for plans "A" - "D," plan "F," high deductible plan "F," and plans "G," "K," "L," "M," and "N" are determined annually by the secretary between September 1 and September 15 of the year preceding the year to which they will apply. As provided in 42 U.S.C. 1395l(b) and 1395r(a)(1), the dollar amount of the Medicare Part B deductible for plans "A" - "D," plan "F," high deductible plan "F," and plans "G," "K," "L," "M," and "N" are determined annually by the secretary. Once determined, the figures are published in the Federal Register and may be obtained from the division.
(p) For a Medicare policy or certificate sold with an effective date of coverage on or after January 1, 2020, the outline of coverage provided to an applicant under this section consists of four parts: a cover page, premium information, disclosure pages, and charts displaying the features of each benefit plan offered by the issuer. The outline of coverage must be in the language and format set out in (w) of this section in no smaller than 12-point type. Plans "A" - "D," plan "F," high deductible plan "F," plan "G," high deductible plan "G," and plans "K," "L," "M," and "N" must be shown on the cover page and the plans offered by the issuer must be prominently identified. Premium information for plans that are offered must be shown on the cover page or immediately following the cover page and must be prominently displayed. The premium and mode must be stated for each plan that is offered to the prospective applicant. Each possible premium for the prospective applicant must be illustrated.
(q) For a Medicare supplement policy or certificate sold with an effective date of coverage on or after January 1, 2020, as provided in 42 U.S.C. 1395e(b)(2), the dollar amount of the inpatient hospital deductible and all coinsurance amounts for plans "A" - "D," plan "F," high deductible plan "F," plan "G," high deductible plan "G," and plans "K," "L," "M," and "N" are determined annually by the secretary between September 1 and September 15 of the year preceding the year to which they will apply. As provided in 42 U.S.C. 1395l(b) and 1395r(a)(1), the dollar amount of the Medicare Part B deductible for plans "A" - "D," plan "F," high deductible plan "F," plan "G," high deductible plan "G," and plans "K," "L," "M," and "N" are determined annually by the secretary. Once determined, the figures are published in the Federal Register and may be obtained from the division.
(r) An issuer shall comply with the notice requirements of P.L. 108-173 (Medicare Prescription Drug, Improvement, and Modernization Act of 2003).
(s) For the purposes of this section, "form" means the language, format, type size, type proportional spacing, bold character, and line spacing.
(t) For a Medicare supplement policy or certificate sold with an effective date of coverage before June 1, 2010, the following items must be included in the outline of coverage in the order set out in this subsection.
[COMPANY NAME] Outline of Medicare Supplement Coverage - Cover Page: 1 of 2 Benefit Plans _______________ [insert letters of plans being offered] These charts show the benefits included in each of the standard Medicare supplement plans. Every company must make plan ''A'' available.Some plans may not be available in your state.See Outlines of Coverage for details about ALL plans.Basic Benefits for Plans A - J: Hospitalization: Part A coinsurance plus coverage for 365 additional days after Medicare benefits end.Medical Expenses: Part B coinsurance (generally 20% of Medicare-approved expenses) or copayments for hospital outpatient services.Blood: First three pints of blood each year.A B C D E F F* G H I J J* Basic BenefitsBasic BenefitsBasic BenefitsBasic BenefitsBasic BenefitsBasic BenefitsBasic BenefitsBasic BenefitsBasic BenefitsBasic BenefitsSkilled
Nursing
Facility
CoinsuranceSkilled
Nursing
Facility
CoinsuranceSkilled
Nursing
Facility
CoinsuranceSkilled
Nursing
Facility
CoinsuranceSkilled
Nursing
Facility
CoinsuranceSkilled
Nursing
Facility
CoinsuranceSkilled
Nursing
Facility
CoinsuranceSkilled
Nursing
Facility
CoinsurancePart A
DeductiblePart A
DeductiblePart A
DeductiblePart A
DeductiblePart A
DeductiblePart A
DeductiblePart A
DeductiblePart A
DeductiblePart A
DeductiblePart B
DeductiblePart B
DeductiblePart B
DeductiblePart B Excess
(100%)Part B Excess
(80%)Part B Excess
(100%)Part B Excess
(100%)Foreign Travel
EmergencyForeign Travel
EmergencyForeign Travel
EmergencyForeign Travel
EmergencyForeign Travel
EmergencyForeign Travel
EmergencyForeign Travel
EmergencyForeign Travel
EmergencyAt-Home
RecoveryAt-Home
RecoveryAt-Home
RecoveryAt-Home
RecoveryPreventive
Care NOT
covered by
MedicarePreventive
Care NOT
covered by
Medicare
*Plans F and J also have an option called a high deductible plan F and a high deductible plan J. These high deductible plans pay the same benefits as plans F and J after one has paid a calendar year [+] deductible. Benefits from high deductible plans F and J will not begin until out-of-pocket expenses exceed [+]. Out-of-pocket expenses for this deductible are expenses that would ordinarily be paid by the policy. These expenses include the Medicare deductibles for Part A and Part B, but do not include the plan's separate foreign travel emergency deductible.
[+ The dollar amount to be inserted is determined annually, as described in (m) of this section, and may be obtained from the division.]
Click to view
PREMIUM INFORMATION [Boldface Type]
We [insert issuer's name] can only raise your premium if we raise the premium for all policies like yours in this state. [If the premium is based on the increasing age of the insured, include information specifying when premiums will change.]
DISCLOSURES [Boldface Type]
Use this outline to compare benefits and premiums among policies.
READ YOUR POLICY VERY CAREFULLY [Boldface Type]
This is only an outline describing your policy's most important features. The policy is your insurance contract. You must read the policy itself to understand all of the rights and duties of both you and your insurance company.
RIGHT TO RETURN POLICY [Boldface Type]
If you find that you are not satisfied with your policy, you may return it to [insert issuer's address] . If you send the policy back to us within 30 days after you receive it, we will treat the policy as if it had never been issued and return all of your payments.
POLICY REPLACEMENT [Boldface Type]
If you are replacing another health insurance policy, do NOT cancel it until you have actually received your new policy and are sure you want to keep it.
NOTICE [Boldface Type]
This policy may not fully cover all of your medical costs.
A. [for agents]:
Neither [insert company's name] nor its agents are connected with Medicare.
B. [for direct response]:
[Insert company's name] is not connected with Medicare.
This outline of coverage does not give all the details of Medicare coverage. Contact your local Social Security Office or consult Medicare and You for more details.
COMPLETE ANSWERS ARE VERY IMPORTANT
[Boldface Type]
When you fill out the application for the new policy, be sure to answer truthfully and completely all questions about your medical and health history. The company may cancel your policy and refuse to pay any claims if you leave out or falsify important medical information. [If the policy or certificate is guaranteed issue, this paragraph need not appear.]
Review the application carefully before you sign it. Be certain that all information has been properly recorded.
[Include for each plan prominently identified in the cover page, a chart showing the services, Medicare payments, plan payments, and insured payments for each plan, using the same language, in the same order, using uniform layout and format as shown in the charts below. No more than four plans may be shown on one chart. For purposes of illustration, charts for each plan are included in this regulation. An issuer may use additional benefit plan designations on these charts as set out in 3 AAC 28.455(e).]
[Include an explanation of any innovative benefits on the cover page and in the chart, in a manner approved by the director.]
PLAN A MEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD *A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALI-
ZATION*
Semiprivate room and
board, general nur-
sing, and miscellaneous
services and supplies First 60 daysAll but $[+]$0$[+] (Part A deductible) 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60
lifetime reserve
daysAll but $[+] a day$[+] a day$0 -Once lifetime re-
serve days are
used: -Additional 365
days$0100% of Medicare eligi-
ble expenses$0** -Beyond the addi-
tional 365 days$0$0All costsSKILLED NUR-
SING FACILITY
CARE* You must meet Medi-
care's requirements,
including having been
in a hospital for at
least 3 days and en-
tered a Medicare-
approved facility
within 30 days
after leaving the
hospital First 20 daysAll approved amounts$0$0 21st - 100th dayAll but $[+] a day$0Up to $[+] a day 101st day and after$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts100%$0$0HOSPICE CARE Available as long as
your doctor certifies
you are terminally ill
and you elect to re-
ceive these servicesAll but very lim-
ited coinsurance
for outpatient
drugs and inpa-
tient respite care$0Balance[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
**NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN A (continued)MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR *Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such as
physician's services, in-
patient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipment First $[+] of Medicare-
approved amounts*$0$0$[+] (Part B deductible) Remainder of Medi-
care-approved
amountsGenerally 80%Generally 20%$0 Part B Excess
Charges (Above
Medicare-approved
amounts)$0$0All costsBLOOD First 3 pints$0All costs$0Next $[+] of Medicare-
approved amounts*$0$0$[+] (Part B deductible)Remainder of Medicare-
approved amounts80%20%$0CLINICAL LABORA-
TORY SERVICES-
TESTS FOR DIAGNOS-
TIC SERVICES100%$0$0
PLAN A (continued)PARTS A & B [+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE MEDICARE-AP-
PROVED SERVICES-Medically necessary
skilled care services
and medical supplies100%$0$0-Durable medical
equipment First $[+] of Medi-
care-approved a-
mounts*$0$0$[+] (Part B deductible) Remainder of
Medicare-approved
amounts80%20%$0[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
PLAN BMEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD *A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALI-
ZATION*
Semiprivate room and
board, general nur-sing,
sing and miscellaneous
services and supplies First 60 daysAll but $[+] a day$[+] (Part A deductible)$0 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60
lifetime reserve
daysAll but $[+] a day$[+] a day$0 -Once lifetime re-
serve days are
used: -Additional 365
days$0100% of Medicare eligi
ble expenses$0** -Beyond the
additional 365
days$0$0All costsSKILLED NURSING
FACILITY CARE*
You must meet Medi-
care's requirements,
including having been
in a hospital for at
least 3 days and enter-
ed a Medicare-approv-
ed facility within 30
days after leaving the
hospital First 20 daysAll approved amounts$0$0 21st - 100th dayAll but $[+] a day$0Up to $[+] a day 101st day and after$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts100%$0$0HOSPICE CARE
Available as long as
your doctor certifies you
are terminally ill and
you elect to receive
these servicesAll but very limited
coinsurance for outpa-
tient drugs and inpa-
tient respite care$0Balance[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
**NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN B (continued)MEDICARE (PART B)-MEDICARE SERVICES-PER
CALENDAR YEAR *Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such as
physician's services, in-
patient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipment First $[+] of Medicare-
approved amounts*$0$0$[+] (Part B deductible) Remainder of Medi
care-approved
amountsGenerally 80%Generally 20%$0 Part B Excess
Charges (Above
Medicare-approved
amounts)$0$0All costsBLOOD First 3 pints$0All costs$0Next $[+] of Medicare-
approved amounts*$0$0$[+] (Part B deductible)Remainder of Medicare-
approved amounts80%20%$0CLINICAL LABORA-
TORY SERVICES -
TESTS FOR DIAGNOS-
TIC SERVICES100%$0$0
PLAN B (continued)PARTS A & B [+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE MEDICARE-
APPROVED SER-
VICES -Medically neces-
sary skilled care ser-
vices and medical
supplies100%$0$0 -Durable medical
equipment First $[+] of Medi-
care-approved
amounts*$0$0$[+] (Part B deductible) Remainder of
Medicare-approv-
ed amounts80%20%$0[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
PLAN CMEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD *A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZA-
TION*
Semiprivate room
and board, gener-
al nursing, and mis-
cellaneous services
and supplies First 60 daysAll but $[+]$[+] (Part A de-
ductible)$0 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60
lifetime reserve
daysAll but $[+] a day$[+] a day$0 -Once lifetime
reserve days
are used: -Additional 365
days$0100% of Medicare
eligible expenses$0** -Beyond the ad-
ditional 365
days$0$0All costsSKILLED NUR-
SING FACILITY
CARE*
You must meet Medi-
care's requirements,
including having been
in a hospital for at
least 3 days and
entered a
Medicare-approved
facility within 30
days after leaving
the hospital First 20 daysAll approved
amounts$0$0 21st - 100th dayAll but $[+] a dayUp to $[+] a day$0 101st day and after$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts100%$0$0HOSPICE CARE
Available as long as
your doctor certifies you
are terminally ill and
you elect to receive
these servicesAll but very lim-
ited coinsurance
for outpatient
drugs and inpa-
tient respite care$0Balance[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
**NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN C (continued)MEDICARE (PART B)-MEDICARE SERVICES-PER
CALENDAR YEAR *Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE
HOSPITAL AND
OUTPATIENT
HOSPITAL
TREATMENT, such
as physician's ser-
vices, inpatient
and outpatient med-
ical and surgical
services and sup-
plies, physical and
speech therapy, diag-
nostic tests, durable
medical equipment First $[+] of Medicare-
approved amounts*$0$[+] (Part B de-
ductible)$0 Remainder of Medi-
care-approved
amountsGenerally 80%Generally 20%$0Part B Excess
Charges (Above
Medicare-approved
amounts)$0$0All costsBLOOD First 3 pints$0All costs$0Next $[+] of Medi-
care-approved
amounts*$0$[+] (Part B de-
ductible)$0Remainder of Medi-
care-approved
amounts80%20%$0CLINICAL
LABORATORY
SERVICES-
TESTS FOR DIAG-
NOSTIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
PLAN C (continued)PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED SER-
VICES -Medically neces-
sary skilled care
services and medi-
cal supplies100%$0$0 -Durable medical
equipment First $[+] of Medi-
care approved
amounts*$0$[+] (Part B de-
ductible)$0 Remainder of
Medicare-ap-
proved amounts80%20%$0
PLAN C (continued)
OTHER BENEFITS-NOT COVERED BY MEDICARE
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
FOREIGN
TRAVEL- NOT
COVERED BY
MEDICARE
Medically necessary
emergency care services
beginning during the
first 60 days of each
trip outside the USA First $250 each
calendar year$0$0$250 Remainder of
charges$080% to a lifetime
maximum benefit
of $50,00020% and amounts
over the $50,000
lifetime maximum[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
PLAN DMEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD *A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZATION*
Semiprivate room and
board, general nursing,
and miscellaneous ser-
vices and supplies First 60 daysAll but $[+]$[+] (Part A de-
ductible)$0 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60
lifetime reserve
days
All but $[+] a day$[+] a day$0 -Once lifetime
reserve days
are used: -Additional 365
days$0100% of Medicare
eligible expenses$0** -Beyond the addi-
tional 365 days$0$0All costsSKILLED NURSING
FACILITY CARE*
You must meet Medi-
care's requirements,
including having been
in a hospital for at least
3 days and entered a
Medicare-approved fa-
cility within 30 days
after leaving the hospi-
tal First 20 daysAll approved
amounts$0$0 21st - 100th dayAll but $[+] a
day$0Up to $[+] a day 101st day and after$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts100%$0$0HOSPICE CARE
Available as long as
your doctor certifies
you are terminally
ill and you elect to
receive these servicesAll but very lim-
ited coinsurance
for outpatient
drugs and inpatient
respite care$0Balance[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
**NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN D (continued)MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR *Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such as
physicians services, in-
patient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipment First $[+] of
Medicare approved
amounts*$0$0$[+] (Part B de-
ductible) Remainder of Medi-
care-approved
amountsGenerally 80%Generally 20%$0Part B Excess
Charges (Above
Medicare-approved
amounts)$0$0All costsBLOOD First 3 pints$0All costs$0Next $[+] of Medicare-
approved amounts*$0$0$[+] (Part B de-
ductible)Remainder of Medicare-
approved amounts80%20%$0CLINICAL LABORA-
TORY SERVICES -
TESTS FOR DIAGNOS-
TIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
PLAN D (continued)PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED SERVICES -Medically necessary
skilled care services
and medical supplies100%$0$0 -Durable medical
equipment First $[+] of Medi-
care approved
amounts*$0$0$[+] (Part B de-
ductible) Remainder of Medi-
care-approved
amounts80%20%$0HOME HEALTH
CARE (cont'd)
AT HOME RECOVERY
SERVICES - NOT
COVERED BY
MEDICARE
Home care certified by
your doctor, for personal
care during recovery
from an injury or
sickness for which
Medicare approved a
home care treatment
plan -Benefit for each visit$0Actual charges to
$40 a visitBalance -Number of visits
covered (Must be
received within 8
weeks of last
Medicare-approved
visit)$0Up to the num-
ber of Medicare-
approved visits,
not to exceed 7
each week -Calendar year
maximum$0$1,600[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
PLAN D (continued)OTHER BENEFITS-NOT COVERED BY MEDICARE
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
FOREIGN
TRAVEL-
NOT COVERED
BY MEDICARE
Medically neces-
sary emergency
care services
beginning during
the first 60 days
of each trip out-
side the USA First $250 each
calendar year
$0$0$250 Remainder of
charges$080% to a lifetime
maximum benefit
of $50,00020% and amounts
over the $50,000
lifetime maximum
PLAN EMEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD *A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZA-
TION*
Semiprivate room
and board, general
nursing, and miscel-
laneous services
and supplies First 60 daysAll but $[+] $[+] (Part A de-
ductible)$0 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60
lifetime reserve
daysAll but $[+] a
day$[+] a day$0 -Once lifetime
reserve days
are used: -Additional
365 days$0100% of Medicare
eligible expenses$0** -Beyond the
additional 365
days$0$0All costsSKILLED
NURSING
FACILITY
CARE*
You must meet
Medicare's require-
ments, including
having been in a
hospital for at least
3 days and entered a
Medicare-approved
facility within 30
days after leaving
the hospital First 20 daysAll approved
amounts$0$0 21st - 100th dayAll but $[+] a
dayUp to $[+] a day$0 101st day and after$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts100%$0$0HOSPICE CARE
Available as long as
your doctor certifies you
are terminally ill and
you elect to receive
these servicesAll but very lim-
ted coinsurance
for outpatient
drugs and inpa-
tient respite care$0Balance[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
**NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN E (continued) MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR *Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EX-
PENSES IN OR
OUT OF THE
HOSPITAL AND
OUTPATIENT
HOSPITAL
TREATMENT,
such as physician's
services, inpatient
and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipment First $[+] of Medi-
care-approved
amounts*$0$0$[+] (Part B deduct-
ible) Remainder of Medi-
care-approved
amountsGenerally 80%Generally 20%$0 Part B Excess
Charges (Above
Medicare-approved
amounts)$0$0All costsBLOOD First 3 pints$0All costs$0Next $[+] of Medi-
care-approved
amounts*$0$0$[+] (Part B deduct-
ible)Remainder of Medi-
care-approved
amounts80%20%$0CLINICAL
LABORATORY
SERVICES-
TESTS FOR DIAG-
NOSTIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
PLAN E (continued) PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED
SERVICES -Medically neces-sary
sary skilled care
services and
medical supplies100%$0$0 -Durable medical
equipment First $[+] of Medi-
care-approved
amounts*$0$0$[+] (Part B deduct-
ible) Remainder of
Medicare-
approved
amounts80%20%$0
PLAN E (continued) OTHER BENEFITS-NOT COVERED BY MEDICARE
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
FOREIGN
TRAVEL-
NOT COVERED BY
MEDICARE
Medically necessary
emergency care ser-
vices beginning dur-
ing the first 60 days
of each trip outside
the USA First $250 each
calendar year$0$0$250 Remainder of
charges$080% to a lifetime
maximum benefit
of $50,00020% and amounts
over the $50,000
lifetime maximum*PREVENTIVE
MEDICAL CARE
BENEFIT-NOT
COVERED BY
MEDICARE Some annual physical
and preventive tests
and services admin-
istered or ordered
by your doctor when
not covered by Medi-
care First $120 each
calendar year$0$120$0 Additional charges$0$0All Costs[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
*Medicare benefits are subject to change. Please consult the latest Guide to Health Insurance for People with Medicare.
[Indicate Plan F or High Deductible Plan F, depending on which plan is offered: PLAN F or HIGH DEDUCTIBLE PLAN F] MEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD *A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
[Language for High Deductible Plan F, if offered: **This high deductible plan pays the same or offers the same benefits as Plan F after one has paid a calendar year $[+] deductible. Benefits from the high deductible Plan F will not begin until out-of-pocket expenses are $[+]. Out-of-pocket expenses for this deductible are expenses that would ordinarily be paid by the policy. This includes the Medicare deductibles for Part A and Part B, but does not include the plan's separate foreign travel emergency deductible.]
SERVICES
MEDICARE PAYS
[Language for High
Deductible Plan F,
if offered: AFTER
YOU PAY $[+] DE-
DUCTIBLE, **]
PLAN PAYS
[Language for High
Deductible Plan F,
if offered: IN AD-
DITION TO $[+] DE-
DUCTIBLE, **]
YOU PAY
HOSPITALIZA-
TION*
Semiprivate room
and board, general
nursing, and miscel
-laneous services
and supplies First 60 daysAll but $[+]$[+] (Part A de-
ductible)$0 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using
60 lifetime
reserve daysAll but $[+] a day$[+] a day$0 -Once life-
time reserve
days are used: -Additional
365 days$0100% of Medicare
eligible expenses$0** -Beyond
the additional
365 days$0$0All costsSKILLED
NURSING
FACILITY
CARE*
You must meet
Mediare's require-
ments including
having been in
a hospital for at
least 3 days and
entered a
Medicare-approv-
ed facility within
30 days after
leaving the hospi-
tal First 20 daysAll approved
amounts$0$0 21st - 100th dayAll but $[+] a dayUp to $[+] a day$0 101st day and after$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts100%$0$0HOSPICE
CARE
Available as long
as your doctor cer-
tifies you are term-
inally ill and you
elect to receive
these servicesAll but very lim-
ited coinsurance
for outpatient
drugs and inpa-
tient respite care$0Balance[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
***NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
[Indicate Plan F or High Deductible Plan F, depending on which plan is offered: PLAN F or HIGH DEDUCTIBLE PLAN F (continued)] MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR
*Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
[Language for High Deductible Plan F, if offered: **This high deductible plan pays the same or offers the same benefits as Plan F after one has paid a calendar year $[+] deductible. Benefits from the high deductible Plan F will not begin until out-of-pocket expenses are $[+]. Out-of-pocket expenses for this deductible are expenses that would ordinarily be paid by the policy. This includes the Medicare deductible for Part A and Part B, but does not include the plan's separate foreign travel emergency deductible.]
SERVICES
MEDICARE PAYS
[Language for High
Deductible Plan F,
if offered: AFTER
YOU PAY $[+]
DEDUCTIBLE, **]
PLAN PAYS
[Language for High
Deductible Plan F,
if offered: IN AD-
DITION TO $[+]
DEDUCTIBLE, **]
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE
HOSPITAL AND
OUTPATIENT
HOSPITAL
TREATMENT,
such as phys-
ician's services,
inpatient and out-
patient medical
and surgical ser-
vices and supplies,
physical and speech
therapy, diagnos-
tic tests, durable
medical equipment First $[+] of Medi-
care-approved
amounts*$0$[+] (Part B deduct
ible)$0 Remainder of Medi-
care-approved
amountsGenerally 80%Generally 20%$0 Part B Excess
Charges (Above
Medicare-approved
amounts)$0100%0BLOOD First 3 pints$0All costs$0Next $[+] of Medi-
care-approved
amounts*$0$[+] (Part B deduct-
ible)$0 Remainder of Medi-
care-approved
amounts80%20%$0CLINICAL
LABORA-
TORY SERVICES-
TESTS FOR DIAG-
NOSTIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
[Indicate Plan F or High Deductible Plan F, depending on which plan is offered: PLAN F or HIGH DEDUCTIBLE PLAN F (continued)] PARTS A & B
SERVICESMEDICARE PAYS[Language for High
Deductible Plan F,
if offered: AFTER
YOU PAY $[+]
DEDUCTIBLE, **]
PLAN PAYS
[Language for High
Deductible Plan F,
if offered: IN AD-
DITION TO $[+]
DEDUCTIBLE, **]
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED
SERVICES -Medically neces-
sary skilled care
services and
medical supplies100%$0$0 -Durable medical
equipment First $[+] of
Medicare-
approved
amounts*$0$[+] (Part B de-
ductible)$0 Remainder of
Medicare-
approved
amounts80%20%$0
[Indicate Plan F or High Deductible Plan F, depending on which plan is offered: PLAN F or HIGH DEDUCTIBLE PLAN F (continued)] OTHER BENEFITS-NOT COVERED BY MEDICARE
SERVICESMEDICARE PAYS[Language for High
Deductible Plan F,
if offered: AFTER
YOU PAY $[+]
DEDUCTIBLE, **]
PLAN PAYS
[Language for High
Deductible Plan F,
if offered: IN AD-
DITION TO $[+]
DEDUCT-IBLE, **]
YOU PAY
FOREIGN
TRAVEL- NOT
COVERED BY
MEDICARE
Medically neces-
sary emergen-
cy care services
beginning during
the first 60 days
of each trip out-
side the USA First $250 each
calendar year$0$0$250 Remainder of
charges$080% to a lifetime
maximum benefit
of $50,00020% and amounts
over the $50,000
lifetime maximum[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
PLAN G MEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD *A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZA-
TION*
Semiprivate room
and board, general
nursing, and miscel-
laneous services
and supplies First 60 daysAll but $[+] $[+] (Part A de-
ductible)$0 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60
lifetime reserve
daysAll but $[+] a day$[+] a day$0 -Once lifetime
reserve days
are used -Additional 365
days$0100% of Medi-
care eligible
expenses
$0** -Beyond the
additional 365
days$0$0All costsSKILLED
NURSING
FACILITY CARE*
You must meet Medi-
care's requirements,
including having been
in a hospital for at
least 3 days and en-
tered a Medicare-
approved facility
within 30 days
after leaving the
hospital First 20 daysAll approved
amounts
$0$0 21st - 100th dayAll but $[+] a dayUp to $[+] a day$0 101st day and after$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts100%$0$0HOSPICE CARE
Available as long
as your doctor
certifies you are
terminally ill and
you elect to re-
ceive these
servicesAll but very limit-
ed coinsurance
for outpatient
drugs and in-
patient respite
care$0Balance[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
**NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN G (continued)MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR *Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EX-
PENSES IN OR
OUT OF THE
HOSPITAL AND
OUTPATIENT
HOSPITAL
TREATMENT, such
as physician's ser-
vices, inpatient
and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipment First $[+] of Medi-
care approved
amounts*$0$0$[+] (Part B deduct-
ible) Remainder of Medi-
care-approved
amountsGenerally 80%Generally 20%$0 Part B Excess
Charges (Above
Medicare-approved
amounts)$0100%0BLOOD First 3 pints$0All costs$0Next $[+] of Medi-
care-approved
amounts*$0$0$[+] (Part B deduct
ible)Remainder of Medi-
care-approved
amounts80%20%$0CLINICAL
LABORA-
TORY SERVICES-
TESTS FOR DIAG-
NOSTIC SER-
VICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
PLAN G (continued)PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED SER-
VICES -Medically neces-
sary skilled
care services
and medical
supplies100%$0$0 -Durable medical
equipment First $[+] of Medi-
care-approved
amounts*$0$0$[+] (Part B deduct-
ible) Remainder of
Medicare-ap-
proved amounts80%20%$0HOME HEALTH
CARE (cont'd)
AT-HOME RECOV-
ERY SERVICES
-NOT
COVERED BY
MEDICARE
Home care certified
by your doctor, for
personal care
during recovery
from an injury or
sickness for which
Medicare approved a
home care treatment
plan -Benefit for each
visit$0Actual charges to
$40 a visitBalance -Number of visits
covered (Must be
received within 8
weeks of last
Medicare-approved
visit)$0Up to the number
of Medicare-ap-
proved visits,
not to exceed 7
each week -Calendar year
maximum$0$1,600[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
PLAN G (continued)OTHER BENEFITS-NOT COVERED BY MEDICARE
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
FOREIGN
TRAVEL- NOT
COVERED BY
MEDICARE
Medically necessary
emergency care ser-
vices beginning
during the first 60
days of each trip
outside the USAFirst $250 each
calendar year$0$0$250Remainder of
charges$080% to a lifetime
maximum benefit
of $50,00020% and amounts
over the $50,000
lifetime maximum
PLAN H MEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD *A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZA-
TION*
Semiprivate room
and board, gen-
eral nursing, and
miscellaneous
services and supplies First 60 daysAll but $[+] a day$0$[+] (Part A deduct-
ible) 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60
lifetime reserve
days All but $[+] a day$[+] a day$0 -Once lifetime
reserve days
are used: -Additional
365 days$0100% of Medicare
eligible expenses$0** -Beyond the
additional 365
days$0$0All costsSKILLED
NURSING
FACILITY CARE*
You must meet Medi-
care's requirements,
including having been
in a hospital for at
least 3 days and en-
tered a Medicare-
approved facility
within 30 days
after leaving the
hospital First 20 daysAll approved
amounts$0$0 21st - 100th dayAll but $[+] a day$0Up to $[+] a day 101st day and after$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts
100%$0$0HOSPICE CARE
Available as long as
your doctor certifies
you are terminally
ill and you elect
to receive these
servicesAll but very lim-
ited coinsurance
for outpatient
drugs and inpa-
tient respite care$0Balance[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
**NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN H MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR
*Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE
HOSPITAL AND
OUTPATIENT
HOSPITAL
TREATMENT, such
as physician's ser-
vices, inpatient
and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipment First $[+] of Medi-
care-approved
amounts*$0$0$[+] (Part B deduct-
ible) Remainder of Medi-
care-approved
amountsGenerally 80%Generally 20%$0 Part B Excess
Charges (Above
Medicare-approved
amounts)$0100%0BLOOD First 3 pints$0All costs$0Next $[+] of Medi-
care-approved
amounts*$0$[+] (Part B deduct-
ible)$0Remainder of Medi-
care-approved
amounts
80%20%$0CLINICAL
LABORA-
TORY SERVICES-
TESTS FOR DIAG-
NOSTIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
PLAN H (continued)
PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED
SERVICES
-Medically neces-
sary skilled care
services and
medical supplies100%$0$0 -Durable medical
equipment First $[+] of Medi-
care-approved
amounts*$0$0$[+] (Part B deduct-
ible) Remainder of
Medicare-ap-
proved amounts80%20%$0
PLAN H (continued) OTHER BENEFITS-NOT COVERED BY MEDICARE
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
FOREIGN
TRAVEL-
NOT COVERED BY
MEDICARE
Medically necessary
emergency care
services beginning
during the first 60
days of each trip
outside the USA First $250 each
calendar year$0$0$250 Remainder of
charges$080% to a lifetime
maximum benefit
of $50,00020% and amounts
over the $50,000
lifetime maximum[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
PLAN I MEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD *A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZA-
TION*
Semiprivate room
and board, general
nursing, and misc-
ellaneous services
and supplies First 60 daysAll but $[+] a day$0$[+] (Part A deduct-
ible) 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60
lifetime reserve
daysAll but $[+] a day$[+] a day$0 -Once lifetime
reserve days
are used: -Additional
365 days$0100% of Medicare eligi-
ble expenses$0** -Beyond the
additional 365
days$0$0All costsSKILLED
NURSING
FACILITY CARE*
You must meet Med-
care's requirements,
including having been
in a hospital for at
least 3 days and en-
tered a Medicare-
approved facility
within 30 days
after leaving the
hospital First 20 daysAll approved
amounts$0$0 21st - 100th dayAll but $[+] a day$0Up to $[+] a day 101st day and after$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts100%$0$0HOSPICE CARE
Available as long
as your doctor cer-
tifies you are termin-
ally ill and you elect
to receive these
servicesAll but very lim-
ited coinsurance
for outpatient
drugs and inpa-
tient respite care$0Balance[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
**NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN I (continued) MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR
*Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such as
physician's services, in-
patient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipment First $[+] of Medi-
care-approved
amounts*$0$0$[+] (Part B deduct-
ible) Remainder of Medi-
care-approved
amountsGenerally 80%Generally 20%$0 Part B Excess
Charges (Above
Medicare-approved
amounts)$0100%0BLOOD First 3 pints$0All costs$0Next $[+] of Medicare-
approved amounts*$0$[+] (Part B de-
ductible)$0Remainder of Medicare-
approved amounts80%20%$0CLINICAL LABORA-
TORY SERVICES-
TESTS FOR DIAG-
NOSTIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
PLAN I (continued) PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED SERVICES -Medically necessary
skilled care services
and medical supplies100%$0$0 -Durable medical
equipment First $[+] of Medi-
care-approved
amounts*$0$0$[+] (Part B de-
ductible) Remainder of Medi-
care-approved
amounts80%20%$0HOME HEALTH
CARE (cont'd)
AT-HOME RECOVERY
SERVICES-NOT
COVERED BY
MEDICARE
Home care certified by
your doctor, for personal
care during recovery
from an injury or
sickness for which
Medicare approved a
home care treatment
plan -Benefit for each visit$0Actual charges to
$40 a visitBalance -Number of visits
covered (Must be
received within 8
weeks of last Medi-
care-approved visit)$0Up to the number
of Medicare-ap-
proved visits, not
to exceed 7 each
week -Calendar year
maximum$0$1,600[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
PLAN I (continued) OTHER BENEFITS-NOT COVERED BY MEDICARE
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
FOREIGN TRAVEL-
NOT COVERED BY
MEDICARE
Medically necessary
emergency care services
beginning during the
first 60 days of each
trip outside the USA First $250 each
calendar year$0$0$250 Remainder of charges$080% to a lifetime
maximum benefit
of $50,00020% and amounts
over the $50,000
lifetime maximum
[Indicate Plan J or High Deductible Plan J, depending on which plan is offered:
PLAN J OR HIGH DEDUCTIBLE PLAN J] MEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD
*A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
[Language for High Deductible Plan J, if offered: **This high deductible plan pays the same or offers the same benefits as Plan J after one has paid a calendar year $[+] deductible. Benefits from high deductible Plan J will not begin until out-of-pocket expenses are $[+]. Out-of-pocket expenses for this deductible are expenses that would ordinarily be paid by the policy. This includes the Medicare deductibles for Part A and Part B, but does not include the plan's separate foreign travel emergency deductible.]
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZATION*
Semiprivate room and
board, general nursing,
and miscellaneous
services and supplies First 60 daysAll but $[+] a day$0$[+] (Part A deduct-
ble) 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60
lifetime reserve
daysAll but $[+] a day$[+] a day$0 -Once lifetime re-
serve days are
used: -Additional 365
days$0100% of Medicare
eligible expenses$0*** -Beyond the addi-
tional 365 days$0$0All costsSKILLED NURSING
FACILITY CARE*
You must meet Med-
care's requirements,
including having been
in a hospital for at least
3 days and entered a
Medicare-approved fa-
cility within 30 days
after leaving the hospi-
tal First 20 daysAll approved
amounts$0$0 21st - 100th dayAll but $[+] a day$0Up to $[+] a day 101st day and after$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts
100%$0$0HOSPICE CARE
Available as long as
your doctor certifies you
are terminally ill and
you elect to receive
these services
All but very lim-
ited coinsurance
for outpatient
drugs and inpa-
tient respite care
$0
Balance[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
***NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
[Indicate Plan J or High Deductible Plan J, depending on which plan is offered:
PLAN J OR HIGH DEDUCTIBLE PLAN J continued] MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR
*Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
[Language for High Deductible Plan J, if offered: **This high deductible plan pays the same or offers the same benefits as Plan J after one has paid a calendar year $[+] deductible. Benefits from high deductible Plan J will not begin until out-of-pocket expenses are $[+]. Out-of-pocket expenses for the deductible are expenses that would ordinarily be paid by the policy. This includes the Medicare deductible for Part A and Part B, but does not include the plan's separate foreign travel emergency deductible.]
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EXPENS-
ES - IN OR OUT
OF THE HOSPITAL
AND OUTPATIENT
HOSPITAL TREAT-
MENT, such as physi-
cian's services, inpatient
and outpatient medical
and surgical services
and supplies, physical
and speech therapy,
diagnostic tests, dur-
able medical equipment First $[+] of Medicare-
approved amounts*$0$0$[+] (Part B de-
ductible) Remainder of Medi-
care-approved
amountsGenerally 80%Generally 20%$0 Part B Excess
Charges (Above
Medicare-approved
amounts)$0100%0BLOOD First 3 pints$0All costs$0Next $[+] of Medicare-
approved amounts*$0$[+] (Part B de-
ductible)$0Remainder of Medicare-
approved amounts
80%20%$0CLINICAL LABORA-
TORY SERVICES-
TESTS FOR DIAGNOS-
TIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
[Indicate Plan J or High Deductible Plan J, depending on which plan is offered:
PLAN J OR HIGH DEDUCTIBLE PLAN J continued] PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED SERVICES -Medically necessary
skilled care services
and medical supplies100%$0$0 -Durable medical
equipment First $[+] of Medi-
care-approved
amounts*$0$0$[+] (Part B de-
ductible) Remainder of
Medicare-
approved
amounts80%20%$0HOME HEALTH
CARE (cont'd)
AT-HOME RECOV-
ERY SERVICES-
NOT COVERED BY
MEDICARE
Home care certified
by your doctor, for
personal care during
recovery from an in-
jury or sickness for
which Medicare
approved a home
care treatment plan -Benefit for
each visit$0Actual charges
to $40 a visitBalance -Number of visits
covered (Must be
received within 8
weeks of last
Medicare-approved
visit)$0Up to the number
of Medicare-ap-
proved visits, not
to exceed 7 each
week -Calendar year
maximum$0$1,600[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
[Indicate Plan J or High Deductible Plan J, depending on which plan is offered:
PLAN J OR HIGH DEDUCTIBLE PLAN J continued] OTHER BENEFITS-NOT COVERED BY MEDICARE
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
FOREIGN TRAVEL-
NOT COVERED BY
MEDICARE
Medically necessary
emergency care services
beginning during the
first 60 days of each
trip outside the USA First $250 each
calendar year$0$0$250 Remainder of charges$080% to a lifetime
maximum benefit
of $50,00020% and amounts
over the $50,000
lifetime maximum***PREVENTIVE
MEDICAL CARE
BENEFIT-NOT
COVERED BY
MEDICARE
Some annual physical
and preventive tests
and services admin-
istered or ordered by
your doctor when not
covered by Medicare First $120 each
calendar year$0$120$0 Additional charges$0$0All costs[+ The dollar amount to be inserted is determined annually, as described in (m) of this section, and may be obtained from the division.]
***Medicare benefits are subject to change. Please consult the latest Guide to Health Insurance for People with Medicare.
PLAN K
*You will pay one-fourth of the cost-sharing of some covered services until you reach the annual out-of-pocket limit of $[+] each calendar year. The amounts that count toward your annual limit are noted with diamonds (¨) in the chart below. Once you reach the annual limit, the plan pays 100% of your Medicare copayment and coinsurance for the rest of the calendar year. However, this limit does NOT include charges from your provider that exceed Medicare-approved amounts (these are called "Excess Charges") and you will be responsible for paying this difference in the amount charged by your provider and the amount paid by Medicare for the item or service.
MEDICARE (PART A)-HOSPITAL SERVICES-PER BENEFIT PERIOD
**A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZATION*
Semiprivate room and
board, general nursing,
and miscellaneous
services and supplies First 60 daysAll but $[+] a day$0$[+] (Part A de-
ductible) 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60
lifetime reserve
daysAll but $[+] a day$[+] a day$0 -Once lifetime
reserve days
are used: -Additional 365
days$0100% of Medicare
eligible expenses$0*** -Beyond the
additional 365
days$0$0All costsSKILLED NURSING
FACILITY CARE*
You must meet
Medicare's require-
ments, including hav-
ing been in a hospital
for at least 3 days
and entered a Medi-
care-approved facility
within 30 days
after leaving the
hospital First 20 daysAll approved
amounts$0$0 21st - 100th dayAll but $[+] a day$0Up to $[+] a day 101st day and after
$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts
100%$0$0HOSPICE CARE
Available as long as
your doctor certifies
you are terminally ill
and you elect to re-
ceive these services
All but very lim-
ited coinsurance
for outpatient
drugs and inpa-
tient respite care
$0
Balance[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
***NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN K (continued) MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR ****Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such as
physician's services, in-
patient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipment First $[+] of Medicare-
approved amounts*$0$0$[+] (Part B de-
ductible) Remainder of Medi-
care-approved
amountsGenerally 80%Generally 20%$0 Preventive Benefits
for Medicare cover-
ed servicesGenerally 75% or
more of Medi-
care-approved
amountsRemainder of
Medicare-ap-
proved amountsAll costs above
Medicare-ap-
proved amounts Remainder of Medi-
care-approved
amountsGenerally 80%Generally 10%Generally 10% Part B Excess
Charges (Above
Medicare-approved
amounts)$0100%0BLOOD First 3 pints$0All costs$0Next $[+] of Medicare-
approved amounts*$0$[+] (Part B de-
ductible)$0Remainder of Medi-
care-approved
amounts80%20%$0CLINICAL LABORA-
TORY SERVICES-
TESTS FOR DIAG
NOSTIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
*This plan limits your annual out-of-pocket payments for Medicare-approved amounts of $[+] per year. However, this limit does NOT include charges from your provider that exceed Medicare-approved amounts (these are called "Excess Charges") and you will be responsible for paying this difference in the amount charged by your provider and the amount paid by Medicare for the item or service.
PLAN K (continued) PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED
SERVICES -Medically necessary
skilled care services
and medical supplies 100%$0$0-Durable medical
equipment First $[+] of Medi-
care-approved
amounts*****$0$0$[+] (Part B de-
ductible) Remainder of
Medicare-approved
amounts80%10%10%[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
*****Medicare benefits are subject to change. Please consult the latest Guide to Health Insurance for People with Medicare.
PLAN L
*You will pay one-fourth of the cost-sharing of some covered services until you reach the annual out-of-pocket limit of $[+] each calendar year. The amounts that count toward your annual limit are noted with diamonds (¨) in the chart below. Once you reach the annual limit, the plan pays 100% of your Medicare copayment and coinsurance for the rest of the calendar year. However, this limit does NOT include charges from your provider that exceed Medicare-approved amounts (these are called "Excess Charges") and you will be responsible for paying this difference in the amount charged by your provider and the amount paid by Medicare for the item or service.
MEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD
**A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZATION*
Semiprivate room and
board, general nursing,
and miscellaneous
services and supplies
First 60 daysAll but $[+] a day$0$[+] (Part A deductible) 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60 life-
time reserve daysAll but $[+] a day$[+] a day$0 -Once lifetime re-
serve days are
used: -Additional 365
days$0100% of Medicare
eligible expenses$0*** -Beyond the addi-
tional 365 days$0$0All costsSKILLED NURSING
FACILITY CARE*
You must meet Med-
care's requirements,
including having been
in a hospital for at least
3 days and entered a
Medicare-approved fa-
cility within 30 days
after leaving the hospi-
tal First 20 daysAll approved amounts$0$0 21st - 100th dayAll but $[+] a day$0Up to $[+] a day 101st day and after$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts
100%$0$0HOSPICE CARE
Available as long as
your doctor certifies you
are terminally ill and
you elect to receive
these servicesAll but very limited
coinsurance for
outpatient drugs and
inpatient
respite care$0Balance[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division at the address listed in the editor's note at the end of this section.]
***NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN L (continued)MEDICARE (PART B)-MEDICAL SERVICES-
PER CALENDAR YEAR ****Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such as
physician's services, in-
patient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipment First $[+] of Medicare-
approved amounts*$0$0$[+] (Part B deductible) Remainder of Medi-
care-approved
amountsGenerally 80%Generally 20%$0 Preventive Benefits for
Medicare covered ser-
vicesGenerally 75% or more
of Medicare-approved
amountsRemainder of Medi-
care-approved amountsAll costs above Medi-
care-approved amounts Remainder of Medi-
care-approved
amountsGenerally 80%Generally 10%Generally 10% Part B Excess
Charges (Above
Medicare-approved
amounts)
$0100%0BLOOD First 3 pints$0All costs$0Next $[+] of Medicare-
approved amounts*$0$[+] (Part B deductible)$0Remainder of Medicare-
approved amounts
80%20%$0CLINICAL LABORA-
TORY SERVICES-
TESTS FOR DIAGNOS-
TIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
*This plan limits your annual out-of-pocket payments for Medicare-approved amounts of $[+] per year. However, this limit does NOT include charges from your provider that exceed Medicare-approved amounts (these are called "Excess Charges") and you will be responsible for paying this difference in the amount charged by your provider and the amount paid by Medicare for the item or service.
PLAN L (continued)PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED SERVICES-
Medically necessary
skilled care services
and medical supplies100%$0$0-Durable medical
equipment First $[+] of Medicare-
approved amounts*****$0$0$[+] (Part B deductible) Remainder of
Medicare-approved
amounts80%10%10%[+ The dollar amount to be inserted here is determined annually, as described in (m) of this section, and may be obtained from the division.]
*****Medicare benefits are subject to change. Please consult the latest Guide to Health Insurance for People with Medicare.
(u) For a Medicare supplement policy or certificate sold with an effective date of coverage on or after June 1, 2010, the following items must be included in the outline of coverage in the order set out in this subsection. The benefit chart and the "DISCLOSURES " paragraph in this subsection may not be used on or after June 1, 2011.
Click to view FORM
PREMIUM INFORMATION [Boldface Type]
We [insert issuer's name] can only raise your premium if we raise the premium for all policies like yours in this state. [If the premium is based on the increasing age of the insured, include information specifying when premiums will change.]
DISCLOSURES [Boldface Type]
Use this outline to compare benefits and premiums among policies.
This outline shows benefits and premiums of policies sold for effective dates on or after June 1, 2010. Policies sold for effective dates before June 1, 2010 have different benefits and premiums. Plans E, H, I, and J are no longer available for sale.
READ YOUR POLICY VERY CAREFULLY [Boldface Type]
This is only an outline describing your policy's most important features. The policy is your insurance contract. You must read the policy itself to understand all of the rights and duties of both you and your insurance company.
RIGHT TO RETURN POLICY [Boldface Type]
If you find that you are not satisfied with your policy, you may return it to [insert issuer's address] . If you send the policy back to us within 30 days after you receive it, we will treat the policy as if it had never been issued and return all of your payments.
POLICY REPLACEMENT [Boldface Type]
If you are replacing another health insurance policy, do NOT cancel it until you have actually received your new policy and are sure you want to keep it.
NOTICE [Boldface Type]
This policy may not fully cover all of your medical costs.
A. [for agents]:
Neither [insert company's name] nor its agents are connected with Medicare.
B. [for direct response]:
[insert company's name] is not connected with Medicare.
This outline of coverage does not give all the details of Medicare coverage. Contact your local Social Security Office or consult Medicare and You for more details.
COMPLETE ANSWERS ARE VERY IMPORTANT
[Boldface Type]
When you fill out the application for the new policy, be sure to answer truthfully and completely all questions about your medical and health history. The company may cancel your policy and refuse to pay any claims if you leave out or falsify important medical information. [If the policy or certificate is guaranteed issue, this paragraph need not appear.]
Review the application carefully before you sign it. Be certain that all information has been properly recorded.
[Include for each plan prominently identified in the cover page, a chart showing the services, Medicare payments, plan payments, and insured payments for each plan, using the same language, in the same order, using uniform layout and format as shown in the charts below. No more than four plans may be shown on one chart. For purposes of illustration, charts for each plan are included in this regulation. An issuer may use additional benefit plan designations on these charts as set out in 3 AAC 28.456(f).]
[Include an explanation of any innovative benefits on the cover page and in the chart, in a manner approved by the director.]
PLAN A MEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD *A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZATION*
Semiprivate room and
board, general nursing,
and miscellaneous ser-
vices and supplies First 60 daysAll but $[+]$0$[+] (Part A deductible) 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60 life-
time reserve daysAll but $[+] a day$[+] a day$0 -Once lifetime re-
serve days are
used: -Additional 365
days$0100% of Medicare
eligible expenses$0** -Beyond the addi-
tional 365 days$0$0All costsSKILLED NURSING
FACILITY CARE*
You must meet Medi-
care's requirements,
including having been
in a hospital for at least
3 days and entered a
Medicare-approved fa-
cility within 30 days
after leaving the hospi-
tal First 20 daysAll approved amounts$0$0 21st - 100th dayAll but $[+] a day$0Up to $[+] a day 101st day and after$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts
100%$0$0HOSPICE CARE
You must meet Medi-
care's requirements,
including a doctor's cer-
tification of terminal
illness
All but very limited
copayment/coinsurance
for outpatient drugs
and inpatient respite
care
Medicare
copayment/coinsurance$0[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
**NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN A (continued)MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR *Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such as
physician's services, in-
patient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipmentFirst $[+] of Medicare-
approved amounts*$0$0$[+] (Part B deductible)Remainder of Medi-
care-approved
amountsGenerally 80%Generally 20%$0Part B Excess
Charges (Above
Medicare-approved
amounts)
$0$0All costsBLOOD First 3 pints$0All costs$0Next $[+] of Medicare-
approved amounts*$0$0$[+] (Part B deductible)Remainder of Medicare-
approved amounts80%20%$0CLINICAL LABORA-
TORY SERVICES - TESTS FOR DIAGNOS-
TIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
PLAN A (continued) PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED SERVICES
-Medically necessary
skilled care services
and medical supplies 100%$0$0 -Durable medical
equipment First $[+] of Medicare-
approved amounts*$0$0$[+] (Part B deductible) Remainder of
Medicare-approved
amounts80%20%$0[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
PLAN B MEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD *A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALI-
ZATION*
Semiprivate room and
board, general nursing,
and miscellaneous ser-
vices and supplies First 60 daysAll but $[+]$[+] (Part A deductible)$0 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60 life-
time reserve daysAll but $[+] a day$[+] a day$0 -Once lifetime re-
serve days are used: -Additional 365
days$0100% of Medicare eligible expenses$0** - Beyond the addi-
tional 365 days$0$0All costsSKILLED NURSING
FACILITY CARE*
You must meet Medicare's requirements, including having been in a hospital for at least 3 days and entered a Medicare-approved facility within 30 days after leaving the hospital First 20 daysAll approved amounts$0$0 21st - 100th dayAll but $[+] a day$0Up to $[+] a day 101st day and after$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts
100%$0$0HOSPICE CARE
You must meet Medi-
care's requirements,
including a doctor's cer-
tification of terminal illness
All but very limited
copayment/coinsurance
for outpatient drugs
and inpatient respite
care
Medicare
copayment/coinsurance
$0[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
PLAN B (continued)MEDICARE (PART B)-MEDICARE SERVICES-PER
CALENDAR YEAR *Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICARE EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such as
physician's services, in-
patient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipment First $[+] of Medicare-
approved amounts*$0$0$[+] (Part B deductible) Remainder of Medi-
care-approved
amountsGenerally 80%Generally 20%$0 Part B Excess
Charges (Above
Medicare-approved
amounts)$0$0All costsBLOOD First 3 pints$0All costs$0Next $[+] of Medicare-
approved amounts*$0$0$[+] (Part B deductible)Remainder of Medicare-
approved amounts
80%20%$0CLINICAL LABORA-
TORY SERVICES -
TESTS FOR DIAGNOS-
TIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
PLAN B (continued)PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED SERVICES -Medically necessary
skilled care services
and medical supplies100%$0$0 -Durable medical
equipment First $[+] of Medi-
care-approved
amounts*$0$0$[+] (Part B deductible) Remainder of Medi-
care-approved
amounts80%20%$0[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
PLAN CMEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD *A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZATION*
Semiprivate room and
board, general nursing,
and miscellaneous ser-
vices and supplies First 60 daysAll but $[+]$[+] (Part A deductible)$0 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60 life-
time reserve daysAll but $[+] a day$[+] a day$0 -Once lifetime re-
serve days are used: -Additional 365
days$0100% of Medicare
eligible expenses$0 -Beyond the addi-
tional 365 days$0$0All costsSKILLED NURSING
FACILITY CARE*
You must meet Medi-
care's requirements,
including having been
in a hospital for at least
3 days and entered a
Medicare-approved fa-
cility within 30 days
after leaving the hospi-
tal First 20 daysAll approved amounts$0$0 21st - 100th dayAll but $[+] a dayUp to $[+] a day$0 101st day and after$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts
100%$0$0HOSPICE CARE
You must meet Medi-
care's requirements,
including a doctor's cer-
tification of terminal
illness
All but very limited copayment/coinsurance for outpatient drugs and inpatient respite care
Medicare copayment/coinsurance
$0[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
**NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN C (continued) MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR *Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such as
physician's services, in-
patient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipment First $[+] of Medicare-
approved amounts*$0$[+] (Part B deductible)$0 Remainder of Medicare-
approved amountsGenerally 80%Generally 20%$0 Part B Excess
Charges (Above
Medicare-approved
amounts)
$0$0All costsBLOOD First 3 pints$0All costs$0Next $[+] of Medicare-
approved amounts*$0$[+] (Part B deductible)$0Remainder of Medicare-
approved amounts
80%20%$0CLINICAL LABORA-
TORY SERVICES -
TESTS FOR DIAGNOS-
TIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
PLAN C (continued)PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED SERVICES-Medically necessary
skilled care services
and medical supplies100%$0$0-Durable medical
equipmentFirst $[+] of Medi-
care-approved
amounts*$0$[+] (Part B deductible)$0Remainder of Medi-
care-approved
amounts80%20%$0
OTHER BENEFITS-NOT COVERED BY MEDICARE
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
FOREIGN
TRAVEL- NOT
COVERED BY
MEDICAREMedically necessary
emergency care services
beginning during the
first 60 days of each
trip outside the USAFirst $250 each
calendar year$0$0$250Remainder of
charges$080% to a lifetime
maximum benefit
of $50,00020% and amounts
over the $50,000
lifetime maximum[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
PLAN DMEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD *A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZATION*
Semiprivate room and
board, general nursing,
and miscellaneous ser-
vices and supplies First 60 days$[+] a day$[+] (Part A deductible)$0 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60 life-
time reserve daysAll but $[+] a day$[+] a day$0 -Once lifetime re-
serve days are
used: -Additional 365
days$0100% of Medicare eligible expenses$0** -Beyond the addi-
tional 365 days$0$0All costsSKILLED NURSING
FACILITY CARE*
You must meet Medi-
care's requirements,
including having been
in a hospital for at least
3 days and entered a
Medicare-approved fa-
cility within 30 days
after leaving the hospi-
tal First 20 daysAll approved amounts$0$0 21st - 100th dayAll but $[+] a dayUp to $[+] a day$0 101st day and after
$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts
100%$0$0HOSPICE CARE
You must meet Medi-
care's requirements,
including a doctor's cer-
tification of terminal
illness
All but very limited copayment/coinsurance for outpatient drugs and inpatient respite care
Medicare copayment/coinsurance
$0[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
**NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN D (continued)MEDICARE (PART B)-MEDICAL SERVICES-
PER CALENDAR YEAR *Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such as
physicians services, in-
patient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipmentFirst $[+] of
Medicare-approved
amounts*$0$0$[+] (Part B deductible)Remainder of Medi-
care-approved
amountsGenerally 80%Generally 20%$0Part B Excess
Charges (Above
Medicare-approved
amounts)
$0$0All costsBLOOD First 3 pints$0All costs$0Next $[+] of Medicare-
approved amounts*$0$0$[+] (Part B deductible)Remainder of Medicare-
approved amounts
80%20%$0CLINICAL LABORATORY SERVICES - TESTS FOR DIAGNOSTIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
PLAN D (continued)PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED SERVICES -Medically necessary
skilled care services
and medical supplies100%$0$0 -Durable medical
equipment First $[+] of Medi-
care-approved
amounts*$0$0$[+] (Part B deductible) Remainder of Medi-
care-approved
amounts80%20%$0
PLAN D (continued)OTHER BENEFITS-NOT COVERED BY MEDICARE
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
FOREIGN TRAVEL-
NOT COVERED BY
MEDICARE
Medically necessary
emergency care services
beginning during the
first 60 days of each
trip outside the USAFirst $250 each
calendar year$0$0$250Remainder of
charges$080% to a lifetime
maximum benefit of
20% and amounts
over the $50,000
lifetime maximum[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
[Indicate Plan F or High Deductible Plan F, depending on which plan is offered:
PLAN F or HIGH DEDUCTIBLE PLAN F]MEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD *A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
[Language for High Deductible Plan F, if offered: **This high deductible plan pays the same or offers the same benefits as Plan F after one has paid a calendar year $[+] deductible. Benefits from the high deductible Plan F will not begin until out-of-pocket expenses are $[+]. Out-of-pocket expenses for this deductible are expenses that would ordinarily be paid by the policy. This includes the Medicare deductibles for Part A and Part B, but does not include the plan's separate foreign travel emergency deductible.]
SERVICESMEDICARE PAYS[Language for High
Deductible Plan F, if
offered: AFTER
YOU PAY $[ + ]
DEDUCTIBLE,**]
PLAN PAYS[Language for High
Deductible Plan F, if
offered: IN ADDITION
TO $[ + ]
DEDUCTIBLE,**]
YOU PAYHOSPITALIZATION*
Semiprivate room and
board, general nursing,
and miscellaneous ser-
vices and supplies First 60 daysAll but $[+]$[+] (Part A deductible)$0 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60 life-
time reserve daysAll but $[+] a day$[+] a day$0 -Once lifetime re-
serve days are used: -Additional 365
days$0100% of Medicare
eligible expenses$0*** -Beyond the addi-
tional 365 days$0$0All costsSKILLED NURSING
FACILITY CARE*
You must meet Medi-
care's requirements,
including having been
in a hospital for at least
3 days and entered a
Medicare-approved fa-
cility within 30 days
after leaving the
hospital First 20 daysAll approved amounts$0$0 21st - 100th dayAll but $[+] a dayUp to $[+] a day$0 101st day and after $0$0All costsBLOOD First 3 pints $03 pints$0Additional amounts
100%$0$0HOSPICE CARE
You must meet Medi-
care's requirements,
including a doctor's cer-
tification of terminal
illness
All but very limited
copayment/coinsurance
for outpatient drugs
and inpatient respite
care
Medicare
copayment/coinsurance
$0[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
***NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
[Indicate Plan F or High Deductible Plan F, depending on which plan is offered:
PLAN F or HIGH DEDUCTIBLE PLAN F (continued)] MEDICARE (PART B)-MEDICAL SERVICES-PER CALENDAR YEAR *Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
[Language for High Deductible Plan F, if offered: **This high deductible plan pays the same or offers the same benefits as Plan F after one has paid a calendar year $[+] deductible. Benefits from the high deductible Plan F will not begin until out-of-pocket expenses are $[+]. Out-of-pocket expenses for this deductible are expenses that would ordinarily be paid by the policy. This includes the Medicare deductible for Part A and Part B, but does not include the plan's separate foreign travel emergency deductible.]
SERVICESMEDICARE PAYS[Language for High
Deductible Plan F, if
offered: AFTER
YOU PAY $[+]
DEDUCTIBLE,**]
PLAN PAYS[Language for High
Deductible Plan F, if
offered: IN ADDITION
TO $[+]
DEDUCTIBLE,**]
YOU PAYMEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such as
physician's services, in-
patient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipment First $[+] of Medicare-
approved amounts*$0$[+] (Part B deductible)$0 Remainder of Medicare-
approved amountsGenerally 80%Generally 20%$0 Part B Excess
Charges (Above
Medicare-approved
amounts)
$0100%$0BLOOD First 3 pints$0All costs$0Next $[+] of Medicare-
approved amounts*$0$[+] (Part B deductible)$0 Remainder of Medi-
care-approved
amounts
80%20%$0CLINICAL LABORA-
TORY SERVICES - TESTS FOR DIAGNOS-
TIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
[Indicate Plan F or High Deductible Plan F, depending on which plan is offered:
PLAN F or HIGH DEDUCTIBLE PLAN F (continued)] PARTS A & B
SERVICESMEDICARE PAYS[Language for High
Deductible Plan F, if
offered: AFTER
YOU PAY $[+]
DEDUCTIBLE,**]
PLAN PAYS[Language for High
Deductible Plan F, if
offered: IN ADDITION
TO $[ +]
DEDUCTIBLE,**]
YOU PAYHOME HEALTH
CARE
MEDICARE-
APPROVED SERVICES -Medically necessary
skilled care services
and medical supplies100%$0$0 -Durable medical
equipment First $[+] of Medi-
care-approved
amounts*$0$[+] (Part B deductible)$0 Remainder of Medi-
care-approved
amounts80%20%$0
[Indicate Plan F or High Deductible Plan F, depending on which plan is offered:
PLAN F or HIGH DEDUCTIBLE PLAN F (continued)] OTHER BENEFITS-NOT COVERED BY MEDICARE
SERVICESMEDICARE PAYS[Language for High
Deductible Plan F, if
offered: AFTER
YOU PAY $[+]
DEDUCTIBLE,**]
PLAN PAYS[Language for High
Deductible Plan F, if
offered: IN ADDITION
TO $[+]
DEDUCTIBLE,**]
YOU PAYFOREIGN
TRAVEL -NOT
COVERED BY
MEDICARE
Medically necessary
emergency care services
beginning during the
first 60 days of each
trip outside the USA First $250 each
calendar year$0$0$250 Remainder of charges$080% to a lifetime
maximum benefit of
$50,00020% and amounts over
the $50,000 lifetime
maximum[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
PLAN GMEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD *A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZATION*
Semiprivate room and
board, general nursing,
and miscellaneous
services and supplies
First 60 daysAll but $[+]$[+] (Part A deductible)$0 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60 life-
time reserve daysAll but $[+] a day$[+] a day$0 -Once lifetime re-
serve days are used: -Additional 365
days$0100% of Medicare
eligible expenses$0** -Beyond the addi-
tional 365 days
$0$0All costsSKILLED NURSING
FACILITY CARE*
You must meet Medi-
care's requirements,
including having been
in a hospital for at least
3 days and entered a
Medicare-approved
facility within 30 days
after leaving the hospital
First 20 daysAll approved amounts$0$021st - 100th dayAll but $[+] a dayUp to $[+] a day$0101st day and after$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts
100%$0$0HOSPICE CARE
You must meet
Medicare's require-
ments, including a
doctor's certification
of terminal illnessAll but very limited
copayment/coinsurance
for outpatient drugs
and inpatient respite
careMedicare
copayment/coinsurance$0[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
**NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN G (continued)MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR *Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such as
physician's services, in-
patient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipment First $[+] of Medicare-
approved amounts*$0$0$[+] (Part B deductible) Remainder of Medicare-
approved amountsGenerally 80%Generally 20%$0 Part B Excess
Charges (Above
Medicare-approved
amounts)
$0100%0%BLOOD First 3 pints$0All costs$0Next $[+] of Medicare-
approved amounts*$0$0$[+] (Part B deductible)Remainder of Medicare-
approved amounts
80%20%$0CLINICAL LABORA-
TORY SERVICES -
TESTS FOR DIAGNOS-
TIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
PLAN G (continued)PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED SERVICES -Medically necessary
skilled care services
and medical supplies100%$0$0 -Durable medical
equipment First $[+] of Medi-
care-approved
amounts*$0$0$[+] (Part B deductible) Remainder of Medi-
care-approved
amounts80%20%$0
PLAN G (continued)OTHER BENEFITS-NOT COVERED BY MEDICARE
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
FOREIGN
TRAVEL - NOT
COVERED BY
MEDICARE
Medically necessary
emergency care services
beginning during the
first 60 days of each
trip outside the USA First $250 each
calendar year$0$0$250 Remainder of
charges$080% to a lifetime
maximum benefit of
$50,00020% and amounts
over the $50,000
lifetime maximum[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
PLAN K
*You will pay one-fourth of the cost-sharing of some covered services until you reach the annual out-of-pocket limit of $[+] each calendar year. The amounts that count toward your annual limit are noted with diamonds (¨) in the chart below. Once you reach the annual limit, the plan pays 100% of your Medicare copayment and coinsurance for the rest of the calendar year. However, this limit does NOT include charges from your provider that exceed Medicare-approved amounts (these are called "Excess Charges") and you will be responsible for paying this difference in the amount charged by your provider and the amount paid by Medicare for the item or service.
MEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD
**A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY*
HOSPITALIZATION**
Semiprivate room and
board, general nursing,
and miscellaneous ser-
vices and supplies First 60 daysAll but $[+]$[+] (50% of Part A
deductible)$[+] (50% of Part A
deductible)¨ 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60 life-
time reserve daysAll but $[+] a day$[+] a day$0 -Once lifetime re-
serve days are used: -Additional 365
days$0100% of Medicare
eligible expenses$0*** -Beyond the addi-
tional 365 days
$0$0All costsSKILLED NURSING
FACILITY CARE**
You must meet Medi-
care's requirements,
including having been
in a hospital for at least
3 days and entered a
Medicare-approved
facility within 30 days
after leaving the hospi-
talFirst 20 daysAll approved amounts$0$021st - 100th dayAll but $[+] a dayUp to $[+] a dayUp to $[+] a day¨101st day and after
$0$0All costsBLOOD First 3 pints$050%50%¨Additional amounts
100%$0$0HOSPICE CARE
You must meet Medi-
care's requirements,
including a doctor's cer-
tification of terminal
illnessAll but very limited
copayment/coinsurance
for outpatient drugs
and inpatient respite
care50% of
copayment/coin-
surance50% of Medicare
copayment/coin-
surance¨[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
***NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN K (continued)MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR ****Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY*
MEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such as
physician's services, in-
patient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipment First $[+] of Medicare-
approved amounts****$0$0$[+] (Part B deductible)****¨ Preventive Benefits for
Medicare covered
servicesGenerally 75% or more of Medicare-approved amountsRemainder of Medicare-approved amountsAll costs above Medicare-approved amounts Remainder of Medi-
care-approved
amountsGenerally 80%Generally 10%Generally 10%¨ Part B Excess
Charges (Above
Medicare-approved
amounts)
$0$0All costs (and they do not count toward annual out-of-pocket limit of $[+])*BLOOD First 3 pints$050%50%¨Next $[+] of Medicare-
approved amounts****$0$0$[+] (Part B deductible)****¨Remainder of Medicare-
approved amounts
Generally 80%Generally 10%Generally 10%¨CLINICAL LABORA-
TORY SERVICES- TESTS FOR DIAGNOS-
TIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
*This plan limits your annual out-of-pocket payments for Medicare-approved amounts of $[+] per year. However, this limit does NOT include charges from your provider that exceed Medicare-approved amounts (these are called "Excess Charges") and you will be responsible for paying this difference in the amount charged by your provider and the amount paid by Medicare for the item or service.
PLAN K (continued)PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY*
HOME HEALTH
CARE
MEDICARE-
APPROVED SERVICES-Medically necessary
skilled care services
and medical supplies100%$0$0-Durable medical
equipment First $[+] of Medicare-
approved amounts*****$0$0$[+] (Part B deductible)¨ Remainder of Medicare-
approved amounts80%10%10%¨[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
*****Medicare benefits are subject to change. Please consult the latest Guide to Health Insurance for People with Medicare.
PLAN L
*You will pay one-fourth of the cost-sharing of some covered services until you reach the annual out-of-pocket limit of $[+] each calendar year. The amounts that count toward your annual limit are noted with diamonds (¨) in the chart below. Once you reach the annual limit, the plan pays 100% of your Medicare copayment and coinsurance for the rest of the calendar year. However, this limit does NOT include charges from your provider that exceed Medicare-approved amounts (these are called "Excess Charges") and you will be responsible for paying this difference in the amount charged by your provider and the amount paid by Medicare for the item or service.
MEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD **A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY*
HOSPITALIZATION**
Semiprivate room and
board, general nursing,
and miscellaneous
services and supplies First 60 daysAll but $[+]$[+] (75% of
Part A deduct-
ible)$[+] (25% of
Part A deduct-
ible)¨ 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60
lifetime reserve
daysAll but $[+] a day$[+] a day$0 -Once lifetime
reserve days
are used: -Additional 365
days$0100% of Medicare
eligible expenses$0*** -Beyond the
additional 365
days$0$0All costsSKILLED NURSING
FACILITY CARE**
You must meet Medi-
care's requirements,
including having been
in a hospital for at
least 3 days and
entered a Medicare-
approved facility
within 30 days after
after leaving the
hospital First 20 daysAll approved
amounts$0$0 21st - 100th dayAll but $[+] a dayUp to $[+] a dayUp to $[+] a day¨ 101st day and after$0$0All costsBLOOD First 3 pints$075%25%¨Additional amounts
100%$0$0HOSPICE CARE
You must meet Medi-
care's requirements,
including a doctor's
certification of term-
inal illness
All but very lim-
ited copayment/
coinsurance for
outpatient drugs
and inpatient
respite care
75% of
copayment/
coinsurance
25% of
copayment/
coinsurance¨[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
***NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN L (continued)MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR ****Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY*
MEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such as
physician's services, in-
patient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipment First $[+] of Medicare-
approved amounts****$0$0$[+] (Part B
deductible)****¨ Preventive Benefits
for Medicare cover-
ed servicesGenerally 75% or
more of Medi-
care-approved
amountsRemainder of
Medicare-ap-
proved amountsAll costs above
Medicare-ap-
proved amounts Remainder of Medi-
care-approved
amountsGenerally 80%Generally 15%Generally 5%¨ Part B Excess
Charges (Above
Medicare-approved
amounts)$00%All costs (and they
do not count toward
annual out-of-pocket
limit of $[+])*BLOOD First 3 pints$075%25%°¨Next $[+] of Medicare-
approved amounts****$0$0$[+] (Part B
deductible)****¨Remainder of Medi-
care approved amountsGenerally 80%Generally 15%Generally 5%¨CLINICAL LABORA-
TORY SERVICES- TESTS FOR DIAG-
NOSTIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
*This plan limits your annual out-of-pocket payments for Medicare-approved amounts of $[+] per year. However, this limit does NOT include charges from your provider that exceed Medicare-approved amounts (these are called "Excess Charges") and you will be responsible for paying this difference in the amount charged by your provider and the amount paid by Medicare for the item or service.
PLAN L (continued)PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY*
HOME HEALTH
CARE
MEDICARE-
APPROVED
SERVICES-Medically necessary
skilled care services
and medical supplies100%$0$0-Durable medical
equipment First $[+] of Medi-
care approved
amounts*****$0$0$[+] (Part B deduct-
ible)¨ Remainder of
Medicare-approved
amounts80%15%5%¨[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
*****Medicare benefits are subject to change. Please consult the latest Guide to Health Insurance for People with Medicare.
PLAN MMEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD *A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZATION*
Semiprivate room
and board, general
nursing, and miscel-
laneous services
and supplies First 60 DaysAll but $[+]$[+] (50%
Part A de-
ductible)$[+] (50%
Part A de-
ductible) 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60
lifetime reserve
daysAll but $[+] a day$[+] a day$0 -Once lifetime
reserve days
are used: -Additional 365
days$0100% of Medi-
care eligible
expenses$0*** -Beyond the
additional 365
days$0$0All costsSKILLED NURSING
FACILITY CARE**
You must meet
Medicare's require-
ments, including
having been in a hos-
pital for at least 3 days
and entered a Medi-
care-approved fa-
cility within 30 days
after leaving the
hospital First 20 daysAll approved
amounts$0$0 21st - 100th dayAll but $[+] a dayUp to $[+] a day$0 101st day and after$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts100%$0$0HOSPICE CARE
You must meet Medi-
care's requirements,
including a doctor's
certification of ter-
minal illness
All but very lim-
ited copayment/
coinsurance for
outpatient drugs
and inpatient respite
care
Medicare
copayment/
coinsurance
$0[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
***NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN M (continued)MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR ****Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such as
physician's services, in-
patient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipment First $[+] of Medi-
care approved
amounts****$0$0$[+] (Part B de-
ductible) Remainder of Medi-
care approved
amountsGenerally 80%Generally 20%$0 Part B Excess
Charges (Above
Medicare-approved
amounts)$0$0All costsBLOOD First 3 pints$0All costs$0Next $[+] of Medi-
care approved
amounts****$0$0$[+] (Part B de-
ductible) Remainder of Medi-
care approved
amounts80%20%$0CLINICAL LABORA-
TORY SERVICES-
TESTS FOR DIAG-
NOSTIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
PLAN M (continued)PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED
SERVICES - Medically neces-
sary skilled care
services and
and medical
supplies100%$0$0 - Durable med-
ical equipment First $[+] of Medi-
care-approved
amounts$0$0$[+] (Part B deduct-
ible) Remainder of Medi-
care-approved
amounts80%20%$0FOREIGN TRAVEL - NOT COVERED BY
MEDICARE
Medically necessary
emergency care ser-
vices beginning dur-
ing the first 60 days
of each trip outside
the USA First $250 each
calendar year$0$0$250 Remainder of
charges$080% to a lifetime
maximum benefit
of $50,00020% and amounts
over the $50,000 life-
time maximum[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
PLAN NMEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD **A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZATION**
Semiprivate room and
board, general nursing,
and miscellaneous ser-
vices and supplies First 60 DaysAll but $[+]$[+] (Part A deduct-
ible)$0 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60
lifetime reserve
daysAll but $[+] a day$[+] a day$0 -Once lifetime
reserve days
are used: -Additional
365 days$0100% of Medicare
eligible expenses$0*** -Beyond the
additional
365 days$0$0All costsSKILLED NURSING
FACILITY CARE**
You must meet Medi-
care's requirements,
including having been
in a hospital for at
least 3 days and en-
tered a Medicare-ap-
proved facility with-
in 30 days after
leaving the hospital First 20 daysAll approved
amounts$0$0 21st - 100th dayAll but $[+] a dayUp to $[+] a day$0 101st day and after$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts100%$0$0HOSPICE CARE
You must meet
Medicare's require-
ments, including a
doctor's certification
of terminal illnessAll but very lim-
ited copayment/
coinsurance for
outpatient drugs
and inpatient
respite careMedicare
copayment/
coinsurance$0[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
***NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN N (continued)MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR ****Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such
as physician's ser-
vices, inpatient and
outpatient medical
and surgical services
and supplies, physical
and speech therapy,
diagnostic tests, dur-
able medical equip-
ment First $[+] of Medi
care-approved
amounts****$0$0$[+] (Part B deduct-
ible) Remainder of Medi-
care approved
amountsGenerally 80%Balance, other
than up to $[+]
per office visit
and up to $[+]
per emergency
room visit. The
copayment of
up to $[+] is
waived if the
insured is admitt-
ed to any hospital
and the emergen-
cy visit is covered
as a Medicare
Part A expense.Up to $[20] per
office visit and
up to $[50] per
emergency
room visit. The
copayment of up
to $[50] is waived
if the insured is
admitted to any
hospital and the
emergency visit
is covered as a
Medicare Part A
expense. Part B Excess
Charges (Above
Medicare-approved
amounts)$0$0All costsBLOOD First 3 pints$0All costs$0Next $[+] of Medi
care-approved
amounts****$0$0$[+] (Part B deduct-
ible)Remainder of Medi-
care-approved
amounts80%20%$0CLINICAL
LABORA-
TORY SERVICES- TESTS FOR DIAG-
NOSTIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
PLAN N (continued)PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED
SERVICES- Medically neces-
sary skilled care
services and medical
supplies100%$0$0- Durable medical
equipment First $[+] of Medi-
care-approved
amounts$0$0$[+] (Part B deduct-
ible) Remainder of Medi-
care-approved
amounts80%20%$0FOREIGN TRAVEL -
NOT COVERED
BY MEDICARE
Medically necessary
emergency care ser-
vices beginning dur-
ing the first 60 days
of each trip outside
the USA First $250 each
calendar year$0$0$250 Remainder of
charges$080% to a life-
time maximum
benefit of
$50,00020% and amounts
over the $50,000
lifetime maximum[+ The dollar amount to be inserted here is determined annually, as described in (o) of this section, and may be obtained from the division.]
**NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
(v) For a Medicare supplement policy or certificate sold on or after June 1, 2011, the benefit chart and the "DISCLOSURES " paragraph in (u) of this section are replaced with the benefit chart and the "DISCLOSURES " paragraph in this subsection. All the rest of the items in the outline of coverage in the order set out in (u) of this section must be included.
Click to view FORM
PREMIUM INFORMATION [Boldface Type]
We [insert issuer's name] can only raise your premium if we raise the premium for all policies like yours in this state. [If the premium is based on the increasing age of the insured, include information specifying when premiums will change.]
DISCLOSURES [Boldface Type]
Use this outline to compare benefits and premiums among policies.
READ YOUR POLICY VERY CAREFULLY [Boldface Type]
This is only an outline describing your policy's most important features. The policy is your insurance contract. You must read the policy itself to understand all of the rights and duties of both you and your insurance company.
RIGHT TO RETURN POLICY [Boldface Type]
If you find that you are not satisfied with your policy, you may return it to [insert issuer's address] . If you send the policy back to us within 30 days after you receive it, we will treat the policy as if it had never been issued and return all of your payments.
POLICY REPLACEMENT [Boldface Type]
If you are replacing another health insurance policy, do NOT cancel it until you have actually received your new policy and are sure you want to keep it.
NOTICE [Boldface Type]
This policy may not fully cover all of your medical costs.
A. [for agents]:
Neither [insert company's name] nor its agents are connected with Medicare.
B. [for direct response]:
[insert company's name] is not connected with Medicare.
This outline of coverage does not give all the details of Medicare coverage. Contact your local Social Security Office or consult Medicare and You for more details.
COMPLETE ANSWERS ARE VERY IMPORTANT
[Boldface Type]
When you fill out the application for the new policy, be sure to answer truthfully and completely all questions about your medical and health history. The company may cancel your policy and refuse to pay any claims if you leave out or falsify important medical information. [If the policy or certificate is guaranteed issue, this paragraph need not appear.]
Review the application carefully before you sign it. Be certain that all information has been properly recorded.
[Include for each plan prominently identified in the cover page, a chart showing the services, Medicare payments, plan payments, and insured payments for each plan, using the same language, in the same order, using uniform layout and format as shown in the charts below. No more than four plans may be shown on one chart. For purposes of illustration, charts for each plan are included in this regulation. An issuer may use additional benefit plan designations on these charts set out in 3 AAC 28.456(f).]
[Include an explanation of any innovative benefits on the cover page and in the chart, in a manner approved by the director.]
Click to view FORM
(w) For a Medicare supplement policy or certificate with an effective date of coverage on or after January 1, 2020, the following items must be included in the outline of coverage in the order set out in this subsection.
PREMIUM INFORMATION [Boldface Type]
We [insert issuer's name] can only raise your premium if we raise the premium for all policies like yours in this state. [If the premium is based on the increasing age of the insured, include information specifying when premiums will change.]
DISCLOSURES [Boldface Type]
Use this outline to compare benefits and premiums among policies.
READ YOUR POLICY VERY CAREFULLY [Boldface Type]
This is only an outline describing your policy's most important features. The policy is your insurance contract. You must read the policy itself to understand all of the rights and duties of both you and your insurance company.
RIGHT TO RETURN POLICY [Boldface Type]
If you find that you are not satisfied with your policy, you may return it to [insert issuer's address] . If you send the policy back to us within 30 days after you receive it, we will treat the policy as if it had never been issued and return all of your payments.
POLICY REPLACEMENT [Boldface Type]
If you are replacing another health insurance policy, do NOT cancel it until you have actually received your new policy and are sure you want to keep it.
NOTICE [Boldface Type]
This policy may not fully cover all of your medical costs.
A. [for agents]:
Neither [insert company's name] nor its agents are connected with Medicare.
B. [for direct response]:
[insert company's name] is not connected with Medicare.
This outline of coverage does not give all the details of Medicare coverage. Contact your local Social Security Office or consult Medicare and You for more details.
COMPLETE ANSWERS ARE VERY IMPORTANT
[Boldface Type]
When you fill out the application for the new policy, be sure to answer truthfully and completely all questions about your medical and health history. The company may cancel your policy and refuse to pay any claims if you leave out or falsify important medical information. [If the policy or certificate is guaranteed issue, this paragraph need not appear.]
Review the application carefully before you sign it. Be certain that all information has been properly recorded.
[Include for each plan prominently identified in the cover page, a chart showing the services, Medicare payments, plan payments, and insured payments for each plan, using the same language, in the same order, using uniform layout and format as shown in the charts below. No more than four plans may be shown on one chart. For purposes of illustration, charts for each plan are included in this regulation. An issuer may use additional benefit plan designations on these charts set out in 3 AAC 28.456(f).]
[Include an explanation of any innovative benefits on the cover page and in the chart, in a manner approved by the director.]
PLAN AMEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD *A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZATION*
Semiprivate room and
board, general nursing,
and miscellaneous
services and supplies First 60 days 61st - 90th dayAll but $[+]$0$[+] (Part A de-
ductible) 91st day and after:All but $[+] a day$[+] a day$0 -While using 60
lifetime reserve
daysAll but $[+] a day$[+] a day$0 -Once lifetime
reserve days
are used: -Additional
365 days$0100% of Medi-
care eligible
expenses$0** -Beyond the
additional 365
days$0$0All costsSKILLED NURSING
FACILITY CARE*
You must meet Medi-
care's requirements,
including having been in
in a hospital for at least
3 days and entered a
Medicare-approved
facility within 30 days
after leaving the
hospital First 20 daysAll approved
amounts$0$0 21st - 100th dayAll but $[+] a day$0Up to $[+] a day 101st day and after$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts100%$0$0HOSPICE CARE
You must meet Medi-
care's requirements,
including a doctor's
certification of terminal
illnessAll but very lim-
ited copayment/
coinsurance for
outpatient drugs
and inpatient re-
spite careMedicare
copayment/
coinsurance$0[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
**NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN A (continued)MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR *Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such
as physician's services,
inpatient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medi-
cal equipment First $[+] of Medi-
care-approved
amounts*$0$0$[+] (Part B de-
ductible) Remainder of Medi-
care approved
amountsGenerally 80%Generally 20%$0 Part B Excess
Charges (Above
Medicare-approved
amounts)
$0$0All costsBLOOD First 3 pints$0All costs$0Next $[+] of Medi-
care approved
amounts*$0$0$[+] (Part B de-
ductible)Remainder of Medi-
care approved
amounts
80%20%$0CLINICAL
LABORATORY
SERVICES -
TESTS FOR DIAG-
NOSTIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
PLAN A (continued)PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED
SERVICES -Medically necessary
skilled care services
and medical supplies100%$0$0 -Durable medical
equipment First $[+] of Medi-
care-approved
amounts*$0$0$[+] (Part B de-
ductible) Remainder of Medi-
care-approved
amounts80%20%$0[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
PLAN BMEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD *A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZATION*
Semiprivate room and
board, general nursing,
and miscellaneous ser-
vices and supplies First 60 daysAll but $[+]$[+] (Part A de-
ductible)$0 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60
lifetime reserve
daysAll but $[+] a day$[+] a day$0 -Once lifetime
reserve days
are used: -Additional
365 days$0100% of Medi-
care eligible
expenses$0** - Beyond the
additional 365
days$0$0All costsSKILLED NURSING
FACILITY CARE*
You must meet Medi-
care's requirements,
including having been
in a hospital for at least
3 days and entered a
Medicare-approved
facility within 30 days
after leaving the
hospital First 20 daysAll approved
amounts$0$0 21st - 100th dayAll but $[+] a day$0Up to $[+] a day 101st day and after$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts100%$0$0HOSPICE CARE
You must meet Medi-
care's requirements,
including a doctor's
certification of
terminal illnessAll but very lim-
ited copayment/
coinsurance
for outpatient
drugs and inpa-
tient respite careMedicare
copayment/
coinsurance$0[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
**NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN B (continued)MEDICARE (PART B)-MEDICARE SERVICES-PER
CALENDAR YEAR *Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICARE EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such as
physician's services, in-
patient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipment First $[+] of Medi-
care-approved
amounts*$0$0$[+] (Part B de-
ductible) Remainder of Medi-
care-approved
amountsGenerally 80%Generally 20%$0 Part B Excess
Charges (Above
Medicare-approved
amounts)
$0$0All costsBLOOD First 3 pints$0All costs$0Next $[+] of Medi-
care-approved
amounts*$0$0$[+] (Part B de-
ductible)Remainder of Medi-
care-approved
amounts
80%20%$0CLINICAL LABORA-
TORY SERVICES
- TESTS FOR DIAG-
NOSTIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
PLAN B (continued)PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYSYOU PAYHOME HEALTH
CARE
MEDICARE-
APPROVED
SERVICES -Medically necessary
skilled care services
and medical supplies100%$0$0 -Durable medical
equipment First $[+] of Medi-
care-approved
amounts*$0$0$[+] (Part B de-
ductible) Remainder of Medi-
care-approved
amounts80%20%$0[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
PLAN CMEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD *A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZATION*
Semiprivate room and
board, general nursing,
and miscellaneous ser-
vices and supplies First 60 daysAll but $[+]$[+] (Part A de-
ductible)$0 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60
lifetime reserve
daysAll but $[+] a day$[+] a day$0 -Once lifetime re-
serve days are
used: -Additional 365
days$0100% of Medicare
eligible expenses$0** -Beyond the
additional
365 days$0$0All costsSKILLED NURSING
FACILITY CARE*
You must meet Medi-
care's requirements,
including having been
in a hospital for at
least 3 days and enter-
ed a Medicare-approv-
ed facility within 30
days after leaving the
hospital First 20 daysAll approved
amounts$0$0 21st - 100th dayAll but $[+] a dayUp to $[+] a day$0 101st day and after
$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts
100%$0$0HOSPICE CARE
You must meet Medi-
care's requirements,
including a doctor's
certification of
terminal illnessAll but very lim-
ited copayment/
coinsurance for
outpatient drugs
and inpatient
respite careMedicare
copayment/
coinsurance$0[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
**NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN C (continued)MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR *Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such as
physician's services, in-
patient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipmentFirst $[+] of Medi-
care approved
amounts*$0$[+] (Part B de-
ductible)$0Remainder of Medi-
care-approved
amounts
Generally 80%Generally 20%$0Part B Excess
Charges (Above
Medicare-approved
amounts)
$0$0All costsBLOOD First 3 pints$0All costs$0Next $[+] of Medi-
care-approved
amounts*$0$[+] (Part B de-
ductible)$0Remainder of Medi-
care-approved
amounts
80%20%$0CLINICAL
LABORA-
TORY SERVICES - TESTS FOR DIAG-
NOSTIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
PLAN C (continued)PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED
SERVICES -Medically neces-
sary skilled care
services and medical
supplies100%$0$0 -Durable medical
equipment First $[+] of Medi-
care approved
amounts*$0$[+] (Part B de-
ductible)$0 Remainder of Medi-
care-approved
amounts80%20%$0
OTHER BENEFITS-NOT COVERED BY MEDICARE
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
FOREIGN
TRAVEL- NOT
COVERED BY
MEDICAREMedically necessary
emergency care ser-
vices beginning
during the first 60
days of each trip out-
side the USAFirst $250 each
calendar year$0$0$250Remainder of
charges$080% to a lifetime
maximum benefit
of $50,00020% and amounts
over the $50,000
lifetime maximum[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
PLAN DMEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD *A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZATION*
Semiprivate room and
board, general nursing,
and miscellaneous
services and supplies First 60 daysAll but $[+]$[+] (Part A de-
ductible)$0 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60
lifetime reserve
daysAll but $[+] a day$[+] a day$0 -Once lifetime
reserve days
are used: -Additional 365
days$0100% of Medicare
eligible expenses$0** -Beyond the
additional 365
days
$0$0All costsSKILLED NURSING
FACILITY CARE*
You must meet Medi-
care's requirements,
including having been
in a hospital for at least
3 days and entered a
Medicare-approved
facility within 30 days
after leaving the
hospital First 20 daysAll approved
amounts$0$0 21st - 100th dayAll but $[+] a dayUp to $[+] a day$0 101st day and after
$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts
100%$0$0HOSPICE CARE
You must meet Medi-
care's requirements,
including a doctor's
certification of terminal
illnessAll but very lim-
ited copayment/
coinsurance for
outpatient drugs
and inpatient
respite careMedicare copay-
ment/coinsurance$0[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
**NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN D (continued)MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR *Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such as
physician's services, in-
patient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipment First $[+] of
Medicare-approved
amounts*$0$0$[+] (Part B de-
ductible) Remainder of Medi-
care-approved
amounts
Generally 80%Generally 20%$0 Part B Excess
Charges (Above
Medicare-approved
amounts)
$0$0All costsBLOOD First 3 pints$0All costs$0Next $[+] of Medicare-
approved amounts*$0$0$[+] (Part B de-
ductible)Remainder of Medicare-
approved amounts
80%20%$0CLINICAL
LABORATORY
SERVICES-
TESTS FOR DIAG-
NOSTIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
PLAN D (continued)PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED
SERVICES -Medically necessary
skilled care services
and medical supplies100%$0$0 -Durable medical
equipment First $[+] of Medi-
care-approved
amounts*$0$0$[+] (Part B de-
ductible) Remainder of Medi-
care-approved
amounts80%20%$0
PLAN D (continued)OTHER BENEFITS-NOT COVERED BY MEDICARE
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
FOREIGN TRAVEL -
NOT COVERED BY
MEDICARE
Medically necessary
emergency care ser-
vices beginning during
the first 60 days of
each trip outside the
USA First $250 each
calendar year$0$0$250 Remainder of
charges$080% to a lifetime
maximum benefit
of $50,00020% and amounts
over the $50,000
lifetime maximum[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
[Indicate Plan F or High Deductible Plan F, depending on which plan is offered:
PLAN F or HIGH DEDUCTIBLE PLAN F] MEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD *A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
[Language for High Deductible Plan F, if offered: **This high deductible plan pays the same or offers the same benefits as Plan F after you have paid a calendar year $[+] deductible. Benefits from the high deductible Plan F will not begin until out-of-pocket expenses are $[+]. Out-of-pocket expenses for this deductible are expenses that would ordinarily be paid by the policy. This includes the Medicare deductibles for Part A and Part B, but does not include the plan's separate foreign travel emergency deductible.]
SERVICES
MEDICARE PAYS
[Language for High
Deductible Plan F,
if offered: AFTER
YOU PAY $[ # ]
DEDUCTIBLE,**]
PLAN PAYS
[Language for High
Deductible Plan F,
if offered: IN ADDI-
TION TO $[ # ]
DEDUCTIBLE,**]
YOU PAY
HOSPITALIZATION*
Semiprivate room and
board, general nursing,
and miscellaneous
services and supplies First 60 daysAll but $[+]$[+] (Part A de-
ductible)$0 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60
lifetime reserve
daysAll but $[+] a day$[+] a day$0 -Once lifetime
reserve days
are used: -Additional 365
days$0100% of Medicare
eligible expenses$0*** -Beyond the
additional 365
days
$0$0All costsSKILLED NURSING
FACILITY CARE*
You must meet Medi-
care's requirements,
including having been
in a hospital for at least
3 days and entered a
Medicare-approved fa-
cility within 30 days
after leaving the
hospital First 20 daysAll approved
amounts$0$0 21st - 100th dayAll but $[+] a dayUp to $[+] a day$0 101st day and after
$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts
100%$0$0HOSPICE CARE
You must meet Medi-
care's requirements,
including a doctor's
certification of
terminal illnessAll but very limited
copayment/coinsurance
for outpatient drugs
and inpatient respite
careMedicare
copayment/coinsurance
$0[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
***NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
[Indicate Plan F or High Deductible Plan F, depending on which plan is offered:
PLAN F or HIGH DEDUCTIBLE PLAN F (continued)]MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR *Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
[Language for High Deductible Plan F, if offered: **This high deductible plan pays the same or offers the same benefits as Plan F after you have paid a calendar year $[+] deductible. Benefits from the high deductible Plan F will not begin until out-of-pocket expenses are $[+]. Out-of-pocket expenses for this deductible are expenses that would ordinarily be paid by the policy. This includes the Medicare deductible for Part A and Part B, but does not include the plan's separate foreign travel emergency deductible.]
SERVICES
MEDICARE PAYS
[Language for High
Deductible Plan F,
if offered: AFTER
YOU PAY $[+]
DEDUCTIBLE,**]
PLAN PAYS
[Language for High
Deductible Plan F,
if offered: IN ADDI-
TION TO $[+]
DEDUCTIBLE, **]
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such as
physician's services, in-
patient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipment First $[+] of Medi-
care-approved
amounts*$0$[+] (Part B de-
ductible)$0 Remainder of Medi-
care-approved
amounts
Generally 80%Generally 20%$0
Part B Excess
Charges (Above
Medicare-approved
amounts)
$0100%$0BLOOD First 3 pints$0All costs$0Next $[+] of Medi-
vare-approved
amounts*$0$[+] (Part B de-
ductible)$0 Remainder of Medi-
care-approved
amounts
80%20%$0CLINICAL LABORA-
TORY SERVICES - TESTS FOR DIAGNOSTIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
[Indicate Plan F or High Deductible Plan F, depending on which plan is offered:
PLAN F or HIGH DEDUCTIBLE PLAN F (continued)] PARTS A & B
SERVICES
MEDICARE PAYS
[Language for High
Deductible Plan F,
if offered: AFTER
YOU PAY $[+]
DEDUCTIBLE,**]
PLAN PAYS
[Language for High
Deductible Plan F,
if offered: IN ADDI-
TION TO $[+]
DEDUCTIBLE,**]
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED
SERVICES -Medically necessary
skilled care services
and medical supplies100%$0$0 -Durable medical
equipment First $[+] of Medi-
care-approved
amounts*$0$[+] (Part B de-
ductible)$0 Remainder of Medi-
care-approved
amounts80%20%$0
[Indicate Plan F or High Deductible Plan F, depending on which plan is offered:
PLAN F or HIGH DEDUCTIBLE PLAN F (continued)] OTHER BENEFITS-NOT COVERED BY MEDICARE
SERVICES
MEDICARE PAYS
[Language for High
Deductible Plan F,
if offered: AFTER
YOU PAY $[+]
DEDUCTIBLE, **]
PLAN PAYS
[Language for High
Deductible Plan F,
if offered: IN ADDI-
TION TO $[+]
DEDUCTIBLE, **]
YOU PAY
FOREIGN TRAVEL -NOT
COVERED BY
MEDICAREMedically necessary
emergency care ser-
vices beginning dur-
ing the first 60 days
of each trip outside
the USA First $250 each
calendar year$0$0$250 Remainder of
charges$080% to a lifetime
maximum benefit
of $50,00020% and amounts
over the $50,000
lifetime maximum[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
[Indicate Plan F or High Deductible Plan F, depending on which plan is offered:
PLAN G or HIGH DEDUCTIBLE PLAN G MEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD *A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
[**This high deductible plan pays the same benefits as Plan G after you have paid a calendar year [+] deductible. Benefits from the high deductible Plan G will not begin until out-of-pocket expenses are [+]. Out-of-pocket expenses for this deductible include expenses for the Medicare Part B deductible, and expenses that would ordinarily be paid by the policy. This does not include the plan's separate foreign travel emergency deductible.]
SERVICES
MEDICARE PAYS
[Language for High
Deductible Plan F,
if offered: AFTER
YOU PAY $[+]
DEDUCTIBLE, **]
PLAN PAYS
[Language for High
Deductible Plan F,
if offered: IN ADDI-
TION TO $[+]
DEDUCTIBLE, **]
YOU PAY
HOSPITALIZATION*
Semiprivate room and
board, general nursing,
and miscellaneous
services and supplies First 60 daysAll but $[+]$[+] (Part A de-
ductible)$0 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60
lifetime reserve
daysAll but $[+] a day$[+] a day$0 -Once lifetime
reserve days
are used: -Additional 365
days$0100% of Medicare
eligible expenses$0*** -Beyond the addi-
tional 365 days
$0$0All costsSKILLED NURSING
FACILITY CARE*
You must meet Medi-
care's requirements,
including having been
in a hospital for at
least 3 days and
entered a Medicare-
approved facility with-
in 30 days after leaving
the hospital First 20 daysAll approved
amounts$0$0 21st - 100th dayAll but $[+] a dayUp to $[+] a day$0 101st day and after
$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts
100%$0$0HOSPICE CARE
You must meet
Medicare's require-
ments, including a
doctor's certifica-
tion of terminal
illnessAll but very limited
copayment/coinsurance
for outpatient drugs
and inpatient respite
careMedicare
copayment/coinsurance$0[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
***NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN G or HIGH DEDUCTIBLE PLAN G (continued)MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR *Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
[**This high deductible plan pays the same benefits as Plan G after you have paid a calendar year $[+] deductible. Benefits from the high deductible plan G will not begin until out-of-pocket expenses are $[+]. Out-of-pocket expenses for this deductible include expenses for the Medicare Part B deductible, and expenses that would ordinarily be paid by the policy. This does not include the plan's separate foreign travel emergency deductible.]
SERVICES
MEDICARE PAYS
[Language for High
Deductible Plan F,
if offered: AFTER
YOU PAY $[+]
DEDUCTIBLE, **]
PLAN PAYS
[Language for High
Deductible Plan F,
if offered: IN ADDI-
TION TO $[+]
DEDUCTIBLE, **]
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such
as physician's services
and supplies, physical
and speech therapy,
diagnostic tests, durable
medical equipment First $[+] of Medi-
care-approved
amounts*$0$0$[+] (unless Part
B deductible has
been met) Remainder of Medi-
care-approved
amountsGenerally 80%Generally 20%$0 Part B Excess
Charges (Above
Medicare-approved
amounts)$0100%$0BLOOD First 3 pints$0All costs$0Next $[+] of Medicare-
approved amounts*$0$0$[+] (Unless Part
B deductible has
been met)
Remainder of Medi-
care-approved
amounts
80%20%$0CLINICAL
LABORATORY
SERVICES - TESTS FOR DIAG-
NOSTIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
PLAN G or HIGH DEDUCTIBLE PLAN G (continued) PARTS A & B
SERVICES
MEDICARE PAYS
[Language for High
Deductible Plan F,
if offered: AFTER
YOU PAY $[+]
DEDUCTIBLE, **]
PLAN PAYS
[Language for High
Deductible Plan F,
if offered: IN ADDI-
TION TO $[+]
DEDUCTIBLE, **]
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED
SERVICES -Medically necessary
skilled care services
and medical supplies100%$0$0 -Durable medical
equipment First $[+] of Medi-
care-approved
amounts*$0$0$[+] (Unless Part
B deductible has
been met)
Remainder of Medi-
care-approved
amounts80%20%$0
PLAN G or HIGH DEDUCTIBLE PLAN G (continued) OTHER BENEFITS-NOT COVERED BY MEDICARE
SERVICES
MEDICARE PAYS
[Language for High
Deductible Plan F,
if offered: AFTER
YOU PAY $[+]
DEDUCTIBLE, **]
PLAN PAYS
[Language for High
Deductible Plan F,
if offered: IN ADDI-
TION TO $[+]
DEDUCTIBLE, **]
YOU PAY
FOREIGN
TRAVEL -NOT
COVERED BY
MEDICAREMedically necessary
emergency care ser-
vices beginning during
the first 60 days of
each trip outside
the USA First $250 each
calendar year$0$0$250 Remainder of
charges$080% to a lifetime
maximum benefit
of $50,00020% and amounts
over the $50,000
lifetime maximum[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
PLAN K
*You will pay one-fourth of the cost-sharing of some covered services until you reach the annual out-of-pocket limit of $[+] each calendar year. The amounts that count toward your annual limit are noted with diamonds (¨) in the chart below. Once you reach the annual limit, the plan pays 100% of your Medicare copayment and coinsurance for the rest of the calendar year. However, this limit does NOT include charges from your provider that exceed Medicare-approved amounts (these are called "Excess Charges") and you will be responsible for paying this difference in the amount charged by your provider and the amount paid by Medicare for the item or service.
MEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD **A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALI-
ZATION*
Semiprivate room
and board, general
nursing, and miscel-
laneous services
and supplies First 60 daysAll but $[+]$[+] (50% of Part
A deductible)$[+] (50% of Part
A deductible)¨ 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60
lifetime reserve
daysAll but $[+] a day$[+] a day$0 -Once lifetime
reserve days
are used: -Additional 365
days$0100% of Medicare
eligible expenses$0*** -Beyond the
additional 365
days
$0$0All costsSKILLED NURSING
FACILITY CARE**
You must meet Medi-
care's requirements,
including having been
in a hospital for at
least 3 days and
entered a Medicare-
approved facility with-
in 30 days after leav-
ing the hospital First 20 daysAll approved
amounts$0$0 21st - 100th dayAll but $[+] a dayUp to $[+] a dayUp to $[+] a day¨ 101st day and after
$0$0All costsBLOOD First 3 pints$050%50%°¨Additional amounts
100%$0$0HOSPICE CARE
You must meet Medi-
care's requirements,
including a doctor's
certification of
terminal illnessAll but very lim-
ited copayment/coin-
surance for outpatient
drugs and inpatient
respite care50% of
copayment/coin-
surance50% of Medicare
copayment/coinsur-
ance¨[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
**NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN K (continued)MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR ****Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such as
physician's services,
inpatient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipment First $[+] of Medi-
care-approved
amounts****$0$0$[+] (Part
B deductible)****¨ Preventive Benefits
for Medicare cover-
ed servicesGenerally 75% or
more of Medicare-
approved amountsRemainder of
Medicare-ap-
proved amountsAll costs above
Medicare-approved
amounts Remainder of Medi-
care-approved
amountsGenerally 80%Generally 10%Generally 10%¨ Part B Excess
Charges (Above
Medicare-approved
amounts
$0$0All costs (and they
do not count toward
annual out-of-pocket
limit of $[+])¨
BLOOD First 3 pints$050%50%¨Next $[+] of Medicare-
approved amounts****$0$0$[+] (Part B
deductible)****¨Remainder of Medicare-
approved amounts
Generally 80%Generally 10%Generally 10%¨CLINICAL LABORA-
TORY SERVICES - TESTS FOR DIAG-
NOSTIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
*This plan limits your annual out-of-pocket payments for Medicare-approved amounts to $[+] per year. However, this limit does NOT include charges from your provider that exceed Medicare-approved amounts (these are called "Excess Charges") and you will be responsible for paying this difference in the amount charged by your provider and the amount paid by Medicare for the item or service.
PLAN K (continued)PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED
SERVICES
-Medically necessary
skilled care services
and medical supplies100%$0$0 -Durable medical
equipment First $[+] of Medi-
care-approved
amounts*****$0$0$[+] (Part B
deductible)¨ Remainder of Medi-
care-approved
amounts80%10%10%¨[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
*****Medicare benefits are subject to change. Please consult the latest Guide to Health Insurance for People with Medicare.
PLAN L
*You will pay one-fourth of the cost-sharing of some covered services until you reach the annual out-of-pocket limit of $[+] each calendar year. The amounts that count toward your annual limit are noted with diamonds (¨) in the chart below. Once you reach the annual limit, the plan pays 100% of your Medicare copayment and coinsurance for the rest of the calendar year. However, this limit does NOT include charges from your provider that exceed Medicare-approved amounts (these are called "Excess Charges") and you will be responsible for paying this difference in the amount charged by your provider and the amount paid by Medicare for the item or service .
MEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD **A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZA-
TION**
Semiprivate room and
board, general nursing,
and miscellaneous
services and supplies First 60 daysAll but $[+]$[+] (75% of
Part A deduct-
ible)$[+] (25% of
Part A deduct-
ible)¨ 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60
lifetime reserve
daysAll but $[+] a day$[+] a day$0 -Once lifetime
reserve days
are used: -Additional 365
days$0100% of Medicare
eligible expenses$0*** -Beyond the
additional 365
days
$0$0All costsSKILLED NURSING
FACILITY CARE**
You must meet Medi-
care's requirements,
including having been
in a hospital for at
least 3 days and
entered a Medicare-
approved facility
within 30 days after
after leaving the
hospital First 20 daysAll approved
amounts$0$0 21st - 100th dayAll but $[+] a dayUp to $[+] a dayUp to $[+] a day¨ 101st day and after
$0$0All costsBLOOD First 3 pints$075%25%¨Additional amounts
100%$0$0HOSPICE CARE
You must meet Medi-
care's requirements,
including a doctor's
certification of termi-
nal illnessAll but very lim-
ited copayment/
coinsurance for
outpatient drugs
and inpatient
respite care75% of
copayment/
coinsurance25% of copayment/
coinsurance¨[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
***NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN L (continued)
MEDICARE (PART B)-MEDICAL SERVICES-PER CALENDAR YEAR
****Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such
as physician's services,
inpatient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipment First $[+] of Medi-
care-approved
amounts****$0$0$[+] (Part B
deductible)****¨ Preventive Benefits
for Medicare
covered servicesGenerally 75% or
more of Medi-
care-approved
amountsRemainder of
Medicare-ap-
proved amountsAll costs above
Medicare-ap-
proved amounts Remainder of Medi-
care-approved
amountsGenerally 80%Generally 15%Generally 5%¨ Part B Excess
Charges (Above
Medicare-approved
amounts)$0$0All costs (and they
do not count toward
annual out-of-pocket
limit of $[+])*BLOOD First 3 pints$075%25%¨Next $[+] of Medicare-
approved amounts****$0$0$[+] (Part B
deductible)¨Remainder of Medi-
care-approved
amountsGenerally 80%Generally 15%Generally 5%CLINICAL LABORA-
TORY SERVICES-
TESTS FOR DIAG-
NOSTIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
*This plan limits your annual out-of-pocket payments for Medicare-approved amounts to $[+] per year. However, this limit does NOT include charges from your provider that exceed Medicare-approved amounts (these are called "Excess Charges") and you will be responsible for paying this difference in the amount charged by your provider and the amount paid by Medicare for the item or service.
PLAN L (continued)PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED
SERVICES -Medically necessary
skilled care services
and medical supplies100%$0$0 -Durable medical
equipment First $[+] of Medi-
care-approved
amounts*****$0$0$[+] (Part B
deductible)¨ Remainder of Medi-
care-approved
amounts80%15%5%¨[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
*****Medicare benefits are subject to change. Please consult the latest Guide to Health Insurance for People with Medicare.
PLAN MMEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD **A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZATION**
Semiprivate room and
board, general nursing,
and miscellaneous
services and supplies First 60 daysAll but $[+]$[+] (50% Part
A deductible)$[+] (50% Part
A deductible) 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60
lifetime reserve
daysAll but $[+] a day$[+] a day$0 -Once lifetime
reserve days
are used: -Additional 365
days$0100% of Medi-
care eligible
expenses$0*** -Beyond the
additional 365
days
$0$0All costsSKILLED NURSING
FACILITY CARE**
You must meet Medi-
care's requirements,
including having been
in a hospital for at
least 3 days and en-
tered a Medicare-
approved facility
within 30 days after
leaving the hospital First 20 daysAll approved
amounts$0$0 21st - 100th dayAll but $[+] a dayUp to $[+] a day$0 101st day and after
$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts
100%$0$0HOSPICE CARE
You must meet Medi-
care's requirements,
including a doctor's
certification of
terminal illnessAll but very lim-
ited copayment/
coinsurance for
outpatient drugs
and inpatient
respite careMedicare
copayment/
coinsurance$0[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
***NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN M (continued)MEDICARE (PART B)-MEDICAL SERVICES-PER
CALENDAR YEAR ****Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such
as physician's services,
inpatient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable medical
equipment First $[+] of Medi-
care-approved
amounts****$0$0$[+] (Part B de
ductible) Remainder of Medi-
care-approved
amounts
Generally 80%Generally 20%$0
Part B Excess
Charges (Above
Medicare-approved
amounts)
$0$0All costsBLOOD First 3 pints$0All costs$0Next $[+] of Medi-
care-approved
amounts****$0$0$[+] (Part B
deductible)Remainder of Medi-
care-approved
amounts
80%20%$0CLINICAL LABORA-
TORY SERVICES - TESTS FOR DIAG-
NOSTIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
PLAN M (continued)PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED
SERVICES -Medically neces-
sary skilled care
services and medi-
cal supplies
100%$0$0 -Durable medical
equipment First $[+] of Medi-
care-approved
amounts*$0$0$[+] (Part B
deductible) Remainder of Medi-
care-approved
amounts
80%20%$0 FOREIGN TRAVEL -
NOT COVERED BY
MEDICARE
Medically necessary
emergency care
services beginning
during the first 60
days of each trip
outside the USA First $250 each
calendar year$0$0$250 Remainder of
charges$080% to a lifetime
maximum benefit
of $50,00020% and amounts
over the $50,000
lifetime maximum
[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
PLAN NMEDICARE (PART A)-HOSPITAL SERVICES-PER
BENEFIT PERIOD **A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZATION**
Semiprivate room and
board, general nursing,
and miscellaneous
services and supplies First 60 daysAll but $[+]$[+] (Part A
deductible)$0 61st - 90th dayAll but $[+] a day$[+] a day$0 91st day and after: -While using 60
lifetime reserve
daysAll but $[+] a day$[+] a day$0 -Once lifetime
reserve days
are used: -Additional 365
days$0100% of Medicare
eligible expenses$0*** - Beyond the
additional 365
days
$0$0All costsSKILLED NURSING
FACILITY CARE**
You must meet Medi-
care's requirements,
including having been
in a hospital for at
least 3 days and en-
tered a Medicare-
approved facility with-
in 30 days after leav-
ing the hospital First 20 daysAll approved
amounts$0$0 21st - 100th dayAll but $[+] a dayUp to $[+] a day$0 101st day and after
$0$0All costsBLOOD First 3 pints$03 pints$0Additional amounts
100%$0$0HOSPICE CARE
You must meet Medi-
care's requirements,
including a doctor's
certification of
terminal illnessAll but very lim-
ited copayment/
coinsurance for
outpatient drugs
and inpatient
respite careMedicare
copayment/
coinsurance$0[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
**NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy's "Core Benefits." During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN N (continued)MEDICARE (PART B)-MEDICARE SERVICES-PER
CALENDAR YEAR ****Once you have been billed $[+] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICARE EX-
PENSES - IN OR
OUT OF THE HOSPI-
TAL AND OUTPA-
TIENT HOSPITAL
TREATMENT, such
as physician's services,
inpatient and outpatient
medical and surgical
services and supplies,
physical and speech
therapy, diagnostic
tests, durable med-
ical equipment First $[+] of Medi-
care-approved
amounts****$0$0$[+] (Part B de
ductible) Remainder of Medi-
care-approved
amountsGenerally 80%Balance, other
than up to $[+]
per office visit
and up to $[+] per
emergency room
visit. The copay-
ment of up to $
[+] is waived if
the insured is ad-
mitted to any
hospital and the
emergency visit
is covered as a
Medicare Part
A expense.
Up to $[20] per
office visit and
up to $[50] per
emergency
room visit. The
copayment of
up to $ [50] is
waived if the in-
sured is admitted
to any hospital
and the emergen-
cy visit is covered
as a Medicare Part
A expense.
Part B Excess
Charges (Above
Medicare-approved
amounts)
$0$0All costsBLOOD First 3 pints$0All costs$0Next $[+] of Medi-
care approved
amounts****$0$0$[+] (Part B de-
ductible)Remainder of Medi-
care-approved
amounts
80%20%$0CLINICAL LABORA-
TORY SERVICES -
TESTS FOR DIAG-
NOSTIC SERVICES100%$0$0[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
PLAN N (continued)PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH
CARE
MEDICARE-
APPROVED
SERVICES -Medically necessary
skilled care services
and medical supplies100%$0$0 -Durable medical
equipment First $[+] of Medicare-
approved amounts$0$0$[+] (Part B
deductible) Remainder of
Medicare-
approved
amounts80%20%$0FOREIGN TRAVEL -
NOT COVERED BY
MEDICARE
Medically necessary
emergency care
services beginning
during the first 60
days of each trip
outside the USA First $250 each
calendar year$0$0$250 Remainder of
charges$080% to a lifetime
maximum benefit
of $50,00020% and amounts
over the $50,000
lifetime maximum[+ The dollar amount to be inserted here is determined annually, as described in (q) of this section, and may be obtained from the division.]
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 3/26/82, Register 81; am 8/8/90, Register 115; am 7/1/92, Register 122; am 12/4/94, Register 132; am 7/12/96, Register 139; am 4/21/99, Register 150; am 7/12/2000, Register 155; am 9/4/2005, Register 175; am 9/19/2009, Register 191; am 3/28/2019, Register 229
3 AAC 28.491 Disclosure requirements to policyholders
Repealed 7/1/92.
3 AAC 28.500 Requirements for application forms and replacement coverage
(a) Application forms must include the following statements and questions designed to obtain information as to whether, as of the date of the application, the applicant currently has a medicare supplement policy, medicare advantage plan, medicaid coverage, or another health insurance policy or certificate in force or whether a medicare supplement policy or certificate is intended to replace any other accident and sickness policy or certificate in force at the time of application. A supplementary application or other form to be signed by the applicant and agent containing the questions and statements may be used by the issuer.
[Statements]
(1) You do not need more than one medicare supplement policy.
(2) If you purchase this policy, you may want to evaluate your existing health coverage and decide if you need multiple coverages.
(3) You may be eligible for benefits under medicaid and may not need a medicare supplement policy.
(4) If you become eligible for medicaid after purchasing this policy, the benefits and premiums under your medicare supplement policy can be suspended, if requested, during your entitlement to benefits under medicaid for 24 months. You must request this suspension within 90 days of becoming eligible for medicaid. If you are no longer entitled to medicaid, your suspended medicare supplement policy or, if that policy is no longer available, a substantially equivalent medicare supplement policy will be reinstituted if requested within 90 days of losing medicaid eligibility. If your medicare supplement policy provided coverage for outpatient prescription drugs and you enrolled in medicare Part D while your policy was suspended, the reinstituted policy will provide substantially similar benefits to the benefits in the policy before the date of suspension but will not include outpatient prescription drug coverage.
(5) If you are eligible for and have enrolled in a medicare supplement policy by reason of disability and you later become covered by an employer or union-based group health plan, the benefits and premiums under your medicare supplement policy can be suspended while you are covered under the employer or union-based group health plan upon your request. If your medicare supplement policy is suspended under these circumstances, and you later lose your employer or union-based group health plan, your suspended medicare supplement policy or, if that policy is no longer available, a substantially equivalent medicare supplement policy will be reinstituted if requested within 90 days of losing your employer or union-based health plan. If your medicare supplement policy provided coverage for outpatient prescription drugs and you enrolled in medicare Part D while your policy was suspended, the reinstituted policy will provide substantially similar benefits to the benefits in the policy before the date of suspension but will not include outpatient prescription drug coverage.
(6) Counseling services may be available in your state to provide advice concerning your purchase of medicare supplement insurance and concerning medical assistance through the state medicaid program, including benefits as a qualified medicare beneficiary (QMB) or a specified low-income medicare beneficiary (SLMB).
[Questions]
If you lost or are losing other health insurance coverage and received a notice from your prior insurer saying you were eligible for guaranteed issue of a medicare supplement insurance policy, or that you had certain rights to buy such a policy, you may be guaranteed acceptance in one or more of our medicare supplement plans. Please include a copy of the notice from your prior insurer with your application. PLEASE ANSWER ALL QUESTIONS. Mark "yes" or "no" below with an "X."
To the best of your knowledge,
(1) (a) Did you turn age 65 in the last 6 months?
Yes _______________ No _______________
(b) Did you enroll in medicare Part B in the last 6 months?
Yes _______________ No _______________
(c) If you answered yes to (1)(a) and (1)(b), what is the effect-
ive date of your medicare Part B coverage? _______________
(2) (a) Do you receive medical assistance through the state medicaid program? (Mark "No" if you are participating in a "spend- down program" and have not met your "share of cost.")
Yes _______________ No _______________
(b) If you answered yes to (2)(a), will medicaid pay your premiums for this medicare supplement policy?
Yes _______________ No _______________
(c) If you answered yes to (2)(b), do you receive any benefits from medicaid other than payment toward your medicare Part B premium?
Yes _______________ No _______________
(3) (a) If you had coverage from any medicare plan other than original medicare (for example, medicare advantage or a medicare health maintenance organization (HMO) or preferred provider organization (PPO) within the past 63 days, fill in your start and end dates below. If you are still covered under this plan, leave the "END" date blank. If you did not have such coverage, skip to question (4).
START ___/___/______ END ___/___/______
(b) If you are still covered under the medicare plan, do you intend to replace your current coverage with this new medicare supplement policy?
Yes _______________ No _______________
(c) Was this your first time in this type of medicare plan?
Yes _______________ No _______________
(d) Did you drop a medicare supplement policy to enroll in the medicare plan?
Yes _______________ No _______________
(4) Do you have another medicare supplement policy in force?
Yes _______________ No _______________
(a) If yes, with what company and what plan do you have? [optional for direct mail business]
Company _______________
Plan _______________
(b) If yes, do you intend to replace your current medicare supplement policy with this policy?
Yes _______________ No _______________
(5) Have you had any other health insurance coverage within the past 63 days? (For example, employer, union, or individual plan)
Yes _______________ No _______________
(a) If yes, with what company and what kind of policy?
Company _______________
Plan description _________
_________
_________
(b) If yes, what are the start and end dates of the coverage? If you are still covered under this policy, leave the "END" date blank.
START ___/___/______ END ___/___/______
(b) Agents shall list any other health insurance policies they have sold to the applicant as follows:
(1) list policies sold that are still in force; and
(2) list policies sold in the past five years that are no longer in force.
(c) In the case of a direct response issuer, a copy of the application or supplemental form, signed by the applicant and acknowledged by the insurer, shall be returned to the applicant by the insurer upon delivery of the policy.
(d) Upon determining that a sale will involve replacement of medicare supplement coverage, an issuer, other than a direct response issuer or its agent, shall furnish the applicant, before issuance or delivery of the medicare supplement policy or certificate, a notice regarding replacement of medicare supplement coverage. One copy of the notice signed by the applicant and the agent, except where the coverage is sold without an agent, must be provided to the applicant and an additional signed copy must be retained by the issuer. A direct response issuer shall deliver to the applicant at the time of the issuance of the policy the notice regarding replacement of medicare supplement coverage.
(e) The notice required under (d) of this section for an issuer must be provided in substantially the following form in no less than 12-point type:
NOTICE TO APPLICANT REGARDING REPLACEMENT
OF MEDICARE SUPPLEMENT OR MEDICARE ADVANTAGE COVERAGE
[Insurance company's name and address]
SAVE THIS NOTICE!
IT MAY BE IMPORTANT TO YOU IN THE FUTURE.
According to (your application) (information you have furnished), you intend to terminate existing medicare supplement or medicare advantage coverage and replace it with a policy to be issued by [company name] Insurance Company. Your new policy will provide 30 days within which you may decide without cost whether you desire to keep the policy.
You should review this new coverage carefully. Compare it with all accident and sickness coverage you now have. If, after due consideration, you find that purchase of this medicare supplement coverage is a wise decision, you should terminate your present medicare supplement or medicare advantage coverage. You should evaluate the need for other accident and sickness coverage you have that may duplicate this policy.
STATEMENT TO APPLICANT BY ISSUER, AGENT (BROKER OR OTHER REPRESENTATIVE):
I have reviewed your current medical or health insurance coverage. To the best of my knowledge, this medicare supplement policy will not duplicate your existing medicare supplement or medicare advantage coverage because you intend to terminate your existing medicare supplement coverage or leave your medicare advantage plan. The replacement policy is being purchased for the following reason (check one):
_______________ Additional benefits.
_______________ No change in benefits, but lower premiums.
_______________ Fewer benefits and lower premiums.
_______________ My plan has outpatient prescription drug
coverage and I am enrolling in Part D.
_______________ Disenrollment from a medicare advantage
plan. Please explain the reason for
disenrollment. [optional for direct mail busi-
ness]
_______________ Other. (please specify)
_________
_________
_________
1. ote: If the issuer of the medicare supplement policy being applied for does not or is otherwise prohibited from imposing preexisting condition limitations, please skip to statement 2 below. Health conditions that you might presently have (preexisting conditions) may not be immediately or fully covered under the new policy. This could result in denial or delay of a claim for benefits under the new policy, whereas a similar claim might have been payable under your present policy.2. tate law provides that your replacement policy or certificate may not contain new preexisting conditions, waiting periods, elimination periods, or probationary periods. The insurer will waive any time periods applicable to preexisting conditions, waiting periods, elimination periods, or probationary periods in the new policy (or coverage) for similar benefits to the extent that that time was spent (depleted) under the original policy.3. f you still wish to terminate your present policy and replace it with new coverage, be certain to truthfully and completely answer all questions on the application concerning your medical and health history. Failure to include all material medical information on an application may provide a basis for the company to deny any future claims and to refund your premium as though your policy had never been in force. After the application has been completed and before you sign it, review it carefully to be certain that all information has been properly recorded. [If the policy or certificate is a guaranteed issue, this paragraph need not appear.] Do not cancel your present policy until you have received your new
policy and are sure that you want to keep it. _________ [Signature of agent, broker, or other representative; signature not
required for direct sales.] _________ [Typed name and address of issuer, agent, or broker] _________ [Applicant's signature] _________ [Date]
(f) The first two paragraphs of the replacement notice that are applicable to preexisting conditions may be deleted by an issuer if the replacement does not involve application of a new preexisting condition limitation.
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 3/26/82, Register 81; am 8/8/90, Register 115; am 7/1/92, Register 122; am 7/12/96, Register 139; am 9/4/2005, Register 175
3 AAC 28.501 Permitted compensation arrangements
(a) An issuer or other entity may provide a commission or other compensation to an agent or other representative for the sale of a medicare supplement policy or certificate only if the first-year commission or other first-year compensation is no more than 200 percent of the commission or other compensation paid for selling or servicing the policy or certificate in the second year or period.
(b) The commission or other compensation provided in subsequent (renewal) years must be the same as that provided in the second year or period and must be provided for no fewer than five renewal years.
(c) No issuer or other entity may provide compensation to its agents or other producers, and no agent or producer may receive compensation greater than the renewal compensation payable by the replacing issuer on renewal policies or certificates if an existing policy or certificate is replaced.
(d) For purposes of this section, "compensation" includes pecuniary or non-pecuniary remuneration of any kind relating to the sale or renewal of the policy or certificate, including bonuses, gifts, prizes, awards, and finders fees.
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 8/8/90, Register 115; am 7/1/92, Register 122
3 AAC 28.502 Notice regarding policies or certificates that are not medicare supplement policies
(a) A health insurance policy or certificate, other than a medicare supplement policy; a policy issued under a contract under 42 U.S.C. 1395 - 1395ccc (sec. 1876 of the Social Security Act); or a disability income policy or certificate delivered or issued for delivery in this state to a person eligible for medicare must notify insureds under the policy or certificate that the policy or certificate is not a medicare supplement policy. The notice must either be printed on or attached to the first page of the outline of coverage delivered to the insured under the policy or certificate, or, if no outline of coverage is delivered, to the first page of the policy or certificate delivered to the insured. The notice must be in no less than 12-point type and must contain the following language:
"THIS (POLICY OR CERTIFICATE) IS NOT A MEDICARE SUPPLEMENT POLICY. If you are eligible for medicare, review the guide to health insurance for people with medicare available from the company."
(b) An application for a health insurance policy or certificate described in (a) of this section that is provided to a person eligible for medicare must disclose, using the applicable disclosure statement contained in Appendix A of this section, the extent to which the policy duplicates medicare benefits. The disclosure statement must be provided as a part of, or together with, the application for the policy or certificate.
Appendix A DISCLOSURE STATEMENTS
Instructions for use of the Disclosure Statements for
Health Insurance Policies Sold to Medicare Beneficiaries
that Duplicate Medicare
1. 42 U.S.C. 1395ss(d) (sec. 1882(d) of the Social Security Act) prohibits
the sale of a health insurance policy (the term "policy" or "policies"
includes "certificates") that duplicates medicare benefits unless the policy
will pay benefits without regard to other health coverage and includes the
prescribed disclosure statement on or together with the application.
2. All types of health insurance policies that duplicate medicare must
include one of the attached disclosure statements, according to the particular
policy type involved, on the application or together with the application. The
disclosure statement may not vary from the attached statements in terms of
language or format (type size, type proportional spacing, bold character, line
spacing, and usage of boxes around text).
3. State and federal law prohibits insurers from selling a medicare
supplement policy to a person that already has a medicare supplement policy
except as a replacement policy.
4. Property/casualty and life insurance policies are not considered health
insurance.
5. Disability income policies are not considered to provide benefits that
duplicate medicare.
6. Long-term care insurance policies that coordinate with medicare and
other health insurance are not considered to provide benefits that duplicate
medicare.
7. Federal law does not preempt state laws that are more stringent than the
federal requirements.
8. Federal law does not preempt existing state form filing requirements.
9. 42 U.S.C. 1395ss (sec. 1882 of the Social Security Act) was amended in
subsection (d)(3)(A) to allow for alternative disclosure statements. The
disclosure statements already in this appendix remain. A carrier may use
either disclosure statement with the requisite insurance product. A carrier
shall use either the original disclosure statements or the alternative
disclosure statements, but may not use both simultaneously.
[Original disclosure statement for policies that provide benefits for
expenses incurred for an accidental injury only.]
Important Notice To Persons on Medicare
This Insurance Duplicates Some Medicare Benefits
This is not Medicare Supplement Insurance
This insurance provides limited benefits, if you meet the policy
conditions, for hospital or medical expenses that result from accidental
injury. It does not pay your medicare deductibles or coinsurance and is not a
substitute for medicare supplement insurance.
This insurance duplicates medicare benefits when it pays:
- hospital or medical expenses up to the maximum stated in the policy
Medicare generally pays for most or all of these expenses.
Medicare pays extensive benefits for medically necessary services
regardless of the reason you need them. These include:
- hospitalization
- physician services
- outpatient prescription drugs if you are enrolled in medicare Part D
- other approved items and services
Before You Buy This Insurance
V Check the coverage in all health insurance policies you already
have.
V For more information about medicare and medicare supplement
insurance, review the Guide to Health Insurance for People with Medicare,
available from the insurance company.
V For help in understanding your health insurance, contact your state
insurance department or state health insurance assistance program (SHIP).
[Original disclosure statement for policies that provide benefits for
specified limited services.]
Important Notice To Persons on Medicare
This Insurance Duplicates Some Medicare Benefits
This is not Medicare Supplement Insurance
This insurance provides limited benefits, if you meet the policy
conditions, for expenses relating to the specific services listed in the
policy. It does not pay your medicare deductibles or coinsurance and is not a
substitute for medicare supplement insurance.
This insurance duplicates medicare benefits when:
- any of the services covered by the policy are also covered by medicare
Medicare pays extensive benefits for medically necessary services
regardless of the reason you need them. These include:
- hospitalization
- physician services
- outpatient prescription drugs if you are enrolled in medicare Part D
- other approved items and services
Before You Buy This Insurance
V Check the coverage in all health insurance policies you already
have.
V For more information about medicare and medicare supplement
insurance, review the Guide to Health Insurance for People with Medicare,
available from the insurance company.
V For help in understanding your health insurance, contact your state
insurance department or state health insurance assistance program (SHIP).
[Original disclosure statement for policies that reimburse expenses
incurred for specified diseases or other specified impairments. This includes
expense-incurred cancer, specified disease, and other types of health
insurance policies that limit reimbursement to named medical conditions.]
Important Notice To Persons on Medicare
This Insurance Duplicates Some Medicare Benefits
This is not Medicare Supplement Insurance
This insurance provides limited benefits, if you meet the policy
conditions, for hospital or medical expenses only when you are treated for one
of the specific diseases or health conditions listed in the policy. It does
not pay your medicare deductibles or coinsurance and is not a substitute for
medicare supplement insurance.
This insurance duplicates medicare benefits when it pays:
- hospital or medical expenses up to the maximum stated in the policy
Medicare generally pays for most or all of these expenses.
Medicare pays extensive benefits for medically necessary services
regardless of the reason you need them. These include:
- hospitalization
- physician services
- hospice
- outpatient prescription drugs if you are enrolled in medicare Part D
- other approved items and services
Before You Buy This Insurance
V Check the coverage in all health insurance policies you already
have.
V For more information about medicare and medicare supplement
insurance, review the Guide to Health Insurance for People with Medicare,
available from the insurance company.
V For help in understanding your health insurance, contact your state
insurance department or state health insurance assistance program (SHIP).
[Original disclosure statement for policies that pay fixed dollar amounts
for specified diseases or other specified impairments. This includes cancer,
specified disease, and other health insurance policies that pay a scheduled
benefit or specific payment based on diagnosis of the conditions named in the
policy.]
Important Notice To Persons on Medicare
This Insurance Duplicates Some Medicare Benefits
This is not Medicare Supplement Insurance
This insurance pays a fixed amount, regardless of your expenses, if you
meet the policy conditions, for one of the specific diseases or health
conditions named in the policy. It does not pay your medicare deductibles or
coinsurance and is not a substitute for medicare supplement insurance.
This insurance duplicates medicare benefits because medicare generally
pays for most of the expenses for the diagnosis and treatment of the specific
conditions or diagnoses named in the policy.
Medicare pays extensive benefits for medically necessary services
regardless of the reason you need them. These include:
- hospitalization
- physician services
- hospice
- outpatient prescription drugs if you are enrolled in medicare Part D
- other approved items and services
Before You Buy This Insurance
V Check the coverage in all health insurance policies you already
have.
V For more information about medicare and medicare supplement
insurance, review the Guide to Health Insurance for People with Medicare,
available from the insurance company.
V For help in understanding your health insurance, contact your state
insurance department or state health insurance assistance program (SHIP).
[Original disclosure statement for indemnity policies and other policies
that pay a fixed dollar amount per day, excluding long-term care policies.]
Important Notice To Persons on Medicare
This Insurance Duplicates Some Medicare Benefits
This is not Medicare Supplement Insurance
This insurance pays a fixed dollar amount, regardless of your expenses,
for each day you meet the policy conditions. It does not pay your medicare
deductibles or coinsurance and is not a substitute for medicare supplement
insurance.
This insurance duplicates medicare benefits when:
- any expenses or services covered by the policy are also covered by
medicare
Medicare generally pays for most or all of these expenses.
Medicare pays extensive benefits for medically necessary services
regardless of the reason you need them. These include:
- hospitalization
- physician services
- hospice
- outpatient prescription drugs if you are enrolled in medicare Part D
- other approved items and services
Before You Buy This Insurance
V Check the coverage in all health insurance policies you already
have.
V For more information about medicare and medicare supplement
insurance, review the Guide to Health Insurance for People with Medicare,
available from the insurance company.
V For help in understanding your health insurance, contact your state
insurance department or state health insurance assistance program (SHIP).
[Original disclosure statement for policies that provide benefits upon
both an expense-incurred and fixed indemnity basis.]
Important Notice To Persons on Medicare
This Insurance Duplicates Some Medicare Benefits
This is not Medicare Supplement Insurance
This insurance pays limited reimbursement for expenses if you meet the
conditions listed in the policy. It also pays a fixed amount, regardless of
your expenses, if you meet other policy conditions. It does not pay your
medicare deductibles or coinsurance and is not a substitute for medicare
supplement insurance.
This insurance duplicates medicare benefits when:
- any expenses or services covered by the policy are also covered by
medicare; or
- it pays the fixed dollar amount stated in the policy and medicare
covers the same event
Medicare generally pays for most or all of the expenses.
Medicare pays extensive benefits for medically necessary services
regardless of the reason you need them. These include:
- hospitalization
- physician services
- hospice care
- outpatient prescription drugs if you are enrolled in medicare Part D
- other approved items & services
Before You Buy This Insurance
V Check the coverage in all health insurance policies you already
have.
V For more information about medicare and medicare supplement
insurance, review the Guide to Health Insurance for People with Medicare,
available from the insurance company.
V For help in understanding your health insurance, contact your state
insurance department or state health insurance assistance program (SHIP).
[Original disclosure statement for other health insurance policies not
specifically identified in the preceding statements.]
Important Notice To Persons on Medicare
This Insurance Duplicates Some Medicare Benefits
This is not Medicare Supplement Insurance
This insurance provides limited benefits if you meet the conditions listed
in the policy. It does not pay your medicare deductibles or coinsurance and is
not a substitute for medicare supplement insurance.
This insurance duplicates medicare benefits when it pays:
- the benefits stated in the policy and coverage for the same event is
provided by medicare
Medicare generally pays for most or all of these expenses.
Medicare pays extensive benefits for medically necessary services
regardless of the reason you need them. These include:
- hospitalization
- physician services
- hospice
- outpatient prescription drugs if you are enrolled in medicare Part D
- other approved items and services
Before You Buy This Insurance
V Check the coverage in all health insurance policies you already
have.
V For more information about medicare and medicare supplement
insurance, review the Guide to Health Insurance for People with Medicare,
available from the insurance company.
V For help in understanding your health insurance, contact your state
insurance department or state health insurance assistance program (SHIP).
[Alternative disclosure statement for policies that provide benefits for
expenses incurred for an accidental injury only.]
Important Notice To Persons on Medicare
This is Not Medicare Supplement Insurance
Some health care services paid for by medicare may also trigger the
payment of benefits from this policy.
This insurance provides limited benefits, if you meet the policy
conditions, for hospital or medical expenses that result from accidental
injury. It does not pay your medicare deductibles or coinsurance and is not a
substitute for medicare supplement insurance.
Medicare generally pays for most or all of these expenses.
Medicare pays extensive benefits for medically necessary services
regardless of the reason you need them. These include:
- hospitalization
- physician services
- outpatient prescription drugs if you are enrolled in medicare Part D
- other approved items and services
This policy must pay benefits without regard to other health benefit
coverage to which you may be entitled under medicare or other insurance.
Before You Buy This Insurance
V Check the coverage in all health insurance policies you already
have.
V For more information about medicare and medicare supplement
insurance, review the Guide to Health Insurance for People with Medicare,
available from the insurance company.
V For help in understanding your health insurance, contact your state
insurance department or state health insurance assistance program (SHIP).
[Alternative disclosure statement for policies that provide benefits for
specified limited services.]
Important Notice To Persons on Medicare
This is Not Medicare Supplement Insurance
Some health care services paid for by medicare may also trigger the
payment of benefits under this policy.
This insurance provides limited benefits, if you meet the policy
conditions, for expenses relating to the specific services listed in the
policy. It does not pay your medicare deductibles or coinsurance and is not a
substitute for medicare supplement insurance.
Medicare pays extensive benefits for medically necessary services
regardless of the reason you need them. These include:
- hospitalization
- physician services
- outpatient prescription drugs if you are enrolled in medicare Part D
- other approved items and services
This policy must pay benefits without regard to other health benefit
coverage to which you may be entitled under medicare or other insurance.
Before You Buy This Insurance
V Check the coverage in all health insurance policies you already
have.
V For more information about medicare and medicare supplement
insurance, review the Guide to Health Insurance for People with Medicare,
available from the insurance company.
V For help in understanding your health insurance, contact your state
insurance department or state health insurance assistance program (SHIP).
[Alternative disclosure statement for policies that reimburse expenses
incurred for specified diseases or other specified impairments. This includes
expense-incurred cancer, specified disease, and other types of health
insurance policies that limit reimbursement to named medical conditions.]
Important Notice To Persons on Medicare
This is Not Medicare Supplement Insurance
Some health care services paid for by medicare may also trigger the
payment of benefits from this policy. Medicare generally pays for most or all
of these expenses.
This insurance provides limited benefits, if you meet the policy
conditions, for hospital or medical expenses only when you are treated for one
of the specific diseases or health conditions listed in the policy. It does
not pay your medicare deductibles or coinsurance and is not a substitute for
medicare supplement insurance.
Medicare generally pays for most or all of these expenses.
Medicare pays extensive benefits for medically necessary services
regardless of the reason you need them. These include:
- hospitalization
- physician services
- hospice
- outpatient prescription drugs if you are enrolled in medicare Part D
- other approved items and services
This policy must pay benefits without regard to other health benefit
coverage to which you may be entitled under medicare or other insurance.
Before You Buy This Insurance
V Check the coverage in all health insurance policies you already
have.
V For more information about medicare and medicare supplement
insurance, review the Guide to Health Insurance for People with Medicare,
available from the insurance company.
V For help in understanding your health insurance, contact your state
insurance department or state health insurance assistance program (SHIP).
[Alternative disclosure statement for policies that pay fixed dollar
amounts for specified diseases or other specified impairments. This includes
cancer, specified disease, and other health insurance policies that pay a
scheduled benefit or specific payment based on diagnosis of the conditions
named in the policy.]
Important Notice To Persons on Medicare
This is Not Medicare Supplement Insurance
Some health care services paid for by medicare may also trigger the
payment of benefits from this policy.
This insurance pays a fixed amount, regardless of your expenses, if you
meet the policy conditions, for one of the specific diseases or health
conditions named in the policy. It does not pay your medicare deductibles or
coinsurance and is not a substitute for medicare supplement insurance.
Medicare pays extensive benefits for medically necessary services
regardless of the reason you need them. These include:
- hospitalization
- physician services
- hospice
- outpatient prescription drugs if you are enrolled in medicare Part D
- other approved items and services
This policy must pay benefits without regard to other health benefit
coverage to which you may be entitled under medicare or other insurance.
Before You Buy This Insurance
V Check the coverage in all health insurance policies you already
have.
V For more information about medicare and medicare supplement
insurance, review the Guide to Health Insurance for People with Medicare,
available from the insurance company.
V For help in understanding your health insurance, contact your state
insurance department or state health insurance assistance program (SHIP).
[Alternative disclosure statement for indemnity policies and other
policies that pay a fixed dollar amount per day, excluding long-term care
policies.]
Important Notice To Persons on Medicare
This is Not Medicare Supplement Insurance
Some health care services paid for by medicare may also trigger the
payment of benefits from this policy.
This insurance pays a fixed dollar amount, regardless of your expenses,
for each day you meet the policy conditions. It does not pay your medicare
deductibles or coinsurance and is not a substitute for medicare supplement
insurance.
Medicare generally pays for most or all of these expenses.
Medicare pays extensive benefits for medically necessary services
regardless of the reason you need them. These include:
- hospitalization
- physician services
- hospice
- outpatient prescription drugs if you are enrolled in medicare Part D
- other approved items and services
This policy must pay benefits without regard to other health benefit
coverage to which you may be entitled under medicare or other insurance.
Before You Buy This Insurance
V Check the coverage in all health insurance policies you already
have.
V For more information about medicare and medicare supplement
insurance, review the Guide to Health Insurance for People with Medicare,
available from the insurance company.
V For help in understanding your health insurance, contact your state
insurance department or state health insurance assistance program (SHIP).
[Alternative disclosure statement for policies that provide benefits upon
both an expense-incurred and fixed indemnity basis.]
Important Notice To Persons on Medicare
This is Not Medicare Supplement Insurance
Some health care services paid for by medicare may also trigger the
payment of benefits from this policy.
This insurance pays limited reimbursement for expenses if you meet the
conditions listed in the policy. It also pays a fixed amount, regardless of
your expenses, if you meet other policy conditions. It does not pay your
medicare deductibles or coinsurance and is not a substitute for medicare
supplement insurance.
Medicare generally pays for most or all of these expenses.
Medicare pays extensive benefits for medically necessary services
regardless of the reason you need them. These include:
- hospitalization
- physician services
- hospice
- outpatient prescription drugs if you are enrolled in medicare Part D
- other approved items and services
This policy must pay benefits without regard to other health benefit
coverage to which you may be entitled under medicare or other insurance.
Before You Buy This Insurance
V Check the coverage in all health insurance policies you already
have.
V /bcm For more information about medicare and medicare supplement
insurance, review the Guide to Health Insurance for People with Medicare,
available from the insurance company.
V For help in understanding your health insurance, contact your state
insurance department or state health insurance assistance program (SHIP).
[Alternative disclosure statement for other health insurance policies not
specifically identified in the preceding statements.]
Important Notice To Persons on Medicare
This is Not Medicare Supplement Insurance
Some health care services paid for by medicare may also trigger the
payment of benefits from this policy.
This insurance provides limited benefits if you meet the conditions listed
in the policy. It does not pay your medicare deductibles or coinsurance and is
not a substitute for medicare supplement insurance.
Medicare generally pays for most or all of these expenses.
Medicare pays extensive benefits for medically necessary services
regardless of the reason you need them. These include:
- hospitalization
- physician services
- hospice
- outpatient prescription drugs if you are enrolled in medicare Part D
- other approved items and services
This policy must pay benefits without regard to other health benefit
coverage to which you may be entitled under medicare or other insurance.
Before You Buy This Insurance
V Check the coverage in all health insurance policies you already
have.
V For more information about medicare and medicare supplement
insurance, review the Guide to Health Insurance for People with Medicare,
available from the insurance company.
V For help in understanding your health insurance, contact your state
insurance department or state health insurance assistance program (SHIP).
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 8/8/90, Register 115; am 7/1/92, Register 122; am 6/4/93, Register 126; am 7/12/96, Register 139; am 4/20/97, Register 142; am 4/21/99, Register 150; am 9/4/2005, Register 175
3 AAC 28.503 Filing requirements for advertising
An issuer shall provide a copy of any medicare supplement advertisement intended for use in this state, whether through written, radio, or television medium, for review and approval by the director.
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 8/8/90, Register 115; am 7/1/92, Register 122
3 AAC 28.504 Standards for marketing
(a) An issuer directly or through its producers, shall
(1) establish marketing procedures to ensure that any comparison of policies by its agents or other producers will be fair and accurate;
(2) establish marketing procedures to ensure excessive insurance is not sold or issued;
(3) display prominently by type, stamp, or other appropriate means, on the first page of the policy, the following:
Notice to buyer: This policy might not cover all of your medical expenses;
(4) inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for medicare supplement insurance already has accident and sickness insurance, and the types and amounts of the insurance;
(5) establish auditable procedures for verifying compliance with this subsection.
(b) In addition to the practices prohibited in AS 21.36, the following acts and practices are prohibited:
(1) employing any method of marketing having the effect of or tending to induce the purchase of insurance through force, fright, threat, whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance;
(2) making use, directly or indirectly, of any method of marketing that fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance and that contact will be made by an insurance agent, a broker, or an issuer.
(c) The terms "medicare supplement," "medigap," "medicare wrap-around" and words of similar import may not be used unless the policy is issued in compliance with 3 AAC 28.410 - 3 AAC 28.510.
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 8/8/90, Register 115; am 7/1/92, Register 122
3 AAC 28.505 Appropriateness of recommended purchase and excessive insurance
(a) In recommending the purchase or replacement of a medicare supplement policy or certificate, a licensee shall make reasonable efforts to determine the appropriateness of a recommended purchase or replacement.
(b) A sale of a medicare supplement policy or certificate that will provide an individual with more than one medicare supplement policy or certificate is prohibited.
(c) An issuer may not issue a medicare supplement policy or certificate to an individual enrolled in medicare Part C unless the effective date of the coverage is after the termination date of the individual's Part C coverage.
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 8/8/90, Register 115; am 7/1/92, Register 122; am 4/21/99, Register 150; am 9/4/2005, Register 175
3 AAC 28.506 Reporting of multiple policies
(a) Annually, on or before March 1, every issuer or other entity providing medicare supplement insurance coverage in this state shall report the following information, on the reporting form contained in Appendix A of this section, for every individual resident of this state for which the issuer or other entity has in force more than one medicare supplement insurance policy or certificate:
(1) policy and subscriber control number; and
(2) date of issuance.
(b) The information required by (a) of this section must be grouped by individual policyholder.
APPENDIX A
FORM FOR REPORTING
MEDICARE SUPPLEMENT POLICIES
Company Name: _________ Address: _________ Phone Number _________ Due: March 1, annually
The purpose of this form is to report the following information on each resident of this state who has in force more than one medicare supplement policy or certificate. The information is to be grouped by individual policyholder.Policy and
Certificate #Date of
Issuance _________ _________ _________ _________ _________ _________ _________ _________ _______________ Signature _______________ Name and Title (please type) _______________ Date
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 8/8/90, Register 115; am 7/1/92, Register 122; am 7/12/96, Register 139
3 AAC 28.507 Prohibition against preexisting conditions, waiting periods, elimination periods, and probationary periods in replacement policies or certificates
(a) If a medicare supplement policy or certificate replaces another medicare supplement policy or certificate, the replacing issuer shall waive any time periods applicable to preexisting conditions, waiting periods, elimination periods, and probationary periods in the new medicare supplement policy or certificate for similar benefits to the extent that that time was spent under the original policy.
(b) If a medicare supplement policy or certificate replaces another medicare supplement policy or certificate that has been in effect for at least six months, the replacing policy or certificate must not provide any time period applicable to preexisting conditions, waiting periods, elimination periods, and probationary periods for benefits similar to those contained in the original policy or certificate.
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 8/8/90, Register 115; am 7/1/92, Register 122
3 AAC 28.508 Prohibition against use of genetic information and requests for genetic testing
(a) An issuer may not, based on an individual's genetic information,
(1) deny or condition the issuance or effectiveness of a medicare supplement policy or certificate; or
(2) exclude benefits under a medicare supplement policy or certificate for a preexisting condition.
(b) An issuer may not, based on an individual's genetic information, discriminate in the pricing of a medicare supplement policy or certificate, including the adjustment of premium rates.
(c) Nothing in (a) and (b) of this section limits the ability of an issuer, if permitted by law, to
(1) based on the manifestation of a disease or disorder of an insured or applicant
(A) deny or condition the issuance or effectiveness of a medicare supplement policy or certificate; or
(B) increase of the premium for a group; or
(2) increase the premium for a policy based on the manifestation of a disease or disorder of an individual who is covered under the policy; however, the issuer may not also use the manifestation of a disease or disorder of one individual as genetic information about other group members and to further increase the premium for the group.
(d) Except as provided in (f) of this section, an issuer may not request or require an individual or a family member of an individual to undergo a genetic test.
(e) Nothing in (d) of this section prohibits an issuer from obtaining and using the results of a genetic test in making a determination regarding payment consistent with (a) of this section. An issuer may request only the minimum amount of information necessary in order to make a determination regarding payment.
(f) An issuer may request, but not require, that an individual or a family member of an individual undergo a genetic test if
(1) the request is made according to research that complies with 45 C.F.R. Part 46 and AS 18.13;
(2) the issuer clearly indicates to each individual or, in the case of a minor child, the legal guardian of the child to whom the request is made that
(A) compliance with the request is voluntary; and
(B) noncompliance will have no effect on enrollment status or premium or contribution amounts;
(3) genetic information collected or acquired under this subsection is not used for underwriting, determination of eligibility to enroll or maintain enrollment status, premium rates, or the issuance, renewal, or replacement of a policy or certificate;
(4) the issuer notifies the secretary in writing that the issuer is conducting activities according to the exception provided under this subsection and includes a description of the activities the issuer is conducting; and
(5) the issuer complies with all other federal law applicable to activities conducted under this subsection.
(g) An issuer may not request, require, or purchase genetic information for underwriting purposes.
(h) An issuer may not request, require, or purchase genetic information with respect to an individual before the individual's enrollment under the policy in connection with the enrollment.
(i) If an issuer obtains genetic information incidental to the requesting, requiring, or purchasing of other information concerning any individual, the request, requirement, or purchase will not be considered a violation of (h) of this section if the request, requirement, or purchase is not in violation of (g) of this section.
(j) In this section,
(1) "issuer," in addition to having the meaning given in 3 AAC 28.510, includes a third-party administrator or other person acting for or on behalf of the issuer with respect to a medicare supplement policy or certificate;
(2) "family member" means, with respect to an individual, any other individual who is a first-degree, second-degree, third-degree, or fourth-degree relative of the individual;
(3) "genetic information"
(A) means, with respect to an individual, information about the individual's genetic tests, the genetic tests of family members of the individual, and the manifestation of a disease or disorder in family members of the individual;
(B) includes
(i) with respect to an individual, any request for or receipt of, genetic services, or participation in clinical research that includes genetic services, by the individual or any family member of the individual; and
(ii) with respect to an individual or family member of an individual who is a pregnant woman, genetic information of a fetus carried by the pregnant woman, or with respect to an individual or family member using reproductive technology, genetic information of any embryo legally held by an individual or family member;
(C) does not include information about the sex or age of any individual;
(4) "genetic services" means
(A) a genetic test;
(B) genetic counseling, including obtaining, interpreting, or assessing genetic information; or
(C) genetic education;
(5) "genetic test" means an analysis of human deoxyribonucleic acid (DNA), ribonucleic acid (RNA), chromosomes, proteins, or metabolites that detect genotypes, mutations, or chromosomal changes; "genetic test" does not include
(A) an analysis of proteins or metabolites that does not detect genotypes, mutations, or chromosomal changes; or
(B) an analysis of proteins or metabolites that is directly related to a manifested disease, disorder, or pathological condition that could reasonably be detected by a health care professional with appropriate training and expertise in the field of medicine involved;
(6) "underwriting purposes" means
(A) rules for, or determination of, eligibility, including enrollment and continued eligibility, for benefits under the policy;
(B) the computation of premium or contribution amounts under the policy;
(C) the application of any preexisting condition exclusion under the policy; and
(D) other activities related to the creation, renewal, or replacement of a contract of health insurance or health benefits.
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 6/28/2009, Register 190
3 AAC 28.510 Definitions
For purposes of 3 AAC 28.410 - 3 AAC 28.510,
(1) "applicant" means,
(A) for an individual medicare supplement policy, the person who seeks to contract for insurance benefits; and
(B) for a group medicare supplement policy, the person who seeks to be the certificate holder;
(2) "bankruptcy" means when a medicare+choice organization that is not an issuer has filed, or has had filed against it, a petition for declaration of bankruptcy and has ceased doing business in this state;
(3) "certificate" means a certificate delivered or issued for delivery in this state under a group medicare supplement policy;
(4) "certificate form" means the form on which the certificate is delivered or issued for delivery by the issuer;
(5) "claim reserves" include only those unpaid liabilities for claims that have already been incurred;
(6) "continuous period of creditable coverage" means the period during which an individual was covered by creditable coverage, if the individual had no breaks in coverage greater than 63 days during the period of the coverage;
(7) "creditable coverage" has the meaning given in AS 21.54.500;
(8) "director" means the director of insurance;
(9) "employee welfare benefit plan" means a plan, fund, or program of employee benefits as defined in 29 U.S.C. 1002 (Employee Retirement Income Security Act);
(10) "incurred claims" means paid claims plus the increase in claim reserves; "incurred claims" do not include policy (additional) reserves;
(11) "insolvency" means when an issuer who is licensed to transact the business of insurance in this state has had a final order of liquidation entered against it with a finding of insolvency by a court of competent jurisdiction in the issuer's state of domicile;
(12) "issuer" means an insurance company, fraternal benefit society, health care service plan, health maintenance organization, or other entity delivering or issuing for delivery in this state a medicare supplement policy or certificate;
(13) "medicare" means Title I, Part I of Public Law 89-97, as enacted by the 89th Congress of the United States of America (popularly known as the Health Insurance for the Aged Act);
(14) "medicare advantage plan" means a plan of coverage for health benefits under medicare Part C as defined in 42 U.S.C. 1395w-28; "medicare advantage plan" includes a
(A) coordinated care plan that provides health care services including health maintenance organization plans, with or without a point-of-service option, plans offered by provider-sponsored organizations, and preferred provider organization plans;
(B) medical savings account plan coupled with a contribution into a medicare advantage medical savings account; and
(C) medicare advantage private fee-for-service plan;
(15) "medicare supplement policy" means a group or individual policy of insurance or a subscriber contract, which is advertised, marketed, or designed primarily as a supplement to reimbursement under medicare for the hospital, medical, or surgical expenses of a person eligible for medicare; "medicare supplement policy" does not include
(A) a policy or contract of one or more employers or labor organizations, or of the trustees of a fund established by one or more employers or labor organizations, or any combination of these, for employees or former employees, or any combination of these, of the labor organizations;
(B) a policy or contract of any professional, trade, or occupational association for its members, former or retired members, or any combination of these, if the association
(i) is comprised of individuals all of whom are actively engaged in the same profession, trade, or occupation;
(ii) has been maintained in good faith for purposes other than obtaining insurance; and
(iii) has been in existence for at least two years before the date of the initial offering of this policy, contract, or plan to its members;
(C) a policy issued by a contract under 42 U.S.C. 1395mm (sec. 1876 of the Social Security Act) or an issued policy under a demonstration project specified in 42 U.S.C. 1395ss(g)(1); or
(D) medicare advantage plans established under medicare Part C, outpatient prescription drug plans established under medicare Part D, or any health care prepayment plan that provides benefits under an agreement under 42 U.S.C. 1395l(a)(1)(A);
(16) "policy form" means the form on which a policy is delivered or issued for delivery by an issuer;
(17) "secretary" means the secretary of the United States Department of Health and Human Services;
(18) "pre-standardized medicare supplement benefit plan" or "pre-standardized plan" means a group or individual policy of medicare supplement insurance issued before July 1, 1992;
(19) "1990 standardized medicare supplement benefit plan" or "1990 plan" means a group or individual policy of medicare supplement insurance issued on or after July 1, 1992 and with an effective date of coverage before June 1, 2010 and includes medicare supplement insurance policies and certificates renewed on or after July 1, 1992 that are not replaced by the issuer at the request of the insured;
(20) "2010 standardized medicare supplement benefit plan" or "2010 plan" means a group or individual policy of medicare supplement insurance issued with an effective date of coverage on or after June 1, 2010.
(21) "newly eligible Medicare beneficiary" has the meaning given in 42 U.S.C. 1395ss(z) (section 401 of the Medicare Access and CHIP Reauthorization Act of 2015).
History
- Authority: AS 21.06.090; AS 21.42.130; AS 21.96.060
- Eff. 3/26/82, Register 81; am 8/8/90, Register 115; am 7/1/92, Register 122; am 7/12/96, Register 139; am 4/21/99, Register 150; am 9/4/2005, Register 175; am 9/19/2009, Register 191; am 3/28/2019, Register 229
Article 6 Group Health Insurance
3 AAC 28.520 Political subdivision groups
(a) A political subdivision constitutes a duly formed group for issuance of a group health insurance policy that provides health insurance coverage to the persons that comprise it, if
(1) the eligibility for coverage for a person is based on criteria that reflect the common purpose for which the political subdivision exists and would preclude from coverage a person who may be associated or attempt to be associated with the political subdivision on a nonpermanent basis for the sole purpose of obtaining group health insurance coverage; and
(2) the benefit payments are made directly to the individuals in the group.
(b) In this section, "political subdivision" means the State of Alaska, an organized borough, or a city.
History
- Authority: AS 21.06.090; AS 21.54.060
- Eff. 3/26/82, Register 81; am 4/20/97, Register 142
3 AAC 28.525 Definition
For purposes of AS 21.54.151(d), "cost" means the total health insurance premiums paid for the health care insurance plan by a large employer including any portion of the premiums paid by individuals covered under the large employer's health care insurance plan.
History
- Authority: AS 21.06.090; AS 21.54.151
- Eff. 7/25/2008, Register 187
Article 7 Long-term Care Insurance
3 AAC 28.550 Applicability
(a) Except as otherwise specifically provided, and except for provisions of 3 AAC 28.550 - 3 AAC 28.599 that apply only to qualified long-term care insurance contracts, the provisions of 3 AAC 28.550 - 3 AAC 28.599 apply to all long-term care insurance policies, including qualified long-term care contracts and life insurance policies that accelerate benefits for long-term care delivered or issued for delivery in this state on or after the effective date by
(1) insurers;
(2) fraternal benefit societies;
(3) hospital and medical service corporations;
(4) health maintenance organizations; and
(5) all similar organizations.
(b) The provisions of 3 AAC 28.550 - 3 AAC 28.599 apply to policies having indemnity benefits that are triggered by activities of daily living and sold as disability income insurance, if
(1) the benefits of the disability income policy are dependent upon or vary in amount based on the receipt of long-term care services;
(2) the disability income policy is advertised, marketed, or offered as insurance for long-term care services; or
(3) benefits under the policy may begin after the policyholder has reached Social Security's normal retirement age unless benefits are designed to replace lost income or pay for specific expenses other than long-term care services.
History
- Authority: AS 21.06.090; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.551 Policy definitions
Long-term care insurance policies delivered or issued for delivery in this state may not use the terms set out in this section, unless the terms are defined in the policy and the definitions satisfy the following requirements:
(1) "activities of daily living" means at least bathing, continence, dressing, eating, toileting and transferring;
(2) "acute condition" means that the individual is medically unstable; the individual requires frequent monitoring by medical professionals, including physicians and registered nurses, to maintain the individual's health status;
(3) "adult day care" means a program for six or more individuals, of social and health-related services provided during the day in a community group setting for the purpose of supporting frail, impaired elderly or other disabled adults who can benefit from care in a group setting outside the home;
(4) "bathing" means washing oneself
(A) by sponge bath; or
(B) in either a tub or shower, including the task of getting into or out of the tub or shower;
(5) "cognitive impairment" means a deficiency in a person's short or long-term memory, orientation as to person, place, and time, deductive or abstract reasoning, or judgment as it relates to safety awareness;
(6) "continence" means the ability to maintain control of bowel and bladder function or, when unable to maintain control of bowel or bladder function, the ability to perform associated personal hygiene, including caring for a catheter or colostomy bag;
(7) "dressing" means putting on and taking off all items of clothing and necessary braces, fasteners, or artificial limbs;
(8) "eating" means feeding oneself by getting food into the body from a receptacle, like a plate, cup or table, or by a feeding tube or intravenously;
(9) "hands-on assistance" means physical assistance, whether minimal, moderate or maximal, without which the individual would not be able to perform the activity of daily living;
(10) "home health care services" means medical and nonmedical services, provided to ill, disabled, or infirm persons in their residences; the services may include homemaker services, assistance with activities of daily living, and respite care services;
(11) "Medicare" means "The Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965 as Then Constituted or Later Amended," or "Title I, Part I of Public Law 89-97, as Enacted by the Eighty-Ninth Congress of the United States of America and popularly known as the Health Insurance for the Aged Act, as then constituted and any later amendments or substitutes thereof," or words of similar import;
(12) "mental or nervous disorder" may not be defined to include more than neurosis, psychoneurosis, psychopathy, psychosis, or mental or emotional disease or disorder;
(13) "personal care" means the provision of hands-on services to assist an individual with activities of daily living;
(14) "skilled nursing care" "personal care," "home care," "specialized care," "assisted living care" and other services must be defined in relation to the level of skill required, the nature of the care, and the setting in which care must be delivered;
(15) "toileting" means getting to and from the toilet getting on and off the toilet, and performing associated personal hygiene;
(16) "transferring" means moving into or out of a bed, chair, or wheelchair;
(17) all providers of services, including "skilled nursing facility," "extended care facility," "convalescent nursing home," "personal care facility," "specialized care providers," "assisted living facility," and "home care agency" must be defined in relation to the services and facilities required to be available and the licensure, certification, registration, or degree status of those providing or supervising the services; when the definition requires that the provider be appropriately licensed, certified, or registered, it must also state what requirements a provider must meet instead of licensure, certification, or registration when the state in which the service is to be furnished does not require a provider of these services to be licensed, certified, or registered, or when the state licenses, certifies, or registers the provider of services under another name.
History
- Authority: AS 21.06.090; AS 21.53.050; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.552 Policy practices and provisions
(a) The terms "guaranteed renewable" and "noncancellable" may not be used in an individual long-term care insurance policy without further explanatory language in accordance with the disclosure requirements of 3 AAC 28.555 and subject to the following restrictions:
(1) a policy issued to an individual may not contain renewal provisions other than "guaranteed renewable" or "noncancellable;"
(2) the term "guaranteed renewable" may only be used when the insured has the right to continue the long-term care insurance in force by the timely payment of premiums and when the insurer has no unilateral right to make a change in a provision of the policy or rider while the insurance is in force, and cannot decline to renew, except that rates may be revised by the insurer on a class basis;
(3) the term "noncancellable" may only be used when the insured has the right to continue the long-term care insurance in force by the timely payment of premiums during which period the insurer has no right to unilaterally make a change in a provision of the insurance or in the premium rate;
(4) the term "level premium" may only be used when the insurer does not have the right to change the premium; and
(5) in addition to the other requirements of this subsection, a qualified long-term care insurance contract must be guaranteed renewable, within the meaning of 26 U.S.C. 7702B(b)(l)(C) (Internal Revenue Code).
(b) A policy may not be delivered or issued for delivery in this state as long-term care insurance if the policy limits or excludes coverage by type of illness, treatment, medical condition, or accident, except as follows:
(1) preexisting conditions or diseases;
(2) mental or nervous disorders; however, this may not permit exclusion or limitation of benefits on the basis of Alzheimer's Disease;
(3) alcoholism and drug addiction;
(4) illness, treatment, or medical condition arising out of
(A) war or an act of war, whether declared or undeclared;
(B) participation in a felony, riot, or insurrection;
(C) service in the armed forces or auxiliary units;
(D) suicide, whether sane or insane, attempted suicide, or intentionally self-inflicted injury; or
(E) aviation; this exclusion applies only to non-fare-paying passengers;
(5) treatment provided in a government facility unless otherwise required by law, services for which benefits are available under Medicare or other governmental program except Medicaid, services provided under a state or federal workers' compensation, employer's liability, or occupational disease law, or a motor vehicle no-fault law, services provided by a member of the covered person's immediate family, and services for which no charge is normally made in the absence of insurance;
(6) expenses for services or items available or paid under another long-term care insurance or health insurance policy;
(7) in the case of a qualified long-term care insurance contract, expenses for services or items to the extent that the expenses are reimbursable under Title XVIII of the Social Security Act or would be so reimbursable but for the application of a deductible or coinsurance amount.
(c) Subsection (b) of this section does not prohibit exclusions and limitations by type of provider. However,
(1) a long-term care issuer may not deny a claim because services are provided in a state other than the state of policy issue under the following conditions:
(A) when the state other than the state of policy issue does not have the provider licensing, certification, or registration required in the policy, but where the provider satisfies the policy requirements outlined for providers instead of licensure, certification, or registration; or
(B) when the state other than the state of policy issue licenses, certifies or registers the provider under another name; and
(2) in this subsection, "state of policy issue" means the state in which the individual policy or certificate was originally issued.
(d) Nothing in (b) of this section prohibits territorial limitations.
(e) Termination of long-term care insurance must be without prejudice to the benefits payable for institutionalization if the institutionalization began while the long-term care insurance was in force and continues without interruption after termination. The extension of benefits beyond the period the long-term care insurance was in force may be limited to the duration of the benefit period, or to payment of the maximum benefits and may be subject to a policy waiting period, and all other applicable provisions of the policy.
(f) Continuation or conversion of coverage is subject to the following provisions:
(1) group long-term care insurance issued in this state on or after March 27, 2022 must provide covered individuals with a basis for continuation or conversion of coverage; for the purposes of this section,
(A) "a basis for continuation of coverage" means a policy provision that maintains coverage under the existing group policy when the coverage would otherwise terminate and that is subject only to the continued timely payment of premium when due; group policies that restrict provision of benefits and services to, or contain incentives to use certain providers or facilities may provide continuation benefits that are substantially equivalent to the benefits of the existing group policy; the director will make a determination as to the substantial equivalency of benefits, and in doing so, will take into consideration the differences between managed-care and nonmanaged-care plans, including provider system arrangements, service availability, benefit levels, and administrative complexity;
(B) "a basis for conversion of coverage" means a policy provision that an individual whose coverage under the group policy would otherwise terminate or has been terminated for a reason, including discontinuance of the group policy in its entirety or with respect to an insured class, and who has been continuously insured under the group policy, and a group policy that it replaced, for at least six months immediately before termination, shall be entitled to the issuance of a converted policy by the insurer under whose group policy the individual is covered, without evidence of insurability;
(C) "converted policy" means an individual policy of long-term care insurance providing benefits identical to or benefits determined by the director to be substantially equivalent to or in excess of those provided under the group policy from which conversion is made; if the group policy from which conversion is made restricts provision of benefits and services to, or contains incentives to use certain providers or facilities, the director, in making a determination as to the substantial equivalency of benefits, will take into consideration the differences between managed-care and nonmanaged-care plans, including provider system arrangements, service availability, benefit levels, and administrative complexity;
(D) a "managed-care plan" is a health care or assisted living arrangement designed to coordinate patient care or control costs through utilization review, case management or use of specific provider networks;
(2) written application for the converted policy shall be made and the first premium due, if any, shall be paid as directed by the insurer not later than 31 days after termination of coverage under the group policy; the converted policy shall be issued effective on the day following the termination of coverage under the group policy and shall be renewable annually;
(3) unless the group policy from which conversion is made replaced previous group coverage, the premium for the converted policy shall be calculated on the basis of the insured's age at inception of coverage under the group policy from which conversion is made; if the group policy from which conversion is made replaced previous group coverage, the premium for the converted policy shall be calculated on the basis of the insured's age at inception of coverage under the group policy replaced;
(4) continuation of coverage or issuance of a converted policy shall be mandatory, except if
(A) termination of group coverage was the result of an individual's failure to make a required payment of premium when due; or
(B) the terminating coverage is replaced not later than 31 days after termination, by group coverage effective on the day following the termination of coverage, and
(i) the replacement coverage provides benefits identical to or benefits determined by the director to be substantially equivalent to or in excess of those provided by the terminating coverage; and
(ii) the premium for the replacement coverage is calculated in a manner consistent with the requirements of (3) of this subsection;
(5) notwithstanding other provisions of this section, a converted policy issued to an individual who at the time of conversion is covered by another long-term care insurance policy that provides benefits on the basis of incurred expenses, may contain a provision that results in a reduction of benefits payable if the benefits provided under the additional coverage, together with the full benefits provided by the converted policy, would result in payment of more than 100 percent of incurred expenses; the provision may only be included in the converted policy if the converted policy also provides for a premium decrease or refund that reflects the reduction in benefits payable;
(6) the converted policy may provide that the benefits payable under the converted policy, together with the benefits payable under the group policy from which conversion is made, may not exceed those that would have been payable had the individual's coverage under the group policy remained in force and effect; and
(7) notwithstanding other provisions of this section an insured individual whose eligibility for group long-term coverage is based upon the individual's relationship to another person must be entitled to continuation of coverage under the group policy upon termination of the qualifying relationship by death or dissolution of marriage.
(g) If a group long-term care policy is replaced by another group long-term care policy issued to the same policyholder, the succeeding insurer shall offer coverage to all persons covered under the previous group policy on its date of termination. Coverage provided or offered to individuals by the insurer and premiums charged to persons under the new group policy:
(1) may not result in an exclusion for preexisting conditions that would have been covered under the group policy being replaced; and
(2) may not vary or otherwise depend on the individual's health or disability status, claim experience or use of long-term care services.
(h) The purchase of additional coverage may not be considered a premium rate increase, but for purposes of the calculation required under 3 AAC 28.579, the portion of the premium attributable to the additional coverage shall be added to and considered part of the initial annual premium. A reduction in benefits may not be considered a premium change, but for purpose of the calculation required under 3 AAC 28.579, the initial annual premium shall be based on the reduced benefits. The premium charged to an insured may not increase due to either:
(1) the increasing age of the insured at ages beyond 65; or
(2) the duration the insured has been covered under the policy.
(i) In the case of a group defined under AS 21.53.200(3)(A), a requirement that a signature of an insured be acquired by an agent or insurer is satisfied if
(1) the consent is acquired by telephonic or electronic enrollment by the group policyholder or insurer; a verification of enrollment information shall be provided to the enrollee;
(2) the telephonic or electronic enrollment provides necessary and reasonable safeguards to assure the accuracy, retention and prompt retrieval of records; and
(3) the telephonic or electronic enrollment provides necessary and reasonable safeguards to assure that the confidentiality of personally identifiable information and other confidential information or records is maintained.
(j) The insurer shall make available not later than 10 working days, upon request of the director, records that will demonstrate the insurer's ability to confirm enrollment and coverage amounts.
History
- Authority: AS 21.06.090; AS 21.53.030; AS 21.53.090 AS 21.53.020; AS 21.53.050
- Eff. 3/27/2022, Register 241
3 AAC 28.554 Unintentional lapse
(a) Each insurer offering long-term care insurance shall comply with the following:
(1) an individual long-term care policy or certificate may not be issued until the insurer has received from the applicant either a written designation of at least one person, in addition to the applicant, who is to receive notice of lapse or termination of the policy or certificate for nonpayment of premium, or a written waiver dated and signed by the applicant electing not to designate additional persons to receive notice; the applicant has the right to designate at least one person who is to receive the notice of termination, in addition to the insured; designation may not constitute acceptance of liability on the third party for services provided to the insured; the form used for the written designation must provide space clearly designated for listing at least one person; the designation must include each person's full name and home address; in the case of an applicant who elects not to designate an additional person, the waiver must state: "Protection against unintended lapse. I understand that I have the right to designate at least one person other than myself to receive notice of lapse or termination of this long-term care insurance policy for nonpayment of premium. I understand that notice will not be given until 30 days after a premium is due and unpaid. I elect NOT to designate a person to receive this notice."; the insurer shall notify the insured of the right to change this written designation, no less often than once every two years;
(2) when the policyholder or certificate holder pays premium for a long-term care insurance policy or certificate through a payroll or pension deduction plan, the requirements contained in (1) of this subsection need not be met until 60 days after the policyholder or certificate holder is no longer on a payment plan; the application or enrollment form for the policies or certificates must clearly indicate the payment plan selected by the applicant;
(3) an individual long-term care policy or certificate may not lapse or be terminated for nonpayment of premium unless the insurer, at least 45 days before the effective date of the lapse or termination, has given notice to the insured and to those persons designated under (1) of this subsection, at the address provided by the insured for purposes of receiving notice of lapse or termination; notice shall be given by first class United States mail, postage prepaid, and notice may not be given until 45 days after a premium is due and unpaid; notice shall be considered to have been given as of five days after the date of mailing.
(b) In addition to the requirements in (a) of this section, a long-term care insurance policy or certificate must include a provision that provides for reinstatement of coverage if a lapse occurs and the insurer is provided proof that the policyholder or certificate holder was cognitively impaired or had a loss of functional capacity before the grace period contained in the policy expired. This option must be available to the insured if requested within five months after termination and must allow for the collection of past due premium, where appropriate. The standard of proof of cognitive impairment or loss of functional capacity may not be more stringent than the benefit eligibility criteria on cognitive impairment or the loss of functional capacity contained in the policy and certificate.
History
- Authority: AS 21.06.090; AS 21.53.030; AS 21.53.090 AS 21.53.020; AS 21.53.050
- Eff. 3/27/2022, Register 241
3 AAC 28.555 Required disclosure provisions
(a) Individual long-term care insurance policies must contain a renewability provision that
(1) is appropriately captioned, appears on the first page of the policy, and clearly states that the coverage is guaranteed renewable or noncancellable; this provision may not apply to policies that do not contain a renewability provision, and under which the right to nonrenew is reserved solely to the policyholder; and
(2) includes a statement that premium rates may change for a long-term care insurance policy or certificate, other than one where the insurer does not have the right to change the premium.
(b) Except for riders or endorsements by which the insurer effectuates a request made in writing by the insured under an individual long-term care insurance policy, all riders or endorsements added to an individual long-term care insurance policy after the date of issue or at reinstatement or renewal that reduce or eliminate benefits or coverage in the policy shall require signed acceptance by the individual insured. After the date of policy issue, a rider or endorsement that increases benefits or coverage with a concomitant increase in premium during the policy term must be agreed to in writing signed by the insured, except if the increased benefits or coverage are required by law. Where a separate additional premium is charged for benefits provided in connection with riders or endorsements, the premium charge shall be set out in the policy, rider, or endorsement.
(c) A long-term care insurance policy that provides for the payment of benefits based on standards described as "usual and customary," "reasonable and customary," or words of similar import must include a definition of these terms and an explanation of the terms in its accompanying outline of coverage.
(d) If a long-term care insurance policy or certificate contains limitations with respect to preexisting conditions, the limitations must appear as a separate paragraph of the policy or certificate and must be labeled as "Preexisting Condition Limitations."
(e) A long-term care insurance policy or certificate containing limitations or conditions for eligibility other than those prohibited in AS 21.53.040(a)(3) must set out a description of the limitations or conditions, including required number of days of confinement, in a separate paragraph of the policy or certificate and must label the paragraph "Limitations or Conditions on Eligibility for Benefits."
(f) With regard to life insurance policies that provide an accelerated benefit for long-term care, a disclosure statement is required at the time of application for the policy or rider and at the time the accelerated benefit payment request is submitted that receipt of these accelerated benefits may be taxable, and that assistance should be sought from a personal tax advisor. The disclosure statement shall be prominently displayed on the first page of the policy or rider and other related documents. This subsection does not apply to qualified long-term care insurance contracts.
(g) Activities of daily living and cognitive impairment shall be used to measure an insured's need for long-term care and shall be described in the policy or certificate in a separate paragraph and shall be labeled "Eligibility for the Payment of Benefits." Additional benefit triggers shall also be explained in this section. If these additional benefit triggers differ for different benefits, explanation of the trigger shall accompany each benefit description. If an attending physician or other specified person must certify a certain level of functional dependency to be eligible for benefits, this requirement shall be specified.
(h) A qualified long-term care insurance contract must include a disclosure statement in the policy and in the outline of coverage under 3 AAC 28.588(5) that the policy is intended to be a qualified long-term care insurance contract under 26 U.S.C. 7702B(b) (Internal Revenue Code).
(i) A nonqualified long-term care insurance contract must include a disclosure statement in the policy and in the outline of coverage under 3 AAC 28.588(5) that the policy is not intended to be a qualified long-term care insurance contract.
History
- Authority: AS 21.06.090; AS 21.53.030; AS 21.53.050 AS 21.53.020; AS 21.53.040; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.556 Required disclosure of rating practices to consumers
(a) This section applies as follows:
(1) except as provided in (2) of this subsection, this section applies to a long-term care policy or certificate issued in this state on or after January 1, 2023;
(2) for certificates issued on or after March 27, 2022, under a group long-term care insurance policy as defined in AS 21.53.200(3)(A), which policy was in force on or after March 23, 2022, the provisions of this section apply on the policy anniversary following January 1, 2023.
(b) Except for policies for which no applicable premium rate or rate schedule increases can be made, insurers shall provide all of the information listed in this subsection to the applicant at the time of application or enrollment, unless the method of application does not allow for delivery at that time. In that case, an insurer shall provide to the applicant, no later than at the time of delivery of the policy or certificate, all of the following information:
(1) a statement that the policy may be subject to rate increases in the future;
(2) an explanation of potential future premium rate revisions, and the policyholder's or certificate holder's options if a premium rate revision occurs;
(3) the premium rate or rate schedules applicable to the applicant that will be in effect until a request is made for an increase;
(4) a general explanation for applying premium rate or rate schedule adjustments that must include
(A) a description of when premium rate or rate schedule adjustments will be effective, for example the next anniversary date or next billing date; and
(B) the right to a revised premium rate or rate schedule as provided in (3) of this subsection if the premium rate or rate schedule is changed;
(5) information regarding each premium rate increase on this policy form, or similar policy forms, over the past 10 years for this state or another state that:
(A) at a minimum, identifies:
(i) the policy forms for which premium rates have been increased;
(ii) the calendar years when the form was available for purchase; and
(iii) the amount or percent of each increase; the percentage may be expressed as a percentage of the premium rate before the increase, and may also be expressed as minimum and maximum percentages if the rate increase is variable by rating characteristics; and
(B) may provide additional explanatory information related to the rate increases.
(c) An insurer has the right to exclude from the disclosure, any premium rate increases that only apply to blocks of business acquired from other nonaffiliated insurers or the long-term care policies acquired from other nonaffiliated insurers when those increases occurred before the acquisition.
(d) If an acquiring insurer files for a rate increase on a long-term care policy form acquired from nonaffiliated insurers or a block of policy forms acquired from nonaffiliated insurers on or before the later of March 27, 2022 or the end of a 24-month period following the acquisition of the block or policies, the acquiring insurer may exclude that rate increase from the disclosure. However, the nonaffiliated selling company shall include the disclosure of that rate increase in accordance with (b)(5)(A) of this section.
(e) If the acquiring insurer in (d) of this section files for a subsequent rate increase, even within the 24-month period, on the same policy form acquired from nonaffiliated insurers or block of policy forms acquired from nonaffiliated insurers referenced in (d) of this section, the acquiring insurer shall make all disclosures required by (b)(5) of this section, including disclosure of the earlier rate increase referenced in (d) of this section.
(f) An applicant shall sign an acknowledgement at the time of application that the insurer made the disclosure required under (b)(1) and (5) of this section, unless the method of application does not allow for signature at that time. If due to the method of application, the applicant cannot sign an acknowledgement at the time of application, the applicant shall sign not later than at the time of delivery of the policy or certificate.
(g) An insurer shall use the forms prescribed by the director to comply with the requirements of (b) - (f) of this section.
(h) An insurer shall provide notice of an upcoming premium rate schedule increase to all policyholders or certificate holders at least 45 days before the implementation of the premium rate schedule increase by the insurer. The notice shall include the information required by (b) - (e) of this section when the rate increase is implemented.
History
- Authority: AS 21.06.090; AS 21.53.030; AS 21.53.090 AS 21.53.020; AS 21.53.050; AS 21.53.200
- Eff. 3/27/2022, Register 241
3 AAC 28.557 Initial filing requirements
(a) This section applies to a long-term care policy issued in this state on or after January 1, 2023.
(b) An insurer shall provide to the director 45 days before making a long-term care insurance form available for sale the following information:
(1) a copy of the disclosure documents required in 3 AAC 28.556;
(2) an actuarial certification consisting of at least the following:
(A) a statement that the initial premium rate schedule is sufficient to cover anticipated costs under moderately adverse experience and that the premium rate schedule is reasonably expected to be sustainable over the life of the form with no future premium increases anticipated;
(B) a statement that the policy design and coverage provided have been reviewed and taken into consideration;
(C) a statement that the underwriting and claims adjudication processes have been reviewed and taken into consideration;
(D) a statement, as follows, that the premiums include at least the minimum margin set out in (i) of this subparagraph or the specification of and justification for a lower margin as required by (ii) of this subparagraph:
(i) a composite margin for moderately adverse experience may not be less than 10 percent of lifetime claims;
(ii) a composite margin for moderately adverse experience that is less than 10 percent may be justified in uncommon circumstances; the proposed amount, full justification of the proposed amount and methods to monitor developing experience that would be the basis for withdrawal of approval for the lower margins must be submitted;
(iii) a composite margin for moderately adverse experience lower than otherwise considered appropriate for the standalone long-term care policy may be justified for long-term care benefits provided through a life policy or an annuity contract; the lower composite margin, if utilized, shall be justified by appropriate actuarial demonstration addressing margins and volatility when considering the entirety of the product;
(iv) a greater margin may be appropriate in circumstances where the company has less credible experience to support its assumptions used to determine the premium rates;
(v) for purposes of this subparagraph, a composite margin is the total of all margins reflected in actuarial assumptions, such as morbidity, mortality, lapse, underwriting selection wear-off, and over best estimate assumptions.
(E) a statement that the premium rate schedule is not less than the premium rate schedule for existing similar policy forms also available from the insurer except for reasonable differences attributable to benefits; or a comparison of the premium schedules for similar policy forms that are currently available from the insurer with an explanation of the differences;
(F) a statement that reserve requirements have been reviewed and considered; support for this statement shall include
(i) sufficient detail or sample calculations provided so as to have a complete depiction of the reserve amounts to be held; and
(ii) a statement that the difference between the gross premium and the net valuation premium for renewal years is sufficient to cover expected renewal expenses; or if a statement cannot be made, a complete description of the situations where this does not occur; an aggregate distribution of anticipated issues may be used as long as the underlying gross premiums maintain a reasonably consistent relationship; and
(3) an actuarial memorandum prepared dated and signed by a member of the Academy of Actuaries; the memorandum shall address and support each specific item required as part of the actuarial certification and provide at least the following information:
(A) an explanation of the review performed by the actuary before making the statements in (2)(B) and (C) of this subsection;
(B) a complete description of pricing assumptions;
(C) sources and levels of margins incorporated into the gross premiums that are the basis for the statement in (2)(A) of this subsection of the actuarial certification and an explanation of the analysis and testing performed in determining the sufficiency of the margins; deviations in margins between ages, sexes, plans, or states shall be clearly described; deviations in margins required to be described are other than those produced utilizing generally accepted actuarial methods for smoothing and interpolating gross premium scales; and
(D) a demonstration that the gross premiums include the minimum composite margin specified in (2)(D) of this subsection.
(c) In a review of the actuarial certification and actuarial memorandum, the director may request review by an actuary with experience in long-term care pricing who is independent of the company. If the director asks for additional information as a result of a review, the period in (b) of this section does not include the period during which the insurer is preparing the requested information.
History
- Authority: AS 21.06.090; AS 21.53.030; AS 21.53.090 AS 21.53.020; AS 21.53.050
- Eff. 3/27/2022, Register 241
3 AAC 28.558 Prohibition against post-claims underwriting
(a) All applications for long-term care insurance policies or certificates, except those that are guaranteed issue, must contain clear and unambiguous questions designed to ascertain the health condition of the applicant.
(b) If an application for long-term care insurance contains a question that asks whether the applicant has had medication prescribed by a physician, it must also ask the applicant to list the medication that has been prescribed. If the medications listed in the application were known by the insurer, or should have been known at the time of application, to be directly related to a medical condition for which coverage would otherwise be denied, then the policy or certificate may not be rescinded for that condition.
(c) Except for policies or certificates that are guaranteed issue,
(1) the following language must be set out conspicuously and in close conjunction with the applicant's signature block on an application for a long-term care insurance policy or certificate:
Caution: If your answers on this application are incorrect or untrue, [company] has the right to deny benefits or rescind your policy. ;
(2) the following language, or language substantially similar to the following, must be set out conspicuously on the long-term care insurance policy or certificate at the time of delivery:
Caution: The issuance of this long-term care insurance [policy] [certificate] is based upon your responses to the questions on your application. A copy of your [application] [enrollment form] [is enclosed] [was retained by you when you applied]. If your answers are incorrect or untrue, the company has the right to deny benefits or rescind your policy. The best time to clear up any questions is now, before a claim arises! If, for any reason, any of your answers are incorrect, contact the company at this address: [insert address] ; and
(3) before issuance of a long-term care policy or certificate to an applicant 80 years of age or older, the insurer shall get one of the following:
(A) a report of a physical examination;
(B) an assessment of functional capacity;
(C) an attending physician's statement; or
(D) copies of medical records.
(d) The completed application or enrollment form, whichever is applicable, is part of the policy and shall be delivered to the insured with the policy or certificate unless it was retained by the applicant at the time of application.
(e) Every insurer or other entity selling or issuing long-term care insurance benefits shall maintain a record of all policy or certificate rescissions, both state and nationwide, except those that the insured voluntarily effectuated and shall annually furnish this information to the director in the format prescribed by the director.
History
- Authority: AS 21.06.090; AS 21.53.030; AS 21.53.090 AS 21.53.020; AS 21.53.050
- Eff. 3/27/2022, Register 241
3 AAC 28.559 Minimum standards for home health and community care benefits in long-term care insurance policies
(a) If it provides benefits for home health care or community care services, a long-term care insurance policy or certificate may not limit or exclude benefits:
(1) by requiring that the insured or claimant would need care in a skilled nursing facility if home health care services were not provided;
(2) by requiring that the insured or claimant first or simultaneously receive nursing or therapeutic services, or both, in a home, community or institutional setting before home health care services are covered;
(3) by limiting eligible services to services provided by registered nurses or licensed practical nurses;
(4) by requiring that a nurse or therapist provide services covered by the policy that can be provided by a home health aide or other home care worker;
(5) by excluding coverage for personal care services provided by a home health aide;
(6) by requiring that the provision of home health care services be at a level of certification or licensure greater than that required by the eligible service;
(7) by requiring that the insured or claimant have an acute condition before home health care services are covered;
(8) by limiting benefits to services provided by Medicare-certified agencies or providers; or
(9) by excluding coverage for adult day care services.
(b) If it provides for home health or community care services, a long-term care insurance policy or certificate must provide total home health or community care coverage that is a dollar amount equivalent to at least one-half of one year's coverage available for nursing home benefits under the policy or certificate, at the time covered home health or community care services are being received. This requirement may not apply to policies or certificates issued to residents of continuing care retirement communities.
(c) Home health care coverage may be applied to the non-home health care benefits provided in the policy or certificate when determining maximum coverage under the terms of the policy or certificate.
History
- Authority: AS 21.06.090; AS 21.53.030; AS 21.53.090 AS 21.53.020; AS 21.53.050
- Eff. 3/27/2022, Register 241
3 AAC 28.560 Requirement to offer inflation protection
(a) An insurer may not offer a long-term care insurance policy unless the insurer also offers the policyholder, in addition to other inflation protection, the option to purchase a policy that provides for benefit levels to increase with benefit maximums or reasonable durations that are meaningful to account for reasonably anticipated increases in the costs of long-term care services covered by the policy. Insurers shall offer to each policyholder, at the time of purchase, the option to purchase a policy with an inflation protection feature no less favorable than one of the following:
(1) increases benefit levels annually in a manner so that the increases are compounded annually at a rate not less than five percent;
(2) guarantees the insured individual the right to periodically increase benefit levels without providing evidence of insurability or health status if the option for the previous period has not been declined; the amount of the additional benefit must be no less than the difference between the existing policy benefit and that benefit compounded annually at a rate of at least five percent for the period beginning with the purchase of the existing benefit and extending until the year in which the offer is made; or
(3) covers a specified percentage of actual or reasonable charges and does not include a maximum specified indemnity amount or limit.
(b) If the policy is issued to a group, the required offer in (a) of this section shall be made to the group policyholder. However, if the policy is issued to a group defined in AS 21.53.200(3)(D) other than to a continuing care retirement community, the offering shall be made to each proposed certificate holder.
(c) The offer in (a) of this section may not be required of life insurance policies or riders containing accelerated long-term care benefits.
(d) An insurer shall include, using a reasonable hypothetical or a graphic demonstration at the insurer's option, the following information in or with the outline of coverage:
(1) a graphic comparison of the benefit levels of a policy that increases benefits over the policy period with a policy that does not increase benefits; the graphic comparison must show benefit levels over at least a 20-year period;
(2) an expected premium increase or additional premiums to pay for automatic or optional benefit increases.
(e) An inflation protection benefit that increases under a policy that contains these benefits must continue without regard to an insured's age, claim status, or claim history, or the length of time the person has been insured under the policy.
(f) An offer of inflation protection that provides for automatic benefit increases must include an offer of a premium that the insurer expects to remain constant. The offer must disclose in a conspicuous manner that the premium may change in the future unless the premium is guaranteed to remain constant.
History
- Authority: AS 21.06.090; AS 21.53.030; AS 21.53.090 AS 21.53.020; AS 21.53.050; AS 21.53.200
- Eff. 3/27/2022, Register 241
3 AAC 28.562 Requirements for application forms and replacement coverage
(a) An application form must include the questions prescribed by the director designed to elicit information as to whether, as of the date of the application, the applicant has another long-term care insurance policy or certificate in force or whether a long-term care policy or certificate is intended to replace another accident-and-sickness or long-term care policy or certificate presently in force. A supplementary application or other form to be signed by the applicant and agent, except where the coverage is sold without an agent, containing the questions may be used. With regard to a replacement policy issued to a group defined by AS 21.53.200(3)(A), the questions may be modified only to the extent necessary to elicit information about health or long-term care insurance policies other than the group policy being replaced, if the certificate holder has been notified of the replacement.
(b) An agent shall list other health insurance policies that the agent has sold to the applicant, including
(1) policies sold that are still in force; and
(2) policies sold in the past five years that are no longer in force.
(c) Upon determining that a sale will involve replacement, an insurer, other than an insurer using direct response solicitation methods, or its agent, shall furnish the applicant, before issuance or delivery of the individual long-term care insurance policy, a notice regarding replacement of accident-and-sickness or long-term care coverage. One copy of the notice shall be retained by the applicant and an additional copy signed by the applicant shall be retained by the insurer. The required notice shall be provided in the manner prescribed by the director.
(d) Insurers using direct response solicitation methods shall deliver a notice regarding replacement of accident-and-sickness or long-term care coverage to the applicant upon issuance of the policy. The required notice shall be provided in the manner prescribed by the director.
(e) If replacement is intended, the replacing insurer may notify, in writing, the existing insurer of the proposed replacement. The existing policy shall be identified by the insurer, name of the insured, and policy number or address including zip code. Notice shall be made not later than five working days from the date the application is received by the insurer or the date the policy is issued, whichever is sooner.
(f) A life insurance policy that accelerates benefits for long-term care must comply with this section if the policy being replaced is a long-term care insurance policy. If the policy being replaced is a life insurance policy, the insurer shall comply with the replacement requirements of 3 AAC 26.790 - 3 AAC 26.819. If a life insurance policy that accelerates benefits for long-term care is replaced by another policy, the replacing insurer shall comply with both the long-term care and the life insurance replacement requirements.
History
- Authority: AS 21.06.090; AS 21.53.030; AS 21.53.090 AS 21.53.020; AS 21.53.050; AS 21.53.200
- Eff. 3/27/2022, Register 241
3 AAC 28.563 Reporting requirements
(a) Every insurer shall maintain records for each agent of that agent's amount of replacement sales as a percent of the agent's total annual sales and the amount of lapses of long-term care insurance policies sold by the agent as a percent of the agent's total annual sales. Reported replacement and lapse rates do not alone constitute a violation of insurance laws or necessarily imply wrongdoing. The reports are for the purpose of reviewing more closely agent activities regarding the sale of long-term care insurance.
(b) Every insurer shall report annually not later than June 30, the 10 percent of its agents with the greatest percentages of lapses and replacements as measured by (a) of this section.
(c) Every insurer shall report annually not later than June 30, the number of lapsed policies as a percent of its total annual sales and as a percent of its total number of policies in force as of the end of the preceding calendar year.
(d) Every insurer shall report annually not later than June 30, the number of replacement policies sold as a percent of its total annual sales and as a percent of its total number of policies in force as of the preceding calendar year.
(e) Every insurer shall report annually not later than June 30, for qualified long-term care insurance contracts, the number of claims denied for each class of business, expressed as a percentage of claims denied.
(f) Reports required under this section shall be filed with the director.
(g) For purposes of this section,
(1) "policy" means only long-term care insurance;
(2) subject to (3) of this subsection, "claim" means a request for payment of benefits under an in force policy regardless of whether the benefit claimed is covered under the policy or the terms or conditions of the policy have been met;
(3) "denied" means the insurer refuses to pay a claim for a reason other than for claims not paid for failure to meet the waiting period or because of an applicable preexisting condition; and
(4) "report" means on a statewide basis.
History
- Authority: AS 21.06.090; AS 21.53.030; AS 21.53.090 AS 21.53.020; AS 21.53.050
- Eff. 3/27/2022, Register 241
3 AAC 28.564 Annual rate certification requirements
(a) This section applies to a long-term care policy issued in this state on or after January 1, 2023. The following annual submission requirements apply after the initial rate filings for individual long-term care insurance policies.
(b) An actuarial certification prepared, dated, and signed by a member of the American Academy of Actuaries who provides the information shall be included and shall provide at least the following information:
(1) a statement of the sufficiency of the current premium rate schedule including:
(A) for the rate schedules currently marketed,
(i) a statement that the premium rate schedule continues to be sufficient to cover anticipated costs under moderately adverse experience and that the premium rate schedule is reasonably expected to be sustainable over the life of the form with no future premium increases anticipated; or
(ii) if the statement in (i) of this subparagraph cannot be made, a statement that margins for moderately adverse experience may no longer be sufficient; in this situation, the insurer shall provide to the director, not later than 60 days after the date the actuarial certification is submitted to the director, a plan of action, including a time frame, for the re-establishment of adequate margins for moderately adverse experience so that the ultimate premium rate schedule would be reasonably expected to be sustainable over the future life of the form with no future premium increases anticipated; failure to submit a plan of action to the director not later than 60 days after the actuarial certification is submitted to the director, or to comply with the time frame stated in the plan of action constitutes grounds for the director to withdraw or modify the director's approval of the form for future sales under AS 21.42.120 and 21.42.130;
(B) for the rate schedules that are no longer marketed, a statement
(i) that the premium rate schedule continues to be sufficient to cover anticipated costs under best estimate assumptions; or
(ii) that the premium rate schedule may no longer be sufficient; in this situation, the insurer shall provide to the director, not later than 60 days of the date the actuarial certification is submitted to the director, a plan of action, including a time frame, for the re-establishment of adequate margins for moderately adverse experience; and
(2) a description of the review performed that led to the statement.
(c) An actuarial memorandum dated and signed by a member of the American Academy of Actuaries who prepares the information shall be prepared to support the actuarial certification and provide at least the following information:
(1) a detailed explanation of the data sources and review performed by the actuary before making the statement in (b) of this section;
(2) a complete description of experience assumptions and their relationship to the initial pricing assumptions;
(3) a description of the credibility of the experience data; and
(4) an explanation of the analysis and testing performed in determining the current presence of margins.
(d) The actuarial certification required under (b) of this section must be based on calendar year data and submitted to the director annually not later than May 1 of each year starting in the second year following the year in which the initial rate schedules are first used. The actuarial memorandum required under (c) of this section must be submitted at least once every three years with the certification.
History
- Authority: AS 21.06.090; AS 21.53.020; AS 21.53.090 AS 21.42.120; AS 21.53.030 AS 21.42.130; AS 21.53.050
- Eff. 3/27/2022, Register 241
3 AAC 28.565 Licensing
A producer is not authorized to sell, solicit, or negotiate with respect to long-term care insurance except as authorized by AS 21.27.
History
- Authority: AS 21.06.090; AS 21.53.020; AS 21.53.050 AS 21.27.010; AS 21.53.030; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.566 Discretionary powers of the director
The director may, upon written request and after an administrative hearing, issue an order to modify or suspend one or more specific provisions of 3 AAC 28.550 - 3 AAC 28.599 with respect to a specific long-term care insurance policy or certificate upon a written finding that
(1) the modification or suspension would be in the best interest of the insureds;
(2) the purposes to be achieved could not be effectively or efficiently achieved without the modification or suspension; and
(3) the modification or suspension
(A) is necessary to the development of an innovative and reasonable approach for insuring long-term care;
(B) is reasonably related to the special needs or nature of the community when the policy or certificate is to be issued to residents of a life care or continuing care retirement community or some other residential community for the elderly; or
(C) is necessary to permit long-term care insurance to be sold as part of, or in conjunction with, another insurance product.
History
- Authority: AS 21.06.090; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.568 Reserve standards
(a) When long-term care benefits are provided through the acceleration of benefits under group or individual life policies or riders to the policies, policy reserves for the benefits shall be determined in accordance with AS 21.45.300. Claim reserves shall also be established in the case when the policy or rider is in claim status. Reserves for policies and riders subject to this subsection shall be based on the multiple decrement model utilizing all relevant decrements, except for voluntary termination rates. However, single decrement approximations are acceptable if the calculation produces essentially similar reserves, if the reserve is clearly more conservative, or if the reserve is immaterial. The calculations may take into account the reduction in life insurance benefits due to the payment of long-term care benefits. However, the reserves for the long-term care benefit and the life insurance benefit may not be less than the reserves for the life insurance benefit assuming no long-term care benefit.
(b) In the development and calculation of reserves for policies and riders subject to (a) of this section, consideration shall be given to the applicable policy provisions, marketing methods, administrative procedures, and all other considerations that have an effect on projected claim costs, including the following:
(1) the definition of insured events;
(2) covered long-term care facilities;
(3) the existence of home convalescence care coverage;
(4) the definition of facilities;
(5) the existence or absence of barriers to eligibility;
(6) a premium waiver provision;
(7) renewability;
(8) the ability to raise premiums;
(9) marketing method;
(10) underwriting procedures;
(11) claims adjustment procedures;
(12) a waiting period;
(13) the maximum benefit;
(14) availability of eligible facilities;
(15) margins in claim costs;
(16) any optional nature of benefit;
(17) any delay in eligibility for benefit;
(18) inflation protection provisions; and
(19) any guaranteed insurability option.
(c) Any applicable valuation morbidity table, used in the calculation of reserves in accordance with this section, shall be certified as appropriate as a statutory valuation table by a member of the American Academy of Actuaries.
(d) When long-term care benefits are provided other than as in (a) - (c) of this section, reserves shall be determined in accordance with AS 21.18.080 - 21.18.086.
History
- Authority: AS 21.06.090; AS 21.18.082; AS 21.18.086 AS 21.18.080; AS 21.18.084; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.569 Loss ratio
(a) This section applies to all long-term care insurance policies or certificates except those covered under 3 AAC 28.557 and 3 AAC 28.570.
(b) Benefits under long-term care insurance policies shall be considered reasonable in relation to premiums if the expected loss ratio is at least 60 percent, calculated in a manner that provides for adequate reserving of the long-term care insurance risk. In evaluating the expected loss ration, consideration shall be given to all relevant factors, including
(1) statistical credibility of incurred claims experience and earned premiums;
(2) the period for which rates are computed to provide coverage;
(3) experienced and projected trends;
(4) concentration of experience within early policy duration;
(5) expected claim fluctuation;
(6) experience refunds, adjustments, or dividends;
(7) renewability features;
(8) all appropriate expense factors;
(9) interest;
(10) experimental nature of the coverage;
(11) policy reserves;
(12) mix of business by risk classification; and
(13) product features including long elimination periods, high deductibles, and high maximum limits.
(c) Subsection (b) of this section does not apply to life insurance policies that accelerate benefits for long-term care. A life insurance policy that funds long-term care benefits entirely by accelerating the death benefit is considered to provide reasonable benefits in relation to premiums paid, if the policy complies with all of the following provisions:
(1) the interest credited internally to determine cash value accumulations, including long-term care, is guaranteed not to be less than the minimum guaranteed interest rate for cash value accumulations without long-term care set out in the policy;
(2) the portion of the policy that provides life insurance benefits meets the nonforfeiture requirements of AS 21.45.300;
(3) the policy meets the disclosure requirements of AS 21.53.060;
(4) the policy illustration meets the applicable requirements of 3 AAC 28.800 - 3 AAC 28.849; and
(5) an actuarial memorandum is filed with the division that includes
(A) a description of the basis on which the long-term care rates were determined;
(B) a description of the basis for the reserves;
(C) a summary of the type of policy, benefits, renewability, general marketing method, and limits on ages of issuance;
(D) a description and a table of each actuarial assumption used; for expenses, an insurer must include percent of premium dollars for each policy and dollars for each unit of benefits;
(E) a description and a table of the anticipated policy reserves and additional reserves to be held in each future year for active lives;
(F) the estimated average annual premium for each policy and the average issue age;
(G) a statement as to whether underwriting is performed at the time of application; the statement must indicate whether underwriting is used and, if used, the statement must include a description of the type or types of underwriting used, like medical underwriting or functional assessment underwriting; with regard to a group policy, the statement must indicate whether the enrollee or a dependent will be underwritten and when underwriting occurs; and
(H) a description of the effect of the long-term care policy provision on the required premiums, nonforfeiture values, and reserves on the underlying life insurance policy, both for active lives and those in long-term care claim status.
History
- Authority: AS 21.06.090; AS 21.53.060 AS 21.45.300; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.570 Premium rate schedule increases for policies subject to loss ratio limits related to original filings
(a) This section applies as follows:
(1) except as provided in (2) of this subsection, this section applies to a long-term care policy or certificate issued in this state on or after January 1, 2023; and
(2) for certificates issued on or after March 27, 2022, under a group long-term care insurance policy as defined in AS 21.53.200(3)(A), which policy was in force on or after March 27, 2022, the provisions of this section shall apply on the policy anniversary following January 1, 2023.
(b) An insurer shall provide notice of a pending premium rate schedule increase, including an exceptional increase, to the director at least 45 days before the notice to the policyholders and shall include
(1) information required by 3 AAC 28.556;
(2) certification by a qualified actuary that
(A) if the requested premium rate schedule increase is implemented and the underlying assumptions, that reflect moderately adverse conditions, are realized, no further premium rate schedule increases are anticipated;
(B) the premium rate filing is in compliance with the provisions of this section; and
(C) the insurer may request a premium rate schedule increase less than what is required under this section and the director may approve a premium rate schedule increase, without submission of the certification in (A) of this paragraph, if the actuarial memorandum discloses the premium rate schedule increase necessary to make the certification required under (A) of this paragraph, the premium rate schedule increase filing satisfies all other requirements of this section, and is, in the opinion of the director, in the best interest of policyholders;
(3) an actuarial memorandum justifying the rate schedule change request that includes
(A) lifetime projections of earned premiums and incurred claims based on the filed premium rate schedule increase and the method and assumptions used in determining the projected values, including reflection of assumptions that deviate from those used for pricing other forms currently available for sale; additionally,
(i) annual values for the five years preceding and the three years following the valuation date shall be provided separately;
(ii) the projections shall include the development of the lifetime loss ratio, unless the rate increase is an exceptional increase;
(iii) the projections shall demonstrate compliance with (c) of this section; and
(iv) for exceptional increases, the projected experience must be limited to the increases in claims expenses attributable to the approved reasons for the exceptional increase, and if the director determines, as provided in 3 AAC 28.599(2)(E), that offsets may exist, the insurer shall use appropriate net projected experience;
(B) disclosure of how reserves have been incorporated in this rate increase whenever the rate increase will trigger contingent benefit upon lapse;
(C) disclosure of the analysis performed to determine why a rate adjustment is necessary, which pricing assumptions were not realized and why, and what other actions taken by the company have been relied on by the actuary;
(D) a statement that policy design, underwriting, and claims adjudication practices have been taken into consideration;
(E) if it is necessary to maintain consistent premium rates for new certificates and certificates receiving a rate increase, composite rates filed by the insurer to reflect projections of new certificates; and
(F) a demonstration that actual and projected costs exceed costs anticipated at the time of initial pricing under moderately adverse experience and that the composite margin specified in 3 AAC 28.557(b)(2)(D) is projected to be exhausted;
(4) a statement that renewal premium rate schedules are not greater than new business premium rate schedules except for differences attributable to benefits, unless sufficient justification is provided to the director; and
(5) sufficient information for review and approval of the premium rate schedule increase by the director.
(c) All premium rate schedule increases shall be determined in accordance with the following requirements:
(1) exceptional increases shall provide that 70 percent of the present value of projected additional premiums from the exceptional increase will be returned to policyholders in benefits;
(2) premium rate schedule increases shall be calculated so that the sum of the lesser of either the accumulated value of actual incurred claims, without the inclusion of active life reserves, or the accumulated value of historic expected claims, without the inclusion of active life reserves, plus the present value of the future expected incurred claims, projected without the inclusion of active life reserves, will not be less than the sum of the following:
(A) the accumulated value of the initial earned premium times the greater of
(i) 58 percent; and
(ii) the lifetime loss ratio consistent with the original filing including margins for moderately adverse experience;
(B) 85 percent of the accumulated value of prior premium rate schedule increases on an earned basis;
(C) the present value of future projected initial earned premiums times the greater of
(i) 58 percent; and
(ii) the lifetime loss ratio consistent with the original filing including margins for moderately adverse experience; and
(D) 85 percent of the present value of future projected premiums not in (C) of this paragraph on an earned basis;
(3) expected claims shall be calculated based on the original filing assumptions assumed until new assumptions are filed as part of a rate increase; new assumptions shall be used for all periods beyond each requested effective date of a rate increase; expected claims are calculated for each calendar year based on the in-force at the beginning of the calendar year; expected claims shall include margins for moderately adverse experience, either amounts included in the claims that were used to determine the lifetime loss ratio consistent with the original filing or as modified in a rate increase filing;
(4) if a policy form has both exceptional and other increases, the values in (2)(B) and (D) of this subsection will also include 70 percent for exceptional rate increase amounts; and
(5) all present and accumulated values used to determine rate increases, including the lifetime loss ratio consistent with the original filing reflecting margins for moderately adverse experience, shall use the maximum valuation interest rate for contract reserves as specified in AS 21.18.110; the actuary shall disclose as part of the actuarial memorandum the use of appropriate averages.
(d) For each rate increase that is implemented, the insurer shall file for review by the director updated projections under (b)(3)(A) of this section, annually for the next three years, and include a comparison of actual results to projected values. The director may extend the period to greater than three years if actual results are not consistent with projected values from prior projections. For group insurance policies that meet the conditions in (l) of this section, the projections required by this subsection shall be provided to the policyholder instead of filing with the director.
(e) If a premium rate in the revised premium rate schedule is greater than 200 percent of the comparable rate in the initial premium schedule, lifetime projections under (b)(3)(A) of this section shall be filed for review and approval by the director every five years following the end of the required period in (d) of this section. For group insurance policies that meet the conditions in (l) of this section, the projections required by this subsection shall be provided to the policyholder instead of filing with the director.
(f) If the director has determined that the actual experience following a rate increase does not adequately match the projected experience, with consideration given to (b)(3)(E) of this section if applicable, and that the current projections under moderately adverse conditions demonstrate that incurred claims will not exceed proportions of premiums specified in (c) of this section, the director may require the insurer to implement the following:
(1) premium rate schedule adjustments; or
(2) other measures to reduce the difference between the projected and actual experience.
(g) If the majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse, the insurer shall file a plan, subject to director approval, for improved administration or claims processing designed to eliminate the potential for further deterioration of the policy form requiring further premium rate schedule increases, or both, or to demonstrate that appropriate administration and claims processing have been implemented or are in effect. Otherwise the director may impose the condition in (h) or (i) of this section.
(h) For a rate increase filing that meets the following criteria, the director will review, for all policies included in the filing, the projected lapse rates and past lapse rates during the 12 months following each increase to determine if a significant adverse lapse has occurred or is anticipated:
(1) the rate increase is not the first rate increase requested for the specific policy form or forms;
(2) the rate increase is not an exceptional increase; and
(3) the majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse.
(i) If a significant adverse lapse has occurred, is anticipated in the filing or is evidenced in the actual results as presented in the updated projections provided by the insurer following the requested rate increase, the director may determine that a rate spiral exists. Following the determination that a rate spiral exists, the director may require the insurer to offer, without underwriting, to all in force insureds subject to the rate increase the option to replace existing coverage with one or more reasonably comparable products being offered by the insurer or its affiliates. If required by the director,
(1) the offer shall
(A) be subject to the approval of the director;
(B) be based on actuarially sound principles, but may not be based on attained age; and
(C) provide that maximum benefits under a new policy accepted by an insured shall be reduced by comparable benefits already paid under the existing policy and
(2) the insurer shall maintain the experience of all the replacement insureds separate from the experience of insureds originally issued the policy forms; if a rate increase on the policy form is requested the rate increase shall be limited to the lesser of
(A) the maximum rate increase determined based on the combined experience; and
(B) the maximum rate increase determined based only on the experience of the insureds originally issued the form plus 10 percent.
(j) If the director determines that the insurer has exhibited a persistent practice of filing inadequate initial premium rates for long-term care insurance, the director may, in addition to the provisions of (h) and (i) of this section, prohibit the insurer from either of the following:
(1) filing and marketing comparable coverage for a period of up to five years; or
(2) offering all other similar coverages and limiting marketing of new applications to the products subject to recent premium rate schedule increases.
(k) Subsections (a) - (j) of this section do not apply to policies for which the long-term care benefits provided by the policy are incidental if the policy complies with all of the following provisions:
(1) the interest credited internally to determine cash value accumulations, including long-term care, are guaranteed not to be less than the minimum guaranteed interest rate for cash value accumulations without long-term care set out in the policy;
(2) the portion of the policy that provides insurance benefits other than long-term care coverage meets the nonforfeiture requirements as applicable in the following:
(A) AS 21.45.300;
(B) AS 21.45.305; and
(C) 3 AAC 28.140;
(3) the policy meets the disclosure requirements of AS 21.53.060;
(4) the portion of the policy that provides insurance benefits other than long-term care coverage meets the requirements as applicable in the following:
(A) policy illustrations as required by 3 AAC 28.800 - 3 AAC 28.849;
(B) disclosure requirements in 3 AAC 26.755; and
(C) disclosure requirements in 3 AAC 28.010 - 3 AAC 28.190.
(5) an actuarial memorandum is filed with the division that includes
(A) a description of the basis on which the long-term care rates were determined;
(B) a description of the basis for the reserves;
(C) a summary of the type of policy, benefits, renewability, general marketing method, and limits on ages of issuance;
(D) a description and a table of each actuarial assumption used; for expenses, an insurer must include percent of premium dollars for each policy and dollars for each unit of benefits;
(E) a description and a table of the anticipated policy reserves and additional reserves to be held in each future year for active lives;
(F) the estimated average annual premium for each policy and the average issue age;
(G) a statement as to whether underwriting is performed at the time of application; the statement shall indicate whether underwriting is used and, if used, the statement shall include a description of the type or types of underwriting used, like medical underwriting or functional assessment underwriting; with regard to a group policy, the statement shall indicate whether the enrollee or a dependent will be underwritten and when underwriting occurs; and
(H) description of the effect of the long-term care policy provision on the required premiums, nonforfeiture values, and reserves on the underlying insurance policy, both for active lives and those in long-term care claim status.
(l) Subsections (f), (h), and (i) of this section do not apply to group insurance policies as defined in AS 21.53.200(3)(A) if
(1) the policies insure 250 or more persons and the policyholder has 5,000 or more eligible employees of a single employer; or
(2) the policyholder, and not the certificate holders, pays a material portion of the premium; the material portion may not be less than 20 percent of the total premium for the group in the calendar year before the year a rate increase is filed.
(m) For purposes of (k) of this section, long-term care benefits are incidental if the value of the benefits provided is less than 10 percent of the total value of the benefits provided over the life of the policy. These benefits shall be measured as of the date of issue.
(n) For purposes of this section, an exceptional increase is
(1) only an increase filed by an insurer as exceptional for which the director determines the need for the premium rate increase is justified
(A) due to changes in laws or regulations applicable to long-term care coverage in this state; or
(B) due to increased and unexpected utilization that affects the majority of insurers of similar products;
(2) except as provided in this section, that is subject to the same requirements as other premium rate schedule increases;
(3) for which the director may request a review by an independent actuary or a professional actuarial body of the basis for a request that an increase be considered an exceptional increase; and
(4) for which the director, in determining that the necessary basis for an exceptional increase exists, will also determine potential offsets to higher claims costs.
History
- Authority: AS 21.06.090; AS 21.45.300; AS 21.53.090 AS 21.18.100; AS 21.45.305; AS 21.53.200 AS 21.18.110; AS 21.53.060
- Eff. 3/27/2022, Register 241
3 AAC 28.573 Filing requirement
Before an insurer or similar organization offers group long-term care insurance to a resident of this state under AS 21.53.070, it shall file with the director evidence that the group policy or certificate under that section has been approved by a state having statutory or regulatory long-term care insurance requirements substantially similar to those adopted in this state.
History
- Authority: AS 21.06.090; AS 21.53.070; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.574 Filing requirements for advertising
(a) Every insurer, health care service plan, or other entity providing long-term care insurance or benefits in this state shall provide a copy of a long-term care insurance advertisement intended for use in this state whether through written, radio, television, or other electronic advertising medium to the director for review or approval to the extent it may be required under state law. In addition, all advertisements shall be retained by the insurer, health care service plan, or other entity for at least three years from the date the advertisement was first used.
(b) The director may exempt from the requirements of (a) of this section an advertising form or material if, in the director's opinion, the requirements may not be reasonably applied.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.575 Standards for marketing
(a) Every insurer, health care service plan, or other entity marketing long-term care insurance coverage in this state, directly or through its producers shall
(1) establish marketing procedures and agent training requirements to assure that
(A) marketing activities, including a comparison of policies, by its agents or other producers will be fair and accurate; and
(B) excessive insurance is not sold or issued;
(2) display prominently by type, stamp, or other appropriate means, on the first page of the outline of coverage and policy the following: "Notice to buyer: This policy may not cover all of the costs associated with long-term care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all policy limitations.";
(3) provide copies of the disclosure forms required in 3 AAC 28.556(f) to the applicant;
(4) inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for long-term care insurance already has accident-and-sickness or long-term care insurance and the types and amounts of insurance, except that in the case of qualified long-term care insurance contracts, an inquiry into whether a prospective applicant or enrollee for long-term care insurance has accident-and-sickness insurance is not required;
(5) establish auditable procedures for verifying compliance with this subsection;
(6) if the state in which the policy or certificate is to be delivered or issued for delivery has a senior insurance counseling program approved by the director, provide written notice at solicitation to the prospective policyholder and certificate holder that the program is available and the name, address, and telephone number of the program;
(7) for long-term care health insurance policies and certificates, use the terms "noncancellable" or "level premium" only when the policy or certificate conforms to 3 AAC 28.552(a)(3) or (4), as applicable; and
(8) provide an explanation of contingent benefit upon lapse provided for in 3 AAC 28.582(d) and, if applicable, the additional contingent benefit upon lapse provided to policies with fixed or limited premium paying periods in 3 AAC 28.582(d)(2).
(b) In addition to the practices prohibited in AS 21.36, the following acts and practices are prohibited:
(1) high-pressure tactics; in this paragraph, "high-pressure tactics" means employing a method of marketing having the effect of or tending to induce the purchase of insurance through force, fright, threat, whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance; and
(2) cold-lead advertising; in this paragraph, "cold-lead advertising" means making use, directly or indirectly, of a method of marketing that fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance and that contact will be made by an insurance agent or insurance company.
History
- Authority: AS 21.06.090; AS 21.53.080; AS 21.53.200 AS 21.36.030; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.576 Association standards for marketing
(a) With respect to the obligations set out in (a) - (i) of this section, the primary responsibility of an association, as defined in AS 21.53.200(3)(B), when endorsing or selling long-term care insurance is to educate its members concerning long-term care issues in general so that its members can make informed decisions. An association shall provide objective information regarding long-term care insurance policies or certificates endorsed or sold by the association to ensure that members of the association receive a balanced and complete explanation of the features in the policies or certificates that are being endorsed or sold. The insurer shall file with the division the following material:
(1) the policy and certificate;
(2) a corresponding outline of coverage; and
(3) all advertisements requested by the division.
(b) The association shall disclose in any long-term care insurance solicitation the following:
(1) the specific nature and amount of the compensation arrangements, including all fees, commissions, administrative fees, and other forms of financial support, that the association receives from endorsement or sale of the policy or certificate to its members; and
(2) a brief description of the process under which the policies and the insurer issuing the policies were selected.
(c) If the association and the insurer have interlocking directorates or trustee arrangements, the association shall disclose that fact to its members.
(d) The board of directors of an association selling or endorsing long-term care insurance policies or certificates shall review and approve the insurance policies as well as the compensation arrangements made with the insurer.
(e) The association shall
(1) at the time of the association's decision to endorse, engage the services of a person with expertise in long-term care insurance not affiliated with the insurer to conduct an examination of the policies, including its benefits, features, and rates, and update the examination thereafter if there is a material change;
(2) actively monitor the marketing efforts of the insurer and its agents; and
(3) review and approve all marketing materials or other insurance communications used to promote sales or sent to members regarding the policies or certificates.
(f) Subsection (e) of this section does not apply to qualified long-term care insurance contracts.
(g) A group long-term care insurance policy or certificate may not be issued to an association unless the insurer files with the division the information required in this section.
(h) The insurer may not issue a long-term care policy or certificate to an association or continue to market a policy or certificate unless the insurer certifies annually that the association has complied with the requirements set out in this section.
(i) Failure to comply with the filing and certification requirements of this section constitutes an unfair trade practice in violation of AS 21.36 and AS 21.53.080.
History
- Authority: AS 21.06.090; AS 21.53.080; AS 21.53.200 AS 21.36.030; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.577 Suitability
(a) This section does not apply to life insurance policies that accelerate benefits for long-term care.
(b) Every insurer, health care service plan, or other entity marketing long-term care insurance shall
(1) develop and use suitability standards to determine whether the purchase or replacement of long-term care insurance is appropriate for the needs of the applicant;
(2) train its agents in the use of its suitability standards; and
(3) maintain a copy of its suitability standards and make them available for inspection upon request by the director.
(c) To determine whether the applicant meets the standards developed by the issuer, the agent and issuer shall develop procedures that take the following into consideration:
(1) the ability to pay for the proposed coverage and other pertinent financial information related to the purchase of the coverage;
(2) the applicant's goals or needs with respect to long-term care and the advantages and disadvantages of insurance to meet these goals or needs; and
(3) the values, benefits, and costs of the applicant's existing insurance, when compared to the values, benefits, and costs of the recommended purchase or replacement.
(d) The issuer, and where an agent is involved, the agent, shall make reasonable efforts to get the information set out in (c) of this section. The efforts shall include presentation to the applicant, at or before application, of the "Long-Term Care Insurance Personal Worksheet." The personal worksheet used by the issuer must contain, at a minimum, the information in the format as prescribed by the director, in not less than 12-point type. The issuer may request the applicant to provide additional information to comply with its suitability standards. A copy of the issuer's personal worksheet shall be filed with the director.
(e) A completed personal worksheet shall be returned to the issuer before the issuer's consideration of the applicant for coverage, except the personal worksheet need not be returned for sales of employer group long-term care insurance to employees and their spouses.
(f) The sale or dissemination outside the company or agency by the issuer or agent of information gotten through the personal worksheet is prohibited.
(g) The issuer shall use the suitability standards it has developed under this section in determining whether issuing long-term care insurance coverage to an applicant is appropriate.
(h) An agent shall use the suitability standards developed by the issuer in marketing long-term care insurance.
(i) At the same time as the personal worksheet is provided to the applicant, the disclosure form entitled "Things You Should Know Before You Buy Long-Term Care Insurance" shall be provided. The form shall be in the format as prescribed by the director, in not less than 12-point type.
(j) If the issuer determines that the applicant does not meet its financial suitability standards, or if the applicant has declined to provide the information, the issuer may reject the application. In the alternative, the issuer shall send the applicant a letter similar to the format prescribed by the director. However, if the applicant has declined to provide financial information, the issuer may use some other method to verify the applicant's intent. Either the applicant's returned letter or a record of the alternative method of verification shall be made part of the applicant's file.
(k) The issuer shall report annually to the director the total number of applications received from residents of this state, the number of those who declined to provide information on the personal worksheet, the number of applicants who did not meet the suitability standards, and the number of those who chose to confirm after receiving a suitability letter.
History
- Authority: AS 21.06.090; AS 21.53.066; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.578 Prohibition against preexisting conditions and probationary periods in replacement policies or certificates
If a long-term care insurance policy or certificate replaces another long-term care policy or certificate, the replacing insurer shall waive the time periods applicable to preexisting conditions and probationary periods in the new long-term care policy for similar benefits to the extent that similar exclusions have been satisfied under the original policy.
History
- Authority: AS 21.06.090; AS 21.53.030; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.579 Availability of new services or providers
(a) An insurer shall notify policyholders of the availability of a new long-term policy series that provides coverage for new long-term care services or providers material in nature and not previously available through the insurer to the general public. The notice shall be provided not later than 12 months after the date the new policy series is made available for sale in this state.
(b) Notwithstanding (a) of this section, notification is not required for a policy issued before March 27, 2022 or to a policyholder or certificate holder who is currently eligible for benefits, within an elimination period or on a claim, or who previously had been in claim status, or who would not be eligible to apply for coverage due to issue age limitations under the new policy. The insurer may require that policyholders meet all eligibility requirements, including underwriting and payment of the required premium to add new services or providers.
(c) The insurer shall make the new coverage available in one of the following ways:
(1) by adding a rider to the existing policy and charging a separate premium for the new rider based on the insured's attained age;
(2) by exchanging the existing policy or certificate for one with an issue age based on the present age of the insured and recognizing past insured status by granting premium credits toward the premiums for the new policy or certificate. The premium credits shall be based on premiums paid or reserves held for the prior policy or certificate;
(3) by exchanging the existing policy or certificate for a new policy or certificate in which consideration for past insured status shall be recognized by setting the premium for the new policy or certificate at the issue age of the policy or certificate being exchanged; the cost for the new policy or certificate may recognize the difference in reserves between the new policy or certificate and the original policy or certificate; or
(4) by an alternative program developed by the insurer that meets the purpose of this section if the program is filed with and approved by the director.
(d) An insurer is not required to notify policyholders of a new proprietary policy series created and filed for use in a limited distribution channel. For purposes of this subsection, "limited distribution channel" means through a discrete entity, similar to a financial institution or brokerage, for which specialized products are available that are not available for sale to the general public. Policyholders that purchased a new proprietary policy shall be notified when a new long-term care policy series that provides coverage for new long-term care services or providers material in nature is made available to that limited distribution channel.
(e) Policies issued under this section are exchanges, not replacements. These changes are not subject to 3 AAC 28.562 or 3 AAC 28.577, or the reporting requirements of 3 AAC 28.563(a) - (d).
(f) If the policy is offered through an employer, labor organization, or professional, trade, or occupational association, the required notification in (a) of this section shall be made to the offering entity. However, if the policy is issued to a group defined in AS 21.53.200(3)(D), the notification shall be made to each certificate holder.
(g) Nothing in this section prohibits an insurer from offering a policy, rider, certificate, or coverage change to a policyholder or certificate holder. However, upon request a policyholder may apply for currently available coverage that includes the new services or providers. The insurer may require that policyholders meet all eligibility requirements, including underwriting and payment of the required premium to add new services or providers.
(h) This section does not apply to life insurance policies or riders containing accelerated long-term care benefits.
History
- Authority: AS 21.06.090; AS 21.53.050; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.580 Right to reduce coverage and lower premiums
(a) Every long-term care insurance policy and certificate must include a provision that allows the policyholder or certificate holder to reduce coverage and lower the policy or certificate premium in at least one of the following ways:
(1) reducing the maximum benefit;
(2) reducing the daily, weekly, or monthly benefit amount; or
(3) other coverage reduction options that are consistent with the policy or certificate design or the insurance carrier's administrative processes; if the reduction in coverage involves the reduction or elimination of the inflation protection provision, the insurer shall allow the policyholder to continue the benefit amount in effect at the time of the reduction.
(b) The provision must include a description of the process for requesting and implementing a reduction in coverage.
(c) The premium for the reduced coverage must
(1) be based on the same age and underwriting class used to determine the premium for the coverage currently in force; and
(2) be consistent with the approved rate table.
(d) The insurer may limit a reduction in coverage to plans or options available for that policy form and to those for which benefits will be available after consideration of claims paid or payable.
(e) If a policy or certificate is about to lapse, the insurer shall provide a written reminder to the policyholder or certificate holder of that individual's right to reduce coverage and premiums in the notice required by 3 AAC 28.554(a)(3).
(f) This section does not apply to life insurance policies or riders containing accelerated long-term care benefits.
(g) The requirements of (a) - (f) of this section apply to a long-term care policy issued in this state on or after January 1, 2023.
(h) A premium increase notice required by 3 AAC 28.556(h) shall include
(1) an offer to reduce policy benefits provided by the current coverage consistent with the requirements of this section;
(2) a disclosure stating that all options available to the policyholder may not be of equal value; and
(3) in the case of a partnership policy, a disclosure that some benefit reduction options may result in a loss in partnership status that may reduce policyholder protections.
(i) The requirements of (h) of this section apply to a rate increase implemented in this state on or after January 1, 2023.
History
- Authority: AS 21.06.090; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.582 Nonforfeiture benefit requirement
(a) This section does not apply to life insurance policies or riders containing accelerated long-term care benefits.
(b) To comply with the requirement to offer a nonforfeiture benefit under the provisions of AS 21.53.064,
(1) a policy or certificate offered with nonforfeiture benefits must have coverage elements, eligibility, benefit triggers and benefit length that are the same as coverage to be issued without nonforfeiture benefits; the nonforfeiture benefit included in the offer must be the benefit described in (h) of this section; and
(2) the offer shall be in writing if the nonforfeiture benefit is not otherwise described in the Outline of Coverage or other materials given to the prospective policyholder.
(c) If the offer required to be made under AS 21.53.064 is rejected, the insurer shall provide the contingent benefit upon lapse described in this section; even if this offer is accepted for a policy with a fixed or limited premium paying period, the contingent benefit on lapse in (d)(2) of this section still applies.
(d) After rejection of the offer required under AS 21.53.064, for individual and group policies without nonforfeiture benefits issued after March 27, 2022, the insurer shall provide a contingent benefit upon lapse. If a group policyholder elects to make the nonforfeiture benefit an option to the certificate holder, a certificate shall provide either the nonforfeiture benefit or the contingent benefit upon lapse. A contingent benefit on lapse shall be triggered every time an insurer increases the premium rates to a level that results in a cumulative increase of the annual premium equal to or exceeding the percentage of the insured's initial annual premium set out in (1) of this subsection based on the insured's issue age, and the policy or certificate lapses not later than 120 days after the due date of the premium so increased. Unless otherwise required, policyholders shall be notified at least 30 days before the due date of the premium reflecting the rate increase. The triggers for a substantial premium increase shall comply with the following:
(1) the following are triggers for a substantial premium increase, according to issue age and percent increase over initial premium:
Triggers for a Substantial Premium Increase Issue Age Percent Increase Over
Initial Premium under 30 years of age200%at least 30 years of age, but under 35 years of age190%at least 35 years of age, but under 40 years of age170%at least 40 years of age, but under 45 years of age150%at least 45 years of age, but under 50 years of age130%at least 50 years of age, but under 55 years of age110%at least 55 years of age, but under 60 years of age90%at least 60 years of age, but under 61 years of age70%at least 61 years of age, but under 62 years of age66%at least 62 years of age, but under 63 years of age62%at least 63 years of age, but under 64 years of age58%at least 64 years of age, but under 65 years of age54%at least 65 years of age, but under 66 years of age50%at least 66 years of age, but under 67 years of age48%at least 67 years of age, but under 68 years of age46%at least 68 years of age, but under 69 years of age44%at least 69 years of age, but under 70 years of age42%at least 70 years of age, but under 71 years of age40%at least 71 years of age, but under 72 years of age38%at least 72 years of age, but under 73 years of age36%at least 73 years of age, but under 74 years of age34%at least 74 years of age, but under 75 years of age32%at least 75 years of age, but under 76 years of age30%at least 76 years of age, but under 77 years of age28%at least 77 years of age, but under 78 years of age26%at least 78 years of age, but under 79 years of age24%at least 79 years of age, but under 80 years of age22%at least 80 years of age, but under 81 years of age20%at least 81 years of age, but under 82 years of age19%at least 82 years of age, but under 83 years of age18%at least 83 years of age, but under 84 years of age17%at least 84 years of age, but under 85 years of age16%at least 85 years of age, but under 86 years of age15%at least 86 years of age, but under 87 years of age14%at least 87 years of age, but under 88 years of age13%at least 88 years of age, but under 89 years of age12%at least 89 years of age, but under 90 years of age11%at least 90 years of age10%
(2) a contingent benefit on lapse shall also be triggered for policies with a fixed or limited premium paying period every time an insurer increases the premium rates to a level that results in a cumulative increase of the annual premium equal to or exceeding the percentage of the insured's initial annual premium set out in this paragraph based on the insured's issue age, the policy or certificate lapses within 120 days of the due date of the premium so increased, and the ratio in (t)(2) of this section is 40 percent or more; unless otherwise required, policyholders shall be notified at least 30 days before the due date of the premium reflecting the rate increase; this provision is in addition to the contingent benefit provided by (1) of this subsection, and if both are triggered, the benefit provided is at the option of the insured; the following are the triggers for a substantial premium increase according to issue age and percent increase over initial premium:
Triggers for a Substantial Premium Increase Issue Age Percent Increase
Over Initial Premium Under 65 years of age50%At least 65 years of age, but under 81 years of age30%At least 81 years of age10%
(e) On or before the effective date of a substantial premium increase as defined in (d)(I) of this section, the insurer shall
(1) offer to reduce policy benefits provided by the current coverage consistent with the requirements of 3 AAC 28.580 so that required premium payments are not increased;
(2) offer to convert the coverage to a paid-up status with a shortened benefit period in accordance with the terms of (h) of this section; this option may be elected during the 120-day period referenced in (d) of this section; and
(3) notify the policyholder or certificate holder that a default or lapse during the 120-day period referenced in (d) of this section shall be considered to be the election of the offer to convert in (2) of this subsection unless the automatic option in (f)(3) of this section applies.
(f) On or before the effective date of a substantial premium increase as defined in (d)(2) of this section, the insurer shall
(1) offer to reduce policy benefits provided by the current coverage consistent with the requirements of 3 AAC 28.580 so that required premium payments are not increased;
(2) offer to convert the coverage to a paid-up status where the amount payable for each benefit is 90 percent of the amount payable in effect immediately before lapse times the ratio of the number of completed months of paid premiums divided by the number of months in the premium paying period; this option may be elected during the 120-day period referenced in (d)(2) of this section; and
(3) notify the policyholder or certificate holder that a default or lapse during the 120-day period referenced in (d)(2) of this section shall be considered to be the election of the offer to convert in (2) of this subsection if the ratio is 40 percent or more.
(g) For a long-term care policy issued in this state on or after January 1, 2023,
(1) if the policy or certificate was issued at least 20 years before the effective date of the increase, a value of zero percent shall be used in place of all values in the table in (d)(1) of this section; and
(2) values above 100 percent in the table in (d)(1) of this section shall be reduced to 100 percent.
(h) Benefits continued as nonforfeiture benefits, including contingent benefits upon lapse in accordance with (d)(l) of this section but not (d)(2) of this section, are described as follows in this subsection:
(1) for purposes of this subsection and (i) of this section, attained age rating is a schedule of premiums starting from the issue date, that increases age at least one percent a year before 50 years of age, and at least three percent a year for 50 years of age or older;
(2) for purposes of this subsection, the nonforfeiture benefit must be of a shortened benefit period providing paid-up long-term care insurance coverage after lapse; the same amounts and frequency of benefits in effect at the time of lapse but not increased thereafter, must be payable for a qualifying claim, but the lifetime maximum dollars or days of benefits must be determined as specified in (3) of this subsection;
(3) the standard nonforfeiture credit must be equal to 100 percent of the sum of all premiums paid, including the premiums paid before changes in benefits; the insurer may offer additional shortened benefit period options, if the benefits for each duration equal or exceed the standard nonforfeiture credit for that duration; however, the minimum nonforfeiture credit may not be less than 30 times the daily nursing home benefit at the time of lapse; in either event, the calculation of the nonforfeiture credit is subject to the limitation of (j) of this section.
(i) Nonforfeiture benefits are subject to the following:
(1) the nonforfeiture benefit may not begin later than the end of the third year following the policy or certificate issue date; the contingent benefit upon lapse must be effective during the first three years as well as thereafter;
(2) notwithstanding (1) of this subsection, for a policy or certificate with attained age rating, the nonforfeiture benefit must begin on the earlier of
(A) the end of the 10th year following the policy or certificate issue date; or
(B) the end of the second year following the date the policy or certificate is no longer subject to attained age rating; and
(3) nonforfeiture credits may be used for all care and services qualifying for benefits under the terms of the policy or certificate, up to the limits specified in the policy or certificate.
(j) All benefits paid by the insurer while the policy or certificate is in premium paying status and in the paid up status may not exceed the maximum benefits that would be payable if the policy or certificate had remained in premium paying status.
(k) There may not be a difference in the minimum nonforfeiture benefits as required under this section for group and individual policies.
(l) The requirements set out in this section apply on and after November 2, 2022, as follows:
(1) except as provided in (2) and (3) of this subsection, the provisions of this section apply to a long-term care policy issued in this state on or after March 27, 2022;
(2) for certificates issued on or after March 27, 2022, under a group long-term care insurance policy as defined in AS 21.53.200(3)(A), which policy was in force before March 27, 2022, the provisions of this section do not apply.
(3) the requirements in (c), (d)(2), and (f) of this section apply to a long-term care insurance policy or certificate issued in this state after January 1, 2023, except that those provisions apply on and after November 2, 2022, to new certificates on a group policy as defined in AS 21.53.200(3)(A).
(m) Premiums charged for a policy or certificate containing nonforfeiture benefits or a contingent benefit on lapse must be subject to the loss ratio requirements of 3 AAC 28.569 or 3 AAC 28.570, whichever is applicable, treating the policy as a whole.
(n) To determine whether contingent nonforfeiture upon lapse provisions are triggered under (d)(l) or (2) of this section, a replacing insurer that purchased or otherwise assumed one or more blocks of long-term care insurance policies from another insurer shall calculate the percentage increase based on the initial annual premium paid by the insured when the policy was first purchased from the original insurer.
(o) A nonforfeiture benefit for qualified long-term care insurance contracts that are level premium contracts shall be offered that meets the following requirements:
(1) the nonforfeiture provision shall be appropriately captioned;
(2) the nonforfeiture provision shall provide a benefit available if there is a default in the payment of premiums and shall state that the amount of the benefit may be adjusted after being initially granted only as necessary to reflect changes in claims, persistency, and interest as reflected in changes in rates for premium paying contracts approved by the director for the same contract form; and
(3) the nonforfeiture provision shall provide at least one of the following:
(A) reduced paid-up insurance;
(B) extended term insurance;
(C) a shortened benefit period; or
(D) other similar offerings approved by the director.
History
- Authority: AS 21.06.090; AS 21.53.064; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.583 Standards for benefit triggers
(a) A long-term care insurance policy must condition the payment of benefits on a determination of the insured's ability to perform activities of daily living and on cognitive impairment. Eligibility for the payment of benefits may not be more restrictive than requiring either a deficiency in the ability to perform not more than three of the activities of daily living or the presence of cognitive impairment.
(b) Insurers may use activities of daily living to trigger covered benefits in addition to those contained in this subsection if they are defined in the policy. Activities of daily living must include at least the following as defined in 3 AAC 28.551 and in the policy:
(1) bathing;
(2) continence;
(3) dressing;
(4) eating;
(5) toileting; and
(6) transferring.
(c) An insurer may use additional provisions for the determination of when benefits are payable under a policy or certificate. However the provisions may not restrict, and are not instead of, the requirements contained in (a) and (b) of this section.
(d) For purposes of this section the determination of a deficiency may not be more restrictive than
(1) requiring the hands-on assistance of another person to perform the prescribed activities of daily living; or
(2) if the deficiency is due to the presence of a cognitive impairment, the need for supervision or verbal cueing by another person to protect the insured or others.
(e) Assessments of activities of daily living and cognitive impairment shall be performed by licensed or certified professionals including physicians, nurses, or social workers.
(f) A long-term care insurance policy must include a clear description of the process for appealing and resolving benefit determinations.
(g) The requirements set out in this section apply on and after January 1, 2023, as follows:
(1) except as provided in (2) of this subsection, the provisions of this section apply to a long-term care policy issued in this state on or after March 27, 2022;
(2) for certificates issued on or after March 27, 2022, under a group long-term care insurance policy as defined in AS 21.53.200(3)(A) that was in force before March 27, 2022, the provisions of this section do not apply.
History
- Authority: AS 21.06.090; AS 21.53.064; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.584 Additional standards for benefit triggers for qualified long-term care insurance contracts
(a) A qualified long-term care insurance contract may pay only for qualified long-term care services received by a chronically ill individual provided under a plan of care prescribed by a licensed health care practitioner.
(b) A qualified long-term care insurance contract must condition the payment of benefits on a determination of the insured's inability to perform activities of daily living for an expected period of at least 90 days due to a loss of functional capacity or to severe cognitive impairment.
(c) Certifications regarding activities of daily living and cognitive impairment required under (b) of this section shall be performed by the following licensed or certified professionals:
(1) physicians within the meaning given in 42 U.S.C. 1395x(r)(1) (sec. 1861(r)(1), Social Security Act);
(2) registered professional nurses;
(3) licensed social workers; or
(4) other individuals who meet requirements prescribed by the Secretary of the Treasury.
(d) Certifications required under (b) of this section may be performed by a licensed health care professional at the direction of the carrier as is reasonably necessary with respect to a specific claim, except that when a licensed health care practitioner has certified that an insured is unable to perform activities of daily living for an expected period of at least 90 days due to a loss of functional capacity and the insured is in claim status, the certification may not be rescinded and additional certifications may not be performed until after the expiration of the 90-day period.
(e) Qualified long-term care insurance contracts must include a clear description of the process for appealing and resolving disputes with respect to benefit determinations.
(f) For purposes of this section,
(1) "qualified long-term care services" means services that meet the requirements of 26 U.S.C. 7702B(c)(1) (Internal Revenue Code) and that consist of necessary diagnostic, preventive, therapeutic, curative, treatment mitigation and rehabilitative services, and maintenance or personal care services, that are required by a chronically ill individual, and are provided under a plan of care prescribed by a licensed health care practitioner;
(2) "chronically ill individual" has the meaning given under 26 U.S.C. 7702B(c)(2) (Internal Revenue Code); under this provision, a chronically ill individual means an individual who has been certified by a licensed health care practitioner as
(A) being unable to perform, without substantial assistance from another individual, at least two activities of daily living for a period of at least 90 days due to a loss of functional capacity;
(B) requiring substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment; or
(C) an individual otherwise meeting these requirements that a licensed health care practitioner has certified that the individual meets these requirements in the preceding 12-month period;
(3) "licensed health care practitioner" means a physician within the meaning given in 42 U.S.C. 1395x(r)(1) (sec. 1861(r)(1) of the Social Security Act), a registered professional nurse, a licensed social worker, or other individual who meets requirements prescribed by the Secretary of the Treasury;
(4) "maintenance or personal care services" means care the primary purpose of which is the provision of needed assistance with disabilities as a result of which the individual is a chronically ill individual, including the protection from threats to health and safety due to severe cognitive impairment.
History
- Authority: AS 21.06.090; AS 21.53.064; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.585 Appealing an insurer's determination that the benefit trigger is not met
(a) For purposes of this section, "authorized representative" is authorized to act as the covered person's personal representative within the meaning of 45 C.F.R. 164.502(g) and means the following:
(1) a person to whom a covered person has given express written consent to represent the covered person in an external review;
(2) a person authorized by law to provide substituted consent for a covered person; or
(3) a family member of the covered person or the covered person's treating health care professional only when the covered person is unable to provide consent.
(b) If an insurer determines that the benefit trigger of a long-term care insurance policy has not been met, it shall provide a clear, written notice to the insured and the insured's authorized representative, if applicable, of all of the following:
(1) the reason that the insurer determined that the insured's benefit trigger has not been met;
(2) the insured's right to internal appeal in accordance with (c) of this section, and the right to submit new or additional information relating to the benefit trigger denial with the appeal request; and
(3) the insured's right, after exhaustion of the insurer's internal appeal process, to have the benefit trigger determination reviewed under the independent review process in accordance with (d) of this section.
(c) The insured or the insured's authorized representative may appeal the insurer's adverse benefit trigger determination by sending a written request to the insurer, along with additional supporting information, not later than 120 calendar days after the insured and the insured's authorized representative, if applicable, receives the insurer's benefit determination notice. The internal appeal shall be considered by an individual or group of individuals designated by the insurer, if the individual or individuals making the internal appeal decision are not the same individual or individuals who made the initial benefit determination. The internal appeal shall be completed and written notice of the internal appeal decision shall be sent to the insured and the insured's authorized representative, if applicable, not later than 30 calendar days after the insurer's receipt of all necessary information upon which a final determination can be made. The internal appeal is subject to the following:
(1) if the insurer's original determination is upheld upon internal appeal, the notice of the internal appeal decision shall describe additional internal appeal rights offered by the insurer; nothing in this paragraph requires the insurer to offer internal appeal rights other than those described in this subsection;
(2) if the insurer's original determination is upheld after the internal appeal process has been exhausted, and new or additional information has not been provided to the insurer, the insurer shall provide a written description of the insured's right to request an independent review of the benefit determination as described in (d) of this section to the insured and the insured's authorized representative, if applicable;
(3) as part of the written description of the insured's right to request an independent review, an insurer shall include the following, or substantially equivalent, language:
"We have determined that the benefit eligibility criteria ("benefit trigger") of your [policy] [certificate] has not been met. You may have the right to an independent review of our decision conducted by long-term care professionals who are not associated with us. Please send a written request for independent review to us at [address]. You must inform us, in writing, of your election to have this decision reviewed within 180 days of receipt of this letter. Listed below are the names and contact information of the independent review organizations available to conduct long-term care insurance benefit eligibility reviews. If you wish to request an independent review, please choose one of the listed organizations and include its name with your request for independent review. If you elect independent review, but do not choose an independent review organization with your request, we will choose one of the independent review organizations for you and refer the request for independent review to it;"
(4) if the insurer does not believe the benefit trigger decision is eligible for independent review, the insurer shall inform the insured and the insured's authorized representative, if applicable, in writing and include in the notice the reasons for its determination of independent review ineligibility; and
(5) the appeal process described in this subsection is not a new service or provider as referenced in 3 AAC 28.579, and therefore does not trigger the notice requirements of that section.
(d) The insured or the insured's authorized representative may request an independent review of the insurer's benefit trigger determination after the internal appeal process set out in (c) of this section has been exhausted. A written request for independent review may be made by the insured or the insured's authorized representative to the insurer not later than 180 calendar days after the insurer's written notice of the final internal appeal decision is received by the insured and the insured's authorized representative, if applicable. The insurer shall bear the cost of the independent review. The independent review process is subject to the following:
(1) not later than five working days after receiving a written request for independent review, the insurer shall refer the request to the independent review organization that the insured or the insured's authorized representative has chosen from the list of certified or approved organizations the insurer has provided to the insured if the insured or the insured's authorized representative does not choose an approved independent review organization to perform the review, the insurer shall choose an independent review organization approved or certified by the state; the insurer shall vary its selection of authorized independent review organizations on a rotating basis;
(2) the insurer shall refer the request for independent review of a benefit trigger determination to an independent review organization, subject to the following:
(A) the independent review organization must be on a list of certified or approved independent review organizations that satisfy the requirements of a qualified long-term care insurance independent review organization contained in this section;
(B) the independent review organization may not have conflicts of interest with the insured, the insured's authorized representative, if applicable, or the insurer; and
(C) a review shall be limited to the information or documentation provided to and considered by the insurer in making its determination, including information or documentation considered as part of the internal appeal process;
(3) if the insured or the insured's authorized representative has new or additional information not previously provided to the insurer, whether submitted to the insurer or the independent review organization, the information shall first be considered in the internal review process, as set out in (c) of this section in accordance with the following:
(A) while this information is being reviewed by the insurer, the independent review organization shall suspend its review and the time period for review is suspended until the insurer completes its review;
(B) the insurer shall complete its review of the information and provide written notice of the results of the review to the insured and the insured's authorized representative, if applicable, and the independent review organization not later than five working days after the insurer's receipt of new or additional information;
(C) if the insurer maintains its denial after a review, the independent review organization shall continue its review, and render its decision within the time period specified in (9) of this subsection; if the insurer overturns its decision following its review, the independent review request shall be considered withdrawn;
(4) the insurer shall acknowledge in writing to the insured and the insured's authorized representative, if applicable, that the request for independent review has been received, accepted, and forwarded to an independent review organization for review; the notice must include the name and address of the independent review organization;
(5) not later than five working days after receipt of the request for independent review, the independent review organization assigned under this subsection shall notify the insured and the insured's authorized representative, if applicable, the insurer, and the director that it has accepted the independent review request and identify the type of licensed health care professional assigned to the review; the assigned independent review organization shall include in the notice a statement that the insured or the insured's authorized representative may submit in writing to the independent review organization not later than seven days following the date of receipt of the notice additional information and supporting documentation that the independent review organization should consider when conducting its review;
(6) the independent review organization shall review all of the information and documents received under (5) of this subsection that have been provided to the independent review organization; the independent review organization shall provide copies of the documentation or information provided by the insured or the insured's authorized representative to the insurer for its review, if it is not part of the information or documentation submitted by the insurer to the independent review organization; the insurer shall review the information or documentation and provide its analysis of the new information or documentation in accordance with (8) of this subsection;
(7) the insured or the insured's authorized representative may submit new or additional information not previously provided to the insurer but pertinent to the benefit trigger denial; the insurer shall consider the information and affirm or overturn its benefit trigger determination; if the insurer affirms its benefit trigger determination, the insurer shall promptly provide the new or additional information to the independent review organization for its review, along with the insurer's analysis of the information;
(8) if the insurer overturns its benefit trigger determination,
(A) the insurer shall provide notice to the independent review organization and the insured and the insured's authorized representative, if applicable, of its decision; and
(B) the independent review process shall immediately stop;
(9) the independent review organization shall provide the insured and the insured's authorized representative, if applicable, the insurer and the director written notice of its decision, not later than 30 calendar days from receipt of the referral referenced in (d)(2) of this section; if the independent review organization overturns the insurer's decision, it shall:
(A) establish the precise date within the specific period of time under review that the benefit trigger was considered to have been met;
(B) specify the specific period of time under review for which the insurer declined eligibility, but during which the independent review organization considered the benefit trigger to have been met; and
(C) for tax-qualified long-term care insurance contracts, provide a certification, made only by a licensed health care practitioner within the meaning given in 26 U.S.C. 7702B(c)(4) (Internal Revenue Code) that the insured is a chronically ill individual;
(10) the decision of the independent review organization with respect to whether the insured met the benefit trigger is final and binding on the insurer;
(11) the independent review organization's determination shall be used solely to establish liability for benefit trigger decisions, and is intended to be admissible in a proceeding only to the extent it establishes the eligibility of benefits payable;
(12) nothing in this section restricts the insured's right to submit a new request for benefit trigger determination after the independent review decision, if the independent review organization upholds the insurer's decision;
(13) the division will accept another state's certification of an independent review organization, if the other state requires the independent review organization to meet substantially similar qualifications as those prescribed by the director.
(e) Nothing in this section limits the ability of an insurer to assert rights an insurer may have under the policy related to
(1) an insured's misrepresentation;
(2) changes in the insured's benefit eligibility; and
(3) terms, conditions, and exclusions of the policy, other than failure to meet the benefit trigger.
(f) The requirements of this section apply to a benefit trigger request made on or after January 1, 2023 under a long-term care insurance policy.
(g) The provisions of this section supersede other external review requirements found in 3 AAC 28.950 - 3 AAC 28.982.
History
- Authority: AS 21.06.09; AS 21.53.064 AS 21.07.005; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.586 Prompt payment of clean claims
(a) Not later than 30 days after receipt of a claim for benefits under a long-term care insurance policy or certificate, an insurer shall pay the claim if it is a clean claim, or send a written notice acknowledging the date of receipt of the claim and one of the following:
(1) the insurer is declining to pay all or part of the claim and the specific reason or reasons for denial; or
(2) that additional information is necessary to determine if all or a part of the claim is payable and the specific additional information that is necessary.
(b) Not later than 30 days after receipt of all the requested additional information, an insurer shall pay a claim for benefits under a long-term care insurance policy or certificate if it is a clean claim, or send a written notice that the insurer is declining to pay all or part of the claim, and the specific reason or reasons for denial.
(c) If an insurer fails to comply with (a) or (b) of this section, the insurer shall pay interest at the rate of 15 percent annually on the amount of the claim that should have been paid but that remains unpaid 30 days after the receipt of the claim with respect to (a) of this section or 15 days after receipt of all requested additional information with respect to (b) of this section. The interest payable under this subsection shall be included in a late reimbursement without requiring the person who filed the original claim to make an additional claim for the interest.
(d) This section does not apply if the insurer has a reasonable basis supported by specific information that the claim was fraudulently submitted.
(e) A violation of 3 AAC 28.550 - 3 AAC 28.599 by an insurer if committed flagrantly and in conscious disregard of the provisions of this section or with a frequency that constitutes a general business practice shall be considered a violation of AS 21.36.
(f) To the extent there is a conflict, this section supersedes another claim payment requirement found in AS 21.36.495.
(g) For purposes of this section,
(1) "claim" means a request for payment of benefits under an in-force policy, regardless of whether the benefit claimed is covered under the policy or the terms or conditions of the policy have been met; and
(2) "clean claim" means a claim that has no defect or impropriety, including the lack of required substantiating documentation, like satisfactory evidence of expenses incurred, or particular circumstance requiring special treatment that prevents timely payment from being made on the claim.
History
- Authority: AS 21.06.090; AS 21.53.060; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.588 Standard format outline of coverage
An outline of coverage to a prospective applicant for long-term care insurance must follow a standard format and content for an outline of coverage, subject to the following standards:
(1) the outline of coverage must be a free-standing document, using no smaller than 10-point type;
(2) the outline of coverage may not contain advertising material;
(3) text that is capitalized or underscored in the standard format outline of coverage may be emphasized by other means that provide prominence equivalent to the capitalization or underscoring;
(4) use of the text and sequence of text of the standard format outline of coverage is mandatory, unless otherwise specifically indicated; and
(5) the outline of coverage must follow the format as prescribed by the director.
History
- Authority: AS 21.06.090; AS 21.53.050; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.590 Requirement to deliver shopper's guide
(a) A long-term care insurance shopper's guide in the format developed by the National Association of Insurance Commissioners, or a guide developed or approved by the director, shall be provided to all prospective applicants of a long-term care insurance policy or certificate. The shopper's guide is subject to the following:
(1) in the case of agent solicitations, an agent shall deliver the shopper's guide before the presentation of an application or enrollment form; or
(2) in the case of direct response solicitations, the shopper's guide shall be presented in conjunction with an application or enrollment form.
(b) Life insurance policies or riders containing accelerated long-term care benefits are not required to furnish the above-referenced guide, but shall furnish the policy summary required under AS 21.53.020 - AS 21.53.060.
History
- Authority: AS 21.06.090; AS 21.53.40; AS 21.53.90 AS 21.53.20; AS 21.53.50 AS 21.53.30; AS 21.53.60
- Eff. 3/27/2022, Register 241
3 AAC 28.592 Permitted compensation arrangements
(a) An insurer, hospital or medical service corporation, or fraternal benefit society may provide commission or other compensation to an agent for the sale of a long-term care insurance policy or certificate only if the first year commission or other first year compensation is not more than 200 percent of the commission or other compensation paid for selling or servicing the policy or certificate in the second year or period.
(b) The commission or other compensation provided in renewal years must be the same as that provided in the second year or period and must be provided for a reasonable number of renewal years.
(c) An entity may not provide compensation to its agents or other producers and an agent or producer may not receive compensation greater than the renewal compensation payable by the replacing insurer on renewal policies.
(d) For purposes of this section, "compensation" includes pecuniary or non-pecuniary remuneration relating to the sale or renewal of the policy or certificate including bonuses, gifts, prizes, awards, and finder's fees.
History
- Authority: AS 21.06.090; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.595 Penalties
In addition to other penalties provided by the laws of this state, an insurer and an agent found to have violated a requirement of this state relating to the regulation of long-term care insurance or the marketing of long-term care insurance are subject to a fine of up to three times the amount of the commissions paid for each policy involved in the violation or up to $10,000, whichever is greater.
History
- Authority: AS 21.06.090; AS 21.36.025 AS 21.36.020; AS 21.53.090
- Eff. 3/27/2022, Register 241
3 AAC 28.599 Definitions
In this chapter,
(1) "applicant" has the meaning given in AS 21.53.200(1);
(2) "benefit trigger", for the purposes of independent review, means a contractual provision in the insured's policy of long-term care insurance conditioning the payment of benefits on a determination of the insured's ability to perform activities of daily living and on cognitive impairment; for purposes of a tax-qualified long-term care insurance contract within the meaning given in 26 U.S.C. 7702B(b) (Internal Revenue Code), a "benefit trigger" does not occur without a determination by a licensed health care practitioner that an insured is a chronically ill individual;
(3) "certificate" has the meaning given in AS 21.53.200(2);
(4) "group long-term care insurance" has the meaning given in AS 21.53.200(3);
(5) "independent review organization" means an organization that conducts independent reviews of long-term care benefit trigger decisions;
(6) "licensed health care professional" means an individual qualified by education and experience in an appropriate field, to determine, by record review, an insured's actual functional or cognitive impairment;
(7) "long-term care insurance" has the meaning given in AS 21.53.200(4);
(8) "qualified actuary" means a member in good standing of the American Academy of Actuaries;
(9) "qualified long-term care insurance" means an insurance contract that pays only for qualified long-term care services within the meaning given in 3 AAC 28.584(f)(1);
(10) "similar policy forms" means all of the long-term care insurance policies and certificates issued by an insurer in the same long-term care benefit classification as the policy form being considered; certificates of groups that meet the definition in AS 21.53.200(3)(A) are not considered similar to certificates or policies otherwise issued as long-term care insurance, but are similar to other comparable certificates with the same long-term care benefit classifications; for purposes of this paragraph, long-term care benefit classifications are defined as follows:
(A) institutional long-term care benefits only;
(B) non-institutional long-term care benefits only; or
(C) comprehensive long-term care benefits.
History
- Authority: AS 21.06.090; AS 21.53.090; AS 21.53.200
- Eff. 3/27/2022, Register 241
Article 8 Mortality Tables
3 AAC 28.600 Individual and group annuity mortality tables
The 1983 Table "a", the 1983 GAM Table, the Annuity 2000 Mortality Table, the 2012 IAR Table, and the 1994 GAR Table for mortality rates are adopted by reference and are recognized for use in determining the minimum standard of valuation for annuity and pure endowment contracts.
History
- Authority: AS 21.06.090; AS 21.18.110; AS 21.18.160
- Eff. 12/31/85, Register 96; am 3/11/98, Register 145; am 12/26/2014, Register 212
3 AAC 28.605 Individual annuity or pure endowment contracts
(a) Except as provided in (b) and (c) of this section, the 1983 Table "a" is recognized and approved as an individual annuity mortality table for valuation and, at the option of the insurance company, may be used to determine the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after July 1, 1978.
(b) Except as provided in (c) of this section, either the 1983 Table "a" or the Annuity 2000 Mortality Table must be used to determine the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after December 31, 1985.
(c) Except as provided in (d) of this section, the Annuity 2000 Mortality Table must be used to determine the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after March II, 1998.
(d) Except as provided in (e) of this section, the 2012 IAR Table must be used to determine the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after January 1, 2015.
(e) The 1983 Table "a" without projection must be used to determine the minimum standard of valuation for an individual annuity or pure endowment contract issued on or after March 11, 1998, if the contract is based on life contingencies and is issued to fund periodic benefits arising from
(1) a settlement of a claim pertaining to a court settlement or arising out of a court settlement from tort actions;
(2) a settlement involving an action similar to a tort, such as a workers' compensation claim; or
(3) a settlement of a long term disability claim where a temporary or life annuity has been used instead of continuing disability payments.
History
- Authority: AS 21.06.090; AS 21.18.110; AS 21.18.160
- Eff. 12/26/2014, Register 212
3 AAC 28.607 Group annuity or pure endowment contracts
(a) Except as provided in (b) and (c) of this section, the 1983 GAM Table, the 1983 Table "a", and the 1994 GAR Table are recognized and approved as group annuity mortality tables for valuation and, at the option of the insurance company, any one of these tables may be used to determine the minimum standard of valuation for any annuity or pure endowment purchased on or after July 1, 1978 under a group annuity or pure endowment contract.
(b) Except as provided in (c) of this section, either the 1983 GAM Table or the 1994 GAR Table must be used to determine the minimum standard of valuation for any annuity or pure endowment purchased on or after December 31, 1985 under a group annuity or pure endowment contract.
(c) The 1994 GAR Table must be used to determine the minimum standard of valuation for any annuity or pure endowment purchased on or after March 11, 1998 under a group annuity or pure endowment contract.
History
- Authority: AS 21.06.090; AS 21.18.110; AS 21.18.160
- Eff. 12/26/2014, Register 212
3 AAC 28.610 Application of the 1994 GAR Table
In using the 1994 GAR Table, the mortality rate for a person age x in year (1994 + n) is calculated as follows:
qx1994+n = qx1994 (1-AAx)n where qx1994 and AAx are as specified in the 1994 GAR Table.
History
- Authority: AS 21.06.090; AS 21.18.110
- Eff. 12/31/85, Register 96; am 3/11/98, Register 145
3 AAC 28.611 Application of the 2012 IAR Table
In using the 2012 IAR Table, the mortality rate for a person age x in year (2012 + n) is calculated as follows:
qx2012+n = qx2012 (1-G2x)n
The resulting qx2012+n must be rounded to three decimal places per 1,000, for example, 0.741 deaths per 1,000. Also, the rounding must occur according to the formula above, starting at the 2012 period table rate.
For example, for a male age 30, qx2012= 0.741.
qx2013= 0.741. (1 - 0.010) ^ 1 = 0.73359, which is rounded to 0.734.
qx2014= 0.741. (1 - 0.010) ^ 2 = 0.7262541, which is rounded to 0.726.
A method leading to incorrect rounding would be to calculate qx2014 as qx2013 * (1 - 0.010), or 0.734 * 0.99 = 0.727. It is incorrect to use the already rounded qx2013 to calculate qx2014.
History
- Authority: AS 21.06.090; AS 21.18.110; AS 21.18.160
- Eff. 12/26/2014, Register 212
3 AAC 28.619 Separability
If any provision of 3 AAC 28.600 - 3 AAC 28.611, or 3 AAC 28.690, or the application of it to any person or circumstances is for any reason held to be invalid, the remainder of the section and the application of its provisions to other persons or circumstances is not affected by that holding.
History
- Authority: AS 21.06.090; AS 21.18.110; AS 21.18.160
- Eff. 12/26/2014, Register 212
3 AAC 28.620 Life mortality tables
(a) Except as provided in (g) of this section, the 2001 CSO Mortality Tables are adopted by reference and are recognized for use under (b) and (c) of this section in determining the minimum standard of valuation for policies for which AS 21.18.110(b)(1)(A)(iii) and AS 21.45.300(t)(6) apply.
(b) Subject to the conditions under (d), (e), and (f) of this section, an insurer may elect to use the 2001 CSO Mortality Tables as the minimum standard of valuation for policies issued on or after January 1, 2005 and before January 1, 2009 for which AS 21.18.110(b)(1)(A)(iii) and AS 21.45.300(t)(6) apply.
(c) Subject to the conditions under (d), (e), and (f) of this section, an insurer shall use the 2001 CSO Mortality Tables in determining the minimum standard of valuation for policies issued on or after January 1, 2009 for which AS 21.18.110(b)(1)(A)(iii), AS 21.45.300(t)(6), and 3 AAC 21.905(a) - (g) apply.
(d) If an insurance policy contains separate mortality rates for smokers and nonsmokers, the insurer may use
(1) composite mortality tables to determine the minimum reserve liabilities, minimum cash surrender values, and amounts of paid-up nonforfeiture benefits;
(2) smoker and nonsmoker mortality tables to determine the valuation net premiums and additional minimum reserves required under AS 21.18.110(b)(4) and use composite mortality tables to determine the basic minimum reserves, minimum cash surrender values, and amounts of paid-up nonforfeiture benefits; or
(3) smoker and nonsmoker mortality tables to determine minimum reserve liabilities, minimum cash surrender values, and amounts of paid-up nonforfeiture benefits.
(e) If an insurance policy does not contain separate mortality rates for smokers and nonsmokers, the insurer shall use composite mortality tables to determine minimum reserve liabilities, minimum cash surrender values, and amounts of paid-up nonforfeiture benefits.
(f) An insurer may elect to use the ultimate or the select and ultimate 2001 CSO Mortality Table for each plan of insurance in determining minimum reserve liabilities, minimum cash surrender values, and amounts of paid-up nonforfeiture benefits subject to the restrictions in 3 AAC 21.635 and 3 AAC 21.900 - 3 AAC 21.949 relating to the use of select and ultimate tables.
(g) For pre-need insurance policies that are issued on or after January 1, 2012 and similar policies and contracts, the Commissioner's 1980 Standard Ordinary Mortality Table without 10-year selection factors is, subject to (h) of this section, the minimum mortality standard for determining reserve liabilities and nonforfeiture values.
(h) An insurer may use the 2001 CSO Mortality Tables for pre-need insurance policies until January 1, 2012 as the minimum standard of valuation for determining reserve liabilities and nonforfeiture values if, as part of the insurer's actuarial opinion memorandum prepared under AS 21.18.110(q), the insurer submits an annual notification that includes
(1) a list of all pre-need policy forms that use the 2001 CSO Mortality Tables as the minimum standard;
(2) a certification signed by the appointed actuary stating that the reserve methodology employed by the company in determining reserves for pre-need policies using the 2001 CSO Mortality Tables as a minimum standard results in adequate reserves for the pre-need policies on a stand-alone basis; and
(3) supporting information regarding the adequacy of reserves for pre-need insurance policies using the 2001 CSO Mortality Tables as the minimum standard for reserve liabilities.
(i) For purposes of this section, a pre-need insurance policy is a life insurance policy or certificate that is issued in combination with, in support of, with an assignment to, or as a guarantee for a prearrangement for goods and services to be provided at the time of and immediately following the death of the insured. Goods and services may include embalming, cremation, body preparation, viewing or visitation, a coffin or urn, a memorial stone, and transportation of the deceased.
(j) If the 2001 CSO Mortality Table is the minimum reserve standard for a policy, the actuarial opinion in the annual statement filed with the director must be based on an asset adequacy analysis set out in 3 AAC 21.830. The director may exempt a company from the requirement of this subsection if the company writes insurance only in this state.
History
- Authority: AS 21.06.090; AS 21.18.160 AS 21.18.110; AS 21.45.300
- Eff. 1/1/2005, Register 172; am 12/28/2008, Register 188; am 1/1/2011, Register 196
3 AAC 28.630 2001 CSO Preferred Class Structure Mortality Tables
(a) At the election of an insurer, for each calendar year of issue, for any one or more specified plans of insurance and subject to the conditions set out in (b) and (c) of this section, the insurer may substitute, as the minimum valuation standard for policies issued on or after January 1, 2007, the 2001 CSO Preferred Class Structure Mortality Tables, which are adopted by reference, for the 2001 CSO smoker and nonsmoker mortality tables specified in 3 AAC 28.620. For policies issued on or after January 1, 2005 and before January 1, 2007, with the approval of the director and subject to the conditions in this section, an insurer may substitute the 2001 CSO Preferred Class Structure Mortality Tables for the 2001 CSO smoker or nonsmoker mortality tables specified in 3 AAC 28.620 as the minimum valuation standard. The insurer may not elect to use the 2001 CSO Preferred Class Structure Mortality Tables unless the insurer demonstrates that at least 20 percent of the business to be valued on those tables is in one or more preferred classes.
(b) For each plan of insurance with separate rates for preferred and standard nonsmoker lives, an insurer may use the super-preferred nonsmoker, preferred nonsmoker, and residual standard nonsmoker tables in place of the nonsmoker mortality table found in the 2001 CSO Mortality Tables to determine minimum reserves. At the time of election and annually thereafter, except for business valued under the residual standard nonsmoker table, the appointed actuary shall certify that
(1) the present value of death benefits over the next 10 years after the valuation date, using the anticipated mortality experience without recognition of mortality improvement beyond the valuation date for each class, is less than the present value of death benefits using the valuation basic table corresponding to the valuation table being used for that class; and
(2) the present value of death benefits over the future life of the contracts, using anticipated mortality experience without recognition of mortality improvement beyond the valuation date for each class, is less than the present value of death benefits using the valuation basic table corresponding to the valuation table being used for that class.
(c) For each plan of insurance with separate rates for preferred and standard smoker lives, an insurer may use the preferred smoker and residual standard smoker tables in place of the smoker mortality table found in the 2001 CSO Mortality Tables to determine minimum reserves. At the time of election and annually thereafter, for business valued under the preferred smoker table, the appointed actuary shall certify that
(1) the present value of death benefits over the next 10 years after the valuation date, using the anticipated mortality experience without recognition of mortality improvement beyond the valuation date for each class, is less than the present value of death benefits using the preferred smoker valuation basic table corresponding to the valuation table being used for that class; and
(2) the present value of death benefits over the future life of the contracts, using anticipated mortality experience without recognition of mortality improvement beyond the valuation date for each class, is less than the present value of death benefits using the preferred smoker valuation basic table corresponding to the valuation table being used for that class.
(d) Unless exempted by the director, an insurer using the 2001 CS0 Preferred Class Structure Mortality Tables shall annually file with the director, with the National Association of Insurance Commissioners, or with a statistical agent designated by the National Association of Insurance Commissioners and acceptable to the director, statistical reports showing mortality and other information that the director considers necessary or expedient for the administration of the provisions of this section. The director either will establish the form of the reports or will require the insurer to use a form established by the National Association of Insurance Commissioners or by a statistical agent designated by the National Association of Insurance Commissioners and acceptable to the director.
(e) An insurer may not use the CSO 2001 Preferred Class Structure Mortality Tables for the valuation of life insurance policies issued before January 1, 2007 in any statutory financial statement in which an insurer reports, with respect to any policy or portion of a policy coinsured, either
(1) in cases where the mode of payment of the reinsurance premium is less frequent than the mode of payment of the policy premium, a reserve credit that exceeds, by more than Y, the gross reserve calculated before reinsurance; for purposes of this paragraph, Y is the amount of the gross reinsurance premium that
(A) provides coverage for the period from the next policy premium due date to the earlier of the end of the policy year or the next reinsurance premium due date; and
(B) would be refunded to the ceding entity upon the termination of the policy; or
(2) in cases where the mode of payment of the reinsurance premium is more frequent than the mode of payment of the policy premium, a reserve credit that is less than the gross reserve, calculated before reinsurance, by an amount that is less than Z; for purposes of this paragraph, Z is the amount of the gross reinsurance premium that the ceding entity would need to pay the assuming insurer to provide reinsurance coverage from the period of the next reinsurance premium due date to the next policy premium due date minus any liability established for the proportionate amount not remitted to the reinsurer.
(f) For purposes of applying (e) of this section, for both the reserve credit and the gross reserve before reinsurance, the reserve for the mean reserve method is the mean reserve minus the deferred premium asset, and the reserve for the mid-terminal reserve must include the unearned premium reserve. An insurer may estimate and adjust its accounting on an aggregate basis in order to meet the conditions to use the 2001 CSO Preferred Class Structure Mortality Tables.
History
- Authority: AS 21.06.090; AS 21.18.160 AS 21.18.110; AS 21.45.300
- Eff. 12/28/2008, Register 188; am 1/1/2011, Register 196
3 AAC 28.635 Life, Health, Variable, and Related Insurance
3 AAC 28.635. Applicability of the 2001 CSO Mortality Tables to 3 AAC 21.900 - 3 AAC 21.949. The 2001 CSO Mortality Tables may be used in complying with 3 AAC 21.900 - 3 AAC 21.949 subject to the following: (1) the net level reserve premium under 3 AAC 21.900(2)(B) must be based on the ultimate mortality rates in the 2001 CSO Mortality Tables; (2) calculations under 3 AAC 21.920(a) are (A) made using the 2001 CSO Mortality Tables; and (B) if elected by the insurer, the optional minimum mortality standard for deficiency reserves under (4) of this section with qx+k+t-1 equal to the valuation mortality rate for deficiency reserves in policy year k+t but using the unmodified select mortality rates if modified select mortality rates are used in computation of deficiency reserves; in this subparagraph, "qx+k+t-1," "k," "t" and "x" have the meanings given in 3 AAC 21.925(d); (3) the minimum standard for calculating basic reserves under 3 AAC 21.905(a) and (d) is the 2001 CSO Mortality Tables; (4) the minimum standard for calculating deficiency reserves under 3 AAC 21.905(f) and (g) is the 2001 CSO Mortality Tables subject to the following: (A) if select mortality factors are used, the factors may be multiplied by X percent as described under 3 AAC 21.905(g)(3) in the first segment subject to the conditions specified in 3 AAC 21.905(g)(3); (B) an insurer may not combine the results of tests that utilize the Commissioner's 1980 Standard Ordinary Mortality Tables referenced in AS 21.18.110 with the tests that utilize the 2001 CSO Mortality Tables in demonstrating compliance with the conditions specified in 3 AAC 21.905(g)(3), unless the combination is necessary for compliance with relevant actuarial standards of practice as adopted by the Actuarial Standards Board; (5) the valuation mortality table used in determining the tabular cost of insurance under 3 AAC 21.910(d) and (e) is the 2001 CSO Mortality Tables; (6) calculations under 3 AAC 21.915(c)(4) and 3 AAC 21.915(e)(4) must use the ultimate mortality rates in the 2001 CSO Mortality Tables; (7) the one-year valuation premium under 3 AAC 21.920(e)(2)(B) must use the ultimate mortality rates in the 2001 CSO Mortality Tables.
History
- Authority: AS 21.06.090; AS 21.18.160 AS 21.18.110; AS 21.45.300
- Eff. 12/28/2008, Register 188; am 1/1/2010, Register 196
3 AAC 28.640 Life, Health, Variable, and Related Insurance
3 AAC 28.640. Gender-blended mortality tables. (a) An insurer may elect to use a gender-blended mortality table for determining minimum cash surrender values and amounts of paid-up nonforfeiture benefits for each plan of insurance if the (1) same premium rates and charges are used for male and female lives; or (2) insurer is prohibited by law from using mortality rates that differ by gender. (b) An insurer may issue the same type of life insurance policy on both a sex-distinct and sex-neutral basis. (c) For purposes of this section, "gender-blended mortality table" is a mortality table that is a blend of the male 2001 CSO Mortality Table and the female 2001 CSO Mortality Table.
History
- Authority: AS 21.06.090; AS 21.18.160 AS 21.18.110; AS 21.45.300
- Eff. 1/1/2005, Register 172
3 AAC 28.690 Life, Health, Variable, and Related Insurance
3 AAC 28.690. Definitions. In this chapter, (1) "the 1983 Table 'a' " means the mortality table developed by the Society of Actuaries Committee to Recommend a New Mortality Basis for Individual Annuity Valuation, and adopted as a recognized mortality table for annuities in June 1982 by the National Association of Insurance Commissioners; (2) "the 1983 GAM Table" means the group annuity mortality table developed by the Society of Actuaries Committee on Annuities and adopted as a recognized mortality table for annuities in December 1983 by the National Association of Insurance Commissioners; (3) "the 1994 GAR Table" means the mortality table developed by the Society of Actuaries Group Annuity Valuation Table Task Force and adopted as a recognized mortality table for annuities in December 1996 by the National Association of Insurance Commissioners; (4) "the Annuity 2000 Mortality Table" means the mortality table developed by the Society of Actuaries Committee on Life Insurance Research and adopted as a recognized mortality table for annuities in December 1996 by the National Association of Insurance Commissioners; (5) "2001 CSO Mortality Tables" means the mortality tables consisting of separate rates of mortality for male and female lives, developed by the American Academy of Actuaries Commissioners Standard Ordinary (CSO) Task Force and adopted by the National Association of Insurance Commissioners in December 2002; "2001 CSO Mortality Tables" includes the ultimate, select and ultimate, smoker, nonsmoker, and composite 2001 CSO Mortality Tables, as well as the age-nearest birthday and age-last birthday bases of the tables; (6) "female 2001 CSO Mortality Table" means the mortality table consisting of the rates of mortality for female lives from the 2001 CSO Mortality Tables; (7) "male 2001 CSO Mortality Table" means the mortality table consisting of the rates of mortality for male lives from the 2001 CSO Mortality Tables; (8) "composite mortality tables" means the mortality tables with rates of mortality that do not distinguish between smokers and nonsmokers; (9) "smoker and nonsmoker mortality tables" means mortality tables with separate rates of mortality for smokers and nonsmokers; (10) "2001 CSO Preferred Class Structure Mortality Tables" means the mortality tables consisting of separate rates of mortality for super-preferred nonsmokers, preferred nonsmokers, residual standard nonsmokers, preferred smokers, and residual standard smoker splits of the 2001 CSO smoker and nonsmoker tables adopted by the National Association of Insurance Commissioners in September 2006 and published in the NAIC Proceedings (3rd Quarter 2006); "2001 CSO Preferred Class Structure Mortality Tables" includes the ultimate, select and ultimate, smoker, nonsmoker, male, female, and composite 2001 CSO Mortality Tables, as well as the age-nearest birthday and age-last birthday bases of the mortality tables; (11) "statistical agent" means an entity with (A) proven systems for protecting the confidentiality of individual insured and insurer information; (B) demonstrated resources for and a history of ongoing electronic communications and data transfer ensuring data integrity with insurers, which are its members or subscribers; and (C) a history of and means for aggregation of data and accurate promulgation of the experience modifications in a timely manner. (12) "generational mortality table" means a mortality table containing a set of mortality rates that decrease for a given age from one year to the next based on a combination of a period table and a projection scale containing rates of mortality improvement; (13) "period" means the given calendar year; (14) "period table" means a table of mortality rates applicable to a given calendar year; (15) "Projection Scale G2" means a table of annual rates, G2x, of mortality improvement by age for projecting future mortality rates beyond calendar year 2012; this table was developed by the Society of Actuaries Committee on Life Insurance Research and is shown in appendices 3 and 4 of this section; (16) "the 2012 IAM Period Table" means the period table containing loaded mortality rates for calendar year 2012; this table contains rates, qx2012, developed by the Society of Actuaries Committee on Life Insurance Research and is shown in appendices 1 and 2 of this section; (17) "the 2012 IAR Table" means the generational mortality table developed by the Society of Actuaries Committee on Life Insurance Research and containing rates, q/x2012+n, derived from a combination of the 2012 IAM Period Table and Projection Scale G2, using the methodology stated in 3 AAC 28.611. Appendix 1 2012 IAM Period Table Female, Age Nearest Birthday AGE.qx20121000AGE.qx20121000AGE.qx20121000AGE.qx2012100001.621300.300603.4609088.37710.405310.321613.9169197.49120.259320.338624.40992107.26930.179330.351634.93393118.20140.137340.365645.50794130.96950.125350.381656.14695146.44960.117360.402666.55196163.90870.110370.429677.03997179.69580.095380.463687.62898196.15190.088390.504698.31199213.150100.085400.552709.074100230.722110.086410.600719.910101251.505120.094420.6507210.827102273.007130.108430.6977311.839103295.086140.131440.7407412.974104317.591150.156450.7807514.282105340.362160.179460.8257615.799106362.371170.198470.8857717.550107384.113180.211480.9647819.582108400.000190.221491.0517921.970109400.000200.228501.1618024.821110400.000210.234511.3088128.351111400.000220.240521.4608232.509112400.000230.245531.6138337.329113400.000240.247541.7748442.830114400.000250.250551.9508548.997115400.000260.256562.1548655.774116400.000270.261572.3998763.140117400.000280.270582.7008871.066118400.000290.281593.0548979.502119400.0001201000.000 Appendix 2 2012 IAM Period Table Male, Age Nearest Birthday AGE.qx20121000AGE.qx20121000AGE.qx20121000AGE.qx2012100001.605300.741605.09690109.99310.401310.751615.61491123.11920.275320.754626.16992137.16830.229330.756636.75993152.17140.174340.756647.39894168.19450.168350.756658.10695185.26060.165360.756668.54896197.32270.159370.756679.07697214.75180.143380.756689.70898232.50790.129390.8006910.46399250.397100.113400.8597011.357100268.607110.111410.9267112.418101290.016120.132420.9997213.675102311.849130.169431.0697315.150103333.962140.213441.1427416.860104356.207150.254451.2197518.815105380.000160.293461.3187621.031106400.000170.328471.4547723.540107400.000180.359481.6277826.375108400.000190.387491.8297929.572109400.000200.414502.0578033.234110400.000210.443512.3028137.533111400.000220.473522.5458242.261112400.000230.513532.7798347.441113400.000240.554543.0118453.233114400.000250.602553.2548559.855115400.000260.655563.5298667.514116400.000270.688573.8458776.340117400.000280.710584.2138886.388118400.000290.727594.6318997.634119400.0001201000.000 Appendix 3 Projection Scale G2 Female, Age Nearest Birthday AGEG2xAGEG2xAGEG2xAGEG2x00.010300.010600.013900.00610.010310.010610.013910.00620.010320.010620.013920.00530.010330.010630.013930.00540.010340.010640.013940.00450.010350.010650.013950.00460.010360.010660.013960.00470.010370.010670.013970.00380.010380.010680.013980.00390.010390.010690.013990.002100.010400.010700.0131000.002110.010410.010710.0131010.002120.010420.010720.0131020.001130.010430.010730.0131030.001140.010440.010740.0131040.000150.010450.010750.0131050.000160.010460.010760.0131060.000170.010470.010770.0131070.000180.010480.010780.0131080.000190.010490.010790.0131090.000200.010500.010800.0131100.000210.010510.010810.0121110.000220.010520.011820.0121120.000230.010530.011830.0111130.000240.010540.011840.0101140.000250.010550.012850.0101150.000260.010560.012860.0091160.000270.010570.012870.0081170.000280.010580.012880.0071180.000290.010590.013890.0071190.0001200.000 Appendix 4 Projection Scale G2 Male, Age Nearest Birthday AGEG2xAGEG2xAGEG2xAGEG2x00.010300.010600.015900.00710.010310.010610.015910.00720.010320.010620.015920.00630.010330.010630.015930.00540.010340.010640.015940.00550.010350.010650.015950.00460.010360.010660.015960.00470.010370.010670.015970.00380.010380.010680.015980.00390.010390.010690.015990.002100.010400.010700.0151000.002110.010410.010710.0151010.002120.010420.010720.0151020.001130.010430.010730.0151030.001140.010440.010740.0151040.000150.010450.010750.0151050.000160.010460.010760.0151060.000170.010470.010770.0151070.000180.010480.010780.0151080.000190.010490.010790.0151090.000200.010500.010800.0151100.000210.010510.011810.0141110.000220.010520.011820.0131120.000230.010530.012830.0131130.000240.010540.012840.0121140.000250.010550.013850.0111150.000260.010560.013860.0101160.000270.010570.014870.0091170.000280.010580.014880.0091180.000290.010590.015890.0081190.0001200.000
History
- Authority: AS 21.06.090; AS 21.18.110; AS 21.18.160
- Eff. 12/31/85, Register 96; am 3/11/98, Register 145; am 1/1/2005, Register 172; am 12/28/2008, Register 188; am 12/26/2014, Register 212
Article 9 Uniform Claim Forms
3 AAC 28.700 Life, Health, Variable, and Related Insurance
3 AAC 28.700. Applicability. (a) 3 AAC 28.700 - 3 AAC 28.725 apply to all insurers transacting health insurance in this state for claims that are paid on an expense-incurred basis. (b) 3 AAC 28.700 - 3 AAC 28.725 do not apply to claims for vision care or drugs, or to benefits paid on other than an expense-incurred basis.
History
- Authority: AS 21.06.085; AS 21.06.090; AS 21.36.125
- Eff. 8/11/95, Register 135
3 AAC 28.705 Life, Health, Variable, and Related Insurance
3 AAC 28.705. Uniform claim forms for health insurance. (a) An insurer shall accept a properly completed claim submitted on the applicable uniform form set out in Uniform Claim Forms for Health Insurance, dated June 23, 1995 and hereby adopted by reference. A properly completed claim includes (1) completion of a uniform claim form with information consistent with the National Uniform Billing Data Element Specifications, as developed by the National Uniform Billing Committee as of January 8, 1993 with technical corrections as of February 19, 1993; and (2) submission of a uniform claim form on electronic media. (b) If the information entered on the form is incomplete, the insurer may return the form to the provider for completion if necessary to process the claim. (c) If additional information is essential to the insurer's proper handling of the claim, the insurer may seek that information by letter, investigative inquiry, or other reasonable means of communication. The insurer may not seek information duplicating what already is known to the insurer. To avoid needless delay, inquiries must be kept to a minimum.
History
- Authority: AS 21.06.085; AS 21.06.090; AS 21.36.125
- Eff. 8/11/95, Register 135
3 AAC 28.725 Life, Health, Variable, and Related Insurance
3 AAC 28.725. Definition. For purposes of 3 AAC 28.700 - 3 AAC 28.725, "health insurance" means an individual or group contract or other plan providing coverage for health care services that is issued by an insurer licensed to transact the business of health insurance; a health maintenance organization under AS 21.86; or a hospital service corporation, medical service corporation, or combined medical and hospital service corporation under AS 21.87.
History
- Authority: AS 21.06.085; AS 21.06.090; AS 21.36.125
- Eff. 8/11/95, Register 135; am 4/20/97, Register 142
3 AAC 28.740 Life, Health, Variable, and Related Insurance
3 AAC 28.740. Uniform prescription drug cards. (a) A health care insurer that offers, issues for delivery, delivers, or renews a health care insurance plan that provides coverage for prescription drugs or devices and that issues, uses, requires, or reissues a card for prescription claims processing shall issue to a covered individual, subscriber, or primary insured a card that contains the following information: (1) the name or logo of the health care insurer; (2) the covered individual's, subscriber's, or primary insured's name and identification number; (3) a toll-free telephone number for obtaining assistance with a claim; (4) electronic transaction routing information necessary for electronic claim processing, if the health care insurer processes claims electronically; (5) any other information that is necessary for processing a prescription drug claim. (b) If a health care insurer's existing or newly issued card for health care insurance coverage contains the information required under (a) of this section, the health care insurer is not required to issue a separate card or a new card for prescription drug coverage. (c) In this section, "card" includes any other technology that performs the same function as a printed card.
History
- Authority: AS 21.06.085; AS 21.06.090
- Eff. 9/15/2004, Register 171
3 AAC 28.745 Life, Health, Variable, and Related Insurance
3 AAC 28.745. Compliance. A health care insurer must comply with 3 AAC 28.740 for new policies issued on or after 12 months from the effective date of 3 AAC 28.740 and for renewal policies on the first renewal date after 12 months from the effective date of 3 AAC 28.740.
History
- Authority: AS 21.06.085; AS 21.06.090
- Eff. 9/15/2004, Register 171
Article 10 Life Insurance Policy Illustrations
3 AAC 28.800 Life, Health, Variable, and Related Insurance
3 AAC 28.800. Purpose of 3 AAC 28.800 - 3 AAC 28.849. The purpose of 3 AAC 28.800 - 3 AAC 28.849 is to protect the public from false, misleading, or deceptive illustrations of life insurance policies by (1) providing formats for life insurance policy illustrations; (2) specifying the disclosures that are required for life insurance policy illustrations; (3) prohibiting misleading life insurance policy illustrations; (4) minimizing the use of footnotes and caveats in life insurance policy illustrations; (5) requiring the use of language that is understandable to those to whom the illustration is directed; and (6) prescribing standards for life insurance policy illustrations.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.42.120 AS 21.36.020; AS 21.36.900; AS 21.42.130
- Eff. 9/1/98, Register 147
3 AAC 28.805 Life, Health, Variable, and Related Insurance
3 AAC 28.805. Applicability and scope of 3 AAC 28.800 - 3 AAC 28.849. (a) 3 AAC 28.800 - 3 AAC 28.849 apply to all group and individual life insurance policies and certificates except (1) variable life insurance; (2) individual and group annuity contracts; (3) credit life insurance under AS 21.57; and (4) individual and group life insurance policies that have death benefits of no more than $10,000 per individual. (b) A life insurance policy or certificate is not exempt from 3 AAC 28.800 - 3 AAC 28.849 merely for the reason that a rider, endorsement, or other provision of the policy or certificate contains an element that is not subject to the requirements of 3 AAC 28.800 - 3 AAC 28.849.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.42.120 AS 21.36.020; AS 21.36.900; AS 21.42.130
- Eff. 9/1/98, Register 147
3 AAC 28.810 Life, Health, Variable, and Related Insurance
3 AAC 28.810. Policies to be illustrated. (a) When a policy form subject to 3 AAC 28.800 - 3 AAC 28.849 is filed under AS 21.42.120, the insurer marketing that policy form shall notify the director in writing whether the policy form will be marketed with or without an illustration. For a policy form subject to 3 AAC 28.800 - 3 AAC 28.849 that was actively marketed before September 1, 1998, the insurer shall notify the director in writing by November 1, 1998, identifying the policy form and stating whether an illustration will be used with it on or after September 1, 1998. An insurer may change its decision to illustrate or not illustrate a policy form by giving a written notice to the director before implementing the change. (b) If an insurer identifies a policy form as one to be marketed without an illustration, the insurer may not use an illustration for a policy using that policy form before the policy's first anniversary date. (c) If an insurer identifies a policy form as one to be marketed with an illustration, a basic illustration prepared and delivered under 3 AAC 28.800 - 3 AAC 28.849 must be provided with the policy; however, the insurer need not provide a basic illustration to individual members of a group or to individuals insured under a multiple lives policy issued to a single applicant, unless the policy is directly marketed to those individuals. (d) The illustration furnished to an applicant for a group life insurance policy or to single applicant under a multiple lives policy may be either an individual or composite illustration representative of the coverage on the lives of all the members of the group or all the individuals under a multiple lives policy. (e) An insurer shall furnish a quotation with the enrollment materials to a potential enrollee in a non-term group life insurance policy subject to 3 AAC 28.800 - 3 AAC 28.849. The quotation must show potential policy values for sample ages and policy years on a guaranteed and non-guaranteed basis that are appropriate to the nature of the group and the coverage. This quotation is not considered an illustration for purposes of 3 AAC 28.800 - 3 AAC 28.849, but any information provided must be consistent with the illustrated scale. (f) An insurer shall provide a basic illustration to an enrollee who enrolls for more than the minimum premium necessary to provide pure death benefit protection at the time a certificate is delivered to the enrollee for the non-term group life policy. Upon request, the insurer also shall make a basic illustration available to any non-term group life enrollee.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.42.120 AS 21.36.020; AS 21.36.900; AS 21.42.130
- Eff. 9/1/98, Register 147
3 AAC 28.815 Life, Health, Variable, and Related Insurance
3 AAC 28.815. General rules and prohibitions. (a) Failure to comply with 3 AAC 28.800 - 3 AAC 28.849 is a violation of AS 21.36.020 and 21.36.030. (b) An illustration used in the sale of a life insurance policy must satisfy the requirements of 3 AAC 28.800 - 3 AAC 28.849, be clearly labeled "life insurance illustration," and contain the following information: (1) the name of the insurer; (2) the name, business address, and telephone number of the person soliciting the policy, if any; (3) the name, age, and sex of the proposed insured, unless a composite illustration is permitted; (4) the underwriting or rating classification on which the illustration is based, described in sufficient detail to identify the payment schedule and any other elements dependent on the classification; (5) the generic name of the policy, company product name, and form number; (6) the initial death benefit; and (7) the dividend option election or the use of non-guaranteed elements, if any. (c) When using an illustration in the sale of a life insurance policy, a person may not (1) represent the policy as anything other than a life insurance policy; (2) use or describe a non-guaranteed element in a manner that is misleading or has the capacity or tendency to mislead; (3) state or imply that the payment or amount of a non-guaranteed element is guaranteed; (4) use an illustration other than one prepared or authorized by the insurer for the specific policy being sold; (5) use an illustration that at any policy duration depicts policy performance more favorable to the policy owner than that produced by the illustrated scale of the insurer whose policy is being illustrated; (6) provide an applicant with an incomplete illustration; (7) falsely represent, directly or indirectly, that premium payments will not be required for each year of the policy in order to maintain the illustrated death benefits; (8) use the term "vanish," "vanishing premium," or a similar term that implies the policy could become paid up, to describe a use of non-guaranteed elements to pay a portion of future premiums; (9) use an illustration that is lapse-supported, unless the policy will never develop nonforfeiture values; or (10) use a non self-supporting illustration. (d) If an interest rate used to determine the illustrated non-guaranteed elements is shown, the interest rate may not be more than the earned interest rate underlying the disciplined current scale.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.42.120 AS 21.36.020; AS 21.36.900; AS 21.42.130
- Eff. 9/1/98, Register 147
3 AAC 28.820 Life, Health, Variable, and Related Insurance
3 AAC 28.820. Standards for basic illustrations. (a) Format. A basic illustration must conform with the following requirements: (1) the terms used in an illustration must be consistent with the terms used in the policy that is being illustrated; (2) an illustration must be labeled with the date on which it was prepared; (3) each page, including any explanatory notes or pages, must be numbered to show its relationship to the total number of pages in the illustration (for example, 1 of 5 pages, 2 of 5 pages, etc.); (4) the assumed dates that payment will be received and benefits will be paid within a policy year must be clearly identified; (5) if the age of the proposed insured is shown as a component of the tabular detail required under (e) of this section, it must be the issue age plus the number of years the policy is assumed to have been in force; (6) the assumed payments upon which the illustrated benefits and values are based must be identified as contract premium, if a specific contract premium is required; otherwise the assumed payments must be identified as premium outlay; (7) if guaranteed death benefits and values are available upon surrender for the illustrated premium outlay or contract premium, they must be shown and clearly identified as guaranteed; (8) if an illustration shows a non-guaranteed element, the non-guaranteed element may not be based on a scale more favorable to the policy owner than the insurer's illustrated scale at any time during the term of the policy, and the elements must be clearly identified as non-guaranteed; (9) guaranteed elements, if any, must be shown before corresponding non-guaranteed elements and must be referenced on any page of an illustration that shows or describes only the non-guaranteed elements (for example, "see page one for guaranteed elements"); (10) the account or accumulation value of a policy, if shown, must be identified by the name the value is given in the policy being illustrated and shown in close proximity to the corresponding value available upon surrender; (11) the value available upon surrender must be identified by the name the value is given in the policy being illustrated and must be the amount that will be available to the policy owner in a lump sum after deduction of any surrender charges, policy loans, or policy loan interest; if the policy does not specify a maximum policy loan interest rate, the illustration must use the greater of the maximum rate permitted by AS 21 or federal law to compute guaranteed values; (12) an illustration may show policy benefits and values in graphic or chart form in addition to tabular form; (13) any illustration of non-guaranteed elements must be accompanied by a statement disclosing that (A) the benefits and values are not guaranteed; (B) the assumptions upon which the benefits and values are based are subject to change by the insurer; and (C) actual results of the benefits and values may be more or less favorable than the illustration; (14) if an illustration shows that the premium payer may choose to pay policy charges using non-guaranteed values, (A) the illustration must clearly disclose that a policy charge continues to be required and, depending on actual results, the premium payer may need to continue or resume premium outlays; (B) a disclosure must be made for a premium outlay of lesser amounts or shorter durations than the contract premium; and (C) if a contract premium is due, the premium outlay display may not be left blank or show zero unless accompanied by an asterisk or similar mark to draw attention to the fact that the policy is not paid up; and (15) if an applicant expresses an intent to use dividends or policy values, whether guaranteed or non-guaranteed, to pay any portion of the contract premium or policy charges, or for any other purpose, the illustration may reflect the applicant's intent and the effect on future policy benefits and values of using dividends or policy values as the applicant intends. (b) Narrative summary. A basic illustration must include the following: (1) a brief description of the policy being illustrated, including a statement that it is a life insurance policy; (2) a brief description of the premium outlay or contract premium, as applicable, for the policy; if a policy does not require payment of a specific contract premium, the illustration must show the premium outlay that must be paid to guarantee coverage for the term of the contract or to a limiting age consistent with the tabular detail in the case of contracts without maturity dates, subject to maximum premiums allowable to qualify as a life insurance policy under the United States Internal Revenue Code; (3) a brief description of any policy features, riders, or options, whether guaranteed or non-guaranteed, shown in the basic illustration, and the effect each feature, rider, or option may have on the benefits and value of the policy; (4) identification and a brief definition of column headings and key terms used in the illustration; and (5) a statement that is substantially similar to the following: "This illustration assumes that the currently illustrated non-guaranteed elements will continue unchanged for all years shown. This is not likely to occur, and actual results may be more or less favorable than those shown." (c) Numeric summary. After the narrative summary, a basic illustration must include a numeric summary of the death benefits, values, and premium outlay or contract premium, as applicable, subject to the following: (1) the summary must be shown on the following three bases: (A) policy guarantees; (B) insurer's illustrated scale; and (C) the insurer's illustrated scale with the following adjustments to the non-guaranteed elements: (i) dividends reduced to 50 percent of the dividends contained in the insurer's illustrated scale; (ii) non-guaranteed credited interest at a rate that is the average of the guaranteed rates and the rates contained in the insurer's illustrated scale; and (iii) non-guaranteed charges, including term insurance, mortality, and expense charges, at a rate that is the average of the guaranteed rates and the rates contained in the insurer's illustrated scale; (2) for multiple lives policies, the numeric summary must be shown at least for policy years 5, 10, 20, and 30 and for all other policies at least for policy years 5, 10, and 20 and at age 70, if applicable; (3) for a policy that provides for a contract premium, the guaranteed death benefits and values must be based on the contract premium; and (4) if coverage would cease prior to policy maturity or age 100, the year in which coverage will cease must be identified for each of the bases identified in (1) of this subsection. (d) Statements. Following the numeric summary on the same page, a basic illustration must include: (1) a statement, in substantially the following form, to be signed and dated by the applicant or by the policy owner in the case of an illustration provided at time of delivery of the policy: "I have received a copy of this illustration and understand that any non-guaranteed elements illustrated are subject to change and could be either higher or lower. The person soliciting the policy has told me these elements are not guaranteed"; and (2) a statement, in substantially the following form, to be signed and dated by the person soliciting the policy: "I certify that this illustration has been presented to the applicant or policyholder and that I have explained that any non-guaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration." (e) Tabular detail. A basic illustration must include in tabular form all of the following that apply to the policy being illustrated: (1) for at least each policy year from 1 to 10 and every subsequent fifth policy year until age 100, policy maturity, or final expiration and, except for term insurance beyond the 20th year, for any year in which the premium outlay or contract premium is to change: (A) the premium outlay and mode the applicant plans to pay and the contract premium, as applicable and consistent with the numeric summary; (B) the corresponding guaranteed death benefit, as provided in the policy; and (C) the corresponding guaranteed value available upon surrender, as provided in the policy; (2) if a policy provides for a contract premium, the guaranteed death benefit and value available upon surrender must be those that will be provided if the contract premium is paid; and (3) non-guaranteed elements may be shown if described in the contract, subject to the following rules: (A) an insurer may show terminal dividends it intends to credit on the policy illustrated if its current practice is to pay terminal dividends; (B) any non-guaranteed elements must be shown at the same durations as the corresponding guaranteed elements; and (C) if a guaranteed benefit or value is not available at a duration for which a non-guaranteed benefit or value is shown, a zero must be displayed in the guaranteed column.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.42.120 AS 21.36.020; AS 21.36.900; AS 21.42.130
- Eff. 9/1/98, Register 147
3 AAC 28.825 Life, Health, Variable, and Related Insurance
3 AAC 28.825. Standards for supplemental illustrations. (a) A supplemental illustration may be provided if: (1) it is appended to, accompanied by, or preceded by a basic illustration that complies with 3 AAC 28.800 - 3 AAC 28.849; (2) the non-guaranteed elements shown in the supplemental illustration are not more favorable to the policy owner than the corresponding non-guaranteed elements that are based on the scale used in the basic illustration; (3) it contains the statement required under 3 AAC 28.820(a)(13) for a non-guaranteed element; (4) the contract premium underlying the supplemental illustration is equal to the contract premium shown in the basic illustration, if the policy has a contract premium; and (5) the premium outlay underlying the supplemental illustration is equal to the premium outlay shown in the basic illustration, if the policy does not require a contract premium. (b) A supplemental illustration must include a notice referring to the basic illustration for guaranteed elements and other information.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.42.120 AS 21.36.020; AS 21.36.900; AS 21.42.130
- Eff. 9/1/98, Register 147
3 AAC 28.830 Life, Health, Variable, and Related Insurance
3 AAC 28.830. Delivery of illustration and record retention. (a) If a basic illustration is used in the solicitation of a life insurance policy that is applied for as illustrated, the person soliciting the policy must provide a copy of that illustration, signed as required under 3 AAC 28.820, to the applicant at the time of application and to the insurer. If the policy issued differs from the policy applied for, or if premiums, benefits, or values differ from the signed basic illustration, a revised basic illustration conforming to the policy as issued must be sent to the applicant with the policy. The revised illustration must conform to the requirements of 3 AAC 28.800 - 3 AAC 28.849, and must be labeled "revised illustration." The person soliciting the policy shall sign and date the revised illustration and obtain the signature of the applicant or policy owner on the revised illustration no later than the time the policy is delivered. A signed copy of the revised illustration must be provided to the insurer and the policy owner. (b) If an illustration is not used in the solicitation of a life insurance policy that the insurer indicated under 3 AAC 28.810 would be marketed with an illustration, or if the policy applied for differs from the illustration, the person soliciting the policy shall certify these facts in writing on a form provided by the insurer. On the same form, the person soliciting the policy shall obtain the applicant's acknowledgment that an illustration conforming to the policy applied for was not provided and that the applicant understands that an illustration conforming to the policy as issued will be provided no later than the time the policy is delivered. This form must be submitted to the insurer at the time of policy application. When the policy is issued, a basic illustration conforming to the policy as issued must be sent to the applicant with the policy. The person soliciting the policy shall sign and date the illustration and obtain the signature of the applicant or policy owner on the illustration no later than the time the policy is delivered. A signed copy of the illustration must be provided to the insurer and the policy owner. (c) If the basic or revised illustration is mailed directly to an applicant or policy owner from an insurer, the illustration must include instructions for the applicant or policy owner to sign a duplicate copy of the numeric summary page of the illustration for the policy issued and to return the signed copy to the insurer. An insurer's obligation under this subsection is satisfied if the insurer can document that it has made a diligent effort to secure a signed copy of the numeric summary page. An insurer may satisfy the obligation if the insurer documents that it included in the mailing a self-addressed, postage paid envelope, and instructions for the return of the signed numeric summary page. (d) If a policy is issued, an insurer shall, for five years after the policy is no longer in force, retain a copy of the basic illustration and a revised basic illustration, if any, signed as applicable, along with any certification that either an illustration was not used or that the policy was applied for other than as illustrated.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.42.120 AS 21.36.020; AS 21.36.900; AS 21.42.130
- Eff. 9/1/98, Register 147
3 AAC 28.835 Life, Health, Variable, and Related Insurance
3 AAC 28.835. Annual report; notice to policy owners. (a) If a policy is designated as one for which an illustration will be used, the insurer shall provide each policy owner with an annual report on the status of the policy that contains at least the following information: (1) for a universal life policy, the report must include (A) the beginning and ending date of the current report period; (B) the policy value at the end of the previous report period and at the end of the current report period; (C) the total amounts that have been credited or debited to the policy value during the current report period, identified by type, such as interest, mortality, expense, or riders; (D) the death benefit at the end of the current report period on each life covered by the policy; (E) the net cash surrender value of the policy as of the end of the current report period; and (F) the amount of any outstanding loans, as of the end of the current report period; (2) in addition to the requirements of (1) of this subsection, for a fixed premium universal life policy, assuming guaranteed interest, mortality, and expense loads and assuming continued scheduled premium payments, if the net cash surrender value of the policy will not maintain insurance in force until the end of the next reporting period, a notice of that effect must be included in the report; (3) in addition to the requirements of (1) of this subsection, for a flexible premium universal life policy, assuming guaranteed interest, mortality, and expense loads, if the policy's net cash surrender value will not maintain insurance in force until the end of the next reporting period unless further premium payments are made, a notice to that effect must be included in the report; and (4) for all policies not described in (1) - (3) of this subsection, where applicable, the report must include as of the end of the current report period: (A) the current death benefit on each life covered by the policy; (B) the annual contract premium; (C) the net cash surrender value; (D) the current dividend; (E) how and to what the current dividend would be applied under the dividend option elected; and (F) the amount of any outstanding loan. (b) In addition to the requirements of (a) of this section, an insurer writing a life insurance policy that does not build nonforfeiture values shall provide an annual report for a policy only for a year when the insurer has made a change to a non-guaranteed policy element. (c) If an annual report does not include an in force illustration, the report must contain the following prominently displayed notice: "IMPORTANT POLICY OWNER NOTICE: You should consider requesting more detailed information about your policy to understand how it may perform in the future. You should not consider replacement of your policy or make changes in your coverage without requesting a current illustration. You may annually request, without charge, a current illustration by calling (insurer's phone number), writing to (insurer's name) at (insurer's address), or contacting the person who sold you your policy. If you do not receive a current illustration of your policy within 30 days from your request, you should contact your state insurance division." The insurer may vary the order of the methods for obtaining an in force illustration in the notice. (d) Upon the request of a policy owner, an insurer shall furnish an in force illustration of current and future benefits and values based on the insurer's present illustrated scale. This illustration must comply with the requirements of 3 AAC 28.815(b) - (d), 3 AAC 28.820(a), and 3 AAC 28.820(e). The insurer is not required to obtain a signature or an acknowledgement of receipt of this illustration from the policyholder. (e) If, since the last annual report, an insurer makes an adverse change to a non-guaranteed element that could affect the policy, the annual report must contain a prominently displayed notice of that fact and of the nature of the change.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.42.120 AS 21.36.020; AS 21.36.900; AS 21.42.130
- Eff. 9/1/98, Register 147
3 AAC 28.840 Life, Health, Variable, and Related Insurance
3 AAC 28.840. Annual certification. (a) The board of directors of an insurer shall appoint one or more illustration actuaries. The illustration actuary or actuaries shall annually certify that the disciplined current scale used in each illustration in current use, as well as those used since the prior certification, conforms with the Actuarial Standards Board Actuarial Standard of Practice No. 24, and that the illustrated scales used in insurer-authorized illustrations meet the requirements of 3 AAC 28.800 - 3 AAC 28.849. (b) The illustration actuary (1) must be a member in good standing of the American Academy of Actuaries; (2) must be familiar with the standard of practice regarding life insurance policy illustrations; (3) may not have been found by the director, after a hearing under AS 21.06.170 - 21.06.230, (A) to have violated any provision of, or any obligation imposed by AS 21 in the course of performing the duties of an illustration actuary; (B) to be guilty of a fraudulent or dishonest practice; (C) to have demonstrated incompetence, lack of cooperation, or untrustworthiness as an illustration actuary; or (D) to have resigned or been removed as an illustration actuary within the past five years as a result of one or more acts or omissions indicated in any adverse report on examination or as a result of a failure to adhere to generally acceptable actuarial standards; and (4) must notify the director within 30 days of an action taken by the chief insurance regulatory official in another jurisdiction that is similar to an action described in (3) of this subsection. (c) The illustration actuary shall disclose in the annual certification (1) whether, since the last annual certification, a currently payable scale applicable for business issued within the previous five years and within the scope of the certification has been reduced for reasons other than changes in the experience factors underlying the disciplined current scale; if non-guaranteed elements illustrated for new policies are not consistent with those illustrated for similar in force policies, or if non-guaranteed elements illustrated for both new and in force policies are not consistent with the non-guaranteed elements actually being paid, charged, or credited to the same or similar forms, that information must be disclosed in the annual certification; and (2) which of the following was used to allocate overhead expenses for an illustration: (A) the marginal expense method; (B) the fully allocated expense method; or (C) a generally recognized expense table based on fully allocated expenses representing a significant portion of insurance companies that has been approved by the director. (d) An illustration actuary shall file a certification with the insurer's board of directors and with the director before a policy form is illustrated and also annually for each policy form for which illustrations are used. Upon discovery, the illustration actuary shall promptly notify the board of directors of the insurer and the director of any error in a previous certification. (e) An illustration actuary who is unable to certify the appropriate scale for any policy form illustration an insurer intends to use shall promptly notify the board of directors of the insurer and the director that the scale cannot be certified under (a) of this section. (f) A responsible officer of an insurer, who is not employed as the insurer's illustration actuary, shall certify annually to the director that (1) the illustration formats meet the requirements of 3 AAC 28.800 - 3 AAC 28.849 and that the scales used in insurer-authorized illustrations are those scales certified by the insurer's illustration actuary; and (2) the company has provided the persons soliciting policies with information about the expense allocation method used by the company in its illustrations and made the disclosures required under (c)(2) of this section. (g) An insurer that changes the illustration actuary responsible for any of the company's policy forms shall promptly notify the director of the change and the reason for the change.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.42.120 AS 21.36.020; AS 21.36.900; AS 21.42.130
- Eff. 9/1/98, Register 147
3 AAC 28.845 Life, Health, Variable, and Related Insurance
3 AAC 28.845. Guidance in determining a disciplined current scale. (a) In determining the disciplined current scale, an insurer may rely on the standards established by the Actuarial Standards Board if the standards (1) conform with the requirements of 3 AAC 28.800 - 3 AAC 28.849; (2) limit a disciplined current scale to reflect only actions that have already been taken or events that have already occurred; (3) do not permit a disciplined current scale to include any projected trends of improvements in experience or any assumed improvements in experience beyond the illustration date; and (4) do not permit assumed expenses to be less than minimum assumed expenses. (b) For purposes of this section (1) each year an insurer may choose to designate the method of determining assumed expenses for all policy forms as fully allocated expenses, marginal expenses, or a generally recognized expense table that has been approved by the director and is based on fully allocated expenses representing a significant portion of insurance companies; the insurer may use marginal expenses only if marginal expenses are greater than the generally recognized expense table; if a generally recognized expense table has not been approved by the director, the insurer shall use fully allocated expenses; and (2) "minimum assumed expenses" means the minimum expenses that may be used in the calculation of the disciplined current scale for a policy form.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.42.120 AS 21.36.020; AS 21.36.900; AS 21.42.130
- Eff. 9/1/98, Register 147
3 AAC 28.849 Life, Health, Variable, and Related Insurance
3 AAC 28.849. Definitions. For the purposes of 3 AAC 28.800 - 3 AAC 28.849, (1) "Actuarial Standards Board" means the board established by the American Academy of Actuaries to develop and adopt standards of actuarial practice; (2) "basic illustration" means a presentation or depiction used in the sale of a life insurance policy that includes both guaranteed and non-guaranteed elements; (3) "contract premium" means the gross premium that is required to be paid under a fixed premium policy, and includes the premium for any rider for which benefits are shown in the illustration; (4) "currently payable scale" means a scale of non-guaranteed elements in effect for a policy form as of the preparation date of the illustration or declared to become effective within the next 95 days; (5) "disciplined current scale" means a scale of non-guaranteed elements constituting a limit on illustrations currently being illustrated by an insurer that is reasonably based on actual recent historical experience, as certified annually by an illustration actuary designated by the insurer; (6) "generic name" means a short title descriptive of the type of policy being illustrated, such as "whole life," "term life," or "flexible premium adjustable life"; (7) "guaranteed element" means a premium, benefit, value, credit, or charge under a policy of life insurance that is guaranteed and determined at the time of issue; (8) "illustrated scale" means a scale of non-guaranteed elements currently being illustrated that is not more favorable to the policy owner than the lesser of the disciplined current scale or the currently payable scale; (9) "illustration" means a presentation or depiction that includes non-guaranteed elements of a policy or certificate of life insurance over a period of years that is either a basic illustration, a supplemental illustration, or an in force illustration; (10) "illustration actuary" means an actuary appointed by the board of directors of an insurer under 3 AAC 28.840(a), who meets the requirements of 3 AAC 28.840(b); (11) "in force illustration" means a presentation or depiction furnished to a policy holder at any time after the policy it depicts has been in force for at least one year; (12) "lapse-supported illustration" means an illustration of a policy form that is not a self-supporting illustration under a modified persistency rate assumption using persistency rates underlying the disciplined current scale for the first five years and 100 percent persistency rate after the fifth year; (13) "non-guaranteed element" means a premium, benefit, value, credit, or charge under a policy or certificate of life insurance that is not guaranteed or determined at the time of issue; (14) "non-term group life" means a group policy or individual policies of life insurance issued to members of an employer group or other group for which each plan of coverage was selected by the employer or plan sponsor; a portion of the premium is paid by the group or through payroll deduction; and group or simplified underwriting is used; (15) "persistency rate" means the ratio of the number of policies that continue coverage to a particular date in a period to the number of policies that were in force on the same date in the preceding period; (16) "policy owner" means the person named as owner of an insurance policy or the certificate holder in the case of a group insurance policy; (17) "premium outlay" means the amount of premium to be paid out-of-pocket by the policy owner or other person responsible for paying the policy premium; (18) "second-or-later-to-die policy" means a policy on two or more people that pays death proceeds only upon the death of the second or later person alive; (19) "self-supporting illustration" means an illustration of a policy form for which it can be demonstrated that, when using experience assumptions underlying the disciplined current scale, for all illustrated points in time on or after the 15th policy anniversary, or on or after the 20th policy anniversary for a second-or-later-to-die policy, or upon policy expiration, if sooner, the accumulated value of all policy cash flows equals or exceeds the total policy owner value available; for this purpose, the policy owner value includes cash surrender values and any other illustrated benefit amounts available at the policy owner's election; (20) "supplemental illustration" means a presentation or depiction furnished in addition to a basic illustration showing special features or variations applicable to the basic policy and that may be presented in a format differing from the basic illustration, but only depicts the scale of non-guaranteed elements that is permitted in a basic illustration.
History
- Authority: AS 21.06.090; AS 21.36.030; AS 21.42.120 AS 21.36.020; AS 21.36.900; AS 21.42.130
- Eff. 9/1/98, Register 147
Article 11 Utilization Review and Benefit Determinations
3 AAC 28.900 Life, Health, Variable, and Related Insurance
3 AAC 28.900. Applicability. 3 AAC 28.900 - 3 AAC 28.918 apply to (1) a health care insurer that (A) transacts health care insurance in this state; and (B) provides or performs utilization review services; (2) a designee of the health care insurer under (1) of this section, including a utilization review organization that performs utilization review functions on the health care insurer's behalf; and (3) a health care insurer under (1) of this section or the health care insurer's designee utilization review organization that provides or performs a prospective review or retrospective review benefit determination.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.902 Life, Health, Variable, and Related Insurance
3 AAC 28.902. Corporate oversight of utilization review program. A health care insurer shall (1) monitor all utilization review activities carried out by, or on behalf of, the health care insurer; (2) ensure that the requirements of 3 AAC 28.900 - 3 AAC 28.918 are met; and (3) ensure that appropriate personnel have operational responsibility for the conduct of the health care insurer's utilization review program.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.904 Life, Health, Variable, and Related Insurance
3 AAC 28.904. Contracting. If a health care insurer contracts to have a utilization review organization or other entity perform the utilization review functions required under 3 AAC 28.900 - 3 AAC 28.918, the director will (1) hold the health care insurer responsible for monitoring the activities of the utilization review organization or entity with which the health care insurer contracts; and (2) ensure that the requirements of 3 AAC 28.900 - 3 AAC 28.918 are met.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.906 Life, Health, Variable, and Related Insurance
3 AAC 28.906. Scope and content of utilization review program. (a) A health care insurer that requires utilization review of a benefit request under a health care insurance policy shall develop and implement a written utilization review program that describes, at a minimum, the following utilization review activities: (1) filing of a benefit request; (2) notification to a covered person or the covered person's authorized representative of a utilization review and benefit determination; (3) review of an adverse determination under 3 AAC 28.930 - 3 AAC 28.938. (b) The written document required under (a) of this section must describe (1) procedures to evaluate the medical necessity, appropriateness, efficacy, or efficiency of health care services; (2) data sources and clinical review criteria used in making a determination; (3) procedures to ensure consistent application of clinical review criteria and compatible determinations; (4) data collection processes and analytical methods used to assess utilization of health care services; (5) provisions to ensure the confidentiality of clinical, proprietary, and protected health information; (6) the health care insurer's organizational mechanism, such as a utilization review committee or quality assurance or other committee, that periodically assesses the health care insurer's utilization review program and reports to the health care insurer's governing body; and (7) the position title for the health care insurer's staff member that is responsible for the day-to-day management of the utilization review program.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.908 Life, Health, Variable, and Related Insurance
3 AAC 28.908. Operational requirements. (a) A utilization review program must use documented clinical review criteria that are (1) based on sound clinical evidence; and (2) evaluated periodically by a health care insurer's organizational mechanism specified under 3 AAC 28.906(b)(6) to ensure the program's effectiveness. (b) A health care insurer may develop its own clinical review criteria or obtain clinical review criteria from qualified vendors. A health care insurer shall make its clinical review criteria available upon request to government agencies authorized by the director or by law to receive the information. (c) Qualified health care professionals shall administer the utilization review program and oversee utilization review decisions. A clinical peer shall evaluate the clinical appropriateness of adverse determinations. (d) A health care insurer shall issue a utilization review and benefit determination in a timely manner under 3 AAC 28.910 and 3 AAC 28.912. (e) A covered person shall be considered to have exhausted the provisions of 3 AAC 28.900 - 3 AAC 28.918 if a health care insurer fails to adhere to the requirements under 3 AAC 28.910 or 3 AAC 28.912 and may (1) file a request for external review under 3 AAC 28.950 - 3 AAC 28.982; and (2) pursue an available remedy under state or federal law on the basis that the health care insurer failed to provide a reasonable internal claims and appeals process that would yield a decision on the merits of the claim. (f) Notwithstanding (e) of this section, a covered person may not be considered to have exhausted the provisions of 3 AAC 28.900 - 3 AAC 28.918 if the failure of a health care insurer to adhere to the requirements of 3 AAC 28.910 or 3 AAC 28.912 is a de minimis violation that (1) does not cause, and is not likely to cause, prejudice or harm to the covered person; (2) the health care insurer demonstrates was for good cause or due to matters beyond the health care insurer's control; (3) occurred in the context of an ongoing, good-faith exchange of information between the health care insurer and the covered person or the covered person's authorized representative; and (4) is not a part of a pattern or practice of violations by the health care insurer. (g) A covered person or the covered person's authorized representative may request a written explanation of a de minimis violation from a health care insurer. Not later than 10 days after receiving a request, the health care insurer shall (1) provide a written explanation of the alleged violation; and (2) the specific reasons for asserting that the violation is de minimis. (h) A covered person or the covered person's authorized representative may resubmit and pursue a review of a benefit request or claim under 3 AAC 28.900 - 3 AAC 28.918 or file a grievance under 3 AAC 28.930 - 3 AAC 28.938 if an independent reviewer or a superior court rejects the benefit request or claim for immediate review on the basis that the violation is a de minimis violation under (f) of this section. The time period for re-filing the benefit request or claim under this subsection begins to run when the covered person or the covered person's authorized representative receives notice of the opportunity to resubmit. (i) Not later than 10 days after receiving notice from an independent reviewer or a superior court of its rejection of a benefit request or claim for immediate review, a health care insurer shall provide to the covered person or the covered person's authorized representative notice of the opportunity to resubmit and, as applicable, pursue a review of the benefit request or claim under 3 AAC 28.900 - 3 AAC 28.918. (j) A health care insurer shall (1) have procedures in place to ensure that the (A) health care professionals administering the health care insurer's utilization review program are applying the clinical review criteria consistently in review determinations; and (B) appropriate or required individual or individuals are designated to conduct utilization reviews; (2) routinely assess the effectiveness and efficiency of its utilization review program; (3) have data systems sufficient to (A) support utilization review program activities; and (B) generate management reports to enable the health care insurer to monitor and manage health care services effectively; (4) maintain adequate oversight over utilization review activity delegated to a utilization review company, which must include (A) a written description of the utilization review company's activities and responsibilities, including the company's reporting requirements; (B) evidence of the health care insurer's formal approval of the utilization review company's program; and (C) a process by which the health care insurer shall evaluate the utilization review company's performance; (5) coordinate the utilization review program with other medical management activity conducted by the health care insurer, such as quality assurance, credentialing, contracting with health care professionals, data reporting, grievance procedures, processes for assessing member satisfaction, and risk management; (6) provide covered persons and participating providers with access to the health care insurer's utilization review staff through a toll-free telephone number or other free calling option, and by electronic means; and (7) when conducting a utilization review, (A) collect only the information necessary, including pertinent clinical information, to make the utilization review or benefit determination; and (B) ensure the independence and impartiality of each individual involved in making the utilization review or benefit determination. (k) A health care insurer may not base one or more of the following decisions related to an individual involved in making a utilization review or benefit determination on the likelihood that the individual will support the denial of benefits: (1) hiring; (2) compensation; (3) termination; (4) promotion; or (5) other similar matter.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.910 Life, Health, Variable, and Related Insurance
3 AAC 28.910. Procedures for standard utilization review and benefit determinations. (a) A health care insurer shall establish and maintain written procedures for (1) receiving a benefit request from a covered person or the covered person's authorized representative; (2) making a standard utilization review and benefit determination; and (3) notifying a covered person or the covered person's authorized representative of the health care insurer's determination not later than the specified time frames required under this section. (b) For a prospective review determination, a health care insurer shall make the determination and notify the covered person or the covered person's authorized representative of the determination, whether the health care insurer certifies the provision of the benefit or not, within a reasonable period of time appropriate to the covered person's medical condition, but not later than five working days after the date the health care insurer receives the request. If the determination is an adverse determination, the health care insurer shall make the notification of the adverse determination under (n) - (t) of this section. (c) The time period for making a determination and notifying the covered person or the covered person's authorized representative under (b) of this section may be extended one time by a health care insurer for not later than five working days, if the health care insurer (1) determines that an extension is necessary due to matters beyond the health care insurer's control; and (2) notifies the covered person or the covered person's authorized representative, before the expiration of the initial five-working-day time period, of (A) the circumstances requiring the extension of time; and (B) the date by which the health care insurer expects to make a determination. (d) If the extension under (c) of this section is due to the failure of the covered person or the covered person's authorized representative to submit the information necessary to reach a determination on the request, the notice of extension must (1) specifically describe the required information necessary to complete the request; and (2) give the covered person or the covered person's authorized representative not less than 45 days from the date of receipt of the notice of extension to provide the specified information. (e) As soon as possible, but not later than five working days after receiving from a covered person or a covered person's authorized representative a prospective review request that fails to meet the health care insurer's filing procedures, a health care insurer shall notify the covered person or the covered person's authorized representative (1) of the failure to meet the health care insurer's filing procedures; and (2) of the proper procedures for filing a request. (f) A health care insurer may provide the notice under (e) of this section orally or, if requested by the covered person or the covered person's authorized representative, in writing. (g) The provisions of (e) and (f) of this section apply only if the failure is a communication (1) by a covered person or a covered person's authorized representative that is received by a person or organizational unit of a health care insurer responsible for handling benefit matters; and (2) that refers to a specific (A) covered person; (B) medical condition or symptom; and (C) health care service, treatment, or provider for which certification is being requested. (h) For a concurrent review determination, if a health care insurer has certified an ongoing course of treatment to be provided over a period of time or number of treatments, (1) a benefit reduction or termination by the health care insurer during the course of treatment before the end of the period or number of treatments, other than by health care insurance policy amendment or termination of the health care insurance policy, constitutes an adverse determination; (2) the health care insurer shall notify the covered person or the covered person's authorized representative under (n) - (t) of this section sufficiently in advance of the benefit reduction or termination to allow the covered person or the covered person's authorized representative to (A) file a grievance to request a review of the adverse determination under 3 AAC 28.930 - 3 AAC 28.938; and (B) obtain a determination with respect to that review of the adverse determination before the benefit is reduced or terminated; and (3) the health care insurer shall continue without liability to the covered person, with respect to the internal review request made under 3 AAC 28.930 - 3 AAC 28.938, the health care service or treatment that is the subject of the adverse determination. (i) For a retrospective review determination, a health care insurer shall make the determination within a reasonable period of time, but not later than 30 days after receiving the benefit request. If the determination is an adverse determination, a health care insurer shall provide the notice of the adverse determination to the covered person or the covered person's authorized representative under (n) - (t) of this section. (j) The time period for making a determination and notifying the covered person or the covered person's authorized representative under (i) of this section may be extended one time by a health care insurer for not later than 15 days if the health care insurer (1) documents that an extension is necessary due to matters beyond the health care insurer's control; and (2) notifies the covered person or the covered person's authorized representative, before the expiration of the initial 30-day time period, of (A) the circumstances requiring the extension of time; and (B) the date by which the health care insurer expects to make a determination. (k) If the extension under (j) of this section is due to the failure of the covered person or the covered person's authorized representative to submit the information necessary to reach a determination on the request, the notice of extension must (1) specifically describe the required information necessary to complete the request; and (2) give the covered person or the covered person's authorized representative not less than 45 days from the date of receipt of the notice of extension to provide the specified information. (l) The time period within which a determination is required to be made under (b) or (i) of this section begins on the date the request is filed with a health care insurer under the health care insurer's procedures established under 3 AAC 28.906 for filing a request, without regard to whether all of the information necessary to make the determination accompanies the filing. If the time period for making the determination under (b) or (i) of this section is extended under (c) or (j) of this section, a health care insurer may not include, in the time period for making the determination, the date on which the health care insurer sends notification of the extension to the covered person or the covered person's authorized representative until the earlier of the date on which the (1) covered person or the covered person's authorized representative responds to the request for additional information; or (2) specified information was to have been submitted. (m) If the covered person or the covered person's authorized representative fails to submit the information before the end of the period of the extension under (d) or (k) of this section, a health care insurer may deny the certification of the requested benefit. (n) A notification of an adverse determination under this section must be set out in a manner calculated to be understood by a person who has an average knowledge of health and medicine and must include (1) information sufficient to identify the benefit request or claim involved, including, if applicable, the date of service, the health care provider, and, if applicable, the claim amount; (2) a statement describing (A) the diagnosis code and the code's corresponding meaning; and (B) the treatment code and the code's corresponding meaning; (3) the specific reason or reasons for the adverse determination, including (A) the denial code and code's corresponding meaning; and (B) a description of the health care insurer's standard, if any, used in denying the benefit request or claim; (4) reference to the specific plan provisions on which the determination is based; (5) a description of additional material or information necessary for the covered person or the covered person's authorized representative to complete the benefit request, including an explanation of why the material or information is necessary to complete the request; (6) a description of the health care insurer's grievance procedures established under 3 AAC 28.930 - 3 AAC 28.938, including time limits, if any, applicable to those procedures; (7) if the health care insurer relied upon an internal rule, guideline, protocol, or other similar criterion to make the adverse determination, (A) the specific rule, guideline, protocol, or other similar criterion; or (B) a statement that a specific rule, guideline, protocol, or other similar criterion was relied upon to make the adverse determination and that a copy of the rule, guideline, protocol, or other similar criterion will be provided free of charge to the covered person or the covered person's authorized representative upon request; (8) if the adverse determination is based on a medical necessity or experimental or investigational treatment, or similar exclusion or limit, (A) an explanation of the scientific or clinical judgment for making the determination, applying the terms of the health care insurance policy to the covered person's medical circumstances; or (B) a statement that an explanation will be provided free of charge to the covered person or the covered person's authorized representative upon request; (9) if applicable, instructions for requesting (A) a copy of the rule, guideline, protocol, or other similar criterion relied upon in making the adverse determination under (7) of this subsection; or (B) the written statement of the scientific or clinical rationale for the determination under (8) of this subsection; and (10) a statement explaining the availability of, and the right of, the covered person or the covered person's authorized representative to (A) contact the division for assistance; the statement must include the division's current mailing address, electronic mail address, and telephone number; or (B) upon completion of a health care insurer's grievance procedure process under 3 AAC 28.930 - 3 AAC 28.938, file a civil suit in superior court. (o) A health care insurer shall provide the notice required under (n) of this section in a culturally and linguistically appropriate manner under whichever of the following federal regulations is applicable to the health care insurer's notice: (1) 29 C.F.R. 2590.715-2719(e); (2) 45 C.F.R. 147.136(e). (p) To meet the requirements of (o) of this section, a health care insurer shall (1) provide oral language services, such as a telephone assistance hotline, that include, in the applicable non-English language, (A) answering questions; and (B) providing assistance with filing (i) benefit requests; (ii) claims; and (iii) appeals; (2) provide, upon request, a notice in the applicable non-English language; and (3) include in the English version of all notices, a statement prominently displayed in the applicable non-English language clearly indicating how to access the language services provided by the health care insurer. (q) For purposes of (p) of this section, with respect to a borough equivalent to which a notice is sent, a non-English language is an applicable non-English language if 10 percent or more of the population residing in the borough equivalent is literate only in the same non-English language, as determined in CLAS County Data, Edition Date: January 2016, issued by the United States Department of Health and Human Services, Centers for Medicare and Medicaid Services, on January 27, 2016, and adopted by reference. (r) A health care insurer offering group or individual health insurance coverage may not rescind coverage under the health care insurance policy, certificate of coverage, or contract of insurance, with respect to an individual, including a group to which the individual belongs or family coverage in which the individual is included, once the individual is covered under the plan or coverage, unless (1) the individual or person seeking coverage on behalf of the individual (A) performs an act, practice, or omission that constitutes fraud; or (B) makes an intentional misrepresentation of material fact, as prohibited by the terms of the plan or coverage; and (2) the health care insurer provides not less than 30 days' advance written notice to each participant, including a primary subscriber in the individual market, who would be affected before coverage may be rescinded. (s) If the adverse decision is a rescission, a health care insurer shall provide in the advance notice of the rescission determination required under (r) of this section, in addition to the applicable disclosures required under (n) of this section, (1) a clear identification of the (A) alleged fraudulent act, practice, or omission; or (B) intentional misrepresentation of material fact; (2) an explanation as to why the act, practice, or omission was fraudulent or was an intentional misrepresentation of a material fact; (3) notice that the covered person or the covered person's authorized representative, before the date when the advance notice of the proposed rescission ends, may immediately file a grievance under 3 AAC 28.930 - 3 AAC 28.938 to request a review of the adverse determination to rescind coverage; (4) a description of the health care insurer's grievance procedures established under 3 AAC 28.930 - 3 AAC 28.938, including time limits, if any, applicable to those procedures; and (5) the date when the advance notice ends and the date back to which the coverage will be retroactively rescinded. (t) A health care insurer may provide a notice required under this section in writing, by electronic mail, or orally. If the notice of the adverse determination is provided orally, the health care insurer shall provide written or electronic mail notice of the adverse decision not later than three days following the oral notification.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.912 Life, Health, Variable, and Related Insurance
3 AAC 28.912. Procedures for expedited utilization review and benefit determinations. (a) A health care insurer shall establish and maintain written procedures for (1) receiving a benefit request from a covered person or the covered person's authorized representative; (2) making an expedited utilization review and benefit determination with respect to (A) an urgent care request; and (B) a concurrent review urgent care request; and (3) notifying a covered person or the covered person's authorized representative of the health care insurer's determination not later than the specified time frames under this section. (b) The written procedures under (a) of this section must provide that, if a covered person or the covered person's authorized representative fails to follow the health care insurer's procedures for filing an urgent care request, the health care insurer shall notify the covered person or the covered person's authorized representative of the failure and the proper procedures to follow for filing the request. A health care insurer shall provide the notice in this subsection to the covered person or the covered person's authorized representative as soon as possible, but not later than 24 hours after receipt of the request. A health care insurer may provide the notice orally, unless the covered person or the covered person's authorized representative requests the notice to be in writing. (c) The provisions of (b) of this section apply only if the failure is a communication (1) by a covered person or a covered person's authorized representative that is received by a person or organizational unit of the health care insurer responsible for handling benefit matters; and (2) that refers to a specific (A) covered person; (B) medical condition or symptom; and (C) health care service, treatment, or provider for which approval is requested. (d) Except under (e) of this section, for an urgent care request, a health care insurer shall notify the covered person or the covered person's authorized representative of the health care insurer's determination with respect to the request, whether the determination is an adverse determination or not, as soon as possible taking into account the medical condition of the covered person, but not later than 24 hours after the receipt of the request by the health care insurer. If a health care insurer's determination is an adverse determination, the health care insurer shall provide notice of the adverse determination under ( l) of this section. (e) For an urgent care request, if a covered person or the covered person's authorized representative fails to provide sufficient information for a health care insurer to make a determination, the health care insurer shall notify the covered person or the covered person's authorized representative, orally or, if requested by the covered person or the covered person's authorized representative, in writing, of the failure and state what specific information is needed. The health care insurer shall provide the notice as soon as possible, but not later than 24 hours after receipt of the request. (f) A health care insurer shall provide a covered person or the covered person's authorized representative a reasonable period of time to submit the specified information, taking into account the circumstances, but not less than 48 hours after notifying the covered person or the covered person's authorized representative of the failure to submit sufficient information under (e) of this section. (g) A health care insurer shall notify a covered person or the covered person's authorized representative of the health care insurer's determination with respect to the urgent care request as soon as possible, but not later than 48 hours after the earlier of (1) the health care insurer's receipt of the requested specified information; or (2) the end of the period provided for the covered person or the covered person's authorized representative to submit the requested specified information. (h) If a covered person or the covered person's authorized representative fails to submit the information before the end of the period of the extension, as specified in (f) of this section, a health care insurer may deny the certification of the requested benefit. (i) If a health care insurer's determination of an urgent care request is an adverse determination, a health care insurer shall provide notice of the adverse determination under ( l) of this section. (j) For a concurrent review urgent care request involving a request by a covered person or the covered person's authorized representative to extend the course of treatment beyond the initial period of time or the number of treatments, if the request is made 24 hours before the expiration of the prescribed period of time or number of treatments, a health care insurer shall make a determination, whether the determination is an adverse determination or not, as soon as possible, taking into account the covered person's medical condition, but not later than 24 hours after the health care insurer's receipt of the request. If the health care insurer's determination is an adverse determination, the health care insurer shall provide notice of the adverse determination under ( l) of this section. (k) The time period within which a determination is required to be made under this section begins on the date the request is filed with a health care insurer under the health care insurer's procedures established under 3 AAC 28.906 for filing a request, without regard to whether all of the information necessary to make the determination accompanies the filing. (l) The requirements under 3 AAC 28.910(n) - (t) for a standard utilization review and benefit determination apply to an expedited review and benefit determination. An expedited review and benefit determination notification of an adverse determination must include a description of a health care insurer's expedited review procedures established under 3 AAC 28.938.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.914 Life, Health, Variable, and Related Insurance
3 AAC 28.914. Emergency services. (a) A health care insurer shall follow the provisions of this section when conducting a utilization review or making a benefit determination for emergency services. (b) A health care insurer shall cover emergency services to screen and stabilize a covered person (1) without the need for prior authorization of emergency services if a prudent person would reasonably believe that an emergency medical condition exists even if the emergency services are provided on an out-of-network basis; (2) without regard to whether the health care provider furnishing the services is a participating provider with respect to the services; (3) if the emergency services are provided out-of-network, without imposing an administrative requirement or limitation on coverage that is more restrictive than the requirements or limitations that apply to emergency services received from network providers; (4) if the emergency services are provided out-of-network, by complying with the cost-sharing requirements of (d) - (h) of this section; and (5) without regard to another term or condition of coverage, other than (A) the exclusion of, or coordination of, benefits; (B) an affiliation or waiting period permitted under 42 U.S.C. 300gg-19a; or (C) applicable cost-sharing, under (c) - (h) of this section. (c) For in-network emergency services, coverage of emergency services is subject to applicable copayments, coinsurance, and deductibles. (d) Except under (e) of this section, for out-of-network emergency services, a cost-sharing requirement expressed as a copayment amount or coinsurance rate imposed with respect to a covered person may not exceed the cost-sharing requirement imposed with respect to a covered person if the services were provided in-network. (e) A covered person may be required to pay, in addition to the in-network cost-sharing, the excess of the amount the out-of-network provider charges over the amount a health care insurer is required to pay under (d) of this section. (f) A health care insurer complies with the requirements of (d) and (e) of this section by paying for emergency services provided by an out-of-network provider in an amount not less than the greatest of the following, taking into account the exceptions under (g) and (h) of this section: (1) the amount negotiated with in-network providers for emergency services, excluding an in-network copayment or coinsurance imposed with respect to the covered person; (2) the amount of the emergency service calculated using the same method the plan uses to determine payments for out-of-network services, but using the in-network cost-sharing provisions instead of the out-of-network cost-sharing provisions; or (3) the amount that would be paid under Medicare for the emergency services, excluding an in-network copayment or coinsurance requirements. (g) For capitated or other health care insurance policies that do not have a negotiated charge for each service for in-network providers, (f)(1) of this section does not apply. (h) If a health plan has more than one negotiated amount for in-network providers for a particular emergency service, the amount in (f)(1) of this section is the median of those negotiated amounts. (i) A health care insurer may impose only in-network cost-sharing amounts on out-of-network emergency services. (j) If prior authorization is required for a post-evaluation or post-stabilization services review, a health care insurer shall provide access to a designated representative 24 hours a day, seven days a week, to facilitate the review.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.916 Life, Health, Variable, and Related Insurance
3 AAC 28.916. Confidentiality requirements. A health care insurer shall annually certify in writing to the director that the utilization review program of the health care insurer or the health care insurer's designee complies with all applicable state and federal laws that establish confidentiality and reporting requirements.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.918 Life, Health, Variable, and Related Insurance
3 AAC 28.918. Disclosure requirements. (a) A health care insurer shall set out in, or attach to, a policy, certificate of coverage, membership booklet, or other evidence of coverage provided to a covered person by a health care insurer a clear and comprehensive description of the health care insurer's utilization review procedures. The description must include (1) the procedures for obtaining review of an adverse determination; and (2) a statement of rights and responsibilities of a covered person with respect to those procedures. (b) A health care insurer shall include a summary of the health care insurer's utilization review and benefit determination procedures in the materials intended for a prospective covered person. (c) A health care insurer's membership card must include a toll-free telephone number a covered person or the covered person's authorized representative may call for a utilization review and benefit decision.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
Article 12 Health Care Insurer Grievance Procedures
3 AAC 28.930 Life, Health, Variable, and Related Insurance
3 AAC 28.930. Applicability. Except as otherwise provided, 3 AAC 28.930 - 3 AAC 28.938 apply to a health care insurer transacting health care insurance in this state.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.932 Life, Health, Variable, and Related Insurance
3 AAC 28.932. Grievance reporting; recordkeeping requirements. (a) A health care insurer shall maintain a written calendar year register, in a manner that is reasonably clear and accessible to the director, to document (1) each grievance received; (2) a general description of the reason for the grievance; (3) the date the grievance was received; (4) the date of each review; (5) resolution of the grievance; (6) the date of resolution; (7) the name of the covered person for whom the grievance was filed; (8) the health care insurer's review of each grievance; (9) notices and claims associated with each grievance; (10) each request for a review of a grievance involving an adverse determination; and (11) evidence sufficient to document compliance with this section. (b) A health care insurer shall make the records maintained under (a) of this section available to the following upon request: (1) the covered person or the covered person's authorized representative; (2) the director; (3) an applicable federal oversight agency. (c) Except under (d) of this section, a health care insurer shall retain a calendar year register for the longer of the following periods: (1) three years; or (2) until the director has adopted a final report of an examination that contains a review of the register for that calendar year. (d) Notwithstanding (c) of this section, a health care insurer shall retain for six years calendar year register records of a claim filed, and notice provided, under 3 AAC 28.936(o) and 3 AAC 28.938(h). (e) A health care insurer shall submit to the director a calendar year annual report in a format approved by the director. The report must include for each type of health care insurance policy offered by the health care insurer (1) a certificate of compliance stating the health care insurer has established and maintains, for each health care insurance policy, grievance procedures that fully comply with 3 AAC 28.930 - 3 AAC 28.938; (2) the number of covered lives; (3) the total number of grievances; (4) the number of grievances resolved and their resolution; (5) the number of grievances appealed to the director of which the health care insurer is aware; (6) the number of grievances referred to alternative dispute resolution procedures or resulting in litigation; and (7) a synopsis of actions being taken by the health care insurer to correct problems identified by the health care insurer or the division during a grievance.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.934 Life, Health, Variable, and Related Insurance
3 AAC 28.934. Grievance review procedures. (a) Except as specified under 3 AAC 28.938, a health care insurer shall use written procedures for receiving and resolving a grievance under 3 AAC 28.930 - 3 AAC 28.938. (b) A covered person will be considered to have exhausted the provisions of 3 AAC 28.930 - 3 AAC 28.938 if a health care insurer fails to adhere to the requirements of 3 AAC 28.936 or 3 AAC 28.938 and may (1) file a request for external review under 3 AAC 28.950 - 3 AAC 28.982; and (2) pursue an available remedy under state or federal law on the basis that the health care insurer failed to provide a reasonable internal claims and appeals process that would yield a decision on the merits of the claim. (c) Notwithstanding (b) of this section, a covered person is considered not to have exhausted the provisions of 3 AAC 28.930 - 3 AAC 28.938 if the failure of a health care insurer to adhere to the requirements of 3 AAC 28.936 or 3 AAC 28.938 is a de minimis violation that (1) does not cause, and is not likely to cause, prejudice or harm to the covered person; (2) the health care insurer demonstrates was for good cause or due to matters beyond the health care insurer's control; (3) occurred in the context of an ongoing, good-faith exchange of information between the health care insurer and the covered person or the covered person's authorized representative; and (4) is not a part of a pattern or practice of violations by the health care insurer. (d) A covered person or the covered person's authorized representative may request a written explanation of the de minimis violation from a health care insurer. Not later than 10 days after receiving the request, the health care insurer shall (1) provide a written explanation of the alleged violation; and (2) the specific reasons for asserting that the violation is de minimis. (e) A covered person or the covered person's authorized representative may resubmit and pursue a review of a grievance under 3 AAC 28.930 - 3 AAC 28.938 if an independent reviewer or superior court rejects the grievance involving an adverse determination for immediate review on the basis that the violation is a de minimis violation under (c) of this section. (f) Not later than 10 days after receiving notice from an independent reviewer or a court of a rejection of a grievance due to a de minimis violation, a health care insurer shall provide to a covered person or the covered person's authorized representative notice of the opportunity to resubmit and, as appropriate, pursue a review of the grievance under 3 AAC 28.930 - 3 AAC 28.938. The time period for resubmitting a grievance under this subsection and (e) of this section begins to run when the covered person or the covered person's authorized representative receives notice of the opportunity to resubmit. (g) A health care insurer shall file with the director (1) a copy of the grievance procedures required under this section, including all forms used to process requests under 3 AAC 28.936; and (2) subsequent material modifications to previously filed documents. (h) The director may disapprove a filing received under (g) of this section that fails to comply with the provisions of 3 AAC 28.930 - 3 AAC 28.938. (i) A health care insurer shall set out in, or attach to, a policy, certificate of coverage, membership booklet, outline of coverage, or other evidence of coverage provided to a covered person, a description of the grievance procedures required under 3 AAC 28.930 - 3 AAC 28.938. The description and other grievance procedure documents of the health care insurer must include a statement of a covered person's or the covered person's authorized representative's right to contact the director for assistance at any time. The statement must include the division's current mailing address, electronic mail address, and telephone number.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.936 Life, Health, Variable, and Related Insurance
3 AAC 28.936. Reviews of grievances involving an adverse determination. (a) A covered person or the covered person's authorized representative may file a grievance with a health care insurer requesting a review of an adverse determination. The covered person or the covered person's authorized representative shall file the request not later than 180 days after the covered person or the covered person's authorized representative received notice of the adverse determination under 3 AAC 28.900 - 3 AAC 28.918. The health care insurer shall extend the 180-day time period for filing a request if the (1) covered person or the covered person's authorized representative files a request with the health care insurer seeking an extension; and (2) the written request for the extension sets out one or more justifications for the extension that a prudent person would consider to be a fair and reasonable basis for allowing the extension; the covered person or the covered person's authorized representative does not need to file the request for an extension under this subsection within the 180-day filing period. (b) Upon receipt of the grievance filed under (a) of this section, a health care insurer shall provide to the covered person or the covered person's authorized representative the name, address, and telephone number of the person or organizational unit designated by the health care insurer to coordinate the review on behalf of the health care insurer. (c) For a review conducted under this section, a health care insurer shall ensure the independence and impartiality of each individual involved in making the review decision. (d) A health care insurer may not base one or more of the following decisions related to an individual involved in making a review decision on the likelihood that the individual will support the denial of benefits: (1) hiring; (2) compensation; (3) termination; (4) promotion; or (5) other similar matter. (e) In an adverse determination involving utilization review, a health care insurer shall designate an appropriate clinical peer or peers, of the same or similar specialty as would typically manage the case being reviewed, to review the adverse determination. A health care insurer may not designate a person involved in the initial adverse determination to be a clinical peer. (f) If more than one clinical peer is designated under (e) of this section, a health care insurer shall ensure that a majority of those designated are health care professionals who have appropriate expertise. (g) In conducting a review under this section, a reviewer shall consider all comments, documents, records, and other information regarding the request for services submitted by a covered person or the covered person's authorized representative, without regard to whether the information was submitted or considered in making the initial adverse determination. (h) A covered person or the covered person's authorized representative (1) does not have the right to attend the review; (2) may submit written comments, documents, records, and other materials relating to the request for benefits for consideration during the review; and (3) may receive from a health care insurer, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the covered person's request for benefits; in this paragraph, "relevant" means a document, record, or other information that (A) was relied upon in making the benefit determination; (B) was submitted, considered, or generated in the course of making the adverse determination, without regard to whether the document, record, or other information was relied upon in making the benefit determination; (C) demonstrates that, in making the benefit determination, the health care insurer or its designated representatives consistently applied required administrative procedures and safeguards with respect to the covered person as other similarly situated covered persons; or (D) constitutes a statement of policy or guidance with respect to the health care insurance policy concerning the denied health care service or treatment for the covered person's diagnosis, without regard to whether the advice or statement was relied upon in making the benefit determination. (i) Not later than three working days after receiving a grievance, a health care insurer shall provide a covered person or the covered person's authorized representative with notice of the provisions of this section. (j) The time period within which a decision is required to be made and notice provided under (k) and (l) of this section begins on the date the grievance is filed with a health care insurer under the health care insurer's procedures established under 3 AAC 28.934 for filing a request, without regard to whether all of the information necessary to make the determination accompanies the filing. A health care insurer shall notify and issue a decision in writing or by electronic mail to the covered person or the covered person's authorized representative not later than the time frames required under (k) or (l) of this section. (k) With respect to a grievance of an adverse determination involving a prospective review request, a health care insurer shall notify, and issue a decision to, the covered person or the covered person's authorized representative within a reasonable period of time that is appropriate given the covered person's medical condition, but not later than 30 days after the date the health care insurer received the grievance under (a) of this section. (l) With respect to a grievance requesting a review of an adverse determination involving a retrospective review request, a health care insurer shall notify, and issue a decision to, the covered person or the covered person's authorized representative within a reasonable period of time but not later than 30 days after the date the health care insurer received the grievance under (a) of this section. (m) Before issuing a decision under (k) or (l) of this section, a health care insurer shall provide free of charge to the covered person or the covered person's authorized representative new or additional evidence relied upon in connection with the grievance, sufficiently in advance of the date the decision is required to be provided, to permit a covered person or the covered person's authorized representative a reasonable opportunity to respond before that date. (n) Before issuing or providing notice of a final adverse determination under (k) or (l) of this section that is based on a new or additional rationale, a health care insurer shall provide the new or additional rationale to the covered person or the covered person's authorized representative free of charge and as soon as possible, sufficiently in advance of the date when the notice of final adverse determination is to be provided, to permit a covered person or the covered person's authorized representative a reasonable opportunity to respond before that date. (o) Notice of a decision issued under (k) or (l) of this section must be set out in a manner calculated to be understood by a person who has an average knowledge of health and medicine and must include (1) the name, title, and qualifying credentials of each person participating as a reviewer in the review process; (2) information sufficient to identify the claim involved with respect to the grievance, including the date of service, if applicable, the health care provider, and, if applicable, the claim amount; (3) a statement describing the (A) diagnosis code and the code's corresponding meaning; and (B) treatment code and the code's corresponding meaning; (4) a statement of the reviewers' understanding of the covered person's grievance; (5) the reviewers' decision, which must include (A) clear terms; (B) the contract basis or medical rationale in sufficient detail for a covered person or the covered person's authorized representative to respond further to the health care insurer's position; (6) a reference to the evidence or documentation used as the basis for the decision; (7) if the decision issued under (k) or (l) of this section upholds the adverse determination, the notice must include (A) the specific reason or reasons for the final adverse determination including (i) the denial code and the code's corresponding meaning; and (ii) a description of the health care insurer's standard, if any, used in reaching the denial; (B) reference to the specific plan provisions on which the determination is based; (C) a statement that a covered person or the covered person's authorized representative is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the covered person's benefit request; in this subparagraph, "relevant" has the meaning given in (h)(3) of this section; (D) if a health care insurer relied upon an internal rule, guideline, protocol, or other similar criterion to make the final adverse determination, (i) the specific rule, guideline, protocol, or other similar criterion; or (ii) a statement that a copy of the rule, guideline, protocol, or other similar criterion was relied upon to make the final adverse determination and that a copy of the rule, guideline, protocol, or other similar criterion will be provided free of charge to the covered person or the covered person's authorized representative upon request; (E) if a final adverse determination is based on a medical necessity or experimental or investigational treatment, or similar exclusion or limit, (i) an explanation of the scientific or clinical judgment for making the determination, applying the terms of the health care insurance policy to the covered person's medical circumstances; or (ii) a statement that an explanation will be provided free of charge to the covered person or the covered person's authorized representative upon request; (F) if applicable, instructions for requesting (i) a copy of the rule, guideline, protocol, or other similar criterion relied upon in making the final adverse determination under (D) of this paragraph; and (ii) the written statement of the scientific or clinical rationale for the determination under (E) of this paragraph; (G) a statement describing the procedures for obtaining an independent external review of the adverse determination under 3 AAC 28.950 - 3 AAC 28.982; (H) a statement indicating a covered person's right to bring a civil action in superior court; and (I) a statement of a covered person's or covered person's authorized representative's right to contact the director's office for assistance with respect to a claim, grievance, or appeal at any time; the statement must include the division's current mailing address, electronic mail address, and telephone number. (p) A health care insurer shall provide the notice required under (o) of this section in a culturally and linguistically appropriate manner under whichever of the following federal regulations is applicable to the health care insurer's notice: (1) 29 C.F.R. 2590.715-2719(e); (2) 45 C.F.R. 147.136(e). (q) To meet the requirements of (p) of this section, a health care insurer shall (1) provide oral language services, such as a telephone assistance hotline, that include, in the applicable non-English language, (A) answering questions; and (B) providing assistance with filing (i) benefit requests; (ii) claims; and (iii) appeals; (2) provide, upon request, a notice in the applicable non-English language; and (3) include in the English version of all notices, a statement prominently displayed in the applicable non-English language clearly indicating how to access the language services provided by the health care insurer.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.938 Life, Health, Variable, and Related Insurance
3 AAC 28.938. Expedited reviews of grievances involving an adverse determination. (a) A health care insurer shall establish written procedures for the expedited review of an urgent care request of a grievance involving an adverse determination. The procedures must allow a covered person or the covered person's authorized representative to request an expedited review under this section orally or in writing. (b) In addition to (a) of this section, a health care insurer shall provide expedited review of a grievance involving an adverse determination with respect to a concurrent review urgent care request involving (1) an admission; (2) availability of care; (3) a continued stay; or (4) a health care service for a covered person who has received emergency services but has not been discharged from a facility. (c) A health care insurer shall appoint an appropriate clinical peer or peers, in the same or similar specialty as would typically manage the case being reviewed, to review the adverse determination. A health care insurer may not designate a person involved in making the initial adverse determination to be a clinical peer. (d) In an expedited review, a health care insurer shall transmit all necessary information, including the health care insurer's decision, to a covered person or the covered person's authorized representative by telephone, facsimile transmission, electronic mail, or the most expeditious method available. (e) A health care insurer shall make an expedited review decision and shall notify a covered person or the covered person's authorized representative of the decision under (h) of this section as expeditiously as the covered person's medical condition requires, but not later than 72 hours after the receipt of the request for the expedited review. (f) If an expedited review is of a grievance involving an adverse determination with respect to a concurrent review urgent care request, a health care insurer shall continue coverage of the services without liability to a covered person until the covered person or the covered person's authorized representative is notified of the determination. (g) The time period within which a decision is required to be made under (e) of this section begins on the date a request is filed with a health care insurer under the health care insurer's procedures established under 3 AAC 28.934 for filing a request, without regard to whether all of the information necessary to make the determination accompanies the filing. (h) Except for 3 AAC 28.936(o)(7), the requirements under 3 AAC 28.936(o) - (q), for the review of a grievance involving an adverse determination, apply to an expedited review of a grievance involving an adverse determination. An expedited review of a grievance involving an adverse determination notice must include a description of additional material or information necessary for a covered person or the covered person's authorized representative to complete a request, including an explanation of why the material or information is necessary to complete the request.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
Article 13 External Review of Health Care Coverage Decisions
3 AAC 28.950 Life, Health, Variable, and Related Insurance
3 AAC 28.950. Applicability. (a) Except under (b) of this section, 3 AAC 28.950 - 3 AAC 28.982 apply to a health care insurer that transacts health care insurance in this state. (b) The provisions of 3 AAC 28.950 - 3 AAC 28.982 do not apply to (1) a policy or certificate that provides coverage only for a specified disease, specified accident, or accident-only coverage, or for credit, disability income, hospital indemnity, long-term care insurance defined under AS 21.53.200, vision care, or other limited supplemental benefit; (2) a Medicare supplement policy of insurance defined under 3 AAC 28.510; (3) coverage under a plan through Medicare, Medicaid, or the federal employees health benefits program; (4) coverage issued under 10 U.S.C. 1071 - 1110b, and coverage issued as supplemental to that coverage; (5) coverage issued as supplemental to liability insurance; (6) workers' compensation or similar insurance; (7) automobile medical-payment insurance or insurance under which a benefit is payable without regard to fault, whether written on a group blanket or individual basis.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.952 Life, Health, Variable, and Related Insurance
3 AAC 28.952. Notice of right to external review. (a) A health care insurer shall notify a covered person or the covered person's authorized representative in writing of the covered person's right to request an external review under 3 AAC 28.958 - 3 AAC 28.962. A health care insurer shall provide the notice of the right to request an external review when the health care insurer sends written notice of (1) an adverse determination upon completion of the health care insurer's utilization review process under 3 AAC 28.900 - 3 AAC 28.918; and (2) a final adverse determination. (b) The notice under (a) of this section must include the following, or substantially equivalent, language: "We have denied your request for the provision of, or payment for, a health care service or course of treatment. You may have the right to have our decision reviewed by health care professionals who have no association with us if our decision involved making a judgment as to the medical necessity, appropriateness, health care setting, level of care, or effectiveness of the health care service or treatment you requested by submitting a request for external review to the director of the Alaska Division of Insurance by mail or personal delivery at the Alaska Division of Insurance, 550 West 7th Avenue, Anchorage, AK. 99501-3567, by electronic mail to insurance@alaska.gov, or by facsimile transmission by calling (907) 269-7910. (c) A notice under (a) of this section relating to an adverse determination must include a statement informing a covered person or the covered person's authorized representative that if the covered person has a medical condition where the time frame for completion of an expedited review of a grievance involving an adverse determination under 3 AAC 28.938 would seriously jeopardize the life or health of the covered person or would jeopardize the covered person's ability to regain maximum function, the covered person or the covered person's authorized representative may (1) file a request for an expedited external review under 3 AAC 28.960, or under 3 AAC 28.962 if the adverse determination involves a denial of coverage based on a determination that the recommended or requested health care service or treatment is experimental or investigational and the covered person's treating physician certifies in writing that the recommended or requested health care service or treatment that is the subject of the adverse determination would be significantly less effective if not promptly initiated; and at the same time that a covered person or the covered person's authorized representative files a request for an expedited review of a grievance involving an adverse determination under 3 AAC 28.938, the independent review organization assigned to conduct the expedited external review shall determine whether the covered person or the covered person's authorized representative shall be required to complete the expedited review of the grievance before the independent review organization conducts the expedited external review; and (2) file a grievance under the health care insurer's internal grievance process under 3 AAC 28.936; however, the covered person or the covered person's authorized representative may file a request for external review under 3 AAC 28.954 and will be considered to have exhausted the health care insurer's internal grievance process for purposes of 3 AAC 28.956 if (A) the health care insurer has not issued a written decision to the covered person or the covered person's authorized representative not later than 30 days after the date the covered person or the covered person's authorized representative files the grievance with the health care insurer; and (B) the covered person or the covered person's authorized representative has not requested or agreed to a delay. (d) A notice under (a) of this section relating to a final adverse determination must include a statement informing a covered person or the covered person's authorized representative that the covered person or the covered person's authorized representative may request (1) an expedited external review under 3 AAC 28.960 if (A) the covered person has a medical condition where the time frame for completion of a standard external review under 3 AAC 28.958 would seriously jeopardize the life or health of the covered person or would jeopardize the covered person's ability to regain maximum function; (B) the final adverse determination concerns an admission, availability of care, continued stay, or health care service for which the covered person received emergency services, but has not been discharged from a facility; (2) a standard external review under 3 AAC 28.962 if a denial of coverage was based on a determination that the recommended or requested health care service or treatment is experimental or investigational; or (3) an expedited external review under 3 AAC 28.962 if (A) a denial of coverage was based on a determination that the recommended or requested health care service or treatment is experimental or investigational; and (B) the covered person's treating physician certifies in writing that the recommended or requested health care service or treatment that is the subject of the request would be significantly less effective if not promptly initiated. (e) A health care insurer shall include with a notice under (a) of this section a copy of the description of the standard and expedited external review procedures the health care insurer is required to provide under 3 AAC 28.982; the description must (1) highlight the provisions in the external review procedures that give the covered person or the covered person's authorized representative the opportunity to submit additional information; and (2) include the forms that the health care insurer uses to process an external review. (f) A health care insurer shall include with the notice under (a) of this section a release form, or other document approved by the director that complies with the requirements of 45 C.F.R. 164.508, by which the covered person or the covered person's authorized representative authorizes the health care insurer and the covered person's treating health care provider to disclose protected health information, including medical records concerning the covered person that are pertinent to the external review.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.954 Life, Health, Variable, and Related Insurance
3 AAC 28.954. Request for external review. (a) A covered person or the covered person's authorized representative may make a request to the director for an external review of an adverse determination or a final adverse determination. Except for a request for an expedited external review, a covered person or the covered person's authorized representative shall submit a request for an external review to the director not later than 180 days after the covered person or the covered person's authorized representative receives notice of the adverse determination. The director will extend the 180-day time period for filing the request if the (1) covered person or the covered person's authorized representative files a written request with the director seeking an extension; and (2) the request for the extension sets out one or more justifications for the extension that a prudent person would consider to be a fair and reasonable basis for allowing the extension; the covered person or the covered person's authorized representative does not need to file the request for an extension under this subsection within the 180-day filing period. (b) A covered person or the covered person's authorized representative may submit a written request for an external review to the director by contacting the division by mail, electronic mail, or facsimile transmission. A written request for an external review must include a copy of the health care insurer's written notice containing the adverse determination or final adverse determination. (c) A covered person or the covered person's authorized representative may make an oral request to the director for an expedited external review by telephoning the division. The director may require submission of additional documents or information, including physician certifications or medical information releases considered practicable under the time constraints. (d) There is no charge for submitting a request for an external review.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.956 Life, Health, Variable, and Related Insurance
3 AAC 28.956. Exhaustion of internal grievance process. (a) Except as otherwise provided under this section, before making a request for an external review, a covered person or the covered person's authorized representative must exhaust a health care insurer's internal grievance process under 3 AAC 28.930 - 3 AAC 28.938. (b) A covered person or the covered person's authorized representative will be considered to have exhausted a health care insurer's grievance process if the covered person or the covered person's authorized representative (1) has filed a grievance involving an adverse determination; and (2) except to the extent the covered person or the covered person's authorized representative requested or agreed to a delay, has not received a written decision on the grievance from the health care insurer not later than 30 days after the covered person or the covered person's authorized representative filed the grievance with the health care insurer. (c) Notwithstanding (b) of this section, a covered person or the covered person's authorized representative must exhaust a health care insurer's internal grievance process before making a request for an external review of an adverse determination involving a retrospective review determination made under 3 AAC 28.900 - 3 AAC 28.918. (d) When a covered person or the covered person's authorized representative files a request for an expedited review of a grievance involving an adverse determination under 3 AAC 28.938, the covered person or the covered person's authorized representative may file a request for an expedited external review of an adverse determination without exhausting a health care insurer's internal grievance process if (1) under 3 AAC 28.960, the covered person has a medical condition where the time frame for completion of an internal review of the grievance involving an adverse determination under 3 AAC 28.938 would (A) seriously jeopardize the life or health of the covered person; or (B) jeopardize the covered person's ability to regain maximum function; or (2) under 3 AAC 28.962, the adverse determination involves a denial of coverage based on a determination that the recommended or requested health care service or treatment is experimental or investigational and the covered person's treating physician certifies in writing that the recommended or requested health care service or treatment that is the subject of the adverse determination would be significantly less effective if not promptly initiated. (e) Before conducting an expedited external review, an independent review organization shall determine whether the covered person is first required to complete the expedited grievance review process under 3 AAC 28.938. Upon determining that the covered person has not exhausted internal grievance processes, the independent review organization shall immediately notify the covered person or the covered person's authorized representative of its determination and that the independent review organization will not proceed with the expedited external review (1) until completion of the expedited grievance review process; and (2) while the covered person's grievance at the completion of the expedited grievance review process remains unresolved. (f) A covered person or the covered person's authorized representative may request an external review of an adverse determination before the covered person or the covered person's authorized representative has exhausted a health care insurer's internal grievance procedures if the health care insurer agrees to waive the exhaustion requirement. If the requirement to exhaust the health care insurer's internal grievance procedures is waived, the covered person or the covered person's authorized representative may file a written request with the director for a standard external review.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.958 Life, Health, Variable, and Related Insurance
3 AAC 28.958. Standard external review. (a) A covered person or a covered person's authorized representative may file a request with the director for a standard external review of a health care insurer's adverse determination or final adverse determination not later than 180 days after (1) receipt of a notice of an adverse determination or a final adverse determination; (2) failure of a health care insurer to issue a written decision not later than 30 days after the covered person or the covered person's authorized representative filed a grievance involving an adverse determination under 3 AAC 28.956(b); or (3) agreement of the health care insurer to waive the requirement that the covered person or the covered person's authorized representative exhaust the health care insurer's internal grievance procedures before filing a request for external review of an adverse determination under 3 AAC 28.956(f). (b) The director will extend the 180-day time period for filing the request if the (1) covered person or the covered person's authorized representative files a request with the director seeking an extension; and (2) the request for the extension sets out one or more justifications for the extension that a prudent person would consider to be a fair and reasonable basis for allowing the extension; the covered person or the covered person's authorized representative does not need to file the request for an extension under this subsection within the 180-day filing period. (c) Not later than one working day after receipt of a request for external review under (a) of this section, the director shall send written notice of the request to the health care insurer. (d) Not later than five working days after receipt of the external review request under (c) of this section, the health care insurer shall complete a preliminary review of the request to determine whether (1) the individual is or was a covered person under the health care insurance policy when the health care service or treatment was recommended or requested or, if the request concerns a retrospective review, was a covered person under the health care insurance policy when the health care service or treatment was provided; (2) the health care service or treatment that is the subject of the adverse determination or final adverse determination is a covered service under the covered person's health care insurance policy but for a determination by the health care insurer that the health care service or treatment is not covered because the service or treatment does not meet the health care insurer's requirements for medical necessity, appropriateness, health care setting, level of care, or effectiveness; (3) the covered person or the covered person's authorized representative has exhausted the health care insurer's internal grievance process, unless the covered person or the covered person's authorized representative is not required to exhaust the health care insurer's internal grievance process under 3 AAC 28.956 or this section; and (4) the covered person or the covered person's authorized representative has provided all of the information and forms required to process an external review request, including the release form under 3 AAC 28.952(f). (e) Not later than one working day after completion of a preliminary review under (d) of this section, a health care insurer shall notify in writing the covered person or the covered person's authorized representative, and also shall notify in writing the director, whether the request is (1) complete; and (2) eligible for external review. (f) If a health care insurer determines the request is not complete, the health care insurer shall notify in writing the covered person or the covered person's authorized representative, and also shall notify in writing the director, (1) that the request is not complete; and (2) what information or materials are needed to make the request complete. (g) If a health care insurer determines that a request is not eligible for external review, the health care insurer shall issue a notice of initial determination in writing informing the covered person or the covered person's authorized representative, and also informing the director, of that determination and the reasons why the request is not eligible for external review. The notice must include a statement that the covered person or the covered person's authorized representative may appeal the health care insurer's initial determination of ineligibility to the director. (h) Notwithstanding a health care insurer's initial determination that a request is not eligible, the director may determine the request is eligible for external review under (d) of this section and refer the request for external review. The director will make the determination (1) under the terms of the covered person's health care insurance policy; and (2) subject to all applicable provisions under 3 AAC 28.950 - 3 AAC 28.982. (i) Not later than one working day after receipt of notice of initial determination from a health care insurer that a request for external review is eligible for external review or upon a determination by the director that a request is eligible for external review, the director will (1) assign an independent review organization to conduct the external review from the list of approved independent review organizations maintained under 3 AAC 28.970(c); the director will assign an independent review organization by rotation among those approved independent review organizations qualified to conduct the particular external review based on the nature of the health care service or treatment that is the subject of the adverse determination or final adverse determination and other circumstances, including conflict-of-interest concerns; (2) notify the health care insurer of the name of the assigned independent review organization; and (3) notify the covered person or the covered person's authorized representative in writing (A) that the request is eligible; (B) that the request is accepted for external review; (C) of the name of the assigned independent review organization; and (D) that the covered person or the covered person's authorized representative may submit in writing to the assigned independent review organization, not later than five working days after receipt of the notice, additional information that the independent review organization shall consider when conducting the external review; the independent review organization may accept and consider additional information submitted by the covered person or the covered person's authorized representative later than five working days after receipt of the notice. (j) Not later than five working days after receipt of a notice of an assignment of an independent review organization, a health care insurer or the health care insurer's designee utilization review organization shall provide or transmit all necessary documents and information considered in making the adverse determination or final adverse determination to the assigned independent review organization. Except under (k) of this section, failure by a health care insurer or the health care insurer's designee utilization review organization to provide the documents and information during the time specified may not delay the conduct of the external review. (k) If a health care insurer or health care insurer's designee utilization review organization fails to provide the documents and information during the time specified under (j) of this section, an assigned independent review organization may terminate the external review and make a decision to reverse the adverse determination or final adverse determination. Immediately after making a decision, the independent review organization shall notify the covered person or the covered person's authorized representative, and also shall notify the health care insurer and the director, of its decision. (l) An assigned independent review organization shall review the information and documents received under (i)(3)(D) and (j) of this section. The assigned independent review organization shall forward the information and documents to the health care insurer not later than one working day after receipt of the information and documents submitted by the covered person or the covered person's authorized representative. (m) Upon receipt of the information and documents forwarded to a health care insurer under (l) of this section, the health care insurer may reconsider the adverse determination or final adverse determination that is the subject of the external review. The health care insurer's reconsideration of its adverse determination or final adverse determination may not delay or terminate the external review. The external review shall only be terminated if the health care insurer decides, upon completion of the reconsideration, to reverse the health care insurer's determination and provide coverage or payment for the recommended or requested health care service or treatment that is the subject of the adverse determination or final adverse determination. (n) Immediately after making a decision to reverse the health care insurer's adverse determination or final adverse determination, a health care insurer shall notify in writing the covered person or the covered person's authorized representative, and also shall notify in writing the assigned independent review organization and the director, of the health care insurer's decision. The assigned independent review organization shall terminate the external review upon receipt of notice of the health care insurer's decision to reverse the health care insurer's adverse determination or final adverse determination. (o) In addition to the documents and information provided to an assigned independent review organization under (j) of this section, the independent review organization shall, to the extent the information or documents are available and the independent review organization considers them appropriate, consider the following in reaching a decision: (1) the covered person's pertinent medical records; (2) the attending physician or health care professional's recommendation or request; (3) consulting reports from appropriate health care professionals and other documents submitted by the health care insurer, the covered person, the covered person's authorized representative, or the covered person's treating physician or other health care professional; (4) the terms of coverage under the covered person's health care insurance policy with the health care insurer to ensure that the independent review organization decision is not contrary to the terms of coverage under the covered person's health care insurance policy with the health care insurer; (5) the most appropriate practice guidelines that (A) must include applicable evidence-based standards; and (B) may include other practice guidelines developed by the federal government, national or professional medical societies, boards, and associations; (6) the applicable clinical review criteria developed and used by the health care insurer or the health care insurer's designee utilization review organization; and (7) the opinion of the independent review organization's clinical reviewer after considering the information or documents described in (1) - (6) of this subsection to the extent the information or documents are available and the clinical reviewer considers them appropriate. (p) Not later than 45 days after receipt of the request for an external review, an assigned independent review organization shall provide written notice of the independent review organization's decision to uphold or reverse the adverse determination or the final adverse determination of a health care insurer to the covered person or the covered person's authorized representative, and also to the health care insurer and the director. In reaching a decision, the assigned independent review organization is not bound by a decision or conclusion reached during the health care insurer's utilization review or internal grievance processes. The notice under this subsection must include (1) a general description of the reason for the request for external review; (2) the date the independent review organization received the assignment from the director to conduct the external review; (3) the date the external review was conducted; (4) the date of the independent review organization's decision; (5) each principal reason for the independent review organization's decision, including what applicable evidence-based standards, if any, were a basis for the decision; (6) the rationale for the decision; (7) references to evidence or documentation, including evidence-based standards, considered in reaching the decision; and (8) the professional licenses held by each reviewer. (q) Upon receipt of notice under (p) of this section of a decision of the independent review organization reversing the adverse determination or final adverse determination of the health care insurer, the health care insurer shall immediately approve the coverage of the recommended or requested health care service or treatment that was the subject of the adverse determination or final adverse determination.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.960 Life, Health, Variable, and Related Insurance
3 AAC 28.960. Expedited external review. (a) Except under (k) of this section, a covered person or the covered person's authorized representative may make an oral or written request to the director for an expedited external review of a health care insurer's adverse determination or final adverse determination when the covered person or the covered person's authorized representative receives (1) an adverse determination that (A) involves a medical condition of the covered person for which the time frame for completion of an expedited internal review of a grievance involving an adverse determination would seriously jeopardize the life or health of the covered person or would jeopardize the covered person's ability to regain maximum function; and (B) the covered person or the covered person's authorized representative has filed a request for an expedited review of a grievance involving an adverse determination; or (2) a final adverse determination that (A) involves a medical condition where the time frame for completion of a standard external review would seriously jeopardize the life or health of the covered person or would jeopardize the covered person's ability to regain maximum function; or (B) concerns emergency or health care services, for which the covered person has not been discharged from a facility, including (i) an admission; (ii) availability of care; (iii) a continued stay; or (iv) a health care service or treatment. (b) Upon receipt of a request for an expedited external review, the director will immediately send written notice of the request to the health care insurer. (c) Immediately upon receipt of notice of a request for expedited external review under (b) of this section, a health care insurer shall complete a preliminary review of the request to determine whether the request meets the eligibility requirements for external review under 3 AAC 28.958(d). If the health care insurer determines that the request is not eligible for external review, the health care insurer shall immediately issue a notice of initial determination in writing informing the covered person or the covered person's authorized representative, and also informing the director, of that determination and the reasons the request is not eligible for external review. The notice must include a statement that the covered person or the covered person's authorized representative may appeal the health care insurer's initial determination of ineligibility to the director. (d) Notwithstanding a health care insurer's initial determination that a request is not eligible, the director may determine the request is eligible for external review under 3 AAC 28.958(d) and refer the request for external review. The director will make the determination (1) under the terms of the covered person's health care insurance policy; and (2) subject to all applicable provisions under 3 AAC 28.950 - 3 AAC 28.982. (e) Upon receipt of notice of initial determination from a health care insurer that a request is eligible for expedited external review or upon a determination by the director that a request is eligible for expedited external review, the director will immediately (1) assign an independent review organization, in the manner set out in 3 AAC 28.958(i)(1), to conduct the expedited external review; and (2) notify the health care insurer and notify the covered person or the covered person's authorized representative of the name of the assigned independent review organization. (f) Upon receiving notice under (e)(2) of this section, a health care insurer or the health care insurer's designee utilization review organization shall immediately provide or transmit, by electronic mail, telephone, facsimile transmission, or other available expeditious method, all necessary documents and information considered in making the adverse determination or final adverse determination to the assigned independent review organization. (g) In addition to the documents and information provided to an assigned independent review organization under (f) of this section, the assigned independent review organization shall, to the extent the information or documents are available and the independent review organization considers them appropriate, consider the information and documents described in 3 AAC 28.958(o)(1) - (7). (h) As expeditiously as the covered person's medical condition or circumstances require, but not later than 72 hours after receipt of an eligible request for expedited external review, an assigned independent review organization shall (1) make a decision to uphold or reverse the adverse determination or final adverse determination of the health care insurer; in reaching a decision, the assigned independent review organization is not bound by the decision or conclusion reached during the health care insurer's utilization review or internal grievance processes; and (2) notify the covered person or the covered person's authorized representative, and also notify the health care insurer and the director, of the decision. (i) If the notice provided under (h) of this section is not in writing, not later than 48 hours after providing that notice, an assigned independent review organization shall provide written confirmation of the decision to the covered person or the covered person's authorized representative, and also to the health care insurer and the director. The written confirmation must include the information set out in 3 AAC 28.958(p)(1) - (8). (j) Upon receipt of notice of a decision of the independent review organization reversing the adverse determination or final adverse determination of the health care insurer under (h) of this section, the health care insurer shall immediately approve the coverage of the recommended or requested health care service or treatment that was the subject of the adverse determination or final adverse determination. (k) The director will reject a request for an expedited external review of a retrospective adverse or final adverse determination.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.962 Life, Health, Variable, and Related Insurance
3 AAC 28.962. External review of experimental or investigational treatment adverse determinations. (a) A covered person or the covered person's authorized representative may file a request with the director for an external review not later than 180 days after receipt of a health care insurer's notice of adverse determination or final adverse determination that involves a denial of coverage based on a determination that the health care service or treatment recommended or requested is experimental or investigational. The director will extend the 180-day time period for filing the request if the (1) covered person or the covered person's authorized representative files a written request with the director seeking an extension; and (2) the written request for the extension sets out one or more justifications for the extension that a prudent person would consider to be a fair and reasonable basis for allowing the extension; the covered person or the covered person's authorized representative does not need to file the request for an extension under this subsection within the 180-day filing period. (b) A covered person or the covered person's authorized representative may make an oral or written request to the director for an expedited external review of a health care insurer's adverse determination or final adverse determination if the covered person's treating physician certifies, in writing, that the recommended or requested health care service or treatment that is the subject of the request would be significantly less effective if not promptly initiated. (c) Upon receipt of a request for an expedited external review, the director will immediately notify the health care insurer of the request. (d) Immediately upon receipt of notice of a request for an expedited external review under (c) of this section, a health care insurer shall determine whether the request is eligible for external review under (i) of this section. If the health care insurer determines that the request is not eligible for external review, the health care insurer shall immediately issue a notice of initial determination in writing informing the covered person or the covered person's authorized representative, and also informing the director, of that determination and the reasons the request is not eligible for review. The notice must include a statement that the covered person or the covered person's authorized representative may appeal the health care insurer's initial determination of ineligibility to the director. (e) Notwithstanding a health care insurer's initial determination that a request is not eligible, the director may determine the request is eligible for external review under (i) of this section and refer the request for external review. The director will make the determination (1) under the terms of the covered person's health care insurance policy; and (2) subject to all applicable provisions under 3 AAC 28.950 - 3 AAC 28.982. (f) Upon receipt of the notice of initial determination from a health care insurer that a request is eligible for expedited external review or upon a determination by the director that a request is eligible for expedited external review, the director will immediately (1) assign an independent review organization, in the manner set out in 3 AAC 28.958(i)(1), to conduct the expedited external review; and (2) notify the health care insurer and notify the covered person or the covered person's authorized representative of the name of the assigned independent review organization. (g) Upon receiving notice under (f)(2) of this section, a health care insurer or the health care insurer's designee utilization review organization shall immediately provide or transmit, by electronic mail, telephone, facsimile transmission, or other available expeditious method, all necessary documents and information considered in making the adverse determination or final adverse determination to the assigned independent review organization. (h) Except for a request for an expedited external review under (b) of this section, not later than one working day after receipt of a request for external review under (a) of this section, the director shall send written notice of the request to the health care insurer. (i) Not later than five working days after receipt of a notice under (h) of this section, a health care insurer shall complete a preliminary review of the external review request to determine whether (1) the individual is or was a covered person under the health care insurance policy when the health care service or treatment was recommended or requested or, if the request concerns a retrospective review, was a covered person in the health care insurance policy when the health care service or treatment was provided; (2) the recommended or requested health care service or treatment that is the subject of the adverse determination or final adverse determination meets the following conditions: (A) is a covered benefit under the covered person's health care insurance policy except for the health care insurer's determination that the service or treatment is experimental or investigational for a particular medical condition; (B) is not explicitly listed as an excluded benefit under the covered person's health care insurance policy with the health care insurer; (3) the covered person's treating physician has certified that one of the following situations is applicable: (A) standard health care services or treatments have not been effective in improving the condition of the covered person; (B) standard health care services or treatments are not medically appropriate for the covered person; or (C) there is no available standard health care service or treatment covered by the health care insurer that is more beneficial than the recommended or requested health care service or treatment sought; (4) the covered person's treating physician has certified in writing that the (A) recommended or requested health care service or treatment that is the subject of the adverse determination or the final adverse determination is likely to be more beneficial to the covered person, in the physician's opinion, than other available standard health care services or treatments; (B) physician is a licensed, board-certified, or board-eligible physician qualified to practice in the area of medicine appropriate to treat the covered person's condition, and scientifically valid studies using accepted protocols demonstrate the health care service or treatment recommended or requested that is the subject of the adverse determination or final adverse determination is likely to be more beneficial to the covered person than other available standard health care services or treatments; (5) the covered person or the covered person's authorized representative has exhausted the health care insurer's internal grievance process under 3 AAC 28.930 - 3 AAC 28.938, unless the covered person or the covered person's authorized representative is not required to exhaust the health care insurer's internal grievance process under 3 AAC 28.956; and (6) the covered person or the covered person's authorized representative has provided the information and forms required to process an external review request, including the release form under 3 AAC 28.952(f). (j) Not later than one working day after completion of a preliminary review under (i) of this section, a health care insurer shall notify in writing the covered person or the covered person's authorized representative, and also shall notify in writing the director, whether the request is (1) complete; and (2) eligible for external review. (k) If a health care insurer determines the request is not complete, the health care insurer shall notify in writing the covered person or the covered person's authorized representative, and also shall notify in writing the director, (1) that the request is not complete; and (2) what information or materials are needed to make the request complete. (l) If a health care insurer determines a request is not eligible for external review, the health care insurer shall issue a notice of initial determination in writing informing the covered person or the covered person's authorized representative, and also informing the director, of that determination and the reasons why the request is not eligible for external review. The notice must include a statement informing the covered person or the covered person's authorized representative that the health care insurer's initial determination of ineligibility may be appealed to the director. (m) Notwithstanding a health care insurer's initial determination that a request is not eligible, the director may determine the request is eligible for external review under (i) of this section and refer the request for external review. The director will make the determination (1) under the terms of the covered person's health care insurance policy; and (2) subject to all applicable provisions under 3 AAC 28.950 - 3 AAC 28.982. (n) A health care insurer shall notify the director and the covered person or the covered person's authorized representative if a request for external review is determined eligible for external review. (o) Not later than one working day after receipt of the notice of initial determination from a health care insurer that a request for external review is eligible for external review or upon a determination by the director that a request is eligible for external review, the director will assign an independent review organization and issue the notification as provided under 3 AAC 28.958(i). (p) Not later than one working day after receipt of a notice of assignment to conduct an external review under (o) of this section, an assigned independent review organization shall (1) select one or more clinical reviewers, as the independent review organization determines is appropriate under (q) of this section, to conduct the external review; and (2) based on the opinion of the clinical reviewer, or opinions if there is more than one clinical reviewer, make a decision to uphold or reverse the adverse determination or final adverse determination. (q) In selecting clinical reviewers, an assigned independent review organization shall select physicians or other health care professionals who (1) meet the minimum qualifications described under 3 AAC 28.974; and (2) through clinical experience in the past three years, are experts in the treatment of the covered person's condition and knowledgeable about the recommended or requested health care service or treatment that is the subject of the adverse determination or the final adverse determination; a covered person, the covered person's authorized representative, or a health care insurer may not choose or control the choice of the clinical reviewers selected to conduct the external review. (r) Each clinical reviewer selected shall (1) review all information and documents received and other information submitted in writing by the covered person or the covered person's authorized representative; (2) review all documents and other information received from the health care insurer under (s) of this section; and (3) provide a written opinion to the assigned independent review organization regarding whether the recommended or requested health care service or treatment should be covered; in reaching an opinion, a clinical reviewer is not bound by the decision or conclusion reached during the health care insurer's utilization review or internal grievance processes. (s) Not later than five working days after receipt of the notice of an assignment of an independent review organization, a health care insurer or the health care insurer's designee utilization review organization shall provide or transmit all necessary documents and information considered in making the adverse determination or the final adverse determination to the assigned independent review organization. Except under (t) of this section, failure by a health care insurer or health care insurer's designee utilization review organization to provide the documents and information during the time specified may not delay the conduct of the external review. (t) If a health care insurer or health care insurer's designee utilization review organization fails to provide the documents and information during the time specified under (s) of this section, an assigned independent review organization may terminate the external review and make a decision to reverse the adverse determination or final adverse determination. Immediately after making a decision, the independent review organization shall notify the covered person or the covered person's authorized representative, and also shall notify the health care insurer and the director, of its decision. (u) Not later than one working day after receipt of information and documents submitted by the covered person or the covered person's authorized representative, an assigned independent review organization shall forward the information and documents to the health care insurer. (v) Upon receipt of the information and documents forwarded to the health care insurer under (u) of this section, the health care insurer may reconsider the adverse determination or final adverse determination that is the subject of the external review. The health care insurer's reconsideration of the adverse determination or final adverse determination may not delay or terminate the external review. The external review shall only be terminated if the health care insurer decides, upon completion of the reconsideration, to reverse the determination and provide coverage or payment for the recommended or requested health care service or treatment that is the subject of the adverse determination or final adverse determination. (w) Immediately after making a decision to reverse an adverse determination or final adverse determination, a health care insurer shall notify in writing the covered person or the covered person's authorized representative, and also shall notify in writing the assigned independent review organization and the director, of the health care insurer's decision. The assigned independent review organization shall terminate the external review upon receipt of notice of the health care insurer's decision to reverse the adverse determination or final adverse determination. (x) Except under (y) of this section, not later than 20 days after being selected to conduct an external review, each clinical reviewer shall provide an opinion to the assigned independent review organization regarding whether the recommended or requested health care service or treatment should be covered under this section. Each clinical reviewer's opinion must be in writing and include (1) a description of the covered person's medical condition; (2) a description of the indicators relevant to determining whether there is sufficient evidence to demonstrate that the recommended or requested health care service or treatment is likely to be more beneficial to the covered person than other available standard health care services or treatments and that the adverse risks of the recommended or requested health care service or treatment would not be substantially increased over those of available standard health care services or treatments; (3) a description and analysis of medical or scientific evidence considered in reaching the opinion; (4) a description and analysis of applicable evidence-based standards, if any; and (5) information on whether the reviewer's rationale for the opinion is based on a factor described in (z)(5)(A) or (B) of this section. (y) For an expedited external review, each clinical reviewer shall provide an opinion orally or in writing to the assigned independent review organization as expeditiously as the covered person's medical condition or circumstances require, but not later than five working days after being selected as a clinical reviewer under (p) of this section. If the opinion provided is not in writing, not later than 48 hours after the opinion is provided, the clinical reviewer shall provide written confirmation of the opinion to the assigned independent review organization and include all required information in support of the opinion. (z) In addition to the documents and information provided under (g) and (s) of this section, each clinical reviewer selected shall, to the extent the information or documents are available and the reviewer considers them appropriate, consider the following in reaching an opinion: (1) the covered person's pertinent medical records; (2) the attending physician or health care professional's recommendation or request; (3) consulting reports from appropriate health care professionals and other documents submitted by the health care insurer, the covered person, the covered person's authorized representative, or the covered person's treating physician or other health care professional; (4) the terms of coverage under the covered person's health care insurance policy with the health care insurer to ensure that, but for the health care insurer's determination that the recommended or requested health care service or treatment that is the subject of the opinion is experimental or investigational, the reviewer's opinion is not contrary to the terms of coverage under the covered person's health care insurance policy with the health care insurer; (5) whether either of the following factors is applicable: (A) the recommended or requested health care service or treatment is approved by the United States Food and Drug Administration, if applicable, for the condition; (B) medical or scientific evidence or evidence-based standards demonstrate that (i) the expected benefits of the recommended or requested health care service or treatment are likely to be more beneficial to the covered person than other available standard health care services or treatments; and (ii) the adverse risks of the recommended or requested health care service or treatment would not be substantially increased over those of available standard health care services or treatments. (aa) Except under (bb) of this section, not later than 20 days after receipt of the opinion of each clinical reviewer, an assigned independent review organization shall (1) make a decision based on the opinions of the clinical reviewer or reviewers, to uphold or reverse the adverse determination or final adverse determination of a health care insurer; and (2) provide written notice of the decision to the covered person or the covered person's representative, and also to the health care insurer and the director. (bb) For an expedited external review, not later than 48 hours after receipt of the opinion of each clinical reviewer, an assigned independent review organization shall (1) make a decision based on the opinions of the clinical reviewer or reviewers, to uphold or reverse or the adverse determination or final adverse determination of a health care insurer; and (2) notify the covered person or the covered person's authorized representative, and also notify the health care insurer and the director, of the decision. (cc) If a notice provided under (bb) of this section is not in writing, not later than 48 hours after providing notice, an assigned independent review organization shall provide written confirmation of the decision to the covered person or the covered person's authorized representative, and also to the health care insurer and the director. (dd) If a majority of the clinical reviewers recommend that the recommended or requested health care service or treatment should be covered, the independent review organization shall make a decision to reverse a health care insurer's adverse determination or final adverse determination. (ee) If a majority of the clinical reviewers recommend that the recommended or requested health care service or treatment should not be covered, the independent review organization shall make a decision to uphold a health care insurer's adverse determination or final adverse determination. (ff) If the clinical reviewers are evenly split as to whether the recommended or requested health care service or treatment should be covered, the independent review organization shall obtain the opinion of an additional clinical reviewer for the independent review organization to make a decision based on the opinions of a majority of the clinical reviewers. The additional clinical reviewer selected shall use the same information to reach an opinion as the clinical reviewers who have already submitted their opinions. The selection of an additional clinical reviewer under this section may not extend the time within which the assigned independent review organization is required to make a decision based on the opinions of the clinical reviewers for the external review. (gg) An independent review organization's notice of decision must include (1) a general description of the reason for the request for external review; (2) the written opinion of each clinical reviewer which must include (A) a description of the qualifications of the clinical reviewer; (B) the recommendation of the clinical reviewer as to whether the recommended or requested health care service or treatment should be covered; and (C) the rationale for the reviewer's recommendation; (3) the date the independent review organization received the assignment from the director to conduct the external review; (4) the date the external review was conducted; (5) the date of the independent review organization's decision; (6) each principal reason for the decision, including what applicable evidence-based standards, if any, were a basis for the decision; (7) the rationale for the decision; (8) references to the evidence or documentation, including evidence-based standards, considered in reaching the decision; and (9) the professional licenses held by each reviewer. (hh) Upon receipt of notice under (bb) of this section of a decision of the independent review organization reversing an adverse determination or final adverse determination of a health care insurer, a health care insurer shall immediately approve the coverage of the recommended or requested health care service or treatment that was the subject of the adverse determination or final adverse determination.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.964 Life, Health, Variable, and Related Insurance
3 AAC 28.964. Declination of external review assignment by the independent review organization. Not later than 24 hours after receipt of an assignment to conduct an external review under 3 AAC 28.958(i)(1), 3 AAC 28.960(e)(1), or 3 AAC 28.962(f)(1), an independent review organization shall (1) make a determination of the independent review organization's ability to perform the external review; and (2) advise the director if the independent review organization is unable to perform the review due to (A) conflict of interest; or (B) lack of expertise or qualification for the particular subject matter of the review.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.966 Life, Health, Variable, and Related Insurance
3 AAC 28.966. Binding nature of external review decision. (a) An external review decision is binding on a health care insurer except to the extent the health care insurer has other remedies available under applicable state law. (b) An external review decision is binding on the covered person except to the extent the covered person has other remedies under applicable federal or state law. (c) A covered person or the covered person's authorized representative may not file a subsequent request for external review involving the same adverse determination or final adverse determination for which the covered person has already received an external review decision.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.968 Life, Health, Variable, and Related Insurance
3 AAC 28.968. Term of initial independent review organization registration period; renewal. (a) An initial biennial independent review organization registration period includes the rest of the calendar year in which the registration is issued and all of the following calendar year. (b) If the director issues an initial biennial independent review organization registration on or after October 1, the registration period includes the rest of the calendar year in which the registration is issued and all of the following two calendar years. (c) An independent review organization is responsible for knowing the date that the independent review organization's biennial registration period ends and for submitting a renewal independent review organization registration application not later than 30 days before the next biennial registration period begin.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.970 Life, Health, Variable, and Related Insurance
3 AAC 28.970. Approval of independent review organizations; registration. (a) The director may assign an independent review organization to conduct an external review in this state if the independent review organization (1) has an approved registration application on file with the director; (2) has paid the independent review organization biennial registration fee under 3 AAC 31.060; (3) is currently in good standing in this state; (4) is accredited by a nationally recognized private accrediting agency that the director determines has independent review organization accreditation standards that are equivalent to, or exceed, the minimum qualifications for independent review organizations under 3 AAC 28.974; and (5) meets the minimum qualifications under 3 AAC 28.974. (b) Notwithstanding (a) of this section, the director may approve an independent review organization that is not accredited by a nationally recognized private accrediting entity if there are no acceptable nationally recognized private accrediting entities providing independent review organization accreditation. (c) The director will maintain and periodically update a list of approved independent review organizations. The director will remove an independent review organization from the list if the director determines the independent review organization no longer satisfies the requirements established under this section. (d) An independent review organization application must include (1) payment of the biennial independent review organization registration fee under 3 AAC 31.060; (2) an independent review organization application form prescribed by the director that includes the (A) name of the state in which the applicant is domiciled; (B) name of the applicant; (C) "doing business as" name of the applicant; (D) complete physical address, mailing address, electronic mail address, telephone number, and facsimile transmission number of the (i) applicant's principal place of business in the applicant's state of domicile; and (ii) applicant's principal place of business in this state; (E) electronic mail address that the applicant desires the division to utilize to communicate with the applicant; (F) Internet address of the applicant; (G) federal employer identification number of the applicant; (H) following contact information provided for use on the division's website: (i) the company name; (ii) the contact person for inquiries on external review questions; (iii) a mailing address; (iv) an electronic mail address; (v) a telephone number; (vi) a facsimile transmission number; (I) applicant's signed attestation and certification that (i) verifies that the information provided by the applicant is truthful and complete; (ii) acknowledges that payment of fees associated with external reviews conducted under 3 AAC 28.950 - 3 AAC 28.982 are the sole responsibility of the health care insurer whose covered person's medical condition is being reviewed; (iii) the applicant has no recourse against the division or the state to the extent that a health care insurer fails to pay fees associated with the external review process; and (iv) authorizes the director to verify applicant information with a federal, state, or local government agency, insurance company, or accrediting organization; (J) if applicable, name and mailing address of the applicant's ultimate controlling owner or holding company; in this subparagraph, "ultimate controlling owner" has the meaning given "ultimate controlling person" in 3 AAC 21.195; (3) a copy of the business license issued to the applicant by the department; (4) a list of other states in which the applicant is approved to conduct external reviews; (5) if applicable, a list of other states in which the applicant has (A) been denied approval to conduct external reviews; or (B) had approval to conduct external reviews revoked; (6) evidence of accreditation received from a nationally recognized accrediting entity the director has determined has independent review organization standards that are equivalent to, or exceed, the minimum qualifications for independent review organizations under 3 AAC 28.974; (7) a copy of the applicant's written policies and procedures that include evidence of (A) meeting the qualifications under 3 AAC 28.974(a)(1)(A) - (F); and (B) ensuring adherence to the requirements under 3 AAC 28.950 - 3 AAC 28.982 by a contractor, subcontractor, agent, or employee affiliated with the independent review organization; (8) a list of the reviewers retained by the independent review organization, with a description of each of their areas of expertise and the types of cases each reviewer is qualified to review; (9) the name, title, electronic mail address, telephone number, and facsimile transmission number of the physician or health care professional responsible for the supervision and oversight of the independent review procedure; and (10) a description of the fees to be charged to a health care insurer by the independent review organization for external reviews. (e) The director may retain an outside expert to perform reviews of applications submitted under this section.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.972 Life, Health, Variable, and Related Insurance
3 AAC 28.972. Examination; suspension or revocation of registration. (a) To determine compliance with 3 AAC 28.950 - 3 AAC 28.989, the director may examine the affairs, transactions, accounts, records, and documents of an independent review organization. The director, after a hearing, may suspend or revoke an independent review organization registration for failure to meet the requirements under 3 AAC 28.970(a). (b) The director will suspend an independent review organization's registration for a fixed period of time determined by the director, or until the occurrence of a specific event necessary for remedying the reasons for suspension. The director may modify, rescind, or reverse a suspension under this section. (c) During a period of suspension, the director will not assign the independent review organization to conduct an external review in this state. The independent review organization may continue to conduct an external review assigned before the suspension if the director determines completion of the assignment to be in the best interests of the public.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.974 Life, Health, Variable, and Related Insurance
3 AAC 28.974. Minimum qualifications for independent review organizations. (a) An independent review organization is eligible to conduct external reviews under 3 AAC 28.950 - 3 AAC 28.982, if the independent review organization has and maintains written policies and procedures that govern all aspects of the standard external review process and the expedited external review process and include, at a minimum, the following: (1) a quality assurance mechanism that ensures (A) that external reviews are conducted not later than the specified time frames and that required notices are provided in a timely manner; (B) the selection of qualified and impartial clinical reviewers to conduct external reviews on behalf of the independent review organization, and the suitable matching of reviewers to specific cases; (C) that the independent review organization employs or contracts with an adequate number of clinical reviewers to meet the objectives under (B) of this paragraph; (D) the confidentiality of medical and treatment records and clinical review criteria; (E) the establishment and maintenance of written procedures to ensure that the independent review organization is unbiased, in addition to other procedures required under this section; and (F) that a person employed by or under contract with the independent review organization adheres to the requirements under 3 AAC 28.950 - 3 AAC 28.982; (2) a toll-free telephone service to receive information related to external reviews 24 hours a day, seven days a week, that is capable of accepting, recording, or providing appropriate instruction to incoming telephone callers outside normal working hours; and (3) an agreement and a system to maintain required records and to provide the director with access to those records; the agreement must include a provision that the independent review organization shall reply in writing not later than five working days after reviewing a records inquiry from the director. (b) A clinical reviewer assigned by an independent review organization to conduct an external review must be a physician or other appropriate health care professional who meets the following minimum qualifications: (1) is an expert in the treatment of the covered person's medical condition that is the subject of the external review; (2) is knowledgeable about the recommended or requested health care service or treatment through recent or current actual clinical experience treating patients with the same or similar medical condition as the covered person; (3) holds a nonrestricted license in a state of the United States and, for physicians, a current certification by a nationally recognized medical specialty board in the area or areas appropriate to the subject of the external review; and (4) has no history of disciplinary actions or sanctions, including loss of staff privileges or participation restrictions, that have been taken or are pending by a hospital, governmental agency or unit, or regulatory body that raise a substantial question as to the clinical reviewer's physical, mental, or professional competence or moral character. (c) An independent review organization may not own or control, be a subsidiary of, or in any way be owned or controlled by, or exercise control with, a health care insurer, a national, state, or local trade association of health care insurers, or a national, state, or local trade association of health care providers. (d) An independent review organization selected to conduct an external review, or a clinical reviewer assigned by the independent organization to conduct an external review, may not have a material professional, familial, or financial conflict of interest with (1) the health care insurer that is the subject of the external review; (2) the covered person whose health care service or treatment is the subject of the external review or the covered person's authorized representative; (3) an officer, director, or management employee of the health care insurer that is the subject of the external review; (4) the health care professional or the health care professional's medical group or independent practice association recommending the health care service or treatment that is the subject of the external review; (5) the facility at which the recommended health care service or treatment would be provided; or (6) the developer or manufacturer of the principal drug, device, procedure, or other therapy being recommended for the covered person whose health care service or treatment is the subject of the external review. (e) In determining whether an independent review organization or a clinical reviewer of the independent review organization has a material professional, familial, or financial conflict of interest under (d) of this section, the director will take into consideration situations where the independent review organization to be assigned to conduct an external review of a specified case or a clinical reviewer to be assigned by the independent review organization to conduct an external review of a specified case may have an apparent professional, familial, or financial relationship or connection with a person described in (d) of this section, but the characteristics of that relationship or connection are such that they do not constitute a material professional, familial, or financial conflict of interest that would prohibit selection of the independent review organization or the clinical reviewer to conduct the external review. (f) An independent review organization is presumed to be in compliance with the requirements of this section if the organization is accredited by a nationally recognized private accrediting entity that has independent review accreditation standards that the director has determined are equivalent to, or exceed, the minimum qualifications of this section. (g) The director will initially and periodically review the standards of each nationally recognized private accrediting entity that accredits independent review organizations to determine whether the accrediting entity's standards are, and continue to be, equivalent to, or exceed, the minimum qualifications established under this section. The director may make the determination based on a National Association of Insurance Commissioners review of the standards. (h) Upon request, a nationally recognized private accrediting entity shall provide its current independent review organization accreditation standards to the director or to the National Association of Insurance Commissioners for the director to determine if the accrediting entity's standards are equivalent to, or exceed, the minimum qualifications established under this section. The director will not consider the accreditation of an independent review organization if the accrediting entity has not had its standards reviewed by the National Association of Insurance Commissioners.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.976 Life, Health, Variable, and Related Insurance
3 AAC 28.976. Immunity for independent review organizations. An independent review organization, a clinical reviewer working on behalf of an independent review organization, or an employee, agent, or contractor of an independent review organization may not be liable in damages to a person for an opinion rendered, or act or omission performed, within the scope of the duties of the organization, the clinical reviewer, or an employee, agent, or contractor of the organization under 3 AAC 28.950 - 3 AAC 28.982 during, or upon completion of, an external review conducted under 3 AAC 28.950 - 3AAC 28.982, unless the opinion was rendered, or the act or omission was performed, in bad faith or involved gross negligence.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.978 Life, Health, Variable, and Related Insurance
3 AAC 28.978. External review reporting requirements. (a) An independent review organization assigned to conduct an external review shall maintain written records, in the aggregate by state and by health care insurer, of requests for external review for which the independent review organization conducted external reviews during a calendar year. (b) An independent review organization required to maintain written records under this section shall submit to the director, upon request, a report in a format specified by the director. The report must include (1) the name and mailing address of the independent review organization; (2) the name, title, electronic mail address, telephone number, and facsimile transmission number of the person completing the report; (3) the name, title, electronic mail address, telephone number, and facsimile transmission number of the person responsible for regulatory compliance and quality of external reviews; and (4) in the aggregate by state and by health care insurer the following: (A) the total number of requests assigned to the independent review organization for (i) standard external reviews; and (ii) expedited external reviews; (B) the average length of time for resolution of requests for external review assigned to the independent review organization for (i) standard external reviews; and (ii) expedited external reviews: (C) the number of medical necessity external reviews decided in favor of a health care insurer and a brief list of the procedures denied; (D) the number of medical necessity external reviews decided in favor of the covered person and a brief list of the procedures approved; (E) the number of experimental or investigational treatment external reviews decided in favor of the health care insurer and a brief list of the procedures denied: (F) the number of experimental or investigational treatment external reviews decided in favor of the covered person and a brief list of the procedures approved; (G) the number of external reviews terminated as the result of a reconsideration by a health care insurer; (H) the number of external reviews terminated by the covered person or the covered person's authorized representative before issuance by the independent review organization of the external review decision; (I) the number of external reviews declined due to possible conflict of interest for each of the following: (i) a health care insurer; (ii) a covered person; (iii) a health care provider; (J) a brief description of the conflicts of interest identified under (I)(i) - (iii) of this paragraph; (K) the number of external reviews declined due to other reasons not reflected under (I) of this paragraph. (c) The independent review organization shall provide to the director documents or information requested by the director not later than five working days after receipt of the request. (d) The independent review organization shall retain the written records required under this section for at least three years. (e) A health care insurer shall maintain written records in the aggregate by state and by type of health care insurance policy offered by the health care insurer of all requests for external review that the health care insurer receives notice of from the director under 3 AAC 28.950 - 3 AAC 28.982. (f) A health care insurer required to maintain written records under this section shall submit to the director, upon request, a report in the format specified by the director. The report must include the following: (1) the name and mailing address of the health care insurer; (2) the name, title, electronic mail address, telephone number, and facsimile transmission number of the person completing the report; (3) the name, title, electronic mail address, telephone number, and facsimile transmission number of the person responsible for regulatory compliance; and (4) in the aggregate, by state and by type of health plan offered, the following: (A) the total number of requests for external review of the health care insurer's adverse determinations and final adverse determinations; (B) the number of requests determined eligible for external review; (C) the number of requests for external review resolved and, of those resolved, (i) the number upholding the adverse determination or final adverse determination of the health care insurer; and (ii) the number reversing the adverse determination or final adverse determination of the health care insurer; and (D) the number of external reviews that were terminated as the result of reconsideration by the health care insurer of an adverse determination or final adverse determination after the receipt of additional information from the covered person or the covered person's authorized representative. (g) A health care insurer shall provide the director with other requested documents or information not later than five working days after receipt of the request. (h) A health care insurer shall retain the written records required under this section for at least three years. (i) A health care insurer shall ensure the health care insurer's person responsible for regulatory compliance identified under (f)(3) of this section or the person's designated alternate is available to the director during the division's normal working hours, 8:00 a.m. to 4:30 p.m., Alaska time zone, Monday through Friday, excluding state holidays.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.980 Life, Health, Variable, and Related Insurance
3 AAC 28.980. Funding of external review. A health care insurer against which a request for a standard external review or an expedited external review is filed shall pay the cost of the independent review organization to conduct the external review.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
3 AAC 28.982 Life, Health, Variable, and Related Insurance
3 AAC 28.982. Disclosure requirements. A health care insurer shall set out in, or attach to, a policy, certificate of coverage, membership booklet, or other evidence of coverage provided to a covered person, a description of the external review procedures described under 3 AAC 28.950 - 3 AAC 28.982. The description must include (1) a statement of the covered person's or the covered person's authorized representative's right to file a request for an external review of an adverse determination or final adverse determination with the director; the statement must include the division's current mailing address, electronic mail address, telephone number, and facsimile transmission number; (2) a statement informing the covered person that, when filing a request for an external review, the covered person will be required to authorize the release of medical records of the covered person that may be required to be reviewed for the purpose of reaching a decision on the external review; (3) a brief description, including timelines, of each type of external review process; and (4) a statement of the covered person or the covered person's authorized representative's right to provide additional information or otherwise participate in the external review process.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
Article 14 General Provisions: Utilization Review and Benefit Determinations, Health Care Insurer Grievance Procedures, and External Review of Health Care Coverage Decisions
3 AAC 28.989 Life, Health, Variable, and Related Insurance
3 AAC 28.989. Definitions. In 3 AAC 28.900 - 3 AAC 28.989, unless the context requires otherwise, (1) "adverse determination" includes a rescission of coverage determination and means (A) a determination by a health care insurer or the health care insurer's designee utilization review organization that (i) based upon the information provided, a request for a benefit under the health care insurer's health care insurance policy upon application of a utilization review technique does not meet the health care insurer's requirements for medical necessity, appropriateness, health care setting, level of care, or effectiveness or is determined to be experimental or investigational, and the requested benefit is therefore denied, reduced, or terminated or payment is not provided or made, in whole or in part, for the benefit; or (ii) an admission, availability of care, continued stay, or other health care service or treatment that is a covered benefit has been reviewed and, based upon the information provided, does not meet the health care insurer's requirements for medical necessity, appropriateness, health care setting, level of care, or effectiveness, and the requested service or payment for the service is therefore denied, reduced, or terminated; (B) the denial, reduction, termination, or failure to provide or make payment, in whole or in part, for a benefit based on a determination by a health care insurer or the health care insurer's designee utilization review organization of a covered person's eligibility to participate in the health care insurer's health care insurance policy; or (C) a prospective review or retrospective review determination that denies, reduces, or terminates or fails to provide or make payment, in whole or in part, for a benefit; (2) "applicable non-English language" means a non-English language if 10 percent or more of the population residing in a borough equivalent is literate only in the same non-English language as determined in CLAS County Data, Edition Date: January 2016, issued by the United States Department of Health and Human Services, Centers for Medicare and Medicaid Services, on January 27, 2016, and adopted by reference; (3) "authorized representative" means (A) a person to whom a covered person has given express written consent to represent the covered person for purposes of 3 AAC 28.900 - 3 AAC 28.982; (B) a person authorized by law to provide substituted consent for a covered person; (C) one of the following only if the covered person is unable to provide consent: (i) a family member of the covered person; or (ii) the covered person's treating health care professional; (D) a health care professional if the covered person's health care insurance policy requires that a request for a benefit under the plan be initiated by the health care professional; or (E) if the person is making an urgent care request, a health care professional with knowledge of the covered person's medical condition; (4) "best evidence" means evidence based on randomized clinical trials; if randomized clinical trials are not available, "best evidence" means evidence based on cohort studies or case-control studies; if randomized clinical trials, cohort studies, or case-control studies are not available, "best evidence" means evidence based on case-series studies; if none of these are available, "best evidence" means evidence based on expert opinion; (5) "borough equivalent" means (A) a unified municipality; (B) an organized borough; or (C) a census area used by the United States Secretary of Commerce in the last decennial census that is located in the unorganized borough of the state; (6) "case-control study" means a retrospective evaluation of two groups of patients with different outcomes to determine which specific interventions the patients received; (7) "case-series study" means an evaluation of a series of patients with a particular outcome, without the use of a control group; (8) "certification" means a determination by a health care insurer or the health care insurer's designee utilization review organization that a request for a benefit under the health care insurer's health care insurance policy has been reviewed and, based on the information provided, satisfies the health care insurer's requirements for medical necessity, appropriateness, health care setting, level of care, and effectiveness; (9) "clinical peer" means a physician or other health care professional who holds a non-restricted license in a state of the United States and in the same or similar specialty as typically manages the medical condition, procedure, or treatment under review; (10) "clinical review criteria" means the written screening procedures, decision abstracts, clinical protocols, and practice guidelines used by a health care insurer to determine the medical necessity and appropriateness of health care services; (11) "closed plan" means a managed care plan that requires a covered person to use participating providers under the terms of the managed care plan; (12) "cohort study" means a prospective evaluation of two groups of patients with only one group of patients receiving a specific intervention; (13) "concurrent review" means utilization review conducted during a patient's stay or course of treatment in a facility, the office of a health care professional, or other inpatient or outpatient health care setting; (14) "covered benefit" or "benefit" means a health care service to which a covered person is entitled under the terms of a health care insurance policy; (15) "covered person" means a policyholder, subscriber, enrollee, or other individual participating in a health care insurance policy; (16) "denial code" means a health care insurer specific identifier indicating the reason why a claim is being denied; (17) "department" means the Department of Commerce, Community, and Economic Development; (18) "diagnosis code" means a universal code used by a health care provider to categorize a health condition, illness, injury, or disease; (19) "director" means the director of the division of insurance; (20) "disclose" means to release, transfer, or otherwise divulge protected health information to a person other than the individual who is the subject of the protected health information; (21) "division" means the division of insurance, Department of Commerce, Community, and Economic Development; (22) "emergency medical condition" has the meaning given in AS 21.07.250; (23) "emergency services" means health care items and services furnished or required to evaluate and treat an emergency medical condition; (24) "evidence-based standard" means the conscientious, explicit, and judicious use of the current best evidence based on the overall systematic review of the research in making decisions about the care of individual patients; (25) "expert opinion" means a belief or an interpretation by specialists with experience in a specific area about the scientific evidence pertaining to a particular service, intervention, or therapy; (26) "facility" (A) means an institution providing health care services or a health care setting; (B) includes hospitals and other licensed inpatient centers, ambulatory surgical or treatment centers, skilled nursing centers, residential treatment centers, diagnostic laboratory and imaging centers, and rehabilitation and other therapeutic health settings; (27) "final adverse determination" means an (A) adverse determination that has been upheld by a health care insurer at the completion of the internal review process applicable under 3 AAC 28.936 or 3 AAC 28.938; or (B) adverse determination that, with respect to the internal review process, has been considered exhausted under 3 AAC 28.934(b); (28) "grievance" means a written complaint or, if the complaint involves an urgent care request, an oral complaint, submitted by or on behalf of a covered person regarding (A) the availability, delivery, or quality of health care services, including a complaint regarding an adverse determination made under utilization review; (B) claims payment, handling, or reimbursement for health care services; or (C) matters pertaining to the contractual relationship between a covered person and a health care insurer; (29) "health care insurance policy" means a policy, contract, certificate, or agreement offered or issued by a health care insurer to provide, deliver, arrange for, pay for, or reimburse the costs of health care services or treatments; (30) "health care professional" means a physician or other health care practitioner licensed, accredited, or certified to perform specified health care services consistent with state law; (31) "health care provider" or "provider" means a health care professional or a facility; (32) "health care services" means services for the diagnosis, prevention, treatment, cure, or relief of a health condition, illness, injury, or disease; (33) "health care insurer" has the meaning given in AS 21.07.250; (34) "health information" means data or information, whether oral or recorded in any form or medium, and personal facts or information about events or relationships that relates to the following: (A) the past, present, or future physical, mental, or behavioral health or condition of an individual or a member of the individual's family; (B) the provision of health care services or treatments to an individual; (C) payment for the provision of health care services or treatments to an individual; (35) "independent review organization" means an entity that conducts independent external reviews of adverse determinations and final adverse determinations; (36) "managed care plan" (A) means a health care insurance policy that requires a covered person to use, or creates incentives, including financial incentives, for a covered person to use, health care providers managed, owned, under contract with, or employed by a health care insurer; (B) includes (i) a closed plan; and (ii) an open plan; (37) "medical or scientific evidence" means evidence found in the following sources: (A) peer-reviewed scientific studies published in or accepted for publication by medical journals that (i) meet nationally recognized requirements for scientific manuscripts; and (ii) submit most of their published articles for review by experts who are not part of the editorial staff; (B) peer-reviewed medical literature, including literature relating to therapies reviewed and approved by a qualified institutional review board, biomedical compendia, and other medical literature that meet the criteria of the National Institutes of Health National Library of Medicine for indexing in Index Medicus (Medline) and Elsevier Science Ltd. for indexing in Excerpta Medicus (EMBASE); (C) medical journals recognized by the United States Secretary of Health and Human Services under 42 U.S.C. 1395x(t)(2) (Social Security Act); (D) the following standard reference compendia: (i) American Hospital Formulary Service - Drug Information; (ii) Drug Facts and Comparisons; (iii) American Dental Association Accepted Dental Therapeutics; and (iv) United States Pharmacopoeia - Drug Information; (E) findings, studies, or research conducted by or under the auspices of federal government agencies and nationally recognized federal research institutes including the following: (i) Agency for Healthcare Research and Quality; (ii) National Institutes of Health; (iii) National Cancer Institute; (iv) National Academy of Sciences; (v) Centers for Medicare and Medicaid Services; (vi) United States Food and Drug Administration; and (vii) a national board recognized by the National Institutes of Health for the purpose of evaluating the medical value of health care services or treatments; (F) other medical or scientific evidence that is comparable to the sources listed in (A) - (E) of this paragraph; (38) "network" means the group of participating providers providing services to a managed care plan; (39) "open plan" means a managed care plan other than a closed plan that provides incentives, including financial incentives, for a covered person to use participating providers under the terms of the managed care plan; (40) "participating provider" means a provider who, under contract with a health care insurer or with the health care insurer's contractor or subcontractor, has agreed to provide health care services to covered persons with an expectation of receiving payment, other than coinsurance, copayments, or deductibles, directly or indirectly from the health care insurer; (41) "person" (A) has the meaning given in AS 21.97.900; (B) includes a joint venture and a joint stock company; (42) "prospective review" means utilization review conducted before an admission or course of treatment; (43) "protected health information" means health information (A) that identifies an individual who is the subject of the information; or (B) with respect to which there is a reasonable basis to believe that the information could be used to identify an individual; (44) "randomized clinical trial" means a controlled, prospective study of patients that have been randomized into an experimental group and a control group at the beginning of the study with only the experimental group of patients receiving a specific intervention, which includes study of the groups for variables and anticipated outcomes over time; (45) "rescission" (A) means a cancellation or discontinuance of coverage under a health care insurance policy that has a retroactive effect; (B) does not include a cancellation or discontinuance of coverage under a health care insurance policy if (i) the cancellation or discontinuance of coverage has only a prospective effect; or (ii) the cancellation or discontinuance of coverage is effective retroactively to the extent the cancellation or discontinuance is attributable to a failure to timely pay required premiums or contributions towards the cost of coverage; (46) "retrospective review" (A) means review of medical necessity conducted after services have been provided to a patient; (B) does not include the review of a claim that is limited to (i) veracity of documentation; or (ii) accuracy of coding; (47) "treatment code" means a universal code used by a health care provider to identify a service or supply provided to an insured under a health care insurance policy; (48) "urgent care request" means a request (A) for a health care service or course of treatment with respect to which the time period for making a non-urgent care request determination (i) could seriously jeopardize the life or health of the covered person to regain maximum function; or (ii) in the opinion of an attending health care professional with knowledge of the covered person's medical condition, would subject the covered person to severe pain that cannot be adequately managed without the health care service or treatment that is the subject of the request; (B) that an attending health care professional with knowledge of the covered person's medical condition determines is an urgent care request under (A) of this paragraph; (C) except under (B) of this paragraph, that an individual determines is an urgent care request if the individual is (i) acting on behalf of a health care insurer; and (ii) applying the judgment of a prudent layperson who has an average knowledge of health and medicine; (49) "utilization review" has the meaning given in AS 21.07.250; (50) "utilization review organization" means an entity that conducts utilization review, other than a health care insurer performing utilization review for the health care insurer's own benefit plans; (51) "working day" has the meaning given in AS 21.97.900.
History
- Authority: AS 21.06.090; AS 21.07.005
- Eff. 3/15/2018, Register 225
Chapter 29 Property, Casualty, and Related Insurance
Article 1 Supplementary Payments
3 AAC 29.010 Supplementary payments
Repealed.
History
- Eff. 3/26/82, Register 81; repealed 7/1/96, Register 138
Article 2 Rate and Rating Plan Filings
3 AAC 29.200 Scope
(a) 3 AAC 29.200 - 3 AAC 29.300 apply to all insurance subject to rate regulation under AS 21.39.
(b) 3 AAC 29.200 - 3 AAC 29.300 do not apply to any insurance for which the filing requirement has been suspended or modified by a written order of the director.
History
- Authority: AS 21.06.090; AS 21.39.130
- Eff. 8/7/92, Register 123; am 1/17/98, Register 145
3 AAC 29.210 Rating organization filing
(a) A rating organization may develop and submit to the director a filing consisting of prospective loss costs supported by statistical data, interpretation of the statistical data, relevant experience or judgment, and other supporting information.
(b) A rating organization may develop and submit a filing of supplementary rating information.
(c) Repealed 1/17/98.
(d) A rating organization may print and distribute prospective loss cost data, rules, and other supplementary rating information.
History
- Authority: AS 21.06.090; AS 21.39.040; AS 21.39.130
- Eff. 8/7/92, Register 123; am 12/24/93, Register 128; am 1/17/98, Register 145
3 AAC 29.220 Insurer filing responsibilities
(a) An insurer may
(1) develop and submit its own filing of rates supported by statistical data, interpretation of the statistical data, relevant loss and expense experience or judgment, and other supporting information as required by the director; or
(2) submit a loss cost adjustment filing that adopts the prospective loss costs filing made by the rating organization of which the insurer is a participating insurer, and applies the insurer's own loss cost adjustments; except as provided in 3 AAC 29.240(c), an insurer must adopt the rating organization filing of prospective loss costs that will be in effect on the effective date of the insurer's loss cost adjustment filing.
(b) Repealed 12/24/93.
(c) Repealed 12/20/2020.
(d) A participating insurer of a rating organization for a kind of insurance may
(1) develop and submit a filing of supplementary rating information; or
(2) authorize the director to accept a filing of supplementary rating information made on its behalf by the licensed rating organization.
History
- Authority: AS 21.06.090; AS 21.39.070 AS 21.39.040; AS 21.39.130
- Eff. 8/7/92, Register 123; am 12/24/93, Register 128; am 1/17/98, Register 145; am 12/20/2020, Register 236
3 AAC 29.230 Insurer supplemental rating information filing
Repealed.
History
- Eff. 8/7/92, Register 123; repealed 12/24/93, Register 128
3 AAC 29.240 Insurer loss cost adjustment filing
(a) Loss cost adjustments included in an insurer's lost cost adjustment filing may be based on the insurer's operating methods for each kind of insurance and the measurable variations of expenses within that kind of insurance. The loss cost adjustments in the filing must be supported by the insurer's statistical data, interpretation of the data, expense experience and judgment, and other relevant information.
(b) Repealed 12/24/93.
(c) When making a loss cost adjustment filing, an insurer may elect to apply the loss cost adjustments to subsequently approved filings of prospective loss costs of its rating organization. If the insurer so elects, upon division approval of a subsequent rating organization filing of prospective loss costs, the insurer's rates will be the combination of the newly approved prospective loss costs and the approved loss cost adjustments on file with the division, and will become effective on the date specified in the filing of the prospective loss costs unless a different effective date is approved by the director. However, if an insurer determines that there is a significant change in the expenses it anticipates for a kind of insurance that would cause the insurer's rates to be excessive, inadequate, or unfairly discriminatory, the insurer shall file a revision of the loss cost adjustments with the director.
(d) If the rates of a participating insurer of a rating organization for a kind of insurance are determined solely by applying the insurer's loss cost adjustments already filed to the prospective loss costs contained in the rating organization filing, the insurer is not required to make an additional filing to combine the prospective loss costs with the loss cost adjustments.
(e) Repealed 3/11/98.
(f) An insurer may file more than one loss cost adjustment to apply to the prospective loss costs from a single rating organization filing only if the insurer
(1) clearly specifies which loss cost adjustment is applicable to which policyholders; and
(2) demonstrates to the director's satisfaction that the different loss cost adjustments are necessary to accommodate different expected expenses or losses.
History
- Authority: AS 21.06.090; AS 21.39.070 AS 21.39.040; AS 21.39.130
- Eff. 8/7/92, Register 123; am 12/24/93, Register 128; am 1/17/98, Register 145; am 3/11/98, Register 145
3 AAC 29.250 Insurer rate filing
(a) Repealed 12/24/93.
(b) Repealed 12/24/93.
(c) An insurer's rate filing must be consistent with the estimate of future costs of a risk transfer as established in the Casualty Actuarial Society's Statement of Principles Regarding Property and Casualty Ratemaking, adopted May 1988. The costs must include estimated future losses, loss adjustment expenses, and other expenses.
(d) Repealed 3/11/98.
(e) If an insurer relies upon the loss costs of a rating organization to support its rates, the insurer must use the approved prospective loss costs of the rating organization in effect at the time of the use.
History
- Authority: AS 21.06.090; AS 21.39.040; AS 21.39.130
- Eff. 8/7/92, Register 123; am 12/24/93, Register 128; am 1/17/98, Register 145; am 3/11/98, Register 145
3 AAC 29.260 Filing transmittal
Repealed.
History
- Eff. 8/7/92, Register 123; repealed 12/24/93, Register 128
3 AAC 29.270 Filing acknowledgement and retention
Repealed.
History
- Eff. 8/7/92, Register 123; repealed 12/24/93, Register 128
3 AAC 29.280 Implementation
Repealed.
History
- Eff. 8/7/92, Register 123; am 1/17/98, Register 145; repealed 12/20/2020, Register 236
3 AAC 29.290 Limits on using accidents or losses in automobile rating
(a) An insurer may not cancel, deny, nonrenew, underwrite, or rate an automobile insurance policy based upon
(1) an accident or claim involving an applicant or insured unless
(A) the accident involved injury to a person or more than $1,000 damage to property; and
(B) the applicant or insured has been determined to be 50 percent or more at fault; the determination of fault must be based on a reasonable investigation of all of the available information and may not be based solely on the existence of the accident in a database or motor vehicle record report that identifies accidents without regard to fault; the insurer shall determine the applicant or insured not to be at fault for an accident that occurs under the following circumstances:
(i) the automobile was lawfully parked; the insurer is not required to determine an automobile rolling from a parked position to be lawfully parked, but may determine the rolling to be the operation of the last operator;
(ii) the applicant, insured, or owner of the motor vehicle is reimbursed by or on behalf of a person responsible for the accident, a judgment against the responsible person exists, or the insurer is able to subrogate its payment to the insured, if the reimbursement, judgment, or subrogation is 50 percent or more of the damages associated with the accident;
(iii) the applicant or insured was struck in the rear and has not been convicted of a moving traffic violation in connection with the accident;
(iv) another party was convicted of a moving traffic violation in connection with the accident and the applicant or insured was not;
(v) the owner and operator of the other vehicle is unknown or has left the scene and the applicant or insured reported the accident to the appropriate authorities within 24 hours;
(vi) damage is the result of contact with animals;
(vii) damage is caused only by flying gravel, missiles, or falling objects; or
(viii) the accident occurs while the insured is using the motor vehicle in response to an emergency if the insured is a paid or voluntary member of a police or fire department, first-aid squad, or law enforcement agency at the time of the accident;
(2) claims for first party medical expenses or death, dismemberment, or similar benefits attributable to an accident for which the applicant or insured was less than 50 percent at fault;
(3) claims made under the uninsured and underinsured motorist coverage;
(4) claims made under comprehensive coverage, unless the insurer can demonstrate that the applicant or insured intentionally caused the loss;
(5) the existence of a resident or relative, including the use of that individual's driving record, claim record, or other risk characteristics, if that resident or relative is excluded from coverage in compliance with AS 28.20.440( l);
(6) the prior insurance history, including the previous insurance company of an applicant or insured, unless detailed actuarial support is included within the applicable rate filing; or
(7) an applicant or insured's failure to maintain continuous automobile insurance coverage, when the failure does not result in violation of AS 28.22 (Alaska Mandatory Automobile Insurance Act).
(b) In this section, "insured" includes customary or permissive operators.
(c) The prohibitions described in (a)(1) - (4) of this section do not prohibit the insurer from considering those claims in determining an overall or average rate level.
History
- Authority: AS 21.06.090; AS 21.36.210; AS 21.39.030 AS 21.36.090; AS 21.36.240 AS 21.36.125; AS 21.36.305
- Eff. 12/20/2020, Register 236
3 AAC 29.300 Definitions
In 3 AAC 29.200 - 3 AAC 29.300, unless the context otherwise requires,
(1) "director" means the director of the division of insurance;
(2) "division" means the division of insurance;
(3) "expenses" means that portion of a rate attributable to acquisition, field supervision, and collection expenses, general expenses, taxes, licenses, and fees;
(4) "loss adjustment expense" means the cost of adjusting losses, excluding the amount of the loss itself;
(5) "loss cost adjustments" means that portion of a rate that includes
(A) provisions for expenses, other than loss adjustment expenses;
(B) all forms of profit, including investment income; and
(C) any modification to the prospective loss costs filed by the rating organization;
(6) "prospective loss costs" means the historical aggregate losses and loss adjustment expenses upon which a portion of a rate is based, adjusted through trending to a future point in time, but does not include expenses, other than loss adjustment expenses, or profit;
(7) "rate" means the cost of a given unit of insurance;
(8) "rating organization" means a corporation, an unincorporated association, a partnership, or a person currently licensed as a rating organization under AS 21.39.060;
(9) repealed 1/17/98;
(10) "supplementary rating information" means any manual or plan of rates, classification, rating schedule, minimum premium, policy fee, rating rule, rate related underwriting rule, experience rating plan, and any other similar information needed to determine the applicable rate in effect or to be in effect;
(11) "supporting information" means
(A) the loss or expense experience and judgment of the filer and the loss or expense experience and data of other insurers or organizations, relied upon by the filer;
(B) the interpretation of statistical data relied upon by the filer;
(C) descriptions of methods used in making the rates; or
(D) any other relevant factors requested by the director;
(12) "trending" means any procedure for projecting developed losses to the average date of loss, or premiums or exposures to the average date of writing, for the period during which the policies are to be in effect;
(13) "participating insurer" means an insurer that purchases loss cost information services from a licensed rating organization, including companies referred to in AS 21.39.060 as members and subscribers.
History
- Authority: AS 21.06.090; AS 21.39.130
- Eff. 8/7/92, Register 123; am 12/24/93, Register 128; am 1/17/98, Register 145
Article 3 Group-Marketed Property and Casualty Insurance
3 AAC 29.305 Purpose
The purpose of 3 AAC 29.305 - 3 AAC 29.369 is to prevent abuses in the group-marketing of property and casualty insurance in this state, while preserving for consumers the potential benefits of this form of marketing.
History
- Authority: AS 21.06.090; AS 21.36.020
- Eff. 1/4/95, Register 133
3 AAC 29.310 Applicability
3 AAC 29.305 - 3 AAC 29.369 apply to all property and casualty insurance policies or renewals delivered or issued for delivery in this state after 12/31/94 that are sold through a group-marketed plan.
History
- Authority: AS 21.06.090; AS 21.36.020
- Eff. 1/4/95, Register 133
3 AAC 29.315 Fictitious arrangement prohibited
An insurer may group-market insurance only to employees of a particular employer or to members of an association, organization or other group formed for a specific purpose that is unrelated to the purpose of obtaining insurance through a group-marketed plan.
History
- Authority: AS 21.06.090; AS 21.36.020; AS 21.36.190
- Eff. 1/4/95, Register 133
3 AAC 29.320 Premium rates
Premium rates under a group-marketed plan must comply with AS 21.39. Rates are not unfairly discriminatory merely because different premiums result for policyholders with like loss exposures but different expense factors, or like expense factors but different loss exposures, as long as the rates reflect the differences with reasonable accuracy. Rates are not unfairly discriminatory if they are averaged broadly among persons insured under a group-marketed plan.
History
- Authority: AS 21.06.090; AS 21.39.020; AS 21.39.040 AS 21.36.190; AS 21.39.030; AS 21.39.130
- Eff. 1/4/95, Register 133
3 AAC 29.325 Statistics
An insurer selling insurance through a group-marketed plan shall maintain separate statistics for the loss and expense experience of the group-marketed plan.
History
- Authority: AS 21.06.090; AS 21.39.130
- Eff. 1/4/95, Register 133
3 AAC 29.330 Producers
A person may not act as or represent to be an insurance producer for a group-marketed plan in this state unless licensed under AS 21.27.
History
- Authority: AS 21.06.090; AS 21.27.010
- Eff. 1/4/95, Register 133
3 AAC 29.335 Compulsory participation prohibited
An insurer may not sell insurance through a group-marketed plan if
(1) the purchase of insurance through the group-marketed plan is a condition of employment or of membership in an association, organization, or other group; or
(2) an employee or a member may be penalized for nonparticipation in the group-marketed plan.
History
- Authority: AS 21.06.090; AS 21.36.080
- Eff. 1/4/95, Register 133
3 AAC 29.340 Tie-in sales prohibited
An insurer may not sell insurance through a group-marketed plan in this state if (1) the purchase of insurance available under the plan is contingent upon the purchase of any other insurance, product, or service; or (2) the purchase or price of any other insurance, product, or service is contingent upon the purchase of insurance available under the group-marketed plan. A reasonable requirement of safety devices, such as heat detectors, lightning rods, or theft prevention equipment, is permitted in the sale of insurance through a group-marketed plan.
History
- Authority: AS 21.06.090; AS 21.36.080
- Eff. 1/4/95, Register 133
3 AAC 29.345 Disclosure required
Before each sale, an insurer or producer selling insurance through a group-marketed plan shall disclose to a prospective insured all features of the plan, whether favorable or unfavorable, including premium rates, benefits, duration of coverage, policyholder services, conversion privileges available, and the financial interest in the plan of the sponsoring employer, association, organization, or group.
History
- Authority: AS 21.06.090; AS 21.36.030
- Eff. 1/4/95, Register 133
3 AAC 29.350 Underwriting standards
(a) An insurer may not use underwriting standards for individual risk selection in a group-marketed plan that are more restrictive overall than the standards used by the insurer for individual risk selection in the sale of the same kind of insurance in this state when a group-marketed plan is not used.
(b) If an insurer does not sell a kind of property or casualty insurance in this state other than through a group-marketed plan, the underwriting standards for individual risk selection in the group-marketed plan may not be more restrictive overall than the standards used by the insurer's principal affiliate for individual risk selection in the sale of the same kind of property or casualty insurance in this state when a group-marketed plan is not used.
History
- Authority: AS 21.06.090; AS 21.36.090
- Eff. 1/4/95, Register 133
3 AAC 29.355 Cancellation and nonrenewal
(a) For purposes of AS 21.36.210 - 21.36.290, if an employer, association, organization, or other group for any reason, including interruption or termination of employment or membership, fails to remit the premiums when due, the insurer may not regard this as nonpayment of premium by the insured unless
(1) the group-marketed plan provides for the payment of the premium by the employer, association, organization, or other group;
(2) the insured is given written notice of the failure to remit the premium; and
(3) the insured has not paid the premium within 20 days after the written notice is sent or the date the premium is due under the group-marketed plan, whichever is later.
(b) A group-marketed plan must provide that, upon termination of employment or membership or termination of the group-marketed plan, the insured may maintain the existing policy in force until the next expiration date for the policy.
History
- Authority: AS 21.06.090; AS 21.36.210; AS 21.36.220
- Eff. 1/4/95, Register 133
3 AAC 29.369 Definitions
In 3 AAC 29.305 - 3 AAC 29.369,
(1) "casualty insurance" has the meaning given in AS 21.12.070 but excludes workers' compensation and employer's liability insurance listed in AS 21.12.070(a)(3);
(2) "group-market" or "group-marketed" means a method of selling property or casualty insurance in which
(A) the insurance is offered to employees of a particular employer or to members of a particular association or organization or to persons grouped in another way; and
(B) the employer, association, organization, or other group agrees to or otherwise affiliates itself with the sale of the insurance to its employees or members;
(3) "property insurance" has the meaning given in AS 21.12.060.
History
- Authority: AS 21.06.090; AS 21.12.070 AS 21.12.060; AS 21.39.130
- Eff. 1/4/95, Register 133
Article 4 Motor Vehicle Liability Insurance Senior Discount
3 AAC 29.380 Written notice required
(a) When a personal motor vehicle liability insurer secures the application of a potentially eligible applicant, the insurer shall notify the applicant in writing that a reduction in the premium charged is available under AS 21.96.025. The insurer shall also notify a potentially eligible insured at each policy renewal. An insurer shall document in its underwriting records that it delivered the written notice to each potentially eligible applicant and insured.
(b) An insurer may satisfy its obligation to notify a potentially eligible applicant by providing a pre-printed notice containing the information required in 3 AAC 29.385 if the insurance producer dealing directly with a potentially eligible applicant delivers the pre-printed notice before the applicant completes the application. The insurance producer shall document the delivery of the pre-printed notice to the applicant in the insurance producer's records.
(c) An insurer may incorporate the required written notice into a computerized application system if the insurer
(1) includes the complete written notice in the application;
(2) provides a printed copy of the application including the complete notice to a potentially eligible applicant; and
(3) retains as part of its underwriting records documentation that each potentially eligible applicant received the notice.
History
- Authority: AS 21.06.090; AS 21.96.025
- Eff. 11/13/97, Register 144
3 AAC 29.385 Content of notice
A written notice informing a potentially eligible applicant or insured of the rate reduction available under AS 21.96.025 must include
(1) a statement that, to be eligible for a discount, the principal operator of the motor vehicle covered by the insurance policy must
(A) be 55 years of age or older;
(B) request the insurer to provide the discount at renewal;
(C) have had no chargeable accidents as set by the established underwriting guidelines in use by the insurer;
(D) have had no moving motor vehicle citations within three years preceding the request for the discount;
(E) have successfully completed a motor vehicle accident prevention course approved by the Department of Public Safety within three years preceding the request for the discount; a course taken and completed as a result of an order or sentence imposed by a court may not satisfy this requirement; and
(F) provide to the insurer documentation issued by the sponsor of the motor vehicle accident prevention course that states the date that the course was taken and successfully completed;
(2) the circumstances under which the insurer's rating rules permit the insurer to cancel the discount if the principal operator of the motor vehicle is
(A) involved in an accident caused by the operator; or
(B) convicted of a moving vehicle violation;
(3) a statement that the discount may not extend beyond three years after the last day of the operator's most recently successfully completed motor vehicle accident prevention course; and
(4) the insurer's premium discount calculation.
History
- Authority: AS 21.06.090; AS 21.96.025
- Eff. 11/13/97, Register 144
3 AAC 29.395 Definitions
In 3 AAC 29.380 - 3 AAC 29.395,
(1) "potentially eligible applicant" means a person who is 55 years of age or older and is identified on an application as an operator;
(2) "potentially eligible insured" means an insured person who has been identified to the insurer as being 55 years of age or older.
History
- Authority: AS 21.06.090; AS 21.96.025
- Eff. 11/13/97, Register 144
Article 5 Schedule and Individual Risk Rating Plans
3 AAC 29.400 Property, Casualty, and Related Insurance
3 AAC 29.400. Purpose of 3 AAC 29.400 - 3 AAC 29.469. The purpose of 3 AAC 29.400 - 3 AAC 29.469 is to establish standards for schedule rating to ensure that (1) a credit or debit that modifies a premium under a schedule rating plan is based only on risk characteristics that can be reasonably expected to affect losses or loss adjustment expenses; (2) the assignment of a credit or debit under a schedule rating plan results in a rate that is not excessive, inadequate, or unfairly discriminatory; and (3) documentation in an insurer's underwriting file provides sufficient detail to establish that the assignment of a credit or debit under a schedule rating plan complies with 3 AAC 29.400 - 3 AAC 29.469.
History
- Authority: AS 21.06.090; AS 21.39.030; AS 21.39.040
- Eff. 7/24/98, Register 147
3 AAC 29.405 Property, Casualty, and Related Insurance
3 AAC 29.405. Applicability. 3 AAC 29.400 - 3 AAC 29.469 apply to all insurers and rating organizations subject to the requirements of AS 21.39.
History
- Authority: AS 21.06.090; AS 21.39.030; AS 21.39.040
- Eff. 7/24/98, Register 147
3 AAC 29.410 Property, Casualty, and Related Insurance
3 AAC 29.410. Limitation on use of schedule rating plan. An insurer may only use a schedule rating plan under 3 AAC 29.400 - 3 AAC 29.469 for business or commercial insurance as defined in AS 21.36.310 and surety insurance as defined in AS 21.12.080.
History
- Authority: AS 21.06.090; AS 21.36.310; AS 21.39.040 AS 21.12.080; AS 21.39.030
- Eff. 7/24/98, Register 147
3 AAC 29.415 Property, Casualty, and Related Insurance
3 AAC 29.415. Filing requirements. (a) A rating organization, on behalf of its member and subscriber insurers, or an insurer may file, for the director's approval, a schedule rating plan that includes (1) the criteria that an applicant or insured must meet to be eligible for the plan; (2) a description of each risk characteristic for which a debit or credit will apply; (3) the range of permissible debits or credits for each risk characteristic; (4) the maximum total debit or credit that an underwriter may assign to the policy; and (5) a statement describing compliance with the requirements of 3 AAC 29.420 and 3 AAC 29.430. (b) A schedule rating plan filing must conform to the requirements of 3 AAC 31.200 - 3 AAC 31.217 and 3 AAC 31.225.
History
- Authority: AS 21.06.090; AS 21.39.030; AS 21.39.040
- Eff. 7/24/98, Register 147; am 11/12/2006, Register 180; am 12/20/2020, Register 236
3 AAC 29.420 Property, Casualty, and Related Insurance
3 AAC 29.420. Implementation requirements. If an insurer uses a schedule rating plan, the insurer (1) must uniformly apply the plan to all eligible insureds or applicants; (2) must apply the plan at each policy renewal; (3) must assign credits or debits only for risk characteristics described in the plan; however, for each insured or applicant, the insurer may use underwriting judgment to determine an appropriate amount of any credit or debit within the filed range; and (4) may not apply the plan in such a way as to duplicate other rating or rate development factors, including those in (A) a manual rate; (B) the classification of insureds within a rating system; or (C) an experience rating plan.
History
- Authority: AS 21.06.090; AS 21.39.030; AS 21.39.040
- Eff. 7/24/98, Register 147
3 AAC 29.425 Property, Casualty, and Related Insurance
3 AAC 29.425. Unfair discrimination. If an insurer using a schedule rating plan fails to comply with 3 AAC 29.420, the application of the plan is unfairly discriminatory and a violation of AS 21.36.
History
- Authority: AS 21.06.090; AS 21.36.900 AS 21.36.120; AS 21.39.030
- Eff. 7/24/98, Register 147
3 AAC 29.430 Property, Casualty, and Related Insurance
3 AAC 29.430. Required documentation. (a) For each policy of an eligible insured, an insurer shall maintain an underwriting file containing documentation of the application of the appropriate schedule rating plan. (b) The documentation required in (a) of this section must include a worksheet prepared annually that (1) describes each risk characteristic and the range of permissible credits or debits for each characteristic of the plan for which the insured is eligible; and (2) shows (A) the underwriting determination of a credit, debit, or zero change for each risk characteristic; (B) the date the determination was made; (C) the identity of the person making the determination; and (D) the basis for the determination. (c) The file documentation required in (a) of this section must support each underwriting determination and may include inspection reports, photographs, licensee observations and analysis, premises evaluations, formal safety plans of the insured, and narrative reports covering other aspects of the insured's hazards.
History
- Authority: AS 21.06.090; AS 21.39.030
- Eff. 7/24/98, Register 147
3 AAC 29.435 Property, Casualty, and Related Insurance
3 AAC 29.435. Use of schedule rating plans approved before 7/24/98. Repealed.
History
- Eff. 7/24/98, Register 147; repealed 12/20/2020, Register 236
3 AAC 29.469 Property, Casualty, and Related Insurance
3 AAC 29.469. Definitions. In 3 AAC 29.400 - 3 AAC 29.469, (1) "experience rating plan" means a rating procedure using past insurance experience of an individual policyholder to forecast future losses by measuring the policyholder's loss experience against the loss experience of other policyholders in the same classification in order to produce a prospective premium modification; (2) "manual rate" means the rate developed for an insured before the application of an experience rating plan or any subjective discount, credit, or surcharge is applied; (3) "risk characteristic" means an attribute that contributes to the variation in hazard among insureds; (4) "schedule rating" means the recognition, through the assignment of judgmental credits and debits to a manual rate, of characteristics that are expected to affect an insured's loss or loss adjustment expense experience, but that are not reflected in the class rates or the experience rating plan; and (5) "schedule rating plan" means a description of the rules and eligibility criteria for schedule rating.
History
- Authority: AS 21.06.090; AS 21.39.030; AS 21.39.040
- Eff. 7/24/98, Register 147
Article 6 Information Filings for Commercial Insurance
3 AAC 29.500 Property, Casualty, and Related Insurance
3 AAC 29.500. Applicability. The provisions of 3 AAC 29.500 - 3 AAC 29.550 apply to rate and form filings providing commercial insurance coverage as defined in AS 21.12.130 for exempt commercial policyholders as defined in 3 AAC 29.545.
History
- Authority: AS 21.06.090; AS 21.39.040 AS 21.12.130; AS 21.42.120
- Eff. 6/11/2005, Register 174; am 8/20/2016, Register 219
3 AAC 29.505 Property, Casualty, and Related Insurance
3 AAC 29.505. Authorization for informational rate filings. An insurer providing insurance coverage for an exempt commercial policyholder shall submit an informational rate filing to the director not later than 30 days after the proposed effective date of the filing. The informational filing is exempt from the filing requirements of AS 21.39.040(a)(1) and (d), 21.39.041, 21.39.210, and 21.39.220. The director will make the filing open to public inspection after completing the review of the filing or after the filing becomes effective, whichever is later.
History
- Authority: AS 21.06.090; AS 21.39.040; AS 21.39.220
- Eff. 6/11/2005, Register 174; am 12/20/2020, Register 236
3 AAC 29.510 Property, Casualty, and Related Insurance
3 AAC 29.510. Standards for informational rate filings. An informational rate filing must (1) include the proposed effective date of the filing; (2) meet the rate standards of AS 21.39.030 and other applicable rate requirements of AS 21; (3) include a statement indicating whether the same rate structure has been filed for approval to be used with policyholders who do not qualify as exempt commercial policyholders under 3 AAC 29.545; (4) meet the filing requirements of 3 AAC 31.205 - 3 AAC 31.217 and 3 AAC 31.225; and (5) include a statement that the filing is for policyholders who qualify as commercial policyholders under 3 AAC 29.545.
History
- Authority: AS 21.06.090; AS 21.39.040
- Eff. 6/11/2005, Register 174; am 11/12/2006, Register 180; am 12/20/2020, Register 236
3 AAC 29.515 Property, Casualty, and Related Insurance
3 AAC 29.515. Determining the annual aggregate premium. (a) An insurer shall calculate the annual aggregate premium threshold for qualification as an exempt commercial policyholder using filed commercial insurance manual rates or rating systems. The annual aggregate premium must include objective discounts and surcharges, but may not include discretionary or subjective discounts, surcharges, or rating plans. (b) An insurer may not include residual market premiums, premiums from unauthorized insurance, workers compensation premiums, aviation premiums, or wet marine premiums.
History
- Authority: AS 21.06.090; AS 21.39.040
- Eff. 6/11/2005, Register 174
3 AAC 29.520 Property, Casualty, and Related Insurance
3 AAC 29.520. Statistical data collection requirements. (a) An insurer that issues a policy to an exempt commercial policyholder shall maintain records that show (1) how the policy premium was determined, including discounts or surcharges; and (2) unless all of the insurer's policies are issued to exempt commercial policyholders, annual experience data on each insured exempt commercial policyholder, including written premium, paid losses and loss adjustment expenses, outstanding losses and loss adjustment expenses, underwriting expenses, underwriting profits, and profits from contingencies. (b) The data required in (a) of this section may be kept in electronic or written form.
History
- Authority: AS 21.06.090; AS 21.39.040
- Eff. 6/11/2005, Register 174
3 AAC 29.525 Property, Casualty, and Related Insurance
3 AAC 29.525. Authorization for informational form filings. An insurer providing insurance coverage for an exempt commercial policyholder shall submit an informational form filing to the director not later than 30 days after the proposed effective date of the filing. The informational filing is exempt from the filing requirements of AS 21.42.120(b), 21.42.123, and 21.42.125. The director will make the filing open to public inspection after completing the review of the filing or after the filing becomes effective, whichever is later.
History
- Authority: AS 21.06.090; AS 21.42.120; AS 21.42.125 AS 21.39.220; AS 21.42.123
- Eff. 6/11/2005, Register 174; am 12/20/2020, Register 236
3 AAC 29.530 Property, Casualty, and Related Insurance
3 AAC 29.530. Standards for informational form filings. The informational form filing must (1) include the proposed effective date of the filing; (2) include a statement indicating whether the same forms have been filed for approval to be used with policyholders who do not qualify as exempt commercial policyholders under 3 AAC 29.545; (3) include a statement that the filing is for policyholders who qualify as exempt commercial policy holders under 3 AAC 29.545; (4) meet the filing requirements of 3 AAC 31.205 - 3 AAC 31.217, 3 AAC 31.225, and 3 AAC 31.250; and (5) comply with all form standards, trade practice requirements, and other applicable requirements of AS 21.
History
- Authority: AS 21.06.090; AS 21.42.120
- Eff. 6/11/2005, Register 174; am 11/12/2006, Register 180; am 12/20/2020, Register 236
3 AAC 29.535 Property, Casualty, and Related Insurance
3 AAC 29.535. Disclosure requirements. (a) At the time of solicitation, an insurer or insurance producer shall disclose to the exempt commercial policyholder and the policyholder's risk manager, if any, that a policy form may be used and a premium or rate may be quoted that is not subject to prior approval by the division. (b) The declaration page or a state endorsement of a policy sold to an exempt commercial policyholder must clearly disclose that the rates, rating plans, resulting policy premiums, and policy forms are exempt from the prior approval filing requirements under the laws of this state.
History
- Authority: AS 21.06.090; AS 21.39.040; AS 21.42.120
- Eff. 6/11/2005, Register 174
3 AAC 29.540 Property, Casualty, and Related Insurance
3 AAC 29.540. Records retention requirements. (a) An insurer providing insurance coverage for an exempt commercial policyholder shall (1) maintain adequate records to document that the exempt commercial policyholder meets the criteria under 3 AAC 29.545; (2) maintain all records and data for a period of at least five years after the date the policy was written; and (3) upon request, provide all records and data to the director at any time. (b) The director may examine the records to ascertain whether the insurer is claiming an exemption for a policy issued to a policyholder that does not meet the criteria for an exempt commercial policyholder under 3 AAC 29.545.
History
- Authority: AS 21.06.090; AS 21.39.040; AS 21.42.120
- Eff. 6/11/2005, Register 174
3 AAC 29.545 Property, Casualty, and Related Insurance
3 AAC 29.545. Exempt commercial policyholder. For purposes of 3 AAC 29.500 - 3 AAC 29.550, an exempt commercial policyholder is an entity that has sufficient insurance buying expertise to negotiate with insurers in a largely unregulated environment and that meets any two of the following criteria: (1) has net worth of over $30 million; (2) has net revenues or sales of over $75 million; (3) has more than 300 employees per individual company or 800 per holding company aggregate; (4) procures its insurance through use of a risk manager, employed or retained; (5) collects annual aggregate premiums of over $250,000; (6) is a nonprofit or public entity with an annual budget or assets of at least $30 million; (7) is a municipality with a population of over 25,000.
History
- Authority: AS 21.06.090; AS 21.39.040; AS 21.42.120
- Eff. 6/11/2005, Register 174
3 AAC 29.550 Property, Casualty, and Related Insurance
3 AAC 29.550. Risk manager. For purposes of 3 AAC 29.500 - 3 AAC 29.550, a risk manager is an individual (1) whose primary economic activity consists of regularly and continuously identifying and analyzing loss exposures, selecting the technique or combination of techniques to be used to handle each exposure to loss, implementing the chosen techniques, and monitoring the results of the decisions that were made; and (2) who has at least one of the following credentials: (A) bachelor's degree or higher degree in risk management from an accredited college or university; (B) a designation as a Chartered Property and Casualty Underwriter (CPCU) issued by the American Institute for CPCU/Insurance Institute of America; (C) a designation as an Associate in Risk Management (ARM) issued by the American Institute for CPCU/Insurance Institute of America; (D) a designation as a Certified Risk Manager (CRM) issued by the National Alliance for Insurance Education and Research; (E) a designation as Fellow in Risk Management issued by the Global Risk Management Institute/Risk and Insurance Management. (F) a designation as a Chartered Enterprise Risk Analyst, Chartered Enterprise Risk Actuary, Certified Enterprise Risk Analyst, or Certified Enterprise Risk Actuary, (CERA) issued by an entity recognized as an Award Signatory under the Global Enterprise Risk Management Designation Recognition Treaty.
History
- Authority: AS 21.06.090; AS 21.39.040; AS 21.42.120
- Eff. 6/11/2005, Register 174; am 8/20/2016, Register 219
Article 7 Reporting of Statistical Data by Property and Casualty Insurance Companies
3 AAC 29.600 Property, Casualty, and Related Insurance
3 AAC 29.600. Purpose and applicability. (a) Except for data reported directly to the director by insurers, 3 AAC 29.600 - 3 AAC 29.669 (1) set out the manner of reporting data by insurers to statistical agents; (2) prescribe reports that statistical agents submit to the director; and (3) prescribe the conduct associated with (1) and (2) of this subsection. (b) The provisions of 3 AAC 29.600 - 3 AAC 29.669 apply to all lines of insurance for which rates are subject to filing with the director under AS 21.39.040.
History
- Authority: AS 21.06.090; AS 21.39.130
- Eff. 12/20/2020, Register 236
3 AAC 29.610 Property, Casualty, and Related Insurance
3 AAC 29.610. Examination of statistical agents. To be designated by the director as a statistical agent to collect statistics from insurers for the purposes of fulfilling the statistical reporting requirements under 3 AAC 29.600 - 3 AAC 29.669, a person, other than an advisory organization, must agree to be subject to the same examination provisions in AS 21 applicable to advisory organizations.
History
- Authority: AS 21.06.090; AS 21.39.130
- Eff. 12/20/2020, Register 236
3 AAC 29.615 Property, Casualty, and Related Insurance
3 AAC 29.615. Filing of statistical plans by statistical agents. A statistical agent shall file with the director every statistical plan and every modification of a statistical plan that the statistical agent proposes to use to collect statistics to meet the requirements of 3 AAC 29.600 - 3 AAC 29.669. The director will consider the filings to meet the requirements of 3 AAC 29.600 - 3 AAC 29.669 unless disapproved by the director in writing not later than 30 days after filing.
History
- Authority: AS 21.06.090; AS 21.39.130
- Eff. 12/20/2020, Register 236
3 AAC 29.620 Property, Casualty, and Related Insurance
3 AAC 29.620. Statistical plans and reporting by insurers. An insurer authorized in this state shall report the insurer's insurance statistical experience for lines of insurance described under 3 AAC 29.600(b) to a statistical agent designated by the director. The insurer shall submit the data in accordance with the statistical plans approved by the director under 3 AAC 29.615.
History
- Authority: AS 21.06.090; AS 21.39.130
- Eff. 12/20/2020, Register 236
3 AAC 29.625 Property, Casualty, and Related Insurance
3 AAC 29.625. Statistical agents' compliance with the statistical handbook. For every line of insurance for which a statistical agent collects statistics in this state, the statistical agent shall, at a minimum, collect statistics and file reports and compilations, unless the director specifies otherwise, in the form and detail provided in the National Association of Insurance Commissioners' Statistical Handbook of Data Available to Insurance Regulators, 2012 edition, adopted by reference.
History
- Authority: AS 21.06.090; AS 21.39.130
- Eff. 12/20/2020, Register 236
3 AAC 29.630 Property, Casualty, and Related Insurance
3 AAC 29.630. Multiple statistical agents for the same line of insurance. For a line of insurance where more than one statistical agent is designated and collecting statistics in this state, the statistical agents, if directed by the director, shall file combined reports for all statistical agents collecting data for the affected lines of insurance. The statistical agents may make arrangements among themselves for the equitable sharing of the costs to produce the combined reports.
History
- Authority: AS 21.06.090; AS 21.39.130
- Eff. 12/20/2020, Register 236
3 AAC 29.635 Property, Casualty, and Related Insurance
3 AAC 29.635. Edit and control procedures for statistical agents. A statistical agent shall adopt edit and control procedures to screen and check data for reasonableness, apparent accuracy, and completeness. At a minimum the procedures, unless the director specifies otherwise, must conform to the specifications provided in the National Association of Insurance Commissioners' Statistical Handbook of Data Available to Insurance Regulators, 2012 edition, adopted by reference in 3 AAC 29.625.
History
- Authority: AS 21.06.090; AS 21.39.130
- Eff. 12/20/2020, Register 236
3 AAC 29.640 Property, Casualty, and Related Insurance
3 AAC 29.640. Insurer edit and audit procedures. An insurer that is required by 3 AAC 29.620 to report data shall adopt edit and audit procedures to screen and check the data to ensure, unless the director specifies otherwise, that the data meet the standards for reasonableness and accuracy provided in the National Association of Insurance Commissioners' Statistical Handbook of Data Available to Insurance Regulators, 2012 edition, adopted by reference in 3 AAC 29.625.
History
- Authority: AS 21.06.090; AS 21.39.130
- Eff. 12/20/2020, Register 236
3 AAC 29.645 Property, Casualty, and Related Insurance
3 AAC 29.645. Disclosure of complying and non-complying insurers. A statistical report must contain a listing of each insurer whose data are included in the report. If data from an insurer who agreed to have the insurer's data included in the report are not included in the report, the statistical agent submitting the report shall also submit a list of all of the insurers not included in the report. At the request of the director, the statistical agent shall provide the director with the reasons for the exclusion.
History
- Authority: AS 21.06.090; AS 21.39.130
- Eff. 12/20/2020, Register 236
3 AAC 29.650 Property, Casualty, and Related Insurance
3 AAC 29.650. Access to data. Upon request of the director, a statistical agent shall provide the director (1) with access to all statistical data collected by the statistical agent for the purpose of fulfilling the requirements of 3 AAC 29.600 - 3 AAC 29.669; and (2) a copy of a report that the statistical agent produces from the data that the director required the statistical agent to collect.
History
- Authority: AS 21.06.090; AS 21.39.130
- Eff. 12/20/2020, Register 236
3 AAC 29.655 Property, Casualty, and Related Insurance
3 AAC 29.655. Lines of insurance without a statistical agent. A licensed insurer, writing a line of insurance for which rates are subject to filing with the director under AS 21.39.040, shall notify the director as soon as practicable if the insurer finds, or believes to have found, that the insurer is writing a line of insurance for which no statistical agent will accept data.
History
- Authority: AS 21.06.090; AS 21.39.130
- Eff. 12/20/2020, Register 236
3 AAC 29.669 Property, Casualty, and Related Insurance
3 AAC 29.669. Definitions. In 3 AAC 29.600 - 3 AAC 29.669, (1) "statistical agent" means a person that the director has designated to collect statistics from insurers and provide reports developed from the statistics to the director for the purpose of fulfilling the statistical reporting obligations of the insurers; (2) "statistical plan" means a statistical agent's system for collecting information from reporting insurers, including exposure, coverage, classification, territory, premium, loss, and other information.
History
- Authority: AS 21.06.090; AS 21.39.130
- Eff. 12/20/2020, Register 236
Article 8 General Provisions
3 AAC 29.900 Property, Casualty, and Related Insurance
3 AAC 29.900. Reimbursement of losses and nonpayment of premium. (a) A property or casualty policy that requires reimbursement by an insured of losses or loss expenses paid by the insurer may not, unless specified in the policy, (1) consider the failure of the insured to make a reimbursement as a nonpayment of premium for the purposes of AS 21.36.210 - 21.36.310; or (2) require the insured to prefund amounts the insured agreed to pay under the policy as reimbursements, or to post collateral to secure the insured's obligation to reimburse the insurer. (b) The failure of an insured to meet prefunding or collateral requirements specified in a policy may not be considered nonpayment of premium. (c) In this section, "collateral" means cash, a letter of credit, a surety bond, or other form of security that an insured posts with an insurer to secure the insured's obligations to reimburse the insurer.
History
- Authority: AS 21.06.090; AS 21.36.210; AS 21.42.075
- Eff. 12/20/2020, Register 236
Chapter 30 Workers’ Compensation
Article 1 Assigned Risk Pool
3 AAC 30.010 Finding
The director finds that mandatory insurer participation in a workers' compensation insurance assigned risk pool is in the public interest and requires this participation as a condition of writing workers' compensation insurance in this state, except for those insurers that are exempt under AS 21.39.155. An insurer's participation in a workers' compensation insurance assigned risk pool shall be satisfied by receiving direct assignments from the plan administrator or by membership in a reinsurance pool that equitably apportions the experience of the assigned risk pool among its members.
History
- Authority: AS 21.06.090; AS 21.39.130; AS 21.39.155
- Eff. 1/1/77, Register 61; am 12/20/96, Register 140
3 AAC 30.020 Pool continuity
Repealed.
History
- Eff. 1/1/77, Register 61; repealed 12/20/2020, Register 236
3 AAC 30.030 Pool administration
(a) A workers' compensation insurance assigned risk pool shall establish a written plan of operation.
(b) A plan of operation or amendment to the plan must be submitted to the director for written approval before its implementation.
(c) A workers' compensation insurance assigned risk pool is subject to examination by the director, and the assigned risk pool shall pay all the expenses of the examination.
(d) To the extent practical, rates shall be established and maintained at a level that permits the assigned risk pool to operate as a self-funded mechanism based upon
(1) premiums charged and collected;
(2) claims incurred, including provisions for claim development and incurred but not reported claims;
(3) administrative expenses incurred to operate the assigned risk pool; and
(4) consideration of investment income and taxes on assigned risk pool claims reserves arising from participation by insurers in the assigned risk plan.
(e) The workers' compensation review and advisory committee appointed under 3 AAC 30.200 shall assist and advise the director regarding assigned risk pool matters, including the selection and oversight of any plan administrator.
(f) The plan of operation required under (a) of this section must provide
(1) for the participation of all admitted, non-exempt insurers who are authorized to write workers' compensation coverage in this state;
(2) that termination of participation by an insurer may only be for cause and only with the prior written permission of the director;
(3) workers' compensation coverage to all eligible employers that are unable to secure workers' compensation coverage in this state for exposures in this state;
(4) reasonable rules and procedures for
(A) determining eligibility of employers that are in good faith entitled to workers' compensation coverage from the assigned risk pool;
(B) assignment of employers to participating insurers or selection of servicing carriers;
(C) binding coverage, issuing policies, and servicing policies; and
(D) establishing and monitoring performance standards for participating insurers and servicing carriers;
(5) for the equitable apportionment of the experience of the assigned risk pool; and
(6) for written notice advising the director of the amount of the reserves and the method for calculation of incurred but not reported claims and loss development reserves as they have been implemented by each participating insurer; the written notice may be provided on behalf of a member insurer by the reinsurance pool if the member insurer uses the reinsurance pool's reserve amounts in its annual and quarterly financial statement blank forms filed with the director.
(g) The plan of operation required under (a) of this section may provide for
(1) workers' compensation coverage for eligible employers that are unable to secure workers' compensation coverage in this state and that also require workers' compensation coverage in at least one other state if the other state provides coverage for Alaska exposures through a residual market mechanism similar to the Alaska assigned risk pool's plan of operation;
(2) the purchase of reinsurance;
(3) direct assignment of risks to an insurer;
(4) a reinsurance pool that equitably apportions among its members
(A) the premiums written, earned, and collected;
(B) the claims incurred, including provision for claims development and incurred but not reported claims;
(C) the administrative expenses incurred to operate the reinsurance pool, including examinations by the director; and
(D) any overall operational losses;
(5) equitable apportionment among participating insurers of administrative expenses incurred to operate the assigned risk pool, including examinations by the director;
(6) its own applications, policies and endorsements, rates and rules, manuals, and similar materials if they are submitted to the director for approval before their implementation; or
(7) the director's appointment of a plan administrator to operate the assigned risk pool.
(h) A plan administrator appointed by the director under (g) of this section shall agree in writing, as a condition of appointment,
(1) to be subject to the jurisdiction of this state;
(2) to appoint the director as its attorney for service of process;
(3) to be subject to examination at its own expense by the director, an expense that may be reimbursed under the plan of operation;
(4) that money collected for the account of the assigned risk pool will be held in a fiduciary account maintained in a manner substantially similar to the requirements of AS 21.27.360, and that the fiduciary account must be used for all payments made on behalf of the assigned risk pool;
(5) to present an accounting to the assigned risk pool detailing all transactions, including information necessary to support any commissions, charges, or other fees received by or owing to the plan administrator;
(6) to remit all money due under the plan and any reinsurance arrangements;
(7) to maintain a separate bank account for the assigned risk pool;
(8) to maintain separate records for the assigned risk pool in a manner substantially similar to the requirements of AS 21.27.350; and
(9) to provide to the assigned risk pool and its member insurers access to, and the right to audit and copy, any accounts and records pertaining to the assigned risk pool.
(i) A plan administrator appointed by the director under (g) of this section does not need to be licensed under AS 21.27 as a reinsurance intermediary broker or a reinsurance intermediary manager.
History
- Authority: AS 21.06.090; AS 21.27.010; AS 21.39.130 AS 21.06.120; AS 21.39.090; AS 21.39.155 AS 21.06.160; AS 21.39.100
- Eff. 1/1/77, Register 61; am 4/23/77, Register 62; am 12/20/96, Register 140
3 AAC 30.040 Definitions
In 3 AAC 30.010 - 3 AAC 30.040
(1) "Carrier" means an insurer authorized to write workers' compensation insurance pursuant to AS 21.09;
(2) "Mandatory pool" means the workers' compensation insurance assigned risk pool in which participation by insurers is mandatory; and
(3) "Voluntary pool" means the workers' compensation insurance assigned risk pool in which participation by insurers is voluntary.
History
- Authority: AS 21.06.090; AS 21.39.155(b)
- Eff. 1/1/77, Register 61
Article 2 Premium Installment Payments
3 AAC 30.100 Filing plans
Each insurer writing workers' compensation policies, and the Alaska Workers' Compensation Assigned Risk Pool, shall file with the division of insurance and implement an installment payment plan not less favorable to the insured than the minimum standards in 3 AAC 30.130 for any workers' compensation insured whose estimated annual premium exceeds $2,000. Previously filed and approved installment payment plans that are less favorable to the insured than the minimum standards in 3 AAC 30.130 shall be construed and applied in accordance with 3 AAC 30.130.
History
- Authority: AS 21.06.090; AS 21.39.130; AS 23.30.030(8) AS 21.39.050; AS 21.42.220; AS 23.30.265(18)
- Eff. 12/25/91, Register 120
3 AAC 30.110 Filing endorsements
Each insurer writing workers' compensation insurance, and the Alaska Workers' Compensation Assigned Risk Pool, shall file with the division of insurance and attach to each issued insurance policy an endorsement providing an explanation of the insured's option to pay the premium in full or in installments if the insured's estimated annual premium exceeds $2,000.
History
- Authority: AS 21.06.090; AS 23.30.030(8) AS 21.42.120; AS 23.30.265(18)
- Eff. 12/25/91, Register 120
3 AAC 30.120 Notice to applicant
(a) Unless an insurer, directly or through an agent or broker, without a specific request by an applicant, voluntarily offers premiums to be paid in installments not less favorable to an applicant than the minimum standards in 3 AAC 30.130, each insurer if a direct writer, agent, or broker shall provide to each applicant for workers' compensation insurance having an estimated annual premium in excess of $2,000 a clearly worded notice explaining to the applicant that premium may be paid in installments upon request by the applicant. An applicant's rejection of the voluntary offer of installment payments shall be in writing and documented in the insurer's underwriting file.
(b) If an applicant has rejected the voluntary offer of installment payments, an offer to renew the insurance by the insurer must include a written notice explaining to the insured that premium may be paid in installments upon request of the insured. Documentation of the written notice shall be maintained in the insurer's underwriting file.
History
- Authority: AS 21.06.090; AS 23.30.030(8) AS 21.39.130; AS 23.30.265(18)
- Eff. 12/25/91, Register 120
3 AAC 30.130 Minimum standards
Calculated in accordance with AS 23.30.030(8), an installment payment plan must offer terms at least as favorable to the insured as a deposit premium, due at the inception of coverage, of
(1) 50 percent of the estimated annual premium, and one installment for the balance of the estimated premium, which is due
(A) 90 days after inception of coverage if the estimated earned premium based on estimated payroll for the first three-month period of the policy is 30 percent or less of the estimated annual premium;
(B) 60 days after inception of coverage if the estimated earned premium based on estimated payroll for the first three-month period of the policy is more than 30 percent but less than 40 percent of the estimated annual premium; or
(C) 30 days after inception of coverage if the estimated earned premium based on estimated payroll for the first three-month period of the policy is 40 percent or more of the estimated annual premium;
(2) 30 percent of the estimated annual premium, and installments calculated using the insured's monthly report of actual payroll to the insurer; or
(3) more than 50 percent of the estimated annual premium, and installments, calculated on the insured's monthly report of actual payroll to the insurer, if the installment payment plan options in (1) or (2) of this section would create an unacceptable credit exposure to the insurer; under this paragraph, the insurer must document its evaluation of the insured's creditworthiness, in writing, in the insurer's underwriting file at the time of each offering and renewal.
History
- Authority: AS 21.06.090; AS 21.39.130; AS 23.39.030
- Eff. 12/25/91, Register 120; am 5/8/92, Register 122
Article 3 Workers’ Compensation Review and Advisory Committee
3 AAC 30.200 Workers' compensation review and advisory committee
(a) The director will appoint a 10-member workers' compensation review and advisory committee to assist and advise the director regarding workers' compensation matters. The director will appoint a secretary to maintain minutes of all meetings, send notice of all meetings as required under (d) of this section, and provide necessary support and assistance to the committee. The secretary is not required to be a member of the committee.
(b) Membership of the committee must include
(1) executive level personnel representing the five insurers that consistently write the largest volume of workers' compensation premiums in the voluntary market in this state;
(2) two Alaska licensed resident insurance produces;
(3) representatives of two insured Alaska employers that have workers' compensation coverage in the voluntary market; and
(4) a representative of one insured Alaska employer that currently has or has had within the last three years workers' compensation coverage through the assigned risk pool.
(c) Members of the committee shall serve staggered three-year terms at the pleasure of the director. A chairperson and vice-chairperson shall be selected by the membership annually by majority vote. The chairperson or vice-chairperson, with the assistance of the secretary, shall work with the division to establish the agenda for each meeting or hearing, arrange for meeting facilities, provide notice as required under (d) of this section, and conduct each meeting or hearing.
(d) A meeting of the committee may be called by or at the request of the chairperson, the director, or upon written request of three members. A notice stating the time, place, and purpose of the meeting must be sent to each member and the director at least 10 days before the date of the meeting. Regular meetings must be scheduled at least quarterly, must take place in this state, and are open to the public. A person may participate telephonically. Five members constitute a quorum for the committee to conduct business at any meeting. The director will consider acts of a majority of the voting members present to be the acts of the committee as a whole.
(e) The committee is not directly involved in the review and approval of rate, rule, or form filings submitted to the director under AS 21.39.041 or AS 21.42.120. However, a rating organization shall share with the committee details of any proposed filing under AS 21.39.041 or AS 21.42.120 before it is submitted to the director, unless the director waives this requirement. Nothing in this subsection restricts the advice or actions of the committee to matters related to rating organization rate, rule, or form filings.
History
- Authority: AS 21.06.090; AS 21.39.090; AS 21.42.120 AS 21.39.041; AS 21.39.120 AS 21.39.060; AS 21.39.155
- Eff. 12/20/96, Register 140; am 12/20/2020, Register 236
Article 4 Workers’ Compensation Loss Reimbursement Requirements
3 AAC 30.300 Applicability
Except for an excess workers' compensation policy issued to an employer who holds a self-insurance certificate under AS 23.30.090, 3 AAC 30.300 - 3 AAC 30.349 apply to a workers' compensation policy issued to an employer in this state.
History
- Authority: AS 21.06.090; AS 21.39.130; AS 23.30.025
- Eff. 12/20/2020, Register 236
3 AAC 30.310 Workers' compensation deductibles prohibited; reimbursement of losses or loss expenses allowed
(a) An insurer may not include a deductible in a policy of workers' compensation insurance providing coverage under AS 23.30 (Alaska Workers' Compensation Act).
(b) An insurer may include a provision in a policy of workers' compensation insurance providing coverage under AS 23.30 requiring an employer to reimburse the insurer for losses or loss expenses.
(c) A workers' compensation loss reimbursement policy is also subject to the requirements under 3 AAC 29.900.
History
- Authority: AS 21.06.090; AS 21.42.075; AS 23.30.030 AS 21.39.130; AS 23.30.025
- Eff. 12/20/2020, Register 236
3 AAC 30.320 Adjustment of claims
(a) An insurer shall handle the defense and settlement of all claims as if no reimbursement provision applies. An employer may not pay amounts directly to claimants or to another person other than the insurer or, if applicable, the insurer's third-party administrator, to settle workers' compensation obligations or to pay the associated settlement costs. An employer may not adjust or administer claims or control a third-party administrator or adjuster.
(b) An insurer shall pay claims and settlement costs notwithstanding the failure of an employer to reimburse the insurer or, if applicable, the insurer's third-party administrator.
(c) The cancellation or expiration of a loss reimbursement policy does not affect a person's obligations for injuries under the policy which arose before the policy's cancellation or expiration.
History
- Authority: AS 21.06.090; AS 21.42.075; AS 23.30.030
- Eff. 12/20/2020, Register 236
3 AAC 30.330 Reimbursement limits and aggregates
(a) An insurer shall specify in a loss reimbursement policy the
(1) nature of losses for which an employer must reimburse the insurer; and
(2) basis of the reimbursement limit.
(b) An insurer may limit the aggregate amount that an employer must reimburse the insurer because of the aggregation of all of the claims arising during the policy period if the aggregate limitation is included in the same policy.
(c) If an insurer includes an aggregate limitation in a loss reimbursement policy, the insurer shall also include in the policy a provision providing for the proration of the aggregate limits if the insurer cancels the policy, unless
(1) the aggregate limits are a function of the audited exposure; or
(2) the insurer cancels the policy
(A) because of nonpayment of premium; or
(B) for a reason set out in AS 21.36.220(b) and associated with the 10-day notice of cancellation requirement.
(d) An employer contracting with an insurer in a loss reimbursement policy may not obtain insurance to cover the amounts the employer agreed to reimburse the insurer under the policy.
History
- Authority: AS 21.06.090; AS 21.36.220; AS 21.42.075
- Eff. 12/20/2020, Register 236
3 AAC 30.349 Definitions
In 3 AAC 30.300 - 3 AAC 30.349,
(1) "deductible" means a provision in an insurance policy where the policyholder must absorb or pay part of the insured loss before qualifying for recovery from the insurer under the policy;
(2) "excess workers' compensation policy" means a policy
(A) issued by an insurer to an employer certified as a self-insurer under AS 23.30.090; and
(B) that reimburses the self-insured employer for amounts
(i) accepted by, imposed upon, or assumed by the employer under AS 23.30 for death, disablement, or injury to the employer's employees; and
(ii) that are above either a specific or an aggregate attachment point or self-insured retention, but that do not by themselves satisfy the requirements under AS 23.30.025 or 23.30.075;
(3) "loss reimbursement" means a provision in a workers' compensation policy that
(A) maintains an insurer's entire obligation under the policy for payment of insured loss under AS 23.30; and
(B) provides that an insured employer will reimburse the insurer under the policy for the first part of the loss subject to an agreed upon limit;
(4) "loss reimbursement policy" means a workers' compensation policy containing a loss reimbursement provision, regardless of whether the loss reimbursement provision is effected by means of an endorsement to a standard workers' compensation policy.
History
- Authority: AS 21.06.090; AS 21.42.030; AS 21.42.075
- Eff. 12/20/2020, Register 236
Chapter 31 Miscellaneous
Article 1 Fees
3 AAC 31.010 General requirements
(a) The applicable nonrefundable fee for each type of license or service, established by the division of insurance under 3 AAC 31.020 - 3 AAC 31.090, must be paid to the director in advance of the action requested.
(b) The director will promptly remit to the commissioner of revenue, for deposit in the general fund, all fees received under this section.
History
- Authority: AS 21.06.090; AS 21.06.250
- Eff. 8/30/86, Register 99; am 6/2/88, Register 106; am 7/1/92, Register 123
3 AAC 31.020 Insurance producer, managing general agent, reinsurance intermediary manager, reinsurance intermediary broker, controlling insurance producer, third-party administrator, pharmacy benefits manager, and independent adjuster fees
(a) The following fees are established for resident and nonresident licenses, for insurance producers, managing general agents, reinsurance intermediary managers, reinsurance intermediary brokers, controlling insurance producers, third-party administrators, pharmacy benefits managers, and independent adjusters:
(1) initial application or biennial renewal for an insurance producer, managing general agent license, reinsurance intermediary manager, reinsurance intermediary broker, controlling insurance producer, independent adjuster, or independent adjuster trainee license, including issuance of the license, if issued, for
(A) all lines:
(i) for a resident or nonresident individual, $75;
(ii) for a resident or nonresident firm, $75;
(B) any or all lines within property and casualty lines only:
(i) for a resident or nonresident individual, $75;
(ii) for a resident or nonresident firm, $75; or
(C) any or all lines within life lines only:
(i) for a resident or nonresident individual, $75;
(ii) for a resident or nonresident firm, $75;
(2) initial application or biennial renewal for each of the following limited producer resident or nonresident licenses for an individual or firm, including issuance of the license, if issued, $75:
(A) bail bond;
(B) motor vehicle rental agency;
(C) travel;
(D) crop;
(E) credit;
(F) miscellaneous, as described in AS 21.27.150; or
(G) portable electronics;
(3) initial application or biennial renewal for a resident limited title producer individual or firm license, including issuance of the license, if issued, $75;
(4) initial application for a temporary license, as described in AS 21.27.390, including issuance of the license, if issued, $75;
(5) initial application or biennial renewal for the registration of a resident or nonresident third-party administrator or pharmacy benefits manager for an individual or firm, including issuance of the registration, if issued, $300.
(b) If the division issues an initial biennial license within 90 days before the date by which it must be renewed, the applicant shall pay the entire license fee and the license will be issued to cover up to a 27-month period.
History
- Authority: AS 21.06.090; AS 21.27.150; AS 21.27.390 AS 21.06.250; AS 21.27.380; AS 21.27.901
- Eff. 8/30/86, Register 99; am 6/2/88, Register 106; am 7/1/92, Register 123; am 4/20/97, Register 142; am 9/24/99, Register 151; am 10/13/2011, Register 200; am 9/4/2014, Register 211; am 7/13/2025, Register 255
3 AAC 31.025 Viatical settlement provider, viatical settlement broker, and viatical settlement representative fees
(a) The following fees are established for resident and nonresident licenses for viatical settlement providers, viatical settlement brokers, and viatical settlement representatives:
(1) initial application or biennial renewal for a resident or nonresident viatical settlement provider, for an individual or firm, including issuance of the license, if issued, $300;
(2) initial application or biennial renewal for a resident or nonresident viatical settlement broker or viatical settlement representative, including issuance of the license, if issued, $100.
(b) If the division issues an initial biennial license within 90 days before the date by which it must be renewed, the applicant shall pay the entire license fee and the license will be issued to cover up to a 27-month period.
History
- Authority: AS 21.06.090; AS 21.06.250; AS 21.96.110
- Eff. 8/25/2002, Register 163; am 10/13/2011, Register 200
3 AAC 31.030 Broker fees
Repealed 7/1/92.
3 AAC 31.040 Surplus lines broker fees
(a) The following fee is established for a resident or nonresident initial application or biennial renewal of a surplus lines broker license for an individual or firm, including issuance of the license, if issued, $300.
(b) If the division issues an initial biennial license within 90 days before the date by which it must be renewed, the applicant shall pay the entire license fee and the license will be issued to cover up to a 27-month period.
History
- Authority: AS 21.06.090; AS 21.27.380 AS 21.06.250; AS 21.27.790
- Eff. 8/30/86, Register 99; am 6/2/88, Register 106; am 7/1/92, Register 123; am 10/13/2011, Register 200
3 AAC 31.050 Insurer fees
(a) The following fees are established for insurers:
(1) application for a certificate of authority, including a solicitation permit and issuance of the certificate, if issued, a one-time fee of $2,250;
(2) annual continuation of a certificate of authority, $2,250;
(3) amendment to a certificate of authority, $100;
(4) amendment to the articles of incorporation, $100;
(5) revised bylaws or amendments to bylaws, $100;
(6) filing an annual statement, $100;
(7) solicitation permit for subsequent financing, for domestic insurers, $100;
(8) reinstatement of a certificate of authority, $500;
(9) registration as an accredited reinsurance company, $500;
(10) filing a holding company Form A Statement Regarding the Acquisition of Control of or Merger with a Domestic Insurer, $2,000;
(11) review of an assuming reinsurance company for compliance with AS 21.12.020(a)(3) and (4), as requested by the company, $100;
(12) for a multiple employer welfare arrangement:
(A) initial application for a certificate of authority, including issuance of the certificate, if issued, $2,000;
(B) annual continuation of a certificate of authority, $2,000;
(13) replacement of a lost certificate of authority, $25.
(b) The fees listed in (a)(2), (a)(6), and (a)(12)(B) of this section must be paid by using the Automated Clearing House debit or credit payment system. In this subsection, "Automated Clearing House debit or credit payment system" means the network for the interbank clearing of electronic payments for participating depository financial institutions.
History
- Authority: AS 21.06.090; AS 21.12.020; AS 21.85.040 AS 21.06.250; AS 21.66.080; AS 21.85.100 AS 21.09.130; AS 21.85.010 AS 21.09.200; AS 21.85.030
- Eff. 6/2/88, Register 106; am 7/1/89, Register 110; am 8/15/90, Register 115; am 7/1/92, Register 123; am 2/2/94, Register 129; am 3/15/97, Register 141; am 1/30/2003, Register 165; am 8/8/2003, Register 167; am 12/28/2008, Register 188
3 AAC 31.060 Miscellaneous fees
(a) The following fees are established:
(1) with respect to a license for which the licensee failed to notify the director of the information required under AS 21.27.025 and within the time period required by AS 21.27.025, if notification is received
(A) one - 60 days late, $50;
(B) 61 - 120 days late, $100; or
(C) more than 120 days late, $200;
(2) issuance of a certification, $25;
(3) acceptance of service of process, $25;
(4) three-year rating bureau license, $6,000;
(5) delayed renewal penalty fee to reinstate a license that lapsed, and that has not been suspended or revoked, if payment is overdue by
(A) one - 60 days, $100; or
(B) over 60 days, $200;
(6) with respect to an application to reinstate a revoked license, if received within six months after the revocation, the application fee plus a reinstatement fee of $500;
(7) filing of a certified annual financial statement by an alien surplus lines insurer not on the list described in AS 21.34.040(c)(7), $100;
(8) initial application for registration on the division's list of eligible surplus lines insurers by an alien surplus lines insurer not on the list described in AS 21.34.040(c)(7), $1,000;
(9) annual renewal for registration on the division's list of eligible surplus lines insurers by an alien surplus lines insurer not on the list described in AS 21.34.040(c)(7), $500;
(10) late fee for reinstatement on the division's list of eligible surplus lines insurers by an alien surplus lines insurer not on the list described in AS 21.34.040(c)(7), $250;
(11) initial service of process filing fee of a risk retention group, $1,000;
(12) annual service of process filing fee for continuation of a risk retention group, $200;
(13) initial registration of a purchasing group, $500;
(14) annual continuation of a purchasing group, $200;
(15) computer listings, $25;
(16) initial application for and annual renewal of a resident attorney-in-fact license, $200;
(17) initial application for and annual renewal of a nonresident attorney-in-fact license, $500;
(18) for a joint title plant company,
(A) initial application for a certificate of authority, including issuance of the certificate, if issued, $1,000;
(B) annual continuation of a certificate of authority, $600;
(19) application for a person seeking written consent to engage in the business of insurance under 18 U.S.C. 1033(e)(2) and AS 21.36.355, with or without application for an insurance license, $300;
(20) for photocopies, $.25 per page if copied by division staff, otherwise $.15 per page;
(21) for a cassette tape or a computer disk, $5;
(22) for a computer disk formatted for data submission, $25;
(23) initial application of a continuing education provider, $200;
(24) continuing education provider renewal fee, $100;
(25) late fee for reinstatement of a continuing education provider, $50;
(26) initial application for and biennial renewal of a continuing education course, $50;
(27) late fee for reinstatement of a continuing education course, $50;
(28) late filing fee for a continuing education course roster, $250;
(29) late fee for issuance of a continuing education course certificate of completion, $20;
(30) licensee request for manually updating licensee's transcript, including adding successfully completed courses, $50;
(31) licensee request for course credit under 3 AAC 23.204, $50;
(32) air ambulance service provider initial biennial registration application fee, $1,000;
(33) air ambulance service provider renewal biennial registration application fee, $200.
(34) returned check fee, $25.
(35) initial application for and biennial renewal of a motor vehicle service contract provider license, $300;
(36) initial application for and biennial renewal of a motor vehicle service contract administrator registration, $75.
(37) independent review organization biennial registration fee, $1,000.
(b) If an applicant for a license or registration submits a paper application when applying by electronic means is available to the applicant, an additional processing fee of $50 will be charged.
(c) If an individual applies to be exempt from licensing as a managing general agent, reinsurance intermediary manager, or reinsurance intermediary broker or from registration as a third party-administrator, the fee is $100.
(d) For any printed material furnished by the director and not otherwise described in this section, the director will charge the actual cost of printing plus handling and postage.
History
- Authority: AS 21.06.090; AS 21.36.355; AS 21.61.109 AS 21.06.250; AS 21.59.140; AS 21.66.210 AS 21.27.010; AS 21.59.160; AS 21.75.045 AS 21.27.025; AS 21.59.200 AS 21.34.040; AS 21.61.105
- Eff. 6/2/88, Register 106; am 7/1/89, Register 110; am 7/1/92, Register 123; am 3/30/94, Register 129; am 3/15/97, Register 141; am 8/23/2001, Register 159; am 12/30/2006, Register 180; am 10/13/2011, Register 200; am 1/1/2014, Register 208; am 9/4/2014, Register 211; am 11/26/2015, Register 216; am 8/20/2016, Register 219; am 3/3/2018, Register 225; am 3/15/2018, Register 225; am 12/20/2020, Register 236
3 AAC 31.070 Proration of license fees
Repealed.
History
- Eff. 7/1/92, Register 123; repealed 10/13/2011, Register 200
3 AAC 31.090 Definitions
Repealed.
History
- Eff. 6/2/88, Register 106; am 7/9/92, Register 123; repealed 12/4/94, Register 132
Article 2 Filing Procedure for Forms, Rates, Manuals, Rating Plans, and Rules
3 AAC 31.200 Applicability and scope
3 AAC 31.200 - 3 AAC 31.299 apply to all persons who are required to file forms, rates, manuals, rating plans, rules, policies, certificates, or other documents under AS 21.39.040, 21.39.041, 21.39.043, 21.39.210, 21.39.220; AS 21.42.120, 21.42.123, 21.42.125; AS 21.51.405; AS 21.54.015; AS 21.57.080; AS 21.66.370, 21.66.450; AS 21.84.255; AS 21.86.070; AS 21.87.180, or 21.87.190.
History
- Authority: AS 21.06.090; AS 21.42.120; AS 21.66.370 AS 21.39.040; AS 21.42.123; AS 21.66.450 AS 21.39.041; AS 21.42.125; AS 21.84.255 AS 21.39.043; AS 21.51.405; AS 21.86.070 AS 21.39.210; AS 21.54.015; AS 21.87.180 AS 21.39.220; AS 21.57.080; AS 21.87.190
- Eff. 12/4/94, Register 132; am 11/12/2006, Register 180; am 3/26/2015, Register 213; am 12/20/2020, Register 236
3 AAC 31.205 Methods and receipt dates of filings
(a) A person shall submit a filing electronically by
(1) using an electronic filing system approved by the director under AS 21.96.080; or
(2) electronic mail, if approved by the director.
(b) If the director receives a filing or other requested information on a weekend or state holiday, or after 3:00 p.m. Alaska Time, the receipt date is the next working day.
History
- Authority: AS 21.06.090; AS 21.42.123; AS 21.84.255 AS 21.39.040; AS 21.42.125; AS 21.86.070 AS 21.39.041; AS 21.51.405; AS 21.87.180 AS 21.39.043; AS 21.54.015; AS 21.87.190 AS 21.39.210; AS 21.57.080; AS 21.96.080 AS 21.39.220; AS 21.66.370 AS 21.42.120; AS 21.66.450
- Eff. 11/12/2006, Register 180; am 8/20/2016, Register 219; am 12/20/2020, Register 236
3 AAC 31.210 Filing
(a) Each filing submitted to the director by electronic mail must include the appropriate transmittal document as described in 3 AAC 31.221 or 3 AAC 31.225. The transmittal document is considered part of the filing. Each filing submitted using an electronic filing system approved under AS 21.96.080 by the director must include the information specified in the transmittal document as described in 3 AAC 31.221 or 3 AAC 31.225 in the appropriate fields.
(b) Except as provided in (d)(1) and (e) of this section, a separate filing must be made for each type of insurance.
(c) Forms must be submitted separately from rates and rules.
(d) For property and casualty types of insurance,
(1) new rates, rules, or forms that apply to different or multiple types of insurance but have the same purpose and effect, or revisions or replacements to existing rates, rules, or forms that apply to different or multiple types of insurance where the proposed revisions have the same purpose and effect, may be submitted in a single filing;
(2) rates and rules may be submitted in a single filing when filed under AS 21.39.041 or 21.39.220;
(3) rates filed under AS 21.39.210 may only contain rules that are revised to update the corresponding rate changes; and
(4) if rate, rule, and form filings for a single program are submitted at the same time, the transmittal document for each filing must cross-reference the other filings submitted for the program.
(e) For life, annuity, and health types of insurance offered to employer groups, a single filing with multiple life, annuity, and health types of insurance may be filed.
(f) Except for health care insurance rates or forms, and subject to the requirements under (b) and (d) of this section, insurers with the same National Association of Insurance Commissioners' group number may submit substantially similar rates, rules, or forms
(1) in a single filing for all insurers if the filing
(A) contains the name of each insurer;
(B) clearly describes the differences between the rates, rules, or forms if they differ by insurer; and
(C) clearly identifies which insurer will use each rate, rule, or form; or
(2) in separate filings for each insurer if the filing
(A) cross-references any substantially similar filings for other insurers in the group that are submitted simultaneously or have already been submitted; and
(B) describes any differences in the rates, rules, or forms submitted in each filing.
(g) An insurer shall include in each applicable filing a cross-reference to other similar or related filings that are submitted simultaneously with the subject filing or other similar or related filings that have already been submitted. The filing must describe any differences between the new rates, rules, or forms in the subject filing and any similar or related filing.
(h) If a filing contains a revision to or replacement of an existing rate, rule, or form, the filing must include each assigned identification number under which the material proposed for revision is currently approved or authorized. The filing must also include a marked copy of the form, rule, or rate page showing the new material underlined and the deleted material with a line stricken through it, or by a similar method of identifying changes that has been approved by the director. A revised or replaced item that is not identified as required may not be approved or authorized for use.
(i) If a filing is a resubmission of a prior filing that was withdrawn or disapproved, the filing must include the identification number assigned to the withdrawn or disapproved filing and must specifically address any questions or comments raised by the director with respect to the withdrawn or disapproved filing. The filing must also include a marked copy of the form, rule or rate page identifying any revisions that have been made compared to the corresponding form, rule, or rate pages contained in the withdrawn or disapproved filing. The marked copy must follow the format described in (h) of this section.
(j) Upon receipt of a filing, the director will assign an identification number to the filing. All subsequent communications regarding the filing must include the assigned identification number.
(k) If the filing does not include the information required under 3 AAC 31.221 or 3 AAC 31.225 and all other information required under this section, the director may reject the filing and the rate, rule, or form may not be used.
(l) If an insurer's response to questions asked by the director does not provide all the information requested or is submitted to the director less than five days before the expiration of the waiting period and an extension under AS 21.42.125, the director will disapprove the filing or consider the failure of an adequate response to be a request to withdraw the filing.
(m) An insurer may not issue insurance to a resident of this state under a group including an out-of-state group that does not meet the requirements of AS 21.54.060 for health insurance, AS 21.54.070 for blanket insurance, and AS 21.48.010 for life insurance. Before issuing coverage to a resident of this state through a policy issued to an association or trust, including a union trust, an insurer must file and obtain the director's approval for each association or trust through which a resident of this state will be issued coverage subject to the following:
(1) if the constitution or bylaws of the association or trust are modified, the insurer must refile and obtain approval of the association or trust;
(2) the filing for approval of the association or trust must be submitted separately from the forms subject to filing under AS 21.42.120 that will be issued to the association or trust unless the forms will be issued exclusively to the association or trust.
(n) Life and health insurers submitting a form filing consisting of endorsements, applications, declarations, or schedules that will be attached to a previously approved or authorized policy or coverage form must include the identification number of the filing in which the policy or coverage form was approved or authorized.
(o) A filing is not required if the only change to the form or rule page is a change to the insurer's logo, letterhead information, pagination, or formatting that
(1) does not affect the text of the currently authorized or approved form, rule, or rate page; and
(2) is not subject to special formatting requirements.
(p) A response to a question from the director must
(1) describe or otherwise clearly identify the changes proposed within the response; and
(2) update the information required by 3 AAC 31.221 or 3 AAC 31.225 that has changed.
History
- Authority: AS 21.06.090; AS 21.42.123; AS 21.66.450 AS 21.39.040; AS 21.42.125; AS 21.84.255 AS 21.39.041; AS 21.48.010; AS 21.86.070 AS 21.39.043; AS 21.54.060; AS 21.87.180 AS 21.39.210; AS 21.54.070; AS 21.87.190 AS 21.39.220; AS 21.57.080; AS 21.96.080 AS 21.42.120; AS 21.66.370
- Eff. 12/4/94, Register 132; am 11/12/2006, Register 180; am 1/1/2011, Register 196; am 8/20/2016, Register 219; am 12/20/2020, Register 236
3 AAC 31.215 Filings submitted by electronic mail
(a) A filing submitted by electronic mail must include
(1) a copy of the appropriate transmittal document as described in 3 AAC 31.221 or 3 AAC 31.225; and
(2) a copy of the filing materials and supporting documentation.
(b) The director will respond to a filing submitted by electronic mail with the receipt date and with the assigned identification number under 3 AAC 31.210(j). The appropriate timeline under AS 21.39.040, 21.39.041, 21.39.043, 21.39.210, 21.39.220; AS 21.42.123, 21.42.125; AS 21.51.405; AS 21.54.015; AS 21.57.080; AS 21.66.370, 21.66.450; AS 21.84.255; AS 21.86.070; or AS 21.87.180 will apply based upon the receipt date stated in the director's response.
(c) A response to questions from the director regarding a specific filing must be addressed to the division employee requesting the information.
(d) A response to questions from the director must be submitted
(1) in the same format in which the filing was originally submitted; or
(2) in a different format if the format is approved by the director.
(e) The director will review filings submitted under AS 21.39.210 and send the contact person an electronic mail confirmation that the effective date requested by the insurer is authorized. An insurer shall retain evidence of the authorization for five years after the date the filing is no longer in use.
(f) If the director approves a filing submitted under AS 21.39.041 or AS 21.42.123, the director will send the contact person an electronic mail approval stating the effective date. An insurer shall retain evidence of the approval for five years after the date the filing is no longer in use.
(g) If the director authorizes a filing submitted under AS 21.39.220 or AS 21.42.125 to become effective, the director will send the contact person an electronic confirmation of the effective date. An insurer shall retain evidence of the confirmation for five years after the date the filing is no longer in use.
(h) If the director disapproves a filing, the director will send the contact person an electronic notification that the filing has been disapproved. An insurer shall retain evidence of the disapproval for five years after the date of disapproval.
History
- Authority: AS 21.06.090; AS 21.42.123; AS 21.84.255 AS 21.39.040; AS 21.42.125; AS 21.86.070 AS 21.39.041; AS 21.51.405; AS 21.87.180 AS 21.39.043; AS 21.54.015; AS 21.87.190 AS 21.39.210; AS 21.57.080; AS 21.96.080 AS 21.39.220; AS 21.66.370 AS 21.42.120; AS 21.66.450
- Eff. 11/12/2006, Register 180; am 8/20/2016, Register 219; am 12/20/2020, Register 236
3 AAC 31.217 Electronic filings
(a) An insurer that submits a filing through an electronic filing system approved under AS 21.96.080 by the director shall submit the filing in accordance with the requirements for that electronic filing system.
(b) If the electronic filing system becomes unavailable for use, the director may extend the review timelines under AS 21.39.040, 21.39.041, 21.39.043, 21.39.220; AS 21.42.123, 21.42.125; AS 21.51.405; AS 21.54.015; AS 21.57.080; AS 21.66.370, 21.66.450; AS 21.84.255; AS 21.86.070; or AS 21.87.180 by an additional working day for each day the system is unavailable. For purposes of identifying the additional working day under the extended timeline, the director will use the procedure set out in 3 AAC 31.205(b).
(c) If the electronic filing system becomes unavailable for use for an extended period of time, the director may authorize communication by another available method in order to continue the review of the filing. When the electronic filing system again becomes available for use, the director and the filer will add their respective filing communications to the electronic filing.
History
- Authority: AS 21.06.090; AS 21.42.123; AS 21.84.255 AS 21.39.040; AS 21.42.125; AS 21.86.070 AS 21.39.041; AS 21.51.405; AS 21.87.180 AS 21.39.043; AS 21.54.015; AS 21.87.190 AS 21.39.210; AS 21.57.080; AS 21.96.080 AS 21.39.220; AS 21.66.370 AS 21.42.120; AS 21.66.450
- Eff. 11/12/2006, Register 180; am 8/20/2016, Register 219; am 12/20/2020, Register 236
3 AAC 31.220 Cover letter
Repealed.
History
- Eff. 12/4/94, Register 132; repealed 11/12/2006, Register 180
3 AAC 31.221 Life and health insurance transmittal document
(a) The transmittal document or transmittal document information in the case of filings submitted using an electronic filing system approved by the director under AS 21.96.080 required to be submitted with a life insurance, health insurance, or annuity filing under 3 AAC 31.210 is the National Association of Insurance Commissioners' Life, Accident & Health, Annuity, Credit Transmittal Document (LHTD-1), with the appropriate attachment (LH FFA-1 or LH RFA-1). For purposes of this section, the National Association of Insurance Commissioners' Life, Accident & Health, Annuity, Credit Transmittal Document (LHTD-1) effective as of July 1, 2009 and attachments (LH FFA-1 and LH RFA-1), effective as of January 1, 2009, are adopted by reference.
(b) An insurer shall include all the following state-specific information in Item 15 of the transmittal document specified in (a) of this section:
(1) a brief description of the purpose of the filing and any changes that the filing will introduce;
(2) information required under 3 AAC 31.210(h) and (i);
(3) the requested effective date;
(4) a description of the group and method of marketing for the type of group identified in Item 8 of the transmittal document specified in (a) of this section;
(5) a statement indicating whether the filing is submitted under AS 21.42.123 or AS 21.42.125;
(6) the company's name for the product, if any;
(7) if the filing is a rate filing, the overall effect of the rate level change requested in the filing;
(8) if the filed form will be used with a previously approved form, the form number and state filing number of the previously approved form.
(c) An insurer shall include the name of the company or firm of the individual submitting the filing in Item 4 of the transmittal document specified in (a) of this section.
(d) For purposes of this section and Items 17 and 18 of the transmittal document attachments specified in (a) of this section,
(1) "initial" means the first submission of the form in this state that does not replace or revise any previous form;
(2) "revised" means
(A) for a form filing, the form contains changes to an existing form and the form number will continue to be used with a revision date that reflects the date of the change; and
(B) for a rate filing, the filing is a change to an existing rate;
(3) "other" means
(A) for a form filing, a replaced form or any other form that is not an initial or revised form; in this subparagraph, "replaced" means that the form contains substantial changes to an existing form and the existing form and its form number will no longer be used; and
(B) for a rate filing, a rate filing that is not a new filing or revised filing.
History
- Authority: AS 21.06.090; AS 21.42.125; AS 21.96.080 AS 21.42.120; AS 21.86.070 AS 21.42.123; AS 21.87.190
- Eff. 11/12/2006, Register 180; am 8/20/2016, Register 219
3 AAC 31.225 Property, casualty, surety, marine, mortgage guaranty, and title insurance transmittal document
(a) The transmittal document required under 3 AAC 31.210(a) or transmittal document information in the case of filings submitted using an electronic filing system approved by the director under AS 21.96.080 and required under 3 AAC 31.210(a) must include
(1) the name of the rating organization, if the filing is made by a rating organization;
(2) the National Association of Insurance Commissioners' group and company numbers and, if the filing is not made by a rating organization, the name of the companies making the filing;
(3) the name of the person to contact regarding the filing;
(4) a brief description of the purpose of the filing and any changes that the filing will introduce;
(5) the date the filing is made;
(6) whether the filing is a rate, rule, or form filing;
(7) the type of insurance to which the filing applies;
(8) the specific product to which the filing applies;
(9) the insurer's identification number for the filing, if any;
(10) identification of whether each form, rule or rate page is a replacement and, if so and if available, the division's identification number for previous filing;
(11) the requested effective date;
(12) the insurer's identification number of any corresponding filings or filings that are substantially similar, in whole or in part, including filings described in 3 AAC 31.210(f)(2);
(13) if the filing references a rating organization filing, the rating organization's name, the rating organization's identification number, and the division's identification number of the referenced filing;
(14) if the filing is submitted for information purposes under 3 AAC 29.500 - 3 AAC 29.550, a statement to that effect; and
(15) if the filing is a resubmission of a prior filing that was withdrawn or disapproved, the identification number assigned to the withdrawn or disapproved filing.
(b) If the filing is a form filing, in addition to the requirements of (a) of this section, the transmittal document must include
(1) the form number, edition date, and name of each form;
(2) whether the filing is submitted for consideration subject to prior approval under AS 21.42.123 or to file and use under AS 21.42.125; and
(3) whether a similar filing has been made in the insurer's state of domicile and the status of the filing in that state.
(c) If the filing is a rate or rule filing, in addition to the requirements of (a) of this section, the transmittal document must include
(1) whether the filing is submitted for consideration subject to prior approval under AS 21.39.041, to flex-rating under AS 21.39.210, or to file and use under AS 21.39.220;
(2) the overall effect of the rate level change requested in the filing, if applicable; and
(3) the maximum and minimum rate changes an individual policyholder may receive.
(d) Responses to the director's questions on a filing submitted by electronic mail must include
(1) the name of the rating organization, if the response is made by a rating organization;
(2) the National Association of Insurance Commissioners' group and company numbers and, if the filing is not made by a rating organization, the name of the company making the filing;
(3) the name of the person to contact regarding the response;
(4) a description of the changes proposed in the response;
(5) the date the response is made;
(6) whether the filing is a rate, rule, or form filing;
(7) the type of insurance to which the filing applies;
(8) the specific product to which the filing applies;
(9) the insurer's identification number for the filing, if any;
(10) the division's identification number assigned to the filing;
(11) the requested effective date; and
(12) if the filing is submitted for information purposes under 3 AAC 29.500 - 3 AAC 29.550, a statement to that effect.
(e) A response to a question from the director must revise any transmittal document information required by (a), (b), or (c) of this section, if the information requires revision to accurately reflect the proposal as amended by the response.
History
- Authority: AS 21.06.090; AS 21.39.210; AS 21.42.125 AS 21.39.040; AS 21.39.220; AS 21.66.370 AS 21.39.041; AS 21.42.120; AS 21.66.450 AS 21.39.043; AS 21.42.123; AS 21.96.080
- Eff. 11/12/2006, Register 180; am 8/20/2016, Register 219; am 12/20/2020, Register 236
3 AAC 31.230 Property, casualty, surety, marine, and mortgage guaranty rate filings
(a) In addition to the requirements under 3 AAC 31.200 - 3 AAC 31.217 and 3 AAC 31.225, a property, casualty, surety, marine, or mortgage guaranty rate filing must include
(1) premium and loss experience, both nationwide and specifically for this state, shown separately by each year in the experience period used or with a full explanation if that information is not available; in the case of a filing for more than one company, the premium and loss experience of the different companies may be combined if an explanation is provided;
(2) expense information, both nationwide and specifically for this state, if available; expense information must be broken out in detail at least as specific as the expense groups shown on Part III of the insurance expense exhibit of the annual statement required by AS 21.09.200; if loss adjustment expenses are included in the loss experience, that fact must be clearly explained;
(3) support showing how investment income was incorporated into the proposed rate or loss cost adjustment;
(4) an explanation of the actuarial methodology used in developing an indicated rate, rating component, or loss cost adjustment, including a description of any trending or credibility procedures used, as well as the role of judgment in the formulation of a final rate proposal;
(5) support for any deviation included in a filing, whether the deviation is between companies or from a rating organization filing;
(6) any other information that the company considers relevant, including reference to rating organization experience or published industry statistics, if appropriate; and
(7) any other information requested by the division in support of the filing.
(b) If the filing is submitted for flex-rating under AS 21.39.210, the filing must also include an exhibit detailing the cumulative rate change of all the rate filings that became effective or will become effective within the 12 months immediately preceding the proposed effective date, including the effect of the rate change of the subject filing. The exhibit must calculate the rate change separately for each company to which the filing applies and must include the division's identification numbers for each of the applicable historical rate filings.
History
- Authority: AS 21.06.090; AS 21.39.043; AS 21.39.210 AS 21.09.200; AS 21.39.060; AS 21.39.220 AS 21.39.040; AS 21.39.070; AS 21.66.370 AS 21.39.041; AS 21.39.130
- Eff. 12/4/94, Register 132; am 11/12/2006, Register 180; am 8/20/2016, Register 219; am 12/20/2020, Register 236
3 AAC 31.235 Health care insurance rate filings
(a) Except as provided in (b) of this section, an insurer may not use or change health care insurance premium rates unless the rates and supporting documentation as required by this section have been filed with and approved by the director. Rates and supporting documentation requested under this section must be filed with the director at least 45 days before the proposed effective date of the new or modified premium rates. A rate filing must be filed annually at least 45 days before the end of the rating period, even if no rate change is proposed.
(b) An insurer is not required to file for approval with the director health care insurance premium rates for a large employer health care insurance policy but must submit rates and supporting documentation with the director not later than 30 days after use for a large employer health insurance policy that is not fully experience-rated. In this subsection, 'large employer' means an employer that employs an average of at least 51 employees on the business days during the preceding calendar year and that employs at least two employees on the first day of a health benefit plan year.
(c) Except as provided in (b) of this section, an insurer shall submit separate filings for individual, small group, and large group policy forms, riders, or endorsements through the National Association of Insurance Commissioners' System for Electronic Rate and Form Filing (SERFF). All applicable filing and rate information fields in the System for Electronic Rate and Form Filing must be completed.
(d) An insurer shall propose the date upon which the proposed health care insurance rates will become effective and shall specify the annual rating period for which the proposed rates will be effective. The proposed effective date may be not later than six months after the date the rate filing is submitted to the director except to the extent necessary to meet any federal filing deadlines.
(e) To develop rates or rate revisions, the insurer shall use the most current reliable data available and, to the extent that the experience is credible, use experience specific to the insurer's policyholders in this state and covered individuals in this state. If other experience is used in developing rates or rate revisions, the rates or rate revisions must be
(1) adjusted to be appropriate for this state's benefit, utilization, and cost levels; and
(2) described in the actuarial memorandum under (g) of this section.
(f) Underwriting adjustments to rates must be
(1) documented in detail in the company records;
(2) objectively determined; and
(3) actuarially justified.
(g) Except as provided in (h) of this section, a health care insurance rate filing must include an actuarial memorandum with information sufficient to demonstrate that rates are not excessive, inadequate, or unfairly discriminatory. The actuarial memorandum must include
(1) a list of policy forms, riders, and endorsements to which the rates apply, including
(A) a summary of benefits for each policy form, rider, and endorsement;
(B) an indication of whether the policy form, rider, or endorsement is open or closed to new sales;
(C) a description of the marketing method for each policy form, rider, and endorsement;
(D) a description of applicable underwriting standards for each policy form, rider, and endorsement; and
(E) a description of any benefit changes from the previous year for each policy form, rider, and endorsement;
(2) a signed certification by a member of the American Academy of Actuaries stating that, in the opinion of the actuary, the rates are in compliance with the law of this state and are not excessive, inadequate, or unfairly discriminatory;
(3) a description of the reason for the rate revision, if applicable;
(4) by policy form or, if experience is combined for multiple policy forms, for the combined forms, the number of policyholders in this state and covered individuals in this state that will be affected by the proposed rate revision;
(5) by policy form or, if experience is combined for multiple policy forms, for the combined forms, the average, minimum, and maximum rate revision that any policyholder or covered individual would receive;
(6) a description of the rating formula, including each rating assumption and any changes in the rating formula or rating assumptions from the previous year;
(7) the methodology for determining, and the actuarial justification for, each rating assumption or change in rating assumption including a description and a summary of the experience data used in developing the rates or rate revisions;
(8) rate schedules for the specified rating period;
(9) the cost and utilization trend analysis by major service category;
(10) a comparison of the prior year projected experience and actual experience as well as actual-to-expected cost, utilization, and claim trends for the experience period used in developing rates;
(11) the pricing or target loss ratio;
(12) the impact on rates or rate revisions of state or federally mandated benefit changes and the impact of other benefit changes for both essential and non-essential health benefits, including the impact of changes in cost-sharing requirements by major service category on rates or rate revisions;
(13) the impact on rates or rate revisions of changes in actual or expected enrollee risk profile including federal rating limitations on age and tobacco;
(14) the impact of any overestimate or underestimate of medical trend for previous years on proposed rates or rate revisions;
(15) the impact of changes in reserve needs on rates or rate revisions;
(16) the impact of changes in administrative costs related to programs that improve health care quality;
(17) the impact of changes in other administrative costs on rates or rate revisions;
(18) the impact of changes in applicable taxes, licensing, or regulatory fees on rates or rate revisions;
(19) projected rebates to policyholders in this state under 42 U.S.C. 300gg - 300gg-95;
(20) for each of the most recent 48 months for each policy form or, if experience is combined for multiple policy forms, for the combined forms:
(A) earned premiums;
(B) paid claims;
(C) incurred claims;
(D) incurred loss ratio;
(E) the number of covered individuals in this state;
(F) the number of member-months;
(G) expected loss ratio;
(21) rate revisions and implementation dates by policy form for the four years before the date of filing;
(22) company capital and surplus, company revenues, and company liabilities for the four years before the date of filing;
(23) rebates paid to policyholders in this state under 42 U.S.C. 300gg - 300gg-95;
(24) the impact of
(A) geographic factors and variations;
(B) changes within a single risk pool to all products or plans within the risk pool;
(C) any reinsurance or risk adjustment payments and charges under 42 U.S.C. 18061 and 18063; and
(25) other information requested by the director.
(h) An insurer that does not actively market health care insurance in this state but provides health care insurance coverage to a resident of this state through an out-of-state single employer insured group plan is exempt from the requirements under (g) of this section.
(i) If an insurer's response to a request for additional information by the director is inadequate or is submitted to the director later than five days before the expiration of the waiting or extension period under AS 21.51.405 or AS 21.54.015, the director may disapprove the filing.
(j) The director will hold a rate filing confidential until the date that the rates become effective and under AS 21.06.060(g) will continue to hold the following rate filings or information provided within a rate filing confidential on and after the effective date:
(1) a large group rate filing;
(2) a rate filing for a specific group including an association rate filing;
(3) a grandfathered plan rate filing;
(4) third-party data and analysis purchased by the insurer and used in developing the rates.
History
- Authority: AS 21.06.060; AS 21.51.405 AS 21.06.090; AS 21.54.015
- Eff. 1/1/2012, Register 200; am 8/20/2016, Register 219
3 AAC 31.240 Loss cost adjustment filing
In addition to the requirements under 3 AAC 31.200 - 3 AAC 31.217, 3 AAC 31.225, and 3 AAC 31.230, a filing by a participating insurer of a rating organization that aims to modify the rating organization's filed and approved loss costs for a type of insurance by applying a loss cost adjustment must include copies of the loss cost adjustment form provided by the director. An explanation, including information upon which the insurer relies to support the deviation, must be included regarding any deviation contained in the filing.
History
- Authority: AS 21.06.090; AS 21.39.060; AS 21.39.210 AS 21.39.040; AS 21.39.070; AS 21.39.220 AS 21.39.041; AS 21.39.130
- Eff. 12/4/94, Register 132; am 1/17/98, Register 145; am 11/12/2006, Register 180; am 12/20/2020, Register 236
3 AAC 31.250 Form filing
(a) Repealed 12/20/2020.
(b) Text or numbers in a form that may vary must be bracketed or otherwise clearly and consistently identified in the form and a statement of variability must be submitted with the form that describes the conditions under which each variable text or number may change and describes any relationship between the variable text or numbers. All ranges or options for text or numbers that are subject to a statutory mandate or that define coverage must be identified in the statement of variability. Benefit schedules may not be entirely variable or illustrative.
(c) A blank endorsement, rider, or form may not be submitted in a filing unless included with the filing is the full range of possible variable language options along with a description of when each variable language option will be used.
(d) A life insurance or annuity contract filing must include an actuarial memorandum certified and signed by an individual who is a qualified actuary under 3 AAC 21.810. The actuarial memorandum must demonstrate compliance with
(1) AS 21.45.300 (Standard Nonforfeiture Law for Life Insurance) or AS 21.45.305 (Standard Nonforfeiture Law for Individual Deferred Annuities), as applicable; and
(2) AS 21.18.110 (Standard Valuation Law - Life Insurance).
(e) For a health insurance policy with separately identified optional components
(1) a new policy form filing must include
(A) the base policy; and
(B) all optional components, including
(i) an index of the optional components; and
(ii) an explanation of how each optional component will be used; and
(2) a new optional component may be submitted separately from the base policy form if the filing clearly states the assigned filing numbers for
(A) the approved base policy form to which the optional component applies; and
(B) all previously submitted optional components approved for use with that base policy form;
(3) repealed 8/20/2016;
(4) repealed 8/20/2016.
(f) For life and health insurance, a filing for a revision to a base policy form or an optional component must include a listing of all associated forms and their assigned filing numbers or a copy of all associated forms and corresponding assigned filing numbers.
(g) For life and health insurance, eligibility rules must be specified in the form.
(h) For life and health insurers, insurance company contact information including the company address, telephone number, Internet address, and officer signatures must be
(1) specified in the form; and
(2) made variable following the requirements under (b) of this section.
(i) Insurance department contact information that may be included in a form must be variable following the requirements under (b) of this section. In this subsection, "insurance department" means an insurance regulatory organization whose chief insurance regulator is a member of the National Association of Insurance Commissioners.
(j) A contract may not contain discretionary language under which the insurer reserves discretion to interpret a provision of the insurance policy.
History
- Authority: AS 21.06.090; AS 21.42.125; AS 21.86.070 AS 21.42.120; AS 21.42.160; AS 21.87.180 AS 21.42.123; AS 21.66.450
- Eff. 11/12/2006, Register 180; am 3/26/2015, Register 213; am 8/20/2016, Register 219; am 12/20/2020, Register 236
3 AAC 31.260 Fees
A licensee or its affiliate or subsidiary is not prohibited from charging and collecting fees included in an insurer's rate filing that has been properly filed.
History
- Authority: AS 06.40.010; AS 21.06.090 AS 06.40.020; AS 21.36.490
- Eff. 12/20/2020, Register 236
3 AAC 31.299 Definitions
In 3 AAC 31.200 - 3 AAC 31.299,
(1) "replaced" or "revised," with respect to a form, rule, or rate page,
(A) means a form, rule, or rate page with the same basic content or effect as a currently authorized or approved form, rule, or rate page and that will be used in place of the currently authorized or approved form, rule, or rate page regardless of whether the name or other identifying information associated with the form, rule, or rate is changing;
(B) does not include a form, rule, or rate page
(i) with changes limited to the insurer's logo, letterhead information, pagination, or formatting that does not affect the text of the currently authorized or approved form, rule, or rate page, and that is not subject to special formatting requirements; or
(ii) defined under 3 AAC 31.221(d)(2) or (3);
(2) "rate filing" includes a loss cost filing.
History
- Authority: AS 21.06.090; AS 21.42.125; AS 21.86.070 AS 21.39.043; AS 21.57.080; AS 21.87.180 AS 21.42.120; AS 21.66.450 AS 21.42.123; AS 21.84.255
- Eff. 3/26/2015, Register 213; am 12/20/2020, Register 236
Article 3 Viatical Settlements
3 AAC 31.300 Qualifications for license
(a) The director will issue or renew a license to a person, or to be exercised by a person, in compliance with AS 21.96.110 and 3 AAC 31.300 - 3 AAC 31.449, if the director finds that the person
(1) has complied with the application requirements of AS 21.27.040;
(2) has provided
(A) the person's social security number or the person's federal employer identification number assigned by the United States Internal Revenue Service; and
(B) any additional information the director may request under AS 21.27.040, including disclosure of the identity of all stockholders, directors, partners, officers, members, and employees;
(3) has established to the satisfaction of the director that the person is in compliance with and is qualified for a license under AS 21.96.110 and 3 AAC 31.300 - 3 AAC 31.449;
(4) is licensed in this state for lines of authority for life insurance coverage and variable coverage under AS 21.27 and 3 AAC 28.010 - 3 AAC 28.190;
(5) is trustworthy and competent;
(6) has not committed an act that is cause for denial, nonrenewal, suspension, or revocation of a license in this state or another jurisdiction;
(7) has provided the plan of operation required under 3 AAC 31.320;
(8) has provided an anti-fraud plan that meets the requirements in 3 AAC 31.405;
(9) for a resident license, is a bona fide resident before issuance of the license and actually resides in the state; and
(10) if a nonresident applicant or licensee and the applicant or licensee's home state does not participate in the producer database maintained by the National Association of Insurance Commissioners, has submitted a certificate of good standing from an official or agency with authority to regulate insurance in the applicant's or licensee's home state.
(b) The director will issue or renew a firm license to a viatical settlement provider, viatical settlement broker, or viatical settlement representative if the director finds that
(1) the applicant or licensee complies with (a) of this section;
(2) the compliance officer of the firm is licensed in the state as an individual;
(3) for an applicant or licensee that is a corporation or partnership, it
(A) maintains a lawfully established place of business in this state unless licensed as a nonresident as provided in (c) of this section;
(B) designates a licensee responsible for the firm's compliance with the insurance statutes and regulations of this state; and
(C) provides to the director documents necessary to verify the information contained in or made in connection with the application.
(c) In addition to the requirements of (a) and (b) of this section, an applicant for a license who is not a resident of this state shall comply with AS 21.27.270.
(d) An applicant or licensee may not use a fictitious name or alias unless the applicant or licensee files with the director the applicant's or licensee's
(1) legal name;
(2) and fictitious name or alias.
(e) After the director issues a license, the licensee shall comply with the notice of change requirements of AS 21.27.025.
History
- Authority: AS 21.06.090; AS 21.27.040; AS 21.96.110 AS 21.27.025; AS 21.27.270
- Eff. 8/25/2002, Register 163; am 10/13/2011, Register 200
3 AAC 31.305 License exemptions
A person is not required to be licensed under 3 AAC 31.300 - 3 AAC 31.449 if the person is employed on salary or hourly wage
(1) and does not receive commission, directly or indirectly, on a viatical settlement contract entered into by a person licensed under 3 AAC 31.300 - 3 AAC 31.449, and the person's activities are solely for the performance of executive, administrative, managerial, clerical, or similar office duties that are only indirectly related to a viatical settlement transaction; or
(2) by a licensed viatical settlement provider, viatical settlement broker, or viatical settlement representative at its place of business and
(A) does not receive commission, directly or indirectly, on a viatical settlement contract entered into by a viatical settlement provider;
(B) is supervised by and reports directly to a licensed viatical settlement provider, viatical settlement broker, or viatical settlement representative in the firm;
(C) does not have direct contact with a viator or insured; and
(D) does not individually engage in the sale, solicitation, or negotiation of a viatical settlement contract with a viator or insured.
History
- Authority: AS 21.06.090; AS 21.96.110
- Eff. 8/25/2002, Register 163
3 AAC 31.310 Appointment of a viatical settlement representative
(a) A licensed viatical settlement provider or a viatical settlement broker shall appoint a viatical settlement representative on forms prescribed by the director within 10 days after the viatical settlement representative first acts or aids in any manner in a viatical settlement transaction.
(b) A viatical settlement representative that is licensed and acts solely on behalf of a licensed viatical settlement representative firm is not required also to have an appointment under (a) of this section.
(c) If the director approves an appointment, based on whether the viatical settlement representative to be appointed has a license in good standing, the director will provide acknowledgement of the appointment and the effective date of the appointment to the person making the appointment and to the appointee.
(d) Within 30 days after receipt of the acknowledgment under (c) of this section, the person making the appointment and the appointee shall notify the director of any error in the acknowledgment.
(e) If either party revokes or terminates an appointment, the appointing viatical settlement provider or viatical settlement broker shall notify the director of the revocation or termination within 30 days after the revocation or termination, and shall provide a statement of the reasons for revocation or termination.
History
- Authority: AS 21.06.090; AS 21.96.110
- Eff. 8/25/2002, Register 163
3 AAC 31.315 Surety bond requirement
(a) In addition to the other requirements under 3 AAC 31.300 - 3 AAC 31.449 and AS 21.96.110 to qualify for issuance or for renewal of a viatical settlement provider license, an applicant or licensee shall have and maintain while licensed an unimpaired bond in a sum of not less than $200,000 aggregate liability.
(b) A bond required under (a) of this section must
(1) be continuous in form;
(2) remain in force until the director releases the licensee from liability;
(3) be without prejudice to any liability accrued before the effective cancellation; however, the bond may be cancelled if the director receives at least 60 days notice before the date of the effective cancellation; and
(4) be in favor of insureds, viators, and the state.
(c) A bond issued under this section must be acceptable to the director and may only be issued
(1) by an admitted insurer authorized to transact surety insurance in the state; or
(2) in compliance with AS 21.34, by a surplus lines insurer that is listed on the most recent list of eligible surplus lines insurers published by the director.
(d) An individual who has entered into an employment contract with the firm is not required to have and maintain a bond required under this section if the firm has and maintains a bond or other alternative allowed under (f) of this section.
(e) A firm licensee's bond required under this section extends to all the firm's separate places of business.
(f) If the director determines that a deposit of cash, certificate of deposit, or letter of credit meets the requirements of this section, the deposit of cash, certificate of deposit, or letter of credit may be used instead of a bond.
(g) A firm may enter into an employment contract with a licensed individual to conduct business under the supervision of and in the name of the firm. The individual and the firm shall retain a copy of the contract and shall reply in writing within three working days to an inquiry of the director regarding any business transacted by the individual and the firm.
(h) A licensed individual may, if authorized by the firm, accept on the firm's behalf, a viatical settlement transaction in accordance with a written agency employment contract.
(i) The firm shall be responsible for the actions of an individual transacting viatical settlement transactions under the firm's employment contracts. In any disciplinary proceeding under AS 21, the existence of the employment contract shall be prima facie evidence that the firm knew of the activities of the individual.
(j) The individual and the firm shall maintain a current list of all of their respective contracts that identifies, for each contract, the parties to the contract, the parties' mailing addresses, electronic mailing addresses, and telephone numbers, and the parties' license number, and the effective and termination dates of employment.
(k) A licensee shall retain the records of an employment contract and make the records available for examination and inspection by the director, at any business time during the five years immediately following the date of the termination of the employment contract unless the director orders a longer period of retention. If the licensee assumes the business of another licensee or former licensee by merger, purchase, or otherwise, the requirements of 3 AAC 31.425 apply.
History
- Authority: AS 21.06.090; AS 21.96.110
- Eff. 8/25/2002, Register 163; am 10/13/2011, Register 200
3 AAC 31.320 Plan of operation
(a) A viatical settlement provider shall provide to the director with a license application a plan of operation that details the manner in which the viatical settlement provider proposes to operate in the state and a description of the life insurance policies or contracts the viatical settlement provider intends to viaticate including a designation by
(1) group or individual; and
(2) term, whole, universal, or variable.
(b) A viatical settlement provider's plan of operation must be a narrative overview of the viatical settlement provider's business and must include
(1) a copy of the viatical settlement provider's charter and bylaws, if a corporation, or a copy of the partnership agreement, if a partnership;
(2) a chart showing the relationship of the viatical settlement provider to any parent, affiliated, or subsidiary corporation;
(3) a detailed description of the viatical settlement provider's marketing techniques, including a description of training programs for those individuals who will have direct contact with a viator or insured;
(4) a schedule listing the names of financial institutions with which the viatical settlement provider has escrow trust agreements, and indicating the balance on each account, and copies of all escrow and trust agreements; and
(5) a detailed description of the steps through which the viator will have access to money, including the name of the escrow agent that will make the money available.
(c) A viatical settlement provider shall notify the director of any change in the plan of operation or the financial information filed with its license application within 30 days after the change.
History
- Authority: AS 21.06.090; AS 21.96.110
- Eff. 8/25/2002, Register 163
3 AAC 31.325 Scope of license
(a) A viatical settlement broker may not be an agent for, or employee of, a viatical settlement provider.
(b) A viatical settlement broker who offers or attempts to negotiate a viatical settlement contract shall act according to the viator's instructions and in the best interest of the viator or insured and not the viatical settlement provider or any other person.
(c) Repealed 10/13/2011.
(d) A licensee may operate only within the scope of the license the person applied for and received.
(e) A firm shall have a firm license of the same scope as each individual employee of the firm.
(f) Except as provided in 3 AAC 31.305, each individual employee of a firm must be licensed in this state.
History
- Authority: AS 21.06.090; AS 21.96.110
- Eff. 8/25/2002, Register 163; am 10/13/2011, Register 200
3 AAC 31.330 Viatical settlement broker contracts
(a) A viatical settlement provider who appoints a viatical settlement broker in this state or relative to a subject resident, located, or to be performed in this state shall execute a written contract that specifically sets out the duties, functions, powers, authority, and compensation of the viatical settlement broker.
(b) A viatical settlement broker may only receive compensation if the compensation is a
(1) fee paid by a client;
(2) combination of a fee paid by a person and a commission paid by a viatical settlement provider who enters into a viatical settlement contact, if the amount of the commission is disclosed to the person; or
(3) commission paid by a viatical settlement provider who enters into the viatical settlement contract.
(c) A viatical settlement broker may not assign, in whole or in part, a contract between the viatical settlement broker and a viatical settlement provider.
History
- Authority: AS 21.06.090; AS 21.96.110
- Eff. 8/25/2002, Register 163
3 AAC 31.335 Commission arrangements
A person may not be promised payment or paid, directly or indirectly, compensation when transacting a viatical settlement under AS 21.96.110 unless the person is licensed as required under 3 AAC 31.300 - 3 AAC 31.449 as a viatical settlement provider, viatical settlement broker, or viatical settlement representative.
History
- Authority: AS 21.06.090; AS 21.96.110
- Eff. 8/25/2002, Register 163
3 AAC 31.340 License renewal
(a) Except as provided in 3 AAC 31.300 - 3 AAC 31.449, the director will renew a viatical settlement provider, viatical settlement broker, or viatical settlement representative license biennially on a date consistent with 3 AAC 23.860, if the licensee continues to be qualified under 3 AAC 31.300 - 3 AAC 31.449 and on or before the close of business on the renewal date, meets all renewal requirements under 3 AAC 23.860. A licensee is responsible for knowing the date that a license lapses and for renewing a license before the expiration date of the license.
(b) If a viatical settlement provider, viatical settlement broker, or viatical settlement representative fails to pay the renewal fee and meet all renewal requirements on or before to the expiration date, the license lapses. A licensee may not act as or represent to be a viatical settlement provider, viatical settlement broker, or viatical settlement representative during the time a license is lapsed. The director may reinstate a lapsed license if the person continues to qualify for the license, pays the applicable license renewal fees set out in 3 AAC 31.025, and pays the applicable delayed renewal penalty fee set out 3 AAC 31.060(a). Reinstatement does not exempt a person from a penalty provided under AS 21.96.110 for transacting business while unlicensed. A license may not be renewed if it has lapsed for two years or longer.
(c) If a licensee does not wish to renew a license issued under AS 21.96.110 and 3 AAC 31.300 - 3 AAC 31.449, the licensee shall surrender the license to the director on or before the close of business on the renewal date in the manner prescribed in AS 21.27.460.
(d) If a viatical settlement provider has in force, at the time of license renewal, viatical settlement contracts with viators in which the insureds are still living, the viatical settlement provider shall
(1) renew the license until the viatical settlement provider assigns, sells, or otherwise transfers each viatical settlement contract in which an insured is still living, or until each insured who is subject to a viatical settlement contract has died, whichever occurs first; or
(2) appoint, in writing, one of the following to make all inquiries in compliance with 3 AAC 31.385 to the viator or insured, or the viator's or insured's designee, regarding the health status of the viator and other pertinent matters:
(A) the licensed viatical settlement provider who entered into the viatical settlement contract;
(B) the licensed viatical settlement broker who received commissions from the viatical settlement;
(C) another licensed viatical settlement provider or viatical settlement broker.
History
- Authority: AS 21.06.090; AS 21.27.460; AS 21.96.110
- Eff. 8/25/2002, Register 163; am 10/13/2011, Register 200
3 AAC 31.345 License disqualification
(a) The director may deny issuance of, deny renewal of, suspend, or revoke the license of a viatical settlement representative, viatical settlement broker, or viatical settlement provider if the viatical settlement provider, viatical settlement broker, viatical settlement representative, or an officer, partner, or member, or management personnel, of a viatical settlement provider, viatical settlement broker, or viatical settlement representative firm
(1) makes a material misrepresentation in the application for a license or renewal;
(2) engages in or is about to engage in a fraudulent, dishonest, or unfair marketing practice or transaction;
(3) has received a suspension or revocation of a viatical settlement license of any kind in another jurisdiction;
(4) exhibits conduct considered by the director to reflect incompetence or untrustworthiness, or to be a source of potential injury or loss to the public;
(5) is convicted of a felony;
(6) places or attempts to place a viatical settlement contract with or through a person who is not licensed as required in AS 21.96.110 or who does not have an appointment as required in 3 AAC 31.310;
(7) violates or participates in a violation of a provision of AS 21.96.110 or 3 AAC 31.300 - 3 AAC 31.449;
(8) fails to honor a contractual obligation of a viatical settlement contract;
(9) with intent to deceive, materially misrepresents the terms or effect of a viatical settlement contract;
(10) if a viatical settlement provider, assigns, transfers, or pledges a viaticated policy to a person other than a viatical settlement provider licensed in this state;
(11) deals with, or attempts to deal with, or to exercise a power relative to, a viatical settlement transaction outside the scope of the license of the licensee or applicant;
(12) demonstrates a pattern of unreasonable payments to viators; or
(13) no longer meets the requirements for licensure.
(b) The director may deny issuance of, deny renewal of, suspend, or revoke the license of a firm and its compliance officer for a violation or cause that relates to a person representing or acting on behalf of the firm.
History
- Authority: AS 21.06.090; AS 21.96.110
- Eff. 8/25/2002, Register 163
3 AAC 31.350 Procedure for suspending, revoking, or conditioning a license
(a) After a hearing under AS 21.06.170 - 21.06.240, if the director decides to suspend or revoke a person's license for a violation under 3 AAC 31.345, the director will issue an order effective 10 days after the issue date of the order that the license is suspended or revoked.
(b) After a hearing under AS 21.06.170 - 21.06.240, the director may place conditions on a person's license, if the director determines that the
(1) person has violated a provision of 3 AAC 31.300 - 3 AAC 31.449; and
(2) conditions will protect the public from injury or potential injury.
(c) With the consent of an applicant or licensee, the director may issue or renew a license with restrictions upon the scope of the person's license or may otherwise restrict or condition the activities of the licensee if the director determines that the
(1) person has violated the provisions of 3 AAC 31.300 - 3 AAC 31.449; or
(2) restrictions or conditions will protect the public from injury or potential injury.
(d) In an order suspending a license, the director will specify the period during which the license is suspended. The director will not set a period of suspension that exceeds 12 months after the effective date of the order as calculated under (a) of this section.
(e) An order revoking a license must specify the period during which the person may not seek to be licensed in this state or licensed relative to a subject resident, located or to be performed in this state.
(f) In addition to any other penalty provided under AS 21.96.110, a person whose license has been suspended or revoked shall pay a penalty equal to all or a portion of the compensation
(1) received during the suspension or revocation; and
(2) relating to a viatical settlement transaction that occurred during the period in which the license was suspended or revoked.
History
- Authority: AS 21.06.090; AS 21.96.110
- Eff. 8/25/2002, Register 163
3 AAC 31.355 Surrender of license
A person licensed under 3 AAC 31.300 - 3 AAC 31.449 shall comply with all the requirements of AS 21.27.460 regarding surrendering a license.
History
- Authority: AS 21.06.090; AS 21.27.460; AS 21.96.110
- Eff. 8/25/2002, Register 163
3 AAC 31.360 Reporting requirements for viatical settlement providers
On or before March 1 of each calendar year, the compliance officer of a viatical settlement firm licensed in this state or an individual viatical settlement provider not in a firm licensed in this state shall make a report of all viatical settlement transactions and shall distinguish between transactions with viators who are residents of this state and transactions with all viators in total. The report must contain the following information for the previous calendar year:
(1) for each viatical settlement transaction during the previous calendar year,
(A) the effective date of the viatical settlement contract;
(B) the viator's state of residence on the effective date of the viatical settlement contract;
(C) the mean life expectancy in months of the insured on the effective date of the viatical settlement contract;
(D) the total face amount of the life insurance policy viaticated;
(E) the amount of net death benefit for the life insurance policy viaticated;
(F) the estimated total premiums necessary to keep the life insurance policy in force for the mean life expectancy of each insured;
(G) the proceeds paid to each viator under a viatical settlement contract;
(H) the source of the viaticated policy, whether
(i) from a viatical settlement broker;
(ii) by direct purchase from a viator; or
(iii) through the secondary market, from an entity other than a viator or viatical settlement broker;
(I) a description of the life insurance policy that is the subject of the viatical settlement contract; the description must include an indication of whether the life insurance policy is
(i) group or individual; and
(ii) term, whole, universal, or variable;
(J) whether the life insurance policy is still within the contestable or suicide period at the effective date of the viatical settlement contract;
(K) a classification of the diagnosis of the insured, according to at least one of the following disease categories:
(i) infectious and parasitic diseases except AIDS/HIV;
(ii) AIDS/HIV;
(iii) neoplasms;
(iv) endocrine disorders, nutritional and metabolic diseases, and immunity disorders other than AIDS/HIV;
(v) diseases of the blood and blood-forming organs;
(vi) mental disorders;
(vii) diseases of the nervous system and sense organs;
(viii) diseases of the circulatory system;
(ix) diseases of the respiratory system;
(x) diseases of the digestive system;
(xi) diseases of the genitourinary system;
(xii) complications of pregnancy, childbirth, and the puerperium;
(xiii) diseases of the skin and subcutaneous tissue;
(xiv) diseases of the musculoskeletal system and connective tissue;
(xv) congenital anomalies;
(xvi) certain conditions originating in the perinatal period;
(xvii) symptoms, signs, and ill-defined conditions;
(xviii) injury and poisoning;
(L) how proceeds from the viatical settlement contract were funded, whether by
(i) institutional investors; or
(ii) private investors; and
(M) the name and address of the viatical settlement broker through whom the viatical settlement provider purchased a policy from a viator who resided in this state on the effective date of the viatical settlement contract;
(2) for a viatical settlement contract in which death occurred during the previous calendar year,
(A) the effective date of the viatical settlement contract;
(B) the viator's state of residence on the effective date of the viatical settlement contract;
(C) the mean life expectancy in months of each insured assumed by the viatical settlement provider on the effective date of the viatical settlement contract;
(D) the amount of net death benefit collected by the viatical settlement provider under the life insurance policy viaticated;
(E) the total premiums paid to keep the life insurance policy in force, whether
(i) a waiver of premium occurs in the event of disability; or
(ii) not applicable because the policy is paid up and premiums are not due;
(F) the proceeds paid to each viator under a viatical settlement contract;
(G) a classification of the diagnosis of the insured, according to at least one of the following disease categories:
(i) infectious and parasitic diseases except AIDS/HIV;
(ii) AIDS/HIV;
(iii) neoplasms;
(iv) endocrine disorders, nutritional and metabolic diseases, and immunity disorders other than AIDS/HIV;
(v) diseases of the blood and blood-forming organs;
(vi) mental disorders;
(vii) diseases of the nervous system and sense organs;
(viii) diseases of the circulatory system;
(ix) diseases of the respiratory system;
(x) diseases of the digestive system;
(xi) diseases of the genitourinary system;
(xii) complications of pregnancy, childbirth, and the puerperium;
(xiii) diseases of the skin and subcutaneous tissue;
(xiv) diseases of the musculoskeletal system and connective tissue;
(xv) congenital anomalies;
(xvi) certain conditions originating in the perinatal period;
(xvii) symptoms, signs, and ill-defined conditions;
(xviii) injury and poisoning;
(H) the date of the insured's death;
(I) the number of months between the effective date of the viatical settlement contract and the date of the insured's death;
(J) the difference between the number reported under (I) of this paragraph and the number reported under (C) of this paragraph; and
(K) the name and address of the viatical settlement broker through whom the viatical settlement provider purchased a policy from a viator who resided in this state on the effective date of the viatical settlement contract;
(3) the number of life insurance policies considered for a viatical settlement contract and rejected by the viatical settlement provider, viatical settlement broker, or viatical settlement representative;
(4) the number of life insurance policies purchased in the secondary market as a percentage of total life insurance policies purchased.
History
- Authority: AS 21.06.090; AS 21.96.110
- Eff. 8/25/2002, Register 163
3 AAC 31.365 Payments
(a) A viatical settlement provider may not enter into or effectuate a viatical settlement contract that provides payment to the viator that is unreasonable or unjust. For life expectancies up to 24 months, the following discount rates as applied to the face value of a life insurance policy, less outstanding loans on the policy, will be presumed to be reasonable and just payment to a viator:
(1) if the life expectancy of the insured is less than six months, at least 80 percent;
(2) if the life expectancy of the insured is at least six months but less than 12 months, at least 70 percent;
(3) if the life expectancy of the insured is at least 12 months but less than 18 months, at least 65 percent;
(4) if the life expectancy of the insured is at least 18 months but less than 24 months, at least 60 percent.
(b) A viatical settlement provider may enter into or effectuate a viatical settlement contract that provides payment to a viator less than the amounts specified in (a) of this section, if the director determines the payment not to be unreasonable or unjust. In determining whether a payment is unreasonable or unjust, the director will consider
(1) the life expectancy of the viator;
(2) the applicable rating of the insurance company that issued the life insurance policy by a rating service generally recognized by the insurance industry, regulators, and consumer groups;
(3) the prevailing discount rates in the viatical settlement market in this state, or if insufficient data is available for this state, the prevailing discount rates nationally or in other states that maintain this data, if the data is credible; if the director determines that credible prevailing discount rate data is not available, the director may require that payment to a viator under a viatical settlement contract must be consistent with the payments specified in (a) of this section; and
(4) other factors relevant to whether the payment is unreasonable or unjust.
(c) If a life insurance policy contains a provision for double or additional indemnity for accidental death, the viatical settlement provider or insurance company shall pay the additional indemnity to the
(1) beneficiary last named by the viator before entering into the viatical settlement contract;
(2) designated beneficiary, if the viator designated a beneficiary other than the viatical settlement provider on or after entering into the viatical settlement contract; or
(3) the estate of the viator, if the viator has not designated a beneficiary.
(d) A viatical settlement provider shall pay proceeds of a viatical settlement contract to the viator in a lump sum unless the
(1) viatical settlement contract clearly states that payments will be made consistent with an annuity; and
(2) viatical settlement provider has purchased an annuity or similar financial instrument issued by a licensed insurance company or bank or by an affiliate of a licensed insurance company or bank specifically for payment of proceeds under the viatical settlement contract.
(e) Within three working days after the viatical settlement provider's receipt of documents to effectuate the transfer of the insurance policy under a viatical settlement contract, the viatical settlement provider shall pay proceeds of the viatical settlement contract to an escrow or trust account in a state or federally chartered financial institution whose deposits are insured by the Federal Deposit Insurance Corporation. The account must be managed by a trustee or escrow agent independent of the parties to the viatical settlement contract. The trustee or escrow account contract must provide for payment by wire transfer or by certified or cashier's check of the viatical settlement proceeds to the viator within three working days after the date that the viatical settlement provider receives an insurer's or group administrator's acknowledgement that
(1) ownership of the policy or interest in the group certificate has been transferred to the viatical settlement provider; and
(2) the beneficiary has been designated under the viatical settlement contract.
(f) A viatical settlement provider, trustee, or escrow agent may not retain a portion of the viatical settlement contract proceeds.
History
- Authority: AS 21.06.090; AS 21.96.110
- Eff. 8/25/2002, Register 163
3 AAC 31.370 Approval of viatical settlement contracts and disclosure statements
(a) A person may not use a viatical settlement contract or provide to a viator a disclosure form in this state unless the contract or form is filed with and approved by the director for compliance with this section.
(b) A viatical settlement contract or a disclosure form must be filed with the director not less than 30 days before the anticipated date of delivery of the viatical settlement contract or disclosure form.
(c) The director will not approve a viatical settlement contract or disclosure form if the director determines that the viatical settlement contract or disclosure form contains a statement or provision that is unreasonable, contrary to the interests of the public, misleading, unfair to the viator or insured, or in violation of 3 AAC 31.300 - 3 AAC 31.449.
(d) If a viatical settlement provider enters into a viatical settlement contract that allows the viator to retain an interest in the life insurance policy, the viatical settlement contract must contain the following:
(1) a statement that the viatical settlement provider will pay viatical settlement contract proceeds to the viator only to the extent or portion of the death benefit subject to the viatical settlement contract;
(2) a statement that the viator's remaining interest in the life insurance policy will be paid directly to the viator's beneficiary by the insurance company;
(3) a statement that the viatical settlement provider will, upon notification by the insurance company that an ownership interest in a life insurance policy has been transferred and a beneficiary has been designated,
(A) advise the insured, in writing, that the insurance company has confirmed the viator's interest in the policy and that ownership or an interest in the life insurance policy has been transferred; or
(B) send to the insured a copy of the communication that was sent from the insurance company to the viatical settlement provider acknowledging the viator's interest in the policy and that ownership or interest in the life insurance policy has been transferred;
(4) a provision that apportions the premiums to be paid by the viatical settlement provider and the viator; the viatical settlement contract may specify that all premiums must be paid by the viatical settlement provider and may require that the viator reimburse the viatical settlement provider for the premiums attributable to the amount of interest the viator retains in the life insurance policy;
(5) a statement in at least 10-point bold typeface substantially similar to the following statement: "Any person who knowingly presents false information in an application for insurance or for a viatical settlement contract is guilty of a crime and may be subject to penalty."
(e) An application for a viatical settlement contract described in (d) of this section must contain the statement described in (d)(5) of this section.
(f) A viatical settlement contract must provide the viator with an unconditional right to rescind the contract within 15 days after the date the viator received the viatical settlement contract proceeds. If the insured dies during the 15-day period, the viatical settlement contract must be rescinded as of the date of death, and the viator shall refund the viatical settlement contract proceeds to the viatical settlement provider within 10 working days after the date the viatical settlement contract was rescinded.
History
- Authority: AS 21.06.090; AS 21.96.110
- Eff. 8/25/2002, Register 163
3 AAC 31.375 Approval of advertising material
(a) A person may not use an advertisement related to a viatical settlement transaction unless the advertisement is filed with and approved by the director for compliance with this section. The director will not approve an advertisement related to a viatical settlement transaction if the advertising
(1) contains misleading, potentially misleading, unfair, unclear, or deceptive information;
(2) is not conducive to accurate presentation and description of viatical settlement transactions or contracts;
(3) is contrary to the public interest; or
(4) is in violation of AS 21 or 3 AAC 31.300 - 3 AAC 31.449.
(b) A viatical settlement producer, viatical settlement broker, or viatical settlement representative shall establish and maintain control over the content, form, and distribution method of an advertisement relating to a viatical settlement transaction including at least annual notification of the requirements and procedures necessary for approval by the director before the use of an advertisement to each person authorized by the viatical settlement producer, viatical settlement broker, or viatical settlement representative to distribute an advertisement.
(c) An advertisement relating to a viatical settlement transaction may not
(1) omit material information or use words, phrases, statements, references, or illustrations if the omission or use has the capacity, tendency, or effect of misleading or deceiving viators as to the nature or extent of a benefit, loss covered, premium payable, or state or federal tax consequence;
(2) state or imply that interest charged on an accelerated death benefit or policy loan is unfair, inequitable, or in any manner an incorrect or improper practice;
(3) use the words "free," "no cost," "without cost," "no additional cost," or "at no extra cost," or words of similar meaning with respect to a benefit or service unless true;
(4) contain statistical information unless the
(A) statistical information accurately reflects recent and relevant facts; and
(B) the source of each statistic is clearly identified;
(5) disparage insurers, viatical settlement providers, viatical settlement brokers, viatical settlement representatives, insurance licensees, policies, services, or methods of marketing;
(6) use of any of the following, without disclosing the name of the viatical settlement provider, viatical settlement broker, or viatical settlement representative, if using any of the following would give the advertisement the capacity or tendency to mislead or deceive a person regarding the true identity of the viatical settlement provider, viatical settlement broker or viatical settlement representative, or to create the impression that a company other than the viatical settlement provider, viatical settlement broker, or viatical settlement representative would have responsibility for the financial obligation under the viatical settlement contract
(A) a trade name;
(B) a group designation;
(C) the name of the parent company of a viatical settlement provider, viatical settlement broker, or viatical settlement representative;
(D) the name of a particular division of a viatical settlement provider, viatical settlement broker, or viatical settlement representative;
(E) a service mark;
(F) a slogan;
(G) a symbol;
(H) a device or reference other than one described in (A) - (G) of this paragraph;
(7) use a combination of words, symbols, or physical material that by their content, phraseology, shape, color, or other characteristics
(A) are similar to a combination of words, symbols, or physical material used by a government program or agency; or
(B) have the capacity or tendency to mislead prospective viators to believe that the viatical settlement transaction is connected with a government program or agency; or
(8) create the impression that a government entity recommends, endorses, approves, or favors
(A) a viatical settlement provider, viatical settlement broker, or viatical settlement representative, its financial condition or status, the payment of its claims, its business practices, or its methods of operation;
(B) the merits, desirability, or advisability of a particular viatical settlement contract;
(C) a viatical settlement contract; or
(D) a life insurance policy or life insurance company.
(d) If an advertisement emphasizes the speed with which a viatical settlement transaction will occur, the advertisement must state, for transactions in this state and for transactions in all other states, the average amount of time for a transaction by the advertised viatical settlement provider
(1) from completion of a viatical settlement application to the date of offer during the previous 12 months; and
(2) from acceptance of the offer to receipt of the viatical settlement proceeds by the viator during the previous 12 months.
(e) If an advertisement emphasizes the dollar amount available to a viator under a viatical settlement contract, the advertisement must state the number of viatical settlement contracts and the average viatical settlement proceeds as a percent of the life insurance policy face value for the viatical settlement contracts entered into with the advertised viatical settlement provider during the past six months for transactions in this state and for transactions in all other states.
History
- Authority: AS 21.06.090; AS 21.96.110
- Eff. 8/25/2002, Register 163
3 AAC 31.380 Disclosure requirements
(a) Before an application for a viatical settlement contract is signed, a viatical settlement provider, viatical settlement broker, or viatical settlement representative shall provide disclosure statements in a conspicuous manner to a viator in a separate document. The document containing the disclosure statements must be signed by the viatical settlement provider, viatical settlement broker, or viatical settlement representative, and by the viator. In the document, the following information must be disclosed:
(1) possible alternatives to a viatical settlement contract, including policy loans or accelerated death benefits that may be offered under the viator's life insurance policy;
(2) that some or all of the proceeds of the viatical settlement contract may be taxable under federal income tax or state franchise or income tax laws, along with a recommendation that the viator seek assistance from a professional tax advisor;
(3) that proceeds from a viatical settlement contract could be subject to the claims of creditors;
(4) that receipt of the proceeds from a viatical settlement contract may adversely affect the viator's eligibility for Medicaid or other government benefits or entitlements, along with a recommendation that the viator obtain advice from the appropriate government agency;
(5) the viator's right to rescind a viatical settlement contract within 15 days after the date of receipt of the proceeds from a viatical settlement contract by the viator pending return of the proceeds;
(6) that the proceeds from a viatical settlement contract will be sent to the viator within three working days after the viatical settlement provider receives the insurer's or group administrator's acknowledgment that
(A) ownership of the life insurance policy or interest in the group certificate has been transferred to the viatical settlement provider; and
(B) the beneficiary under the viatical settlement contract has been designated;
(7) that entering into a viatical settlement contract may cause other rights or benefits available to the viator, including conversion rights and waiver of premium benefits existing under the life insurance policy or interest in the group certificate, to be forfeited, along with a recommendation that the viator seek assistance from a financial adviser;
(8) the name, business address, and telephone number of the independent trustee or escrow agent that is to be used in the transaction, along with a statement that the viator may inspect or receive copies of relevant agreements or documents provided by the trustee or escrow agent;
(9) that providing false or misleading information in order to obtain an insurance policy is insurance fraud under AS 21.36.360;
(10) the name, address, and telephone number of the viatical settlement provider;
(11) that all medical, financial, and personal information solicited or obtained by a viatical settlement provider, viatical settlement broker, or viatical settlement representative about a viator and insured, including the viator's or insured's identity and the identity of family members, a spouse, or a spousal equivalent of the viator or insured, is confidential unless disclosure is
(A) necessary to effectuate a viatical settlement contract between the viator and a viatical settlement provider and the viator and insured have provided prior written consent to release the information; or
(B) provided in response to an investigation or examination by the director;
(12) that by entering into a viatical settlement contract, information regarding the viator's or insured's identity and medical condition will be available to each subsequent owner of the life insurance policy;
(13) that subject to (12) of this subsection, medical, financial, and personal information solicited or obtained by a viatical settlement provider, viatical settlement broker, or viatical settlement representative about a viator or insured, including the viator's or insured's identity or the identity of a viator's or insured's family members, spouse, or a spousal equivalent may be provided to viatical settlement financing entities;
(14) that the insured may be contacted no more than once every three months if the insured has a life expectancy of more than one year and no more than once per month if the insured has a life expectancy of one year or less by the viatical settlement provider, the viatical settlement broker, or the viatical settlement representative to determine the insured's health status;
(15) the information in Appendix A of this section printed in at least 12-point typeface.
(b) Before a viatical settlement contract is signed, a viatical settlement provider, viatical settlement broker, or viatical settlement representative shall provide disclosure statements in a conspicuous manner to a viator in a separate document. The document containing the disclosure statements must be signed by the viatical settlement provider, viatical settlement broker, or viatical settlement representative, and by the viator. In the document, the following information must be included:
(1) the affiliation, if any, between the viatical settlement provider and the issuer of an insurance policy subject to the viatical settlement contract;
(2) the name, address, and telephone number of the viatical settlement provider;
(3) the amount and method of calculating the viatical settlement broker's compensation;
(4) if the life insurance policy subject to the viatical settlement contract has been issued as a joint policy or involves family riders or any coverage of a life other than the insured, information about the possible loss of coverage on the other lives under the policy, along with a recommendation that the viator consult with an insurance producer or the insurance company issuing the life insurance policy for advice regarding the impact of entering into a viatical settlement contract on the benefits of the life insurance policy;
(5) the dollar amount of the current net death benefit payable to the viatical settlement provider under the life insurance policy or interest in the group certificate;
(6) the availability of any additional guaranteed insurance benefits, the dollar amount of any accidental death and dismemberment benefits under the policy, and the viatical settlement provider's interest in those benefits;
(7) the name, business address, and telephone number of the independent trustee or escrow agent that is to be used in the transaction, along with a statement that the viator may inspect or receive copies of relevant agreements or documents provided by the trustee or escrow agent;
(8) the procedure for how contacts with the viator or the insured will be handled.
(c) If the viatical settlement provider transfers ownership or changes the beneficiary of the life insurance policy, the viatical settlement provider shall provide the viator and insured the name, business address, and phone number of the new beneficiary or owner within 20 days after the transfer of ownership or change in beneficiary.
APPENDIX A Selling Your Life Insurance Policy
Today it's possible for you to sell your life insurance policy to someone
else (a viatical settlement provider) for an immediate cash payment. This
financial arrangement, known as a viatical settlement, is best suited for
people who are living with an immediate life-threatening illness and facing
tough financial choices.
It may not always be in your best interest to sell your life insurance
policy. Before you take action, you should be sure you understand
* what future benefits you may lose; and
* what other options may be available
Selling your life insurance policy is a complex financial arrangement. This
guide will help you make an informed decision.
We recommend that you
1. evaluate your needs;
2. check all your options;
3. understand how the process works;
4. know your rights; and
5. check with the Alaska Division of Insurance.
Step 1. Evaluate your needs Before you sell your policy and give up valuable insurance protection,
think about whether your need for life insurance has changed since you bought
the policy. If it hasn't, selling your policy may not be the right choice. If
you sell your policy now, your beneficiaries will not be paid a benefit at
your death.
If you sell your policy now, remember premiums go up a lot as you grow
older. You may not want to pay the higher cost to replace your coverage later.
Step 2. Check all of your options You may be able to get the cash you need now without selling your policy.
Policy Cash Values
Contact your current life insurance agent or company to see if you have any
cash value in your policy. Ask if you can
(1) borrow from the cash value and still keep the insurance in force;
(2) cancel the policy for its current cash value; or
(3) use the cash value as collateral to get a loan from a financial
institution.
Your insurance company must tell you about your options if you ask.
Accelerated Death Benefits
Find out if your policy has an "accelerated death benefit." It may be your
best option.
Many life insurance policies do have an accelerated death benefit. With
that benefit, policyholders who are terminally ill, affected with certain
diseases, or permanently confined in a nursing home can access 50 percent or
more of a policy's death benefit while still living. An accelerated death
benefit could pay you a large part of your policy's death benefit and you
could keep your policy.
A very important feature of the accelerated benefit is that when the
policyholder dies, the beneficiaries get the remaining death benefit. This
means that eventually 100 percent of the policy benefits will be paid out
either to the insured or the beneficiary.
Other Considerations
Think about what it will mean if you do sell your policy. Check out the tax
implications. Not all proceeds from a viatical settlement are tax-free.
Find out if creditors could claim any of the money you would get from a
viatical settlement.
Find out if you will lose any public assistance benefits such as medicaid
or other government benefits if you accept a cash settlement for your life
insurance policy.
Comparison Shop
To learn the market value of your policy, it's a good idea to contact three
to five viatical settlement providers. Or you could use a viatical settlement
broker who would contact several viatical settlement providers for you. Your
financial advisor can help you decide whether to work with a viatical
settlement provider or through a viatical settlement broker.
Summary
Everyone's financial situation is different. A viatical settlement may or
may not be the best approach for you. Check it out for yourself. We recommend
that you ask an advisor who is qualified to review your finances to help you
review your options.
Step 3. How the process works If you decide to sell your life insurance policy to a viatical settlement
provider, you will enter into a viatical settlement agreement with the
provider. You, the seller, agree to accept a cash payment for your policy. The
amount will be less than the face amount the policy would pay upon your death.
(For example, you might agree to accept a $75,000 cash payment for a $100,000
policy.)
The viatical settlement provider buying your policy
* becomes the new owner of your policy;
* names the beneficiary;
* collects the full death benefit when you die;
* begins paying premiums on the policy; and
* may sell your policy again.
There are four basic phases required to complete a viatical transaction.
Phase 1 - Qualifying to sell your policy (underwriting)
The viatical settlement provider will need information about you before
making an offer. Usually, the viatical settlement provider will take some
preliminary information from you over the phone and send you this paperwork to
sign:
* a medical release form so the viatical settlement provider can get and
review your medical records;
* an authorization form to contact your insurance company to confirm
benefit, premium, and ownership of your policy.
To avoid delays, it's important that you give complete and accurate
information about your medical history.
If you apply with more than one viatical settlement provider, each will
contact your doctor for medical records and your insurance company for policy
information.
Phase 2 - Calculating the offer
The viatical settlement provider uses the information it gets in the
underwriting phase to make an offer. To develop an offer, a viatical
settlement provider takes into account various factors including
* estimated life expectancy and medical condition of the insured;
generally, the shorter the life expectancy of the insured, the more the
viatical settlement provider will offer for the policy;
* the amount of life insurance coverage;
* loans or advances, if any, previously taken against the policy;
* amount of premiums necessary to keep the life insurance policy in
force;
* the rating of the issuing insurance company;
* prevailing interest rates; and
* payment restrictions.
Phase 3 - Closing the agreement
* If you accept an offer, a closing package is forwarded to you, the
seller, for approval and signature. Closing documents typically include an
offer letter, a viatical settlement contract, and the forms the insurance
company needs to transfer ownership of the policy to the viatical settlement
provider.
* The closing documents are then returned to the viatical settlement
provider for its signature.
* The viatical settlement provider will put the cash payment owed to you
in escrow, if required, and send the signed insurance change forms to the
insurance company to record the change.
Phase 4 - Receiving the payment
Once the insurance company notifies the viatical settlement provider that
the changes on the life insurance policy have been recorded, the payment is
released to you, the seller, usually the next business day.
Step 4. Know your rights State laws
Alaska insurance laws provide important consumer protections including the
following:
* a viatical settlement broker or viatical settlement provider arranging
viatical settlements must be licensed with the Alaska Division of Insurance;
* with few exceptions, the viatical settlement provider buying your
policy must keep your identity and medical history confidential unless you
give written consent to tell others;
* to protect your proceeds, the viatical settlement provider buying your
policy must put your money into an escrow account with an independent party
during the transfer process;
* you have the right to change your mind about the settlement within 15
days AFTER you receive the money, provided you return all the money;
* the new owners of your policy are limited in how often they may
contact you about your health status.
Federal tax laws
Two groups of people might receive benefits from a viatical settlement
without owing federal income tax:
* persons who have been diagnosed with a terminal illness and with a
life expectancy of 24 months or less;
* certain chronically ill individuals.
Before entering into a viatical settlement, consult your own financial
advisor or tax attorney about the federal tax consequences.
Avoiding Consumer Fraud
* If you're in good health and someone asks you to sell your life
insurance policy, proceed with caution. Refer to the section on selling your
life insurance policy.
* If you've been contacted by someone who wants you to buy a policy and
then sell it immediately, you should contact the Alaska Division of Insurance.
You may be a target for fraud.
* If you're asked to buy a life insurance policy for the sole purpose of
selling it, you may be participating in fraud. Contact the Alaska Division of
Insurance to report the request and to obtain information.
* If you're asked to invest in a viatical settlement, we recommend that
you contact the Alaska Division of Insurance to learn more about the issues
and risks that might be involved in such an investment.
Step 5. Check with the Alaska Division of Insurance State Licensing
For a complete list of authorized viatical settlement providers, viatical
settlement brokers, and viatical settlement representatives, call the Alaska
Division of Insurance.
Seller Checklist
Before you sell your policy be sure you know the answers to these questions.
Evaluating Your Needs
* Do you still need life insurance?
* Do you have dependents who might rely on your life insurance benefits
should anything happen to you?
* If you don't need life insurance protection now, what are the chances
you'll need it in the future?
Current Policy Benefits
* Can you borrow from the cash value?
* Can you cancel the policy for its current cash value?
* Can you use the cash value as collateral to get a loan from a
financial institution?
* Do you have art accelerated death benefit feature?
Taxes and Other Financial Considerations
* Is the money you get from selling the policy taxable?
* Will the money you get from selling the policy affect your eligibility
for government benefits?
* Do you need the advice of a tax or estate-planning specialist before
you decide to sell your policy?
* If you sell your policy, can any of your creditors claim the money?
Understanding the Process
* If you sell your policy, who will be the legal owner?
* Is the viatical settlement provider buying your policy licensed?
* If you sell your policy, how will the value you get be calculated?
What interest rate will be used?
* If you sell your policy but then change your mind, can you get your
money back?
* Will investors have specific information about you, your family, or
your health status?
* How are fees or commissions paid to the viatical settlement broker or
viatical settlement provider?
Protections in Your State
Contact the Alaska Division of Insurance to find out about the laws
governing viatical settlements.
History
- Authority: AS 21.06.090; AS 21.36.360; AS 21.96.110
- Eff. 8/25/2002, Register 163
3 AAC 31.385 Privacy
(a) Except as otherwise allowed or required by law, medical, financial, and personal information about a viator and insured, including the viator's or insured's identity or the identity of a family member or spousal equivalent, may not be disclosed to another person unless the disclosure is
(1) necessary to effectuate a viatical settlement contract between a viator and a viatical settlement provider and the viator and insured have provided prior written consent to the disclosure; or
(2) provided in response to an investigation or examination by the director.
(b) Contacts with an insured for the purpose of determining the health status of the insured after the effective date of the viatical settlement contract may be made only by a viatical settlement provider, viatical settlement broker, or viatical settlement representative licensed in this state. The insured may be contacted no more than
(1) once every three months, if the insured has a life expectancy of more than one year; and
(2) once a month, if the insured has a life expectancy of one year or less.
(c) A viatical settlement provider, viatical settlement broker, or viatical settlement representative shall obtain from a person that is provided with information that may not be disclosed under this section a signed affirmation that the person will not further divulge the information without first obtaining the express written consent of the viator and the insured for the disclosure. If a viatical settlement provider, viatical settlement broker, or viatical settlement representative is served with a subpoena and compelled to produce records containing patient identifying information, the viatical settlement provider, viatical settlement broker, or viatical settlement representative shall notify the viator and the insured in writing at their last known addresses within five working days after receiving the subpoena.
History
- Authority: AS 21.06.090; AS 21.96.110
- Eff. 8/25/2002, Register 163
3 AAC 31.390 Fair marketing
(a) A viatical settlement provider, viatical settlement broker, or viatical settlement representative may not pay or offer to pay a finder's fee, commission, or other compensation to
(1) an insured's physician;
(2) an attorney, accountant, or other person providing medical, legal, or financial planning services to the viator; or
(3) a person acting as an agent of the viator with respect to the viatical settlement transaction.
(b) A viatical settlement provider may not knowingly solicit as an investor a person who has treated or has been asked to treat the illness of the insured whose coverage would be the subject of the investment.
(c) Before the execution of a viatical settlement contract, a viatical settlement provider shall first obtain
(1) if the viator is the insured, a written statement from a licensed attending physician that the viator is of sound mind and under no constraint or undue influence to enter into or effectuate a viatical settlement contract;
(2) a witnessed document signed by the viator and the insured
(A) stating that the viator consents to the viatical settlement contract;
(B) representing that the viator and the insured have a full and complete understanding of the viatical settlement contract;
(C) representing that the viator has a full and complete understanding of the benefits of the life insurance policy;
(D) acknowledging that the viator entered into the viatical settlement contract freely and voluntarily; and
(E) acknowledging that, if the insured has a terminal or chronic illness or condition, the terminal or chronic illness or condition was diagnosed after the life insurance policy was issued; and
(3) a witnessed document signed by the viator stating that the insured consents to the release of the insured's medical records to
(A) a viatical settlement provider or viatical settlement broker; and
(B) the insurance company that issued the life insurance policy covering the life of the insured.
(d) Within 20 days after a viator executes documents necessary to transfer rights under a life insurance policy, or within 20 days after entering an agreement, option, promise, or other form of understanding to viaticate a life insurance policy, whichever is earlier, a viatical settlement provider shall
(1) give written notice to the insurance company that issued the life insurance policy subject to the viatical settlement contract that the life insurance policy is or will be viaticated; and
(2) deliver a copy of the medical release required in (c)(3) of this section, a copy of the viator's application for the viatical settlement contract, and the notice required in (1) of this subsection to the insurance company that issued the life insurance policy to be viaticated.
History
- Authority: AS 21.06.090; AS 21.96.110
- Eff. 8/25/2002, Register 163
3 AAC 31.395 Prohibited practices
(a) A viatical settlement provider may not also act as a viatical settlement broker, whether entitled to collect a fee directly or indirectly, in the same viatical settlement transaction.
(b) A person may not knowingly engage in a viatical settlement transaction in which the person has participated in the sale or solicitation of the associated life insurance policy.
(c) A viatical settlement broker may not seek or receive compensation from the viator, without obtaining the written agreement of the viator for the compensation before performing services in connection with a viatical settlement transaction.
(d) A person may not use a longer life expectancy than is realistic in order to reduce the payout to which the viator is entitled or use more than one life expectancy in a single viatical settlement transaction.
(e) A person may not knowingly enter into or effectuate a viatical settlement contract in which the associated life insurance policy was obtained by means of a false, deceptive, or misleading application.
(f) A person may not communicate, in any way, an advertisement, announcement, or statement containing an assertion, representation, or statement with respect to the viatical settlement business or with respect to a person in the conduct of the person's viatical settlement business that
(1) misrepresents the benefits, advantages, conditions, sponsorship, source, or terms of a viatical settlement contract;
(2) is a misrepresentation for the purpose of effecting or tending to effect a viatical settlement contract;
(3) uses a name or title of a viatical settlement contract that misrepresents its true nature;
(4) appears to be an actual viatical settlement contract for the named viator when it is merely an advertisement;
(5) does not clearly designate the name of the viatical settlement provider; or
(6) is in any way misleading, false, or deceptive.
(g) A person may not enter into a viatical settlement contract within two years after the date the life insurance policy to be viaticated is issued unless evidence is provided that one or more of the following conditions is met within the two-year period:
(1) the life insurance policy was issued upon the policy owner's exercise of conversion rights under a group or individual life insurance policy and the duration of coverage under the conversion policy plus the duration of coverage under the prior policy is at least 24 months;
(2) the policy owner is a charitable organization exempt from taxation under 26 U.S.C. 501(c)(3);
(3) the policy owner is not a natural person;
(4) the viator or the insured provides independent evidence to the viatical settlement provider that at least one of the following has occurred within the two-year period:
(A) the policy owner or insured is terminally or chronically ill;
(B) the viator's spouse dies;
(C) the viator becomes divorced;
(D) the viator retires from full-time employment;
(E) the viator becomes physically or mentally disabled and a physician certifies that the disability prevents the viator from maintaining full-time employment;
(F) the viator was the insured's employer at the time the life insurance policy was issued and the employment relationship has been terminated;
(G) on the application of a creditor of the viator, a court of competent jurisdiction enters a final order, judgment, or decree,
(i) adjudicating the viator bankrupt or insolvent;
(ii) approving a petition seeking reorganization of the viator; or
(iii) appointing a receiver, trustee, or liquidator to a substantial portion of the viator's assets;
(H) the viator experiences a significant decrease in income that is unexpected by the viator and that impairs the viator's reasonable ability to pay the premiums necessary to keep the life insurance policy in force;
(I) the viator or insured disposes of ownership in a closely held corporation under which the life insurance policy was purchased.
(h) A viatical settlement provider shall submit independent evidence to the insurance company that at least one of the conditions in (g) of this section was met when the viatical settlement provider submits a request to the insurance company to effectuate the transfer of a life insurance policy to the viatical settlement provider.
History
- Authority: AS 21.06.090; AS 21.96.110
- Eff. 8/25/2002, Register 163
3 AAC 31.400 Insurance company practices
(a) A life insurance company authorized to do business in this state shall respond to a request for verification of coverage from a viatical settlement provider or a viatical settlement broker within 30 days after the date the request is received, if the following are submitted with the request:
(1) in the case of an individual policy, a form substantially similar to Appendix A of this section, completed by the viatical settlement provider or the viatical settlement broker in accordance with the instructions on the form;
(2) in the case of group insurance coverage, a form substantially similar to Appendix B of this section, first completed by the group certificate holder to the extent the information is available to the group certificate holder, and then completed by the viatical settlement provider or viatical settlement broker in accordance with the instructions on the form.
(b) Nothing in this section prohibits a life insurance company and either a viatical settlement provider or a viatical settlement broker from using another verification of coverage form that has been mutually agreed upon in writing in advance of the submission of the request.
(c) For responding to a request for information from a viatical settlement provider or viatical settlement broker in compliance with this section, a life insurance company may not charge a fee in excess of any usual and customary charges to contract holders, group certificate holders, or insureds for similar services.
(d) The life insurance company may send an acknowledgment of receipt of the request for verification of coverage to the policyholder or group certificate holder and, if the policyholder or group certificate holder is other than the insured, to the insured. In the acknowledgment, the life insurance company may include a general description of any accelerated death benefit that is available under a provision of or rider to the life insurance contract.
(e) If a viatical settlement provider submits to the insurance company a request to effectuate the transfer of a life insurance policy and includes a copy of a certification signed by a viator or insured that meets at least one of the conditions of 3 AAC 31.395(g), the insurance company shall effectuate the transfer of the life insurance policy in a timely manner.
APPENDIX AVERIFICATION OF COVERAGEFOR INDIVIDUAL POLICIES
Section One: (To be completed by the Viatical Settlement Provider or Viatical
Settlement Broker)Insurance Company: _________ Name of Policyowner: _________ Policy Number: _________ Owner's Social Security Number: _________ Name of Insured: _________ Policyowner's Address: _________
StreetInsured's date of birth: _________ _________
City/StatePlease provide the information requested in Section Two (below)
with regard to the policy identified above and in accordance with
the attached authorization.
In addition, please provide the forms checked below which are avail-
able from your company to complete a viatical settlement transaction:
* Absolute Assignment/Change of Ownership/Viatical Assignment
Form* Change of Beneficiary* Release of Irrevocable Beneficiary (if applicable)* Waiver of Premium Claim Form* Disability Waiver of Premium Approval Letter
_______________ _________ DateSignature of a representative of Viatical
Settlement Broker or Viatical Settlement
Provider _________ _________ _________ Full name and address of Viatical Settle-
ment Broker or Viatical Settlement Provider _________ Section Two: (To be completed by the life insurance company)1) Fact amount of policy: $ _______________ 2) Original date of issue: _______________ / _______________ / _______________ (Month/Date/Year)3) Was face amount increased after original issue date? * no * yesa) If yes, when: _______________ / _______________ / _______________ 4)Type of policy: _______________ (Term/Whole Life/Universal
Life/Variable Life)5)Is policy participating? * no * yes
If yes, what is current dividend election? _______________ 6)Current net death benefit: _______________ (Enter full
amount payable, including any additional insurance, and/or
dividends accumulated at interest, minus policy loans, out-
standing interest on policy loans and/or accelerated death
benefits paid)7)a) Current cash value: $ _______________ (Enter full amount,
including cash value of any additional insurance and/or
dividends accumulated at interest, minus policy loans
and outstanding interest on policy loans)b) Current surrender value: $ _________ 8)Terms of policy loans: _________ a) Amount of policy loans: $ _________ b) Amount of outstanding interest on policy loan: $ _________ c) Current interest rate: _________ 9)Has policy lapsed? * no * yes If yes, when did policy lapse? _______________ / _______________ / _______________ If policy has lapsed, is coverage continued under non-
forfeiture option? * no * yes If yes, indicate which option, amount of coverage, duration,
etc.: _________ _________ 10)Is policy in force? * no * yes If yes, has the policy been reinstated within the last two
years? * no * yes If yes, date of reinstatement: _______________ / _______________ / _______________ 11)Amount of contract/scheduled premiums: $ _________ 12)Current premium mode: _______________ (Monthly, semi-annually,
etc.)When is next premium due? _______________ / _______________ / _______________ (Month/Day/Year)13)Does the policy include a disability premium waiver
provision/rider? * no * yesa) If yes, are premiums currently being waived? * no * yesb) If yes, since when? _______________ / _______________ / _______________ c) How often is continued eligibility reviewed? _________ d) When is next review? _______________ / _______________ / _______________ 14)Can payment of all or part of the death benefit be accelerated
under this policy? * no * yesa) If yes, by what method is the benefit calculated, the lien
method or the discount method? _________ b) If lien method, what is the interest rate? _________ c) Can any remaining death benefit be assigned? * no * yes15)Has a claim for accelerated death benefit been submitted? * no * yesIf yes, was payment made under this provision? * no * yes Amount paid: _______________ Date paid: _______________ 16)Do current records show any assignments of record? * no * yes17)Do current records show any outstanding liens or encum-
brances of record? * no * yes18)Please identify current primary beneficiaries: _________ Are they named irrevocably, or is owner otherwise limited in
designation of new beneficiaries? * no * yes19)Have any riders been added to this policy after issue? * no * yesIf yes, please identify: _________ 20)If an ownership or beneficiary change or assignment were to
be made on this policy, to whom would the completed forms
be sent?
Name: Title: Company Name: Department: Address (No P.O. Box please): City: ST: ZIP: Telephone No.: Fax: The answers provided reflect information contained in the company's records as
of: _________ (date)
Signature: Name (Printed): Title: Company: Direct Telephone No.: Direct FAX No.:
APPENDIX BVERIFICATION OF GROUP LIFE INSURANCE BENEFITS
Section One: (To be completed by the viatical settlement provider or viatical
settlement broker) Insurance Company
Name of Employee/Member Employer/Policy Name
Insured's Date of Birth Policy Number
Insured's Social Security Number Certificate Number
Employee/Membership Number
Please provide the information requested in Section Two or Section Three, as appropriate, with regard to the individual and coverage described, in accordance with the attached authorization. In addition, please provide the forms checked below which are available from your company to complete a viatical settlement transaction:* Absolute Assignment* Change of beneficiary (irrevocable if applicable)* Disability Waiver of premium claim or* Disability Waiver of premium award letter
_______________ _________ DateSignature of a representative of
Viatical Settlement Broker or
Viatical Settlement Provider _________ _________ _________ Full name and address of Via-
tical Settlement Broker or Via-
tical Settlement Provider _________
Section Two: (To be completed by the employer/group policyholder and the
insurer. Both should indicate the parts they completed.) 1)BASIC COVERAGE:a)Is the plan self-insured or is coverage provided under a group
policy issued by a life insurance company? _________ If by a group policy, please provide the name of the insurance
company for BASIC life insurance coverage _________ b)Effective date of BASIC life insurance coverage: _________ c)Face amount of BASIC life insurance: _________ d)Does BASIC coverage plan have contestable provisions? * no * yese)Is BASIC coverage subject to a suicide provision? * no * yesf)Monthly premium paid by employer/group policyholder for
BASIC life insurance: $ _______________ g)Monthly premium paid by employee/insured for BASIC life
insurance: $ _______________ h)Is BASIC life insurance coverage * Term * Universal Life?i) If Universal Life, please indicate each value, if any: _______________ ii) Is this amount payable in addition to the face amount? * no * yesi)Is coverage in force? * no * yesj)When is the next premium due? _______________ / _______________ / _______________ k)Have employee's coverage under the plan ever been reinstated? * no * yes If yes, date of reinstatement: _______________ / _______________ / _______________ 2)SUPPLEMENTAL (OPTIONAL) COVERAGEa)Insurance Company for SUPPLEMENTAL life insurance
coverage: _______________ b)Effective date of SUPPLEMENTAL life insurance coverage:
_______________ / _______________ / _______________ c)Face amount of SUPPLEMENTAL life insurance:
_______________ d)Does SUPPLEMENTAL coverage plan have contestable
provisions? * no _______________ * yese)Is SUPPLEMENTAL coverage subject to a suicide provision? * no * yesf)Monthly premium paid by employee/group policyholder for
supplemental life insurance: $ _______________ g)Monthly premium paid by employee/insured for SUPPLE-
MENTAL life insurance: $ _______________ h)Is SUPPLEMENTAL life insurance * Term * Universal Life?i) If Universal Life, please indicate cash value, if any:
_______________ ii) Is this amount payable in addition to the face amount? * no * yesi)Is coverage in force? * no * yes j)When is the next premium due? _______________ / _______________ / _______________ k)Has employee's coverage under this policy been reinstated
within the last two years? * no * yes If yes, date of reinstatement: _______________ / _______________ / _______________ 3)DISABILITY WAIVER OF PREMIUMa)Does plan provide for waiver of premium in the event of em-
ployee/injured's disability?BASIC * no * yes What is the waiting period? _______________ SUPPLEMENTAL * no * yes What is the waiting period? _______________ b)Are premiums currently being waived under disability
premium waiver?BASIC * no * yesSUPPLEMENTAL * no * yesc)Who pays premiums under disability premium waiver?BASIC * Insurance carrier * EmployerSUPPLEMENTAL * Insurance carrier * Employerd)What was the date of approval? _______________ / _______________ / _______________ e)Next review date? _______________ / _______________ / _______________ f)If the insured is no longer eligible for waiver, what amount of
coverage can be converted to an individual policy?
$ _______________ i) Will a new suicide/contestability clause be in effect for
the converted policy? * no * yes ii) Will assignee be notified if insured is no longer eligible
for waiver? * no * yes4)BENEFICIARIES, ASSIGNMENTS AND LIMITATIONSa)Who are the primary beneficiaries of the coverage(s)?BASIC _________ SUPPLEMENTAL _________ b)Is any beneficiary under this policy designated irrevocably, or
is insured otherwise limited in designation of new benefi-
ciaries? * no * yesc)Can this coverage be assigned?BASIC * no * yesIf yes, to a corporation? * no * yesTo someone not related to insured? * no * yesSUPPLEMENTAL * no * yesIf yes, to a corporation? * no * yesTo someone not related to insured? * no * yesd)Do records show any assignments of record? * no * yese)Do records show any outstanding liens or encumbrances
of record? * no * yesf)The following parties (as applicable) should indicate whether
they will provide notice to the assignee if the master policy
is terminated.Group policyholder * no * yesThird party administrator (if any) * no * yesInsurance company * no * yesg)Can Assignee convert the coverage without the permission of
insured? * no * yes5)ACCELERATED DEATH BENEFITSa)Is there an Accelerated Death Benefit available under the
coverage?BASIC * no * yesSUPPLEMENTAL * no * yesb)Has request for Accelerated Death Benefit been made? * no * yesc)Has payment been made to insured under this provision? * no * yes i) Amount Paid: _______________ Date Paid: _______________ / _______________ / _______________ ii) Is this amount a lien against death proceeds? * no * yes Interest rate _______________ iii) Can the remaining death benefit be assigned? * no * 6)MISCELLANEOUSa)Is coverage portable?BASIC * no * yesSUPPLEMENTAL * no * yesb)If insured is no longer eligible for coverage under the group,
will Assignee be notified? * no * yesIf master policy discontinues, what amount can be converted
to an individual policy? $ _______________ Is this plan administered by a third party? * no * yesIf yes, please provide the name, address and telephone
number of administrator.
Name: Title: Company name: Department: Street Address: (No P.O. Box please)
City: State: Zip: Telephone number: ( ) Fax: ( ) If a change of beneficiary form or assignment were to be made for this coverage, to whom should the completed forms be sent?
Name: Title: Company name: Department: Street Address: (No P.O. Box please)
City: State: Zip: Telephone number: ( ) Fax: ( ) The answers provided reflect information contained in the company's records as
of: _________ (date)Signature: Name: Date: Title: Company: Direct telephone number: ( ) Direct fax number: ( )
Information not provided by the employer may be obtained from the insurance company if different from administrator identified above:Name: Title: Company name: Department: Address: (No P.O. Box please)
City: State: Zip: Telephone number: ( ) Fax: ( )
Section Three: Under the terms of 3 AAC 31.400, the insurance company or the third party administrator named above is requested to complete the information not provided by the employer in Section Two, above, Item numbers: _________
The answers provided to the identified questions reflect information in the files of the insurance company as of _______________ (date)
The answers provided reflect information contained in the company's records as of: (date)
Signature: Name: Date: Title: Company: Direct telephone number: ( ) Direct fax number: ( )
History
- Authority: AS 21.06.090; AS 21.96.110
- Eff. 8/25/2002, Register 163
3 AAC 31.405 Unfair trade practices
(a) A person may not commit or participate directly or indirectly in an unfair trade practice involving a viatical settlement transaction.
(b) The director may investigate a suspected unfair trade practice involving a viatical settlement transaction or a person engaged in a viatical settlement transaction and assess a penalty, consistent with AS 21.36.32, for an unfair trade practice involving a viatical settlement transaction.
(c) A person may not knowingly or intentionally interfere with the enforcement of or an investigation of a suspected or actual violation of AS 21.96.110 or 3 AAC 31.300 - 3 AAC 31.449.
(d) A person may not knowingly or intentionally engage directly or indirectly in a viatical settlement transaction with a person convicted of a felony involving dishonesty or breach of trust.
(e) An unfair trade practice is committed by a person
(1) engaged in a viatical settlement transaction in the state relative to a subject resident, located or to be performed in this state who
(A) places or causes to be placed a viatical settlement contract from or through a person not licensed under AS 21.96.110;
(B) pays a commission or other form of remuneration to a person, firm, or organization for placing a viatical settlement contract when the person, firm, or organization is not licensed under AS 21.96.110; or
(C) acts as a viatical settlement provider, viatical settlement broker, or viatical settlement representative without being licensed under AS 21.96.110; or
(2) who
(A) with intent to injure, defraud, or deceive, knowingly makes a false or fraudulent statement or representation or conceals information in or with reference to
(i) an application for a viatical settlement contract;
(ii) underwriting of a viatical settlement contract;
(iii) claim for payment of benefit under a viatical settlement contract;
(iv) premiums paid on an insurance policy under a viatical settlement contract;
(v) payment and changes in ownership or beneficiary made in accordance with the terms of the viatical settlement contract and life insurance policy;
(vi) reinstatement or conversion of a life insurance policy;
(vii) a solicitation, offer, effectuation, or sale of a viatical settlement contract;
(viii) the issuance of evidence of a viatical settlement contract; or
(ix) a viatical settlement financing transaction;
(B) viaticates or attempts to viaticate a life insurance policy fraudulently obtained by an insured, owner of the life insurance policy, or agent of the insured or owner of the life insurance policy;
(C) makes a false, sworn statement that the person does not believe to be true regarding a matter material to an examination, investigation, or hearing of the division involving a viatical settlement transaction;
(D) in a matter material to an examination, investigation, or hearing by the division involving a viatical settlement transaction, makes two or more sworn statements that are irreconcilably inconsistent to the degree that one of them is necessarily false and the person does not believe one of the statements to be true at the time the statement is made;
(E) with intent to deceive, knowingly exhibits a false account, document, or advertisement relative to the affairs of a viatical settlement provider or viatical settlement broker;
(F) wrongfully removes, conceals, alters, destroys, or sequesters from the director the assets or records relating to a viatical settlement transaction, or attempts to remove records relating to a viatical settlement transaction from the place they are required to be kept under 3 AAC 31.425;
(G) falsely makes, completes, or alters a viatical settlement contract or other document relating to a viatical settlement transaction;
(H) knowingly possesses a forged viatical settlement contract or other document viatical settlement transaction;
(I) knowingly enters into a forged viatical settlement contract or other document related to a viatical settlement transaction;
(J) misrepresents or conceals the financial condition of a licensee, insurer, or other person;
(K) embezzles, steals, misappropriates, or converts monies, funds, premiums, credits, or other property of a viator, insured, insurer, viatical settlement provider, or other person involved in a viatical settlement transaction; or
(L) discriminates in the making or solicitation of a viatical settlement contract on the basis of race, age, sex, national origin, creed, religion, occupation, marital or family status, or sexual orientation, or discriminates between viators with or without dependents.
(f) A viatical settlement provider or a viatical settlement broker shall develop and implement antifraud initiatives to detect, prosecute, and prevent a fraudulent act involving a viatical settlement transaction, including
(1) obtaining services of a fraud investigator through employment or by contract; and
(2) developing an antifraud plan that includes
(A) a description of the procedures for detecting and investigating a possible fraudulent act involving a viatical settlement transaction and procedures for resolving material inconsistencies between medical records and insurance applications;
(B) a description of the plan for antifraud education and training of personnel; and
(C) a chart outlining the organizational arrangement of the antifraud personnel who are responsible for the investigation and reporting of a possible fraudulent act involving a viatical settlement transaction and investigating unresolved material inconsistencies between medical records and insurance transactions.
(g) An act by a person or by the person's employee appointed or authorized to represent a viatical settlement broker or viatical settlement provider is considered an act of the person who appointed or authorized the person or the person's employee.
History
- Authority: AS 21.06.090; AS 21.36.910; AS 21.96.110
- Eff. 8/25/2002, Register 163
3 AAC 31.410 Examination of viatical settlement providers, viatical settlement brokers, and viatical settlement representatives
(a) The director may examine the affairs, transactions, accounts, records, and assets of a licensed or formerly licensed viatical settlement provider, viatical settlement broker, or viatical settlement representative.
(b) In the place of an examination by the director, the director may accept a full examination report of the last recent examination of a licensed viatical settlement provider, viatical settlement broker, or viatical settlement representative certified to by the insurance supervisory official of another state, territory, commonwealth, or district of the United States.
History
- Authority: AS 21.06.090; AS 21.96.110
- Eff. 8/25/2002, Register 163
3 AAC 31.415 Conduct of examination
(a) The director may conduct an examination under 3 AAC 31.410 at the business office of the viatical settlement provider, viatical settlement broker, or viatical settlement representative.
(b) Each person being examined or from whom information is sought, and that person's officers, employees, and agents shall provide to the director timely, convenient, and free access, at all reasonable hours at its office, to the books, records, accounts, papers, documents, assets, and computer files or other recordings relating to the property, assets, business, and affairs of the person being examined, and shall facilitate and aid the examination as far as it is in their power to do so, including providing to the director, at the expense of the person being examined, a copy of any document requested during the examination. The director may suspend, revoke, or refuse to issue or renew a license or authority of a person engaging in a viatical settlement transaction or other business under the jurisdiction of the director if the person or an officer, director, employee, or agent of the person refuses to submit to examination or to comply with a reasonable written request of the director.
(c) When conducting an examination under this section, the director may retain attorneys, appraisers, independent actuaries, independent certified public accounts, or other professionals and specialists as examiners, the reasonable costs of which shall be paid by the person being examined.
(d) The director may terminate or suspend an examination in order to pursue other legal or regulatory action under AS 21.
(e) The director will not appoint an examiner who has a conflict of interest with, is affiliated with the management of, or owns a pecuniary interest in a person subject to an examination. This section does not preclude an examiner from being a viator, an insured in a viaticated policy, or a beneficiary in a life insurance policy that is proposed to be viaticated.
History
- Authority: AS 21.06.090; AS 21.96.110
- Eff. 8/25/2002, Register 163
3 AAC 31.420 Examination reports and expenses
(a) A report of an examination by the director under 3 AAC 31.410 and 3 AAC 31.415 will be issued in conformance with the requirements of AS 21.06.150.
(b) Expenses incurred in an examination by the director under 3 AAC 31.410 and 3 AAC 31.415 will be administered in conformance with AS 21.06.160.
History
- Authority: AS 21.06.090; AS 21.06.160 AS 21.06.150; AS 21.96.110
- Eff. 8/25/2002, Register 163
3 AAC 31.425 Records
(a) For at least five years after the death of the insured, a viatical settlement provider, a viatical settlement broker, or a viatical settlement representative shall maintain all records of a viatical settlement transaction, including
(1) accounting and financial records;
(2) proposed, offered, or executed viatical settlement contracts, underwriting documents, policy forms, and applications;
(3) all checks, drafts, or other evidence and documentation related to the payment, transfer, deposit, or release of money on or after the date of the transaction; and
(4) documents or records related to requirements under AS 21.96.110 and 3 AAC 31.300 - 3 AAC 31.449.
(b) The records required under (a) of this section must be made available to the director for inspection during reasonable business hours at the licensee's place of business.
(c) The viatical settlement broker shall keep as a permanent record the written contract required under 3 AAC 31.330 and make the contract available for inspection by the director during reasonable business hours.
History
- Authority: AS 21.06.090; AS 21.96.110
- Eff. 8/25/2002, Register 163
3 AAC 31.449 Definitions
In 3 AAC 31.300 - 3 AAC 31.449, unless the context requires otherwise,
(1) "chronically ill" means
(A) being unable to perform at least two activities of daily living; in this subparagraph, "activities of daily living" means
(i) eating;
(ii) toileting;
(iii) transferring;
(iv) bathing;
(v) dressing; and
(vi) continence; or
(B) requiring substantial supervision to protect the insured from threats to health and safety due to severe cognitive impairment;
(2) "compliance officer" means a licensee responsible for a firm's compliance with AS 21 and 3 AAC 31.300 - 3 AAC 31.449;
(3) "firm" has the meaning given in AS 21.97.900;
(4) "home state" means the District of Columbia or a state or territory of the United States in which a viatical settlement provider, viatical settlement broker, or viatical settlement representative maintains that person's principal place of residence or principal place of business and is licensed to act as a viatical settlement provider, viatical settlement broker, or viatical settlement representative;
(5) "individual" means a natural person who is required to be licensed under AS 21.96.110 and 3 AAC 31.300 - 3 AAC 31.449;
(6) repealed 10/13/2011;
(7) "insured" means the person covered under an insurance policy that has been viaticated or that is proposed to be viaticated;
(8) "life expectancy" means the average number of months an insured under a life insurance policy to be viaticated can be expected to live as determined by a viatical settlement provider considering medical records and appropriate experiential data;
(9) "net death benefit" means the amount of a life insurance policy or certificate to be viaticated, less any outstanding debts or liens;
(10) "patient identifying information" means
(A) an insured's address, telephone number, facsimile number, electronic mail address, photograph or other likeness, employer, employment status, or social security number; or
(B) information that is likely to lead to the identification of the insured;
(11) "person" has the meaning given in AS 21.97.900 and includes a limited liability company;
(12) "resident" has the meaning given in AS 21.27.900;
(13) "spousal equivalent" means a person who is cohabiting with another person in a relationship that is like a marriage but that is not a legal marriage;
(14) "terminally ill" means having an illness or disease that can reasonably be expected to result in death in 24 months or less;
(15) "viatical settlement financing entity" means an underwriter, placement agent, lender, purchaser of securities, purchaser of a life insurance policy from a viatical settlement provider, credit enhancer, reinsurer, or person that is a party to a viatical settlement contract and that has a direct ownership in a life insurance policy that is the subject of a viatical settlement contract but whose sole activity related to the transaction is providing funds to effect the viatical settlement contract and that has an agreement in writing with a viatical settlement provider to act as a participant in a viatical settlement financing transaction;
(16) "viatical settlement financing transaction" means a transaction in which a viatical settlement provider or a viatical settlement financing entity obtains financing for viatical settlement contracts, viaticated policies, or interests in those contracts or policies; "viatical settlement financing transaction" includes secured or unsecured financing, a securitization transaction or securities offering either registered or exempt from registration under federal and state law, or a direct purchase of interests in that policy, if that financing transaction complies with federal and state securities law;
(17) "viaticate" means to enter into a viatical settlement contract;
(18) "working day" means a calendar day other than Saturday, Sunday, an official federal holiday, or an official holiday in this state.
History
- Authority: AS 21.06.090; AS 21.96.110 AS 21.27.900; AS 21.97.900
- Eff. 8/25/2002, Register 163; am 10/13/2011, Register 200
Article 4 Comprehensive Health Insurance Association Reinsurance Program
3 AAC 31.500 Purpose and applicability
(a) The purpose of 3 AAC 31.500 - 3 AAC 31.549 is to
(1) implement a reinsurance program for high risk residents in the individual health care insurance market in order to stabilize health care insurance premiums;
(2) encourage participation in this state's individual health care insurance market; and
(3) allow the director to apply to the United States Secretary of Health and Human Services under 42 U.S.C. 18052 for a waiver of applicable provisions of P.L. 111-148 (Patient Protection and Affordable Care Act).
(b) Except for a health care insurance plan providing grandfathered health care coverage and a health care insurance plan providing transitional health care coverage, 3 AAC 31.500 - 3 AAC 31.549 applies to a health care insurance plan in the individual market offered on or off a health care exchange.
(c) A health care insurer shall cede to the program the risk associated with insuring an eligible high risk resident who is issued a health care insurance plan in the individual market on or after January 1, 2017 and before the cessation of the program.
(d) Nothing in 3 AAC 31.500 - 3 AAC 31.549 requires a health care insurer to offer or issue a health care insurance plan in the individual market.
History
- Authority: AS 21.06.090; AS 21.55.400 AS 21.55.220; AS 21.96.120
- Eff. 2/2/2013, Register 205; am 12/22/2016, Register 220
3 AAC 31.505 Establishment of high risk reinsurance program
(a) There is established within the Comprehensive Health Insurance Association a program to reinsure high risk residents of this state diagnosed with one or more of the covered conditions under 3 AAC 31.540. The program will be referred to as the Alaska Reinsurance Program.
(b) The Alaska Reinsurance Program will have a segregated fund established within the association. The segregated fund will hold all receipts and make all disbursements related to the program. All obligations of the Alaska Reinsurance Program, including payment or reimbursements of claims and expenses, will be limited to the monies available within the program fund.
(c) The association shall administer the reinsurance program under a contract with the director. The program will have its own plan of operation to establish administrative and accounting procedures necessary or proper to implement and administer the program.
(d) The Alaska Reinsurance Program becomes effective January 1, 2017.
History
- Authority: AS 21.06.090; AS 21.55.220; AS 21.55.430 AS 21.55.040; AS 21.55.400
- Eff. 12/22/2016, Register 220
3 AAC 31.510 Association duties
(a) The association shall establish a plan of operation for the administration and operation of the Alaska Reinsurance Program under which a health care insurer shall cede the risk of a high risk resident to the program. The plan of operation must include
(1) a description of the data a health care insurer submitting a reinsurance payment request must provide to the association for the association to implement and administer the reinsurance program, including data necessary for the association to determine a health care insurer's eligibility for reinsurance payments;
(2) guidance to insurers relating to diagnosis codes for identifying residents with covered conditions under the program;
(3) the manner and time period in which a health care insurer must
(A) provide the data described under (1) of this subsection;
(B) pay the quarterly
(i) premium amounts required to be paid under 3 AAC 31.515(b); and
(ii) pharmacy rebates required to be paid under 3 AAC 31.515(c); and
(C) cede risk under this section;
(4) requirements for reporting and processing reports submitted by health care insurers as required by the association;
(5) requirements for conducting audits under 3 AAC 31.530; and
(6) details of an annual actuarial study of this state's individual market that
(A) measures the impact of the program;
(B) recommends funding levels; and
(C) reveals emerging conditions within the market.
(b) The association shall accept a risk ceded to it with respect to a high risk resident in compliance with 3 AAC 31.500 - 3 AAC 31.549 effective on the date coverage becomes effective with the health care insurer and shall continue to accept a risk ceded to it until March 31 of the year following the calendar year in which the high risk resident's coverage becomes effective with the health care insurer or, if earlier, the date on which the coverage terminates or the reinsurance program ceases active operation.
(c) The association shall establish a process to reimburse, on a quarterly basis, participating health insurers for claims paid with respect to risk ceded to the program.
(d) The association shall ensure, in accordance with applicable provisions of generally accepted accounting requirements, circulars on funds management of the United States Office of Management and Budget, and guidance on accounting of the United States Government Accountability Office, that the Alaska Reinsurance Program uses no federal funds for coverage of abortion services described under 42 U.S.C. 18023(b)(1)(B)(i).
History
- Authority: AS 21.06.090; AS 21.55.220; AS 21.55.430 AS 21.55.040; AS 21.55.400
- Eff. 2/2/2013, Register 205; am 12/22/2016, Register 220; am 11/1/2018, Register 228
3 AAC 31.515 Health care insurer eligibility for reinsurance payments
(a) A health care insurer is eligible for reinsurance payments to reimburse the insurer for the claims of a high risk resident for a benefit year if the health care insurer
(1) provides evidence to the association that the health care insurer has paid a claim of a high risk resident for the applicable benefit year that is for a covered condition listed under 3 AAC 31.540;
(2) continues to pay the claims of a high risk resident for the applicable benefit year;
(3) pays to the association, under (b) of this section, the premium amount the health care insurer receives under the insurance policy for the applicable benefit year covering the eligible high risk resident;
(4) pays to the association, under (c) of this section, pharmacy rebates the health care insurer receives for the applicable benefit year for health care services provided to the applicable high risk resident; and
(5) reports to the association payments, applicable to the high risk resident, the health care insurer collects for
(A) third party liabilities;
(B) payments the health care insurer recovers for overpayments;
(C) payments for commercial reinsurance recoveries; and
(D) estimated federal cost-sharing reduction payments made under 42 U.S.C. 18071.
(b) The health care insurer shall pay to the association the separately identifiable premium amount the health care insurer received under the insurance policy for the applicable benefit year covering the eligible high risk resident on a quarterly basis not later than the dates set by the association and specified in the association's plan of operation after the association accepts a risk ceded to it with respect to a high risk resident. If the high risk resident is covered under a family policy and the high risk resident has a separately identifiable premium equal to $0, the health care insurer shall pay to the association the highest separately identifiable premium under the family policy. For each additional high risk resident covered under a family policy who has a separately identifiable premium equal to $0, the health care insurer shall pay to the association the next highest separately identifiable premium under the family policy.
(c) A health care insurer shall pay to the association a pharmacy rebate required to be paid to the association under (a)(4) of this section on a quarterly basis in conjunction with the payment of premiums under (b) of this section.
History
- Authority: AS 21.06.090; AS 21.55.220; AS 21.55.400
- Eff. 12/22/2016, Register 220; am 11/1/2018, Register 228
3 AAC 31.520 Health care insurer duties and rules
(a) A health care insurer shall comply with the requirements established by the association in order to cede a risk to the association.
(b) A health care insurer shall continue to administer and manage the policy for risk ceded to the association in accordance with the terms of the insurance policy and with the insurance law of this state.
(c) A health care insurer shall offer individuals that may be ceded to the association the same plans offered to other individuals.
(d) A health care insurer may not vary premium rates based on whether a risk is ceded to the association.
(e) A health care insurer shall cede a risk to the association with respect to a high risk resident during the period beginning on the date the high risk resident's coverage becomes effective with the health care insurer and ending on March 31 of the year following the calendar year in which the high risk resident's coverage becomes effective with the health care insurer. A health care insurer required to cede risk with respect to a high risk resident to the association in a subsequent calendar year shall re-cede that risk for that calendar year. A health care insurer shall use the dates set by the association and specified in the association's plan of operation when ceding a risk required to be ceded to the association under this subsection.
(f) A health care insurer shall submit to the program claims incurred during a calendar year for a ceded risk not later than April 30 after that calendar year for the claim to be eligible for reimbursement from the program.
History
- Authority: AS 21.06.090; AS 21.55.220; AS 21.55.400
- Eff. 2/2/2013, Register 205; am 12/22/2016 Register 220; am 11/1/2018, Register 228
3 AAC 31.525 Premiums and other financial matters
(a) A health care insurer shall forward all premiums to the association for each risk ceded to the program and may not retain any portion of the premium.
(b) A health care insurer shall report to the association amounts collected by a health care insurer for
(1) third party liabilities;
(2) overpayment recoveries;
(3) estimated federal cost-sharing reduction payments made under 42 U.S.C. 18071;
(4) commercial reinsurance recoveries;
(5) pharmacy rebates; and
(6) any other similar amounts with respect to risk ceded to the program.
(c) The association shall retain all premiums it receives in excess of administrative and operational expenses and claims paid for ceded risks in a calendar year and shall apply any excess premiums toward payment of future administrative and operational expenses and claims incurred by ceded risks in subsequent years of the program.
(d) Premiums received by the association for the program will be used first to pay, or to establish reasonable reserves for payment of, administrative and operational expenses of the program and second to pay claims for risks ceded to the program.
History
- Authority: AS 21.06.090; AS 21.55.220; AS 21.55.430 AS 21.55.040; AS 21.55.400
- Eff. 2/2/2013, Register 205; am 12/22/2016, Register 220; am 11/1/2018, Register 228
3 AAC 31.530 Accounting, reporting, and auditing
(a) A health care insurer that cedes a risk to the program shall submit to the program all data and information when required by the association and in the manner and format required by the association. The data and information must include
(1) eligibility information;
(2) claims information; and
(3) premium information.
(b) The association shall maintain its books, records, accounts, and operations on a calendar-year basis.
(c) The association shall conduct a final accounting and annual claims true-up with respect to each calendar year after April 30 of the following calendar year.
(d) Claims with respect to ceded risk that are incurred during a calendar year and are submitted for reimbursement not later than April 30 of the following calendar year will be allocated to the calendar year in which they are incurred. The association may not reimburse claims submitted after April 30 following the calendar year in which they are incurred.
(e) If the total receipts of the fund with respect to a calendar year are expected to be insufficient to pay all program expenses, claims for reimbursement, and other disbursements allocable to that calendar year, all claims for reimbursement allocable to that calendar year will be reduced proportionately to the extent necessary to prevent a deficit in the fund for that calendar year. Any reduction in claims for reimbursement with respect to a calendar year will apply to all claims allocable to that calendar year without regard to when those claims are submitted for reimbursement, and any reduction will be applied to each claim in the same proportion.
(f) The association shall establish a process for auditing each health care insurer ceding risk to the program. Audits may include both a baseline audit conducted in connection with commencement of an insurer's participation in the program and periodic audits up to four times a year throughout the insurer's participation in the program.
(g) The association shall engage an independent qualified auditing entity to perform a financial and programmatic audit for each benefit year in accordance with generally accepted auditing standards. The association shall provide a copy of the audit to the director at the time the association receives the audit. The association shall make a public summary of the results of the audit. The public summary must be made available within a time period and in a manner that a prudent person would consider to be timely and informative.
(h) The director or the director's designee may conduct financial and programmatic audits of the reinsurance program and the association to assess compliance with
(1) 3 AAC 31.500 - 3 AAC 31.549;
(2) the contract between the director and the association; and
(3) the plan of operation established for the administration and operation of the program.
History
- Authority: AS 21.06.090; AS 21.55.220; AS 21.55.430 AS 21.55.040; AS 21.55.400
- Eff. 2/2/2013, Register 205; am 12/22/2016, Register 220; am 11/1/2018, Register 228
3 AAC 31.535 Annual true-up
(a) The association shall establish a true-up process with respect to a calendar year to reflect adjustments made in establishing the final accounting for that calendar year, including crediting of premiums received with respect to risk ceded after the end of the calendar year and retroactive reductions or other adjustments in reimbursements necessary to prevent a deficit in the fund for that calendar year and to prevent a windfall to an insurer as a result of third party recoveries, recovery of overpayments, commercial reinsurance recoveries, or risk adjustments made under 42 U.S.C. 18063 (sec. 1343 of the Patient Protection and Affordable Care Act, P.L. 111-148). The true-up must occur after April 30 following the calendar year to which it relates.
(b) With respect to the risk adjustment transfers as determined by the United States Department of Health and Human Services, Centers for Medicare and Medicaid Services, Center for Consumer Information and Insurance Oversight (CCIIO),
(1) the director or the director's designee will review the risk adjustment transfers to determine the impact of the ceding of risk to the program;
(2) the review will occur not later than 60 days after publication of the notice of final risk adjustment transfers by the Center for Consumer Information and Insurance Oversight;
(3) the director or director's designee will notify a health care insurer of the amount of any risk adjustment transfer it received that does not accurately reflect benefits provided under the program and
(A) the health care insurer shall pay that amount to the program not later than 30 days after receipt of the notice from the director or the director's designee; and
(B) as appropriate, the director or the director's designee will refund that amount to the health care insurer or insurers that made the federal risk adjustment payment; and
(4) to facilitate the true-up process, a health care insurer shall submit to the director or the director's designee, in a form and manner determined by the director or the directors' designee, all data requested by the director in a data call in March of the year following the year to which the risk adjustment applies.
History
- Authority: AS 21.06.090; AS 21.55.220; AS 21.55.430 AS 21.55.040; AS 21.55.400
- Eff. 2/2/2013, Register 205; am 12/22/2016, Register 220; am 11/1/2018, Register 228
3 AAC 31.540 Covered conditions
A resident of this state diagnosed with one or more of the following covered conditions under this section is a high risk resident under 3 AAC 31.500 - 3 AAC 31.549:
(1) human immunodeficiency virus or acquired immune deficiency syndrome (HIV/AIDS);
(2) septicemia sepsis, systemic inflammatory response syndrome/shock;
(3) metastatic cancer;
(4) lung, brain and other severe cancers, including pediatric acute lymphoid leukemia;
(5) non-Hodgkin's lymphomas and other cancers and tumors;
(6) mucopolysaccharidosis;
(7) lipidoses and glycogenosis;
(8) amyloidosis, porphyria, and other metabolic disorders;
(9) end-stage liver disease;
(10) chronic hepatitis;
(11) acute liver failure or disease, including neonatal hepatitis;
(12) intestinal obstruction;
(13) chronic pancreatitis;
(14) inflammatory bowel disease;
(15) rheumatoid arthritis and specified autoimmune disorders;
(16) hemophilia;
(17) acquired hemolytic anemia, including hemolytic disease of newborn;
(18) sickle cell anemia (Hb-SS);
(19) thalassemia major;
(20) coagulation defects and other specified hematological disorders;
(21) anorexia/bulimia nervosa;
(22) paraplegia;
(23) amyotrophic lateral sclerosis and other anterior horn cell disease;
(24) quadriplegic cerebral palsy;
(25) cerebral palsy, except quadriplegic;
(26) myasthenia gravis/myoneural disorders and Guillain-Barre syndrome/inflammatory and toxic neuropathy;
(27) multiple sclerosis;
(28) Parkinson's, Huntington's and spinocerebellar disease, and other neurodegenerative disorders;
(29) cystic fibrosis;
(30) end-stage renal disease;
(31) premature newborns, including birthweight 2,000 - 2,499 grams;
(32) stem cell, including bone marrow, transplant status/complications;
(33) amputation status, lower limb/amputation complications;
(34) cardio-respiratory failure and shock, including respiratory distress syndromes.
History
- Authority: AS 21.06.090; AS 21.55.220; AS 21.55.400
- Eff. 12/22/2016, Register 220; am 3/25/2020, Register 234
3 AAC 31.549 Definitions
In 3 AAC 31.500 - 3 AAC 31.549,
(1) "association" means the Comprehensive Health Insurance Association established under AS 21.55.010 - 21.55.060;
(2) "Comprehensive Health Insurance Association" means the nonprofit incorporated legal entity established under AS 21.55.010 - 21.55.060;
(3) "covered condition" means high risk resident's health condition, injury, illness, or disease that is listed under 3 AAC 31.540;
(4) "diagnosis code" means a universal code that a health care provider uses to identify a person's diagnosis;
(5) "director" means the director of the division of insurance;
(6) "fund" means the segregated fund established within the association to hold all receipts and make all disbursements related to the program;
(7) "grandfathered health care coverage" means coverage provided by an individual health care insurance policy purchased before March 23, 2010;
(8) "health care exchange" has the meaning given in AS 21.51.500;
(9) "health care insurance plan" has the meaning given in AS 21.42.599;
(10) "health care insurer" has the meaning given in AS 21.54.500;
(11) "health care provider" has the meaning given in AS 21.07.250;
(12) "high risk resident" means a resident of this state who has been diagnosed with one or more of the covered conditions under 3 AAC 31.540;
(13) "individual market" has the meaning given in AS 21.51.500;
(14) "program" means the reinsurance program authorized under AS 21.55.400 and established under 3 AAC 31.500 - 3 AAC 31.549;
(15) "transitional health care coverage" means coverage provided by an individual health care insurance policy purchased after March 22, 2010 and before January 1, 2014.
History
- Authority: AS 21.06.090; AS 21.55.400 AS 21.55.220; AS 21.55.430
- Eff. 2/2/2013, Register 205; am 12/22/2016, Register 220
Article 5 Air Ambulance Services
3 AAC 31.600 Term of initial provider registration period; renewal
(a) An initial provider biennial registration period ends on June 30 of the renewal year assigned by the division at the time the director approves the initial provider registration. Except as provided in (b) of this section, the initial provider biennial registration period consists of the remainder of the calendar year in which the provider registration is approved and the first six months of the following calendar year.
(b) If the director approves a provider registration on or after April 1, but before January 1, the initial provider biennial registration period consists of the remainder of the calendar year in which the provider registration is approved and all of the following 18 months.
(c) A provider's biennial registration period ends on June 30 of the provider's biennial registration period. A provider is responsible for knowing the date that a provider's biennial registration period ends. To renew a registration, a provider must submit a renewal provider registration application for the next provider biennial registration period by June 1 of the year the provider's biennial registration period ends.
History
- Authority: AS 21.06.090; AS 21.61.105; AS 21.61.109
- Eff. 11/26/2015, Register 216
3 AAC 31.610 Provider registration
(a) A person may not sell, solicit, or negotiate a membership agreement in this state unless registered as a provider under this section. Initial provider registration applications may be filed at any time. Renewal provider registration applications shall be filed on or before June 1 of the year the provider's current provider biennial registration period ends.
(b) An initial provider registration application must include
(1) payment of the initial biennial registration application fee under 3 AAC 31.060(a)(32);
(2) a completed provider registration application form prescribed by the director that includes the
(A) name of each state in which the applicant is authorized to offer membership agreements;
(B) name of the state in which the applicant is domiciled;
(C) name of the applicant;
(D) "doing business as" name of the applicant;
(E) complete physical address, mailing address, electronic mail address, phone number, and facsimile number of the
(i) applicant's principal place of business in the applicant's state of domicile; and
(ii) applicant's principal place of business in this state;
(F) electronic mail address the applicant wants the division to use to communicate with the applicant;
(G) internet address of the applicant; and
(H) federal employer identification number of the applicant;
(3) a copy of the business license issued to the applicant by the department;
(4) for registrations filed
(A) before January 1, 2017, audited or reviewed financial statements for each of the preceding two calendar years;
(B) on or after January 1, 2017, audited financial statements for each of the preceding two calendar years;
(5) a biographical information affidavit for each officer, director, and individual acting in a fiduciary capacity that includes
(A) the affiant's full name;
(B) the physical address, mailing address, electronic mail address, telephone number, and facsimile number where the affiant works;
(C) the affiant's employment record for the past ten years which includes for each office and position held the
(i) affiant's title;
(ii) beginning and ending dates;
(iii) employer's name, address, and telephone number;
(iv) type of business; and
(v) name of the affiant's supervisor or contact person;
(D) any judicial, administrative, regulatory, or disciplinary action during the past ten years taken against any occupational, professional, or vocational license or permit the affiant holds or has held;
(E) any guilty or nolo contendere plea, or conviction of a crime during the past ten years, other than a minor traffic violation; and
(F) any civil action in which the affiant is or was a party during the past ten years involving dishonesty, breach of trust, or a financial dispute;
(6) a plan of operation satisfactory to the director that demonstrates the applicant has the financial resources necessary to sustain operations for at least two years with qualified staff at the proposed level of service and in the proposed service area or areas;
(7) a plan demonstrating actions the applicant will take should the applicant cease operations;
(8) a copy of each proposed membership agreement, proposed fee or other consideration, and the expected ratio of the total annual membership benefits to the total amount of annual considerations;
(9) all agreements directly or indirectly associated with membership agreements including reciprocal provider agreements, aircraft lease agreements, and service contracts;
(10) a certification issued by the Department of Health under AS 18.08.082(a)(3); and;
(11) a detailed description of any criteria used in determining who is eligible for a membership agreement.
(c) In complying with (b)(5)(D), (E), and (F) of this section, no response is required if a record has been sealed or expunged, and the affiant has personally verified that the record was sealed or expunged. If a response is required, the affiant shall provide the
(1) nature of the action or crime;
(2) date;
(3) location; and
(4) disposition.
(d) A renewal provider registration application must include
(1) the renewal biennial registration application fee under 3 AAC 31.060(a)(33); and
(2) all of the requirements under (b)(2) - (11), and (c) of this section.
(e) If a change occurs in the information submitted to the director in a registration application, a provider shall update the information in the registration application by sending the changes to the director in writing not later than 30 days after the change. If an officer, director, or person acting in a fiduciary capacity is appointed after the registration application has been filed with the director, the provider shall file a biographical information affidavit not later than 30 days after the appointment of the person.
(f) The following information received by the director under this section is confidential and not subject to public inspection:
(1) biographical information affidavits;
(2) information that is confidential under AS 21.06.060.
History
- Authority: AS 21.06.060; AS 21.36.355; AS 21.61.109 AS 21.06.090; AS 21.61.105
- Eff. 11/26/2015, Register 216
3 AAC 31.620 Provider bond requirements
(a) A registration will not be issued by the director unless the provider posts with the director a bond in the amount of $100,000, issued by a corporate surety authorized under AS 21 to act as surety and conditioned upon the provider's faithful fulfillment of its membership agreements. The director will surrender the bond after the provider has been registered in this state for two years.
(b) The bond requirements under (a) of this section apply only to a provider who does not provide evidence satisfactory to the director at the time the provider files its initial registration that the provider has been in operation in this state for at least two years.
History
- Authority: AS 21.06.090; AS 21.61.105; AS 21.61.109
- Eff. 11/26/2015, Register 216
3 AAC 31.630 Reinstatement, suspension, or revocation of registration
(a) If a producer fails to file its provider renewal biennial registration application for the next biennial renewal period by July 30 in the year the provider's biennial registration period ends, the provider may not solicit or write a new membership agreement in this state until the provider submits a provider renewal biennial registration application under 3 AAC 31.610 and pays the fee under 3 AAC 31.060(a).
(b) The director, after a hearing, may suspend or revoke a provider registration for any of the following causes:
(1) failure to meet the provider registration application requirements under 3 AAC 31.610;
(2) failure to meet the provider bond requirements under 3 AAC 31.620;
(3) failure to comply with membership agreements issued to residents of this state;
(4) the provider is in unsound condition, or in a condition, or using methods or practices in the conduct of its business, that render its further transaction of insurance in this state injurious or hazardous to its air ambulance service members or to the public;
(5) ceasing provider operations in this state without first providing at least 60 days' notice by certified mail to the director and obtaining the director's written authorization.
(c) Suspension of a provider's registration shall be for a fixed period of time determined by the director, or until the occurrence of a specific event necessary for remedying the reasons for suspension. The director may modify, rescind or reverse a suspension under this section.
(d) During the period of suspension, the provider
(1) may not solicit or write a new or renewal membership agreement in this state;
(2) shall file its renewal biennial provider registration application and pay the fee required under 3 AAC 31.060(a); and;
(3) may service its outstanding membership agreements in force in this state as if the registration had continued in full force.
History
- Authority: AS 21.06.090; AS 21.61.109 AS 21.61.105; AS 21.61.180
- Eff. 11/26/2015, Register 216
3 AAC 31.640 Trade practices
(a) If the benefits under a membership agreement are in whole or in part contingent upon a medical necessity determination by the provider,
(1) medical necessity must be determined by a qualified medical professional; and
(2) what constitutes medical necessity must be clearly defined in the membership agreement.
(b) A provider shall comply with 3 AAC 26.605 - 3 AAC 26.749;
(c) A membership agreement must include
(1) a statement that the membership agreement is an insurance contract;
(2) the effective date of the agreement;
(3) a grace period of 30 days for payment of a renewal air ambulance service membership fee;
(4) a free-look period of 10 days during which a membership agreement may be returned by the member with a full refund of any air ambulance service membership fee; and
(5) if eligibility for a membership agreement is contingent upon the member's current and continuing insurance coverage, a description of what constitutes acceptable insurance coverage.
(d) A provider may not condition membership or continued membership on a person's health status.
(e) A membership agreement may not contain a provision asserting exclusive or discretionary authority to interpret the terms of the agreement.
(f) An air ambulance service membership fee or other consideration must be reasonable in relation to the benefits provided under a membership agreement and in aggregate must reasonably approximate the amounts that the members would expect to pay in the absence of the membership agreement over the period covered by the membership agreement.
History
- Authority: AS 21.06.090; AS 21.61.106 AS 21.42.120; AS 21.61.109
- Eff. 11/26/2015, Register 216
3 AAC 31.650 Membership agreements
(a) A membership agreement may not be issued or renewed in this state unless
(1) filed with and approved by the director under AS 21.42.120; and
(2) in compliance with 3 AAC 31.205, 3 AAC 31.215(c) - 3 AAC 31.215(h), and 3 AAC 31.250.
(b) A provider may deliver a membership agreement consistent with AS 21.42.250(c).
History
- Authority: AS 21.06.090; AS 21.42.250; AS 21.61.106 AS 21.42.120; AS 21.61.100; AS 21.61.109
- Eff. 11/26/2015, Register 216
3 AAC 31.660 Provider records
(a) A provider shall establish and maintain on an annual basis complete and accurate records and accounts of the provider's transactions and operations in this state.
(b) A provider shall reply in writing not later than 10 working days to a records inquiry of the director. The director may inspect or request summary or detailed copies of records and accounts for examination by the division.
History
- Authority: AS 21.06.090; AS 21.61.106; AS 21.61.109
- Eff. 11/26/2015, Register 216
3 AAC 31.690 Definitions
In 3 AAC 31.600 - 3 AAC 31.690,
(1) "membership agreement" means an air ambulance membership agreement as defined under AS 21.61.110(2);
(2) "provider" means an air ambulance service provider as defined under AS 21.61.110(3).
History
- Authority: AS 21.06.090; AS 21.61.109
- Eff. 11/26/2015, Register 216
Article 6 Motor Vehicle Service Contracts
3 AAC 31.700 Applicability
Unless exempted under AS 21.59.120, the provisions of 3 AAC 31.700 - 3 AAC 31.729 apply to a
(1) motor vehicle service contract marketed, offered for sale, sold, administered, or issued to, or made with, a consumer in this state;
(2) motor vehicle service contract provider marketing, offering for sale, selling, issuing, or making a motor vehicle service contract in this state; and
(3) motor vehicle service contract administrator responsible for the administration of a motor vehicle service contract or motor vehicle service contract plan in this state.
History
- Authority: AS 21.06.090; AS 21.59.120; AS 21.59.200
- Eff. 3/3/2018, Register 225
3 AAC 31.705 Term of initial provider license period; biennial renewal
(a) Except as provided in (b) of this section,
(1) the term of an initial biennial motor vehicle service contract provider firm license begins on the date the director issues the license and ends two years later; and
(2) the date the term of an initial biennial motor vehicle service contract provider firm license ends is the biennial renewal date for the licensee's motor vehicle service contract provider firm license.
(b) If the firm applying for an initial biennial motor vehicle service contract provider firm license is currently licensed under AS 21.27, the term of the initial biennial motor vehicle service contract provider firm license is the same as the licensee's current license. The biennial renewal date for the motor vehicle service contract provider firm license is the same date as the biennial renewal date for the licensee's current license.
History
- Authority: AS 21.06.090; AS 21.59.150 AS 21.59.140; AS 21.59.200
- Eff. 3/3/2018, Register 225
3 AAC 31.710 Provider application
(a) An applicant for a motor vehicle service contract provider license shall
(1) file an application on a form prescribed by the director; and
(2) pay the fee required under 3 AAC 31.060(a).
(b) An applicant for a motor vehicle service contract provider firm license shall submit the following information and documents directly to the division:
(1) a copy of all organizational documents including, as applicable, articles of incorporation, bylaws, articles of association, and operating or partnership agreements;
(2) proof of financial responsibility meeting the requirements under AS 21.59.180 by providing evidence of
(A) insurance meeting the requirements under AS 21.59.180(a)(1); or
(B) financial stability meeting the requirements under AS 21.59.180(a)(2);
(3) if the applicant's parent company's annual report filed with the United States Securities and Exchange Commission or the applicant's parent company's audited financial statements are filed with the division to meet the applicant's financial stability requirement under (2)(B) of this subsection, a notarized statement that is signed by an authorized officer of the parent company and that guarantees the obligations of the applicant relating to motor vehicle service contracts sold by the applicant in this state;
(4) if the applicant appoints a motor vehicle service contract administrator to administer all or a part of a motor vehicle service contract in this state, for each motor vehicle service contract administrator, the administrator's
(A) name;
(B) mailing address;
(C) telephone number; and
(D) electronic mail address that the motor vehicle service contract administrator wants the division to use to communicate with the motor vehicle service contract administrator; and
(5) the name of the agent registered in this state upon whom process, notice, or demand required or permitted by law to be served upon the applicant may be served.
(c) A natural person who is an employee or agent of a firm licensed as a motor vehicle service contract provider under 3 AAC 31.700 - 3 AAC 31.729 is not required to be licensed or registered as a motor vehicle service contract provider or a motor vehicle service contract administrator.
History
- Authority: AS 21.06.090; AS 21.59.180 AS 21.59.140; AS 21.59.200
- Eff. 3/3/2018, Register 225
3 AAC 31.715 Provider qualifications
(a) A motor vehicle service contract provider may not market, offer for sale, sell, issue, or make a motor vehicle service contract in this state unless the provider meets the qualifications under AS 21.59.110 - 21.59.290 and this section.
(b) A motor vehicle service contract provider is qualified to market, offer for sale, sell, issue, or make a motor vehicle service contract in this state if the provider
(1) has an approved motor vehicle service contract provider application on file with the director;
(2) has paid the motor vehicle service contract provider initial application or biennial renewal fee under 3 AAC 31.060(a); and
(3) is currently licensed in good standing in this state.
(c) An applicant for a motor vehicle service contract provider license shall establish to the satisfaction of the director that the applicant is
(1) qualified under AS 21.59.110 - 21.59.290;
(2) trustworthy;
(3) competent; and
(4) financially responsible.
(d) The director will consider an applicant for a motor vehicle service contract provider firm license to have met the requirements under (c)(1) - (3) of this section if the applicant has not committed an act that is the cause for denial, nonrenewal, suspension, or revocation of a license in this state or another state and
(1) is currently licensed and in good standing as a motor vehicle service contract provider in another state; or
(2) provides information that demonstrates to the satisfaction of the director the applicant's ability to competently perform the functions of a motor vehicle service contract provider in this state.
(e) The director will consider an applicant for a motor vehicle service contract provider firm license to have met the requirement under (c)(4) of this section if the applicant meets the requirements under 3 AAC 31.710(b)(2).
History
- Authority: AS 21.06.090; AS 21.59.140; AS 21.59.200
- Eff. 3/3/2018, Register 225
3 AAC 31.720 Administrator registration
(a) An applicant for a motor vehicle service contract administrator registration shall
(1) file an application on a form prescribed by the director; and
(2) pay the fee required under 3 AAC 31.060(a).
(b) An applicant for a motor vehicle service contract administrator registration shall submit the following information and documents directly to the division:
(1) if the applicant is appointed by a motor vehicle service contract provider to be a motor vehicle service contract administrator to administer all or a part of a motor vehicle service contract in this state, for each motor vehicle service contract provider, the provider's
(A) name
(B) mailing address;
(C) telephone number; and
(D) electronic mail address that the motor vehicle service contract provider wants the division to use to communicate with the motor vehicle service contract provider.
(c) The term of an initial biennial motor vehicle service contract administrator registration begins on the date the director determines the motor vehicle service contract administrator registration is complete and ends two years later.
(d) The date the term of an initial biennial motor vehicle service contract administrator registration ends is the biennial renewal date for the administrator's motor vehicle service contract administrator registration.
History
- Authority: AS 21.06.090; AS 21.59.160; AS 21.59.200
- Eff. 3/3/2018, Register 225
3 AAC 31.729 Definitions
In 3 AAC 31.700 - 3 AAC 31.729, unless the context requires otherwise,
(1) "consumer" means a natural person who
(A) buys a motor vehicle other than for purposes of resale; and
(B) primarily uses the motor vehicle for personal, family, or household purposes;
(2) "firm" has the meaning given in AS 21.97.900;
(3) "state" has the meaning given in AS 21.97.900.
History
- Authority: AS 21.06.090; AS 21.59.200 AS 21.59.140; AS 21.97.900
- Eff. 3/3/2018, Register 225
Article 7 General Provisions
3 AAC 31.900 Definitions
In this chapter,
(1) "all lines" means both life lines and property and casualty lines;
(2) "director" means the director of the division of insurance;
(3) "division" means the division of insurance, Department of Commerce, Community, and Economic Development;
(4) "life lines" means life, health, annuities, credit life and disability, and, if qualified, variable life and variable annuities;
(5) repealed 12/20/2020;
(6) "property and casualty lines" means property, casualty, surety, marine, mortgage guaranty, and, if qualified, health insurance as defined in AS 21.12.050;
(7) "department" means the Department of Commerce, Community, and Economic Development;
(8) "type of insurance" means, for property and casualty insurers, the Type of Insurance as defined and identified within the applicable Uniform Property & Casualty Product Coding Matrix adopted by the National Association of Insurance Commissioners, revised as of January 1, 2020, and adopted by reference.
History
- Authority: AS 21.06.090; AS 21.09.200
- Eff. 12/4/94, Register 132; am 4/20/97, Register 142; am 11/26/2015, Register 216; am 12/20/2020, Register 236
Part 3 Division of Measurement Standards
Chapter 32 Specifications, Tolerances, and Regulations for Weighing and Measuring Devices
Article 1 Testing Equipment
3 AAC 32.010 Application
Repealed 7/17/82.
3 AAC 32.020 Tolerances
Repealed 7/17/82.
3 AAC 32.030 Remote indicating hanging scales
Repealed 7/17/82.
3 AAC 32.040 Remote hanging scales
Repealed 7/17/82.
3 AAC 32.045 Testing equipment
Repealed.
History
- Eff. 5/27/89, Register 110; repealed 1/18/2002, Register 161
3 AAC 32.047 Annual verification
Repealed.
History
- Eff. 5/27/89, Register 110; repealed 1/18/2002, Register 161
3 AAC 32.049 Minimum test loads
Repealed.
History
- Eff. 9/9/94, Register 131; repealed 1/18/2002, Register 161
Article 4 Disposition of Incorrect Apparatus
3 AAC 32.090 Repair notice
Repealed.
History
- Eff. 7/24/70, Register 35; am 5/27/89, Register 110; repealed 1/18/2002, Register 161
3 AAC 32.100 Not-sealed tags
Repealed.
History
- Eff. 7/24/70, Register 35; am 5/27/89, Register 110; repealed 1/18/2002, Register 161
3 AAC 32.110 Definitions
Repealed 5/27/89.
Article 5 Gas Measuring Devices
3 AAC 32.120 Application
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.130 Construction and design
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.140 Sealing provisions
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.150 Marking requirements
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
Article 6 Specifications: Positive Displacement and Turbine Gas Measuring Devices
3 AAC 32.160 Primary indicating and recording elements
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.170 Graduations
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.180 Design of pressure measuring elements; positive displacement devices
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.190 Automatic temperature compensation
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.200 Design of discharge lines and shutoff valves
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
Article 7 Testing of Positive Displacement and Turbine Gas Measuring Devices
3 AAC 32.210 Test medium
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.220 Temperature and volume change
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.230 Test drafts
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.240 Test procedures
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.250 Tolerances
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.260 Base temperature
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.270 Approved test procedures and tables
Repealed.
History
- Eff. 5/8/74, Register 50; am 5/27/89, Register 110; repealed 1/18/2002, Register 161
Article 8 Specifications and Requirements — Orifice Meters
3 AAC 32.280 Specifications and requirements for orifice meters
Repealed.
History
- Eff. 5/8/74, Register 50; am 5/27/89, Register 110; repealed 1/18/2002, Register 161
3 AAC 32.290 Meter accuracy
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
Article 9 User Requirements, Gas Measuring Devices — General
3 AAC 32.300 Capacity rate
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.310 Installation
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.320 Leakage
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.330 Frequency of testing
Repealed.
History
- Eff. 5/8/74, Register 50; am 5/27/89, Register 110; repealed 1/18/2002, Register 161
3 AAC 32.340 Removal of a device for inspection
Repealed.
History
- Eff. 5/8/74, Register 50; am 5/27/89, Register 110; repealed 1/18/2002, Register 161
3 AAC 32.350 Inspection at a central location
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.360 Invoices
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.370 Device test records
Repealed.
History
- Eff. 5/8/74, Register 50; am 5/27/89, Register 110; repealed 1/18/2002, Register 161
Article 10 Corrections for Altitude: Applicable to All Gas Meters
3 AAC 32.380 Corrections for altitude
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.390 Specific gravity
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.400 Definitions
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
Article 11 Electric Meters
3 AAC 32.410 Application
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.420 Specifications and requirements for electric meters
Repealed.
History
- Eff. 5/8/74, Register 50; am 5/27/89, Register 110; repealed 1/18/2002, Register 161
3 AAC 32.430 Construction and design
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.440 Type designation and identification
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.450 Rated current
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.460 Tolerances
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.470 Watthour meter test
Repealed.
History
- Eff. 5/8/74, Register 50; am 5/27/89, Register 110; repealed 1/18/2002, Register 161
3 AAC 32.480 Tolerances for demand meters and meter accessories
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.490 Instrument transformers
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.500 Frequency of testing
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.510 Meter test records
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.520 Removal of meters for inspection
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.530 Meter inspection at a central location
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.540 Meter size
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.550 Performance requirements
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.560 Location of a meter
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.570 Use of adjustments
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.580 Assistance in testing operations
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.590 Disposition of correct and incorrect meters
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.600 Duty of owners of incorrect meters
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
3 AAC 32.610 Definitions
Repealed.
History
- Eff. 5/8/74, Register 50; repealed 1/18/2002, Register 161
Article 12 National Type Evaluation Program
3 AAC 32.620 Certificate of conformance
Repealed.
History
- Eff. 5/27/89, Register 110; repealed 1/18/2002, Register 161
Article 13 Weighing and Measuring Device Registration and Fees
3 AAC 32.700 Registration required
Repealed.
History
- Eff. 8/15/91, Register 119; repealed 1/18/2002, Register 161
3 AAC 32.710 Forms, certificates and application
Repealed.
History
- Eff. 8/15/91, Register 119; repealed 1/18/2002, Register 161
3 AAC 32.720 Term of registration
Repealed.
History
- Eff. 8/15/91, Register 119; repealed 1/18/2002, Register 161
3 AAC 32.730 Schedule of fees
Repealed.
History
- Eff. 8/15/91, Register 119; repealed 1/18/2002, Register 161
3 AAC 32.740 Past due fees
Repealed.
History
- Eff. 8/15/91, Register 119; repealed 1/18/2002, Register 161
3 AAC 32.750 Transitional provision
Repealed.
History
- Eff. 8/15/91, Register 119; repealed 1/18/2002, Register 161
3 AAC 32.760 Definitions
Repealed.
History
- Eff. 8/15/91, Register 119; repealed 1/18/2002, Register 161
Chapter 33 Commodities
3 AAC 33.010 Application
Repealed 5/27/89.
3 AAC 33.015 Checking the net contents of packaged goods
Repealed.
History
- Eff. 5/27/89, Register 110; repealed 1/18/2002, Register 161
3 AAC 33.020 Declaration of identity: consumer package
Repealed 5/27/89.
3 AAC 33.030 Parallel identity declaration: consumer package
Repealed 5/27/89.
3 AAC 33.040 Declaration of identity: nonconsumer package
Repealed 5/27/89.
3 AAC 33.050 Declaration of responsibility: consumer and nonconsumer packages
Repealed 5/27/89.
3 AAC 33.060 Largest whole unit
Repealed 5/27/89.
3 AAC 33.070 Net quantity
Repealed 5/27/89.
3 AAC 33.080 Use of "net weight"
Repealed 5/27/89.
3 AAC 33.090 Lines of print or type
Repealed 5/27/89.
3 AAC 33.100 Terms: weight, liquid measure, or count
Repealed 5/27/89.
3 AAC 33.110 Combination declaration: weight or measure
Repealed 5/27/89.
3 AAC 33.120 Combination declaration: count
Repealed 5/27/89.
3 AAC 33.130 Units: weight, measure
Repealed 5/27/89.
3 AAC 33.140 Abbreviations
Repealed 5/27/89.
3 AAC 33.150 Units with two or more meanings
Repealed 5/27/89.
3 AAC 33.160 Prescribed units
Repealed 5/27/89.
3 AAC 33.170 Dual quantity declaration
Repealed 5/27/89.
3 AAC 33.180 Bidimensional commodities
Repealed 5/27/89.
3 AAC 33.190 Count; ply
Repealed 5/27/89.
3 AAC 33.200 Reduction of fractions
Repealed 5/27/89.
3 AAC 33.210 Supplementary quantity declaration
Repealed 5/27/89.
3 AAC 33.220 Metric system declarations
Repealed 5/27/89.
3 AAC 33.230 Qualification of declaration prohibited
Repealed 5/27/89.
3 AAC 33.240 Location
Repealed 5/27/89.
3 AAC 33.250 Units: weight, measure
Repealed 5/27/89.
3 AAC 33.260 Abbreviations
Repealed 5/27/89.
3 AAC 33.270 Character of declaration: average
Repealed 5/27/89.
3 AAC 33.280 General
Repealed 5/27/89.
3 AAC 33.290 Location
Repealed 5/27/89.
3 AAC 33.300 Style of type or lettering
Repealed 5/27/89.
3 AAC 33.310 Color contrast
Repealed 5/27/89.
3 AAC 33.320 Free area
Repealed 5/27/89.
3 AAC 33.330 Parallel quantity declaration
Repealed 5/27/89.
3 AAC 33.340 Calculation of area of principal display
Repealed 5/27/89.
3 AAC 33.350 Minimum height of numbers and letters
Repealed 5/27/89.
3 AAC 33.360 Numbers and letter: proportion
Repealed 5/27/89.
3 AAC 33.370 Prominence and placement: nonconsumer package
Repealed 5/27/89.
3 AAC 33.380 Display card package
Repealed 5/27/89.
3 AAC 33.390 Eggs
Repealed 5/27/89.
3 AAC 33.400 Aerosols and similar pressurized containers
Repealed 5/27/89.
3 AAC 33.410 Multi-unit packages
Repealed 5/27/89.
3 AAC 33.420 Combination packages
Repealed 5/27/89.
3 AAC 33.430 Variety packages
Repealed 5/27/89.
3 AAC 33.440 Cylindrical containers
Repealed 5/27/89.
3 AAC 33.450 General
Repealed 5/27/89.
3 AAC 33.460 Random packages
Repealed 5/27/89.
3 AAC 33.470 Penny candy
Repealed 5/27/89.
3 AAC 33.480 Individual servings
Repealed 5/27/89.
3 AAC 33.490 Cuts, plugs, and twists of tobacco and cigars
Repealed 5/27/89.
3 AAC 33.500 Reusable (returnable) glass containers
Repealed 5/27/89.
3 AAC 33.510 Containers standardized by device regulation
Repealed 5/27/89.
3 AAC 33.520 Packaged commodities with labeling requirements
Repealed 5/27/89.
3 AAC 33.530 Fluid dairy products, ice cream, and similar frozen desserts
Repealed 5/27/89.
3 AAC 33.540 Soft-drink bottles
Repealed 5/27/89.
3 AAC 33.550 Multi-unit soft-drink packages
Repealed 5/27/89.
3 AAC 33.560 Butter
Repealed 5/27/89.
3 AAC 33.570 Eggs
Repealed 5/27/89.
3 AAC 33.580 Flour
Repealed 5/27/89.
3 AAC 33.590 Exemption: location: small package
Repealed 5/27/89.
3 AAC 33.600 Exemption: multi-unit package: location
Repealed 5/27/89.
3 AAC 33.610 Exemption: decorative container
Repealed 5/27/89.
3 AAC 33.620 Exemption: combination or variety packages
Repealed 5/27/89.
3 AAC 33.630 Variations from declared net quantity
Repealed 5/27/89.
3 AAC 33.640 Variations resulting from exposure
Repealed 5/27/89.
3 AAC 33.650 Magnitude of permitted variations
Repealed 5/27/89.
3 AAC 33.660 Prepackaged commodity checking procedure
Repealed 5/27/89.
3 AAC 33.670 Language of declarations
Repealed 5/27/89.
3 AAC 33.680 Definitions
Repealed 5/27/89.
Chapter 35 Oversize and Overweight Vehicles
3 AAC 35.110 Weigh stations
Repealed.
History
- Eff. 11/16/83, Register 88; repealed 10/7/2001, Register 160
3 AAC 35.120 Permits for oversize or overweight vehicles
Repealed.
History
- Eff. 11/16/83, Register 88; am 8/23/89, Register 111; repealed 10/7/2001, Register 160
3 AAC 35.130 Applications for permits
Repealed.
History
- Eff. 11/16/83, Register 88; repealed 10/7/2001, Register 160
3 AAC 35.140 Enforcement
Repealed.
History
- Eff. 11/16/83, Register 88; am 8/23/89, Register 111; repealed 10/7/2001, Register 160
3 AAC 35.150 Stop orders
Repealed.
History
- Eff. 11/16/83, Register 88; repealed 10/7/2001, Register 160
3 AAC 35.160 Offloading of vehicles
Repealed.
History
- Eff. 11/16/83, Register 88; repealed 10/7/2001, Register 160
3 AAC 35.170 Revocation of permits
Repealed.
History
- Eff. 11/16/83, Register 88; repealed 10/7/2001, Register 160
3 AAC 35.180 Oversize and overweight vehicle permit fees
Repealed.
History
- Eff. 12/14/89, Register 112; am 2/7/93, Register 125; repealed 10/7/2001, Register 160
3 AAC 35.900 Definitions
Repealed.
History
- Eff. 11/16/83, Register 88; repealed 10/7/2001, Register 160
Part 4A Air Carrier Compliance Certificates
Chapter 38 Air Carrier Compliance Certificates
3 AAC 38.010 Air carrier certificate fees
The annual fee for a certificate of compliance for one aircraft is $50, for two aircraft is $100, and for a fleet of three or more aircraft is $150.
History
- Authority: AS 42.30.225(b)
- Eff. 12/12/89, Register 113; am 4/15/90, Register 114
Part 5 Division of Veterans’ Affairs
Chapter 40 Guaranteed Loans
3 AAC 40.010 Guaranteed loan provisions
(a) Guaranty of loans by the Division of Veterans' Affairs shall provide that the notice of default is to be given within 90 days after default, and that such notice shall be in writing. If such notice is not given in writing within 90 days after default in interest or principal payments, the guaranty shall be null and void. The guaranty shall further provide for assignment of the veteran's note and mortgage to the division in the event the division is called upon to honor the guaranty.
(b) A loan otherwise eligible to be guaranteed which is for an amount over the legal maximum may be guaranteed only for the legal maximum amount. In that case the guaranty applies to the first and all subsequent amounts repaid until the balance has been reduced by the amount of the guaranty, at which time the guaranty shall become void. Then the remaining balance will be eligible for a new guaranty.
History
- Authority: AS 26.15.010; AS 26.15.030
- In effect before 7/28/59
Chapter 41 Veteran’s Loan Assumptions
3 AAC 41.010 Application process
(a) To apply for an assumption of an existing single family, multiple dwelling, or small business veterans' loan, an applicant shall file with the department
(1) a completed application for a veterans' loan assumption, on a form provided by the department;
(2) an individual financial statement from each individual applicant, including each member of a partnership or other association, or, if the applicant is a corporation, each individual owning 10 percent or more of any outstanding shares, on a form provided by the department;
(3) a business financial statement if applicable, on a form provided by the department;
(4) a signed credit authorization on a form provided by the department;
(5) repealed 8/10/97;
(6) an employment verification form, on a form provided by the department;
(7) an earnest money agreement explaining all terms and conditions of the transaction with signatures by all parties;
(8) signed copies of the applicant's federal income tax returns for the preceding three years, including returns for each member of a partnership or other association;
(9) a $100 nonrefundable application fee;
(10) repealed 8/10/97; and
(11) any other information that might be helpful to the applicant in demonstrating eligibility for a loan, as requested by the department.
(b) The department will, in its discretion, process an application for an assumption without the information described in (a) of this section, if the department determines that the department can make an informed lending decision without access to the information.
History
- Authority: AS 26.15.010; AS 26.15.030; AS 26.15.040
- Eff. 9/11/85, Register 95; am 1/11/87, Register 101; am 8/10/97, Register 143
3 AAC 41.015 Examination
(a) The materials described in 3 AAC 41.010 will be processed and evaluated by a loan officer. The loan officer will evaluate the applicant's financial and credit history, ability to repay, and proposed collateral.
(b) On the basis of the evaluation, the loan officer will either inactivate the application due to lack of information required under 3 AAC 41.010, or recommend proposed action on the loan request to the appropriate loan committee. However, the recommendation of a loan officer is not binding on a loan committee.
History
- Authority: AS 26.15.010; AS 26.15.030; AS 26.15.040
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 41.020 Loan committee
(a) A loan committee consists of one or more persons appointed by the director to act on a request for assumption.
(b) A loan committee may approve, deny, or modify and approve a request for assumption, or may table a request subject to obtaining additional information.
(c) A loan committee may impose reasonable conditions on the approval of an assumption, including
(1) additional collateral to secure the loan;
(2) additional guarantors; and
(3) subordination of prior lienholders rights to the interests of the state.
(d) A loan committee shall evaluate the applicant's financial and credit record, ability to repay, and the proposed collateral. A loan committee may also consider the recommendations of the loan officer assigned to process the application, and any other relevant information.
(e) If a request for an assumption is denied or significantly modified by a loan committee, the loan committee will provide the applicant with a statement of the reasons for the action and the information relied on.
(f) A material misstatement or omission of fact made by an applicant constitutes grounds for denial of a request for an assumption.
History
- Authority: AS 26.15.010; AS 26.15.030; AS 26.15.040
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 41.040 Financial and credit record
(a) The department will, in its discretion, consider the following factors in evaluating an applicant's financial and credit record:
(1) existing and prior debts;
(2) credit reports obtained from creditors and private credit reporting services;
(3) prior loan history with the department;
(4) timeliness in making payments on loans and other debts;
(5) prior bankruptcies;
(6) existence of tax liens;
(7) unpaid judgments and prior foreclosures; and
(8) financial and credit reputation.
(b) Information establishing unacceptable credit will be more heavily weighed by the department if it has occurred in recent years.
History
- Authority: AS 26.15.010; AS 26.15.030; AS 26.15.040
- Eff. 9/11/85, Register 95
3 AAC 41.045 Ability to repay
The department will, in its discretion, consider the following factors in evaluating an applicant's ability to repay a proposed assumption:
(1) income history, including present income;
(2) prospects for future income;
(3) assets and their liquidity; and
(4) liabilities.
History
- Authority: AS 26.15.010; AS 26.15.030; AS 26.15.040
- Eff. 9/11/85, Register 95
3 AAC 41.065 Closing an assumption
An assumption agreement will be considered by the department to be closed when
(1) all required signatures have been obtained and the assumption agreement has been properly recorded;
(2) repealed 8/10/97;
(3) all requirements of the loan committee have been met; and
(4) the borrower is in compliance with all provisions of the loan documents, including insurance requirements, and this chapter.
History
- Authority: AS 26.15.010; AS 26.15.030; AS 26.15.040
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 41.070 Supervision of loans
If a loan is in default, the department will, in its discretion, require the borrower to furnish annual financial statements consisting of a balance sheet, profit-and-loss statement, sources and application of all money received, and a schedule of change of owner's equity. The department will, in its discretion, also require an audit or audits to determine whether the borrower has complied with the provisions of the assumption, and conduct periodic inspections of collateral.
History
- Authority: AS 26.15.010; AS 26.15.030; AS 26.15.040
- Eff. 9/11/85, Register 95
3 AAC 41.075 Costs
(a) All expenses incurred by the department in processing an application must be paid by the applicant. These expenses include the cost of title reports and insurance, recording fees, appraisals, surveys, travel, and other direct costs.
(b) An assumption fee of one percent of the remaining loan balance is due from the borrower when all provisions of 3 AAC 41.065 have been met.
(c) A late fee not to exceed five percent of the payment amount will, in the department's discretion, be charged to a borrower for each loan payment that is more than 15 days past due.
(d) An extension fee not to exceed $100 will, in the department's discretion, be charged to a borrower to process a loan extension.
History
- Authority: AS 26.15.010; AS 26.15.030
- Eff. 9/11/85, Register 95; am 1/11/87, Register 101; am 7/4/91, Register 119; am 8/10/97, Register 143
3 AAC 41.080 Assumptions
(a) The department will, in its discretion, allow an assumption of a loan made under AS 26.15 and this chapter, if the department determines the assumption is in the best interests of the state.
(b) A request for an assumption of a loan made under AS 26.15 and this chapter will be processed in the same manner as a loan application. If necessary to evaluate the request, the department will, in its discretion, require that the applicant supply one or more of the items specified in 3 AAC 41.010, before the request will be processed.
(c) Wraparound financing that includes a loan made under AS 26.15 and this chapter is prohibited and constitutes a default on the loan.
History
- Authority: AS 26.15.010; AS 26.15.030; AS 26.15.040
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 41.082 Modifications
(a) A request for a modification to a loan made under AS 26.15 or assumed under this chapter will be processed in the same manner as a loan application. The department will, in its discretion, require one or more of the items specified in 3 AAC 41.010.
(b) A loan committee may permit a loan modification only if the security of the state and its investment is preserved.
History
- Authority: AS 26.15.010; AS 26.15.030
- Eff. 1/11/87, Register 101
3 AAC 41.085 Reconsideration of assumption request
(a) If an assumption request is denied, inactivated, or significantly modified by the department, an applicant may file a written request for reconsideration within 30 days after receipt of notice of the department's decision.
(b) The department will, in its discretion, reconsider a request upon a showing by the applicant that
(1) there has been a substantial change in the circumstances leading to the department's decision;
(2) additional relevant information can be provided to the department that was not initially available; or
(3) administrative errors were made by the department.
History
- Authority: AS 26.15.010; AS 26.15.030
- Eff. 9/11/85, Register 95
3 AAC 41.090 Confidentiality of loan information
(a) The following information is not confidential and is available for public inspection upon request:
(1) a document that is already a public record including deeds of trust, financing statements, warranty deeds, bills of sale, mortgages, liens, and vehicle titles;
(2) general information regarding loans, including the original loan, loan terms, personal guarantees, and disbursement and repayment schedules;
(3) insurance matters including title insurance policies and correspondence with insurance companies or borrowers regarding losses, accident reports, and nonpayment of premiums; and
(4) foreclosure and default proceedings.
(b) The following information is confidential and is not subject to public disclosure:
(1) personal and financial information, including income tax returns, financial statements, business income statements, pro forma profit and loss statements, credit information obtained directly from banks and other creditors, and reports obtained from consumer reporting agencies;
(2) loan committee memoranda and minutes containing information relating to credit worthiness of an applicant; and
(3) payment history on a loan, unless the loan is in default.
(c) Information not described in (a) or (b) of this section may be subject to public disclosure. Requests for disclosure must be made, and will be determined, in accordance with 2 AAC 96. On receipt of a request for disclosure, the department will notify the loan applicant and other persons with a privacy interest in the request, to permit them to present reasons why the requested information should not be disclosed.
History
- Authority: Ak. Const., art. I,AS 26.15.030; AS 40.25.120 $ 22AS 40.25.110
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 41.900 Definitions
Unless the context requires otherwise, in this chapter
(1) repealed 8/10/97;
(2) "default" means a violation of any term of the loan document, or failure to make the necessary payment within fifteen days of when it is due, or failure to maintain the insurance required by the department;
(3) "department" means the Department of Commerce, Community, and Economic Development;
(4) "wraparound financing" means a contract that includes the balance due on an existing debt and an additional amount to cover the difference between the selling price and the existing debt;
(5) "director" means the division assigned economic development functions or its successor agency in the department.
History
- Authority: AS 26.15.010; AS 26.15.030
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143; am 10/16/2012, Register 204
Part 7 Regulatory Commission of Alaska
Chapter 46 Electric Reliability Organizations and Integrated Resource Planning
Article 1 Certification and Practice of Electric Reliability Organizations
3 AAC 46.010 Petitions
(a) A petition filed under this chapter must be in writing and formatted in compliance with 3 AAC 48.025 and 3 AAC 48.100.
(b) The commission will docket and consider, in a formal proceeding in conformance with 3 AAC 48.060(a) - (c), a petition filed under this chapter, except that
(1) the commission will docket and consider, in a formal proceeding in conformance with the process established in AS 42.05.780(b), a petition filed under 3 AAC 46.220;
(2) the commission will docket and consider, in a formal proceeding under the process established in 3 AAC 46.390, a tariff letter filed under 3 AAC 46.330; and
(3) the commission will docket and consider, in a formal proceeding under the process established in 3 AAC 46.470(f), an electric reliability organization rule letter filed under 3 AAC 46.470.
(c) A petition filed under this chapter must be accompanied by an entry of appearance by a person representing the petitioner, qualified under 3 AAC 48.080 to appear before the commission.
(d) A petition must be filed electronically in conformance with 3 AAC 48.095, unless accompanied by a petition for waiver under 3 AAC 48.095(l).
(e) In substantially the same manner and format as a tariff filing under 3 AAC 46.370, the commission will notice to the public a petition filed under this chapter. A response to the notice must be filed in compliance with 3 AAC 46.380. The commission will arrange for publication of a public notice not later than five business days after the petition has been filed.
(f) A person may petition to intervene in a docket opened under this section. The person shall file the petition in compliance with 3 AAC 48.110(c) and (d). An answer to the petition must be filed in compliance with 3 AAC 48.110(e). The commission will consider the petition in conformance with 3 AAC 48.110(a), (b), and (f). Intervention granted under this section is subject to the limitation set out in 3 AAC 48.110(g).
(g) Not later than 45 days after the date a petition under this chapter is filed, the commission will schedule a prehearing conference to determine, consistent with the public interest, if an evidentiary hearing is required and otherwise address a procedural schedule for resolution of the docket, except that
(1) the commission will determine if an evidentiary hearing is required for a petition filed under 3 AAC 46.220 through the process established in AS 42.05.780(b);
(2) the commission will determine if an evidentiary hearing is required for a tariff letter through the process established in 3 AAC 46.390;
(3) the procedural schedule set out in 3 AAC 46.030(e) and (f) applies to a petition filed under AS 42.05.760(d); and
(4) the commission will determine if an evidentiary hearing is required for an electric reliability organization rule filing through the process established in 3 AAC 46.470.
(h) The commission may waive or modify by order the requirements of this section, in whole or in part, upon application and a showing of good cause or on the commission's own motion.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.020 Motions
(a) A request for commission action under this chapter that is not required to be in the form of a petition or an application must be filed in the form of a motion.
(b) A motion filed under this chapter must be filed in compliance with the requirements of 3 AAC 48.090 - 3 AAC 48.095.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.030 Petition for exemption from the requirement to form an electric reliability organization
(a) A petition for exemption filed under AS 42.05.760(d) by all load-serving entities within an interconnected bulk-electric system must be filed not later than 90 days after the commission provides notice under AS 42.05.760(c) to the load-serving entities.
(b) If a petition for exemption from the requirement to form an electric reliability organization is filed under AS 42.05.760(d), the requirement in AS 42.05.760(e)(l) that the commission form and certificate an electric reliability organization is stayed pending the commission's decision on the petition for exemption.
(c) An application for certification as an electric reliability organization filed not later than 90 days after the commission provides notice to the load-serving entities under AS 42.05.760(c) will be processed even if the load-serving entities file a petition for exemption under AS 42.05.760(d). However, if the commission grants the petition for exemption, the application will be denied.
(d) If the commission denies a petition for exemption filed under AS 42.05.760(d), the commission will continue to process a filed application for certification as an electric reliability organization or, if no application has been filed, the commission will proceed to form and certificate an electric reliability organization.
(e) Not later than 15 business days after a petition for exemption under AS 42.05.760(d) is filed, a person
(1) may file comments in support of or in opposition to the petition; or
(2) may file a protest setting out the legal and policy reasons why the petition must be denied; a petition for intervention must accompany the protest.
(f) The load-serving entities may respond to a comment, protest, or petition to intervene not later than 10 business days after the comment period ends. If the commission finds good cause to investigate a protest, the commission will rule on petitions to intervene, establish a procedural schedule, and set a hearing date by order.
(g) Issues for hearing include
(1) whether, as to the interconnected bulk-electric system considered as a whole, the petitioning load-serving entities provide adequate, efficient, and safe service and facilities that are reasonably continuous and without unreasonable interruption or delay;
(2) whether, as to the interconnected bulk-electric system considered as a whole, the petitioning load-serving entities are likely to provide adequate, efficient, and safe service and facilities that are reasonably continuous and without unreasonable interruption or delay without forming an electric reliability organization; and
(3) whether a protester has demonstrated legal or policy reasons why a petition for exemption must be denied.
History
- Authority: AS 42.05.141; AS 42.05.760 AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.040 Petition to find an electric reliability organization should be established
(a) A petition under AS 42.05.760(f) for an interconnected electric energy transmission network that is not an interconnected bulk-electric system must include
(1) verification, signed by a person authorized to sign on behalf of the petitioner, that the load-serving entity filing the petition is interconnected with the interconnected electric energy transmission network and that the governing body of the load-serving entity has approved the petition, and include a copy of all written public comments received; and
(2) an application conforming with the requirements of 3 AAC 46.090 as an informational filing.
(b) The commission may reject a petition filed under this section if the petition does not comply with the requirements of this chapter and 3 AAC 48.020 - 3 AAC 48.100.
(c) The commission will grant or deny a petition filed under this section based upon a determination of whether granting the petition is in the public interest. The commission will base its determination on
(1) the long- and short-term costs that the public and ratepayers would incur and the long- and short-term benefits achieved to the public and ratepayers if the commission granted the petition; and
(2) whether the applicant to be an electric reliability organization appears capable of fulfilling the duties and obligations set out in AS 42.05.762.
(d) If it grants a petition filed under AS 42.05.762(f), the commission will simultaneously accept the informational application attached to the petition for consideration under 3 AAC 46.060 or 3 AAC 46.070. The commission will docket and consider the application separately under the procedures set out in 3 AAC 48.645.
(e) The commission may waive or modify by order the requirements of this section, in whole or in part, upon application and a showing of good cause or on the commission's own motion, if the waiver does not also require a waiver of the requirements set out in AS 42.05.760(f).
History
- Authority: AS 42.05.141; AS 42.05.760 AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.050 Electric reliability organization certificates
(a) In a certificate issued to an electric reliability organization, the commission will describe the nature and extent of the authority granted to the organization under AS 42.05.760 - 42.05.790 for an interconnected electric energy transmission network.
(b) The certificate of an electric reliability organization expires after six years. Not less than two years before the date of expiration, the electric reliability organization must notify the commission if it declines to seek certificate renewal. Absent that notice, the electric reliability organization's certificate automatically renews, and the organization shall retain it unless the commission finds, after notice and an opportunity to be heard, that the electric reliability organization no longer meets the requirements of this section for the form of board under which it received its certificate.
(c) If the commission receives competing applications from entities seeking certification as the electric reliability organization for an interconnected bulk-electric system, the commission will issue the certificate to the entity that is able both to best fulfill the duties associated with AS 42.05.762 and to most fairly consider stakeholder class interests.
(d) During the period between one certificate's expiration and the issuance of a subsequent certificate, the commission will consider the most recently approved tariffed reliability standards to continue to satisfy the requirements of AS 42.05.291(c).
(e) Upon complaint or upon its own motion the commission, after notice and opportunity for hearing and for good cause shown, may amend, modify, suspend, or revoke a certificate issued to an electric reliability organization, in whole or in part. Good cause for amendment, modification, suspension, or revocation of a certificate includes
(1) the requirements of the public interest;
(2) misrepresentation of a material fact in obtaining the certificate;
(3) unauthorized discontinuance or abandonment of all or part of an electric reliability organization's duties;
(4) willful failure to comply with the provisions of AS 42.05.760 - 42.05.790, this chapter, or the orders of the commission; or
(5) willful failure to comply with a term, condition, or limitation of the certificate.
(f) The commission will grant a certificate only if the commission determines that an applicant has demonstrated the ability to perform the duties of an electric reliability organization. To demonstrate that ability, the applicant must
(1) have established rules that comply with 3 AAC 46.460(a); and
(2) have established procedures that ensure that a reliability standard or integrated resource plan is first approved by the voting members of a committee whose members satisfy the technical qualification requirements of 3 AAC 46.460(a)(l); the voting threshold must ensure that the reliability standard or integrated resource plan is technically sound.
(g) The commission may waive or modify by order the requirements of this section, in whole or in part, upon application and a showing of good cause or on the commission's own motion, if the waiver does not also require a waiver of the requirements set out in AS 42.05.760 - 42.05.790.
History
- Authority: AS 42.05.141; AS 42.05.760; AS 42.05.765 AS 42.05.151; AS 42.05.762; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.060 Certification of an electric reliability organization with a balanced stakeholder board
(a) The commission may issue a certificate to an applicant formed with a balanced stakeholder board under AS 42.05.762(4)(B)(ii) only after the commission finds that the stakeholder board is balanced.
(b) A stakeholder board is balanced if
(1) the composition of the board is based on a stakeholder classification;
(2) each board member has a single stakeholder class to which it is designated;
(3) each board member is associated with, drawn from, and understands and can articulate the interests of its designated stakeholder class;
(4) consideration and the avoidance of undue attenuation or amplification of relevant stakeholder class interests are ensured through
(A) membership in and composition of the board;
(B) board and committee voting procedures and requirements; and
(C) the sufficiency of resources available to board members to effectively participate in the electric reliability organization; and
(5) its organization has procedures to ensure that the requirements of (4) of this subsection continue to be satisfied as relevant stakeholder class interests change; these procedures must
(A) allow a person to propose an additional or different stakeholder classification;
(B) enable evaluation of whether the requirements of (4) of this subsection continue to be satisfied; and
(C) allow the organization to timely modify board composition, applicable committee voting procedures, or the resources available to board members or take other actions to satisfy the requirements of (4) of this subsection.
(c) A stakeholder must be classified as a provider stakeholder, consumer stakeholder, or hybrid stakeholder. A stakeholder must be further classified according to relevant factors in (d)(l) of this section so that, with regard to the effects of electric reliability organization reliability standards, standards set out in AS 42.05.770(1), or integrated resource plans, stakeholders within each class have a shared interest that distinguishes them from stakeholders in other classes.
(d) In determining whether an applicant's board is balanced, the commission will consider each of the following factors:
(1) how stakeholder interests in reliability standards, standards set out in AS 42.05.770(1), or integrated resource plans are differently affected by the following characteristics:
(A) for provider stakeholders, whether the stakeholder class members
(i) stand to profit from construction of new facilities used to provide electrical service for compensation;
(ii) have assets that the state primarily or entirely owns;
(iii) own or operate assets involved in two or more functions of electricity distribution, transmission, generation, and storage;
(iv) own or operate assets involved in only one function of electricity distribution, transmission, generation, and storage and, if so, the particular function; and
(v) are assured, by virtue of their ability to modify tariff rates under AS 42.05.411, the opportunity to recover their prudently incurred costs of providing service;
(B) for consumer stakeholders, characteristics regarding the
(i) amount of power they consume;
(ii) amount of energy they consume;
(iii) variability in energy or power that they consume;
(iv) economic or public safety consequences for them of disruptions in electricity service;
(v) ability of members of the stakeholder class to modify when and how they consume electricity; and
(vi) preference regarding non-price aspects of how electricity service is provided;
(C) for provider stakeholders or consumer stakeholders,
(i) the combined effects of geographic location, degree of transmission system redundancy, or relative proximity of consumer loads to interconnected bulk-electric system generating resources;
(ii) the certainty with which provider resources can be dispatched to meet consumer needs;
(iii) the degree to which a load-serving entity has excess resources to meet consumer needs; and
(iv) other factors that the applicant presents; and
(D) for hybrid stakeholders, how the factors in (A) - (C) of this paragraph apply;
(2) how stakeholders of the interconnected bulk-electric system should be classified as being sufficiently similar to, or distinguished from, one another with regard to their interests in electric reliability organization reliability standards, standards set out in AS 42.05.770(1), or integrated resource plans, in light of the characteristics listed in (1) of this subsection;
(3) whether stakeholders, consistent with (2) of this subsection, have designated directors that help enable the board to avoid undue amplification or attenuation of relevant stakeholder class interests;
(4) whether each designated director has sufficient association with, is drawn from, and understands and can articulate the interests of its designated stakeholder class; in its assessment the commission will consider, among other issues, the process by which each director designated to a stakeholder class is selected;
(5) if a stakeholder class does not have a designated director that satisfies the criteria in (b)(3) of this section, the reasonableness of this omission and the means by which the particular and relevant interests of that stakeholder class will be adequately considered;
(6) how voting procedures for the board and committees help to avoid undue amplification or attenuation of relevant stakeholder class interests;
(7) whether all board members have resources sufficient to ensure adequate consideration, and avoid undue amplification or attenuation, of relevant stakeholder class interests;
(8) whether the electric reliability organization has adequate procedures to ensure that the requirements of (b)(4) of this section continue to be satisfied as relevant stakeholder classifications and interests in the electric reliability organization reliability standards, standards set out in AS 42.05.770(1), or integrated resource plans change; and
(9) other factors as determined by the commission.
(e) The commission may waive or modify by order the requirements of this section, in whole or in part, upon application and a showing of good cause or on the commission's own motion, if the waiver does not also require a waiver of the requirements set out in AS 42.05.760 - 42.05.790.
History
- Authority: AS 42.05.141; AS 42.05.760; AS 42.05.770 AS 42.05.151; AS 42.05.762
- Eff. 3/11/2022, Register 241
3 AAC 46.070 Certification of an electric reliability organization with an independent board or a combination independent and balanced stakeholder board
(a) The commission may issue a certificate to an applicant formed with an independent board consistent with AS 42.05.762(4)(B)(i) only after the commission finds that the board is, and has rules to ensure that it is likely to remain, independent. A board is independent if no board member
(1) is an employee of the electric reliability organization;
(2) is employed or contracted by a registered entity, within the interconnected bulk-electric system of the applicable electric reliability organization, that generates, transmits, distributes, or stores electricity for direct compensation, or by a person who is expected to become such a registered entity within the reasonably foreseeable future;
(3) has an immediate family member who is employed or contracted by a registered entity, within the interconnected bulk-electric system of the applicable electric reliability organization, that generates, transmits, distributes, or stores electricity for direct compensation, or by a person who is expected to become such a registered entity within the reasonably foreseeable future; or
(4) is reasonably perceived as having, or has an immediate family member who is reasonably perceived as having, a direct and material financial interest in the board's decisions.
(b) The commission may issue a certificate to an applicant formed with a combination independent and balanced stakeholder board consistent with AS 42.05.762(4)(B)(iii) only after the commission finds that the board is a combination of a balanced stakeholder board and independent members.
(c) The commission may waive or modify by order the requirements of this section, in whole or in part, upon application and a showing of good cause or on the commission's own motion, if the waiver does not also require a waiver of the requirements set out in AS 42.05.760 - 42.05.790.
History
- Authority: AS 42.05.141; AS 42.05.760; AS 42.05.770 AS 42.05.151; AS 42.05.762
- Eff. 3/11/2022, Register 241
3 AAC 46.080 Balanced board safe harbor
(a) An application for a certificate for an electric reliability organization with a balanced stakeholder board consistent with AS 42.05.762(4)(B)(ii) or combination independent and balanced stakeholder board consistent with AS 42.05.762(4)(B)(iii) has a rebuttable presumption that the board meets the requirements of 3 AAC 46.060(b)(l) and (4)(A) and (B), if the application satisfies each of the following conditions:
(1) stakeholders that have designated directors are classified so that
(A) provider stakeholder classes are sub-classified, as distinguished by
(i) whether a class's stakeholders stand to profit from the construction of new facilities used to provide electrical service for compensation;
(ii) whether the assets of a class's stakeholders are primarily or entirely owned by the state;
(iii) whether a class's stakeholders own or operate assets involved in two or more functions of electricity distribution, transmission, generation, and storage, regardless of whether the assets are part of an interconnected electric energy transmission network; and
(iv) whether a class's stakeholders own or operate assets involved in only one function of electricity distribution, transmission, generation, and storage, and if so, the particular function; and
(B) consumer stakeholder classes are sub-classified, as distinguished by
(i) whether a class's stakeholders are primarily residential;
(ii) whether a class's stakeholders are primarily commercial;
(iii) whether a class's stakeholders are primarily industrial; and
(iv) whether a class's stakeholders have a primary interest in attributes, other than price or reliability, in how electricity service is provided;
(2) voting directors on the board each have one vote on matters before the board, and
(A) are odd in number;
(B) include at least one director designated to a provider stakeholder class and at least one director designated to a consumer stakeholder class;
(C) are constituted so that the number of directors representing a single stakeholder class, as sub-classified, is less than 50 percent of all voting directors; and
(D) are composed in number and type so that total provider interests and total consumer interests are equal; for purposes of this subparagraph, a director's provider interest and consumer interest are determined as follows:
(i) if the director's designated provider stakeholder class, as subclassified, either does not profit from construction of new facilities or has assets primarily or entirely owned by the state, the director will be assigned fractional provider interests and fractional consumer interests, such that the maximum consumer interest is one-half and the director's fractional provider and consumer interests sum to one;
(ii) if the director's designated provider stakeholder class, as subclassified, profits from construction of new facilities used to provide electrical service for compensation, and does not have assets primarily or entirely owned by the state, the director will be assigned a provider interest of one and a consumer interest of zero;
(iii) if the director is designated to a consumer stakeholder class, the director will be assigned a provider interest of zero and a consumer interest of one;
(iv) if the director is independent, the director will be assigned a provider interest of zero and a consumer interest of zero;
(3) the board has rules to ensure that each member of the board of directors is entitled to designate a qualified representative to serve on a committee.
(b) In considering the application for a certificate as an electric reliability organization and a protest or complaint regarding that application, the commission may determine that good cause exists to investigate whether the rebuttable presumption described in (a) of this section is overcome. After a hearing, and upon a finding by the commission that the rebuttable presumption has been overcome, the commission will determine whether the applicant's board satisfies the requirements of 3 AAC 46.060(b)(l) and (4)(A) and (B).
History
- Authority: AS 42.05.141; AS 42.05.760; AS 42.05.770 AS 42.05.151; AS 42.05.762
- Eff. 3/11/2022, Register 241
3 AAC 46.090 Application requirements
(a) An application for certification as an electric reliability organization must include
(1) the applicant's mailing address, business telephone number, electronic mail address, legal name and name under which it proposes to do business, and if applicable, business address and facsimile number;
(2) the applicant's type of business structure, including
(A) proof of incorporation, registration, or certification, if applicable;
(B) the name, mailing address, telephone number, and electronic mail address of the applicant's registered agent, if applicable;
(C) an organization chart detailing the applicant's organizational structure; and
(D) a description of the applicant's expected personnel positions, including key management, financial, and technical positions;
(3) the name, title, telephone number, mailing address, and electronic mail address of the individual who is available to provide the commission with information about the application;
(4) a verification signed by a person authorized to sign on behalf of the applicant that information provided in the application is true, accurate, and complete;
(5) a list of qualifications of directors, and of employees or committee members, if available, who satisfy the requirements of 3 AAC 46.460(a)(1);
(6) a proposed tariff that includes at a minimum the provisions of 3 AAC 46.360(a)(1) - (3), (5), and (6) and a plan for completing the proposed tariff; a plan filed for completing a proposed tariff must include
(A) a list of anticipated tariff provisions, including provisions that are in addition to those required by 3 AAC 46.360(a), if applicable;
(B) a work plan and budget for developing the items in (A) of this paragraph, including proposed dates of filing; and
(C) the applicant's process, consistent with AS 42.05.762(3)(D), for developing reliability standards, including a description of how the applicant will identify and directly notify potentially affected parties so that they can participate in the organization's reliability standards development process;
(7) the location in this state where the applicant's books, accounts, papers, and records will be held;
(8) a code of conduct or other document establishing expectations for ethical conduct that satisfies the requirements of 3 AAC 46.110;
(9) the applicant's rules that comply with the requirements of AS 42.05.762(3)(C);
(10) if different from the requirements of 3 AAC 46.160(c), a proposed method of allocating administrative costs to load-serving entities served by the electric reliability organization;
(11) proposed rules that ensure that the electric reliability organization is able to comply with the requirements of AS 42.05.762 and the commission's exercise of its authority under AS 42.05.767; the proposed rules must include
(A) processes for amending the rules that implement AS 42.05.762(3);
(B) board and each committee's voting procedures;
(C) rules governing the scheduling, noticing, and conduct of public meetings and executive sessions and that satisfy the requirements of 3 AAC 46.460(a)(4)(K) and (L) and (5); and
(D) rules required by 3 AAC 46.460(a);
(12) a narrative explaining the applicant's proposed rules that, separately and in totality, ensure compliance with the requirements of AS 42.05.762(3);
(13) the applicant's proposed
(A) board member required qualifications; and
(B) criteria for determining a board or committee member's ability to contribute to the technical support required under 3 AAC 46.460(a)(l);
(14) a narrative explaining the applicant's technical ability to satisfy the requirements of AS 42.05.762(1) and (2);
(15) a description of committees and their responsibilities;
(16) a board and executive compensation plan, if applicable; and
(17) a proposed plan for developing and filing the electric reliability organization's initial integrated resource plan; the proposed plan must contain
(A) a work plan and budget for satisfying the requirements of the integrated resource plan, including a proposed date of filing; and
(B) the applicant's process, consistent with AS 42.05.762(3)(D), for developing the integrated resource plan, including a description of how the applicant will identify and directly notify potentially affected parties so that they can participate.
(b) In addition to the application information required under this section, the commission may require that the applicant provide supplemental or clarifying information that the commission determines is necessary.
(c) In its order approving the application, the commission will require an electric reliability organization to file an initial tariff as a new tariff filing.
(d) An applicant that seeks certification with an independent board under AS 42.05.762(4)(B)(i) or combination independent and balanced stakeholder board under AS 42.05.762(4)(B)(iii) must describe its processes to remove and replace a director that fails to meet the requirements of 3 AAC 46.070(a).
(e) Except as provided in (f) of this section, an applicant that seeks certification with a balanced stakeholder board under AS 42.05.762(4)(B)(ii) or combination independent and balanced stakeholder board under AS 42.05.762(4)(B)(iii) must provide the following:
(1) a table listing each director's designated stakeholder class;
(2) an explanation why each director listed in (1) of this subsection has sufficient association with, is drawn from, and understands and can articulate the interests of its designated stakeholder class;
(3) an explanation of the process by which each director designated to a stakeholder class was selected;
(4) an explanation of how the applicant's stakeholders are classified;
(5) a description of additional factors identified under 3 AAC 46.060(d)(l)(C)(iv) that the applicant believes importantly and differentially affect stakeholder interests;
(6) a description of whether and, if so, how each factor in 3 AAC 46.060(d)(l) differentially affects stakeholder interests in reliability standards, standards set out in AS 42.05.770(1), or integrated resource plans, and the resultant stakeholder classification described in (4) of this subsection;
(7) an explanation, that considers the distinguishing consequences that the applicant describes in (6) of this subsection, of which stakeholder classes were determined to require designated board members;
(8) an explanation of why some stakeholder classes lack designated directors that satisfy the criteria in 3 AAC 46.060(b)(3), if applicable;
(9) an explanation of mechanisms to ensure that the relevant interests of stakeholder classes without designated directors that satisfy the criteria in 3 AAC 46.060(b)(3) will be adequately considered; these mechanisms may include composition or independence of technical advisory committees, electric reliability organization staffing, programs to recruit qualified directors for future board membership, or other means;
(10) an explanation of how voting procedures for the board and its committees help to avoid undue amplification or attenuation of stakeholder class interests;
(11) an explanation of how the applicant satisfies the requirements of 3 AAC 46.060(b)(4)(B), through committee composition and procedures, levels of director compensation, levels of electric reliability organization staffing, or other electric reliability organization mechanisms and structures;
(12) a description of the electric reliability organization's procedures to meet the requirements of 3 AAC 46.060(b)(5);
(13) if the application is for a combination independent and balanced stakeholder board formed under AS 42.05.762(4)(B)(iii), a description of processes to remove and replace a director that fails to meet the requirements of 3 AAC 46.070(a); and
(14) additional information that makes specific reference to the factors set out in 3 AAC 46.060(d).
(f) If the applicant files its application under 3 AAC 46.080(a),
(1) the commission will waive the filing requirements of (e)(4) - (10) of this section; and
(2) the applicant must submit
(A) an explanation of how its classification of its stakeholders is consistent with 3 AAC 46.080(a)(l); and
(B) a declaration of the numerical value, as calculated under 3 AAC 46.080(a)(2)(D), of each director's provider interest and consumer interest.
(g) If an applicant proposes a classification that includes a hybrid stakeholder class, the applicant must provide an explanation of why the relevant hybrid stakeholder interests cannot be adequately presented or considered if the hybrid stakeholders are exclusively classified as a provider stakeholder or consumer stakeholder.
(h) The commission will consider an application in a docket of investigation under the procedures set out in 3 AAC 48.645.
History
- Authority: AS 42.05.141; AS 42.05.760; AS 42.05.770 AS 42.05.151; AS 42.05.762
- Eff. 3/11/2022, Register 241
3 AAC 46.100 Commission formation of an electric reliability organization
(a) The commission will open a docket to form an electric reliability organization for an interconnected bulk-electric system if
(1) required under AS 42.05.760(e);
(2) the certificate of the electric reliability organization serving an interconnected bulk-electric system expires under 3 AAC 46.050(6); or
(3) the commission has revoked, under 3 AAC 46.050(e), the certificate of the electric reliability organization serving an interconnected bulk-electric system.
(b) When it opens a docket under (a) of this section, the commission will
(1) designate all interconnected load-serving entities in the interconnected bulk-electric system as parties to the docket;
(2) permit an interested user, owner, or operator of the interconnected bulk-electric system to become a party to the docket upon the filing of a notice of participation; and
(3) allow other interested persons to petition to intervene in the docket under the procedures set out in 3 AAC 48.110.
(c) After an opportunity for the parties in the docket to be heard, the commission will initiate formation of an electric reliability organization for an interconnected bulk-electric system by developing articles of incorporation under AS 10.20 as a nonprofit corporation exempt from federal taxation under the United States Internal Revenue Code (26 U.S.C.), as that federal law exists at the time. The corporation's purpose is to become the electric reliability organization of the interconnected bulk-electric system, consistent with (i) of this section. The chair of the commission shall appoint three commissioners to serve as interim directors. Interim directors shall file the articles of incorporation, and serve as voting directors of the nonprofit corporation, until they are replaced with directors who are selected under the process required by (d) - (h) of this section.
(d) The commission will solicit applications from persons interested in serving as directors of the corporation that will become the electric reliability organization for the interconnected bulk-electric system. The commission will notify the general public that applications for three positions as directors of the electric reliability organization are being accepted. In the notice, the commission will describe
(1) the minimum qualifications for the director positions, including the qualifications set out in 3 AAC 46.460(a)(1);
(2) the application process and requirements;
(3) the closing date for applications; and
(4) the selection process.
(e) Applications must be accompanied by
(1) a resume of the applicant's education and work experience; and
(2) a narrative explaining how the applicant's education and work experience qualify the applicant to be an effective director of the electric reliability organization.
(f) The commission will accept applications only from persons who would qualify as independent directors under 3 AAC 46.070. The commission will return an application of a person who does not qualify as an independent director under 3 AAC 46.070 to the applicant, with an explanation of why the applicant does not qualify as an independent director. If the commission determines that the number of qualified applicants is insufficient, the commission will solicit additional applications.
(g) After the final closing date for applications and a commission determination that the number of applications is sufficient, the commission will notify the general public that comments are being accepted on the applications received.
(h) After review of public comments and interviews with applicants the commission will select three directors.
(i) Upon selection of directors by the commission under (h) of this section, the interim directors shall appoint the persons selected by the commission to be directors of the electric reliability organization and resign from their position as interim directors. Upon the resignation of the interim directors and their replacement by directors selected under (h) of this section, the commission will grant the nonprofit corporation a certificate to be the electric reliability organization of the interconnected bulk-electric system. Any amendments to or restatement of articles of incorporation, or electric reliability organization bylaws or rules, or modifications of those documents, that the electric reliability organization seeks to adopt must be submitted to and approved by the commission before being finalized.
(j) Not later than 21 days after the date of the order announcing the commission's selection, the directors shall meet to develop a proposed budget for organizing the electric reliability organization. In the proposed budget, the directors shall include the costs to develop the materials required for an applicant under 3 AAC 46.090(a), including director compensation, if any. The proposed budget must be filed in the electric reliability organization docket established under (a) of this section. After providing parties an opportunity to be heard on the proposed budget, the commission may approve or modify the proposed budget. The electric reliability organization may file for commission approval of an initial surcharge to recover its budgeted costs. The requirements of 3 AAC 46.420 - 3 AAC 46.430 do not apply to the initial surcharge filing.
(k) Not later than 180 days after its budget is approved, the electric reliability organization shall file the materials required of an applicant under 3 AAC 46.090(a). The commission may open a new docket of investigation to consider a filing made under this subsection.
(l) The commission may waive or modify by order the requirements of this section, in whole or in part, upon application and a showing of good cause or on the commission's own motion. A waiver granted under this subsection does not limit the burden of an applicant to prove the applicant's ability to comply with the requirements of AS 42.05.762.
History
- Authority: AS 42.05.141; AS 42.05.760; AS 42.05.767 AS 42.05.151; AS 42.05.762; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.110 Independence of directors and electric reliability organization action
(a) To ensure that the electric reliability organization and its directors act independently of the users, owners, and operators of the interconnected electric energy transmission network, directors, employees, and members of committees shall abide by rules that must, at a minimum, include
(1) explicit prohibitions of
(A) the use of electric reliability organization equipment or tools for unauthorized projects or activities;
(B) payment or acceptance of bribes, kickbacks, or other improper payments while conducting the business of the electric reliability organization; and
(C) the use of position, title, or employment status at the electric reliability organization to exert inappropriate influence for personal gain or benefit, or the gain or benefit of an individual's employers;
(2) explicit requirements
(A) to faithfully pursue the interests of the electric reliability organization; the requirements must include duties to
(i) provide impartial consideration of, and due weight to, the interests of all stakeholder classes, regardless of whether a given stakeholder class has a designated director on the board;
(ii) exercise first loyalty to the mission of the electric reliability organization, rather than the interest of a particular stakeholder class;
(iii) refrain from promoting the director's own financial or other interests or the interests of a particular person or organization; and
(iv) act in a manner consistent with the electric reliability organization's bylaws, code of conduct, policies, and procedures;
(B) for recusal of a person from voting on an alleged violation of a reliability standard by, or on an associated penalty on, the person's employer; and
(C) to provide a public, written explanation addressing how interests articulated in the development of a rule, reliability standard, or integrated resource plan were considered and balanced, and to which a director may append a dissent;
(3) procedures to ensure adherence to the rules that implement the requirements of AS 42.05.762(3)(A); those procedures must include
(A) a process by which an interested person may initiate a complaint alleging a potential violation of those rules; and
(B) processes for implementing sanctions against violations of those rules;
(4) a requirement that an employee of the electric reliability organization not be a voting member of an electric reliability organization certificated under 3 AAC 46.070(a) or (b); and
(5) if the electric reliability organization is governed by a balanced stakeholder board or combination independent and balanced stakeholder board, a requirement that the board may approve a reliability standard, enforcement of a reliability standard, or an integrated resource plan only if the proposed action receives an affirmative vote from directors designated to at least three different stakeholder classes; for purposes of this paragraph, an independent director is designated as a stakeholder class.
(b) An electric reliability organization's rules may not preclude an interested member of the public from serving in a non-voting capacity on an advisory committee of the electric reliability organization, subject to reasonable qualification and confidentiality requirements.
History
- Authority: AS 42.05.141; AS 42.05.175; AS 42.05.762 AS 42.05.151; AS 42.05.760; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.120 Penalties imposed by the electric reliability organization
(a) An electric reliability organization shall file a notice of penalty and the record of its proceeding with the commission and provide a copy of the notice of penalty to the entity that is the subject of the penalty. A notice of penalty by the electric reliability organization must include
(1) the name of the entity subject to the penalty;
(2) identification of each violated reliability standard;
(3) a statement setting out findings of fact with respect to the act or practice resulting in the violation of each reliability standard;
(4) a statement describing the monetary or nonmonetary penalty imposed; and
(5) other matters the electric reliability organization finds relevant to the imposition of the penalty.
(b) The record of the electric reliability organization's penalty proceedings must include
(1) prepared written findings of fact and the reasons for the penalty decision;
(2) information and documentation supporting the penalty findings;
(3) a record of the hearing in accordance with AS 42.05.775(a)(2) held to address the assessment of the penalty; and
(4) copies of all documents or other evidence presented at the hearing.
(c) A person or entity submitting documentation to the commission for a notice of penalty, for a record of proceeding, or supporting an appeal of a penalty may petition the commission, in accordance with the requirements of 3 AAC 48.045, for confidential status of the information contained within the documentation.
(d) A penalty imposed by an electric reliability organization must take into consideration all mitigating factors. The penalty may be a monetary or nonmonetary penalty and may include a limitation on an activity, function, or operation, or another appropriate sanction. Provisions for the imposition of nonmonetary penalties must be described in the tariff.
History
- Authority: AS 42.05.141; AS 42.05.762; AS 42.05.775 AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.130 Penalties imposed by the commission
(a) Upon notification of a potential violation of a reliability standard or on its own motion, the commission may direct the electric reliability organization to investigate the potential violation in accordance with the electric reliability organization's tariff.
(b) The commission may, on its own motion, open an investigation into a potential violation of a reliability standard.
(c) For a commission-imposed penalty, the penalty shall be levied consistent with the electric reliability organization's tariff or AS 42.05.571.
History
- Authority: AS 42.05.141; AS 42.05.571; AS 42.05.775 AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.140 Appeal of penalties
(a) An entity subject to a penalty imposed by the electric reliability organization may appeal the penalty amount or imposition to the commission not later than 10 business days after receiving notice of the penalty.
(b) An appeal under this section is initiated by serving and filing a notice of appeal consistent with the requirements of 3 AAC 48.090. The notice of appeal must be served on the electric reliability organization and explain the basis for appealing the assessment or the amount of the penalty, and may be supplemented by the appellant, electric reliability organization, or commission with information excluded from the record of the proceedings submitted by the electric reliability organization.
(c) The scope of an appeal of a penalty is limited to review and consideration of the evidence and argument presented to determine whether a violation of a reliability standard occurred and, if so, whether the penalty imposed is appropriate.
(d) The commission may, after notice and an opportunity to be heard, stay a penalty.
(e) The commission will issue a remand of the penalty by written order informing the electric reliability organization of
(1) the deficiencies of the penalty assessment process or amount; and
(2) expectations regarding the remanded penalty assessment process and relevant considerations regarding the penalty amount.
History
- Authority: AS 42.05.141; AS 42.05.762; AS 42.05.775 AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.150 Payment of monetary penalties
(a) Monetary penalties imposed under this chapter by an electric reliability organization must be remitted to the electric reliability organization and must be used to offset the costs of the electric reliability organization.
(b) Monetary penalties imposed by the commission must be remitted to the commission in compliance with 3 AAC 48.030.
History
- Authority: AS 42.05.141; AS 42.05.762; AS 42.05.775 AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.160 Continuing requirements
(a) On or before October 1 of each year, an electric reliability organization shall electronically file with the commission, in accordance with 3 AAC 48.095, on a form provided by the commission, a report containing
(1) the organizational structure for the electric reliability organization, that includes committee descriptions;
(2) a discussion of the electric reliability organization's major activities, accomplishments, penalties, and events;
(3) a self-assessment describing how the electric reliability organization continues to comply with the requirements of AS 42.05.762;
(4) a narrative describing the electric reliability organization's compliance with 3 AAC 46.060(b)(5)(B) for balanced stakeholder boards, with 3 AAC 46.070(a) for independent stakeholder boards, or with both 3 AAC 46.060(b)(5)(B) and 3 AAC 46.070(a) for combination independent and balanced stakeholder boards, as applicable to the type of board governing the electric reliability organization;
(5) staffing and organization charts; and
(6) a description of the board members or electric reliability organization personnel that establish the technical competency required under AS 42.05.762.
(b) Not later than 45 days before its annual surcharge filing made in compliance with 3 AAC 46.430, a certificated electric reliability organization shall file, in accordance with 3 AAC 48.095, a proposed budget, including anticipated administrative costs for the following calendar year, to the commission as an informational filing described in the commission's records with the prefix "EB." The electric reliability organization must transmit the budget filing to the commission under a consecutively numbered cover letter designated as "EB[number]" followed by a hyphen and the number of the electric reliability organization's certificate.
(c) The electric reliability organization's budget filing must include
(1) a narrative description and explanation of the proposed budget by account and subaccount;
(2) a schedule and explanation of each account and subaccount that has increased or decreased more than 10 percent from the previous 12-month period; and
(3) if applicable, other information that the board of directors of the electric reliability organization considers appropriate to support the budget.
(d) The electric reliability organization shall make a good faith effort to electronically notify each registered entity of the proposed budget and include the location of the public documents that support the proposed budget filed with the commission. The electric reliability organization shall publish on its website a notice of the proposed budget and the public documents that support the proposed budget.
(e) The electric reliability organization may modify the proposed budget in response to public comments or revised cost estimates before submitting its surcharge filing under 3 AAC 46.430. A modification of the budget under this subsection must be identified and explained in the tariff letter included with the electric reliability organization's surcharge filing.
(f) The annual surcharge factor proposed to recover the proposed budget of the electric reliability organization will be allocated to load-serving entities served by the electric reliability organization on the basis of net energy for load. An electric reliability organization may petition the commission to authorize a different method of allocating the proposed budget of the electric reliability organization. A petition must provide information sufficient to support a finding that good cause exists for the use of a different method.
(g) The commission may waive or modify by order the requirements of this section, in whole or in part, upon application and a showing of good cause or on the commission's own motion, if the waiver does not also require a waiver of the requirements set out in AS 42.05.762 or 42.05.772.
History
- Authority: AS 42.05.141; AS 42.05.760; AS 42.05.770 AS 42.05.151; AS 42.05.762; AS 42.05.772
- Eff. 3/11/2022, Register 241
Article 2 Integrated Resource Plans and Large Project Preapproval
3 AAC 46.220 Integrated resource plan petition requirements
(a) An electric reliability organization transmitting to the commission a petition for a new or updated integrated resource plan must transmit the petition under a consecutively numbered cover letter designated as "Electric Reliability Organization Petition Letter No. 1, 2, 3, etc.", identified in the commission's records with the prefix "EP." The petition must include
(1) a description of stakeholder involvement and public process in accordance with the criteria in 3 AAC 46.260(a);
(2) an explanation of substantial deviations from a previous plan, if applicable, including deviations from previously anticipated demand forecasts;
(3) the date the copy of the proposed integrated resource plan was provided to the registered entities under 3 AAC 46.260(a)(l); and
(4) the integrated resource plan, the form of which is described in 3 AAC 46.230.
(b) The commission may waive or modify by order the requirements of this section, in whole or in part, upon application and a showing of good cause or on the commission's own motion, if the waiver does not also require a waiver of the requirements set out in AS 42.05.760(f).
History
- Authority: AS 42.05.141; AS 42.05.762; AS 42.05.780 AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.230 Integrated resource plan requirements
(a) Under AS 42.05.780, an electric reliability organization shall submit a proposed integrated resource plan to the commission. The integrated resource plan must address a forecast period of not less than 20 calendar years from the date of filing and must include portfolios, including a preferred portfolio, each of which must comply with the electric reliability organization's reliability standards and certificate requirements. The integrated resource plan must
(1) contain an executive summary that provides
(A) the goals and objectives of the integrated resource plan; and
(B) a summary of the integrated resource plan process and approach;
(2) contain a description and explanation of the planning environment used in preparing the integrated resource plan that includes
(A) the layout of the interconnected bulk-electric system, including generation, storage, transmission, and system control assets;
(B) a discussion of how the integrated resource plan has considered
(i) relevant municipal, tribal, state, and federal mandates, directives, and policies governing resources included in the integrated resource plan;
(ii) known or reasonably estimated constraints on the availability or price of generation fuel sources; and
(iii) the effect of the planning environment on reliability and cost of power;
(C) the primary planning assumptions that were incorporated in the plan; and
(D) identification of all exemptions from municipal planning decisions under AS 42.05.641 required to implement the integrated resource plan and an explanation of why those exemptions cannot be avoided;
(3) contain a discussion, including an analysis and technical assessment, of the full range of resource options evaluated in the development of the resource portfolios that meet projected or existing unmet needs in the interconnected bulk-electric system; the discussion
(A) must consider the resource options specified in AS 42.05.780(a) and projected retirements;
(B) may consider resource options that include one or more of the following:
(i) customer voluntary interruptible programs;
(ii) distributed energy resources;
(iii) market purchases;
(iv) other resource options identified by the electric reliability organization;
(C) as part of the analysis of these resource options, must describe and support the following elements:
(i) model input assumptions;
(ii) models and techniques used;
(iii) model sensitivities and scenarios considered;
(iv) the resource option's availability, reliability, and cost; and
(v) the applicable time horizon; and
(D) may consider a resource option to be cost-effective for purposes of AS 42.05.780(a) in delivering a given quantum of service only if the resource option meets one or more criteria in (6) of this subsection at minimum expected cost, considering the risks specified in (4)(A)(i) and (ii) of this subsection and other risks proposed by the electric reliability organization;
(4) contain a presentation and analysis of at least two resource portfolios
(A) that each satisfy one or more criteria in (6) of this subsection at lowest reasonable cost, consistent with each load-serving entity's obligations, and with satisfaction being shown through detailed and consistent analysis to minimize the cost of the resource portfolio's mix of resource options, given due consideration of
(i) risks affecting resource option costs;
(ii) risks associated with the ability of applicable resource options, either collectively or individually, to provide service when needed;
(iii) effects on system operation; and
(iv) effects on the environment; and
(B) that, for each portfolio, describe and support the resource portfolio modeling relied upon, including
(i) input assumptions;
(ii) models and techniques; and
(iii) sensitivities and scenarios;
(5) contain an explanation why the preferred portfolio, chosen from the resource portfolios described in (4) of this subsection, provides greatest value;
(6) for purposes of (4)(A) and (5) of the subsection, use one or more criteria for determining greatest value that include
(A) the satisfaction of the needs of the customers of each load-serving entity;
(B) interconnected bulk-electric system reliability;
(C) interconnected bulk-electric system resiliency;
(D) costs or benefits to the environment; and
(E) other considerations proposed by the electric reliability organization;
(7) provide a demand forecast, except as provided in (8) of this subsection, using a uniform demand-forecasting methodology for all load-serving entities in the interconnected bulk-electric system when estimating future demand;
(8) as an alternative to the demand forecast required under (7) of this subsection, provide a demand forecast using multiple demand-forecasting methodologies for the load-serving entities in the interconnected bulk-electric system when estimating future demand if
(A) multiple methods are needed to reasonably estimate future demand;
(B) the integrated resource plan explains why a uniform demand-forecasting methodology cannot most reasonably estimate future demand; and
(C) the integrated resource plan identifies the multiple demand-forecasting methods used and explains the differences in how each method forecasts load;
(9) reflect a planning area that
(A) includes the entirety of the interconnected bulk-electric system;
(B) identifies resource options, resource portfolios, and, as applicable, specific projects or project portfolios without regard to service territory boundaries within the interconnected bulk-electric system, while satisfying each load-serving entity's obligations; and
(C) excepting resources that a load-serving entity must acquire under federal law, includes only those specific and defined large energy projects that have been sized to ensure that available economies of scale have been reasonably maximized in light of projected demand; and
(10) contain, for the electric reliability organization, an action plan that provides a non-binding framework for implementing the preferred resource portfolio and that includes
(A) a process for determining the entities that will be involved in the procurement;
(B) a process for ensuring that the means for satisfying needs are accomplished at the lowest reasonable cost;
(C) a process by which load-serving entities of the interconnected bulk-electric system determine how they will apportion cost responsibility for the measures that satisfy the needs identified in the integrated resource plan; and
(D) a schedule of key activities and timelines.
(b) The commission may waive or modify by order the requirements of this section, in whole or in part, upon application and a showing of good cause or on the commission's own motion, if the waiver does not also require a waiver of the requirements set out in AS 42.05.780.
History
- Authority: AS 42.05.141; AS 42.05.762; AS 42.05.780 AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.240 Approval, rejection, or suspension of an integrated resource plan
(a) Not later than 45 days after receipt, the commission will approve, reject, or suspend an integrated resource plan or plan update filed under a petition letter from an electric reliability organization.
(b) If the commission approves an integrated resource plan, the commission will issue an approval order within the 45-day statutory notice period under AS 42.05.780(b).
(c) If an electric reliability organization submits an integrated resource plan or plan update that does not meet all of the form and filing requirements provided under statute, 3 AAC 46.220, and 3 AAC 46.230, and the commission does not waive requirements under 3 AAC 46.220(b) or 3 AAC 46.230(b),
(1) the commission may reject the filing; unless the electric reliability organization perfects the filing, a rejected filing is void;
(2) for a rejected integrated resource plan or plan update, the statutory notice period under AS 42.05.780(b) begins only after the filing is supplemented, within a period specified by the commission, to comply with all applicable requirements; if an electric reliability organization
(A) fails to supplement a rejected integrated resource plan or plan update in order to comply with all applicable requirements within the period specified by the commission, the commission will close the integrated resource plan or plan update and return it to the electric reliability organization;
(B) refiles an integrated resource plan or plan update that has previously been rejected, the commission will renumber the integrated resource plan or plan update with the next available petition letter number and treat it as a new filing.
(d) The commission may suspend an integrated resource plan filed under 3 AAC 46.220 - 3 AAC 46.260 to investigate
(1) whether the proposed integrated resource plan adequately meets the reliability requirements at the greatest value and has evaluated a full range of cost-effective alternatives and options as required under AS 42.05.780(a); or
(2) the sufficiency and completeness of filings made to meet the requirements of 3 AAC 46.220 and 3 AAC 46.230.
(e) In an order returning an integrated resource plan to the electric reliability organization for modification, the commission will specify the returned plan's statutory, regulatory or other deficiencies.
History
- Authority: AS 42.05.141; AS 42.05.762; AS 42.05.780 AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.250 Timing of integrated resource plans and updates
(a) Unless a complete integrated resource plan consistent with the requirements of 3 AAC 46.230 is required, an electric reliability organization shall file a plan update within two years after the filing of its previous integrated resource plan. A plan update must include
(1) an updated demand forecast, using the same methodologies as deployed in the most recent integrated resource plan;
(2) a comparison of the updated demand forecast with the demand forecast contained in the most recent integrated resource plan;
(3) an assessment of progress to date on the action plan provided in the most recent integrated resource plan; and
(4) an assessment of materially changed circumstances that have bearing on or affect the planning environment; the assessment must address
(A) technological advancements that may affect a public utility's ability to efficiently meet service requirements to its customers;
(B) actual retirements of and additions to interconnected generation resources, transmission lines, and associated equipment since the previous integrated resource plan was filed;
(C) state or federal policy actions; and
(D) reliability standards approved after the last complete update of an integrated resource plan.
(b) No less than four years from the date of filing of the previous complete integrated resource plan, an electric reliability organization shall file an integrated resource plan consistent with the requirements of 3 AAC 46.230, unless a petition for waiver under (c) of this section is granted.
(c) An electric reliability organization may petition for a waiver from the full filing requirement in (b) of this section. If the waiver is granted, the electric reliability organization shall file a second plan update, consistent with the requirements of (a) of this section, and within two years after the previous plan update. The commission will grant a waiver only if
(1) there have been no material changes in the interconnected electric energy transmission network that require a new integrated resources plan;
(2) no public utility has requested an update
(A) to facilitate a petition for project preapproval of a large energy facility not included in the previous integrated resource plan; and
(B) that may be necessary to address material changes in the interconnected electric energy transmission network or planning environment that occurred since the previous complete integrated resource plan was filed; and
(3) the petitioner will file a complete integrated resource plan within six years from the date of filing of the previous complete integrated resource plan.
(d) A person may petition the commission to direct the electric reliability organization to file a complete integrated resource plan sooner than the deadlines set out in (b) or (c) of this section.
History
- Authority: AS 42.05.141; AS 42.05.762; AS 42.05.780 AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.260 Integrated resource plan notification, protest process, and returning orders
(a) Not later than 20 calendar days before filing an integrated resource plan with the commission, an electric reliability organization shall
(1) make a good faith effort to electronically notify each registered entity of its intent to file an integrated resource plan and make available the integrated resource plan and all non-confidential work papers that support the integrated resource plan; and
(2) publish on its website a notice of its intent to file an integrated resource plan.
(b) Not later than five business days after the filing of a complete integrated resource plan, the commission will arrange for publication of a public notice with a newspaper of general circulation in the geographic area of the interconnected bulk-electric system. The commission will also publish the notice on the commission's website and post it on the Alaska Online Public Notice System (AS 44.62.175). The deadline for the public comment period is 14 calendar days from the date of the public notice.
(c) An interested person may file with the commission comments or a protest of the petition and integrated resource plan in accordance with the requirements of 3 AAC 48.100 before the close of the comment period. A protest must include
(1) specific grounds for the protest;
(2) the steps that the petitioner may take to mitigate the protest;
(3) the conditions that the commission should consider applying to the integrated resource plan; and
(4) a petition to intervene.
(d) A petitioner wishing to file a response to the protest shall file that response with the commission not later than 10 calendar days after the close of the comment period.
History
- Authority: AS 42.05.141; AS 42.05.762; AS 42.05.780 AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.270 Large project preapproval
(a) Upon certification of an electric reliability organization, any large energy facility that has not yet completed construction is subject to the requirements of AS 42.05.785.
(b) A utility that has undertaken but not completed a large energy facility before commission approval of the first integrated resource plan satisfies the requirements of AS 42.05.785(a) if the utility undertaking the large energy facility attests that it undertook its project before
(1) commission approval of an electric reliability organization's first filed reliability standards, other than reliability standards that the commission previously adopted; and
(2) certification of an electric reliability organization.
(c) If a large energy facility, undertaken but not completed before commission approval of the first integrated resource plan, is not operationally integrated into the interconnected bulk-electric system, the utility must provide evidence and make an affirmative showing that the large energy facility satisfies the requirements of AS 42.05.785(a) not later than 24 months after the date that a certificate is issued to the electric reliability organization.
(d) A utility making an attestation under (b) of this section must do so not later than 30 days after an electric reliability organization's first filed reliability standards or the certification of an electric reliability organization.
(e) For purposes of AS 42.05.785(b), a large energy facility is included in an integrated resource plan's preferred resource portfolio if the portfolio specifically delineates the large energy facility, or if the large energy facility has been selected under the processes described in the commission-approved action plan.
(f) For a large energy facility that is not subject to (b) of this section and is not included in an integrated resource plan's preferred resource portfolio, the commission will find that the facility satisfies the requirements of AS 42.05.785(a)(3) only if it determines that
(1) the utility's failure to acquire the facility could result in degradation to utility customer service or reliability requirements, is necessary to remedy a critical known deficiency, or would provide energy service at less than current marginal costs; and
(2) the degradation will occur, the critical known deficiency will persist, or energy service total costs will not be reduced if the large energy facility is not undertaken before the next integrated resource plan has been completed.
(g) A load-serving entity seeking approval for a large energy facility under AS 42.05.785(a) shall provide the commission with sufficient evidence to enable the commission to reasonably determine that construction of the proposed large energy facility will provide the greatest value at lowest reasonable cost, after taking into account a range of alternatives, including demand-side management and efficiency strategies, energy conservation, and refurbishment of existing plant.
(h) After commission approval of an integrated resource plan, a large energy facility included in that integrated resource plan's preferred resource portfolio as a defined facility, or a large energy facility selected under the process set out in the most current action plan, satisfies the requirements of AS 42.05.785(b).
(i) A public utility shall notify the commission of refurbishment or capitalized maintenance of a large energy facility. The commission may require the public utility to provide documentation to show previous operating condition before refurbishments.
(j) Nothing in this chapter
(1) applies to or overrides municipal jurisdiction over local planning; or
(2) prevents a party from seeking exemption from municipal planning decisions under AS 42.05.641.
(k) For purposes of this section, a large energy facility is undertaken upon the beginning of one or more of the following activities as part of a continuous on-site construction program:
(1) the placement, assembly, or installation of its facilities or equipment;
(2) significant site preparation work, including
(A) clearing;
(B) excavation; or
(C) the removal of existing buildings, structures, or facilities if their removal is necessary for the placement, assembly, or installation of new facilities or equipment; or
(3) the making of binding contractual obligations for the purchase of facilities or equipment that are intended to be used in the facility's operation; options to purchase, contracts that may be terminated without a substantial loss, and contracts for feasibility, engineering, or design studies do not constitute the undertaking of a large energy facility.
(l) The commission may waive or modify by order the requirements of this section, in whole or in part, upon application and a showing of good cause or on the commission's own motion, if the waiver does not also require a waiver of the requirements set out in AS 42.05.785.
History
- Authority: AS 42.05.141; AS 42.05.641; AS 42.05.770 AS 42.05.151; AS 42.05.762; AS 42.05.785
- Eff. 3/11/2022, Register 241
Article 3 Electric Reliability Organization Tariffs and Rules
3 AAC 46.320 Tariff filing submission, calculation of regulatory notice period, and effective date
(a) Unless otherwise provided, the regulatory notice period for a tariff filing does not begin until the filing electric reliability organization has complied with this section. If an electric reliability organization submits a tariff filing that does not meet all of the notice and form and filing requirements provided under statute and 3 AAC 46.320 - 3 AAC 46.430, and the commission does not waive the requirements of 3 AAC 46.320 - 3 AAC 46.430 under (i) of this section, the commission may reject the filing. For a rejected tariff filing, the regulatory notice period under (c) of this section begins only after the electric reliability organization supplements the filing, within a period specified by the commission, to comply with all applicable requirements. If the electric reliability organization fails to supplement a rejected tariff filing in order to comply with all applicable requirements within the period specified by the commission, the commission will close the tariff filing and return it to the electric reliability organization. If a tariff filing is refiled by the electric reliability organization after the commission has rejected and returned the tariff filing as provided in this chapter, the commission will renumber the tariff filing with the next available tariff number and treat the filing as new.
(b) Unless otherwise specified by order or under another applicable provision of this chapter or 3 AAC 48, an electric reliability organization may submit a tariff filing electronically in accordance with 3 AAC 48.095. An electric reliability organization that files by paper shall submit an original and five copies of each tariff filing, unless otherwise specified by the commission.
(c) Each tariff filing submitted to the commission must be transmitted by means of a consecutively numbered tariff letter and must be designated as "TE[number]" followed by a hyphen and the number of the electric reliability organization's certificate. Each tariff letter must contain the applicable information set out in 3 AAC 46.330(a) and must be submitted to the commission not later than 45 days before the filing may take effect, unless the commission by order authorizes the filing to take effect in less than 45 days after the date of filing.
(d) Whether submitted on paper or electronically, a tariff filing made before 5:00 p.m. on a regular business day will be considered filed with the commission for the purpose of determining the regulatory notice period under (c) of this section. The day after the filing is submitted to the commission will be counted as the first day of the period of notice to the commission and public in accordance with AS 01.10.080. The regulatory notice period under (c) of this section will be determined in the same manner prescribed in 3 AAC 48.090. If a notice period ends on a Saturday, Sunday, or state legal holiday, the notice period will be extended to the end of the commission's next regular business day. In computing the regulatory notice period, consideration will not be given to notice by telephone, electronic mail, or facsimile transmission.
(e) Except as otherwise provided in this chapter, the commission may reject a tariff filing submitted to the commission with insufficient time to accommodate the regulatory notice period under (c) of this section before a proposed effective date.
(f) An electric reliability organization may request a tariff filing take effect, as set out in 3 AAC 46.330(a)(7), before the end of the regulatory notice period under (c) of this section for a tariff filing. If a proposed effective date is not included in a tariff letter, the commission will treat the last day of the regulatory notice period as the proposed effective date, unless the commission suspends the tariff filing in accordance with 3 AAC 46.390(d). The commission may reject a tariff filing if a proposed effective date is more than 90 days after the date the tariff filing is submitted to the commission, except as specifically authorized by the commission on request of the electric reliability organization.
(g) After approval, the commission will validate each effective tariff sheet, form, or other document required by commission order, by placing the commission's date-of-receipt stamp on the upper right comer of each tariff sheet, form, and other document and by entering the appropriate effective date on the bottom right comer of each tariff sheet, form, and other document. The commission will return a copy of each effective tariff sheet, form, and other document required by commission order to the electric reliability organization after the effective date of the filing.
(h) Each effective tariff on file with the commission is lawful until revised in accordance with the procedures established under law and 3 AAC 46.320 - 3 AAC 46.430.
(i) The commission may waive or modify by order the requirements of 3 AAC 46.320 - 3 AAC 46.430, in whole or in part, upon application and a showing of good cause or on the commission's own motion, if the waiver does not also require a waiver of the requirements set out in AS 42.05.
History
- Authority: AS 42.05.141; AS 42.05.762; AS 42.05.770 AS 42.05.151; AS 42.05.765
- Eff. 3/11/2022, Register 241
3 AAC 46.330 Tariff letters for electric reliability organizations
(a) Every tariff filing required by 3 AAC 46.320 - 3 AAC 46.430, except a filing directly related to an application for a new or amended certificate, must be transmitted to the commission by a consecutively numbered tariff letter, as set out in 3 AAC 46.320(c). A tariff letter may be on either letterhead or plain paper, but must be formatted to print eight and one-half inches by 11 inches in size, must contain the name and return address of the filing electric reliability organization, and must contain the name, return address, and electronic mail address of the filing electric reliability organization's representative authorized to issue tariffs. A tariff letter must
(1) list the tariff letter number;
(2) specify the statutes, regulations, or commission order under which the filing is made;
(3) list the tariff sheets, forms, or other documents required by commission order that are being filed;
(4) summarize the proposed tariff revision;
(5) provide a summary of the proceeding or stakeholder process leading to the development of the proposed tariff filing;
(6) provide a summary of how the proposed tariff filing is just, reasonable, not unduly discriminatory or preferential, and in the public interest;
(7) include a request, if applicable, for the tariff filing to take effect before the end of the regulatory notice period under 3 AAC 46.320(c), including a proposed effective date and explanation demonstrating good cause showing why the early effective date is necessary; and
(8) include a request, if applicable, for interim approval of the electric reliability organization surcharge.
(b) If the filing is based upon a study used by the electric reliability organization, a copy of the study must be filed with the tariff letter, if not already on file with the commission. If the electric reliability organization wishes to keep a study confidential, it may petition for confidentiality as provided in 3 AAC 48.045.
(c) A tariff letter filed under this section is an initiating petition for purposes of AS 42.05.175(i).
History
- Authority: AS 42.05.141; AS 42.05.175; AS 42.05.765 AS 42.05.151; AS 42.05.760; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.340 Tariff on file for public inspection
(a) An electric reliability organization shall maintain a current tariff on its website. The electric reliability organization shall also either maintain a paper copy of its current tariff or provide electronic access to that tariff at the electric reliability organization's primary business office, if applicable.
(b) Not later than 10 business days after a change to an electric reliability organization's Internet website address, the electric reliability organization shall file that change with the commission as a tariff filing amending the title page, in compliance with 3 AAC 46.320 - 3 AAC 46.430.
(c) An electric reliability organization may not refuse to permit anyone to inspect its effective tariff during regular business hours. An electric reliability organization may not require anyone to provide a reason for inspecting the tariff as a prerequisite to the inspection.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.350 Controlling effective tariff
(a) An electric reliability organization may not deviate from its effective tariff or refuse to apply it uniformly without prior commission approval.
(b) Errors occurring in an effective tariff that result solely from a typographic or reproduction mistake must, upon discovery, be corrected immediately by the electric reliability organization by filing revised tariff sheets in compliance with 3 AAC 46.320 and 3 AAC 46.330.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.360 General arrangement and content of tariff
(a) The tariff of an electric reliability organization must contain
(1) a title page, including
(A) the name of the electric reliability organization issuing the tariff, as listed on the electric reliability organization's certificate;
(B) a description of the interconnected bulk-electric system to which the tariff applies that is sufficient to allow users, owners, and operators of that system to identify the tariffs applicability to them;
(C) the physical address of the issuing electric reliability organization, if applicable;
(D) the electric reliability organization's Internet website address;
(E) the electric reliability organization's telephone number;
(F) the electric reliability organization's general electronic mail address; and
(G) the tariff number;
(2) an index with a complete and accurate list of the contents of the tariff;
(3) a schedule of all rates and charges;
(4) the contents required by AS 42.05.770(1);
(5) provisions for the process by which a user, owner, or operator may become a registered entity, if the user, owner, or operator is subject to an approved reliability standard;
(6) provisions that load-serving entities notify the electric reliability organization of all persons that are subject to a commission-approved reliability standard, or that may be subject to a reliability standard that the electric reliability organization may develop in the reasonably foreseeable future; and
(7) reliability standards, including
(A) each penalty matrix associated with a violation of those reliability standards; and
(B) nonmonetary penalties that may be assessed for violation of those reliability standards.
(b) The commission may order additional provisions to be included in an electric reliability organization's tariff, after notice and an opportunity to be heard.
(c) Each page of the electric reliability organization's tariff must be legible and formatted to print eight and one-half inches by 11 inches in size and must include
(1) the name of the electric reliability organization;
(2) the number of the electric reliability organization's certificate;
(3) the tariff filing number;
(4) the tariff sheet number; and
(5) the tariff revision numbers.
(d) Each sheet of every tariff, except the title page, must bear a sheet number at the top of the sheet. The first publication of a tariff sheet number must be designated as "Original Sheet ..... " The amendment of any sheet of a tariff shall be made only by reissuing the particular sheet upon which the change, addition, or cancellation is made. Reissuing the sheet means to cancel it by a new tariff sheet that contains the same tariff provisions except whatever additions, changes, or cancellations are made. Each revised tariff sheet must bear the same sheet number. A revised tariff sheet that amends an original sheet must be designated "First Revision ..., " "Second Revision ... ," etc. Each revised sheet must direct the cancellation of the original or revised sheet that it amends.
(e) The purpose and effect of every tariff revision must be indicated on the tariff by the use of the following symbols to the right of the text to which they apply:
C - To denote a changed condition or regulation;
D - To denote a discontinued rate, regulation, or condition;
I - To denote an increase;
L - To denote that material has been relocated from or to another sheet or place in the tariff with no change in text, rate, provision, or condition;
N - To denote a new rate, regulation, condition, or sheet;
R - To denote a reduction;
S - To denote a reissued matter;
T - To denote a change in text for clarification.
(f) The symbols in (e) of this section may not be carried forward on subsequent revisions of the tariff sheets where they originally are shown or into tariff reissues or supplements, and the filing electric reliability organization is not required to use them in any reproduction of its tariff for public inspection.
(g) If the index is rendered inaccurate due to the submission of a tariff sheet with a proposed revision, the index tariff sheet must be revised concurrently.
(h) In the construction of a tariff, consideration may be given to the fact that it may be necessary, in the future, to file additional standards, rates, provisions, or other items. Reservation of sheet and schedule numbers may therefore be made to provide, in advance, for subsequent filings to be made in proper relation to schedules, or other items filed previously. If, after a tariff has been issued, adding an additional tariff sheet becomes necessary, the added sheet must be designated as an original sheet. When added between existing sheets of the tariff, it must be given the same sheet number as the sheet that it follows. A period suffix, in the numerical sequence, must follow the sheet number: for example, "Original Sheet 4.1". If the added sheet is added after the last sheet, at the end of the tariff, the added sheet shall be given the next consecutive number following the last sheet of the tariff.
History
- Authority: AS 42.05.141; AS 42.05.762 AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.370 Public notice
The commission may prescribe, on a case-by-case basis, one or more appropriate means by which a tariff filing must be noticed to the public, including
(1) individual notice to all users, owners, or operators directly affected by the tariff filing, by United States mail, electronic mail, or similar delivery service, under conditions prescribed by the commission, or by the commission itself;
(2) publication on the commission's website; or
(3) posting on the Alaska Online Public Notice System (AS 44.62.175).
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.380 Response to public notice
(a) Comments must be filed either electronically, including by electronic mail, or on paper. Any person desiring to submit a comment in response to a tariff filing may be asked to do so not later than 20 days after the date the commission issues the public notice. Every notice to the public must specify the deadline date for comments.
(b) Comments must be submitted with a copy to the electric reliability organization, must be signed by the interested person or the person's authorized representative, and must contain at least the following information:
(1) reference to the applicable docket number, tariff filing number, or file reference specified in the notice;
(2) the name and the mailing or electronic mail address of the person filing;
(3) the reason for filing, together with any supporting factual data;
(4) whether the comment is made on behalf of the interested person or on behalf of another named person, including an organized group, association, or company; and
(5) the person's comment in the noticed matter with reasonable particularity, and as concisely as possible.
(c) An electric reliability organization wishing to file a response to the comments must file that response with the commission not later than 10 days after the close of the comment period.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.390 Suspension or rejection of tariff filings
(a) The commission may reject a tariff filing that is received by the commission in a form, or is filed by a method, that in whole or in part is not consistent with 3 AAC 46.320 - 3 AAC 46.430.
(b) If the commission rejects a tariff filing, it will return the filing promptly to the electric reliability organization with a letter explaining the reason the filing was rejected.
(c) A tariff filing, or any portion of one, that has been rejected is void.
(d) At any time before the end of the regulatory notice period under 3 AAC 46.320(c), the commission may, by order stating the reason, suspend a tariff filing either in whole or in part for 180 days from the filing of a complete electric reliability organization tariff filing. In the order suspending a reliability standard, the commission will identify the reliability standard's deficiencies and specify a time line for resubmission, with consideration of the electric reliability organization's reliability standard development process.
(e) With the exception of a tariff filing containing reliability standards, if the commission does not enter a formal order suspending a tariff filing, in whole or in part, the part of the filing that is not suspended takes effect when the regulatory notice period has expired in accordance with 3 AAC 46.320(c), or at a later date designated by the electric reliability organization.
(f) Show cause orders and orders of investigation involving a suspended tariff filing will be issued under the same docket file number as the one under which the original suspension order was entered.
(g) If a suspended tariff filing is withdrawn by an electric reliability organization and later refiled, the commission may suspend the filing again up to the full regulatory notice period under (d) of this section.
(h) An order of the commission suspending a tariff filing, in whole or in part, may later be vacated, in whole or in part, by means of an order in the same formal proceeding.
(i) During the suspension period, an electric reliability organization may supplement or amend its tariff filing or make additional filings. However, if the supplementary or additional filings represent or make a significant or material change in the original filing, the commission may suspend the filing again up to the full regulatory notice period under (d) of this section and renotice the supplemented or amended filing to the public.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.400 Waiver of regulatory notice period
(a) When an electric reliability organization includes in its tariff letter a request under 3 AAC 46.330(a)(7) for a tariff filing to take effect before the end of the regulatory notice period under 3 AAC 46.320(c), the burden of showing good cause for waiving the regulatory notice period must be borne by the filing electric reliability organization.
(b) In response to each request under (a) of this section, the commission may take one of the following actions:
(1) deny the request and require at least the regulatory notice period to expire before allowing the tariff filing to take effect;
(2) grant the requested effective date as proposed in the tariff letter;
(3) allow the tariff filing to take effect before the end of the regulatory notice period but later than the requested effective date proposed in the tariff letter; or
(4) pending a public hearing, suspend the operation of the tariff filing for a period not longer than that permitted under AS 42.05.175(i).
(c) The commission, on its own motion or for good cause shown, may waive regulatory notice and specify an effective date before the end of the regulatory notice period for a tariff filing filed to comply with an order of the commission.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.410 Reliability standard filings
(a) Each reliability standard filing must include
(1) a copy of the electric reliability organization board resolution authorizing the proposed reliability standard;
(2) a summary of the proposed reliability standard, including an explanation of how it impacts the interconnected bulk-electric system, and what the proposed reliability standard intends to accomplish;
(3) if a proposed reliability standard or modification is based on a standard adopted by a recognized standard-setting entity,
(A) a copy of the authoritative standard on which the proposed reliability standard is based; and
(B) a summary explaining how and why the proposed reliability standard differs from the standard on which it is based;
(4) a narrative indicating if the electric reliability organization is aware if the proposed reliability standard or modification conflicts with a commission rule or directive, or any federal standard, rule, or function;
(5) a proposed order that includes the following items:
(A) how the proposed reliability standard meets the requirements of AS 42.05.765(a); and
(B) how the proposed reliability standard is just, reasonable, not unduly discriminatory or preferential, and in the public interest;
(6) a statement setting out the users, owners, or operators to which the proposed reliability standard would apply based on their impact on the reliability of the interconnected electric energy transmission network;
(7) the proposed implementation plan, if approved, including a proposed effective date;
(8) a penalty matrix that describes
(A) the violation type and severity level;
(B) a range of penalties that may associated with a violation of the standard; and
(C) if applicable, how a violation could threaten grid stability;
(9) a statement on how the electric reliability organization will monitor, ensure compliance with, and enforce the proposed reliability standard; and
(10) procedures by which a registered entity found in violation of the proposed reliability standard must take action to come back into compliance, as needed.
(b) The commission may, upon petition or on its own motion, open a docket of investigation for the purpose of reviewing approved reliability standards for conflicts with a function, rule, tariff, rate schedule, or agreement that the commission has also accepted, approved, adopted, or ordered.
(c) If a conflict is identified, the commission will issue an order giving notice to the electric reliability organization of the nature of the conflict. The electric reliability organization must resolve the conflict not later than 180 days after the commission's order.
(d) The resubmitted reliability standard must be filed as a compliance filing in the docket of investigation.
(e) Not later than 45 days after receipt of the resubmitted reliability standard, the commission will issue a final order approving the resubmitted reliability standard or return it for further revision. If the reliability standard requires further revision, the commission may close the docket. In that circumstance, a revised reliability standard must be submitted under a new tariff letter.
(f) The commission may extend the timelines in (c) and (e) of this section on its own motion or for good cause shown.
History
- Authority: AS 42.05.141; AS 42.05.762; AS 42.05.770 AS 42.05.151; AS 42.05.765
- Eff. 3/11/2022, Register 241
3 AAC 46.420 Electric reliability organization surcharge
(a) An electric reliability organization shall maintain its books and records in a manner that separately shows its
(1) costs of general administration, developing reliability standards, ensuring compliance with and enforcement of reliability standards, and integrated resource planning; and
(2) costs associated with the standards required by AS 42.05.770(1).
(b) After an electric reliability organization's initial surcharge has been approved, the electric reliability organization shall file surcharge revisions at least annually. An electric reliability organization may file a surcharge revision more often than annually, if necessary, to adequately collect its costs.
(c) For purposes of determining surcharge revisions, an electric reliability organization shall maintain a balancing account, the balance of which must be entered into the surcharge calculation with the following entries made:
(1) a debit entry equal to the actual costs of budgeted categories that the commission approved for recovery in the previous surcharge filing;
(2) a credit entry equal to the surcharge collected from the load-serving entities;
(3) a credit entry equal to any penalties levied under AS 42.05.775 and collected by the electric reliability organization;
(4) a credit entry equal to dues, fees, and other charges collected by the electric reliability organization under AS 42.05.762(3)(B), if applicable.
(d) If the commission suspends an electric reliability organization's surcharge filing for further investigation, the commission may allow the surcharge to go into effect on an interim and refundable basis.
(e) If a load-serving entity is located within an interconnected bulk-electric system served by an electric reliability organization, and is subject to an electric reliability organization surcharge, the load-serving entity may implement a separate charge on its bills to retail customers to collect the commission-approved electric reliability organization surcharge it is assessed, after the electric reliability organization has been certificated and the commission has approved its initial budget.
(f) A load-serving entity may implement a charge in accordance with (e) of this section, without prior commission approval, after the commission has approved the electric reliability organization's surcharge. Not later than 15 days after implementing a charge under (e) of this section, a regulated utility shall submit a tariff filing under the procedures set out in 3 AAC 48.220 and 3 AAC 48.270.
History
- Authority: AS 42.05.141; AS 42.05.762; AS 42.05.775 AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.430 Filing requirements for electric reliability organization surcharge filings
(a) An electric reliability organization shall submit each surcharge filing as a tariff filing in compliance with the applicable provisions of 3 AAC 46.320 - 3 AAC 46.430.
(b) An electric reliability organization surcharge revision must be filed at least 45 days before the beginning of the electric reliability organization's fiscal year.
(c) With each surcharge tariff filing, the electric reliability organization must submit the following information to support entries in the balancing account and the proposed budget for the future period:
(1) an electric reliability organization's board resolution authorizing the proposed budget;
(2) the proposed budget;
(3) a schedule showing the proposed dollar amount for each major planned activity, and general administrative expenses, of the electric reliability organization;
(4) the plan for carrying out each identified major planned activity;
(5) a narrative explaining the required estimated costs;
(6) a schedule showing the proposed dollar amount of each line item in the proposed budget, by account number, including any subaccounts;
(7) a schedule and explanation of each account and subaccount for which the current and prior year's proposed budget amounts differ by more than 10 percent;
(8) a schedule and explanation of each account and subaccount for which actual costs incurred in the prior year differ by more than five percent from the budgeted amounts contained in that year's proposed budget filing;
(9) the calculation of the surcharge;
(10) a calculation of the monthly balances in the balancing account;
(11) revised tariff sheets; and
(12) other information that the commission considers necessary to explain entries in the balancing account or surcharge calculation.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.440 Open access transmission and interconnection
(a) Not later than the date specified in the order approving an application to serve as an electric reliability organization, an electric reliability organization's tariff addressing interconnection must include
(1) a definition of the entities eligible to interconnect with the interconnected bulk-electric system served by the electric reliability organization;
(2) a requirement that generators and loads capable of interconnecting with the interconnected bulk-electric system served by the electric reliability organization are eligible to apply for interconnection with interconnected load-serving entities in accordance with the standards for interconnection stated in the electric reliability organization's interconnection tariff;
(3) standard procedures for interconnection by facilities generating no more than 15,000 kilowatts of power; the electric reliability organization may submit standards
(A) based wholly on the Small Generator Procedures (for Generating Facilities no larger than 20 MW) adopted by Federal Energy Regulatory Commission Orders 2006 and 2006-A in Docket RM13-2-000;
(B) based in part on the procedures in (A) of this paragraph, and adjusted to reflect the size, stability, and economic resources of the local region; or
(C) based on an alternative interconnection standard more appropriate for local conditions; and
(4) standard procedures for interconnection by facilities generating more than 15,000 kilowatts of power; the electric reliability organization may submit standards
(A) based wholly on the Standard Large Generator Interconnection Procedures (Applicable to Generating Facilities that exceed 20 MW) adopted by Federal Energy Regulatory Commission Orders 2003 and 2003-A in Docket RM02-1-001;
(B) based in part on the procedures in (A) of this paragraph, and adjusted to reflect the size, stability, and economic resources of the local region; or
(C) based on an alternative interconnection standard more appropriate for local conditions.
(b) Not later than the date specified in the order approving an application to serve as an electric reliability organization, an electric reliability organization's tariff addressing open access transmission must include
(1) a definition of entities eligible to obtain transmission service;
(2) a requirement that generators interconnected to the interconnected bulk-electric system served by the electric reliability organization are eligible to apply to acquire transmission capacity on the interconnected bulk-electric system; and
(3) standards for open access transmission tariffs; the electric reliability organization may submit standards
(A) based wholly on the Proforma Open Access Transmission Tariff attached as Appendix C to Federal Energy Regulatory Commission Order 1000 in Docket RM10-23-000;
(B) based in part on the proforma tariff described in (A) of this paragraph, and adjusted to reflect the size, stability, and economic resources of the local region; or
(C) based on a standard tariff more appropriate for local conditions.
(c) A filing for a standard for interconnection or open access transmission must
(1) demonstrate that the standard is not discriminatory or preferential; a standard for
(A) interconnection is not discriminatory if all generators and loads requesting access to interconnect to the transmission system are provided nondiscriminatory access to the transmission system through interconnection requests that are evaluated and studied in an equivalent manner and subject to the same criteria, fees, timelines, and processes;
(B) open access transmission is not discriminatory if
(i) transmission service is provided to any eligible transmission customer; and
(ii) the rates, terms, and conditions of providing that transmission service are offered on an equivalent and non-preferential basis;
(2) include a definition of "transmission" for interconnection and open access transmission purposes;
(3) for an interconnection standard adjusted as described in (a)(3) or (4) of this section, explain how and why the filed interconnection standard deviates from the applicable federal standard specified in (a)(3) or (4) of this section; if a standard other than the applicable federal standard specified in (a)(3) or (4) of this section is filed, the filing must explain why the applicable federal standard or a modification of that standard is not appropriate for the local region, and how the proposed standard remedies those defects; and
(4) for a standard open access transmission tariff adjusted as described in (b)(3) of this section, explain how and why the filed standard transmission tariff deviates from the federal standard specified in (b)(3) of this section; if a standard other than the federal standard specified in (b)(3) of this section is filed, the filing must explain why the federal standard or a modification of that standard is not appropriate for the local region, and how the proposed standard remedies those defects.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.450 Transmission cost recovery
(a) Not later than the date specified in the order approving an application to serve as an electric reliability organization, an electric reliability organization's tariff must include methodologies for addressing transmission costs that ensure that the transmission system costs are allocated to those that derive benefits from the system in a manner that is at least roughly commensurate with estimated benefits.
(b) A filing to implement a standard for transmission system cost recovery must demonstrate that the standard
(1) ensures that only costs of assets that provide transmission benefits are included; and
(2) allocates project costs in a manner that is at least roughly commensurate with the estimated benefits derived from the transmission system.
(c) The showing required under (b)(2) of this section must describe in detail the cost allocation principles used to develop the cost allocation recommendations for a transmission project, including an explanation of
(1) the method by which the benefits derived from and the beneficiaries of the project were determined, including a discussion of the data requirements and analysis for determining benefits and beneficiaries; and
(2) the considerations and conclusions underlying the determination that transmission costs will be allocated in a way that is at least roughly commensurate with estimated benefits.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.770
- Eff. 3/11/2022, Register 241
3 AAC 46.460 Electric reliability organization rule content
(a) To ensure that an electric reliability organization meets the requirements of AS 42.05.762, the rules of the electric reliability organization must
(1) contain standards or procedures by which a director, director's designee, or employee of the electric reliability organization can be determined to possess the technical qualifications sufficient to enable the electric reliability organization to meet the requirements of AS 42.05.762(1) and (2);
(2) establish a procedure to ensure that the standards, plans, and rules adopted by the electric reliability organization do not grant any person an unreasonable preference or advantage or subject any person to an unreasonable prejudice or disadvantage;
(3) establish a procedure to ensure that enforcement investigations, including penalty recommendations, undertaken by the electric reliability organization cannot be carried out by persons employed by, either directly or by contractual arrangement, or affiliated with the person under investigation;
(4) provide for public access to the approved and proposed plans, standards, tariff, and rules of the electric reliability organization; at a minimum, the rules of the electric reliability organization must provide
(A) a website that posts all the approved and proposed plans, standards, tariff, rules, and budgets of the electric reliability organization, and all related comments received from the public that do not include information classified as confidential under 3 AAC 48.040(b) or include language that could subject the electric reliability organization to civil liability if republished; the website must
(i) allow for the posting of documents in a format that prevents unauthorized revision to the documents, that is text-searchable, and that can be read by any person with Internet access using publicly available free software;
(ii) provide the public with access to each approved or proposed plan, standard, tariff, or rule, and any public document related to development or interpretation of the approved or proposed plan, standard, tariff, or rule, without special expertise or knowledge of the posting protocols of the electric reliability organization; and
(iii) be capable of receiving comments from the public related to a proposed plan, standard, tariff, or rule of the electric reliability organization before filing with the commission for approval;
(B) a presumption that all documents received by the electric reliability organization are public unless the document is classified in whole or in part as confidential
(i) for good cause as defined in 3 AAC 48.045(b) under rules established by the electric reliability organization; or
(ii) under 3 AAC 48.040(b);
(C) a process under which the electric reliability organization will make available to the public those portions of a document that are not confidential if a portion of the document is classified as confidential under (B) of this paragraph;
(D) a record retention schedule that maintains
(i) paper copies of all current governing documentation; and
(ii) for at least 15 years, electronic records of meetings and agency documents other than governing documentation;
(E) a process under which any interested person may petition the electric reliability organization to participate in development of a proposed plan, standard, tariff, or rule of the electric reliability organization; the process may require consideration of the following factors:
(i) the interest of the petitioner;
(ii) the effect on the petitioner's interest in the matter to be developed;
(iii) the availability of other means by which the petitioner's interest may be protected;
(iv) the extent to which the petitioner's interest will be represented by other participating persons;
(v) the extent to which the petitioner's participation may reasonably be expected to assist in the development of a sound record; and
(vi) the extent to which the petitioner's participation will broaden or delay the matter to be developed;
(F) a process by which a successful petitioner may gain access to relevant confidential documents and information in possession of or shared with the electric reliability organization; the electric reliability organization may develop rules that define the level of participation in the development of the proposed plan, standard, tariff, or rule that entitles a successful petitioner access to confidential information;
(G) a process under which all documentation regarding the organization's governance and budget, network reliability statistics, and registered entity registration are made publicly available;
(H) a process under which notice of a proposed plan, standard, tariff, or rule of the electric reliability organization is provided to the potentially affected public, and comments on the proposed plan, standard, tariff, or rule of the electric reliability organization will be accepted;
(I) a process for developing a report to be filed with the commission as an attachment to any submittal requesting approval of a proposed plan, standard, tariff, or rule of the electric reliability organization; the report must include
(i) the input of all persons participating in development of a proposed plan, standard, tariff, or rule of the electric reliability organization;
(ii) all comments submitted in response to public notice of a proposed plan, standard, tariff, or rule of the electric reliability organization; and
(iii) an explanation of how the interests represented by persons providing input or comments have been given due consideration by the electric reliability organization in developing the proposed plan, standard, tariff, or rule that is submitted to the commission for approval;
(J) a process for providing public notice and an opportunity for public comment on each proposed enforcement action;
(K) a process to ensure that meetings of the board of directors of an electric reliability organization shall be open to the public, and held in person, telephonically, or by utilizing an Internet-based virtual meeting platform; and
(L) a process to ensure that the board of directors may only use nonpublic executive sessions for topics and discussions that could cause harm to the electric reliability organization or a registered entity if the information discussed were made publicly available;
(5) require that, except for an emergency board of directors meeting, an electric reliability organization publish, at least 14 calendar days before convening a meeting of the board of directors, a public notice of the meeting on the electric reliability organization's website and by any other means the board determines to be appropriate; the public notice must
(A) state the time and place for the meeting; and
(B) include an agenda listing items up for discussion, and provide instructions for filing public comments with the electric reliability organization; if the meeting is an emergency meeting, the electric reliability organization shall issue a copy of the agenda as soon as the agenda is available, and not later than one week after the scheduled date of the emergency meeting; the electric reliability organization shall make every effort to issue a copy of the agenda of an emergency meeting at least six hours before the meeting being held; and
(6) require the electric reliability organization to keep an original set of books, accounts, papers, and records within this state; the electric reliability organization shall timely provide the commission with a certified copy of any books, accounts, papers, or records upon request of the commission; those records are public under AS 42.05.671, unless exempted from public disclosure under AS 42.05.671; the electric reliability organization shall allow the commission to inspect the electric reliability organization's original books, accounts, papers, or records where they are kept at any reasonable time chosen by the commission.
(b) The commission may waive or modify by order the requirements of (a) of this section, in whole or in part, upon application and a showing of good cause or on the commission's own motion, if the waiver does not also require a waiver of the requirements set out in AS 42.05.
History
- Authority: AS 42.05.141; AS 42.05.760; AS 42.05.770 AS 42.05.151; AS 42.05.762 AS 42.05.671; AS 42.05.767
- Eff. 3/11/2022, Register 241
3 AAC 46.470 Review and approval of electric reliability organization rules
(a) An electric reliability organization shall file all rules, or revisions to rules, developed in compliance with, or developed with the intent to comply with, AS 42.05.762(3) by means of a consecutively numbered electric reliability organization rule letter. Every rule letter must contain the applicable information set out in (b) of this section, unless waived by the commission on a showing of good cause. All elements of an electric reliability organization's compliance monitoring and enforcement program not specifically identified as part of the electric reliability organization's tariff under 3 AAC 46.360 shall be filed under this subsection, except that filings made under this subsection do not include budget filings made under 3 AAC 46.160(b).
(b) Each electric reliability organization rule filing under this section must be transmitted to the commission by a consecutively numbered letter designated as "ER[number]" followed by a hyphen and the number of the electric reliability organization's certificate. A letter may be on either letterhead or plain paper but must be formatted to print eight and one-half inches by 11 inches in size, must contain the name and return address of the filing electric reliability organization, and must contain the name, return address, and electronic mail address of the filing electric reliability organization's representative authorized to issue rules.
(c) An electric reliability organization rule letter filed under this section is an initiating petition for purposes of AS 42.05.175(i).
(d) Each rule filing must be submitted to the commission not later than 45 days before the filing may take effect, unless the commission by order authorizes the filing to take effect in less than 45 days after the date of filing. An electric reliability organization rule letter must
(1) list the electric reliability organization rule letter number;
(2) clearly articulate the proposed rule or rule revision;
(3) explain the proposed rule or rule revision's intended effect;
(4) explain the cause of the proposed rule or rule revision's development;
(5) provide any additional information that the electric reliability organization believes important to the development of the proposed rule or rule revision;
(6) provide a dated certificate of service or proof of publication, as appropriate, of a public notice
(A) served or published by means of
(i) individual notice to all registered entities affected by the rule change or rule revision by United States mail, electronic mail, or similar delivery service, under conditions prescribed by the commission;
(ii) publication on the electric reliability organization's website; or
(iii) posting on the Alaska Online Public Notice System (AS 44.62.175); and
(B) containing
(i) a general description of the proposed rule or rule revision that is accurate, written in plain English, and sufficient to alert the public of the proposed rule or rule revision;
(ii) the date when the electric reliability organization made, or will make, its filing with the commission;
(iii) the date when the rule or rule revision is proposed to become effective;
(iv) a statement of where both the proposed rule or rule revision and the electric reliability organization's complete set of rules are available for review; and
(v) a statement similar to the following: "Any person may file written comments on this proposed rule or rule revision with the Regulatory Commission of Alaska, 701 West Eighth Avenue, Suite 300, Anchorage, Alaska 99501. To assure that the Commission has sufficient time to consider the comments before the rule or rule revision takes effect, (electric reliability organization's name) suggests that your comments be filed with the Commission no later than (a specific date, not a weekend or holiday, approximately 7 - 10 days before the filing takes effect).";
(7) in the case of a proposed rule revision, provide an annotated copy of the existing and proposed rule language identifying the proposed rule changes; and
(8) in the case of a proposed rule or rule revision addressing the electric reliability organization's compliance monitoring and enforcement program, supporting documentation describing how the a proposed rule or rule revision was developed, supporting the proposed rule or rule revision's reasonableness, and providing any additional documentation that the electric reliability organization considers important to the commission's review.
(e) A rule filing may be filed electronically or physically with the commission. A rule filing made before 5:00 p.m. on a regular business day will be considered filed with the commission for the purpose of determining the regulatory notice period. The day after the filing is submitted with the commission will be counted as the first day of the period of notice to the commission and public in accordance with AS 01.10.080. The regulatory notice period set out in (d) of this section shall be determined in the same manner prescribed under 3 AAC 48.090. If a notice period ends on a Saturday, Sunday, or state legal holiday, the notice period will be extended to the end of the commission's next regular business day. In computing the regulatory notice period, consideration will not be given to notice by telephone, electronic mail, or facsimile transmission.
(f) If the commission does not issue a letter rejecting a rule filing or enter an order suspending a rule filing, in whole or in part, the part of the filing that is not rejected or suspended takes effect after the 45-day review period has expired, or at a later date designated by the electric reliability organization in its rule filing. The commission may suspend for investigation any electric reliability organization proposed rule or rule revision. In an order suspending a proposed rule or rule revision, the commission may establish a temporary rule or rule revision identical to the rule or rule revision contained in suspended filing for use by the electric reliability organization until the final disposition of the suspension. During the suspension period, an electric reliability organization may supplement or amend its rule filing or make additional filings. However, if the supplementary or additional filings represent or make a significant or material change in the original filing, the commission may suspend the filing again up to the full regulatory period and renotice the supplemented or amended filing to the public. An order of the commission under this subsection suspending a rule filing, in whole or in part, may later be vacated, in whole or in part, by means of an order in the same formal proceeding.
(g) The commission may, upon complaint or on its own motion, open a docket of investigation to propose a rule or rule revision for an electric reliability organization. If the commission finds, after notice and the opportunity for public comment, that a change to the electric reliability organization's rule or rule revision is just, reasonable, not unduly discriminatory or preferential, and in the public interest,
(1) the commission will remand the rule or rule revision to the electric reliability organization for modification;
(2) the electric reliability organization must submit the commission's proposed rule, modified rule, or rule revision as a compliance filing in the formal docket not later than 45 days after the order requiring modification; and
(3) not later than 45 days after receipt of the compliance filing, the commission will either issue a final order approving the rule or rule revision or return it for additional modification.
(h) The commission may extend the timelines in this subsection on its own motion or for good cause shown.
(i) After approval, the commission will validate each effective rule, form, or other document required by commission order, by placing the commission's date-of-receipt stamp on the upper right corner of each rule, form, and other document and by entering the appropriate effective date on the bottom right corner of each rule, form, and other document. The commission will return a copy of each effective rule, form, and other document required by commission order to the electric reliability organization after the effective date of the filing.
(j) Each effective set of an electric reliability organization's rules on file with the commission is lawful until revised in accordance with the procedures established under law and this section.
History
- Authority: AS 42.05.080; AS 42.05.175; AS 42.05.770 AS 42.05.141; AS 42.05.762 AS 42.05.151; AS 42.05.767
- Eff. 3/11/2022, Register 241
Article 4 General Provisions
3 AAC 46.990 Good cause and application for waiver
(a) For purposes of a waiver under this chapter, good cause shown or good cause determined on the commission's own motion must be based on a finding by the commission that
(1) waiver of the requirement will not conflict with the provisions of AS 42.05.760 - AS 42.05.790, and is consistent with the public interest; and
(2) the basis for the waiver does not involve
(A) misrepresentation of a material fact;
(B) unauthorized discontinuance or abandonment of all or part of an electric reliability organization's duties;
(C) willful failure to comply with the provisions of AS 42.05.760 - 42.05.790, this chapter, or the orders of the commission; or
(D) willful failure to comply with a term, condition, or limitation of a certificate.
(b) An application for a waiver under this chapter must be in writing and must set out the pertinent facts in sufficient detail to support a finding by the commission that no legitimate public interest will be served by enforcing the requirement designated in the application. An application under this section may be made to the commission by motion, petition, or, where appropriate, by a tariff letter.
History
- Authority: AS 42.05.141; AS 42.05.770 AS 42.05.151; AS 42.05.780
- Eff. 3/11/2022, Register 241
3 AAC 46.999 Definitions
(a) In the definition of "large energy facility" in AS 42.05.785(e),
(1) "capacity" means nameplate capacity within the meaning given in 3 AAC 50.949;
(2) "single site" means facilities owned by the same entity and
(A) within one mile of each other; or
(B) within 10 miles of each other, if circumstances exist under which the facilities should reasonably be considered a single site.
(b) In AS 42.05.762, 42.05.767, and this chapter, "rules" means those articles of incorporation, bylaws, codes of conduct, protocols, and other procedures of an electric reliability organization
(1) that address the subject matter enumerated in AS 42.05.762(3); and
(2) that the organization must establish under AS 42.05.762(3).
(c) In this chapter, unless the context requires otherwise,
(1) "balanced stakeholder board" means an electric reliability organization board that meets the requirements of 3 AAC 46.060(b);
(2) "board" means the governing body of an applicant or certificated electric reliability organization appropriate to the business form under which it is organized;
(3) "business day" means a day other than Saturday, Sunday, or a state legal holiday;
(4) "capitalized maintenance" means a significant expense that
(A) a utility incurs to maintain the usefulness and efficiency of an asset, including the cost of an engine overhaul; and
(B) does not occur on an annual basis;
(5) "committee" means a committee, subcommittee, working group, task force, advisory committee, or other topic-specific group that plays a role in electric reliability organization decision making;
(6) "consumer" means a person that purchases electricity that was transmitted on, or generated on or stored on facilities connected to, an interconnected bulk-electric system;
(7) "consumer stakeholder" means a person, other than a provider stakeholder, that receives electricity services from a provider stakeholder furnished through tariff or special contract, including a person that indirectly receives services continuously, such as a landlord or an employer that furnishes housing, that are paid for by a tenant or another consumer;
(8) "electric reliability organization" has the meaning given in AS 42.05.790;
(9) "electric utility" has the meaning given in AS 42.05.790;
(10) "hybrid stakeholder" means a person that has characteristics of both a provider stakeholder and a consumer stakeholder but whose interests might not be adequately presented or considered if exclusively classified as a provider stakeholder or a consumer stakeholder;
(11) "immediate family member" means
(A) a spouse of the person;
(B) another person cohabiting with the person in a conjugal relationship that is not a legal marriage;
(C) a child, including a stepchild and an adopted child, of the person;
(D) a parent, sibling, grandparent, aunt, or uncle of the person; and
(E) a parent or sibling of the person's spouse;
(12) "implementation plan" means a document setting out the steps necessary to put a reliability standard into practice;
(13) "independent," with respect to voting members of the board of an electric reliability organization, means a director that may serve on the board of an electric reliability organization formed under AS 42.05.762(4)(B)(i);
(14) "interconnected bulk-electric system" has the meaning given in AS 42.05.790;
(15) "interconnected electric energy transmission network" has the meaning given in AS 42.05.790;
(16) "large energy facility" has the meaning given in AS 42.05.785(e); in that definition, "capacity" and "single site" have the meanings given in (a) of this section;
(17) "load-serving entity" has the meaning given in AS 42.05.790;
(18) "net energy for load"
(A) means the generation energy injected into a specific electrical system, plus energy received from other systems, less energy delivered to other systems through interchange, including losses;
(B) does not include energy required to operate storage facilities or plant use by a generator;
(19) "provider stakeholder" means a person that is a user, owner, or operator that provides electric energy, capacity, transmission, distribution, or storage to the public for direct compensation;
(20) "public notice" means a notice written in a format substantially the same as tariff filings noticed under 3 AAC 48.280;
(21) "refurbishment" means expenses that a load-serving entity incurs to restore an asset to a previous operating condition;
(22) "registered entity" means a user, owner, or operator registered with the electric reliability organization and subject to reliability standards approved by the electric reliability organization and the commission;
(23) "reliability standard" means a standard identified in AS 42.05.765(a)(1) or (2)(A) or (B) or any class of operating standard for the interconnected electric energy transmission network, including balancing, modeling, protective relaying, reserve sharing, transmission planning, and reactive power generation and control;
(24) "reliable operation" has the meaning given in AS 42.05.790;
(25) "resource option" means
(A) a specified asset or asset type that provides generation, transmission, or battery storage; or
(B) a specified conservation or efficiency improvement program or program type to affect customer demand;
(26) "resource portfolio" means a mix of resource options that could meet customers' collective needs, as projected in an integrated resource plan;
(27) "stakeholder" means a provider stakeholder, a consumer stakeholder, or a hybrid stakeholder;
(28) "user, owner, or operator" means a person or entity that
(A) is, or within a reasonable time will be, generating, transmitting, storing, or distributing electricity; and
(B) may, as a result of electric facilities or equipment it owns, leases, operates, or controls, adversely affect the reliable operation of the interconnected bulk-electric system.
History
- Authority: AS 42.05.141; AS 42.05.770; AS 42.05.785 AS 42.05.151; AS 42.05.780
- Eff. 3/11/2022, Register 241
Chapter 47 Regulatory Cost Charges for Public Utilities and Pipeline Carriers
Article 1 Applicability
3 AAC 47.010 Applicability, purpose, and waiver
(a) The provisions of this chapter apply to all public utilities and pipeline carriers operating in Alaska, as specified in this chapter.
(b) The purpose of 3 AAC 47.010 - 3 AAC 47.999 is to implement
(1) AS 42.05.254 and AS 42.06.286 by establishing a method to determine the regulatory cost charges for all regulated utilities and pipeline carriers operating in Alaska; and
(2) AS 42.05.254 by establishing a procedure to determine the actual cost of services provided by the commission to public utilities exempt from regulation under AS 42.05.711.
(c) Unless otherwise mandated under AS 42.05 or AS 42.06, any requirement in 3 AAC 47.010 - 3 AAC 47.999 may be modified or waived, in whole or in part, by order of the commission upon application and a showing of good cause or on the commission's own motion in accordance with the provisions of 3 AAC 48.805.
History
- Authority: AS 42.05.141; AS 42.05.254; AS 42.06.140 AS 42.05.151; AS 42.05.711; AS 42.06.286
- Eff. 10/21/92, Register 124; am/readopt 12/1/95, Register 136
Article 2 Regulatory Cost Charges for Regulated Public Utilities and Pipeline Carriers
3 AAC 47.020 Initial regulatory cost charges
Repealed.
History
- Eff. 10/21/92, Register 124; repealed 12/1/94, Register 132
3 AAC 47.021 Initial regulatory cost charges
Repealed.
History
- Eff. 12/1/95, Register 136; repealed 6/11/2006, Register 178
3 AAC 47.030 Determination of regulatory cost charge rates and payment dates; overpayment
(a) For state fiscal years beginning after June 30, 2006, the regulatory cost charge rates will be established annually by commission order, using the formulae in 3 AAC 47.040. However, if the regulatory cost charge rate applicable to adjusted gross regulated operating revenue, calculated under 3 AAC 47.040(a) - (e), would result in a regulatory cost charge that exceeds the limit set by AS 42.05.254(a) or AS 42.06.286(a), the commission order will establish that rate at a level that would result in a regulatory cost charge that is equal to the limit set by those statutes. The regulatory cost charge rates will be adjusted by commission order if necessary under AS 42.05.254(b) - (h) or AS 42.06.286(b) and (h), or if necessary because of changes in a factor in a formula in 3 AAC 47.040.
(b) Within 30 days after the annual budget of the commission is passed by the legislature each year, the commission will notify the public and each regulated utility and pipeline carrier of the regulatory cost charge rate to be imposed and the basis for that rate. The notice will also be posted on the commission's Internet website. The regulatory cost charge rate will be a charge per kilowatt-hour in the case of regulated electric utilities and a percentage of adjusted gross regulated operating revenue for all other regulated utilities and pipeline carriers.
(c) Within 30 days after notice is issued under (b) of this section, each regulated utility and pipeline carrier may submit comments on, or request revisions to, the regulatory cost charge rates proposed by the commission and, in the case of public utilities, may object to a designation as a regulated utility.
(d) Within 60 days after notice is issued under (b) of this section, the commission will hold a public hearing to receive comments on the proposed regulatory cost charge rates.
(e) Within 90 days after notice is issued under (b) of this section, and after taking into account the commission's final authorized annual budget, the commission will issue an order establishing the regulatory cost charge rates and the date or dates when the regulatory cost charges must be paid.
(f) If the total regulatory cost charge payments made by a regulated utility or pipeline carrier during a state fiscal year exceed the limit set by AS 42.05.254(a) or AS 42.06.286(a), the commission will notify the Department of Revenue to refund to the utility or pipeline carrier the amount of the overpayment.
History
- Authority: AS 42.05.141; AS 42.05.254; AS 42.06.286 AS 42.05.151; AS 42.06.140
- Eff. 10/21/92, Register 124; am 12/1/94, Register 132; am/readopt 12/1/95, Register 136; am 6/13/2006, Register 178
3 AAC 47.040 Formulae for determination of regulatory cost charge rates
(a) The formula for determining individual regulatory cost charge rates for each regulated public utility or pipeline carrier, as a percentage of adjusted gross regulated operating revenue is
RCC = A1 + A2
_______________ GRwhere, RCC equals the regulatory cost charge rate applicable to a regulated
sector's adjusted gross operating revenue; A1 equals the portion of the commission's total requirement from
regulatory cost charges that is allocated to the regulated sector; A2 equals the portion of the Department of Law's public advocacy
function costs certified under AS 42.05.254(h), that is allocated to the
regulated sector; and GR equals the regulated sector's annual adjusted gross regulated
operating revenue in the preceding calendar or annual reporting
year.
(b) The formula for determining the portion of the commission's total requirement from regulatory cost charges that is allocated to a regulated sector is
A1 = D + Nwhere, A1 equals portion of the commission's total requirement from regu-
latory cost. charges that is allocated to the regulated sector; D is the portion of the commission's total requirement from regula-
tory cost charges that is directly assignable to the regulated sector;
and N is the portion of the commission's total requirement from regula-
tory cost that is not directly assignable to the regulated sector, but is
allocated to the regulated sector; the allocation of the commission's
total requirement from regulatory cost charges that is not directly
assignable to a regulated sector is based on allocating factors
developed to reflect the relative amount of direct hours spent by the
commission regulating each sector during the preceding fiscal year.
(c) The formula for determining the commission's total requirement from regulatory cost charges is
R = B - E + Xwhere, R equals the commission's total requirement from regulatory cost
charges; B equals the commission's authorized budget for a state fiscal year; E equals the amount expected to be collected from exempt utilities,
from other sources in that fiscal year, and any carryover balance of
the regulatory cost charge program receipts account appropriated for
that fiscal year; and X equals an allowance for regulatory cost charges due under this
chapter for that fiscal year that the commission or the Department of
Revenue is unable to collect.
(d) Notwithstanding (c) of this section, the commission's total requirement from regulatory cost charges may not exceed the maximum percentage of total adjusted gross revenue prescribed in AS 42.05.254(a).
(e) For the purpose of developing the allocating factors used in (b) of this section, the commission staff engaged in substantive matters shall maintain records of direct hours worked on each regulated sector on a per pay period basis.
(f) For electric utilities,
(1) the formula for determining the regulatory cost charge rate expressed as a charge per kilowatt-hour is
RCCe = RCC x GRe
_______________ kWhTwhere, RCCe equals the regulatory cost charge rate applicable to kilowatt-
hours; RCC equals the regulatory cost charge rate applicable to electric
adjusted gross regulated operating revenue determined under (a) of
this section; GRe equals the total annual adjusted gross regulated operating
revenue of electric utilities in the preceding calendar year;and kWhT equals the total annual kilowatt-hour sales of regulated
electric utilities in the preceding calendar year, modified by subtract-
ing wholesale kilowatt-hour sales in that year;
(2) that have both wholesale and retail sales, the electric utility cost of power that is deducted from retail sales may not include any portion of the cost of power that was accounted for under wholesale sales.
History
- Authority: AS 42.05.141; AS 42.05.254; AS 42.06.286 AS 42.05.151; AS 42.06.140
- Eff. 10/21/92, Register 124; am 12/1/94, Register 132; am/readopt 12/1/95, Register 136; am/readopt 3/13/2006, Register 178
3 AAC 47.045 Determination of regulatory cost charge for fiscal year 1995; single annual payment
Repealed.
History
- Eff. 12/1/94, Register 132; repealed 6/13/2006, Register 178
3 AAC 47.050 Regulatory cost charge quarterly payments; reporting requirements
(a) If the commission by order under 3 AAC 47.030(e) directs that payment of the regulatory cost charge must be made quarterly, each regulated utility and pipeline carrier shall submit to the Department of Revenue, within 30 days after the end of each quarter of the state fiscal year, quarterly payment of its regulatory cost charge, calculated by applying the regulatory cost charge rate established under 3 AAC 47.030(e) to the amounts described in (b)(1) of this section.
(b) At the time a regulated utility or pipeline carrier submits the payment required by (a) of this section, it shall electronically file with the commission, in accordance with 3 AAC 48.095, a report that contains the
(1) amount of adjusted gross regulated operating revenue from bills rendered during the preceding quarter and, in the case of a regulated electric utility, kilowatt-hour sales, not including wholesale sales, on bills rendered during the preceding quarter; and
(2) total regulatory cost charge due on adjusted gross regulated operating revenue or, in the case of a regulated electric utility, kilowatt-hour sales, not including wholesale sales, for the preceding quarter;
(3) repealed 12/1/94.
History
- Authority: AS 42.05.141; AS 42.05.254; AS 42.06.286 AS 42.05.151; AS 42.06.140
- Eff. 10/21/92, Register 124; am 12/1/94, Register 132; readopt 12/1/95, Register 136; am 11/6/2016, Register 220
3 AAC 47.060 Annual reporting requirements
On or before April 30 of each year, a regulated utility or pipeline carrier shall electronically file with the commission, in accordance with 3 AAC 48.095, on a form provided by the commission, a report containing
(1) the total amount of the regulated utility's or pipeline carrier's adjusted gross regulated operating revenue and, in the case of a regulated electric utility, kilowatt-hour sales, not including wholesale sales, for the period of the report;
(2) the total regulatory cost charge due on adjusted gross regulated operating revenue or, in the case of a regulated electric utility, the total regulatory cost charge due, based on kilowatt-hour sales, not including wholesale sales, for the period of the report;
(3) a reconciliation of the annual amounts with the amounts previously filed for quarterly periods for the period of the report;
(4) the total amount collected from ratepayers for the period of the report from a charge implemented under 3 AAC 47.070; and
(5) an affidavit stating whether the total regulatory cost charge due for the annual period, including adjustments required for payments for quarterly periods, has been paid to the Department of Revenue.
History
- Authority: AS 42.05.141; AS 42.05.254; AS 42.06.286 AS 42.05.151; AS 42.06.140
- Eff. 10/21/92, Register 124; readopt 12/1/95, Register 136; am 11/6/2016, Register 220; am 11/13/2017, Register 224
3 AAC 47.070 Billing of regulatory cost charges
(a) A regulated utility or pipeline carrier may implement a separate charge on its bills to retail customers and shippers, including bills rendered by a local exchange carrier on behalf of an interexchange carrier, to collect the regulatory cost charge, subject to the following limitations:
(1) in the case of a regulated electric utility, the amount billed to customers may be no more than the regulatory cost charge rate per kilowatt-hour times the number of kilowatt-hours billed;
(2) in the case of a local exchange carrier, the amount billed to customers may be no more than the regulatory cost charge rate times the amount billed for all local services;
(3) in the case of an interexchange carrier, including bills rendered by a local exchange carrier on behalf of an interexchange carrier, the amount billed to the customers may be no more than the regulatory cost charge rate times the amount billed for intrastate interexchange service;
(4) in the case of all other regulated utilities and pipeline carriers, the amount billed may be no more than the regulatory cost charge rate times the amount billed for all services; and
(5) if the commission requires payment of the regulatory cost charge in a single annual payment under 3 AAC 47.030(e),
(A) at the beginning of the complete billing period after a regulated utility or pipeline carrier has billed for the full amount of the charge imposed by the commission plus the net cost of capital resulting from the time between the date the regulatory cost charge is paid to the state and the date the regulatory cost charge is collected by the regulated utility or pipeline carrier from its customers or shippers, the utility or carrier shall discontinue billing its regulatory cost charge, including the net cost of capital;
(B) a regulated utility or pipeline carrier may, without prior commission approval, reduce the regulatory cost charge, including the net cost of capital, it bills its customers or shippers for the final month of collection to minimize the amount that would otherwise be overcollected; and
(C) if the regulatory cost charge, including the net cost of capital, collected by a regulated utility or pipeline carrier from its customers or shippers exceeds the amount imposed by the commission by more than two percent, that utility or pipeline carrier shall propose to the commission a method of returning to its customers or shippers the excess amount.
(b) A separate charge implemented by a regulated utility or pipeline carrier in accordance with (a) of this section must be entitled "Regulatory Cost Charge" on bills to customers or shippers.
(c) A regulated utility or pipeline carrier may implement a charge in accordance with (a) of this section, without prior commission approval, after the commission has implemented the initial or revised regulatory cost charge. Within 15 days after implementing a charge under (a) of this section, a regulated utility or pipeline carrier shall submit a tariff filing under the procedures set out in 3 AAC 48.220 and 3 AAC 48.270.
(d) A regulated utility or pipeline carrier may not include regulatory cost charges in rates or charges to customers or shippers except as provided in (a) of this section.
(e) The failure of a regulated utility or pipeline carrier to implement a separate charge on its bills to customers or shippers to collect the regulatory cost charge does not affect the obligation of the regulated utility or pipeline carrier to pay the regulatory cost charge to the state.
History
- Authority: AS 42.05.141; AS 42.05.254; AS 42.06.286 AS 42.05.151; AS 42.06.140
- Eff. 10/21/92, Register 124; am 12/1/94, Register 132; am/readopt 12/1/95, Register 136; am 6/13/2006, Register 178; am 11/6/2016, Register 220; am 10/27/2017, Register 224
Article 3 Regulatory Cost Charges for Exempt Utilities
3 AAC 47.100 Determination of actual costs for exempt public utilities
(a) After notice and an opportunity for interested persons to be heard, the commission will establish, by order, a schedule of actual costs of services performed by the commission to be charged to exempt utilities. The schedule will be adjusted by commission order as necessary.
(b) Actual costs will be charged based upon either actual time and materials spent on a specific task or project, plus allowance for overhead, or upon an average of time, materials, and overhead for a group of similar tasks or projects.
(c) If the service rendered to an exempt utility is on the schedule established under (a) of this section, the charges for that service will be from the schedule.
(d) If the service rendered to an exempt utility is not specified on the schedule established under (a) of this section, the exempt utility will be charged based upon actual costs for that service.
History
- Authority: AS 42.05.141; AS 42.05.254; AS 42.06.286 AS 42.05.151; AS 42.06.140
- Eff. 10/21/92, Register 124; readopt 12/1/95, Register 136
Article 4 General Provisions
3 AAC 47.999 Definitions
(a) Unless the context indicates otherwise, in 3 AAC 47.010 - 3 AAC 47.999,
(1) "actual costs" means that portion of the direct or indirect cost of operating the commission that can be assigned to a specific task or project performed for an exempt utility;
(2) "adjusted gross regulated operating revenue" means the total revenue derived from operations in intrastate services, reduced by uncollectible revenue, and, as applicable, settlements or access charges, wholesale sales, and electric utility cost of power;
(3) "exempt utility" has the meaning given in AS 42.05.254(i);
(4) "regulated utility" has the meaning given in AS 42.05.254(i);
(5) "wholesale sales" has the meaning given in AS 42.05.254(i);
(6) "electric utility cost of power" means the total of accounts 500 - 557 of the uniform system of accounts prescribed for use by electric utilities under 3 AAC 48.277(a)(9) - (a)(13);
(7) "regulated sector" means the regulated public utility sector and the regulated pipeline carrier sector.
(b) Definitions contained in 3 AAC 48.820, 3 AAC 52.340, and 3 AAC 52.399 also apply to this chapter.
History
- Authority: AS 42.05.141; AS 42.05.254; AS 42.06.286 AS 42.05.151; AS 42.06.140
- Eff. 10/21/92, Register 124; am/readopt 12/1/95, Register 136; 6/13/2006, Register 178
Chapter 48 Practice and Procedure
Article 1 Practice Before the Commission
3 AAC 48.010 Commission office, hours and seal
(a) The principal office of the commission is located at 701 West Eighth Avenue, Suite 300, Anchorage, Alaska 99501-3469. The commission's area code number is 907 and its telephone number is 276-6222.
(b) The office of the commission is open for the transaction of business each day from 8:00 a.m. until 5:00 p.m., except Saturday, Sunday, and every state legal holiday.
(c) The official seal of the commission is a vignette of the official flag of the State of Alaska surrounded by the words "Regulatory Commission of Alaska," a facsimile of which is reproduced below.
Click to view SEAL
(d) The commission will, by resolution, designate the custodian of its official seal.
(e) Except as a particular credential may provide a more limited authorization, persons issued credentials by the commission are authorized to enter, inspect, and examine any and all lands, buildings, and equipment of persons subject to AS 42.05 Alaska Public Utilities Regulatory Act, AS 42.06, Pipeline Act, or related statutes, and to examine and copy any and all correspondence and other documents of those persons. A properly endorsed facsimile of the commission's credential card as set out below must, on demand, be shown by any representative of the commission whose identity and official authority may be questioned:
STATE OF ALASKA
THIS IS TO CERTIFY THAT _______________ , whose signature appears on the margin, is a representative of the Regulatory Commission of Alaska and is authorized to inspect any and all books, records, documents, and plant facilities of any person subject to AS 42.05 and AS 42.06 and related statutes.
This identification card expires _______________ .
REGULATORY COMMISSION OF ALASKA
BY (Signature in Ink)
CHAIR
(f) The commission will be in continuous session for the performance of its administrative duties, including hearings, participation in meetings, conferences and the conduct of other business.
History
- Authority: AS 42.04.030; AS 42.05.141; AS 42.06.140 AS 42.04.050; AS 42.05.151; AS 42.06.440
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90; am 4/24/2004, Register 170; am 2/16/2012, Register 201
3 AAC 48.020 Communications
(a) All correspondence with the commission should be addressed to the commission at its principal office and not to an individual staff member or commissioner unless otherwise specifically authorized or directed by the commission. If a written communication to the commission is in response to correspondence or an order of the commission, the response should make reference to the docket number, informal complaint number or file reference used by the commission.
(b) Repealed 6/29/84.
(c) Each written communication should embrace only one subject and should include the name and return address of the sender, the correct docket number and the commission's file reference, if any, to which the communication relates.
(d) If the writer holds a certificate of public convenience and necessity or an electric reliability organization certificate, the certificate holder shall use the name on the certificate and state the certificate number. The commission may disregard correspondence not complying with this subsection. The commission may consider any correspondence as an initiatory pleading and proceed accordingly.
(e) Written communications are considered to be officially received when delivered to the commission's office or received electronically through the commission's electronic filing systems. A commissioner, or an employee designated by the commission, may also receive written communications under conditions prescribed by the commission.
(f) Correspondence signed by an individual staff member or commissioner does not state an official determination by the commission unless the signature is preceded by the recital "By Direction of the Commission." The presence of this recital constitutes presumptive evidence that the signatory has been delegated specific authority to state the commission's official action in the particular matter. Staff correspondence containing routine interpretations regarding tariffs, accounting, or any other matter under a general delegation of authority will not contain the above recital but will, instead, state that the staff interpretation is subject to direct appeal to the commission by application, petition, or motion.
(g) A commissioner, presiding officer, or commission staff member may not, except upon reasonable notice and opportunity for all parties to participate, communicate with a party, and other affected persons, about any issue of fact, law, or policy in a pending adjudicatory proceeding.
(h) Communications not prohibited by (g) of this section include communications
(1) to discuss scheduling or procedural matters;
(2) between the presiding officer and parties, designed to produce a settlement; with the consent of all parties, the presiding officer may continue to preside in the same proceeding;
(3) between a regulated entity and the commission staff in a preliminary investigation of a tariff filing before
(A) suspension under AS 42.05.421; or
(B) suspension of a tariff filing under AS 42.05.765 and regulations that implement tariff requirements under AS 42.05.770;
(4) between a regulated entity and the commission staff in a preliminary investigation of an electric reliability organization rule filing before suspension under AS 42.05.767;
(5) between a regulated entity and the commission staff in review of an electric reliability organization budget filing;
(6) between the commission staff and an applicant for certification, registration, or another ruling by the commission, if the applicant is the only party to a proceeding; or
(7) during a scheduled meeting between commissioners or commission staff members and a regulated entity to discuss utility and pipeline projects, industry trends, technology, and developments, if those persons do not discuss an issue in a pending adjudicatory proceeding; within two business days after that meeting, a commissioner or commission staff member involved in the communication shall submit, by electronic mail or in writing to the commission staff member who supervises the commission's records and filings section, a statement that includes the following information:
(A) to the extent known, the names and addresses of the persons involved in the scheduled meeting;
(B) the date and time of the scheduled meeting, its duration, and the means and circumstances under which it was made;
(C) a summary of matters discussed.
(i) If a person makes or attempts to make an ex parte communication prohibited by (g) of this section, the commissioner, presiding officer, or commission staff member shall advise the person that the communication is prohibited and shall immediately terminate the prohibited communication.
(j) If an ex parte communication prohibited by (g) of this section occurs, the commissioner, presiding officer, or commission staff member involved in the communication shall submit, within two business days after the prohibited ex parte communication occurs, and either by electronic mail or in writing to the commission staff member who supervises the commission's records and filings section and to all commissioners, a statement that includes the following information:
(1) the name and docket number of the proceeding;
(2) to the extent known, the name and address of the person making the communication and the relationship, if any, to the parties to the proceeding;
(3) the date and time of the communication, its duration, and the means by and circumstances under which it was made;
(4) a summary of the matters discussed;
(5) whether and how the person making the prohibited communication was advised that the communication was prohibited.
(k) Within two business days after receiving a statement under (j) of this section, the commission staff member who supervises the commission's records and filings section shall
(1) place the statement in the commission's public file; and
(2) serve a copy of the statement on the parties on the commission's official service list, within each relevant docket.
(l) The commission staff member who supervises the commission's records and filings section shall maintain a permanent file of any statement filed under (h), (j), and (k) of this section. That statement shall be noticed in the commission's incoming mail report, and the file of statements shall be made available for public inspection at the commission's office during regular business hours.
(m) In this section, "business day" means a day other than Saturday, Sunday, or a state holiday.
History
- Authority: AS 42.05.141; AS 42.05.770 AS 42.05.151; AS 42.06.140
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90; am 4/24/2004, Register 170; am 4/20/2006, Register 178; am 2/16/2012, Register 201; am 11/6/2016, Register 220; am 3/11/2022; Register 241
3 AAC 48.025 Format for filings
(a) Except as provided in (e) of this section, all text in filings, including correspondence, tariff filings, pleadings, and letters, whether filed on paper or electronically under 3 AAC 48.095, must be legibly typewritten in a font not less than 11 point, or hand printed in black ink, and must be formatted for or printed on 8-1/2 inch by 11 inch paper. Pleadings and testimony must have left-hand margins not less than one and one-half inches, right-hand margins not less than one-half inch, and top and bottom margins not less than one inch. All other filings must have not less than one inch margins on all sides, except that spreadsheets, graphs, maps, and similar documents must have not less than one-half inch margins on all sides. Spreadsheets, graphs, maps, and similar documents may have a font less than 11 point if the font is legible.
(b) Original paper filings of more than one page must be fastened with a clip on the upper left-hand corner or wrapped with a rubber band. Stapled or bound original materials will not be accepted. For both paper and electronic filings, pages must be numbered at the bottom of each page in the form "page x of y," with the exception of tariff sheets and commission forms using an alternate page format. Copies may be stapled or bound.
(c) Filings formatted to print on paper larger than 8-1/2 inches by 11 inches may not be reduced before filing if doing so will make the substantive text, graphics, or photographic material illegible. Instead, oversized paper filings must be folded to 8-1/2 inches by 11 inches before filing. Electronic filings containing documents that should be printed on oversized paper must identify those documents and the proper paper sizes necessary to print legible copies of the documents. If the oversized document is greater than 11 inches by 17 inches and is part of a filing that is to be made electronically, a placeholder page generally describing the oversized document must be inserted in the filing where the oversized document otherwise would be and must be filed with the commission under 3 AAC 48.090(b)(3) with a cover letter that includes the commission's docket or tariff advice number for the corresponding electronic filing, and the title, filed date, and page reference of the electronic filing to which the oversized filing pertains. An electronic filing with a placeholder page is not complete until the paper version of the oversized document is officially received under 3 AAC 48.090(a) by the commission. Oversized documents must have not less than one-half inch margins on all sides and must be legible.
(d) Filings that are formatted to include distinct divisions, whether filed on paper or electronically in accordance with 3 AAC 48.095, must identify those divisions by a cover page inserted at the beginning of the division indicating the name or title of each division. The name or title must be roughly centered on the page and be exclusive of all other information.
(e) The requirements of (a) of this section do not apply to filings submitted under (c) of this section, 3 AAC 48.100(k), or 3 AAC 48.330, or to filings using commission forms that require a different format. However, any submission must be legible and otherwise comply with this section.
(f) The commission will not accept a filing that fails to meet the requirements of this section.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.06.140
- Eff. 2/16/2012, Register 201; am 11/6/2016, Register 220
3 AAC 48.030 Fees, remittances and charges
(a) Every charge payable to the commission shall be transmitted by letter indicating the amount and purpose thereof.
(b) Every remittance shall be by money order, bank draft, or check payable to the Regulatory Commission of Alaska. Remittances in coin or currency are tendered at the risk of the loss of money sent in that manner.
(c) Postage stamps shall not be sent as a remittance unless the remitter is so directed.
(d) Every fee required by statute in connection with applications relating to certificates of public convenience and necessity, electric reliability organization certificates, or any other matter which by statute requires formal action by the commission must be paid in full before the matter will be docketed for consideration. Every charge for copying; printing; reproducing; furnishing copies of reports, orders, pleadings, tariff sheets, regulations, or other items; and all costs allocated under AS 42.05.221(e), 42.05.401(b), 42.05.651; or AS 42.06.610 must be paid promptly upon receipt of the commission's invoice or order designating the amount owed. Failure to remit the amount due will, as appropriate, and at the commission's discretion, result in
(1) discontinuance of the service for which payment is due;
(2) denial of standing to participate in a proceeding in which costs may be allocated, until the amount due is paid;
(3) refusal of the commission to accept or act upon any application or tariff filing of the person who is in arrears, until the amount due is paid; and
(4) referral of the problem to the attorney general for appropriate action pursuant to AS 42.05.561 - 42.05.611 or AS 42.06.530 - 42.06.570.
(e) The commission may, by general order, prescribe appropriate charges to recover, in whole or in part, the costs it incurs in furnishing copies of notices, reports, orders or any printed or typed material in its possession, except privileged information or records.
History
- Authority: AS 42.05.141; AS 42.05.571; AS 42.06.140 AS 42.05.151; AS 42.05.581; AS 42.06.210 AS 42.05.201; AS 42.05.601; AS 42.06.607 AS 42.05.221; AS 42.05.611; AS 42.06.610 AS 42.05.401; AS 42.05.651 AS 42.05.561; AS 42.05.770
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90; am 4/24/2004, Register 170; am 3/11/2022, Register 241
3 AAC 48.040 Confidential records
(a) Except as provided in (b) of this section, the records in the possession of the commission or its advisory staff are open to inspection by the public during regular office hours.
(b) The following records are confidential and are not open to inspection by the public unless they are released under 3 AAC 48.049 or court order or their release is authorized by the person with confidentiality interests:
(1) bids for contracted services received in response to an invitation to bid issued by the commission until after the notice of intent to award a contract is given by the commission;
(2) communications relating to personnel matters and medical or other personal information that, under governing personnel practices and the laws of the state, are not public information;
(3) records filed with the commission that are confidential under AS 42.06.445(c);
(4) records classified as confidential under a protective order of the commission or the court;
(5) records designated as confidential by written agreement among the parties to adjudicatory matters before the commission for the purpose of conducting discovery;
(6) communications, regarding confidential legal advice or assistance, between legal counsel for the commission and the commission, its advisory staff, or its consultants, and documents prepared by or at the direction of legal counsel that contain investigative conclusions or are created for litigation or adjudicatory matters involving the commission;
(7) preliminary records relating to an investigation by the commission until the investigation is complete or formal proceedings have been initiated by the commission;
(8) records of deliberations on adjudicatory matters before the commission;
(9) notes, drafts, and analyses used to aid the commission in the preparation of any order or finding on adjudicatory matters;
(10) records of a regulated public utility, electric reliability organization, pipeline carrier, or pipeline submitted to or copied by the commission's advisory staff during any audit, review, or investigation in connection with any formal or informal proceeding;
(11) records classified as confidential in accordance with 3 AAC 48.045;
(12) financial records filed in support of an application for a certificate of public convenience and necessity to provide local exchange telecommunication services in a competitive local exchange market;
(13) critical electric infrastructure information within the meaning given in 18 C.F.R. 388.113(c); and
(14) cybersecurity incident information, including any information related to, describing, or that could be used to plan or cause any malicious or suspicious event that disrupts, or was an attempt to disrupt, the operation of those programmable electronic devices and communications networks, including hardware, software, and data, that are essential to the reliable operation of the interconnected bulk-electric system; in this paragraph,
(A) "cybersecurity incident" has the meaning given in AS 42.05.790;
(B) "interconnected bulk-electric system" has the meaning given in AS 42.05.790.
History
- Authority: AS 40.25.110; AS 42.05.671; AS 42.06.140 AS 40.25.120; AS 42.05.762; AS 42.06.445 AS 42.05.141; AS 42.05.765 AS 42.05.151; AS 42.05.770
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90; am 7/12/92, Register 123; am 3/21/2003, Register 165; am 4/20/2006, Register 178; am 3/25/2017, Register 221; am 3/11/2022, Register 241
3 AAC 48.045 Procedure to classify records as confidential
(a) A person wishing to protect a record filed with, served upon, or otherwise made available to the commission must file with the commission a petition identifying the record to be protected and setting out good cause, including facts, reasons, or other grounds, for the commission to classify that record as confidential. If, at the time of filing, the person wishes to protect a record under this section, that person must stamp or otherwise mark the record as "confidential," and must file that record separately from any public record. If a person wishes to protect a record that has already been filed with the commission, that person must file a request with the commission to have that record marked as "confidential" and filed separately from any public record. A person may not file electronically any confidential record, and any document electronically filed with the commission is a public record in accordance with AS 42.05.671(a) and AS 42.06.445(a). The commission will reject an electronic filing, without releasing it as a public record, if the filing plainly contains confidential information. However, nothing in this subsection requires or imposes a duty on the commission to screen a filing for confidential information, and the commission will not screen a filing for confidential information.
(b) Good cause to classify a record as confidential under this section includes a showing that
(1) disclosure of the record to the public might competitively or financially disadvantage or harm the person with confidentiality interest or might reveal a trade secret; and
(2) the need for confidentiality outweighs the public interest in disclosure.
(c) A person who opposes a petition filed under (a) of this section may file a statement of opposition to the petition within five days of the filing of the petition with the commission. The statement must set out the facts and reasons why the record under consideration should not be classified as confidential.
(d) Unless the public interest or considerations of justice require expedited action, the decision of whether to grant or deny a petition to classify a record as confidential, in whole or in part, will be issued by the commission within 30 days following the filing of the petition.
(e) Pending the commission's action on a petition filed under (a) of this section, the record identified in the petition will be treated as confidential.
(f) Upon a determination by the commission that good cause exists under (b) of this section, an order will be issued by the commission that classifies the record as confidential and restricts access to the record or sets out other reasonable terms or conditions regarding access to it.
History
- Authority: AS 42.05.141; AS 42.05.671; AS 42.06.445 AS 42.05.151; AS 42.06.140
- Eff. 6/29/84, Register 90; am 7/12/92, Register 123; am 2/16/2012, Register 201
3 AAC 48.047 Denial of petition to classify records as confidential
(a) If the commission denies a petition filed under 3 AAC 48.045, the commission will notify the petitioner and any person opposing the petition of the commission's determination to deny the petition.
(b) Within seven days following service of notice of a determination denying the petition, the petitioner may
(1) petition for reconsideration; or
(2) petition to withdraw the record.
(c) If neither reconsideration nor withdrawal of the record is requested, the record becomes public at the end of the seven-day period prescribed in (b) of this section.
(d) If reconsideration or withdrawal of a record is requested under (b) of this section and the request is denied by the commission, the commission will notify the petitioner and the record becomes public on the date set out in the commission's order denying reconsideration or withdrawal.
(e) If a petition for reconsideration or for withdrawal is granted, the commission will issue an order in accordance with 3 AAC 48.045(f).
History
- Authority: AS 42.05.141; AS 42.05.671; AS 42.06.445 AS 42.05.151; AS 42.06.140(a)
- Eff. 6/29/84, Register 90; am 7/12/92 Register 123
3 AAC 48.049 Access to confidential records
(a) A confidential record will not be made public or furnished to any person other than to the commission, its advisory staff, its consultants, and other authorized representatives, except under a subpoena duces tecum or as provided under (b) - (h) of this section.
(b) A person may file a written motion requesting access to a record that the commission has designated as confidential. The motion must identify as specifically as possible the record to which access is sought and must set out the reasons access is sought.
(c) The person filing the motion described in (a) of this section shall serve the person with confidentiality interests in the record with a copy of the motion. Within 15 days following service of the motion, the person with confidentiality interests in the record may submit its response.
(d) The commission will, at the earliest possible time, issue its determination to grant or deny the motion requesting access, as follows:
(1) if the commission determines that the record should be made public, the commission will notify the person filing the motion and the person with confidentiality interests in the record of the commission's intent to release the record;
(2) within seven days following service of the notice of the commission's intent to release, the person with confidentiality interests in the record may petition for reconsideration or for withdrawal of the record;
(3) if neither reconsideration nor withdrawal of the record is requested, the record becomes public at the end of the seven-day period prescribed in (2) of this subsection;
(4) if reconsideration or withdrawal of the record is requested under (2) of this subsection and the request is denied, the commission will notify the person with confidentiality interest in the record and the person filing the motion for access and the record becomes public on the date set out in the commission's order denying reconsideration or withdrawal;
(5) if a petition for reconsideration or for withdrawal of the record is granted, the commission will issue an order that reclassifies the record as confidential or restricts access to it.
(e) Disclosure of a record covered by a protective order of the commission or the court that prescribes procedures for disclosure other than those contained in this section will be governed by the terms of the order rather than by this section.
(f) A record designated as confidential by order of the commission and entered into evidence in an adjudicatory matter will be disclosed to the parties in the matter under a protective order unless this requirement is waived by the person with confidentiality interests in the record. Examination of the confidential record will be conducted by the commission in camera, and the portions of the record that are confidential will be placed under seal by the commission.
(g) If a party intends to enter as evidence a record designated as confidential under 3 AAC 48.040(b)(5) or (b)(10), that party shall provide the person with confidentiality interests in the record at least five days' notice of that party's intent. Unless within five days after service of that notice the person with confidentiality interests in the record files a petition for confidential status of the record under 3 AAC 48.045(a), the record becomes public when presented to the commission.
(h) If the confidential record to which access is sought is in the possession of a consultant employed by the commission and if access is granted, the person who requests the record will, in the commission's discretion, be required to reimburse the consultant directly for costs incurred in producing the record.
History
- Authority: AS 42.05.141; AS 42.05.671; AS 42.06.445 AS 42.05.151; AS 42.06.140
- Eff. 6/29/84, Register 90; am 7/12/92 Register 123; am 3/21/2003, Register 165; am 4/20/2006, Register 178
3 AAC 48.050 Inspection of records and facilities
(a) The facilities and records of a public utility, electric reliability organization, or pipeline carrier are not available to the public for inspection, copying or any purpose, other than to furnish a service or commodity, except
(1) as otherwise provided by statute or by an applicable rule, regulation, or general order of the commission;
(2) by specific order of the commission;
(3) with the prior voluntary consent of the utility, electric reliability organization, or pipeline carrier; and
(4) upon enforcement of a subpoena duces tecum or other legal process.
(b) A member of the commission advisory staff and any agent, consultant, or other authorized representative of the commission must, upon presentation of authentic credentials issued by the commission, be allowed access to the premises of any utility, electric reliability organization, or pipeline carrier during its regular business hours to investigate, inspect, examine, evaluate, or analyze its rates, services, facilities, accounts, books, records, contracts, and operating practices, to make copies of any record, account, contract, or other document or paper of the utility, electric reliability organization, or pipeline carrier, or to implement, in any other way, any jurisdictional function of the commission.
(c) If office and desk space is required to perform any function listed in (b) of this section, the utility, electric reliability organization, or pipeline carrier shall provide it at a conveniently located place that is reasonably comfortable, adequately lighted, and otherwise suitable. If the utility, electric reliability organization, or pipeline carrier does not have satisfactory office and desk space in its own quarters, it shall make other suitable arrangements, including, if ordered by the commission, direct payment by the utility, electric reliability organization, or pipeline carrier of rental or lease charges for office and desk space selected by the commission.
(d) Public utilities, electric reliability organizations, and pipeline carriers shall, in every way possible within reason, assist the commission's advisory staff, and its agents, consultants, and representatives in the performance of any function listed in (b) of this section.
(e) An action or responsibility applicable to public utilities, electric reliability organizations, and pipeline carriers under (b), (c), or (d) of this section is also applicable to the affiliated interests of public utilities, electric reliability organizations, and pipeline carriers, but only to the extent required to obtain, copy, examine, and analyze any contract, record, account, document, income tax return, report, or paper directly or indirectly relating to a written or unwritten contract or arrangement between a utility, electric reliability organization, or pipeline carrier and its affiliated interests.
(f) Each jurisdictional utility, electric reliability organization, or pipeline carrier that does not keep, in one or more offices located in this state, all of its books, accounts, records, and papers relating to its utility, electric reliability organization, or pipeline operations in this state shall make application to the commission for an order authorizing it to keep all or part of them elsewhere. That application must
(1) with reasonable particularity, list and describe the records of its utility, electric reliability organization, or pipeline operations in this state that are kept at each specifically described location in this state;
(2) with reasonable particularity, list and describe the records of its utility, electric reliability organization, or pipeline operations in this state that are kept at each specifically described location in places other than within this state;
(3) specifically request permission to continue keeping either all or part of the records described in (2) of this subsection at the places where they are located, or at other specifically described places, outside this state; and
(4) set out, in complete detail, the grounds for a request made under (3) of this subsection.
(g) The commission will docket each application submitted under (f) of this section, will notice it to the public, may hold a hearing on it, and will enter an appropriate order based upon the facts of record.
(h) If a utility, electric reliability organization, or pipeline carrier has a contract or arrangement with an affiliated interest that keeps accounts, records, or other supporting information pertaining to those documents outside of this state, the utility, electric reliability organization, or pipeline carrier shall notify the commission of the identity, content, and location of the documents. If a change occurs in the identity, content, or location of the documents, the utility, electric reliability organization, or pipeline carrier shall notify the commission within 30 days after the date of the change.
(i) If the commission authorizes, or requires, a utility, electric reliability organization, or pipeline carrier to keep any of its accounts, records, and supporting information outside this state, the utility, electric reliability organization, or pipeline carrier may not deviate from the terms of the commission's order
(1) with respect to the places where its records and accounts are kept without first notifying the commission as to the change; or
(2) with respect to the kinds of accounts and records that are kept at each location without first applying for, and obtaining, authority to do so.
(j) If a utility, electric reliability organization, or pipeline carrier or its affiliated interest elects to pay the expenses of sending commission personnel to any out-of-state place where its records are kept, the utility, electric reliability organization, or pipeline carrier shall provide transportation and, within 30 days after billing, reimburse the commission for the expenses incurred by the commission in sending personnel to examine the utility's, electric reliability organization's, or pipeline carrier's or its affiliated interest's books and records at the place where they are kept. The expenses subject to reimbursement will be documented and will fully comply with applicable state regulations. The chair of the commission will approve the expenses before submitting the bill to the utility, electric reliability organization, or pipeline carrier for payment.
(k) - (n) Repealed 6/29/84.
(o) Repealed 4/20/2006.
History
- Authority: AS 42.05.141; AS 42.05.501; AS 42.06.430 AS 42.05.151; AS 42.05.770; AS 42.06.440 AS 42.05.491; AS 42.06.140
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90; 7/12/92, Register 123; am 3/21/2003, Register 165; am 4/20/2006, Register 178; am 3/11/2022, Register 241
3 AAC 48.055 Subpoenas
(a) A subpoena duces tecum for the production of books, records, papers, or other documents of any sort will be issued by the commission, at its discretion, upon application. The subpoena will be under the seal of the commission, on a commission form, and will describe the documents ordered to be produced in sufficient detail to permit ready identification.
(b) Applications for the issuance of a subpoena requiring the attendance of a witness for the purpose of taking oral testimony before the commission must be in writing and may be made by letter or wire.
(c) Unless otherwise directed by the commission, a subpoena or subpoena duces tecum will be issued by the commission only upon verified application showing general relevance and reasonable scope of the evidence sought. An application for a subpoena duces tecum must also specify with particularity the books, papers, or documents desired, and the facts expected to be proved by them. However, for good cause shown, the officer presiding at a hearing may issue a subpoena or subpoena duces tecum upon oral request made upon the record.
(d) A subpoena will be under the seal of the commission, will be on a commission form, and will not be issued unless the applicant establishes that the applicant has a proper relationship to the matter and gives the name and address of the desired witness.
(e) Signed and sealed blank subpoenas or subpoenas duces tecum will not be issued to anyone. The name and address of the witness will be inserted in the original subpoena, a copy of which will be filed in the proceeding. A subpoena or a subpoena duces tecum will show at whose request the subpoena is issued.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.06.140(a)
- Eff. 6/29/84, Register 90
3 AAC 48.060 Formal and informal procedures and files
(a) The commission shall maintain separate files for all formal proceedings, assign a docket number and an appropriate caption to each formal proceeding and maintain a docket book. The docket pages for each proceeding shall contain
(1) the assigned docket number and caption of the proceeding;
(2) the date the proceeding was instituted;
(3) the general nature, filing party and date of each order, filing and submittal;
(4) the name of the court, and number assigned by the court to any order that is appealed;
(5) a cross-reference showing the order book and page where the original copy of each order is filed.
(b) A separate series of docket numbers will be used for each calendar year. Each series will begin with a capital letter "U" for utility proceedings, "P" for pipeline proceedings, "R" for rulemaking proceedings, "I" for informational proceedings, or "E" for electric reliability organization proceedings, followed by a dash, the year designated by the last two numbers of the year, another dash, and then a number starting with the number "001" for the first formal proceeding and ending with the sequential number for the last proceeding docketed in a calendar year. For the year 2012, for example, the first proceeding that is docketed will be assigned Docket No. U-12-001 if it is a utility proceeding, or P-12-001 if it is a pipeline proceeding and the last one, if there is a total of 75, would be in Docket No. U-12-075 if it is a utility proceeding or P-12-075 if it is a pipeline proceeding.
(c) The caption originally assigned to a proceeding by the commission shall not be changed in any way except by formal order and shall be used by the commission and all parties to the proceeding unless and until it is revised by order of the commission. All pleadings shall contain the officially assigned caption and the docket number shall be placed to the right of the caption, the same as in commission orders.
(d) The commission shall maintain a separate and complete file for each formal proceeding containing the original copy of each filing together with the hearing transcript, if any, and all other material relating to the proceeding.
(e) Whether issued by the commission or by an administrative law judge, and whether issued electronically or on paper, orders in each proceeding will be designated numerically in the sequence in which they are issued. An errata to an order will be designated by the associated order number and the suffix letter "E."
(f) Informal complaints will be kept in a separate file and will be numbered in the same general manner described in (b) of this section, except that the capital letter "C" will be used for utilities, electric reliability organizations, and pipeline carriers instead of the capital letters "U," "E," and "P."
(g) If an informal complaint is not resolved by informal action, the complainant may request the commission to take formal action. If the commission institutes a formal proceeding, the entire informal file shall be transferred to the file of the formal proceeding and become a part of the correspondence pertaining to the formal proceeding. The informal file shall not become a part of the record of the formal proceeding, however, unless and until the informal file is admitted into evidence in a hearing in the formal proceeding.
(h) The commission will establish and maintain a separate set of files containing a copy of every special contract and the complete effective tariff of every utility, electric liability organization, and pipeline carrier together with
(1) every tariff advice letter and tariff letter; and
(2) all associated correspondence.
(i) If a tariff filing is suspended, in whole or in part, during the statutory period of notice to the commission and the public, one copy of the filing will be transferred to the formal proceeding file in which the commission's suspension order was entered, together with a copy of the advice letter and all unprivileged material relating to the filing. Pending hearing on a suspended filing, the commission may issue an order instituting an investigation, naming parties, or establishing schedules, or may issue other orders it considers appropriate. Each order relating to a suspended tariff filing will be entered in the same proceeding as the one in which the suspension order was entered.
(j) Applications for water and wastewater provisional certifications will be kept in a separate set of files and will be numbered in the same general manner described in (b) of this section, except that the capital letter "W" will be used instead of the capital letter "U," "E," or "P."
(k) Intrastate interexchange registrations will be kept in a separate set of files and will be numbered in the same general manner described in (b) of this section, except that the capital letters "RX" will be used instead of the capital letter "U," "E," or "P."
(l) The commission will maintain a separate and complete file for each water and wastewater provisional certification proceeding and each intrastate interexchange registration proceeding, containing the original copy of each filing and all other material related to the proceeding.
(m) The commission will establish and maintain a separate set of files containing a copy of every rule and petition for a new or revised integrated resource plan of every electric reliability organization, filed under AS 42.05.780, together with all associated correspondence.
History
- Authority: AS 42.05.141; AS 42.05.361; AS 42.06.400 AS 42.05.151; AS 42.05.770 AS 42.05.201; AS 42.06.140
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90; am 3/21/2003, Register 165; am 2/16/2012, Register 201; am 11/6/2016, Register 220; am 3/11/2022, Register 241
3 AAC 48.070 Formal proceedings
(a) Except as otherwise provided by 3 AAC 48.030 and 3 AAC 48.650, an application for a certificate of public convenience and necessity or electric reliability organization certificate or for the revision, sale, lease, rental, or inheritance of a certificate; or for the authority to acquire a controlling interest in a certificated public utility, electric reliability organization, or pipeline carrier; or any other application required by AS 42.05 or AS 42.06, will be docketed and considered in a formal proceeding.
(b) A tariff filing will not be docketed or considered in a formal proceeding unless it is suspended by order of the commission within the statutory notice period, or within the regulatory notice period set under 3 AAC 46.320 for an electric reliability organization.
(c) The commission may institute a formal proceeding in regard to any jurisdictional matter, either on its own motion or on complaint.
(d) An electric reliability organization rule or petition for a new or revised integrated resource plan under AS 42.05.780 will not be docketed or considered in a formal proceeding unless it is suspended by order of the commission within the regulatory notice period set under 3 AAC 46.260 for a new or revised integrated resource plan or 3 AAC 46.470 for an electric reliability organization rule.
History
- Authority: AS 42.05.141; AS 42.05.271; AS 42.06.290 AS 42.05.151; AS 42.05.281; AS 42.06.300 AS 42.05.171; AS 42.05.770; AS 42.06.340 AS 42.05.241; AS 42.06.140; AS 42.06.400 AS 42.05.261; AS 42.06.260
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90; am 3/11/2022, Register 241
3 AAC 48.080 Appearances
(a) In any formal proceeding in which pleadings are filed, a party may appear before the commission and be represented by
(1) attorneys at law admitted to practice in Alaska;
(2) attorneys at law qualified and entitled to practice before the highest court of record of any other state;
(3) himself or herself;
(4) a co-partner of a partnership;
(5) an officer, or full-time employee, of a corporation;
(6) bona fide officer, or full-time employee of an unincorporated association;
(7) a duly authorized officer, agent or employee of a political subdivision; or
(8) any persons who can satisfy the commission that they possess the qualifications necessary to enable them to render valuable service before the commission, and that they are otherwise competent to advise and assist in the presentation of matters before the commission.
(b) An attorney may be permitted to withdraw from a proceeding before the commission under the conditions and in the manner prescribed in Alaska Rule of Civil Procedure 81 for the withdrawal of an attorney from a superior court proceeding.
(c) The commission may disqualify, and deny, temporarily or permanently, the privilege of appearing or practicing before it in any way, to any individual who is found by the commission, after hearing, either to be lacking in the requisite qualifications to represent others or in character or integrity or to have engaged in unethical or improper professional conduct.
History
- Authority: AS 42.05.141; AS 42.05.151
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90
3 AAC 48.090 Filing, service, amendment and disposition of pleadings
(a) A document is considered filed with the commission on the date it is officially received by the commission. If a party has the right, or is required, to perform some act within a prescribed period after notice or a pleading is served on that party, and the notice or pleading is served by United States mail or a similar delivery service, by hand, or by electronic means, the prescribed period begins the day after the date of certification of service. In computing any period of time prescribed or allowed by rule, order, or statute, the day of the act, event, or default after which the designated period of time begins to run is not included, in accordance with AS 01.10.080. If the last day of the period so computed is a Saturday, Sunday, or state legal holiday, the period runs until the end of the commission's next regular business day. When the period of time prescribed or allowed is less than seven days, intermediate Saturdays, Sundays, and state legal holidays are excluded in the computation. A filing, whether filed on paper or electronically, that the commission receives on a Saturday, Sunday, or state legal holiday, or that the commission receives after 5:00 p.m. on a business day, will be treated as officially received the next business day. The commission will not accept a filing unless the commission receives it free of any delivery charge or claim. In a specific proceeding, the commission may set a deadline that modifies when a filing will be accepted.
(b) Unless otherwise directed by the commission, service of pleadings, orders, and other documents is valid and complete if made in accordance with this subsection, as follows:
(1) except as provided in (3) of this subsection, service is completed by
(A) the commission when it
(i) issues an order by hand, by United States mail or a similar delivery service, or by electronic means to the parties of record; or
(ii) publishes an order in an informational or regulations proceeding on the commission's website;
(B) a party when the party files electronically with the commission through the commission's website in accordance with 3 AAC 48.095 and the party successfully sends notification and a copy of the filing by electronic mail to the other parties, or to their attorneys of record or other authorized representatives;
(C) a party when the party files with the commission on paper in accordance with (3) of this subsection and the party serves notification and its filing to other parties, or their attorney of records or other authorized representatives by hand or by United States mail or a similar delivery service;
(2) a party with electronic mail shall provide the commission and other parties with the party's electronic mail address; a party shall make and accept service electronically, instead of by paper copies, in docketed proceedings; compliance with this requirement is achieved by including the electronic mail address within the signature block of submitted pleadings in accordance with 3 AAC 48.095(h) or within the letterhead or signature block of other correspondence; concurrent with the party's first filing in the proceeding, a party that is technologically unable to send or receive electronic documents in accordance with this subsection shall indicate in the signature block "no electronic mail address"; parties shall serve other parties electronically as follows:
(A) the sending party shall use electronic mail to complete service to all other parties in docketed proceedings; a sending party may not substitute paper service for electronic service on another party, unless both parties agree to be served in this manner;
(B) parties are responsible for coordinating with each other regarding proper electronic mail addresses, file size limitations, filters, and other technical matters that might affect electronic service; unless the parties agree otherwise, an electronic mailing, including its attachments, may not exceed 10 megabytes; a sending party may divide service into multiple electronic mailings to accommodate electronic mailbox size restrictions, if each electronic mailing clearly identifies the division;
(C) electronic service to another party may be completed either by providing the files as attachments to an electronic mailing or by including hyperlinks to the files in an electronic mailing; submissions to the commission may not include hyperlinks;
(3) A party filing oversized documents or filing confidential materials on paper to the commission must provide electronic service of those documents to other parties in docketed proceedings, in accordance with (2) of this subsection, unless the sending and receiving party agree to alternative means of service;
(A) an original and, if possible, a compact disc containing the file formats approved by the commission in accordance with 3 AAC 48.095(d) - (f) and containing the filing made to the commission; the party shall clearly label the compact disc with the party's name, docket number, type of pleading, date of submission, and file names; the party shall also provide signed verification that the documents contained on the compact disc are an exact replica of the documents filed with the commission in accordance with this section;
(B) five copies of each document to the commission, with one additional copy for each additional docket if the matter is a consolidated proceeding; documents exceeding 11 inches by 17 inches and filed under 3 AAC 48.025(c) are not subject to this subparagraph; however, the party shall supplement the party's filing with additional copies if requested to do so by the commission after filing; and
(C) one copy to each other party's attorney of record or other authorized representative, or to the other party if the other party is unrepresented; a party filing oversized documents or filing confidential materials on paper to the commission must provide electronic service of those documents to other parties in docketed proceedings, in accordance with (2) of this subsection, unless the sending and receiving party agree to alternative means of service;
(4) a sending party may substitute electronic service for paper service of confidential material on another party, if both parties agree to be served in this manner;
(5) service between parties under this subsection must be completed no later than 5:00 p.m., absent agreement of the parties.
(c) Pleadings shall be liberally construed and any defect that does not substantially affect the rights of the parties will, in the commission's discretion, be disregarded. Subject to any conditions it may impose, the commission may allow a pleading to be amended, withdrawn, corrected, supplemented or to be made orally with written notice to any other party. Pleadings that are considered grossly defective may, in the commission's discretion, be disregarded or rejected and returned to the pleading party together with an explanation, in writing, of the reason for the action taken.
(d) At any stage of the proceeding, prior to entry of a commission's final order
(1) an application or petition may be withdrawn without order of the commission by filing a notice of withdrawal;
(2) the proceeding may be terminated by filing a stipulation agreed to by all parties of record provided the commission does not find that the public interest requires the proceeding to be continued;
(3) a party shall promptly file an amendment to any pleading explaining any changed facts or circumstances if, after the date of the original pleading, there is a significant change in the information required to be shown in pleadings by 3 AAC 48.010 - 3 AAC 48.170 or in regard to any other relevant matter; or
(4) the commission may, for reasons stated in its order, terminate a proceeding at the request of an interested party or on its own motion.
(e) Repealed 6/29/84.
(f) If a pleading is filed with the commission setting out a violation or omission by any party, the respondent has the right to satisfy or answer the complaint according to the following:
(1) Any party against whom such a pleading is directed who wishes to defend or contest it, or to make any representation to the commission in connection with it, shall file with the commission and serve on the petitioner and all parties, a written answer to the pleading within 20 days after service of the pleading upon that party, unless for good cause, the commission extends or shortens the time within which answers may be made. Answers must be so drawn as to inform the commission and all parties of record fully and completely as to the nature of the answer, and must specifically admit or deny in detail all material allegations of the pleading against which the answer is directed. Matters alleged by way of cross-complaint or affirmative defense must be separately stated and numbered. The commission will, in its discretion, order a respondent to file an answer if it considers that action necessary. If a party fails to answer within the time specified in this paragraph, the party is considered to have denied generally the allegation of the complaint or petition and is precluded, except with the consent of opposing parties and the commission, from setting up an affirmative defense in the proceeding; the commission will proceed with the matter solely upon the issues set out in the complaint or petition. Answers are not required in a rate proceeding initiated as a result of a tariff filing.
(2) A party may amend its pleading once, as a matter of course, at any time before a responsive pleading is served. If the pleading is one to which no responsive pleading is permitted and the action has not been placed upon the hearing calendar, the party may so amend it at any time within 20 days after it is served. Otherwise a party may amend its pleading only by permission of the commission. A party shall plead in response to an amended pleading within the time remaining for response to the original pleading or within 10 days after service of the amended pleading, whichever period may be the longer, unless the commission otherwise orders.
(g) A party desiring to reply to an answer shall serve the commission within 20 days after service of the answer.
(h) If the commission so orders in any proceeding, any application, petition, complaint, motion, or other document designated by the commission shall be served by the party that submitted the filing on all persons whom the commission determines may be affected by the proceeding. After a proceeding has been instituted, each answer, motion, or other document subsequently filed by any party must be served on all attorneys and parties of record concurrently with the filing of that document with the commission together with proof of service.
(i) Whenever, by rule or order, an act is required or allowed to be performed on or before a specified date, the commission, for cause shown, may
(1) on its own initiative or pursuant to motion and with or without notice, order the period extended if the order is issued prior to the date originally specified; or
(2) pursuant to motion, with notice given after the expiration of the specified period, permit the act to be performed provided the failure to act was the result of excusable neglect or oversight, but a permission thus granted shall not relieve a party from complying with additional requirements the commission may specify for obtaining relief from a particular failure.
(j) A formal proceeding shall not be terminated without issuing at least one order containing the commission's findings, conclusions and decision. If final order of the commission is reconsidered or subject to judicial review, the proceeding shall be reopened under the same docket number until the issues being reconsidered or reviewed have been resolved and no further action by the commission is required.
History
- Authority: AS 42.04.080; AS 42.05.151; AS 42.06.140 AS 42.05.141; AS 42.06.055
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90; am 8/6/92, Register 123; am 5/5/2000, Register 154; am 2/16/2012, Register 201; am 11/6/2016, Register 220
3 AAC 48.091 Motions
(a) A motion or related filing must comply with the filing, service, and general pleading requirements of 3 AAC 48.090 - 3 AAC 48.100. A motion, any opposition to, or support for, the motion, and any reply must contain a complete written statement of the reasons in support of the pleading including the points and authorities upon which the party will rely. A party may not file a supporting memorandum as a separate document from the party's corresponding motion, opposition, or reply.
(b) With a motion, the moving party shall file a legible copy of each photograph, affidavit, and other documentary evidence that the party intends to submit in support of the motion.
(c) Unless otherwise ordered by the commission, or otherwise stipulated to by the parties with commission approval, a party opposing or supporting a motion shall, no later than 10 days after service of the motion upon that party, file the complete written statement of reasons in support of the pleading as required under (a) of this section and a legible copy of each photograph, affidavit, and other documentary evidence upon which the party intends to rely.
(d) Notwithstanding the time specified in (c) of this section, the time for filings related to a motion to dismiss, a motion for summary disposition, or any other dispositive motion is 15 days.
(e) The movant may file a reply that complies with (a) of this section and supplemental material, if any, no later than three business days after the date of service of the opposition to or support for the motion. These filings are subject to the requirements of (a) and (b) of this section.
(f) The commission will not consider a written motion before an opposing party has a reasonable opportunity to respond, unless it clearly appears from the specific facts in the motion or commission records that immediate and irreparable injury, loss, or damage would result to the moving party before any reasonable opportunity to respond could be given.
(g) In a separate motion, a party may move for expedited consideration of its principal motion by requesting relief in less time than would normally be required for the commission to issue a decision. If the party files electronically under 3 AAC 48.095, the party shall also use the commission's website features to indicate that the filing includes a motion for expedited consideration, if the motion is required to be submitted with the filing. A failure to properly indicate that the filing includes a motion for expedited consideration may delay commission review of the request. Courtesy copies of an electronically filed motion, regardless of when or how they are received by the commission, will not be considered part of the official record of the proceeding, and the commission will not base a timeline upon their receipt. The motion must
(1) be captioned "Motion for Expedited Consideration";
(2) comply with other applicable provisions of this section;
(3) include an affidavit or other evidence showing the facts that justify expedited consideration and the date by which a decision on the principal motion is needed; and
(4) if the motion requests a decision before the usual time for response to the motion, include a certificate indicating when and how the opposing party was served with the motion, or, if the opposing party was not notified, what efforts were made to notify the opposing party and why it was not practical to notify the opposing party in a manner and at a time that a response could be made; in the certificate, the moving party shall indicate the position of the other parties on the request for expedited consideration if that position is known by the party.
(h) The commission will not rule on a motion for expedited consideration before the opposing party is allowed a reasonable opportunity to respond, without compelling reasons for an expedited decision and a showing by the movant of reasonable efforts to timely notify the opposing party.
(i) A stipulation between parties may be submitted in support of a motion but is not binding on the commission.
(j) The filing of a frivolous or unnecessary motion or frivolous or unnecessary response to a motion that unduly delays the course of the proceeding, or the filing of any motion to dismiss or motion to strike for the purpose of delay if no reasonable ground appears for the filing, will subject the person filing that pleading to imposition of sanctions set out in 3 AAC 48.155(c) and 3 AAC 48.170.
(k) If additional pertinent authority comes to the attention of a party after the party's pleading made under this section has been filed but before a decision has been issued on the motion, the party shall promptly file notice of additional pertinent authority with the commission and all parties. In its filing, the party shall refer to the page of the pleading to which the authority pertains, but the filing may not contain argument or explanations. The other party may file a response. Any response must be made promptly and is limited in the same manner as described in this subsection.
(l) Notwithstanding the time specified in (c) of this section, the time to file in opposition to or in support of a motion under 3 AAC 48.141 - 3 AAC 48.145 concerning discovery is five business days unless the presiding officer establishes a different time for response. Notwithstanding the time specified in (e) of this section, the time to file a reply to a response to a motion 3 AAC 48.141 - 3 AAC 48.145 concerning discovery is two business days unless the presiding officer establishes a different time for reply.
History
- Authority: AS 42.04.080; AS 42.05.151 AS 42.05.141; AS 42.06.140
- Eff. 4/13/2000, Register 154; am 2/16/2012, Register 201; am 8/18/2013, Register 207; am 11/6/2016, Register 220
3 AAC 48.095 Electronic filing requirements
(a) Unless otherwise specified by order or another applicable provision of this chapter, all filings submitted to the commission, with the exception of regulatory cost charge reports, may be filed electronically or on paper. Reports submitted in accordance with 3 AAC 47.050(b) or 3 AAC 47.060 shall be filed electronically, unless waived in accordance with ( l) of this section or otherwise specified by order. Parties and their representatives participating in docket proceedings before the commission shall serve and accept service electronically in accordance with 3 AAC 48.090(b). An electronic filing with the commission must be made through the commission's electronic filing systems using the commission's website. Public comments may be filed either electronically, including by electronic mail, or on paper. Additional copies of an electronic filing, in any form, are not required, and may be deleted or destroyed by the commission. Electronic mail may be submitted to facilitate the commission staff's work, if requested by the staff or the commission.
(b) Upon request, the commission may issue a user name and password to a person that seeks to file and accept service electronically through the commission's electronic filing systems using the commission's website. Use of the commission's electronic filing systems is subject to the following:
(1) the filer's use of a commission-issued user name and password constitutes the filer's verification that the filer has the requisite authority to make the filing on the filer's own behalf or on behalf of the entity that the filer purports to represent;
(2) if a filer believes that the security of an existing user name or password has been compromised, the filer shall notify the commission and, if possible, change the password immediately;
(3) the commission may revoke a filer's participation in electronic filing and cancel the filer's user name and password if the commission determines that the filer or whoever is using the user name and password is abusing electronic filing privileges;
(4) for purposes of (3) of this subsection, abuse of electronic filing privileges includes knowingly permitting unauthorized use of a user name or password or knowingly engaging in actions that interfere, or attempt to interfere, with the security of the commission's electronic filing systems, including the introduction of a virus or destructive programming into the electronic filing systems;
(5) the commission may authorize additional users associated with a utility, electric reliability organization, pipeline carrier, or other entity.
(c) An electronic filing may be rejected if it is not in compliance with this chapter or for other good cause. The commission may combine or separate files within a filing, or documents within a file, if necessary for administrative efficiency or organizational clarity. Multi-topic electronic filings may be rejected. An electronic filing will be rejected by letter or electronically, if the filing
(1) contains an excessive number of files;
(2) is excessively large;
(3) does not have an appropriate extension indicating the file type;
(4) is corrupt or otherwise cannot be successfully read or processed by the commission; or
(5) contains, in violation of 3 AAC 48.045(a), confidential information.
(d) When submitting an electronic filing containing supporting documents, the filer shall make one submission containing an individual file for each document. Each individual file must be named consistent with (g) of this section.
(e) An electronic filing submitted to the commission must be filed in portable document format (pdf), and must be text-searchable. A filer shall provide an electronic filing in its native format, if requested to do so by the commission after filing. If possible, a filer shall convert a document from its native format into portable document format, rather than scan a paper copy. If a document is scanned into portable document format, the filer shall use the highest quality resolution available, and shall employ an optical character recognition (OCR) program so that copy and paste and keyword search functions may be used. A document may not be scanned in color, unless color is essential to understanding of the information, such as in certain kinds of graphs.
(f) An electronic filing may not be submitted with security settings that prevent printing, copying, and pasting of text from the files. The security settings on an electronic filing must allow the commission to apply its electronic date-received stamp to the files. A filing not meeting the requirements of this subsection will be rejected.
(g) An electronic file description and name must be as descriptive and concise as possible. The commission staff may change a file description or name if the change will assist staff processing of the file. The commission staff shall notify a filing entity, in writing, of any file description or file name changes.
(h) To verify an electronic filing by signature, a filer shall do the following:
(1) an electronic filing must include at least one signature block within the filing; the cover letter, application form, motion, or similar document within a filing must include, in the following format, a signature block or letterhead that includes the typewritten name, mailing address, telephone number, and electronic mail address of the signatory authorized to sign under 3 AAC 48.100(g) and 3 AAC 48.270(a):
Contact Name
Mailing Address
City, State, Zip Code
Phone: (xxx) xxx-xxxx
Fax: (xxx) xxx-xxxx
Electronic Mail Address: xxx@xxx.xxx;
(2) if the electronic filing is not based on a signed, scanned paper document, the filer shall apply an electronic signature to the electronic filing; if a filer does not have the requisite software to apply an electronic signature, the filer shall sign the signature line in the following manner: "/s/ (contact name)"; upon filing through the commission's website in accordance with an approved user identification and password, the electronic or typed signature is presumptively valid;
(3) a scanned filing must contain an original signature in ink, not an electronic signature or "/s/ (contact name)."
(i) A joint filing submitted on behalf of more than one party will be accepted electronically if
(1) the filing clearly indicates the parties on behalf of whom the filing is made; and
(2) each indicated party has applied the party's electronic or original signature, the filing party represents in the filing that the filing party is authorized to sign on behalf of the parties not signing on their own behalf, or any party not signing separately files a certificate of concurrence in accordance with (j) of this section; if a single person is authorized to file on behalf of more than one party, as indicated in a properly filed entry of appearance, a certificate of concurrence is not required from the represented parties.
(j) If a joint filing under (i) of this section is not signed by or on behalf of a party, that party shall file a certificate of concurrence no later than three business days after the commission has assigned a tracking number to the filing. The certificate must be filed in accordance with 3 AAC 48.090(b) and contain the following elements:
[Docket caption and number]
Certificate of Concurrence
[Party name] concurs with the filing [tracking number] made [date received by the commission] entitled [filing title/description].
/s/ [Contact Name]
Mailing Address
City, State, Zip Code
Phone: (xxx) xxx-xxxx
Fax: (xxx) xxx-xxxx
Electronic Mail Address: xxx@xxx.xxx;
(k) Service of filings in formal proceedings, as described in 3 AAC 48.070, must comply with 3 AAC 48.090(b).
(l) The following procedures and requirements apply to a waiver from the electronic filing requirements of this section:
(1) a person requesting a waiver from the requirements of this section must file an original and two copies of a pleading entitled "Request for Waiver of Electronic Filing Requirements"; the provisions of 3 AAC 48.091 do not apply to a request for waiver submitted under this section; the administrative law judge assigned to a docket or commission staff member assigned to review a report filed under 3 AAC 47.050(b) or 3 AAC 47.060 may reject a paper filing made without a pending waiver request, or proof of an existing waiver, if the filing was required to be submitted electronically;
(2) a request for a waiver of the electronic filing requirements for the duration of a docket or for a report filed under 3 AAC 47.050(b) or 3 AAC 47.060 may be granted if the requesting person
(A) does not own or have reasonable access to the electronic equipment and software necessary to make the electronic filing;
(B) does not have a broadband Internet access connection to make the electronic filing;
(C) would incur interexchange per-minute charges to make the electronic filing;
(D) lacks a scanner, and the scanner is necessary for the person to make the electronic filing; or
(E) provides an affidavit setting out the factual basis for why compliance is not reasonably possible or would lead to undue hardship;
(3) the requesting person must file with the commission and serve on all other parties the request for a waiver concurrently with the person's first filing in the docket proceeding; while the request for a waiver is pending, all other parties to the proceeding shall complete service in person upon the requesting person, or by United States mail or a similar delivery service;
(4) a party may not file an opposition to a request for a waiver;
(5) the commission or an administrative law judge may deny a request for a waiver for good cause; if no action is taken on a request for a waiver five business days or earlier after filing, the request for a waiver is granted;
(6) if, after receiving a waiver under this subsection, a person becomes able to send and receive electronic filings, the person shall notify the commission immediately; the waiver of the electronic filing requirements automatically terminates upon receipt by the commission of that notice;
(7) a waiver of electronic filing requirements applies to a party's participation in a specific docket proceeding or a specific report filed under 3 AAC 47.050(b) or 3 AAC 47.060 and continues for the duration of that docket or the specific report unless terminated under (6) of this subsection, or otherwise stated in a commission order.
(m) A certificate of service may not be filed as a separate filing, but may be either a separate file within the filing or contained within and at the end of the primary file. A certificate of service that includes service on a party by electronic means must be worded substantially as follows:
I hereby certify that on [date], a copy of [name of document] was served electronically on [names of parties served electronically, including electronic mail address used] by electronic means authorized by the commission, and on [name(s) and address(es) of parties served a paper version] by [method]. /s/ [person responsible for service].
(n) Material that is not available in electronic format and that cannot be converted to an electronic format acceptable to the commission must be filed on paper under 3 AAC 48.090(b). If material is filed on paper, the filer shall include a placeholder page at the appropriate place sequentially in the electronically filed document to which the material applies, with a conspicuous notation in the middle of the page in at least 14 point font: "(insert brief description) filed on paper only." An electronic filing with a placeholder page is not complete until the paper version of the omitted material is officially received under 3 AAC 48.090(a) by the commission.
(o) If a failure of the commission's electronic filing systems prevents a timely electronic filing, the filing shall be submitted by electronic mail to the commission's records and filings department, or submitted on paper. If a filer cannot timely file due to a failure of the commission's electronic filing systems, the commission will accept the filing as timely filed, without the need for the filer to submit a motion to accept late filing. If a filer's system failure causes a late electronic filing, the filer shall include with that filing a motion to accept late filing. That motion may not exceed three pages.
(p) If a filer does not receive an electronic mail acknowledgement that the commission has received an electronic filing, the filer shall contact the commission to verify that the electronic filing has been received.
(q) Notwithstanding (c)(1) and (2) of this section, a filing made in compliance with 3 AAC 46.220 and 3 AAC 46.230 that is too large to be filed online through the commission's electronic filing systems portal may be provided on a portable digital storage device with broad operating system compatibility. If the entity making the filing wishes to obtain a date-stamped receipt indicating that the commission has received the filing, the entity must provide a physical cover letter with the portable digital storage device. The commission will treat a filing made under this subsection as if it had been electronically filed under this section.
History
- Authority: AS 42.05.141; AS 42.05.770 AS 42.05.151; AS 42.06.140
- Eff. 2/16/2012, Register 201; am 11/6/2016, Register 220; am 3/11/2022, Register 241
3 AAC 48.100 General requirements of filings
(a) Pleadings before the commission shall be classified and designated as an application, complaint, cross-complaint, petition, protest, answer, reply or motion.
(b) In the order listed below, each pleading shall include
(1) the heading and caption (including the names of the parties and the docket number, if known);
(2) the allegations or statements of fact and law set forth in numbered paragraphs;
(3) the prayer or request of the party filing the pleading;
(4) the signature and execution of the pleading;
(5) the verification in compliance with applicable state law, including AS 09.63, when necessary; and
(6) the proof of service.
(c) Each pleading shall contain the heading "BEFORE THE REGULATORY COMMISSION OF ALASKA." The exact caption and docket number assigned by the commission, if known, shall be inserted immediately below the heading in every pleading filed after the date that the proceeding is docketed. This caption, when known, shall be followed by a brief description of the desired order, authorization, permission, or certificate, followed by a word designating the title of the document (e.g., the heading of a complaint shall designate the title of the document as a "COMPLAINT" and the heading of an answer shall set forth the title as "ANSWER"). The name of the party filing the pleading must be stated in the caption if the docket number is not known. Space must be left to the right of the caption for the insertion of the docket number by the commission in the event the pleading does not contain the docket number. The name of the complainant shall be followed by the word "COMPLAINANT"; the name of the respondent named in a complaint shall be followed by the word "RESPONDENT"; the name of an applicant shall be followed by the word "APPLICANT"; etc.
(d) The numbered paragraphs of each pleading shall contain
(1) correct citations to the law, rules, regulations or orders that govern the subject of the pleading;
(2) a complete and detailed statement of all facts and circumstances pertinent to the pleading, together with a correct reference to each appendix (designated as appendix "A," appendix "B," etc.) that is submitted in support of the pleading; and
(3) a statement as to the form of organization of the pleading party (e.g., private corporation, municipal corporation; incorporated borough, partnership, incorporated association, unincorporated association, joint-venture, individual, individual proprietorship, etc.) and, when applicable, the date of organization and the term or duration of the organization (e.g., 50 years, perpetual, etc.).
(e) The numbered paragraphs of a pleading shall be followed by the prayer which shall be a concise and complete statement of all relief sought by the pleader. The prayer should be brief, but should be complete to the end that an order granting the prayer would include all of the relief desired and requested by the pleader.
(f) The original of each pleading filed with the commission must be personally signed in ink, or in accordance with 3 AAC 48.095(h), by any one of the following:
(1) the party making the pleading or by each of the parties, if there is more than one party;
(2) an authorized official of the party;
(3) a co-partner of a partnership;
(4) an authorized officer or full-time employee of a corporation;
(5) an authorized bona fide officer or full-time employee of an unincorporated association; or
(6) the party's attorney or authorized representative.
(g) Beneath the signature of every attorney of record, party, or other person appearing on a filing, there must be typed, stamped, or printed the person's name and, for initial proceedings, the person's mailing address, telephone number, and, if applicable, attorney bar number and electronic mail address. The correct legal name of an unrepresented party, or the firm name of a party's representative, who signs the filing must appear above the signature of the person signing the filing on behalf of that entity. The first filing of a party, and only the first, must
(1) set out the address of the party and, if the party is a corporation, association, or other organized group, the state in which, and the law under which, it is organized; and
(2) state the name, title, mailing address, and, if applicable, electronic mail address of the person to whom correspondence and communications are to be addressed.
(h) Notices, orders, and pleadings may be served on the person designated for service under (g) of this section in accordance with 3 AAC 48.090(b).
(i) All balance sheets, income statements, journal entries, and other accounting exhibits, reports or statements shall conform to the applicable uniform system of accounts prescribed by the commission.
(j) Pleadings must be legible. Handwritten pleadings may be single-spaced, but the text of pleadings that are typewritten must be double-spaced except for quotations, which must be single-spaced and may be indented. Any process of reproduction may be used, if every copy is clear and permanently legible. The first time that a person's name is mentioned in the body of a pleading, it must be stated accurately and completely. For example, if a corporation's legal name is "The ABC Corporation," it may not be designated as "ABC Corp." But if the pleading party wishes, for any reason, to abbreviate a name used repeatedly in a pleading, the abbreviation must be set out in parentheses immediately following the first time that the name is spelled out in full.
(k) The type and size requirements in 3 AAC 48.025 do not apply to an exhibit submitted as part of prefiled testimony under 3 AAC 48.153 or introduced at hearing under 3 AAC 48.154. However, the exhibit must be legible, and the exhibit must be folded to conform in size to 8 1/2 inches by 11 inches. Service must be completed under 3 AAC 48.090(b).
(l) A copy of each pleading in a proceeding shall be served by the filing party on every other party to the proceeding together with proof of service, under 3 AAC 48.090(b). The commission will serve its orders and notices in accordance with 3 AAC 48.090(b)(1)(A). The commission will post its orders on its website.
(m) An affidavit must be signed and notarized in ink. Unless otherwise ordered, the commission will not accept an electronic signature by an affiant or the affiant's notary on an affidavit filed under 3 AAC 48.095. However, the document may be scanned and submitted electronically after original signatures are applied. The filer shall retain the original notarized affidavit for inspection for the duration of the proceeding, including any appeals.
History
- Authority: AS 42.05.141; AS 42.05.451 AS 42.05.151; AS 42.06.140
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90; am 8/6/92, Register 123; am 4/24/2004, Register 170; am 2/16/2012, Register 201; am 11/6/2016, Register 220
3 AAC 48.105 Petitions for reconsideration
Within 15 days after an order of the commission is served, a party may file a petition for reconsideration of that order setting out specifically the grounds upon which the petitioner believes the order is unreasonable, erroneous, unlawful, or otherwise defective. The petitioner may also submit a proposed order designed to cure the alleged defects of the commission's order. A party opposing a petition for reconsideration has 10 days after the date on which the petition is filed with the commission to respond. The commission's power to order reconsideration expires 30 days after the date on which the petition for reconsideration is filed with the commission. If the commission takes no action on a petition for reconsideration within the time allowed for ordering reconsideration, the petition is automatically denied. The commission may order reconsideration in writing of all or part of the record in a proceeding together with any additional evidence and argument which may be permitted either in writing or orally. The mere filing of a petition for reconsideration does not excuse the petitioning party from compliance with a decision or order of the commission.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.06.140(a)
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90
3 AAC 48.110 Intervention
(a) Petitions for permission to intervene as a party will be considered only in those cases that are to be decided upon an evidentiary record after notice and hearing. Any person who has a statutory right to be made a party to that proceeding will be permitted to intervene. Any person whose intervention will be conducive to the ends of justice and will not unduly delay the conduct of the proceeding will, in the commission's discretion, be permitted to intervene. The commission does not grant formal intervention, as such, in nonhearing matters, and any interested person may file documents authorized under 3 AAC 48.010 - 3 AAC 48.170 without first obtaining permission.
(b) In passing upon a petition to intervene, the following factors, among others, will be considered:
(1) the nature of the petitioner's right under statute to be made a party to the proceeding;
(2) the nature and extent of the property, financial, or other interest of the petitioner;
(3) the effect on petitioner's interest of the order which may be entered in the proceeding;
(4) the availability of other means by which the petitioner's interest may be protected;
(5) the extent to which petitioner's interest will be represented by existing parties;
(6) the extent to which petitioner's participation may reasonably be expected to assist in the development of a sound record, including the issues that petitioner intends to address in the proceeding; and
(7) the extent to which participation of the petitioner will broaden the issue or delay the proceeding.
(c) A person wishing to intervene in a proceeding shall file a petition in conformity with 3 AAC 48.090 - 3 AAC 48.100 setting out the facts and reasons why that person should be granted permission to intervene. The petition should make specific reference to the factors set out in (b) of this section.
(d) Unless otherwise ordered by the commission, a petition for permission to intervene must be filed with the commission before the first prehearing conference or, if no conference is to be held, not later than 30 days before the hearing. A petition for permission to intervene which is not timely filed will be dismissed unless the petitioner clearly shows good cause for failure to file that petition on time.
(e) A party to a proceeding may file an answer to a petition to intervene, making specific reference to the factors set out in (b) of this section, within seven days after the petition is filed.
(f) The decision granting, denying, or otherwise ruling on any petition to intervene will, in the commission's discretion, be issued without receiving testimony or oral argument either from the petitioner or other parties to the proceeding.
(g) A person permitted to intervene in a proceeding thereby becomes a party to the proceeding. However, interventions provided for in this section are for administrative purposes only, and no decision granting leave to intervene may be deemed to constitute an expression by the commission that the intervening party has such a substantial interest in the order that is to be entered in the proceeding as will entitle it to judicial review of such order.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.06.140(a)
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90
3 AAC 48.115 Compensation for consumer participation
(a) Unless an alternative means of compensation is provided as described in (g) of this section, an electric consumer who participates in a commission proceeding either as an intervenor or as a public witness, and who substantially contributes to the acceptance, in whole or in part, of a position related to any of the standards contained in Title I, Subtitle B of the Public Utility Regulatory Policies Act of 1978 (P.L. 95 - 617), as applied to the consumer's utility, will, in the commission's discretion, be compensated for reasonable costs of preparing and advocating that position.
(b) At least 10 days before the beginning of a hearing in which the commission considers any of the standards contained in Title I, Subtitle B, an electric consumer who desires compensation shall file a written statement which includes
(1) notice of intent to request compensation for participation;
(2) the name of the electric utility which serves the consumer; and
(3) a description of the consumer's interest and expected participation in the proceeding.
(c) If any of these electric consumers share the same or similar interests, the commission may appoint a common representative as a condition to the consumers receiving compensation.
(d) (1) The commission will name in its final order in the proceeding any electric consumer who substantially contributed to the approval by the commission, in whole or in part, of the consumer's position.
(2) Within 15 days after this order is issued, an electric consumer whom the commission qualifies for compensation shall file with the commission and serve on the affected utility a memorandum of costs. If participation in the proceeding has caused the consumer significant financial hardship, the consumer may describe the circumstances of hardship in the memorandum.
(3) Within 15 days after filing the memorandum of costs, the affected utility may file with the commission and serve on the consumer a response.
(4) Based on the results of the consumer's participation, the utility's response, and, where relevant, the consumer's financial circumstances, the commission will award by written order, the fees and costs it finds reasonable.
(5) If an electric consumer whom the commission qualifies for compensation participates in an appeal of this order, that consumer may file with the commission and serve on the affected utility a memorandum of appeal costs within 15 days of the issuance of the court order which finally adjudicates the appeal. The procedures established in paragraphs (3) and (4) of this subsection and (f) of this section apply for compensation for appeal costs.
(e) The commission will, in its discretion, compensate an electric consumer for the following fees and costs:
(1) reasonable attorney fees;
(2) reasonable expert witness fees; and
(3) reasonable costs incurred in the preparation and advocacy of the consumer's position, including costs of obtaining judicial review.
(f) The affected electric utility shall pay the consumer the amount awarded within 45 days after the issuance of the commission's order awarding costs.
(g) Subsections (a) - (f) of this section do not apply if the state or the commission has provided an alternative means of compensating persons who cannot afford to pay reasonable costs of preparing and advocating a position and who have, or represent, an interest
(1) not otherwise adequately represented in the proceeding; and
(2) necessary for a fair determination in the proceeding.
(h) This section applies to an electric consumer of a regulated electric utility subject to Title I of the Public Utility Regulatory Policies Act of 1978 (a public utility whose sales of electric energy, for purposes other than resale, during any calendar year after 1975 and before the immediately preceding calendar year, exceeded 500 million kilowatt-hours).
(i) In this section
(1) "electric consumer" means any person to whom electric energy is sold, other than for purposes of resale, by a public utility;
(2) "memorandum of costs" or "memorandum of appeal costs" means an itemized list of work and services performed with associated costs, expenses, and fees, documented by invoices and by time sheets marked in no less detail than 15-minute intervals;
(3) "public witness" means a person who presents an oral or written statement, comment, argument, or draft revision to a proposed regulation, in a proceeding conducted by the commission;
(4) "reasonable fee or cost" means a range, the upper end of which is the fee or cost based on the prevailing market rates in Alaska for the kind and quality of service provided, and the lower end of which is the fee or cost based on the prevailing market rates in the contiguous United States for the kind and quality of service provided; and
(5) "same or similar interests" means identical or like concerns, circumstances, or legal rights, similarly affected by the commission's consideration of a specific regulation or standard.
History
- Authority: 16 U.S.C. 2632AS 42.05.151(a)
- Eff. 8/10/80, Register 75
3 AAC 48.120 Informal complaints
(a) If a customer or shipper has an informal complaint against a public utility or pipeline carrier, the complaint must be made first to the utility or carrier. If the complainant is not satisfied with the disposition of the complaint, the complainant or the complainant's authorized representative, may then file a complaint with the commission. A utility or pipeline carrier shall assist a customer or shipper by giving notice on how to follow through on a complaint. An informal complaint to the commission need not be in any particular form and may be either written or oral. The commission will, in its discretion, request written confirmation of an oral complaint. A complaint must include, in as much detail as possible,
(1) every pertinent fact relative to the origin, nature, and basis of the complaint;
(2) everything the complainant has done, or tried to do, either orally or in writing, to resolve the complaint;
(3) the response of the utility or pipeline carrier to the arguments and efforts of the complainant; and
(4) a copy of any written actions to resolve the complaint or other available supporting documents.
(b) It is advisable, but not mandatory, for an aggrieved party to submit a written complaint to the utility or pipeline carrier, and to retain a copy of all correspondence to document the facts, rather than to rely solely upon oral communications. If a complainant chooses to document the complaint, the complainant may furnish the commission with a copy for whatever value it may be if the complainant later files an informal complaint with the commission.
(c) The commission will try to resolve an informal complaint only if it appears that the complainant has, in fact, taken the complaint to the utility or pipeline carrier and
(1) the utility or pipeline carrier has not disposed of the complaint within a reasonable time to the satisfaction of the complainant;
(2) the complainant, or one authorized to speak on the complainant's behalf, specifically requests the commission to take appropriate informal action to resolve the complaint; or
(3) there is a substantial indication that the utility or pipeline carrier has violated a law, rule, or regulation administered by the commission, or that the utility or pipeline carrier has not complied with applicable provisions of its effective tariff.
(d) An informal complaint not acted upon by the commissioner will, nevertheless, be assigned a number, be filed, and be closed with a written statement furnished to the complainant summarizing the facts of the complaint and the reason it is closed.
(e) A party who is not satisfied with an informal resolution made by the commission's consumer protection section may file a request for action under the alternative dispute resolution procedures set out in 3 AAC 48.121 or under the formal complaint procedures set out in 3 AAC 48.130. In determining whether to grant the request, the commission will apply the good cause standard set out in 3 AAC 48.130(f). If the commission institutes a formal proceeding, the entire informal file will be transferred to the file of the formal proceeding as provided for under 3 AAC 48.060(g).
History
- Authority: AS 42.04.080; AS 42.05.151; AS 42.06.140 AS 42.05.141; AS 42.06.055
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90; am 5/5/2000, Register 154
3 AAC 48.121 Alternative dispute resolution procedures
(a) A person may request alternative dispute resolution by petition if no adjudicatory proceeding is open, or by motion in an existing adjudicatory proceeding. An initiating order in an adjudicatory proceeding will specify the date by which a motion for alternative dispute resolution must be filed.
(b) Except for a dispute over an initial interconnection agreement filed under 47 U.S.C. 252 (Telecommunications Act of 1996), a telecommunications carrier may submit any dispute with another telecommunications carrier to the commission for resolution under this section.
(c) A petition or motion requesting alternative dispute resolution must contain
(1) a description of the matter to be resolved;
(2) the type of alternative dispute resolution procedure sought;
(3) a request for the commission to appoint an administrative law judge or a statement that outside resources will be used;
(4) a certification that the person attempted to negotiate the matter to be resolved before filing the petition or motion;
(5) a statement that the person believes alternative dispute resolution has a reasonable potential of resolving disputed matters and the reasons supporting that belief;
(6) an explanation of the anticipated effect of alternative dispute resolution on applicable timelines; and
(7) a proposal for concluding the adjudicatory proceeding within applicable timelines.
(d) A petition for alternative dispute resolution must be served on those persons that will be involved in the alternative dispute resolution process. A motion in an existing adjudicatory proceeding must be served on all parties.
(e) A person served with a petition for alternative dispute resolution may file a response within 30 days after the date the petition is filed. A party served with a motion for alternative dispute resolution may file a response within 10 days after the date the motion is filed. The commission may order a person opposing alternative dispute resolution to participate in a one-day mediation session. A person opposing alternative dispute resolution is not
(1) obligated to attend subsequent alternative dispute resolution sessions or to pay costs of alternative dispute resolution; and
(2) bound by the resolution of the matter achieved under this section.
(f) In determining whether a matter is suitable for alternative dispute resolution, the commission will consider the
(1) timing of the request relative to the ability of the participants to adequately prepare, whether parties to an existing adjudicatory proceeding are willing to waive applicable timelines, the effect of alternative dispute resolution on applicable timelines, and other factors that may make the request untimely; and
(2) complexity of the subject matter, if needed, availability of commission resources, and whether the absence of an interested person from the alternative dispute resolution process detrimentally affects the likelihood of resolving disputed issues.
(g) If the commission determines the matter is suitable for alternative dispute resolution, the commission will issue an order directing that the alternative dispute resolution proceeding be held and establishing guidelines for the proceeding. The participants may select the individual who will conduct the alternative dispute resolution proceeding and must notify the commission of their selection. If the individual selected is an administrative law judge, the commission will appoint the administrative law judge by order.
(h) The person assigned or appointed to conduct the alternative dispute resolution proceeding
(1) shall consult with the participants and establish procedures and schedules necessary to resolve the dispute, and may facilitate voluntary discovery;
(2) may with the consent of all participants engage in ex parte communications with individual participants; and
(3) may not preside over the underlying or subsequent adjudicatory proceeding unless the person assigned to conduct the alternative dispute resolution proceeding, all participants, and the commission consent in writing.
(i) A schedule adopted under (h)(1) of this section must allow the commission 30 days to consider and rule upon the proposed resolution of disputed issues. The commission will issue its decision within 30 days, unless it extends the time for good cause. The commission may accept or reject the proposed resolution of the dispute or may require additional proceedings.
(j) A participant in an alternative dispute resolution proceeding may withdraw from the proceeding by filing a notice of withdrawal with the commission. The notice must be served on all participants in the alternative dispute resolution proceeding and all parties in the underlying adjudicatory proceeding, if any. If a notice of withdrawal is filed by a participant in an alternative dispute resolution proceeding, the commission may reevaluate the suitability of the matter for alternative dispute resolution under (f) of this section.
(k) Evidence of conduct or statements in an alternative dispute resolution proceeding is not subject to discovery and is not admissible in adjudicatory proceedings before the commission.
(l) If a proposed resolution achieved through alternative dispute resolution is not accepted by the commission, any evidence of comments or statements made on that proposed resolution is not admissible in adjudicatory proceedings before the commission.
(m) The participants may use commission meeting or hearing rooms for alternative dispute resolution, subject to commission priorities.
(n) The commission may assess participants a share of the costs of the alternative dispute resolution proceeding.
(o) If a party to an informal complaint is not satisfied with the resolution of the complaint under 3 AAC 48.120, the party may request alternative dispute resolution of the issues addressed in the informal complaint rather than pursue a formal complaint under 3 AAC 48.130. The commission may order alternative dispute resolution after evaluating the factors stated in (f) of this section and the ability of each party to effectively participate in alternative dispute resolution.
(p) In this section, "alternative dispute resolution"
(1) includes conciliation, facilitation, early neutral evaluation, fact finding, mini-trial, and mediation; and
(2) does not include arbitration.
History
- Authority: AS 42.04.050; AS 42.05.141; AS 42.06.140 AS 42.04.070; AS 42.05.151 AS 42.04.080; AS 42.06.055
- Eff. 5/5/2000, Register 154; am 8/31/2008, Register 187
3 AAC 48.130 Formal complaints, protests and investigations
(a) A formal complaint or protest shall be in writing and should
(1) be so drawn as to fully inform the respondent or respondents and the commission as to how applicable provisions of the utility's, electricity reliability organization's, or pipeline carrier's effective tariff or of the governing law, rules, regulations, or order of the commission have been, are being, or will be violated by the acts or omissions in question;
(2) set forth concisely, and in plain language, the facts and circumstances on which the complaint or protest is predicated;
(3) state the relief sought by the complainant;
(4) comply with 3 AAC 48.090 - 3 AAC 48.100.
(b) The commission may allow a formal complaint or protest to be supplemented because of facts arising subsequent to the original filing.
(c) Unless the commission orders otherwise, the answer to a complaint or protest shall be filed 20 days from the filing date of the complaint. Formal complaints or protests will be set for hearing at the earliest convenience of the commission, unless notice of satisfaction of the complaint, by answer or otherwise, is received by the commission within 20 days after the complaint or protest is filed. If satisfaction of the complaint has been made, the commission will notify the complainant or protestant thereof and take appropriate action thereon.
(d) Two or more grounds of complaint or protest concerning the same subject matter may be included in one pleading, but should be stated and numbered separately. Two or more complainants or protestants may join in one pleading if their respective causes of action are against the same person, and deal with substantially the same alleged tariff infraction or violation of a law, rule, regulation or order of the commission.
(e) If a complaint or protest is made concerning a utility, electric reliability organization, or pipeline carrier operated by a receiver or trustee, both the utility and its receiver or trustee must be named as respondents in cases involving the utility, electric reliability organization, or pipeline carrier.
(f) A formal investigation will not be instituted on complaint, except for good cause shown to the commission's satisfaction by the complainant. The commission will rule on whether good cause exists to institute an investigation within 30 days after an answer to the complaint has been filed with the commission as provided for under (c) of this section. The commission will extend that deadline if amended or supplemental pleadings are filed. In that event, the deadline for commission ruling is 30 days after the final amended or supplemental pleading is filed.
(g) If a formal investigation or "show cause" proceeding is instituted by the commission on its own motion, the order instituting the investigation or proceeding shall clearly state the facts, circumstances, and allegations on which it is predicated.
(h) If a formal investigation is instituted under (f) or (g) of this section, the commission will rule on the matter within 60 days after the hearing is concluded or the evidentiary record is closed, whichever occurs later.
(i) The commission will extend the period for action set out in (h) of this section for good cause. The commission will set out its findings on good cause in an order extending that period.
History
- Authority: AS 42.04.080; AS 42.05.271; AS 42.06.140 AS 42.05.141; AS 42.05.770 AS 42.05.151; AS 42.06.055
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90; am 5/5/2000, Register 154; am 3/11/2022, Register 241
3 AAC 48.140 Conferences
(a) Informal conferences of the parties involved in an informal complaint or formal proceeding or of their authorized representatives may be held at any time to provide opportunity for the settlement, adjustment, clarification or resolution of any issues or problems relating to any matter whatever. Informal conferences may be initiated by the parties or by the commission or members of its staff. Any decision, or agreement, resulting from an informal conference may, if necessary, be presented to the commission by an authorized spokesman for the conferees and the commission may take whatever action thereon it deems appropriate.
(b) Upon call by a presiding officer, on motion by any party, or on the commission's own initiative, a pre-hearing conference of the parties or their attorneys or authorized representatives may be held at any time to expedite the orderly conduct and disposition of a hearing. Any member of the commission may attend a pre-hearing conference, and shall conduct the conference if elected to do so by the commission. Alternatively, the commission will appoint as chair of the pre-hearing conference a presiding officer, a hearing examiner, a hearing officer, an administrative law judge, an employee of the commission, or legal counsel representing the commission, and will direct that person to conduct and preside over the pre-hearing conference and report the results to the commission. If a pre-hearing conference is called while a hearing is in session with all parties either present or represented, oral notice of the time and place of the conference is sufficient. Otherwise, notice of the time and place of the conference must be given to each party, in writing, with due regard and consideration to the convenience of the parties.
(c) By direction of the presiding officer, a pre-hearing conference may be conducted on or off the record. In addition to any pertinent matter considered previously at an informal conference, each conferee will be encouraged to present any factual contentions and theories in support of the conferee's pleading or position in the proceeding and, in addition, to consider and, if possible, agree upon other matters including
(1) the simplification, delineation, and limitation of matters involving issues of fact and questions of law;
(2) the identification and numbering of exhibits;
(3) the exchange and acceptance of service of exhibits, including exhibits containing written testimony proposed to be offered in evidence;
(4) the obtaining of admission as to, or stipulation of, facts not remaining in dispute;
(5) the necessity or desirability of amendments to pleadings for purposes of clarification, amplification, or limitation;
(6) limitation of the number of witnesses;
(7) the feasibility of consolidating the examination of witnesses;
(8) the procedure of the hearing;
(9) the possibility of settlement and the use of alternative dispute resolution; and
(10) any other matter that may expedite the orderly conduct and disposition of the proceeding.
(d) Upon conclusion of a pre-hearing conference, the parties, their attorneys, or their authorized representatives shall reduce the results of the conference to the form of a written stipulation reciting the matters agreed upon. The written stipulation shall be filed with the commission in accordance with 3 AAC 48.095 and served on parties in accordance with 3 AAC 48.090(b) no later than 10 days after the date of the conference or at the beginning of the hearing that follows, whichever occurs first. Every stipulation must be
(1) signed by the parties or by their attorneys or authorized representatives;
(2) received in evidence as part of the evidentiary record; and
(3) binding on the parties with respect to the matters stipulated.
(e) If a pre-hearing conference is conducted on the record, and a transcript of it is ordered, it may, upon agreement of the conferees, be introduced in evidence at the hearing and be received as part of the evidentiary record. If the record of a pre-hearing conference is not introduced and received in evidence, all facts disclosed during the pre-hearing conference, except as set forth in a stipulation pursuant to (d) of this section, are privileged and, except by prior agreement, shall not be used against participating parties either before the commission or elsewhere unless fully substantiated by evidence.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.06.140
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90; am 8/6/92, Register 123; am 3/21/2003, Register 165; am 8/31/2008, Register 187; am 2/16/2012, Register 201
3 AAC 48.141 Scope of discovery
A party may obtain discovery from another party regarding any matter, not privileged, that is relevant to the subject matter of the proceeding, if the matter is admissible in evidence under 3 AAC 48.154 or appears reasonably calculated to lead to the discovery of admissible evidence. Upon motion by a party the presiding officer may limit discovery otherwise obtainable if the moving party establishes that the burden and expense of the requested discovery outweighs its likely benefit.
History
- Authority: AS 42.05.141; AS 42.05.671; AS 42.06.445 AS 42.05.151; AS 42.06.140
- Eff. 8/18/2013, Register 207
3 AAC 48.142 Service of discovery
Discovery requests and responses to discovery requests must be served electronically as provided in 3 AAC 48.090(b)(2), (4), and (5), unless electronic filing has been waived under 3 AAC 48.095( l) or the sending and receiving party agree to alternative means of service. If electronic filing has been waived the parties shall determine how discovery is served. Responses to discovery requests may be shared among the parties by other means, if all parties agree. If the parties cannot agree on how discovery is served, the presiding officer will determine how discovery is served. Discovery requests and responses to discovery requests are not filed with the commission when served.
History
- Authority: AS 42.05.141; AS 42.05.671; AS 42.06.445 AS 42.05.151; AS 42.06.140
- Eff. 8/18/2013, Register 207; am 11/6/2016, Register 220
3 AAC 48.143 Discovery requests and responses
(a) A party may obtain discovery from another party through interrogatories, requests for production, and requests for admission. A party may notice and conduct a deposition only upon agreement of all parties or with permission of the presiding officer upon motion and a showing that the information sought cannot be efficiently obtained through a less burdensome form of discovery.
(b) A party from whom discovery is requested shall address each discovery request by answering the discovery request, furnishing the documents requested, objecting to the discovery request, or asserting privilege. A party responding to a discovery request shall identify in its response each person who supplied the information contained in the response.
(c) If a party objects to a discovery request, the party shall state the basis for the objection and the facts justifying the objection and respond to the discovery request to the extent the discovery request is not objectionable. If a party asserts privilege, the party shall specify the privilege and respond to the discovery request to the extent the response is not privileged.
(d) A party shall promptly amend or supplement its response to a discovery request if, during the proceeding, the party determines that the response was inaccurate or incomplete or finds additional information responsive to the discovery request.
History
- Authority: AS 42.05.141; AS 42.05.671; AS 42.06.445 AS 42.05.151; AS 42.06.140
- Eff. 8/18/2013, Register 207
3 AAC 48.144 Discovery procedure
(a) A party may obtain discovery from another party before a procedural schedule is established. After the presiding officer establishes a procedural schedule specifying discovery times, a party may request discovery only when permitted by the procedural schedule unless, upon motion and a showing of good cause, the presiding officer permits discovery outside the times established in the procedural schedule.
(b) In proceedings under AS 42.05 a party shall serve its response to a discovery request on all other parties not later than 10 days after service of the discovery request except that, if a discovery request concerns reply testimony, a party shall serve its response not later than seven days. The parties may agree to or the presiding officer may direct a shorter or longer time for response.
(c) In proceedings under AS 42.06 a party shall serve its response to a discovery request on all other parties not later than 30 days after service of the discovery request except that, if a discovery request concerns reply testimony, a party shall serve its response not later than 20 days. The parties may agree to or the presiding officer may direct a shorter or longer time for response.
(d) If a dispute arises concerning discovery, the requesting party and the party from whom discovery is requested shall confer in good faith to resolve the dispute before filing a motion concerning discovery.
(e) A requesting party receiving an objection to its discovery request may file a motion for an order compelling the objecting party to respond to the discovery request, if attempts to resolve the dispute with the objecting party fail. A motion to compel discovery must describe the efforts made to resolve the discovery dispute. A party filing a motion to compel discovery shall attach the discovery request and all responses made to the discovery request.
(f) A party receiving a discovery request may file a motion for an order limiting the discovery requested if discussions with the requesting party to limit the discovery requested fail. A motion to limit discovery must describe the efforts made to resolve the discovery dispute. A party filing a motion to limit discovery shall attach the discovery request it seeks to limit.
(g) Any motion filed under 3 AAC 48.141 - 3 AAC 48.145 is a motion concerning discovery. The provisions of 3 AAC 48.091 apply to a motion concerning discovery except to the extent modified by 3 AAC 48.091( l).
(h) A party filing a motion concerning discovery shall include language stating that the motion concerns discovery and a response must be filed in five business days.
(i) The presiding officer shall rule on a motion concerning discovery. The presiding officer may require oral argument before ruling on a motion concerning discovery and may rule on the motion at the oral argument.
History
- Authority: AS 42.05.141; AS 42.05.671; AS 42.06.445 AS 42.05.151; AS 42.06.140
- Eff. 8/18/2013, Register 207
3 AAC 48.145 Confidential discovery
After notice to the other parties, a party may request that the presiding officer issue an order governing the production in discovery and use by parties of confidential information. A party expecting to produce confidential information in discovery shall request issuance of a confidentiality order. Upon request, the presiding officer shall issue a confidentiality order appropriate to the proceeding. The parties may agree on the terms of a confidentiality order and submit the proposed order to the presiding officer for issuance.
History
- Authority: AS 42.05.141; AS 42.05.671; AS 42.06.445 AS 42.05.151; AS 42.06.140
- Eff. 8/18/2013, Register 207
3 AAC 48.150 Hearings
(a) The commission shall give parties reasonable notice of a hearing or of the change in the date and place of a hearing and the nature of such hearing.
(b) Repealed 6/29/84.
(c) The person designated to conduct a hearing shall have authority, subject to possible contrary rulings by the commission
(1) to regulate the course and conduct of a hearing;
(2) to administer oaths and perform other functions set forth in AS 42.05.151(c);
(3) to rule upon offers of proof and receive evidence;
(4) to call and preside at pre-hearing conferences before a hearing, and informal conferences during a hearing;
(5) to dispose of procedural motions, requests and other similar matters, except a motion to dismiss a proceeding or any other motion that would be dispositive of a proceeding;
(6) to fix the time and order for filing and service of briefs; and
(7) to take any other action necessary and appropriate to the discharge of the presiding officer's duties, consistent with the statutory and other authority under which the commission functions.
(d) - (o)Repealed 6/29/84.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.06.140(a)
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90
3 AAC 48.151 Order of hearing
As the first order of business at a hearing, the presiding officer shall call the docket by reading the docket number and caption and shall state on the record when and how notice was given as to the time, place, and nature of the hearing. The presiding officer may also make a concise statement of the scope and purpose of the hearing and the issues involved. After that, all parties, either on their own behalf or through their attorneys or other authorized representatives, shall enter their appearances by giving their names and addresses to the reporter, together with the party on whose behalf they are appearing. The procedure in a hearing may be determined by stipulation in a prehearing conference, or by the presiding officer, subject, in either case, to approval, rejection, or modification by the commission. Otherwise, the matters considered at a hearing, after all appearances have been entered, will ordinarily be disposed of in substantially the following order:
(1) pending motions;
(2) stipulations of the parties;
(3) opening statements;
(4) presentation of cases as follows, unless otherwise ordered by the commission:
(A) in regard to an investigation on motion of the commission, the commission will hear
(i) the attorney general's direct case;
(ii) each intervenor's direct case in the order in which the petitions for intervention were filed with the commission;
(iii) the respondent's direct case; and
(iv) rebuttal by the attorney general;
(B) in regard to proceedings in which the operation of a tariff filing has been suspended, the commission will hear
(i) the applicant's direct case;
(ii) the attorney general's direct case;
(iii) each intervenor's direct case in the order in which the petitions for intervention were filed with the commission; and
(iv) rebuttal by the applicant;
(C) in regard to an application or petition, the commission will hear
(i) each applicant's or petitioner's direct case in the order in which the applications or petitions were filed with the commission;
(ii) the attorney general's direct case;
(iii) each intervenor's direct case in the order in which the petitions for intervention were filed with the commission; and
(iv) rebuttal by each applicant or petitioner in the order in which the applications or petitions were filed with the commission;
(D) in regard to complaints, the commission will hear
(i) the complainant's direct case;
(ii) the attorney general's direct case;
(iii) each intervenor's direct case in the order in which the petitions for intervention were filed with the commission;
(iv) the respondent's direct case; and
(v) rebuttal by the complainant;
(5) statements by participants, protestants, or any other interested members of the public will be scheduled at the discretion of the presiding officer at any convenient point during the hearing.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.06.140
- Eff. 6/29/84, Register 90; am 3/21/2003, Register 165; am 7/2/2006, Register 178
3 AAC 48.152 Consolidated hearings
In hearings of several proceedings upon a consolidated record, the presiding officer shall designate who shall open or close. Intervenors shall follow the party named in the petition to intervene. If the intervenor is not an original party, the presiding officer shall decide the stage at which the intervenor will be heard. When two or more proceedings are heard at the same time and place, the proceeding having the lowest docket number must be heard first if all parties are ready. The presiding officer may direct a different order to suit the convenience of the parties.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.06.140(a)
- Eff. 6/29/84, Register 90
3 AAC 48.153 Prefiled testimony
(a) The written testimony of a witness in question form, or in narrative form if allowed by the commission for good cause shown in advance of the prefiling deadline, will, if directed by the commission, be presented instead of the witness' oral testimony. After an exhibit containing the witness' testimony has been properly identified and authenticated by the witness, under oath, it may be marked and introduced as an exhibit. Written testimony must be as complete and accurate as if it were oral testimony, and it is subject to the same rules of evidence as if given orally. The witness shall be subject to cross-examination, and the presiding officer may require the testimony to be given orally. Written testimony may not be used unless it has either been filed and served on all parties the same as any other exhibit, or unless the parties have stipulated that it may be accepted by the commission at the hearing. A party who opposes the introduction of written testimony may make an oral or written protest, and the presiding officer, or the commission, will make an appropriate ruling on the matter. The commission will, in its discretion, require the presentation of written testimony instead of oral direct examination, if it considers that doing so would be conducive to a fair and expeditious disposition of the proceeding. A party objecting to such a requirement will be afforded an opportunity to be heard, and the commission will then ratify, revise, or rescind its action.
(b) Each page of prefiled testimony must be numbered at the bottom with consecutive Arabic numerals. Schedules, appendices, documents, or other attachments to prefiled testimony must be identified in the manner prescribed in 3 AAC 48.154(e). If any of these items contain more than one page, each page must be numbered at the bottom by consecutive Arabic numerals.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.06.140(a)
- Eff. 6/29/84, Register 90
3 AAC 48.154 Evidence and exhibits
(a) All relevant evidence which, in the opinion of the presiding officer, is the best evidence reasonably obtainable, with due regard to its necessity, availability, and trustworthiness, is admissible. In passing upon the admissibility of evidence, the presiding officer may consider, but is not bound to follow, the rules of evidence governing general civil proceedings, in matters not involving trial by jury, in the courts of the State of Alaska. When objection is made to the admissibility of evidence, the evidence may be received subject to later ruling by the commission. The presiding officer may, either with or without objection, exclude inadmissible evidence or order repetitive evidence discontinued. A party objecting to the introduction of evidence shall state the grounds for the objection at the time the evidence is offered but need not reaffirm the objection repeatedly after that. The presiding officer may, either orally or in writing, issue procedural orders and rulings pertaining to the conduct of a hearing. If in writing, an order or ruling must be in substantially the same format as a regular commission order in the same proceeding in regard to placement of the heading, the correct docket number, caption, etc., except that they shall be designated as "HEARING ORDER NO. 1, 2, 3," etc., in the space to the right of the caption. Every hearing order is a part of the evidentiary record of the proceeding.
(b) In addition to matters of which courts of the State of Alaska take judicial notice, the commission will take official notice of
(1) all rules, regulations, administrative rulings, and orders, exclusive of findings of fact, of the commission or another comparable federal or state regulatory body or agency;
(2) the contents of certificates of public convenience and necessity or electric reliability organization certificates granted by the commission;
(3) the tariffs and special contracts regularly established by or filed with the commission as required or authorized by law;
(4) any annual or other report on file with the commission except those that are privileged; or
(5) the results of its own inspection of the physical conditions involved; however, the commission will state on the record a summary of its observations.
(c) An official rule, report, order, record, resolution, or other document prepared and issued by any governmental authority, when admissible for any purpose, may be evidenced by an official publication of it, by a publication of a nationally recognized reporting service considered by the presiding officer to constitute a sufficient guarantee of its trustworthiness, by a copy attested by the officer having legal custody of it, or by a person who can testify to its authenticity based on his or her firsthand knowledge. When an official record, otherwise admissible, is contained in official publications or publications by nationally recognized reporting services which are in general circulation and readily accessible to all parties, it may be introduced by specific reference by the party offering it. Papers and documents on file with the commission, if otherwise admissible, may be introduced by any method of identification satisfactory to the presiding officer. If only a portion of a paper or document is offered in evidence, the part offered must be clearly designated. Intra-office commission memoranda and reports, when designated as privileged by the commission, are not public records subject to inspection and will not be introduced in evidence. If a portion of the record in any other proceeding is admissible for any purpose, and if it is offered in evidence, a true copy of the portion must be presented for the record in the form of an exhibit unless
(1) the offering party agrees to supply copies later at the party's own expense, if and when required by the commission;
(2) the portion is specified with sufficient particularity to readily identify it;
(3) the parties represented at the hearing stipulate upon the record that the portion may be incorporated by reference, and that any portion of the same record offered by any other party may be incorporated by like reference; and
(4) the presiding officer directs that the portion be incorporated.
(d) Documentary evidence offered, whether in the form of an exhibit or introduced by reference, is subject to appropriate and timely objection. When specifically prepared exhibits of a documentary nature are offered in evidence, copies must be furnished by the parties, their attorneys, or authorized representatives to
(1) the other parties, their attorneys, or authorized representatives;
(2) the presiding officer;
(3) the reporter;
(4) each commissioner; and
(5) repealed 4/20/2006;
(6) anyone else designated by the presiding officer.
(e) Prefiled testimony will be identified by the letter "T" followed by sequential Arabic numerals in the order in which witnesses appear to testify, e.g., "T-1, T-2," etc. Schedules, appendices, and other documents attached to prefiled testimony will be identified by the witness' initials, followed by sequential Arabic numerals, e.g., "ABC-1. Any other exhibits referred to at a hearing will be marked with sequential Arabic numerals, without regard to the party introducing the exhibit. Unless otherwise prescribed by the commission by order, or by the presiding officer, the same series of testimony and exhibit numbers will continue for an entire proceeding even if a hearing is recessed, continued, or otherwise bifurcated.
History
- Authority: AS 42.05.141; AS 42.05.770 AS 42.05.151; AS 42.06.140
- Eff. 6/29/84, Register 90; am 3/21/2003, Register 165; am 4/20/2006, Register 178; am 3/11/2022, Register 241
3 AAC 48.155 Rights and obligations of parties
(a) Unless a party's rights are expressly limited by commission order, or a party or the party's authorized representative waives any right or rights, each party to an adjudicative proceeding has the right to
(1) make an opening statement;
(2) present an affirmative or direct case;
(3) cross-examine witnesses of other parties and public witnesses;
(4) object to the introduction or exclusion of testimony or other evidence;
(5) argue points of law;
(6) make a closing statement;
(7) submit timely briefs; and
(8) exercise all other rights commonly and ordinarily accruing to parties in administrative adjudicative proceedings, including, but not limited to, the right of discovery.
(b) Unless otherwise ordered, directed, or excused by the commission, a party to a proceeding has the duty or obligation to
(1) respond to discovery;
(2) meet all filing deadlines prescribed by the commission in a timely manner;
(3) attend and participate fully in hearings or pre-hearing conferences, or other proceedings at the time scheduled by the commission;
(4) be prepared to go forward with the presentation of its affirmative or direct case or with the examination or cross-examination of witnesses in a timely, reasonable, and professional manner;
(5) produce, in a timely manner, the documents, information or other data or materials required or requested by the commission;
(6) share in proportion, and timely pay, any costs allocated by the commission under AS 42.05.221, 42.05.401(b), 42.05.651 or AS 42.06.610, and 3 AAC 48.157.
(c) Unless otherwise ordered, directed, or excused by the commission, failure to meet or comply with commission requirements established by statute, regulation, or order may result in the forfeiture of any or all of a party's rights.
History
- Authority: AS 42.05.141; AS 42.05.401; AS 42.06.610 AS 42.05.151; AS 42.05.651 AS 42.05.221; AS 42.06.140(a)
- Eff. 6/29/84, Register 90
3 AAC 48.156 Hearing record
(a) A tape recording will be made of the record of each hearing regardless of whether all or part of the record is also made with the aid of shorthand or stenotype notes. The hearing record will be made by a member of the commission staff designated for the purpose, by a professional reporter, or, in exceptional cases and by direction of the commission, by someone who is not a professional reporter. Unless otherwise directed by the commission, a transcript of all recorded proceedings will be prepared. The original typewritten transcript, along with the unerased tape used to record the hearing, will be submitted to the commission. The transcript will be retained as the commission's permanent official record. Upon submission of the original transcript to the commission, the transcript becomes a public document subject to those statutes and regulations governing public access to and reproduction of public documents. Parties or individuals requesting copies or excerpts of a transcript before submission of the original transcript to the commission shall make arrangements with the reporter for this service. Transcripts will be numbered consecutively starting with page one in the first volume and ending with the last page in the last volume. If necessary to expedite the preparation of a daily transcript, it is permissible to skip page numbers between volumes but, in no event, may any volume after the first start with page one. References to the transcript in briefs, orders, etc., must be to the official transcript prepared by the court reporter and by the abbreviation, in parentheses, "Tr." followed by the page, or pages, of the transcript to which reference is made. Reference to volume numbers need not be made, but is not prohibited. The commission will, in its discretion, initially pay the entire cost for recording a hearing as well as the cost for production of the original transcript, but later will allocate all or part of the cost to the parties under AS 42.05.651 or AS 42.06.610.
(b) A tape used to record a hearing may not be released by the commission or the court reporter to any party for the preparation of an unofficial transcript. Excerpts from a tape recording of a hearing may be prepared only by the commission or the court reporter.
(c) Certified copies of a transcript may be obtained only from the court reporter or from the commission.
History
- Authority: AS 42.05.141; AS 42.05.651; AS 42.06.260 AS 42.05.151; AS 42.06.140(a)AS 42.06.610
- Eff. 6/29/84, Register 90
3 AAC 48.157 Allocation of costs
(a) After each hearing or investigation in which costs allocable under AS 42.05.221, 42.05.401(b), 42.05.651, or AS 42.06.610 have been incurred and the commission decides to allocate those costs to a party or the commission, the commission will enter a cost allocation order, with appropriate discussion and findings, which includes
(1) a summary of all the allocable expenses incurred by the commission, whether paid or not;
(2) the beginning and ending dates of the hearing or investigation;
(3) the identification of each party that entered an appearance;
(4) the amount allocated to each party and to the commission itself;
(5) if applicable, the identification of each party to whom no cost has been allocated, and the reason;
(6) if applicable, the reason the commission has decided, in its discretion, to assume all the costs.
(b) Except as provided in AS 42.05.401(b), the commission will, in its discretion, if it has the money, initially pay all the expenses incurred by it in connection with a hearing or investigation. If for budgetary reasons it does not have money to pay all the expenses initially, the commission will, in its discretion, postpone the hearing or investigation until it does have the money or make alternative arrangements with the parties to pay the expenses directly so that the hearing or investigation may continue. The allocable expenses of a proceeding include, but are not limited to,
(1) the time fee of the reporter and the fee for preparation of any transcript;
(2) the fees and expenses of consultants employed by the commission;
(3) the fees, expenses, or salary of an administrative law judge or hearing officer employed or contracted by the commission;
(4) the fees, expenses, or salary of legal counsel employed or contracted by the commission;
(5) any charge incurred for a hearing room other than the commission's own hearing room;
(6) the per diem and transportation costs incurred by the commission;
(7) other documented out-of-pocket expenses such as telephone calls, mailing, and copying charges.
(c) The mere filing of a written or oral protest or statement of interest, or the voluntary offering of written or oral testimony at the request of the commission or of an acknowledged participant in a proceeding, is not participation of such magnitude or extent as to subject the person who made the filing or offered the testimony, to the assessment of an allocated share of the proceeding.
(d) If a party takes an active part in a hearing or investigation by way of cross-examination of witnesses or by requesting service of copies of pleadings briefs, exhibits, etc., that party may be required to bear a just share of the special costs which the commission considers to be directly allocable under AS 42.05.221, 42.05.401(b), 42.05.651, or AS 42.06.610 to the party's participation in the hearing, investigation, or other proceedings.
(e) A person who successfully petitions for intervention in a proceeding, or by any other means leads the commission or the other parties to believe he or she will be an active party in the proceeding, will be considered an active party up to the time the party signifies in writing to the commission, with service on the other parties, an intention to withdraw from active participation in the proceeding.
History
- Authority: AS 42.05.111; AS 42.05.254; AS 42.06.286 AS 42.05.141; AS 42.05.401; AS 42.06.610 AS 42.05.151; AS 42.05.651 AS 42.05.221; AS 42.06.140(a)
- Eff. 6/29/84, Register 90; am 10/10/96, Register 140
3 AAC 48.159 Standards of conduct - Hearing decorum
(a) Hearings before the commission must be conducted with fitting dignity and decorum. Conduct amounting to contempt at a public hearing is grounds for exclusion from the hearing and for summary suspension for the contemptuous person, without a hearing, for the duration of the hearing.
(b) Except as ordered otherwise by the commission, there shall be free access for the news media to all public hearings as long as the media exercise discretion and good judgment in their conduct.
(c) Smoking is not permitted at a formal hearing or prehearing conference while it is in session but will, in the commission's discretion, be permitted during recesses outside the hearing room.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.06.140(a)
- Eff. 6/29/84, Register 90
3 AAC 48.160 Briefs
(a) The commission or the presiding officer will fix the time for the filing and service of briefs with due regard to the immediacy of the decision size of the record, and the nature, complexity, and importance of the proceeding or of the issues involved. The commission or the presiding officer will, in their discretion, decide the order in which briefs will be filed and any limitation on the number of pages that may be contained in a brief.
(b) Except as otherwise provided in this section, briefs must be submitted in compliance with the provisions of 3 AAC 48.090 - 3 AAC 48.100, including requirements dealing with heading, caption, size of paper, typing, margins, number of copies, and proof of service.
(c) The commission or the presiding officer will, in their discretion, require the parties and their counsel or other authorized representatives to present their arguments and authorities orally at the close of the hearing instead of by written brief.
(d) Requests for extension of time in which to file briefs shall be in writing and be served upon all parties of record, or upon their attorneys or authorized representatives, and be submitted to the commission at least five days before the date fixed for filing the briefs.
(e) Every brief shall contain
(1) a table of contents and subject index with page references;
(2) a list of all cases and authorities cited, arranged alphabetically, with page references;
(3) a concise statement of
(A) the nature and history of the proceeding;
(B) the questions to which the brief is directed;
(C) the facts relied upon with references to the testimony and exhibits cited;
(4) the argument under as many appropriate headings as there are major points argued.
(f) If a brief is addressed to a question of law, it shall, in addition to complying with (e) of this section, contain a discussion of the points of law presented with citations of authorities and a conclusion containing a brief summary and prayer.
(g) Lengthy quotations from the record or from authorities should not be included in the body of a brief, but may be included in an attached appendix designated as "Appendix 'A,' 'B,' 'C"' etc., with an appropriate title.
(h) Exhibits may be analyzed, but should not be reproduced in the body of a brief; however, if desired, they may be reproduced and attached as an appendix to a brief.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.06.140(a)
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90
3 AAC 48.165 Hearings assigned to administrative law judge or hearing officer
(a) The commission will, in its discretion, assign a proceeding under AS 42.06 to an administrative law judge or hearing officer, or a proceeding under AS 42.05 to a hearing officer, for hearing and proposed decision. The assignment will be made by order.
(b) Unless specifically ordered otherwise by the commission, in an assigned proceeding an administrative law judge or hearing officer will have all powers which the commission possesses, including ruling on discovery and other prehearing matters, holding prehearing conferences in accordance with 3 AAC 48.140, conducting hearings in accordance with 3 AAC 48.150(c) and 3 AAC 48.151, and ordering briefing in accordance with 3 AAC 48.160.
(c) The administrative law judge or hearing officer shall render a proposed decision in writing unless the commission orders that the entire record be certified to the commission for a decision. The administrative law judge or hearing officer shall issue the proposed decision within 60 days after the hearing is concluded or the evidentiary record is closed, whichever occurs later, unless good cause exists to extend that deadline. Findings of good cause must be set out in an order extending that deadline.
(d) A party has 30 days after issuance of the proposed decision to comment on the decision. A party disagreeing with the proposed decision shall list the findings or conclusions to which the party takes exception, the reasons why the party takes exception, and the portions of the record by title and page number that the party believes the commission must review in order to evaluate the party's comments.
(e) The commission will consider the proposed decision of the administrative law judge or hearing officer and any comments received on the proposed decision and will issue an order accepting, modifying, or rejecting the proposed decision. The commission will issue its order within 60 days after the deadline for comments on the proposed decision as provided for in (d) of this section, unless good cause exists to extend that deadline. The commission will set out its findings on good cause in an order extending that deadline.
(f) An administrative law judge or hearing officer, at the request of a party or on the judge's or hearing officer's own motion, may certify a question to the commission for decision at any time during a proceeding when it appears to the judge or hearing officer that a novel or unsettled issue of law or policy is involved in the question or that a decision by the commission during the proceeding will simplify or shorten the proceeding. A copy of the certification will be served on all parties. The administrative law judge or hearing officer will set a schedule for briefing the question to the commission, giving consideration to the elements contained in 3 AAC 48.160. The commission will, in its discretion, decide the question or decline to consider it. If the commission does not act within 30 days after the filing of the last brief on the question, unless that time is extended by the commission, the question will be considered to have been declined.
History
- Authority: AS 42.04.050; AS 42.05.141; AS 42.06.140 AS 42.04.070; AS 42.05.151 AS 42.04.080; AS 42.06.055
- Eff. 6/29/84, Register 90; am 5/5/2000, Register 154
3 AAC 48.166 Stipulations
Parties may stipulate among themselves to the disposition of a proceeding or to the disposition of outstanding issues in a proceeding by written agreement filed with the commission or by oral statement presented on the record. The parties are bound by the terms of the stipulation if the commission accepts it. The parties may present a statement of the facts supporting the stipulation. The commission is not bound to adopt a stipulation by the parties. The commission will, in its discretion, require evidence to support a finding that the stipulation is in the public interest and consistent with controlling law. If the commission rejects a stipulation, the commission will, in its discretion, provide an additional opportunity for the parties to present evidence and arguments on the subject matter of the rejected stipulation. The commission will rule on a stipulation within 30 days after it is filed with the commission, unless that time is extended for good cause. The commission will set out findings on good cause in an order extending that deadline.
History
- Authority: AS 42.04.080; AS 42.05.171; AS 42.06.140 AS 42.05.141; AS 42.05.191 AS 42.05.151; AS 42.06.055
- Eff. 5/5/2000, Register 154
3 AAC 48.168 Concurrent hearings
(a) In hearings held concurrently with another governmental agency the commission, through its presiding officer designated to preside at the concurrent hearings, will, in its discretion, allow variance from the procedures set out in 3 AAC 48.151 - 3 AAC 48.160 to facilitate the conduct of the concurrent hearings. The presiding officer will state on the record of the hearing the variances allowed, the citation to the regulations being varied, and the reason for allowing the variance.
(b) To facilitate the conduct of concurrent hearings, the commission may vary any provision of 3 AAC 48 by order stating the reason for the variance.
History
- Authority: AS 42.04.050; AS 42.05.151 AS 42.05.141; AS 42.06.140
- Eff. 6/29/84, Register 90
3 AAC 48.170 Ethical standards, violations
(a) Any person transacting business with the commission shall maintain at all times the respect due the commission, its presiding officers, legal counsel and its staff and shall never knowingly, by artifice, misstatement or silence, lead or allow them to believe in a false factual or legal proposition relevant to the discharge of their responsibilities. Members of the legal, accounting, financial and engineering professions shall also comply with the ethical standards of their respective professions.
(b) Depending upon the gravity of the violation and the source of responsibility for it, a violation of ethical standards may result in
(1) preclusion from further participation of the party or the party's authorized representative in the proceeding in which the infraction occurs or in any other proceeding before the commission;
(2) referral of the violation to the appropriate professional body or public authority for disciplinary action;
(3) a finding of unfitness of an applicant or utility, electric reliability organization, or pipeline carrier with consequent revocation, suspension, or denial of operating authority; or
(4) the imposition of any sanction appropriate to the offense and consistent with law.
History
- Authority: AS 42.05.141; AS 42.05.770 AS 42.05.151; AS 42.06.140
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90; am 3/11/2022, Register 241
3 AAC 48.180 Public meetings
Subject to the exceptions in AS 44.62.310 and AS 42.05.161, meetings of the commission are public.
History
- Authority: AS 42.05.141; AS 42.05.161; AS 44.62.310 AS 42.05.151; AS 42.06.140(a)AS 44.62.312
- Eff. 6/27/92, Register 122
3 AAC 48.181 Types and scheduling of public meetings
(a) Unless otherwise noticed under 3 AAC 48.182, regular public meetings will be held by the commission twice a month on dates set by the commission at 9:00 a.m. in the commission's offices in Anchorage. The chair of the commission may cancel a regular public meeting if there is no item that requires public discussion and the action does not result in cancellation of consecutive regular public meetings.
(b) A special public meeting will be held by the commission when necessary to conduct official business on any matter that requires action by the commission before the next regular public meeting of the commission. Unless otherwise noticed under 3 AAC 48.182, a special public meeting of the commission will begin at 9:00 a.m. in the commission's offices in Anchorage. The number of special public meetings will be kept to a minimum.
(c) An emergency public meeting will be held by the commission when the commission determines it is necessary to conduct official business on any matter that requires action by the commission on an expedited basis. The number of emergency public meetings will be kept to a minimum.
History
- Authority: AS 42.05.141; AS 42.05.161; AS 44.62.310 AS 42.05.151; AS 42.06.140; AS 44.62.312
- Eff. 6/27/92, Register 122; am 11/10/96, Register 140; am 7/17/2024, Register 251
3 AAC 48.182 Notice of public meetings
(a) Reasonable public notice will be given by the commission as provided in this section for all public meetings of the commission.
(b) Notice of a regular or special public meeting may be published by the commission in a newspaper of general circulation in the area where the meeting will be held and teleconferenced. Notice will be posted at the commission's offices, on the commission's Internet website, and the Alaska Online Public Notice System at least one week prior to the scheduled meeting. Notice of a regular or special public meeting will include the date, time, and place of the meeting; general topics to be discussed or considered; and information for virtual access, including a contact number for those seeking to participate telephonically and the location of any teleconferencing facilities that will be used.
(c) Notice of an emergency public meeting may be published by the commission as provided for under (b) of this section if the commission determines that sufficient time is available. Otherwise, notice of an emergency public meeting will be posted at the commission's offices, on the commission's Internet website, and the Alaska Online Public Notice System. Notice of an emergency public meeting will include the date, time, and place of the meeting; general topics to be discussed or considered; and information regarding virtual access, including a contact number for those seeking to participate telephonically and the location of any teleconferencing facilities that will be used. Reasonable attempts will be made to provide notice to known interested persons on the topics scheduled for the emergency public meeting.
(d) Repealed 11/6/2016.
(e) In this section, "virtual access" includes any real time means of listening to, and optionally observing, the conduct of a public meeting in a location other than where the commission is physically meeting, including teleconferencing, video conferencing, web streaming or other similar technologies or services, and may include capability for two-way communication to facilitate efficient participation by commissioners, advisory staff, counsel, and scheduled presenters, as well as public participants if permitted under 3 AAC 48.186.
History
- Authority: AS 42.05.141; AS 42.06.140 AS 42.05.151; AS 44.62.310
- Eff. 6/27/92, Register 122; am 11/6/2016, Register 220; am 7/17/2024, Register 251
3 AAC 48.183 Public meeting agendas
(a) In addition to the notice provisions of 3 AAC 48.182 for public meetings of the commission, an agenda of each public meeting of the commission will be printed and available for public inspection and copying at the commission's offices and will be posted on the commission's Internet website and the Alaska Online Public Notice System.
(b) The commission will post on the commission's Internet website and may deliver by hand, by United States mail or a similar delivery service, or by electronic mail a copy of an agenda to each known participant in a proceeding listed on the agenda.
(c) A copy of an agenda of each regular public meeting and of each special public meeting will be available at the commission's offices, posted on the commission's Internet website, and the Alaska Online Public Notice System at least one week before the scheduled date of the meeting.
(d) A copy of an agenda of an emergency public meeting will be posted on the commission's Internet website and the Alaska Online Public Notice System as soon as the agenda is available, but not later than one week after the scheduled date of the emergency meeting.
(e) Repealed 11/6/2016.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.06.140
- Eff. 6/27/92, Register 122; am 2/16/2012, Register 201; am 11/6/2016, Register 220; am 7/17/2024, Register 251
3 AAC 48.184 Procedures at meetings
A public meeting of the commission will be conducted in accordance with the 1990 edition of Robert's Rule of Order Newly Revised. The commission will make written material discussed at the public meeting available to the public at the beginning of the meeting unless such material is intended for discussion during executive session or is subject to attorney-client privilege.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.06.140
- Eff. 6/27/92, Register 122; am 7/17/2024, Register 251
3 AAC 48.185 Voting at public meetings
The use of proxy votes by commission members is prohibited at public meetings. The votes of commission members will be recorded by the commission.
History
- Authority: AS 42.05.141; AS 42.06.140(a) AS 42.05.151; AS 44.62.310(a)
- Eff. 6/27/92, Register 122
3 AAC 48.186 Public participation
The commission will, in its discretion, allow public participation at public meetings. No public testimony or participation will be allowed by the commission regarding an adjudicatory matter pending before the commission.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.06.140(a)
- Eff. 6/27/92, Register 122
3 AAC 48.187 Meeting record
(a) Each public meeting will be tape recorded by the commission. The recording will serve as the commission's official record of the public meeting. The recording will be retained for a period of five years in accordance with the commission's records retention schedule approved under AS 40.21.030.
(b) A transcript of a public meeting will be prepared by the commission and will include as an attachment written material discussed at the public meeting unless such material is related to executive session or is subject to attorney-client privilege.
(c) Repealed 7/17/2024.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.06.140(a)
- Eff. 6/27/92, Register 122; am 7/17/2024, Register 251
3 AAC 48.188 Deliberations on adjudicatory matters conducted in a public forum
The commission will, in its discretion, conduct deliberations on adjudicatory matters in public. Deliberations on adjudicatory matters conducted in public are not subject to the provisions of 3 AAC 48.180 - 3 AAC 48.187.
History
- Authority: AS 42.05.141; AS 42.06.140(a) AS 42.05.151; AS 42.62.310(d)
- Eff. 6/27/92, Register 122
3 AAC 48.190 Official record
The official record of each proceeding before the commission is a paper printing of the electronic file. The official record includes any staff memoranda, paper documents, or exhibits considered at a public meeting. Each document must also be included in the record of any related docketed proceeding discussed as an agenda item at a public meeting.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.06.140
- Eff. 2/16/2012, Register 201; am 7/17/2024, Register 251
Article 2 Utility and Pipeline Tariffs
3 AAC 48.200 Scope of regulations
Except as provided in 3 AAC 48.450 - 3 AAC 48.490, the provisions of 3 AAC 48.200 - 3 AAC 48.442 cover the construction, preparation, content, filing, posting, and publication of utility and pipeline tariffs, including special contracts.
History
- Authority: AS 42.05.141; AS 42.06.140; AS 42.06.390 AS 42.05.151; AS 42.06.350
- Eff. 11/16/73, Register 48; am 6/29/84, Register 90; am 1/9/2009, Register 189
3 AAC 48.210 Waivers
Repealed 6/29/84.
3 AAC 48.220 Tariff filing submission, calculation of statutory notice period, and effective date
(a) Unless otherwise provided, the statutory notice period for a tariff filing does not begin until the filing utility or pipeline carrier has complied with this section. If a utility or pipeline carrier submits a tariff filing that does not meet all of the notice and form and filing requirements provided under statute and 3 AAC 48.200 - 3 AAC 48.430, and the commission does not waive those requirements under 3 AAC 48.805, the commission may reject the filing. The statutory notice period for a rejected tariff filing begins only after the filing is supplemented, within a period specified by the commission, to comply with all applicable requirements. If a utility or pipeline carrier fails to supplement a rejected tariff filing in order to comply with all applicable requirements within the period specified by the commission, the tariff filing will be closed and returned to the utility or pipeline carrier. If a tariff filing is refiled by the utility or pipeline carrier after having been rejected and returned as provided in this chapter, the tariff filing shall be renumbered with the next available tariff advice number and treated as a new tariff filing.
(b) Unless otherwise specified by order or another applicable provision of this chapter, tariff filings may be submitted electronically, in accordance with 3 AAC 48.095. A utility or pipeline carrier filing on paper shall submit an original and five copies of each tariff filing, unless otherwise directed by the commission.
(c) Each tariff filing submitted to the commission must be transmitted by means of consecutively numbered tariff advice letters. Every tariff advice letter must contain the applicable information set out in 3 AAC 48.270(a), unless another provision of 3 AAC 47 - 3 AAC 53 (Regulatory Commission of Alaska) provides otherwise, and is subject to one of the following statutory notice periods as follows:
(1) a utility tariff filing must be submitted to the commission not later than 45 days before it may take effect unless the commission, by order, authorizes the filing to take effect in less than 45 days after the date of filing, or unless another provision of 3 AAC 47 - 3 AAC 53 (Regulatory Commission of Alaska) provides for a different filing method or time period;
(2) an initial pipeline tariff filing must be submitted to the commission not later than 90 days before it may take effect unless the commission, by order, authorizes the filing to take effect in less than 90 days after the date of filing, or unless another provision of 3 AAC 47 - 3 AAC 53 (Regulatory Commission of Alaska) provides for a different filing method or time period;
(3) a pipeline tariff filing, other than an initial pipeline tariff filing, must be submitted to the commission not later than 30 days before it may take effect unless the commission, by order, authorizes the filing to take effect in less than 30 days after the date of filing, or unless another provision of 3 AAC 47 - 3 AAC 53 (Regulatory Commission of Alaska) provides for a different filing method or time period.
(d) Whether submitted on paper or electronically, a tariff filing made before 5:00 p.m. on a regular business day will be considered filed with the commission for the purpose of determining the statutory notice period. The day after the filing is submitted with the commission will be counted as the first day of the period of notice to the commission and the public in accordance with AS 01.10.080. The statutory notice periods set out in (c) of this section shall be determined in the same manner prescribed under 3 AAC 48.090. If a notice period ends on a Saturday, Sunday, or state legal holiday, the notice period will be extended to the end of the commission's next regular business day. In computing the statutory notice period, consideration will not be given to notice by telephone, electronic mail, or facsimile transmission.
(e) Except as otherwise provided in this chapter, the commission may reject a tariff filing submitted to the commission with insufficient time to accommodate the statutory notice period before a proposed effective date.
(f) A utility or pipeline carrier may propose an effective date before the end of the statutory notice period for a tariff filing as set out in 3 AAC 48.270(a). If a proposed effective date is not included in a tariff advice letter, the commission will treat the last day of the statutory period of notice to the commission as the proposed effective date, unless the tariff filing is suspended in accordance with 3 AAC 48.310(d). The commission may reject a tariff filing if a proposed effective date is more than 90 days after the date the tariff filing is submitted to the commission, except as specifically authorized by the commission on request of a utility or pipeline carrier, or except in the case of an initial pipeline tariff.
(g) After approval, the commission will validate each effective tariff sheet, special contract, agreement, form, and other document required by commission order, by placing the commission's date-of-receipt stamp on the upper right corner of each tariff sheet, form, and other document and by entering the appropriate effective date on the bottom right corner of each tariff sheet, form, and other document. The commission will return a copy of each effective tariff sheet, special contract, agreement, form, and other document required by commission order to the utility or the pipeline carrier after the effective date of the filing.
(h) Each effective tariff on file with the commission is lawful until revised in accordance with the procedures established under law, 3 AAC 48.200 - 3 AAC 48.430, and other provisions of 3 AAC 47 - 3 AAC 53 (Regulatory Commission of Alaska).
History
- Authority: AS 42.05.141; AS 42.05.361; AS 42.05.421 AS 42.05.151; AS 42.05.371; AS 42.06.140 AS 42.05.231; AS 42.05.391; AS 42.06.350 AS 42.05.241; AS 42.05.411; AS 42.06.390
- Eff. 11/16/73, Register 48; am 6/29/84, Register 90; am 8/6/92, Register 123; am 9/16/2005, Register 175; am 4/24/2009, Register 190; am 11/6/2016, Register 220; am 10/27/2017, Register 224
3 AAC 48.230 Billing and contract forms
Repealed.
History
- Eff. 11/16/73, Register 48; am 6/29/84, Register 90; am 8/6/92, Register 123; repealed 10/27/2017, Register 224
3 AAC 48.240 Delivery of tariff
Repealed.
History
- Eff. 11/16/73, Register 48; am 6/29/84, Register 90; am 11/6/2016, Register 220; repealed 10/27/2017, Register 224
3 AAC 48.250 Tariff on file for public inspection
(a) Each utility or pipeline carrier shall maintain in its tariff a list of the locations at which it keeps a copy of its paper tariff available for public inspection and, if applicable, the Internet address of its electronic tariff.
(b) A utility or pipeline carrier may not refuse to permit anyone to inspect any of its effective tariffs during regular business hours. A utility or pipeline carrier may not require anyone to provide a reason for inspecting the tariff as a prerequisite to the inspection.
(c) Repealed 10/27/2017.
History
- Authority: AS 42.05.141; AS 42.05.361; AS 42.06.350 AS 42.05.151; AS 42.06.140; AS 42.06.390
- Eff. 11/16/73, Register 48; am 6/29/84, Register 90; am 10/27/2017, Register 224
3 AAC 48.260 Public notice of utility tariff inspection privilege
Repealed.
History
- Eff. 11/16/73, Register 48; am 6/29/84, Register 90; repealed 10/27/2017, Register 224
3 AAC 48.270 Tariff advice letters
(a) Unless otherwise provided, every tariff filing required by 3 AAC 48.200 - 3 AAC 48.430, except filings directly related to applications for new or amended certificates of public convenience and necessity, must be transmitted to the commission by a consecutively numbered letter designated as "Tariff Advice Letter No. 1, 2, 3, etc." Tariff advice letters may be on either letterhead or plain paper, but must be formatted to print eight and one-half inches by 11 inches in size, must contain the name and return address of the filing utility or pipeline carrier, and must contain the name, return address, and electronic mail address of the filing utility or pipeline carrier's representative authorized to issue tariffs. Tariff advice letters must
(1) list the tariff advice letter number;
(2) specify the statutes, regulations, or commission order that the filing is made under;
(3) list the tariff sheets, special contracts, agreements, forms, or other documents required by commission order that are being filed;
(4) summarize the proposed tariff revisions, including an explanation about whether the filing proposes to implement rules, rates, or both;
(5) include a statement setting out whether the filing will impact any current customers or shippers and if so, the estimated number of customers or shippers that will be affected;
(6) if applicable, include a request for the tariff filing to take effect before the end of the statutory notice period, including a proposed effective date and explanation demonstrating good cause showing why the early effective date is necessary; and
(7) if applicable, include a request for interim approval.
(b) If the filing is based upon a study, a copy of the study used by the utility or pipeline carrier must be filed with the tariff advice letter, if not already on file with the commission. If a utility or pipeline carrier wishes to keep a study confidential it may petition for confidentiality as provided in 3 AAC 48.045.
(c) When a special contract is filed, the tariff advice letter must address the requirements of 3 AAC 48.390(b) and include a statement explaining the reason the customer was not required to take service under an existing tariff schedule or appropriate revision of it, designed to accommodate the customer and all others similarly situated. If a special contract is filed under seal, in accordance with 3 AAC 48.045(a), the tariff advice letter must also name the signatories to the contract and give the date of execution.
History
- Authority: AS 42.05.141; AS 42.06.140; AS 42.06.380 AS 42.05.151; AS 42.06.350; AS 42.06.390 AS 42.05.411; AS 42.06.360
- Eff. 5/9/75, Register 54; am 6/29/84, Register 90; am 8/6/92, Register 123; am 4/24/2004, Register 170; am 11/6/2016, Register 220; am 10/27/2017, Register 224
3 AAC 48.274 Pipeline carrier initial rate filings
(a) Each filing with the commission of an initial pipeline tariff rate for a newly constructed pipeline or a pipeline not previously regulated under AS 42.06 must include
(1) a statement of assets, liabilities, and other credits as of the beginning of the calendar or fiscal year following the projected commencement of regulated pipeline operation;
(2) a statement of annual income and operating expenses as of the beginning of the calendar or fiscal year following the projected commencement of regulated pipeline operation;
(3) a statement of the pipeline carrier's equity position to include capital stock, retained earnings, owner's equity, or fund balances for the beginning of the calendar or fiscal year following the projected commencement of regulated pipeline operation;
(4) a schedule showing the calculation of the initial rates;
(5) a schedule showing the computations of the revenue requirement for the calendar or fiscal year following the projected commencement of regulated pipeline operation;
(6) a schedule showing estimated operating revenues and expenses for the calendar or fiscal year following the projected commencement of regulated pipeline operation;
(7) a schedule showing the computation of the pro forma provision for income taxes for the calendar or fiscal year following the projected commencement of regulated pipeline operation;
(8) a schedule showing the computation of rate base using the initial balances of all rate base components;
(9) a summary of
(A) pipeline plant and depreciation for the first calendar or fiscal year following the projected commencement of regulated pipeline operation, showing plant in service;
(B) depreciation expense for each plant account;
(C) the depreciation method;
(D) asset life; and
(E) net salvage value used for computing depreciation expense and the beginning-of-year balance of each plant account and the related account for accumulated depreciation;
(10) a schedule showing the pro forma cash working capital requirement based on the projected test-year;
(11) a schedule showing the computation of weighted cost of capital, separately delineating
(A) the percentage amount and embedded cost of debt;
(B) the percentage amount and rate of return on equity; and
(C) the resultant returns on the rate base computed in (8) of this subsection;
(12) a schedule showing all liabilities of long-term debt at the beginning of the calendar or fiscal year following the projected commencement of regulated pipeline operation, including
(A) a description of each obligation;
(B) the nominal date of issue;
(C) the date of maturity;
(D) the authorized face amount; and
(E) a computation of embedded cost of debt used in (11) of this subsection; and
(13) prefiled direct testimony complying with 3 AAC 48.153 that supports the information filed with the application, and a list of the witnesses filing testimony.
(b) A pipeline carrier seeking to collect funds to dismantle or remove pipeline facilities or restore rights-of-way in rates filed in accordance with (a) of this section must provide
(1) a copy of all documents imposing an obligation to dismantle or remove pipeline facilities or restore rights-of-way;
(2) a detailed study supporting estimated costs to dismantle and remove the pipeline facilities and restore rights-of-way, and the work papers supporting the study;
(3) a schedule of cumulative projected fund balance by year, including projected collections, expenditures, earnings, and any effect of income taxes on the fund's projected earnings;
(4) an explanation of proposed fund management; and prefiled direct testimony complying with 3 AAC 48.153 that supports information filed under this subsection, and a list of the witnesses filing testimony.
(c) If a pipeline carrier files a new rate for transportation on a pipeline not previously regulated under AS 42.06, the commission may require, in addition to the information required under (a) of this section, information pertaining to the pipeline's historical costs and operations.
History
- Authority: AS 42.06.140; AS 42.06.360; AS 42.06.380 AS 42.06.350; AS 42.06.370; AS 42.06.390
- Eff. 4/24/2009, Register 190
3 AAC 48.275 Supporting information
(a) Except as provided in (b) of this section, each filing with the commission of a permanent or interim tariff revision that involves a change in rates to the customers of a utility or shippers of a pipeline carrier must include the following supporting information in the following order:
(1) a comparative statement of assets, liabilities, and other credits as of the end of each of the two calendar or fiscal years preceding the date of filing;
(2) a comparative statement of income and operating expenses as of the end of each of the two calendar or fiscal years preceding the date of filing;
(3) a comparative statement of changes in the utility's or pipeline carrier's equity position to include fluctuations in capital stock, retained earnings, owner's equity, or fund balances for each of the two calendar or fiscal years preceding the date of filing;
(4) a schedule showing the amount of the proposed rate change, both in absolute dollars and as a percentage increase or decrease, applied to the most recent approved permanent tariff rates and charges for each customer or service classification;
(5) a schedule showing the computations of revenue requirement, and revenue deficiency or surplus, in both absolute dollars and as a percentage of revenues, for the normalized test-year;
(6) a schedule showing test-year operating revenues and expenses, pro forma adjustments, and the resulting normalized test-year operating revenues and expenses;
(7) a schedule showing the computation of and a narrative explanation for any pro forma adjustments to the test-year results of operations;
(8) a schedule showing the computation of the pro forma provision for income taxes for the normalized test-year;
(9) a schedule showing the computation of rate base using a 13-month average (the arithmetic sum of the beginning of each month net balance for the 12-month test period, plus the balance at the end of the twelfth month of the test period, divided by 13) of all rate-base components except cash working capital allowance, and using any other rate-base theory the utility or pipeline carrier considers appropriate and supportable;
(10) a summary of utility, or pipeline, plant and depreciation for each of the two calendar or fiscal years preceding the date of filing, showing plant in service; depreciation expense for each plant account; depreciation method; asset life; and net salvage used for computing that depreciation expense and the end-of-year balance of each plant account and the related account for accumulated depreciation;
(11) a schedule showing the pro forma cash working capital requirement based on the normalized test-year;
(12) a schedule showing the computation of weighted cost of capital, separately delineating the percentage amount and embedded cost of debt, and the percentage amount and rate of return on equity, together with a schedule showing the resultant returns on each of the rate bases computed in (9) of this subsection;
(13) a schedule showing all liabilities of longterm debt for each of the two calendar or fiscal years preceding the filing, including a description of each obligation; nominal date of issue; date of maturity; authorized face amount; and the computation of the embedded cost of debt used in (12) of this subsection;
(14) as provided for under 3 AAC 48.153, prefiled direct testimony in support of the information filed under this subsection, together with a list of the witnesses filing testimony;
(15) for a pipeline carrier seeking to collect in rates money to cover costs to dismantle or remove a pipeline facility or restore a right-of-way,
(A) any document imposing an obligation to dismantle or remove a pipeline facility or restore a right-of-way;
(B) a detailed study supporting the total estimated cost to dismantle and remove the pipeline facility and restore the right-of-way;
(C) a schedule of the cumulative balance to date of any fund for the dismantlement or removal of a pipeline facility or the restoration of a right-of-way; the schedule must provide details since inception of the pipeline of annual revenue, expenditures, and earnings;
(D) a schedule showing the effect of income taxes, if any, on the cumulative balance to date of any fund for the dismantlement or removal of a pipeline facility or the restoration of a right-of-way;
(E) an explanation of how the existing or proposed fund for the dismantlement or removal of a pipeline facility or the restoration of a right-of-way will be managed; and
(F) a statement identifying any component of the rate-base computation associated with the dismantlement or removal of a pipeline facility or the restoration of a right-of-way;
(16) for a pipeline carrier that has performed dismantlement or removal of a pipeline facility or the restoration of a right-of-way during the test year, a schedule showing any adjustments pertaining to the costs of the dismantlement or removal of the pipeline facility or the restoration of the right-of-way included in the schedule submitted in accordance with (5) of this subsection.
(b) Unless otherwise ordered by the commission, (a) of this section does not apply to the following charges and periodic rates, provided cost justification is included with the tariff filings:
(1) charges for connections, reconnections, installations, bad checks, late payments, line extensions, meter testing, special services of a non-utility nature, special equipment (one-time charges), moves and changes, directory listings, or maintaining records;
(2) changes in customer deposit requirements, cooperative association membership fees, payments instead of assessments, or contributions or advances in aid of construction;
(3) initial connection or installation charges and initial, inception, or periodic rates established for new equipment or a new service added to the tariff of a utility or pipeline carrier.
(c) If the information required by (a)(1), (2), (3) and (4) of this section is not available for the entire calendar or fiscal year immediately preceding the tariff filing, the utility shall file the available information for that year and indicate the date the entire information for that year will be filed with the commission.
(d) - (f) Repealed 6/29/84.
(g) Each account referred to in any item required to be filed by (a) of this section shall refer to the proper account number of the applicable Uniform System of Accounts.
(h) In addition to any other supporting studies required by this chapter, if a proposed tariff revision includes a rate redesign, other than an across-the-board increase, a cost-of-service study and a narrative explaining the methodology used in the study must be submitted.
(i) If the rates for public utility or pipeline carrier services submitted as a part of a tariff filed with an application for transfer of a certificate of public convenience and necessity, or for transfer of a controlling interest in a certificated public utility or pipeline carrier, under AS 42.05.281 or AS 42.06.305 and 3 AAC 48.640(a)(3) and (4), differ from those of the transferor, the applicant shall file supporting financial information required by (a) of this section.
(j) The commission advisory staff, within its resources as provided for in 3 AAC 48.157(b), shall analyze the reasonableness and propriety of a utility's or pipeline carrier's filing, including its accuracy, representativeness, methodology, and conformance with law.
(k) Subsection (a) of this section does not apply to filings for the development and support of access charges. A filing for the development and support of access charges must be in accordance with the Alaska Intrastate Interexchange Access Charge Manual, adopted by reference in 3 AAC 48.440.
(l) A pipeline carrier with simplified pipeline tariff rates filed under 3 AAC 48.450 - 3 AAC 48.490 may file revised rates, along with a statement specifying the simplified tariff rates subject to revision, under this section if
(1) property balances filed in support of the revised rates are based on current plant property, additions, retirements, and accumulated depreciation consistent with the pipeline carrier's previous filings under 3 AAC 48.450 - 3 AAC 48.490;
(2) the rate base and property balances are not adjusted to
(A) add an allowance for funds used during construction for property in service during the period rates filed under 3 AAC 48.450 - 3 AAC 48.490 were in effect except as provided in (m) of this section; or
(B) subtract accumulated deferred income taxes except as provided in (m) of this section; and
(3) any dismantlement, removal, and restoration costs waived by the pipeline carrier during the period rates filed under 3 AAC 48.450 - 3 AAC 48.490 were in effect are not recovered in rates filed under this section.
(m) If the commission orders the pipeline carrier to subtract accumulated deferred income taxes from the rate base, the pipeline carrier filing revised rates under (l) of this section may add to the rate base and property balances an allowance for funds used during construction that does not exceed the amount of accumulated deferred income taxes deducted from the rate base.
(n) The accumulated depreciation balances used to calculate rates filed under 3 AAC 48.450 - 3 AAC 48.490 are not subject to investigation or protest when included in rates filed under (l) of this section. The beginning plant balances, additions, and retirements verified by the pipeline carrier for rates filed under 3 AAC 48.450 - 3 AAC 48.490 are subject to investigation or protest when included in rates filed under (l) of this section.
History
- Authority: AS 42.04.080; AS 42.05.411; AS 42.06.350 AS 42.05.141; AS 42.05.431; AS 42.06.370 AS 42.05.151; AS 42.05.441; AS 42.06.390 AS 42.05.361; AS 42.06.055; AS 42.06.430 AS 42.05.391; AS 42.06.140
- Eff. 9/12/75, Register 55; am 6/8/78, Register 66; am 6/29/84, Register 90; am 1/10/99, Register 149; am 5/5/2000, Register 154; am 3/21/2003, Register 165; am 8/19/2006, Register 179; am 1/9/2009, Register 189; am 11/6/2016, Register 220
3 AAC 48.277 Uniform system of accounts
(a) Except as otherwise ordered by the commission, each public utility or pipeline carrier shall comply with the following Uniform System of Accounts applicable to that utility or carrier:
(1) a telephone utility shall maintain records and accounts in accordance with the Uniform System of Accounts for Telecommunications Companies prescribed by 47 C.F.R. 32, as revised as of January 1, 1988 and adopted by reference, subject to the following modifications, exceptions, and exclusions:
(A) a telephone utility with annual operating revenues of $5,000,000 or more is a Class A utility and shall use the Class A system of accounts under 47 C.F.R. 32;
(B) a telephone utility with annual operating revenues of less than $5,000,000 is a Class B utility and shall use the Class B system of accounts under 47 C.F.R. 32;
(C) the provisions of 47 C.F.R. 32.16(a), 47 C.F.R. 32.22(a) and (c), 47 C.F.R. 32.27(f), 47 C.F.R. 32.2000(b)(1) and (4), 47 C.F.R. 32.2004, 47 C.F.R. 32.2005(b)(3), 47 C.F.R. 32.2215, 47 C.F.R. 32.2425, 47 C.F.R. 32.6215, and 47 C.F.R. 32.6425 are not adopted by reference;
(D) a reference in 47 C.F.R. 32 to "Commission," "Federal Communications Commission," "Common Carrier Bureau," or "Wireline Competition Bureau" means the Regulatory Commission of Alaska;
(E) the dollar-limit waivers provided for in 47 C.F.R. 32 are not applicable for purposes of the account treatment required by this paragraph, with the following exceptions:
(i) the provisions of 47 C.F.R. 32.25 are adopted, as revised to allow a Class A telephone utility, without prior commission approval, to record in current operating accounts a correction of an error in a prior period that is no more than one percent of the aggregate summary account;
(ii) the provisions of 47 C.F.R. 32.2000(d)(1) are adopted;
(iii) the provisions of 47 C.F.R. 32.2003(b) are adopted, as revised to allow a Class A telephone utility to book short-term plant under construction to plant accounts when the cost of a construction project is $100,000 or less and to allow a Class B telephone utility to book plant under construction to plant accounts when the cost of the construction project is $25,000 or less;
(iv) the provisions of 47 C.F.R. 32.2000(a)(4), as revised as of January 1, 2003, are adopted by reference to allow a telephone utility to employ a capitalization threshold of $2,000 for the applicable accounts identified in 47 C.F.R. 32.2000(a)(4);
(v) a telephone utility following 47 C.F.R. 32.2000(a)(4), as adopted by reference in (iv) of this subparagraph, may elect a $500 capitalization threshold in place of the $2,000 threshold; within 60 days after November 28, 2003, a telephone utility making an election under this sub-subparagraph must file with the commission a letter indicating the election to use the lower threshold; once the election is made, the telephone utility may not change to the $2,000 threshold without commission approval;
(F) for purposes of the account at 47 C.F.R. 32.2003 for plant under construction, a telephone utility shall capitalize allowance for funds used during construction and construction work in progress using a capitalization rate based on the actual average cost of debt, as provided for in 47 C.F.R. 32.2000(c)(2)(x), 47 C.F.R. 32.2003(a) and (c), and 47 C.F.R. 32.7340, as revised as of September 6, 1995 and adopted by reference;
(G) the provisions of 47 C.F.R. 32.2123, 47 C.F.R. 32.2211, 47 C.F.R. 32.2212, 47 C.F.R. 32.2232, and 47 C.F.R. 32.2424, as revised as of January 1, 2003, are adopted by reference;
(H) the provisions of 47 C.F.R. 32.6120, 47 C.F.R. 32.6211, 47 C.F.R. 32.6212, 47 C.F.R. 32.6232, and 47 C.F.R. 32.6424, as revised as of January 1, 2003, are adopted by reference;
(2) for purposes of applying (1) of this subsection a telephone utility shall follow the cost allocation principles prescribed by 47 C.F.R. 64.901, as revised as of January 1, 1988 and adopted by reference;
(3) for purposes of allocating the costs of joint use or interconnection of facilities under 3 AAC 48.430, a telephone utility shall account for its operations in accordance with (1) and (2) of this subsection;
(4) in (1) - (3) of this subsection "telephone utility" means a telecommunications public utility, except for a cable television or radio common carrier utility;
(5) gas public utilities with annual operating revenues of $5,000,000 or more shall maintain records and accounts in accordance with the Uniform System of Accounts for Class A natural gas companies prescribed by Part 201 of the Federal Energy Regulatory Commission regulations (18 C.F.R. Part 201) which were in effect on January 1, 1982;
(6) gas public utilities with annual operating revenues of at least $1,500,000 but less than $5,000,000 shall maintain records and accounts in accordance with the Uniform System of Accounts for Class B natural gas companies prescribed by Part 201 of the Federal Energy Regulatory Commission regulations (18 C.F.R. Part 201) which were in effect on January 1, 1982;
(7) gas public utilities with annual operating revenues of at least $500,000 but less than $1,500,000 shall maintain records and accounts in accordance with the Uniform System of Accounts for Class C natural gas companies prescribed by Part 204 of the Federal Energy Regulatory Commission regulations (18 C.F.R. Part 204) which were in effect on January 1, 1982;
(8) gas public utilities with annual operating revenues of less than $500,000 shall maintain records and accounts in accordance with the Uniform System of Accounts for Class D natural gas companies prescribed by Part 204 of the Federal Energy Regulatory Commission regulations (18 C.F.R. Part 204) which were in effect on January 1, 1982;
(9) electric public utilities financed in whole or in part by the Rural Electrification Administration shall maintain their records and accounts in accordance with the Uniform System of Accounts prescribed for electric borrowers of the Rural Electrification Administration, United States Department of Agriculture, which were in effect on January 1, 1982;
(10) electric public utilities not subject to (9) of this subsection with annual operating revenues of $5,000,000 or more shall maintain records and accounts in accordance with the Uniform System of Accounts for Class A public utilities prescribed by Part 101 of the Federal Energy Regulatory Commission regulations (18 C.F.R. Part 101) which were in effect on January 1, 1982;
(11) electric public utilities not subject to (9) of this subsection with annual operating revenues of at least $1,500,000 but less than $5,000,000 shall maintain records and accounts in accordance with the Uniform System of Accounts for Class B public utilities prescribed by Part 101 of the Federal Energy Regulatory Commission regulations (18 C.F.R. Part 101) which were in effect on January 1, 1982;
(12) electric public utilities not subject to (9) of this subsection with annual operating revenues of at least $500,000 but less than $1,500,000 shall maintain records and accounts in accordance with the Uniform System of Accounts for Class C public utilities prescribed by Part 104 of the Federal Energy Regulatory Commission regulations (18 C.F.R. Part 104) which were in effect on January 1, 1982;
(13) electric public utilities not subject to (9) of this subsection with annual operating revenues of less than $500,000 shall maintain records and accounts in accordance with the Uniform System of Accounts for Class D public utilities prescribed by Part 104 of the Federal Energy Regulatory Commission regulations (18 C.R.F. Part 104) which were in effect on January 1, 1982;
(14) water public utilities with annual operating revenues of $1,000,000 or more shall maintain records and accounts in accordance with the Uniform System of Accounts for Class A water utilities prescribed by the National Association of Regulatory Utility Commissioners which were in effect on January 1, 1982;
(15) water public utilities with annual operating revenues of at least $500,000 but less than $1,000,000 shall maintain records and accounts in accordance with the Uniform System of Accounts for Class B water utilities prescribed by the National Association of Regulatory Utility Commissioners which were in effect on January 1, 1982;
(16) water public utilities with annual operating revenues of at least $250,000 but less than $500,000 shall maintain records and accounts in accordance with the Uniform System of Accounts for Class C water utilities prescribed by the National Association of Regulatory Utility Commissioners which were in effect on January 1, 1982;
(17) water public utilities with annual operating revenues of less than $250,000 shall maintain records and accounts in accordance with the Uniform System of Accounts for Class D water utilities prescribed by the National Association of Regulatory Commissioners which were in effect on January 1, 1982;
(18) garbage, refuse, trash, and other waste material public utilities with annual operating revenues of $250,000 or more shall maintain records and accounts in accordance with the Uniform System of Accounts for Class 1 solid waste collection and disposal utilities prescribed by the Department of Public Utilities, State of New Jersey, which were in effect on January 1, 1982;
(19) garbage, refuse, trash, or other waste material public utilities with annual operating revenues of less than $250,000 but more than $100,000 shall maintain records and accounts in accordance with the Uniform System of Accounts for Class 2 solid waste collection and disposal utilities prescribed by the Department of Public Utilities, State of New Jersey, which were in effect on January 1, 1982;
(20) garbage, refuse, trash, or other waste material public utilities with annual operating revenues of less than $100,000 shall maintain records and accounts in accordance with the Uniform System of Accounts for Class 3 solid waste collection and disposal utilities prescribed by the Department of Public Utilities, State of New Jersey, which were in effect on January 1, 1982;
(21) community antenna or cable television (CATV) public utilities with annual operating revenues of $200,000 or more shall maintain records and accounts in accordance with the Uniform System of Accounts for Class A CATV public utilities prescribed by the National Association of Regulatory Utility Commissioners which were in effect on January 1, 1982;
(22) community antenna or cable television (CATV) public utilities with annual operating revenues of less than $200,000 shall maintain records and accounts in accordance with the Uniform System of Accounts for Class B CATV public utilities prescribed by the National Association of Regulatory Utility Commissioners which were in effect on January 1, 1982;
(23) beginning with the utility's fiscal year immediately following the effective date of this paragraph, radio common carrier public utilities shall maintain records and accounts in accordance with the Uniform System of Accounts for radio common carrier public utilities prescribed by the National Association of Regulatory Utility Commissioners which were in effect on January 1, 1982;
(24) beginning with the utility's fiscal year immediately following the effective date of this paragraph, sewer public utilities with annual operating revenues of $1,000,000 or more shall maintain records and accounts in accordance with the Uniform System of Accounts for Class A sewer utilities prescribed by the National Association of Regulatory Utility Commissioners which were in effect on January 1, 1982;
(25) beginning with the utility's fiscal year immediately following the effective date of this paragraph, sewer public utilities with annual operating revenues of at least $500,000 but less than $1,000,000 shall maintain records and accounts in accordance with the Uniform System of Accounts for Class B sewer public utilities prescribed by the National Association of Regulatory Utility Commissioners which were in effect on January 1, 1982;
(26) beginning with the utility's fiscal year immediately following the effective date of this paragraph, sewer public utilities with annual operating revenues of at least $250,000 but less than $500,000 shall maintain records and accounts in accordance with the Uniform System of Accounts for Class C sewer public utilities prescribed by the National Association of Regulatory Utility Commissioners which were in effect on January 1, 1982;
(27) beginning with the utility's fiscal year immediately following the effective date of this paragraph, sewer public utilities with annual operating revenues of less than $250,000 shall maintain records and accounts in accordance with the Uniform System of Accounts for Class D sewer utilities prescribed by the National Association of Regulatory Utility Commissioners which were in effect on January 1, 1982;
(28) beginning with the pipeline carrier's fiscal year immediately following the effective date of this paragraph, pipeline carriers shall maintain records and accounts in accordance with the Uniform System of Accounts for oil (crude and products) pipelines prescribed by Part 352 (18 C.F.R. Part 352) of the Federal Energy Regulatory Commission regulations which were in effect on January 1, 1982;
(29) beginning with the pipeline carrier's fiscal year immediately following the effective date of this paragraph, natural gas pipeline carriers with annual operating revenues of $2,500,000 or more shall maintain records and accounts in accordance with the Uniform System of Accounts for Class A natural gas pipelines prescribed by Part 201 of the Federal Regulatory Commission regulations (18 C.F.R. Part 201) which were in effect on January 1, 1982;
(30) beginning with the pipeline carrier's fiscal year immediately following the effective date of this paragraph, natural gas pipeline carriers with annual operating revenues of at least $1,000,000 but less than $2,500,000 shall maintain records and accounts in accordance with the Uniform System of Accounts for Class B natural gas pipelines prescribed by Part 201 of the Federal Energy Regulatory Commission regulations (18 C.F.R. Part 201) which were in effect on January 1, 1982;
(31) beginning with the pipeline carrier's fiscal year immediately following the effective date of this paragraph, natural gas pipeline carriers with annual operating revenues of at least $150,000 but less than $1,000,000 shall maintain records and accounts in accordance with the Uniform System of Accounts for Class C natural gas pipelines prescribed by Part 204 of the Federal Energy Regulatory Commission regulations (18 C.F.R. Part 204) which were in effect on January 1, 1982;
(32) beginning with the pipeline carrier's fiscal year immediately following the effective date of this paragraph, natural gas pipeline carriers with annual operating revenues of less than $150,000 shall maintain records and accounts in accordance with the Uniform System of Accounts for Class D natural gas pipelines prescribed by Part 204 of the Federal Energy Regulatory Commission regulations (18 C.F.R. Part 204) which were in effect on January 1, 1982.
(b) Each of the Uniform System of Accounts referred to in (a) of this section may be obtained at the office of the Alaska Public Utilities Commission as specified in 3 AAC 48.010(a).
(c) Repealed 11/28/2003.
(d) The adoption by reference of the applicable Uniform System of Accounts set out in (a) of this section does not preclude a utility, upon notification to the commission, from maintaining accounts and records in accordance with the Uniform System of Accounts prescribed for the same type of utility in a higher revenue classification.
(e) A pipeline carrier shall establish and maintain as part of its system of accounts continuing property records showing, as to property units in this state, the year of placement in service; original cost; and current location; and, as to a pipeline system, accounts and records in a manner showing, on a current basis, the original cost of the system in the state and related reserves for depreciation.
(f) A pipeline carrier shall keep its accounts for its pipeline facilities located in this state separate from any accounts relating to any other business it engages in, directly or indirectly. No property, expense, or revenue used in or derived from the other business will be considered in establishing the rates and charges of the facilities.
History
- Authority: AS 42.05.141; AS 42.05.401; AS 42.06.430 AS 42.05.151; AS 42.05.451; AS 42.06.620 AS 42.05.321; AS 42.05.691 AS 42.05.361; AS 42.06.140
- Eff. 6/29/84, Register 90; am 6/16/88, Register 106; am 5/20/99, Register 150; am 11/23/2003, Register 168
3 AAC 48.280 Additional public notice
The commission may prescribe, on a case-by-case basis, one or more appropriate additional means by which a tariff filing must be noticed to the public, including
(1) publication in one or more newspapers or by means of other news media at the expense of the filing utility or pipeline carrier;
(2) individual notice to all customers or shippers that may be affected by the tariff filing, either by hand, by United States mail, or by a similar delivery service, under conditions prescribed by the commission, or by the commission itself; or
(3) publication on the commission's website.
History
- Authority: AS 42.05.141; AS 42.05.411; AS 42.06.390 AS 42.05.151; AS 42.06.140 AS 42.05.361; AS 42.06.350
- Eff. 11/16/73, Register 48; am 6/29/84, Register 90; am 11/6/2016, Register 220; am 10/27/2017, Register 224
3 AAC 48.290 Response to public notice
(a) Comments may be filed either electronically, including by electronic mail, or on paper. Any person desiring to submit a comment in response to a tariff filing may be asked to do so not later than 20 days after the date the commission received the tariff filing, unless a longer period, not in excess of 30 days, is granted by public notice, or by notice in writing. Every notice to the public by hand, United States mail, or a similar delivery service or by means of a paid legal advertisement in any news media shall specify the deadline date for comments.
(b) Comments must be submitted with a copy to the utility or pipeline carrier, must be signed by the interested person or the person's authorized representative, and must contain at least the following information:
(1) reference to the applicable docket number, tariff advice letter number, or file reference specified in the notice;
(2) the name, mailing address, and, if applicable, electronic mail address of the person filing, regardless of whether the person is a customer of the utility or a shipper with the pipeline carrier; and if the person is a customer or shipper, the physical address of the place or places where service is taken, or the place or places where shipment is received by the carrier;
(3) the reason for filing, if not a customer or shipper, together with any supporting factual data;
(4) whether or not the comment is made on behalf of the interested person or on behalf of other named persons, including an organized group, association, or company;
(5) the person's comment in the noticed matter with reasonable particularity, and as concisely as possible; and
(6) a statement that a true copy of the same comment has been served on the utility or pipeline carrier that made the tariff filing, together with the date it was either electronically mailed or delivered by hand, United States mail, or similar delivery service to the utility or pipeline carrier.
(c) A customer of a utility, or a shipper with a pipeline carrier, has unquestioned standing to file a timely comment on a filing by that utility or pipeline carrier. The standing of others to file comments depends upon the nature of their interest, the merit of their position, the extent to which their comments are supported by accurate factual data, and other factors that the commission considers pertinent. Comments may be summarily dismissed, or ignored, if the commission finds the comment is based upon erroneous assumptions or appears to be motivated mainly by a desire to harass or embarrass the utility or pipeline carrier or to protect the economic interests of the competitors of the utility or pipeline carrier. A person who is denied standing may file a motion asking the commission to reconsider its decision and indicating the reason the motion should be granted.
History
- Authority: AS 42.05.141; AS 42.06.140; AS 42.06.370 AS 42.05.151; AS 42.06.350; AS 42.06.390
- Eff. 11/16/73, Register 48; am 6/29/84, Register 90; am 11/6/2016, Register 220
3 AAC 48.300 Waiver of statutory notice period
(a) When a utility or pipeline carrier includes in its tariff advice letter a request under 3 AAC 48.270(a)(6) for a tariff filing to take effect before the end of the statutory notice period, the burden of showing good cause for waiving statutory notice must be borne by the filing utility or pipeline carrier.
(b) In response to each request under (a) of this section, the commission may take one of the following actions:
(1) deny the request and require at least the statutory notice period to expire before allowing the tariff filing to take effect;
(2) grant the requested effective date as proposed in the tariff advice letter;
(3) allow the tariff filing to take effect before the end of the statutory notice period but later than the requested effective date proposed in the tariff advice letter;
(4) pending a public hearing, suspend the operation of the tariff filing for a period not longer than that permitted under AS 42.05.421 or AS 42.06.400.
(c) The commission, on its own motion or for good cause shown, may waive statutory notice and specify an effective date before the end of the statutory notice period for
(1) tariffs of new utilities or pipeline carriers and of utilities or pipeline carriers brought under regulation by operation of law;
(2) tariff filings covering services, facilities, or commodities not previously furnished;
(3) tariffs that take effect by means of adoption notices; and
(4) tariff filings filed to comply with orders of the commission.
History
- Authority: AS 42.05.141; AS 42.05.411; AS 42.06.390 AS 42.05.151; AS 42.06.140; AS 42.06.400
- Eff. 11/16/73, Register 48; am 6/29/84, Register 90; am 10/27/2017, Register 224
3 AAC 48.310 Suspension and rejection of tariff filings
(a) A tariff filing that is received by the commission in a form or filed by a method which, in whole or in part, is not consistent with 3 AAC 48.200 - 3 AAC 48.430, or which reflects retroactive rate treatment, will, in the commission's discretion, be rejected.
(b) When a tariff filing is rejected, it will be returned promptly to the utility or pipeline carrier with a letter explaining the reason the filing was rejected.
(c) A tariff filing, or any portion of one, that has been rejected is void.
(d) The commission will, in its discretion, by order stating the reason, suspend a tariff filing either in whole or in part at any time before the end of the statutory notice period to the commission.
(e) If the commission does not enter a formal order suspending a tariff filing, in whole or in part, the part of the filing that is not suspended takes effect when the statutory notice period has expired in accordance with 3 AAC 48.220, or at a later date designated by the utility or pipeline carrier.
(f) Show cause orders and orders of investigation involving a suspended tariff filing will be issued under the same docket file number as the one under which the original suspension order was entered.
(g) If a suspended tariff filing is withdrawn by a utility or a pipeline carrier and later refiled, the commission may suspend the filing again up to the full statutory period.
(h) An order of the commission suspending a tariff filing, in whole or in part, may later be vacated, in whole or in part, by means of an order in the same formal proceeding.
(i) During the suspension period, a utility or pipeline carrier may supplement or amend its tariff filing or make additional filings. However, if the supplementary or additional filings represent or make a significant or material change in the original filing, the commission will, in its discretion, suspend the filing again up to the full statutory period and renotice the supplemented or amended filing to the public under 3 AAC 48.280.
History
- Authority: AS 42.05.141; AS 42.05.421; AS 42.06.400 AS 42.05.151; AS 42.06.140 AS 42.05.411; AS 42.06.350
- Eff. 11/16/73, Register 48; am 6/29/84, Register 90; am 10/27/2017, Register 224
3 AAC 48.315 Telecommunications utility rate reductions
(a) A telecommunications utility may reduce a retail rate without commission approval after notice of a tariff filing submitted by the utility in accordance with applicable filing requirements and notice procedures of this chapter, 3 AAC 52, and 3 AAC 53.
(b) Notwithstanding (a) of this section, the commission may act on rates proposed as follows:
(1) in a local exchange area not designated as a competitive local exchange market under 3 AAC 53.205, the commission will either deny or require modification of rates proposed by a local exchange carrier if the proposal violates an applicable statutory requirement of AS 42.05;
(2) in all other areas, a telecommunications utility proposal to reduce retail rates must comply with the applicable requirements of 3 AAC 52.370, 3 AAC 53.240, or 3 AAC 53.243.
(c) The provisions of 3 AAC 48.275(a) do not apply to a telecommunications utility submitting a tariff filing involving a rate reduction that is not associated with a rate increase. This subsection does not prevent the commission or its staff from requesting information necessary to review compliance with (b) of this section.
(d) In taking any action under this section, the commission may, consistent with principles of state and federal antitrust law, act to preserve fair competition, prevent predatory pricing, and prohibit an unjust or unreasonable bundled service.
History
- Authority: AS 42.05.141; AS 42.05.145; AS 42.05.151
- Eff. 9/16/2005, Register 175
3 AAC 48.320 Separate tariff for each utility or pipeline carrier and controlling effective tariff
(a) When a single entity furnishes more than one kind of utility service, pipeline carrier service, or commodity, as defined in AS 42.05 or AS 42.06, the entity shall file a separate tariff for each kind of utility service, pipeline carrier service, or commodity that the entity furnishes.
(b) For every service that a utility or pipeline carrier offers that is regulated by the commission, the effective tariff of the utility or pipeline carrier must set out the rates, charges, regulations, terms, and conditions applicable to the service. The effective tariff of every utility or pipeline carrier must specifically provide for, and authorize, every rate or charge subject to the commission's jurisdiction.
(c) A utility or pipeline carrier may not deviate from its effective tariff or refuse to apply it uniformly without prior commission approval.
(d) If a utility or pipeline carrier charges more or less than the amount provided by its effective tariff, it shall promptly make appropriate adjustments to correct the total overpayment or underpayment.
(e) Errors occurring in an effective tariff that result solely from a typographic or reproduction mistake must, upon discovery, be corrected immediately by the utility or pipeline carrier by filing, in compliance with 3 AAC 48.220 and 3 AAC 48.270, revised tariff sheets.
History
- Authority: AS 42.05.141; AS 42.05.371; AS 42.06.140 AS 42.05.151; AS 42.05.381; AS 42.06.360
- Eff. 11/16/73, Register 48; am 6/29/84, Register 90; am 10/27/2017, Register 224
3 AAC 48.330 Format of tariff sheets
Every tariff sheet must be legible and formatted to print eight and one-half by 11 inches in size and, except as provided in 3 AAC 48.360(d), include
(1) the number of the utility or pipeline carrier's certificates of public convenience and necessity;
(2) the tariff sheet number;
(3) the tariff sheet revision number;
(4) the name of the utility or pipeline carrier;
(5) the tariff advice number; and
(6) the proposed effective date.
History
- Authority: AS 42.05.141; AS 42.05.361; AS 42.06.350 AS 42.05.151; AS 42.06.140
- Eff. 11/16/73, Register 48; am 6/29/84, Register 90; am 4/24/2004, Register 170; am 10/27/2017, Register 224
3 AAC 48.340 Tariff sheet designation
(a) Each new tariff sheet must be officially designated by the letters "RCA" in the upper left-hand corner of the tariff sheet, followed by the number of the utility or pipeline carrier's certificate of public convenience and necessity authorizing the utility or pipeline carrier to furnish the kind of service or commodity covered by its tariff.
(b) Each sheet of every tariff, except the title page, must bear a sheet number at the top of the sheet. The first publication of a tariff sheet must be designated as "Original Sheet . . . . . . . . "
(c) The amendment of any sheet of a tariff shall be made only by reissuing the particular sheet upon which the change, addition, or cancellation is made. Reissuing the sheet means to cancel it by a new tariff sheet that contains the same tariff provisions except whatever additions, changes, or cancellations are made. Each revised tariff sheet must bear the same sheet number, either spelled out or in numerical format, as the sheet it amends and must bear a consecutive revision number as explained in this subsection. A revised tariff sheet that amends an original sheet must be designated "FIRST REVISION OF SHEET . . . . . . . . ," "SECOND REVISION OF SHEET . . . . . . . . ," etc. Each revised sheet must direct the cancellation of the original or revised sheet that it amends and this cancellation may be shown in the manner indicated in the following example:
FIRST REVISION OF SHEET . . . . . . . .
CANCELLING
ORIGINAL SHEET . . . . . . . .
When the first revision of a sheet is to be amended, it must be cancelled by a second revised sheet in the following manner:
SECOND REVISION OF SHEET . . . . . . . .
CANCELLING
FIRST REVISION OF SHEET . . . . . . . .
The same number formatting must be used consistently throughout the tariff.
(d) If, after a tariff has been issued, adding an additional sheet becomes necessary to provide for an expanded or additional tariff matter, the added sheet must be designated as an original sheet, not a revised sheet, and must be given the same sheet number, when added between existing sheets of the tariff, as the sheet that it follows. A period or dash suffix, in the numerical sequence, must follow the sheet number, but not both a period and dash. For example, a sheet added between sheets four and five of the tariff must be designated as "Original Sheet 4.1" or "Original sheet 4-1" and a sheet added between 4.1 or 4-1 and 5 of the tariff must be designated as "Original Sheet 4.2" or "Original Sheet 4-2" etc. Either dashes or periods must be used consistently throughout the tariff. A sheet may not be added between two sheets both of which bear sheet numbers with suffixes containing two periods or two dashes. If amending original sheet 4.1 or 4-1 becomes necessary, it shall be done in the manner prescribed in (c) of this section by issuing the first revision of sheet 4.1 or 4-1.
(e) When the added sheet is added after the last sheet, at the end of the tariff, the added sheet shall be given the next consecutive number following the number of the last sheet of the tariff. For example, if the last sheet of a tariff is Sheet 99, the added sheet shall be designated "Original Sheet 100.
(f) When a revised tariff sheet is issued that omits rates, charges, or other provisions formerly published on the sheet that it cancels, and the omitted matter is transferred to a different sheet, the revised sheet must make specific reference to the tariff sheet on which the omitted matter will thereafter be found. The sheet to which the omitted matter is transferred must refer to the tariff sheet on which the matter was formerly published. The cancellation of the matter on the former tariff sheet shall be made effective simultaneously with the effective date of the matter on the sheet to which it is transferred. Subsequent revisions of the revised sheets accomplishing the transfer must omit the references required in this subsection.
(g) If anything on a tariff sheet is to be cancelled entirely, and is not to be transferred to another sheet of the same tariff, the revised sheet that effects the amendment must specifically show the cancellation of the provisions, as prescribed under 3 AAC 48.360(g). Subsequent revisions of the revised tariff sheet that effected the cancellation must omit the required margin notations.
History
- Authority: AS 42.05.141; AS 42.05.361; AS 42.06.350 AS 42.05.151; AS 42.06.140
- Eff. 11/16/73, Register 48; am 6/29/84, Register 90; am; 4/24/2004, Register 170; am 10/27/2017, Register 224
3 AAC 48.350 Separate tariff for each utility
Repealed.
History
- Eff. 11/16/73, Register 48; am 6/29/84, Register 90; repealed 10/27/2017, Register 224
3 AAC 48.360 General arrangement and content of tariff
(a) The effective tariff of a utility or pipeline carrier must contain
(1) a title page that includes the name of the utility or pipeline carrier issuing the tariff as listed on the utility or pipeline carrier's certificate of public convenience and necessity, the certificated service or commodity offered, each certificated area to which the tariff applies, and the physical address of the issuing utility or pipeline carrier;
(2) an index with a complete and accurate list of the contents of the tariff;
(3) a map or set of maps depicting the utility or pipeline carrier's certificated service area;
(4) a complete set of terms and conditions governing the services offered by each utility or pipeline carrier under its applicable tariff; and
(5) a schedule of all rates and charges for each class of service offered, or for each customer or shipper group.
(b) If the index is rendered inaccurate due to the submission of a tariff sheet with a proposed revision, the index tariff sheet must be revised concurrently.
(c) The maps furnished by a pipeline carrier must show the pipeline facility or extension, the route of the pipeline facility or extension, the location of each intake and offtake point currently used, and each intake or offtake point that has been constructed but is not currently used. The maps furnished by a utility must clearly delineate the boundaries of
(1) each of the utility's certificated areas, and the principal area and major points actually served under the tariff; and
(2) the areas, zones, or districts in which the utility's rate schedules are generally applied.
(d) For a pipeline carrier also subject to federal jurisdiction, tariff sheets that delineate the sections of the pipeline carrier's currently effective federal tariff and that are applicable to intrastate transportation of oil and petroleum products, together with a complete copy of the federal tariff, must be set out on consecutively numbered pages immediately following the intrastate rates and charges.
(e) Special contracts with customers must be filed separately by the utility, need not conform to the numbering plan set out in this section, and need not be included in the index page.
(f) In the construction of a tariff, consideration may be given to the fact that it will probably be necessary, in the future, to file additional rates, rules, regulations, or other items. Reservation of sheet and schedule numbers may therefore be made to provide, in advance, for subsequent filings to be made in proper relation to schedules, or other items filed previously.
(g) The purpose and effect of every tariff revision must be indicated on the tariff by the use of the following symbols to the right of the text to which they apply:
C - To denote a changed condition or regulation;
D - To denote a discontinued rate, regulation, or condition;
I - To denote an increase;
L - To denote that material has been relocated from or to another sheet or place in the tariff with no change in text, rate, rule, or condition;
N - To denote a new rate, regulation, condition, or sheet
R - To denote a reduction
S - To denote reissued matter;
T - To denote a change in text for clarification.
(h) The symbols in (g) of this section may not be carried forward on subsequent revisions of the tariff sheets where they originally are shown or into tariff reissues or supplements, and the filing utility or pipeline carrier is not required to use them in any reproduction of its tariff for public inspection.
History
- Authority: AS 42.05.141; AS 42.05.411; AS 42.06.350 AS 42.05.151; AS 42.06.140; AS 42.06.390
- Eff. 11/16/73, Register 48; am 6/29/84, Register 90; am 10/27/2017, Register 224
3 AAC 48.370 Content of rules and regulations
Except as otherwise provided in 3 AAC 48.360, the rules and regulations of each utility or pipeline carrier, to the extent applicable, must include
(1) applications for service, deposits, and credit rules;
(2) definitions of terms used in the tariff;
(3) terms, conditions, and charges for service connections;
(4) the reconnection charge and conditions under which the charge applies;
(5) use of service when it is a determining factor in the application of rates;
(6) installation and allowable deviation of metering devices from fixed standards;
(7) restrictions as to the hours of service, if any;
(8) terms and conditions under which service will be extended to applicants via distribution main extensions, line extensions, or other means (except when stated in a rate schedule);
(9) responsibility for, and maintenance of, service;
(10) access to customer premises;
(11) interruptions of service and credit for interruptions;
(12) billing regulations, including special bills;
(13) delinquent accounts;
(14) illegal use of service;
(15) discontinuance of service by customer or shipper or utility or pipeline carrier, including temporary disconnection of service;
(16) sales for resale;
(17) procedure for filing and disposition of customer or shipper complaints;
(18) form of all contracts, except special contracts, utilized in furnishing services and commodities, and conditions under which they are required;
(19) conditions under which a person may share in the use of the customer's service (e.g., joint-user arrangements in tariff of a telecommunications utility);
(20) directory listing policy;
(21) priority of service;
(22) supersedure of service;
(23) liability clauses;
(24) responsibility of customer or shipper;
(25) responsibility of utility or pipeline carrier;
(26) list of special contracts, with whom and for what service; and
(27) sheet indicating locations of tariff.
History
- Authority: AS 42.05.141; AS 42.05.361; AS 42.06.350 AS 42.05.151; AS 42.05.411; AS 42.06.390 AS 42.05.311; AS 42.06.140(a)
- Eff. 11/16/73, Register 48; am 6/29/84, Register 90
3 AAC 48.380 Content of rate schedules
Each schedule setting out the rates and charges for services offered by the utility or pipeline carrier must be given an appropriate heading. Each schedule must begin on a separate page and must, if applicable, include the following:
(1) the schedule number, class of service, and the locality or area where it is applicable;
(2) to whom the service is available;
(3) the kind or classification of service, the conditions under which it is offered, and, if necessary, the geographic area in which the rate is applicable;
(4) the rate;
(5) whether a schedule is optional, and the associated conditions;
(6) the minimum charge;
(7) the time when service is available if not 24-hour service;
(8) the discount for prompt payment when applicable;
(9) promotional practices involving an offer to pay compensation or consideration or furnish equipment as an inducement for the installation or use of a service or commodity;
(10) any provision for the automatic revision of a rate or charge which is contingent on changes in a cost element entering into the cost of providing service such as fuel adjustment clauses, or changes in the wholesale rate paid by the utility or pipeline carrier for the service or commodity it purchases;
(11) all factors entering into the computation of bills under the schedule;
(12) for telecommunications utilities that furnish local exchange telephone service, their primary rate schedules, their regulated terminal equipment rates, rates and charges for equipment furnished by customers, and schedules for other services peculiar to their operations; and
(13) for telecommunications utilities that furnish interexchange long-lines service, their basic rate schedules, their supplementary rate schedules, their list of toll points and schedules covering all other intrastate services and facilities they furnish to the public for compensation, but not toll settlement formulas and procedures.
History
- Authority: AS 42.05.141; AS 42.05.361; AS 42.06.350 AS 42.05.151; AS 42.06.140(a)AS 42.06.390
- Eff. 11/16/73, Register 48; am 6/29/84, Register 90
3 AAC 48.390 Special contracts
(a) Special contracts are treated as tariff filings. A utility service, commodity, or facility furnished to a customer under an unwritten contract or arrangement must be discontinued unless the parties to it execute a written contract and file it with the commission. This section does not apply to
(1) the merchandising of equipment and appliances;
(2) parts replacement and repair work on customer-owned equipment;
(3) utility construction or materials purchase contracts;
(4) easements;
(5) applications for membership in cooperative associations; or
(6) service agreements which merely recite the provisions of a utility's effective tariff.
(b) Each special contract filed with the commission under AS 42.05.361 (a) and 3 AAC 48.200 - 3 AAC 48.430 must contain a provision indicating the understanding of the parties that the contract
(1) does not take effect without the prior approval of the commission; and
(2) is, at all times, subject to revisions by the commission.
(c) The parties to every special contract shall be given notice and an opportunity to be heard as a condition precedent to the commission revising a special contract.
(d) A special contract may not be used as a device or method to give the vendee an unreasonable preference or advantage or subject the vendee to an unreasonable prejudice or disadvantage as determined by analyzing the provisions of the contract in relation to the terms and conditions under which the utility offers a comparable service under comparable conditions to the general public.
(e) The commission may authorize a utility to offer untariffed services or equipment to customers by special contract under the following conditions:
(1) the utility has filed a tariff filing for the service or equipment in the form and accompanied by the supporting information required under 3 AAC 48.200 - 3 AAC 48.430;
(2) the commission has suspended the operation of the tariff filing pending final approval;
(3) the commission has specified each rate to be charged the customer in the special contract;
(4) each rate specified is retroactively reviewable and revisable, upward or downward, from the effective date of the special contract, and the customer's liability is to pay each rate finally approved for the tariff filing plus or minus accrued interest if that rate is different from the rate initially approved for use in the special contract; and
(5) the special contract expressly advises the customer of the potential retroactive liability for increased rates, plus accrued interest.
(f) Upon the commission's final approval of the tariff filing submitted under (e)(1) of this section, including any adjustment of the rate authorized for use in the special contract, the special contract lapses and service must continue under the terms and conditions set out in the utility's effective tariff.
(g) If the parties to a special contract that is filed with and approved by the commission cancel that contract, the utility or pipeline carrier shall notify the commission that the special contract has been cancelled. The notice to the commission must be by tariff advice letter and must include a copy of the instrument cancelling the special contract and the effective date of the cancellation.
History
- Authority: AS 42.05.141; AS 42.05.301; AS 42.05.391 AS 42.05.151; AS 42.05.361; AS 42.05.431 AS 42.05.291; AS 42.05.381
- Eff. 11/16/73, Register 48; am 1/19/80, Register 73; am 6/29/84, Register 90; am 10/27/2017, Register 224
3 AAC 48.400 Adoption notice
(a) When the name of a utility or pipeline carrier, as shown on a certificate of public convenience and necessity is changed, due to the transfer of operating control of one utility or pipeline carrier to that of another by sale, lease, rental, inheritance, assignment, receivership, acquisition of a controlling interest by any means, or change in the legal form of its organization, or when the name of the utility or pipeline carrier is changed, the utility or pipeline carrier operating after that, if it intends to continue using the tariff shall, for each tariff so used, issue and file with the commission and shall, at the same time, make available for the statutory notice period at every place designated under 3 AAC 48.200 - 3 AAC 48.430, a tariff supplement containing an adoption notice reading substantially as follows:
(Name of utility or pipeline carrier) hereby adopts, as if they had been originally filed by it, all tariffs, rules, notices, concurrences, provisions, authorities, power of attorney, or any other instruments of (name of predecessor utility or pipeline carrier) before (here insert the date of change). By this notice, it also adopts and ratifies all supplements and amendments to any of the above tariffs of the (name of predecessor utility or pipeline carrier).
(b) Adoption notices may be filed and take effect in less than the statutory notice period without written authorization of the commission unless the commission finds it would be contrary to the public interest.
(c) Until the time when an adopted tariff is refiled in the name of the utility or pipeline carrier that adopted it, all subsequent revisions to the tariff must bear the name of the utility or pipeline carrier whose tariff was adopted. A tariff adopted by one utility or pipeline carrier may not be adopted by another utility or pipeline carrier, but instead must be filed as the tariff of the filing utility or pipeline carrier without any substantive change in the rates, charges, rules, and regulations of the predecessor utility or pipeline carrier.
History
- Authority: AS 42.05.141; AS 42.06.140; AS 42.06.360 AS 42.05.151; AS 42.06.305; AS 42.06.390 AS 42.05.361; AS 42.06.350
- Eff. 11/16/73, Register 48; am 6/29/84, Register 90; am 10/27/2017, Register 224
3 AAC 48.410 Tariff of acquired or newly formed utility or pipeline carrier
(a) A newly formed utility, or a utility brought under the commission's jurisdiction by operation of law, shall file its complete tariff with the commission as part of its application for a certificate of public convenience and necessity. A utility filing an application for extension of its service area shall include as part of its application any tariff revisions that may be required and a statement justifying the applicability of its existing tariff in the new service area. The filings are subject to modification, and take effect on the date the certificate, or amendment to the certificate, is granted or at a later date under an order of the commission.
(b) A utility or pipeline carrier acquiring ownership or control of another utility or pipeline carrier, or portion of one, and filing a notice adopting the rates, rules, regulations, and other items of that utility or pipeline carrier shall, not later than 90 days after the filing of that adoption notice, file those rates, rules, regulations, and other items as a part of the acquiring utility or pipeline carrier's own tariff or as a separate tariff in the acquiring utility or pipeline carrier's own name if it plans to continue to operate in accordance with them.
History
- Authority: AS 42.05.141; AS 42.05.411; AS 42.06.360 AS 42.05.151; AS 42.06.305; AS 42.06.390 AS 42.05.361; AS 42.06.350
- Eff. 11/16/73, Register 48; am 6/29/84, Register 90; am 10/27/2017, Register 224
3 AAC 48.420 Uniform deposit practices
(a) When a deposit is required as a condition of receiving utility service the rule which established the deposit requirement shall also set forth the maximum amount of the deposit to be paid, which in no case shall exceed the following amount for a customer of the indicated type of utility as determined by the utility after consultation with the customer:
(1) two months' telephone billings, including toll charges as estimated by the utility;
(2) two months' electric billing based on the utility's estimate of usage;
(3) two months' water charges at the flat rate, or two months of metered charges as estimated by the utility;
(4) two months' gas billings as estimated by the utility;
(5) two months' sewer service fees as estimated by the utility;
(6) two months' garbage, refuse, trash, or other waste material collection and disposal service billings as estimated by the utility;
(7) two months' community antenna or cable television (CATV) service billings as estimated by the utility; and
(8) two months' radio common carrier service billings as estimated by the utility.
(b) The deposit rule must clearly state the length of time the utility will retain a customer's deposit, but under no circumstances may a utility retain a customer's deposit longer than two years, if, in the interim period, the utility has not been forced to disconnect that customer's service for reasons of delinquency in payment of charges, and if the customer has not been delinquent in payment more than once in any 12 consecutive months. Except for electric utilities as set out in 3 AAC 52.420, the deposit must be returned to the customer either within 60 days after discontinuance of telephone service or within 25 days after discontinuance of other utility service, after deducting money due the utility.
History
- Authority: AS 42.05.141; AS 42.05.361; AS 42.05.391 AS 42.05.151; AS 42.05.381
- Eff. 11/16/73, Register 48; am 6/29/84, Register 90; am 1/1/87, Register 100
3 AAC 48.425 Depreciation practices for local exchange carriers
(a) The Federal Communications Commission's Depreciation Ranges Adopted in CC Docket No. 98-137, dated December 17, 1999, is adopted by reference and is used as the depreciation ranges in this section. A local exchange carrier may use depreciation projection lives and future net salvage levels from the depreciation ranges for the carrier's property accounts for purposes of developing intrastate depreciation rates. Depreciation rates developed using the depreciation ranges shall be filed with the commission, and those depreciation rates may go into effect without commission approval if the filing meets the requirements of (f) of this section and the filing is not suspended under (g) of this section.
(b) A local exchange carrier requesting a depreciation projection life or net salvage level not included in the depreciation ranges shall obtain commission approval of its proposed depreciation rates before placing the rates in effect.
(c) The commission will consider the actual useful life of depreciated equipment and facilities in establishing depreciation rates.
(d) When proposing depreciation rates, a local exchange carrier has the burden of proof to demonstrate that its proposed depreciation or amortization expenses are adequate, but not excessive, in accordance with AS 42.05.471, and in accordance with generally accepted accounting principles.
(e) Regardless of whether the depreciation ranges are used, the rates proposed in a depreciation study filed under this section become effective if
(1) after publishing notice of the depreciation study in a newspaper of general circulation in the affected service areas of the local exchange carrier, the commission does not receive opposing comments within the comment period of the commission's public notice; and
(2) the commission does not take action within six months after the filing date of a complete depreciation study.
(f) A local exchange carrier may apply depreciation rates developed from the depreciation ranges without commission approval 90 days after the filing of a complete depreciation study that complies with the requirements established in this subsection. The depreciation rates proposed under this subsection are presumed to be adequate, but not excessive, if the proposed rates and study comply with the following requirements:
(1) the proposed depreciation rates are based on a depreciation study that uses the remaining life method of depreciation;
(2) the proposed depreciation rates are based on a depreciation study that uses the straight-line method of depreciation;
(3) the depreciation ranges are used for all property accounts of the carrier;
(4) after publishing notice of the depreciation study in a newspaper of general circulation in the affected service areas of the local exchange carrier, the commission does not receive opposing comments within the comment period of the commission's public notice;
(5) the depreciation study clearly demonstrates the procedures and methods by which the proposed depreciation rates were developed, and that (b) of this section does not apply;
(6) the proposed change in the intrastate depreciation expense does not exceed eight percent from the carrier's previous year's intrastate annual depreciation expense when adjusted to eliminate changes in expense that result from changes in plant account balances; however, the carrier must demonstrate in its filing that the adjustment is just and reasonable.
(g) Notwithstanding (f) of this section, for good cause shown, the commission may issue an order instituting an investigation and suspending the depreciation proposal submitted under (f) of this section. The commission may either approve, deny, or require modification to the carrier's proposal to ensure that adequate, but not excessive, depreciation rates apply in accordance with AS 42.05.471.
History
- Authority: AS 42.05.141; AS 42.05.411; AS 42.05.471 AS 42.05.151; AS 42.05.421 AS 42.05.381; AS 42.05.431
- Eff. 9/16/2005, Register 175
3 AAC 48.430 Jurisdictional separations
(a) Except as set out in (b) - (m) of this section, the Separations Manual, setting out the standard procedure for separating telephone property costs, revenues, expenses, taxes, and reserves, and as set out in 47 C.F.R. 36, as revised as of August 8, 1988, is adopted by reference. A telephone utility shall allocate its property costs, revenues, expenses, taxes, and reserves in accordance with the principles and procedures in 47 C.F.R. 36, except as set out in (b) - (m) of this section, for use by the commission in establishing rates for telephone utilities.
(b) Except as set out in (e) and (f) of this section, "state toll" is substituted for "state" throughout Part 36.
(c) Sections 36.1(b), 36.2(b)(3), and (e), 36.155(a), 36.331(b), and 37.377(a)(7) are modified by substituting "state toll and local" for "state and interstate" and "interstate or state."
(d) 47 C.F.R. 36.2(b)(3)(iv), 36.126(c)(3), and 36.154(c) - (f) are not adopted. The following applies:
(1) No portion of Category 4.13 or Category 1.3 costs, as defined by 47 C.F.R. 36.126(a) and (b) and 36.154(a), will be apportioned to state toll.
(2) Repealed 1/10/99.
(3) Repealed 1/10/99.
(4) Repealed 1/10/99.
(5) Repealed 1/10/99.
(6) Support received from essential network support, as provided by 3 AAC 53.346, and from the network access fee, as established under Section 109 of the Alaska Intrastate Interexchange Access Charge Manual, adopted by reference in 3 AAC 48.440, shall be offset against the local exchange revenue requirement.
(e) 47 C.F.R. 36.125(b) - (f) are not adopted. The following applies:
(1) Category 3 investment, as defined by 47 C.F.R. 36.125(a), is apportioned to the state toll jurisdiction on the basis of the state toll dial equipment minute (DEM) factor. The state toll DEM factor is the ratio of the state toll DEM to total DEM.
(2) Category 3 investment, as defined by 47 C.F.R. 36.125(a), is apportioned to the AUSF on the basis of weighted state toll DEM minus state toll DEM. Weighted state toll DEM is equal to state toll DEM times in weighting factor set out in (3) of this subsection.
(3) The applicable weighting factor is as follows:
(A) in a local exchange carrier study area with 10,000 or fewer access lines, the applicable weighting factor is 2.33 beginning January 1, 2019, 1.67 beginning January 1, 2020, and 1.0 beginning January 1, 2021 and thereafter.
(B) in a local exchange carrier study area with more than 10,000 but fewer than 20,001 access lines, the applicable weighting factor is 2.0 beginning January 1, 2019, 1.5 beginning January 1, 2020, and 1.0 beginning January 1, 2021 and thereafter.
(C) in a local exchange carrier study area with 20,001 or more access lines, the applicable factor is 1.0.
(4) Notwithstanding (1) - (3) of this subsection, the allocation factor to intrastate toll and universal service is limited to a level that brings the total allocation to interstate toll plus federal universal service support for switching, intrastate toll, and the state universal service support for DEM weighting to the percent of Category 3 investment determined for each local exchange company by the following formula:
.85 + (.05 x (A / B))
where:
A = the number of exchanges with toll free calling to less than 100 access lines
B = the total number of exchanges
(5) Reductions to intrastate factors resulting from application of (3) and (4) of this subsection are applied first to reduce the DEM weighting support portion of the state universal service factor, with any residual used to reduce the intrastate toll DEM factor.
(f) Sections 36.142(b) and 36.377(a)(1)(i), (a)(1)(iii), (a)(2)(v), and (a)(3)(vi) are modified by substituting "local" or "local exchange" for "state" in the phrases "state jurisdiction" and "state operations."
(g) Section 36.154 is modified by adding "Subcategory 1.4, local private lines," in section 36.154(a) and including subcategory 1.4 in the direct assignments provided in section 36.154(b).
(h) Section 36.181(a) is modified by substituting "state toll operation" for "interstate operation."
(i) Section 36.377(a)(1)(i), (a)(2)(v), and (a)(3)(vi) are modified by adding "local private line expense" to the assignments provided in these sections.
(j) Section 36.377(a)(7) is modified by substituting "revenues of" for "revenues deposited in."
(k) Subparts F and G of Part 36, sections 36.601 - 36.741, are not adopted.
(l) Unless the context indicates otherwise, in this section
(1) "dial equipment minutes" or "DEM" means the minutes of holding time of the originating and terminating local switching equipment;
(2) "holding time" means the time in which an item of telephone plant is in actual use either by a customer or an operator; "holding time" includes on a completed telephone call, conversation time as well as other time in use; "holding time" does not include at local dial offices measured minutes that result from other than customer attempts to place calls as evidenced by the dialing of at least one digit.
(m) The provisions of 47 C.F.R. 36.171 and 47 C.F.R. 36.222(c), as revised as of September 6, 1995, are adopted by reference.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.401
- Eff. 7/18/75, Register 55; am 11/25/83, Register 88; am 4/9/89, Register 110; am 3/28/90, Register 113; am 1/10/99, Register 149; am 5/20/99, Register 150; am 1/1/2001, Register 156; am 4/24/2004, Register 170; am 12/20/2018, Register 228
3 AAC 48.440 Rates for interexchange access
Access charges shall be assessed for use of local exchange telephone utility facilities by the providers of intrastate interexchange telecommunications services. Those charges must be determined, assessed, and collected, and revenues from those charges must be distributed, in accordance with the commission's rules as set out in the Alaska Intrastate Interexchange Access Charge Manual, dated August 9, 2018, and adopted by reference. That manual is available at the offices of the Regulatory Commission of Alaska as specified in 3 AAC 48.010(a).
History
- Authority: AS 42.05.141; AS 42.05.321; AS 42.05.401 AS 42.05.151; AS 42.05.371; AS 42.05.830 AS 42.05.311; AS 42.05.381
- Eff. 2/16/90, Register 113; am 4/7/93, Register 126; am 1/10/99, Register 149; am 4/24/2004, Register 170; am 7/9/2004, Register 171; am 12/12/2004, Register 172; am 8/14/2006, Register 179; am 7/31/2011, Register 199; am 12/20/2018, Register 228
3 AAC 48.442 Delayed implementation of regulatory provisions relating to DEM weighting
Notwithstanding the 1/10/99 amendments to 3 AAC 48.275 - 3 AAC 48.820, if the commission determines that the delay of implementation of provisions in those regulations that relate to weighted state DEM support in those regulations is in the best interests of the state, the commission will, by order, provide for a delayed implementation date of those provisions as they relate to weighted state DEM support, the reasons for the delay, and a statement that the language of the regulations cited in this section as it appeared on the day before 1/10/99 applies to weighted state DEM support until the stated delayed implementation date.
History
- Authority: AS 42.05.141; AS 42.05.361; AS 42.05.830 AS 42.05.151; AS 42.05.371; AS 42.05.840 AS 42.05.311; AS 42.05.381 AS 42.05.321; AS 42.05.431
- Eff. 1/10/99, Register 149
Article 3 Simplified Pipeline Tariffs
3 AAC 48.450 Applicability and purpose
(a) The provisions of 3 AAC 48.450 - 3 AAC 48.490 apply to a pipeline carrier proposing to implement or revise a simplified pipeline tariff for a designated pipeline facility.
(b) The purpose of 3 AAC 48.450 - 3 AAC 48.490 is to create a separate class of pipeline facilities under AS 42.06.620, each of which is referred to as a designated pipeline facility. A pipeline carrier may maintain as its effective tariff or as a portion of its effective tariff for a designated pipeline facility a simplified form of tariff.
History
- Authority: AS 42.06.140; AS 42.06.390 AS 42.06.350; AS 42.06.620
- Eff. 1/9/2009, Register 189
3 AAC 48.452 Eligibility of pipeline facility subject to no permanent tariff
(a) A pipeline carrier may file a simplified pipeline tariff containing rules complying with 3 AAC 48.462, rates complying with 3 AAC 48.464, or both, for a new pipeline facility, the new portion of an existing pipeline facility, or a pipeline facility or portion of a pipeline facility to be constructed.
(b) A pipeline carrier that has not had permanent tariff rules for an existing pipeline facility may file a simplified pipeline tariff containing rules complying with 3 AAC 48.462.
(c) A pipeline carrier that has not had permanent tariff rates for an existing pipeline facility may file a simplified pipeline tariff containing rates complying with 3 AAC 48.464.
(d) A pipeline carrier that has not had either permanent tariff rules or rates for an existing pipeline facility may file rules complying with 3 AAC 48.462, rates complying with 3 AAC 48.464, or both.
(e) A pipeline carrier may file a simplified pipeline tariff containing rules complying with 3 AAC 48.462, rates complying with 3 AAC 48.464, or both, for an existing pipeline facility not previously regulated under AS 42.05 or AS 42.06.
History
- Authority: AS 42.06.140; AS 42.06.390 AS 42.06.350; AS 42.06.620
- Eff. 1/9/2009, Register 189
3 AAC 48.454 Eligibility of pipeline facility with permanent tariff
(a) A pipeline carrier with a proposed designated pipeline facility not eligible under 3 AAC 48.452 may file a simplified pipeline tariff containing rules complying with 3 AAC 48.462, rates complying with 3 AAC 48.464, or both, along with a petition requesting that the commission declare the pipeline facility a designated pipeline facility eligible to operate under a simplified pipeline tariff. The petition must contain a statement that the pipeline carrier withdraws its tariff or specific tariff sheets filed under 3 AAC 48.200 - 3 AAC 48.410, as of the date the simplified pipeline tariff goes into effect.
(b) After notice and an opportunity for hearing, the commission will grant the petition and declare the proposed designated pipeline facility a designated pipeline facility if it finds that designated pipeline facility status is consistent with controlling law and is in the public interest.
History
- Authority: AS 42.04.080; AS 42.06.140; AS 42.06.620 AS 42.06.055; AS 42.06.350
- Eff. 1/9/2009, Register 189
3 AAC 48.456 Date of designated pipeline facility status
A pipeline facility that is the subject of a simplified pipeline tariff under 3 AAC 48.452 - 3 AAC 48.454 becomes a designated pipeline facility on the date the simplified pipeline tariff goes into effect.
History
- Authority: AS 42.06.140; AS 42.06.350; AS 42.06.620
- Eff. 1/9/2009, Register 189
3 AAC 48.458 Simplified pipeline tariff
(a) A simplified pipeline tariff must contain rules complying with 3 AAC 48.462, rates complying with 3 AAC 48.464, or both. The provisions of 3 AAC 48.200 - 3 AAC 48.410 are generally applicable to simplified pipeline tariff filings under 3 AAC 48.450 - 3 AAC 48.490, except
(1) the provisions of 3 AAC 48.275(a), (c), (g), (h) and (i) do not apply to those filings; and
(2) as otherwise provided in 3 AAC 48.450 - 3 AAC 48.490.
(b) A simplified tariff filed under 3 AAC 48.452 must also state the proposed effective date of the simplified pipeline tariff. If the simplified pipeline tariff is filed under 3 AAC 48.454, the tariff must state that the effective date is the date the commission grants designated pipeline facility status.
(c) A pipeline carrier proposing to revise a simplified pipeline tariff for a designated pipeline facility shall file a complete replacement tariff, along with a markup version of the existing tariff identifying additions, deletions, or other changes.
History
- Authority: AS 42.06.140; AS 42.06.350; AS 42.06.360
- Eff. 1/9/2009, Register 189
3 AAC 48.460 Tariff letter for simplified pipeline tariffs
(a) A pipeline carrier proposing to implement a simplified pipeline tariff for the first time for a proposed designated pipeline facility shall file a tariff letter that
(1) if filed under 3 AAC 48.452, specifies an effective date for the simplified pipeline tariff at least 90 days following the date of filing; if an earlier effective date is requested the tariff letter must state good cause for the tariff to take effect on the earlier date;
(2) specifies whether the filing is made under 3 AAC 48.452(a), (b), (c), (d), or (e), or 3 AAC 48.454(a);
(3) specifies whether the filing proposes to implement rules, rates, or both, and describes the proposed rules, rates, or both;
(4) attaches an affidavit attesting that the rules, rates, or both comply with 3 AAC 48.462, 3 AAC 48.464, or both, as applicable.
(b) A pipeline carrier with a permanent tariff in effect under 3 AAC 48.200 - 3 AAC 48.410 shall specify that the tariff or specified sheets of the tariff filed under 3 AAC 48.450 - 3 AAC 48.490 will supersede some or all of the existing tariff as of the date the simplified pipeline tariff goes into effect.
(c) A pipeline carrier proposing to revise a simplified pipeline tariff for a designated pipeline facility shall file a tariff letter that
(1) specifies an effective date for the replacement simplified pipeline tariff at least 90 days following the date of filing; if an earlier effective date is requested the tariff letter must state good cause for the tariff to take effect on the earlier date;
(2) describes the proposed revisions; and
(3) attaches an affidavit attesting that the revised rules or rates comply with the requirements of 3 AAC 48.462 or 3 AAC 48.464, as applicable.
(d) Each tariff advice letter filed under this section must be designated as TL[number] followed by a hyphen and the number of the pipeline carrier's certificate of public convenience and necessity, if issued. If the pipeline carrier has previously filed tariff letters for tariffs filed under 3 AAC 48.200 - 3 AAC 48.410 or 3 AAC 48.450 - 3 AAC 48.490, the TL number must be the next consecutive number.
History
- Authority: AS 42.06.140; AS 42.06.350; AS 42.06.360
- Eff. 1/9/2009, Register 189
3 AAC 48.462 Simplified pipeline tariff rules
(a) In addition to the requirements of 3 AAC 48.360 and as applicable 3 AAC 48.370, rules contained in a simplified pipeline tariff must include
(1) a statement setting out the location of the principal place of business and the location where the books and records are kept;
(2) a statement that the pipeline carrier's books and records are kept in accordance with 3 AAC 48.277, or that the accounts of the pipeline carrier are kept in a manner enabling the pipeline carrier to furnish the books and records in compliance with 3 AAC 48.277;
(3) a description of the oil, gas, or product quality, temperature of transported substance, and any other applicable specifications, including pipeline pressure specifications;
(4) if the designated pipeline facility transports crude oil or products, a statement that upon request the pipeline carrier will provide common carriage over the designated pipeline facility;
(5) if the designated pipeline facility transports natural gas, either
(A) a statement that upon bona fide request the pipeline carrier will provide common carriage over the designated pipeline facility; or
(B) a statement that upon bona fide request the pipeline carrier will provide firm transportation service and interruptible transportation service over the designated pipeline facility in compliance with (b) of this section;
(6) a statement of how to apply for service and interconnection, including the name, title, and address of the designated contact for the pipeline carrier; and
(7) a statement describing the invoicing practices of the pipeline carrier and the obligations of the shipper to pay invoices, including the timing of invoicing and payment.
(b) If simplified tariff rules provide for firm and interruptible transportation services, simplified tariff rules must provide that
(1) upon bona fide request for interruptible transportation service, a natural gas pipeline carrier that provides service under firm and interruptible rules shall provide interruptible transportation service to the degree capacity is unused by firm shippers;
(2) upon bona fide request for firm transportation service, a natural gas pipeline carrier shall
(A) provide firm transportation service if sufficient capacity exists; or
(B) if sufficient capacity does not exist, provide interruptible transportation service and commit to secure additional capacity in accordance with (3) and (4) of this subsection;
(3) if sufficient capacity is not available to meet a bona fide request for firm transportation service, the pipeline carrier shall immediately request all existing firm shippers to identify any firm capacity on the designated pipeline facility that the shipper is willing to release back to the pipeline carrier for re-contracting to the party seeking firm service; the pipeline carrier shall offer to the entity seeking firm transportation service the right to acquire the released or assigned firm capacity up to the amount of its initial request;
(4) if firm transportation service secured by the pipeline carrier under (3) of this subsection is not sufficient to meet the bona fide request, the pipeline carrier shall expand the designated natural gas pipeline facility if the shipper requesting expanded capacity for firm transportation service fully pays for the additional firm transportation capacity requested; the pipeline carrier shall credit the amount of payment provided against future rates payable by the shipper, provide additional firm transportation capacity on a rolled-in rate basis, and complete the expansion of the designated pipeline facility by the end of the construction season following the granting of timely filed applications for any permits necessary to authorize the expansion;
(5) if the expansion of the designated pipeline facility is not completed within the time period specified in (4) of this subsection, the pipeline carrier shall provide prorated service to all firm shippers, including the entity requesting additional firm capacity, until the expanded capacity is available; and
(6) the pipeline carrier's commitment and offer to provide firm and interruptible transportation service, and to expand the designated pipeline facility to provide additional firm transportation capacity, continue regardless of whether the designated pipeline facility continues to operate under simplified pipeline tariff rules.
History
- Authority: AS 42.06.140; AS 42.06.360; AS 42.06.380 AS 42.06.350; AS 42.06.370; AS 42.06.410
- Eff. 1/9/2009, Register 189
3 AAC 48.464 Simplified pipeline tariff rates
(a) Rates contained in an initial simplified pipeline tariff must be less than or equal to rates computed using
(1) a cost-of-service component that consists of
(A) total actual annual operating costs up to and including $10,000,000 and less than or equal to the sum of
(i) 10 percent of the initial rate base of $1,000,000 or less;
(ii) 7.5 percent of the initial rate base over $1,000,000 up to and including $5,000,000; and
(iii) five percent of the initial rate base over $5,000,000;
(B) an annual depreciation expense calculated using straight-line depreciation and a 25-year economic life;
(C) a return on rate base equal to the rate of return specified in (3) of this subsection multiplied by the rate base specified in (2) of this subsection; and
(D) annual ad valorem taxes based on the mill rate adopted under
(i) AS 43.56.010 for crude oil and gas pipelines; or
(ii) AS 29.45.010 for product pipelines;
(2) a rate base component composed of beginning plant costs less prior accumulated depreciation, if any, and working capital of 2.5 percent of beginning plant costs; and
(3) a rate-of-return component with an overall weighted pretax cost of capital of 14.1 percent.
(b) Total annual operating costs under (a)(1)(A) of this section must be exclusive of depreciation and ad valorem taxes.
(c) The rate design for rates contained in a simplified pipeline tariff must be either a single system-wide rate or mileage-proportional rates and
(1) if the carrier is providing common carriage service, the rate design must include a volumetric rate based on throughput; or
(2) if the carrier is providing firm and interruptible service, the rate design must include a reservation fee or similar charge for reservation of capacity complying with AS 42.06.350(c)(1).
(d) The collection of money for dismantlement, removal, and restoration is waived for the period the designated pipeline facility operates under rates contained in a simplified pipeline tariff. The pipeline carrier may not, through future revised rates, recover any portion of the dismantlement, removal, and restoration money waived under this subsection.
(e) The initial estimated throughput used to calculate rates for a new pipeline facility with less than 15 months' operating experience must be the estimated average annual throughput during the first three years of operation. The initial estimated throughput used to calculate rates for a pipeline facility with 15 or more months' operating experience must be the actual annual throughput during the most recent four calendar quarters.
(f) A pipeline carrier collecting rates filed under 3 AAC 48.200 - 3 AAC 48.410 that proposes to revise its rates by implementing simplified pipeline tariff rates shall comply with the requirements of (a), (b), and (c) of this section and the following requirements:
(1) plant balances, accumulated depreciation, additions, and retirements shall be based upon
(A) actual beginning plant balances, accumulated depreciation, additions, and retirements authorized by the commission to be included in rates; or
(B) in the absence of a specific authorization by the commission, amounts used to determine rates in the pipeline carrier's previous rate filings;
(2) undepreciated plant balances must be depreciated using the straight-line method based on a 25-year economic life reduced by the number of years the designated pipeline facility was in public service before the filing of a simplified pipeline tariff.
(g) A pipeline carrier with simplified pipeline tariff rates in effect may file revised rates below the currently effective rates without providing information required by 3 AAC 48.466. This subsection does not relieve the pipeline carrier of the obligation to file revised rates in compliance with (h) of this section.
(h) A pipeline carrier with simplified pipeline tariff rates shall file revised rates no later than first quarter of the third calendar year following the effective date of the most recent rates filed under (a) of this section.
(i) Revisions to simplified pipeline tariff rates may be submitted in accordance with 3 AAC 48.275 or this section. Revised rates filed under this section must be calculated in accordance with (a), (b), and (c) of this section and the following requirements:
(1) operating costs for revised rates must be based on initial operating costs, indexed upward or downward as follows:
(A) the index is the Producer Price Index for Finished Goods (PPI-FG) using a 1982 base year, as published by the United States Department of Labor, Bureau of Labor Statistics (BLS) in the PPI Detailed Report, or equivalent data retrieved from http://www.bls.govas Series ID WPUSOP3000;
(B) the operating costs for revised rates are the initial operating costs, divided by the PPI-FG reported for the month in which the initial operating costs were filed, multiplied by the PPI-FG
(i) for the month nearest to the date of the current filing; and
(ii) that is not identified as preliminary or subject to revision or correction;
(C) each filing that includes an indexing calculation must
(i) clearly identify the value and month of the PPI-FG used in each step of the calculation; and
(ii) include a copy of each BLS report that was used to obtain the data, or a printout of the equivalent data retrieved from the BLS website;
(2) property balances for revised rates must include adjustments, for actual additions and actual retirements including accumulated depreciation balances, to plant balances, as reflected in the most recent previous filing under this section;
(3) estimated throughput for revised rates must be based upon actual throughput for the most recent four calendar quarters.
History
- Authority: AS 42.06.140; AS 42.06.370; AS 42.06.410 AS 42.06.350; AS 42.06.380 AS 42.06.360; AS 42.06.390
- Eff. 1/9/2009, Register 189
3 AAC 48.466 Supporting information for simplified pipeline tariff rates
(a) A pipeline carrier filing a simplified pipeline tariff to implement simplified pipeline tariff rates for the first time shall file with the tariff
(1) an affidavit itemizing actual plant expenditures by major asset class and attesting that all plant costs were prudently incurred and expended solely for the purpose of providing the regulated service; and
(2) an affidavit stating the basis for the actual or estimated throughput level and attesting that the actual or estimated throughput level complies with 3 AAC 48.464(e) and is based on the most accurate information available at the time of the filing.
(b) A pipeline carrier proposing to revise simplified pipeline tariff rates voluntarily or as required by 3 AAC 48.464(h) shall file with the tariff
(1) an affidavit itemizing any additions to or retirements of plant by major asset class and attesting that all additional plant costs were prudently incurred and expended solely for the purpose of providing the regulated service; and
(2) an affidavit stating the basis for the actual or estimated throughput level and attesting that the actual or estimated throughput level is based on the most accurate information available at the time of the filing.
History
- Authority: AS 42.06.140; AS 42.06.370; AS 42.06.410 AS 42.06.350; AS 42.06.380 AS 42.06.360; AS 42.06.390
- Eff. 1/9/2009, Register 189
3 AAC 48.468 Rejection, suspension, notice, and effective date
(a) In accordance with 3 AAC 48.310, the commission may reject a simplified pipeline tariff that does not meet the requirements of 3 AAC 48.450 - 3 AAC 48.490.
(b) A simplified pipeline tariff meeting the requirements of 3 AAC 48.450 - 3 AAC 48.490 will be noticed to the public in accordance with 3 AAC 48.220 and 3 AAC 48.280. A petition to declare the pipeline facility a designated pipeline facility eligible to operate under a simplified pipeline tariff will be noticed to the public as part of the simplified pipeline tariff filing.
(c) Except as provided in 3 AAC 48.474(b), simplified pipeline tariff rules under 3 AAC 48.462 or rates filed under 3 AAC 48.464 are effective on the 91st day after filing unless
(1) the commission suspends the simplified pipeline tariff filing and opens an investigation into the filing; or
(2) upon request by the applicant for good cause shown the commission determines to shorten the period before which the tariff rules, rates, or both become effective.
(d) A simplified pipeline tariff filed under 3 AAC 48.454(a) takes effect on the date of the commission order granting the petition requesting designated pipeline facility status.
History
- Authority: AS 42.04.080; AS 42.06.140; AS 42.06.400 AS 42.06.055; AS 42.06.350
- Eff. 1/9/2009, Register 189; am 10/27/2017, Register 224
3 AAC 48.470 Exemption from AS 42.05
A designated pipeline facility with an effective simplified pipeline tariff is exempt under AS 42.05.711(d) from the provisions of AS 42.05.
History
- Authority: AS 42.05.711; AS 42.06.140
- Eff. 1/9/2009, Register 189
3 AAC 48.474 Protests and settlements
(a) A person may protest a simplified pipeline tariff under 3 AAC 48.130. Upon the filing of a protest, or upon the commission's own motion, the commission will open a docket and appoint a settlement judge who shall
(1) convene a settlement meeting with the parties within 10 days of the initial order opening the docket;
(2) work with the parties to resolve the disputed issues within 60 days of the initial order opening the docket by assisting the parties in reaching an agreement to withdraw the protest and to move the commission to close the docket under 3 AAC 48.090(d)(2); and
(3) if the settlement process does not resolve all issues, file a report within 10 days of the conclusion of the settlement process identifying to the commission each issue that remains unresolved.
(b) If a docket is opened under (a) of this section, proposed simplified pipeline tariff rules or rates take effect 121 days after their filing unless suspended or otherwise ordered by the commission.
(c) If the settlement process does not resolve all issues, the commission may suspend the tariff filing and order additional proceedings and filings as required by AS 42.04 and AS 42.06.
(d) The commission will assign an administrative law judge other than the assigned settlement judge to preside over any proceeding required under (c) of this section.
History
- Authority: AS 42.04.070; AS 42.06.055; AS 42.06.350 AS 42.04.080; AS 42.06.140; AS 42.06.400
- Eff. 1/9/2009, Register 189
3 AAC 48.476 No precedential effect
Tariff rules adopted and approved under 3 AAC 48.462 and tariff rates adopted and approved under 3 AAC 48.464 are not precedent for tariff rules or rates filed under other provisions of this chapter.
History
- Authority: AS 42.06.140
- Eff. 1/9/2009, Register 189
3 AAC 48.490 Definitions
In 3 AAC 48.450 - 3 AAC 48.490, unless the context requires otherwise,
(1) "BLS" means the United States Department of Labor, Bureau of Labor Statistics;
(2) "bona fide request" means a request for transportation service made by a shipper or potential shipper that
(A) has natural gas capable of being shipped on the designated pipeline facility; and
(B) if requesting expansion, is capable of advancing and will advance the necessary and reasonable capital to pay for any necessary expansion of the designated pipeline facility;
(3) "calendar quarter" means the three-month periods ending March 31, June 30, September 30 and December 31 of each year;
(4) "designated pipeline facility" means, as identified in a simplified pipeline tariff and accompanying tariff letter or petition, either the entirety of a new or an existing pipeline facility, or the new extension of an existing pipeline facility that qualifies as a designated pipeline facility under 3 AAC 48.456;
(5) "firm transportation service" has the meaning given in AS 42.06.630;
(6) "interruptible transportation service" has the meaning given in AS 42.06.630;
(7) "PPI-FG" means the Producer Price Index for Finished Goods using a 1982 base year, as published by the United States Department of Labor, Bureau of Labor Statistics (BLS) in the PPI Detailed Report, or equivalent data retrieved from http://www.bls.govas Series ID WPUSOP3000.
History
- Authority: AS 42.06.140; AS 42.06.350
- Eff. 1/9/2009, Register 189
Article 4 Cost-Of-Service Study and Rate Design Information for Electric Utilities
3 AAC 48.500 Application and purpose
(a) 3 AAC 48.500 - 3 AAC 48.560 apply to all electric utilities subject to the regulatory jurisdiction of the commission under AS 42.05.361 - 42.05.441.
(b) The purpose of 3 AAC 48.500 - 3 AAC 48.560 is to set out standard guidelines for cost-of-service methodology and pricing objectives for use by regulated electric utilities in preparation of cost-of-service studies, rate design, and related activity filings.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.691 AS 42.05.151; AS 42.05.391; AS 42.05.990 AS 42.05.361; AS 42.05.451
- Eff. 11/22/84, Register 92
3 AAC 48.510 Pricing objectives
(a) The following are the primary objectives for the pricing of electricity:
(1) the cost causer should be the cost payer;
(2) the revenue requirement or utility financial need;
(3) equity, which includes the fair-cost apportionment of revenue among customer classes;
(4) conservation; and
(5) optimal use, which includes considerations of efficiency.
(b) The commission will, in its discretion, consider other pricing objectives on a case-by-case basis.
History
- Authority: AS 42.05.141; AS 42.05.361; AS 42.05.391 AS 42.05.151; AS 42.05.381; AS 42.05.691
- Eff. 11/22/84, Register 92
3 AAC 48.520 Costs as basis for rates
The fundamental basis for establishing rates in order to meet pricing objectives is costs. The commission will, in its discretion, for appropriate reasons, consider noncost standards in establishing electricity rates.
History
- Authority: AS 42.05.141; AS 42.05.361; AS 42.05.391 AS 42.05.151; AS 42.05.381
- Eff. 11/22/84, Register 92
3 AAC 48.530 Cost measures
Accounting costs, embedded or fully distributed, are the primary basis for designing electricity rates. The commission will, in its discretion, upon an appropriate evidentiary basis, consider marginal or incremental costs in designing electricity rates.
History
- Authority: AS 42.05.141; AS 42.05.361; AS 42.05.391 AS 42.05.151; AS 42.05.381
- Eff. 11/22/84, Register 92
3 AAC 48.540 Cost-of-service methods
(a) Each electric utility that sells 100,000,000 kilowatt-hours or more annually shall submit an accounting cost-of-service study in each rate case in conformance with (c) - (h) of this section. To support that study, the utility shall submit prefiled direct testimony in conformance with 3 AAC 48.275(a)(14).
(b) Each electric utility that sells less than 100,000,000 kilowatt-hours annually shall submit an accounting cost-of-service study when proposing new rate designs, or upon reasonable notice by the commission, in conformance with (c) - (h) of this section. To support that study, the utility shall submit prefiled direct testimony in conformance with 3 AAC 48.275(a)(14).
(c) Each electric utility shall use the general framework developed in the NARUC Electric Utility Cost Allocation Manual (1973) as the foundation for conducting an accounting cost-of-service study. This framework consists of the following primary components or steps:
(1) costs are functionalized as production, transmission, or distribution;
(2) functionalized costs are subdivided or classified into demand, energy, or customer costs; and
(3) functionalized and classified costs are finally allocated to rate or customer classes.
(d) Each electric utility shall use customer demand and energy usage characteristics as the method for establishing rate classes for the customers it serves. Residential, small commercial, large commercial, and street lighting are the preferred classification titles for reflecting classes with homogeneous load characteristics. However, the commission will, in its discretion, consider alternative classifications provided that appropriate justification based on load research and consumer bill impact analysis is presented.
(e) In a cost-of-service study required by this section, demand capacity costs will be considered as follows:
(1) Each electric utility that sells 100,000,000 kilowatt-hours or more annually shall provide cost-of-service analyses that show the impact of
(A) allocating demand-related generation and transmission costs to rate classes on the basis of both the peak responsibility method and the average and excess method; and
(B) allocating demand-related distribution costs on the basis of the noncoincident peak method.
(2) Each electric utility that sells less than 100,000,000 kilowatt-hours annually shall provide cost-of-service analyses that show the impact of
(A) allocating demand-related generation and transmission costs to rate classes on the basis of the peak responsibility method; and
(B) allocating demand-related distribution costs on the basis of the noncoincident peak method.
(3) In addition to the methods required by this section, each electric utility may present to the commission additional analyses with appropriate justification which show the impact of using other methods to allocate demand costs.
(f) In a cost-of-service study required by this section, customer costs will be considered as follows:
(1) Customer costs may include
(A) carrying costs associated with service lines from the transformer to the meter, meters, and installations on customer premises; and
(B) meter-reading expense, customer installation expense, meter maintenance, and customer accounting and billing expense.
(2) Customer costs may not include
(A) any portion of the distribution system costs, which will be considered and classified as demand-related costs;
(B) any portion of the transmission system; or
(C) any portion of the generation system.
(g) Except as noted in (e) and (f) of this section, where the NARUC Electric Utility Cost Allocation Manual (1973) allows for the use of two or more approaches in addressing a cost-of-service issue, an electric utility shall provide explanation and justification for the use of its selected approach.
(h) Each electric utility shall state the unit customer, energy, and demand if applicable, cost components for each customer class for each cost-of-service study which is submitted.
History
- Authority: AS 42.04.080; AS 42.05.361; AS 42.05.691 AS 42.05.141; AS 42.05.381 AS 42.05.151; AS 42.05.391
- Eff. 11/22/84, Register 92; am 5/5/2000, Register 154
3 AAC 48.550 Rate design
(a) The customer or fixed charge may recover only those customer costs defined in 3 AAC 48.540(f)(1)(A) and (B). However, the commission will, in its discretion, consider requests to increase or decrease the fixed charge when the electric utility or any other party submits to the commission appropriate justification and analysis which relates to its pricing objectives.
(b) Each electric utility shall use flat rates as the standard rate form for all customer classes. However, the commission will, in its discretion, upon submission of appropriate justification and analysis, including load research data, approve an alternative rate form.
(c) An electric utility may recover demand costs through rates as follows:
(1) each electric utility shall implement a three-part rate that includes a customer charge, a demand charge, and an energy charge to at least all customers consuming in excess of 7,500 kilowatt-hours per month or with a maximum demand of 20 kilowatts per month for three consecutive months; or
(2) in the absence of a separate demand charge as provided for under (c)(1) of this section, demand costs are recoverable through the energy charge.
(d) Conditions for use of seasonal rates by an electric utility are as follows:
(1) each electric utility shall implement seasonal rates where the rates are demonstrated to be cost-justified and cost-beneficial for the utility system; and
(2) each electric utility that sells 100,000,000 kilowatt-hours or more annually shall provide, upon reasonable notice by the commission, appropriate cost-of-service analysis and cost-benefit analysis that address the reasonableness of implementing seasonal rates.
(e) Based on its cost-of-service analysis in conformance with 3 AAC 48.540(c) - (h), each electric utility shall submit its preferred or recommended rates for all customer classes.
(f) The recommended or preferred rates submitted by an electric utility in compliance with (e) of this section must be accompanied by the following:
(1) a comparison or summary of existing and proposed new rates for each customer class; and
(2) a customer bill impact analysis which illustrates the percentage impact of the proposed rates at various levels of customer usage.
(g) Each electric utility shall design and, upon approval of the commission, distribute informative and understandable customer bills. Customer bills must, at a minimum, separately identify the following information for the billing period: customer charges; total kilowatt-hour consumption and associated energy charges; monthly kilowatt maximum demand and associated demand charges; and the energy surcharge, if appropriate. If billing is based upon an estimate, the customer bill must reflect this information.
History
- Authority: AS 42.05.141; AS 42.05.361; AS 42.05.391 AS 42.05.151; AS 42.05.381; AS 42.05.691
- Eff. 11/22/84, Register 92
3 AAC 48.560 Related activities
(a) Each electric utility shall develop and implement customer education and information programs for existing and new rate designs.
(b) Each electric utility which sells 100,000,000 kilowatt-hours or more annually shall develop and conduct load-research activities for all customer classes in conformance with guidelines promulgated by the commission.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.691
- Eff. 11/22/84, Register 92
Article 5 Applications Generally
3 AAC 48.600 Scope of regulations
The regulations in 3 AAC 48.600 - 3 AAC 48.660 set out
(1) the general information that must be furnished in all applications;
(2) the procedures which the commission will observe to prescribe appropriate specialized applications, application forms, and associated instructions for making specific kinds of applications; and
(3) other provisions relating to applications generally.
History
- Authority: AS 42.05.141; AS 42.05.231; AS 42.06.250 AS 42.05.151; AS 42.06.140
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90
3 AAC 48.610 Modification or waiver
Repealed 6/29/84.
3 AAC 48.620 Form
Every application and every application form prescribed by the commission must comply with the applicable requirements of 3 AAC 48.090 - 3 AAC 48.100, including those concerning filing, type of organization, general form, execution, and verification. However, the factual data set out in the numbered paragraphs and the exhibits attached to, and made a part of, an application will, in the commission's discretion, be prescribed by general order.
History
- Authority: AS 42.05.141; AS 42.05.231; AS 42.06.250 AS 42.05.151; AS 42.06.140
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90
3 AAC 48.625 Pipeline carrier application
(a) In addition to any other information or requirement specified by 3 AAC 48.600 - 3 AAC 48.660, a person requesting a right, power, privilege, or authority provided for in AS 42.06 shall file an application with the commission. An application must be in writing, and verified under oath by the applicant. Except as provided in (b) of this section, must contain:
(1) the names of applicants, business mailing addresses, electronic mail addresses, and contact telephone numbers;
(2) the name and address of the operator of the pipeline, if different from the applicants;
(3) a clear and concise statement of what right, power, privilege, or authority is being requested;
(4) the statutory or regulatory citation authorizing the right, power, privilege, or authority requested;
(5) a detailed description of the proposed service to be offered or discontinued, and the pipeline or facility to be constructed, operated, extended, expanded, interconnected, acquired or abandoned or otherwise modified, including
(A) a United States Geological Survey topographic map or other map of similar quality showing the pipeline route, exact location of the pipeline facilities, and receipt and delivery points;
(B) a description of the length and diameter of the pipeline;
(C) a statement of the pipeline's capacity and projected life; and
(D) copies of all pipeline right-of-way agreements or, if right-of-way agreements are not finalized, copies of the most current right-of-way applications;
(6) for new construction, the estimated system cost, annual operating expenses, description of financing arrangements, and projected rates;
(7) for new construction, transfers of certificates of public convenience and necessity, or transfers of controlling interest,
(A) a description of the ability and willingness of one or more applicants to provide the proposed services;
(B) for existing businesses, the applicants' most recent audited financial statements for the two most recent fiscal years preceding the date of the application;
(C) for new businesses, the audited financial statements for the two most recent fiscal years preceding the date of the application, of the entities that hold ownership interests; or
(D) if the audited financial statements required in (B) or (C) of this paragraph are unavailable, a request that the requirements of (B) or (C) of this paragraph be waived; a request for a waiver under this subparagraph must include
(i) a certification that independent audits are not performed;
(ii) financial statements consisting of, at a minimum, comparative balance sheets, income, and cash flow statements for the two most recent fiscal years preceding the date of the application, verified and certified for accuracy; and
(iii) a description of how the public convenience and necessity requires the service;
(8) the names, addresses, and percentage ownership of owners holding five percent or more;
(9) the names and addresses of the applicants' affiliated interests;
(10) the location in this state where the applicants' books, accounts, papers, and records will be held as required by AS 42.06.430(5);
(11) the names, titles, resumes, and responsibilities of key management employed or to be employed by the applicants;
(12) if a substantial change or modification is contemplated in a pipeline or facility, a detailed description and analysis of the projected change in facilities, service, and transportation rates;
(13) the names of persons that may be affected if the application is granted; and
(14) a statement from a company official authorizing the commission to notice the application.
(b) If information satisfying the requirements of (a)(5) - (12) of this section is filed with a previous application submitted under this section, the applicant may reference that information and need not restate the information.
(c) The commission will provide notice of the application by hand, by United States mail or a similar delivery service, or by electronic mail to each person who
(1) has filed a request for notice of applications; or
(2) the commission believes is interested in the proposed application.
(d) The commission will rule on an application filed under this section in accordance with the timelines set out in 3 AAC 48.661, including extensions of those timelines for good cause. The commission will set out findings on good cause in an order extending the deadline.
History
- Authority: AS 42.04.080; AS 42.06.240; AS 42.06.305 AS 42.06.055; AS 42.06.290; AS 42.06.340 AS 42.06.140; AS 42.06.300
- Eff. 6/29/84, Register 90; am 5/5/2000, Register 154; am 4/24/2009, Register 190; am 2/16/2012, Register 201
3 AAC 48.630 Content
After notice and affording interested parties an opportunity to be heard in a general proceeding, the commission may prescribe the information to be included in the numbered paragraphs of applications, and the content of supporting exhibits for various kinds of applications with due regard to
(1) the nature and complexity of the application;
(2) the necessity of obtaining full disclosure of all pertinent facts relating to applicant's legal, financial, technical and managerial capabilities;
(3) any other relevant factors.
History
- Authority: AS 42.05.141(1)AS 42.05.151; AS 42.05.231
- Eff. 1/13/73, Register 44
3 AAC 48.640 Special kinds of applications
(a) In a general proceeding the commission may, after notice and affording interested parties an opportunity to be heard, enter a general order prescribing the information and supporting exhibits that shall be included in applications for
(1) an original certificate of public convenience and necessity;
(2) the revision of an outstanding certificate with respect to
(A) the delineation of service areas;
(B) the nature and extent of the authority granted;
(C) the scope of operations or services authorized;
(D) any authority that may be needed in connection with
(i) the elimination of competition and any undesirable duplication or paralleling of facilities;
(ii) the exchange of customers or facilities with another utility in connection with a contract, arrangement, or plan to eliminate the overlapping of service areas; or
(E) any other matter.
(3) the sale, lease, rental, inheritance, assignment, receivership, or disposition of a certificate, or the controlling interest in a certificated public utility or pipeline carrier, by any means, under AS 42.05.281 or AS 42.06.305;
(4) the purchase, lease, rental, inheritance, assignment, receivership, or acquisition of a certificate, or the controlling interest in a certificated public utility or pipeline carrier, by any means, under AS 42.05.281 or AS 42.06.305;
(5) the joint use or interconnection of facilities under AS 42.05.321 or AS 42.06.340;
(6) the apportionment of joint rates under AS 42.05.401;
(7) the privilege of keeping books and records pertaining to a utility's intrastate operations any place other than within Alaska;
(8) the discontinuance or abandonment of service under AS 42.05.261 or AS 42.06.290; or
(9) any other matter.
(b) By general order issued in a general proceeding the commission may also prescribe
(1) detailed instructions for guidance in the preparation of applications;
(2) appropriate application forms and the conditions under which they may or shall be used and those under which they may not be used.
History
- Authority: AS 42.05.141; AS 42.05.281; AS 42.06.250 AS 42.05.151; AS 42.05.321; AS 42.06.290 AS 42.05.221; AS 42.05.401; AS 42.06.300 AS 42.05.231; AS 42.05.491; AS 42.06.305 AS 42.05.261; AS 42.06.140(a)AS 42.06.340
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90
3 AAC 48.645 Applications: notice, deadline for filing competing applications; public hearing
(a) An application for a certificate of public convenience and necessity; for an amendment to a certificate; for discontinuance, abandonment, or suspension of a service, facility, or route in whole or in part; for transfer of a certificate of public convenience and necessity; or for the authority to acquire or dispose of a controlling interest in a certificated public utility or pipeline carrier under AS 42.05.281 or AS 42.06.305; or any other application described in 3 AAC 48.625 and 3 AAC 48.640(a), will be noticed by the commission to the public in substantially the same manner and format as a tariff filing is noticed to the public under 3 AAC 48.220 and 3 AAC 48.280 - 3 AAC 48.290. If an application for a certificate, for an amendment to, or transfer of, a certificate, or for authority to acquire a controlling interest in a certificated utility or pipeline carrier, is filed by a utility or pipeline carrier that is not subject to economic regulation by the commission, the public notice will state that fact, define the meaning of the term "economic regulation," and place the public on notice by explaining that, with respect to this applicant, the commission has no jurisdiction over matters that constitute economic regulation. The notice will cite the applicable statute, regulation, or other authority, under which the applicant is exempt or claims exemption from economic regulation.
(b) Except as to notices of applications for transfer of a certificate of public convenience and necessity or applications for authority to acquire a controlling interest in a certificated public utility, the notice issued under (a) of this section will invite comment from interested members of the public. The notice will also announce that a person who proposes to file an application to furnish the same, or substantially the same, service or facility to essentially the same service area or route, in whole or in part, thus creating the potential for mutually exclusive applications must file within 30 days after the date the original application is noticed to the public, a notice of intent to file a competing application. The person must then file the competing application within 90 days after the date the original application was noticed to the public. If no notice of intent to file a competing application is filed within the 30-day period following public notice, the commission will proceed to grant or deny the application for a certificate filed by the original applicant in accordance with the applicable provisions of AS 42.05.221 - 42.05.281 or AS 42.06.240 - 42.06.280.
(c) If the commission finds that two or more complete mutually exclusive applications have been timely filed, a public hearing will be held to afford an opportunity for examination of the applications on a comparative basis.
(d) For good cause shown, the commission will, in its discretion, modify the time periods prescribed in (b) of this section and permit supplements to initial applications.
History
- Authority: AS 42.05.141; AS 42.06.140; AS 42.06.290 AS 42.05.151; AS 42.06.240; AS 42.06.300 AS 42.05.221; AS 42.06.250; AS 42.06.305 AS 42.05.231; AS 42.06.260; AS 42.06.340 AS 42.05.241; AS 42.06.270
- Eff. 6/29/84, Register 90; am 10/27/2017, Register 224
3 AAC 48.648 Complete applications
(a) The provisions of this section apply to applications subject to timelines under AS 42.05.175 and to pipeline applications filed under 3 AAC 48.625.
(b) An application is complete when filed with the commission unless the application
(1) is rejected by the commission under 3 AAC 48.650(a) within the 15 business days after the date the application was filed;
(2) is accompanied by a request, described in (c) of this section, for waiver of a filing requirement, and the waiver request is subsequently denied;
(3) is accompanied by a petition, described in (d) of this section, for confidential treatment that is subsequently denied, and the records filed under seal are withdrawn under the procedures stated at 3 AAC 48.047; or
(4) does not include a proposed public notice of the application that complies with (e) of this section.
(c) For the purposes of (b)(2) of this section, an applicant requesting a waiver of any filing requirement must file a separate motion for waiver, accompanying the application, in compliance with the filing requirements of 3 AAC 48.805. An interested person wishing to file a response to a waiver request must file that response with the commission by the end of the public comment period. The applicant requesting the waiver wishing to file a reply to the response must file that reply with the commission within the five business days after the end of the public comment period. The commission will by order grant or deny the waiver request within 30 days after the end of the public comment period. An application accompanied by a waiver request is
(1) complete on the date the application is filed if all requested waivers of application filing requirements are granted and all other filing requirements are met; or
(2) rejected without prejudice to refiling if any requested waiver of a filing requirement is denied.
(d) For the purposes of (b)(3) of this section, an applicant requesting confidentiality on any component of an application must file a separate petition for confidential treatment, accompanying the application, in compliance with 3 AAC 48.045. An interested person wishing to file an opposition to the confidentiality petition must file the opposition with the commission by the end of the public comment period. The applicant seeking confidential treatment wishing to file a reply to the opposition must file that reply with the commission within the five business days after the end of the public comment period. The commission will by order grant or deny the confidentiality petition within 30 days after the end of the public comment period. An application accompanied by a petition for confidential treatment is
(1) complete on the date the application was filed if the confidentiality petition is granted and all other filing requirements are met;
(2) complete on the date the application was filed if the confidentiality petition is denied, the confidentiality proponent does not request to withdraw the record, and all other filing requirements are met; or
(3) rejected without prejudice to refiling if the confidentiality petition is denied and the commission grants a petition to withdraw the record under 3 AAC 48.047.
(e) An applicant shall file a proposed notice of the application with the commission, along with a purchase order reflecting that the applicant has arranged for publication of the notice in a newspaper of general circulation in this state. The notice must comply with 3 AAC 48.645 and contain
(1) a general description of the service proposed by the application;
(2) a request that interested parties file public comments with the commission at the address specified in the notice;
(3) a deadline for the public comment period of 21 days from the date of publication of the notice;
(4) a statement indicating whether any motions for waiver or petitions for confidentiality will be filed with the application, along with a description of the information subject to the motion for waiver or petition for confidentiality;
(5) the physical and mailing address and telephone number of the applicant;
(6) the commission's mailing address and website address;
(7) a statement that the commission has not determined whether the application is complete;
(8) a statement of the deadline for the commission to determine whether the application is complete; and
(9) a statement that the application will be available for review at the offices of the commission upon filing, along with a statement of the date that the application will be filed with the commission.
(f) Within five business days after the filing of an application and proposed notice, the commission will arrange for publication of the notice in a newspaper of general circulation in this state.
(g) In this section, "business day" means a day other than Saturday, Sunday, or a state holiday.
History
- Authority: AS 42.04.080; AS 42.05.241; AS 42.06.250 AS 42.05.141; AS 42.05.281; AS 42.06.260 AS 42.05.151; AS 42.05.661; AS 42.06.270 AS 42.05.175; AS 42.05.810; AS 42.06.305 AS 42.05.221; AS 42.06.140 AS 42.05.231; AS 42.06.240
- Eff. 10/16/2009, Register 192
3 AAC 48.650 Incomplete applications
(a) The commission may dismiss an application that
(1) does not comply with a requirement established by statute or regulations and forms adopted by the commission;
(2) contains a request for waiver that does not comply with 3 AAC 48.648(c); or
(3) contains a petition for confidential treatment that does not comply with 3 AAC 48.648(d).
(b) If an application is found to be partially incomplete, the commission will issue an order explaining why the application is being dismissed.
(c) Repealed 10/16/2009.
History
- Authority: AS 42.05.141; AS 42.05.241; AS 42.06.270 AS 42.05.151; AS 42.06.140
- Eff. 1/13/73, Register 44; am 10/16/2009, Register 192
3 AAC 48.652 Supplemental information
After issuing an order finding an application to be complete, the commission may require that the applicant provide supplemental or clarifying information that the commission determines is necessary for the commission to reach a decision in the application. The commission will request the applicant furnish the information by a specified date. If the applicant fails to respond on or before the specified date, the commission will proceed with the application as filed.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.06.140
- Eff. 10/16/2009, Register 192
3 AAC 48.654 Contested applications
(a) Before the close of the comment period, an interested person may file with the commission comments or a protest of the application under 3 AAC 48.100.
(b) A protest of an application must include
(1) specific grounds for the protest, including a listing of facts in dispute;
(2) any steps the applicant may take to mitigate the protest;
(3) any conditions the commission should consider applying to the application if approved; and
(4) a petition to intervene under 3 AAC 48.110.
(c) If a filing does not contain the information required in (b) of this section, the commission will consider the filing to be comments.
(d) An applicant wishing to file a response to the protest must file that response with the commission within the 10 days after the close of the comment period.
(e) The commission will issue an order indicating whether there will be a hearing on the application within 15 days after the filing of the applicant's response to the protest.
History
- Authority: AS 42.04.080; AS 42.05.171; AS 42.06.140 AS 42.05.141; AS 42.05.221; AS 42.06.240 AS 42.05.151; AS 42.06.055
- Eff. 10/16/2009, Register 192
3 AAC 48.656 Separate applications
(a) An applicant for commission designation under 3 AAC 53.400 - 3 AAC 53.499 as an eligible telecommunications carrier for more than one study area must file a separate application for each study area.
(b) An applicant for commission approval to acquire control of more than one certificate of public convenience and necessity may file a consolidated application for the multiple certificates of public convenience and necessity. The commission may consider the request to acquire control of each certificate of public convenience and necessity in a separate docket and may require the applicant to submit additional copies of supporting information.
(c) An applicant for commission approval for the issuance of more than one certificate of public convenience and necessity must file a separate application for each proposed certificate of public convenience and necessity.
(d) Except as specified in (a) of this section, an applicant for commission approval to provide telecommunications service in more than one study area may submit a consolidated application for all areas. The commission may consider the request to provide service in each study area in a separate docket and may require the applicant to submit additional copies of supporting information. For the purpose of this subsection, "telecommunications" has the meaning given in AS 42.05.990.
(e) The commission will reject an application that does not meet the requirements of (a) or (c) of this section.
History
- Authority: AS 42.05.141; AS 42.05.231; AS 42.06.240 AS 42.05.151; AS 42.06.055; AS 42.06.305 AS 42.05.221; AS 42.06.140
- Eff. 10/16/2009, Register 192
3 AAC 48.660 Burden of proof
Every applicant shall have the burden of furnishing whatever information and data that may be required to prove to the commission's satisfaction that the applicant has, or will, comply with the governing law and the provisions of any applicable rule, regulation or order of the commission. When a governing law requires the commission to make a finding in regard to any application, the applicant shall, in each case, have the burden of furnishing whatever information, data, and documents may be required to prove to the commission's satisfaction that the finding is justified.
History
- Authority: AS 42.05.141; AS 42.05.151
- Eff. 1/13/73, Register 44
3 AAC 48.661 Timelines for consideration of applications
(a) Except for intrastate interexchange carrier applications governed by 3 AAC 52.360(d), the commission will rule on an application for a new certificate of public convenience and necessity within six months after the filing of a complete application.
(b) The commission will rule on an application to extend the service area authorized under an existing certificate of public convenience and necessity within six months after the filing of a complete application.
(c) The commission will rule on an application to transfer an existing certificate of public convenience and necessity within six months after the filing of a complete application.
(d) The commission will rule on an application to acquire a controlling interest in a certificated public utility or pipeline carrier within six months after the filing of a complete application.
(e) The commission will rule on an application to change the name of the holder of an existing certificate of public convenience and necessity within three months after the filing of a complete application.
(f) The commission will determine if an application is complete in accordance with 3 AAC 48.648.
(g) The commission will extend the periods for action set out in (a) - (f) of this section for good cause. The commission will set out findings on good cause in an order extending a deadline.
History
- Authority: AS 42.04.080; AS 42.05.221; AS 42.06.140 AS 42.05.141; AS 42.05.281; AS 42.06.240 AS 42.05.151; AS 42.06.055
- Eff. 5/5/2000, Register 154; am 5/18/2003, Register 166; am 10/16/2009, Register 192
Article 6 Simplified Rate Filing Procedures for Electric Cooperatives
3 AAC 48.700 Application and purpose
(a) The purpose of 3 AAC 48.700 - 3 AAC 48.790 is to implement AS 42.05.381(e) and to establish simplified, expedited filing and rate adjustment procedures for those nonprofit electric cooperatives organized under AS 10.25 and regulated by the commission.
(b) If allowed or required by 3 AAC 48.740, an electric cooperative organized under AS 10.25 may adjust rates no more than quarterly based on the filing requirements and other conditions set out in 3 AAC 48.710 - 3 AAC 48.790.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 1/1/87, Register 100
3 AAC 48.710 Filing requirements
(a) A rate adjustment filing under 3 AAC 48.700 - 3 AAC 48.790 is subject to 3 AAC 48.220 and 3 AAC 48.270.
(b) A cooperative that adjusts its rates under the authority of 3 AAC 48.700 - 3 AAC 48.790 shall then file all of the information required by 3 AAC 48.720 for whichever period is elected, quarterly or semi-annual, whether or not a change in rates is requested, until permission to discontinue the filing is granted by the commission or the cooperative submits a filing in accordance with AS 42.05.411 and 3 AAC 48.275. A cooperative that files the information required by 3 AAC 48.720 for each quarterly period shall file that information within 60 days after the end of each quarter, and a cooperative that files the information required by 3 AAC 48.720 for each semi-annual period shall file that information within 90 days after the end of the semi-annual period.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 1/1/87, Register 100; am 10/27/2017, Register 224
3 AAC 48.720 Supporting information
(a) In accordance with 3 AAC 48.710(b), a cooperative shall file with the commission the following information for each quarterly or semi-annual period:
(1) RCA Form 201 (Modified REA Form 7);
(2) a schedule and explanation of all amortized expenses;
(3) a schedule and explanation of all pro forma and normalizing adjustments;
(4) a schedule and explanation of each line item on RCA Form 201 which has increased or decreased more than 10 percent from the previous 12-month period;
(5) a schedule of the calculation of the cooperative's Times Interest Earned Ratio (TIER), calculated in accordance with 3 AAC 48.750;
(6) a schedule showing the ratio of residential class kilowatt-hour sales to total kilowatt-hour sales for the current 12-month period and the ratio that existed when the cooperative last filed a cost-of-service study;
(7) if appropriate, a schedule showing the ratio of retail kilowatt-hour sales as a percentage of total retail and wholesale kilowatt-hour sales, and the ratio that existed when the cooperative filed its last cost-of-service study; and
(8) a copy of the cooperative's annual certified audit, including any adjusting journal entries.
(b) If a cooperative proposes to adjust rates in accordance with 3 AAC 48.740 based on its quarterly or semi-annual filing, the cooperative shall file with the commission the following additional information:
(1) tariff sheets showing any proposed adjustments to the cooperative's rates;
(2) if applicable, power cost equalization updates, including tariff sheets;
(3) a copy of the resolution of the board of directors of the cooperative authorizing the requested increase in rates; and
(4) a narrative description or evidence of the cooperative's actions taken to comply with the notice requirements in 3 AAC 48.730.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 1/1/87, Register 100; am 4/24/2004, Register 170
3 AAC 48.730 Notice and effective date
(a) A cooperative's rate adjustment filing under 3 AAC 48.700 - 3 AAC 48.790 is subject to 3 AAC 48.220 - 3 AAC 48.280 and becomes permanent at the end of the notice period described in AS 42.05.411 unless the commission suspends the filing in accordance with AS 42.05.421. If the commission suspends the filing, the commission may allow the filing to take effect on an interim basis, subject to refund.
(b) A cooperative shall provide to its customers prior individual notice of the intent of its board of directors to consider participation in the simplified rate filing procedure established in 3 AAC 48.700 - 3 AAC 48.790. That notice must include, at a minimum,
(1) the purpose of 3 AAC 48.700 - 3 AAC 48.790 and its possible effect on recurring electric rates on a quarterly or semi-annual basis, whichever is appropriate;
(2) the time and place of the board of director's meeting scheduled for consideration of the appropriateness and desirability of participation in the simplified rate procedure; and
(3) acknowledgment that the major responsibility for rate adjustments under the simplified procedure will rest with the board of directors of the cooperative rather than with the commission.
(c) A cooperative shall provide its customers with reasonable notice of any rate adjustments approved by its board of directors either before or at the time the rate adjustment takes effect.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 1/1/87, Register 100; am 10/27/2017, Register 224
3 AAC 48.740 Rate adjustments
If a cooperative's TIER deviates from the cooperative's Target TIER, the cooperative may adjust rates in accordance with 3 AAC 48.700 - 3 AAC 48.790 to achieve its Target TIER. If a cooperative's TIER is more than five percent above the cooperative's Target TIER, the cooperative shall reduce rates to achieve its Target TIER.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 1/1/87, Register 100
3 AAC 48.750 Calculation of TIER
A cooperative's TIER is calculated for the most recent 12-month period, based on the information filed in accordance with 3 AAC 48.720 and on the following principles:
(1) the annualized long-term interest expense for the period must be used;
(2) the actual operating expenses for the period must be normalized to remove nonrecurring items and to adjust for items normally amortized for ratemaking purposes, and may also be normalized to reflect pro forma adjustments for known and measurable changes that are more than likely to continue through the period in which the rates will be in effect;
(3) interest income must be included in the determination of TIER to the extent that interest income exceeds short-term interest expense.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 1/1/87, Register 100
3 AAC 48.760 Target TIER determination
(a) The Target TIER (Times Interest Earned Ratio) for a cooperative is the TIER approved by the commission in that cooperative's last general rate case or the TIER established under (b) of this section.
(b) By petition separate from another proceeding under 3 AAC 48.700 - 3 AAC 48.790, a cooperative may request that a new Target TIER be set, based on consideration of the cooperative's present equity levels, optimum equity levels, cost of debt, growth rate and capitalization, mortgage covenants, the capital credits retirement program of the cooperative, and other relevant factors.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 1/1/87, Register 100
3 AAC 48.770 Limitations on use of simplified procedure
(a) Rate adjustments allowed under 3 AAC 48.700 - 3 AAC 48.790 may not exceed a cumulative 20 percent increase in any three-year period, or a cumulative eight percent in any 12-month period, excluding purchased power and fuel costs rate adjustments.
(b) For good cause shown, the commission will, in its discretion, revoke or deny a cooperative's authority to request an increase under the simplified rate filing procedure in 3 AAC 48.700 - 3 AAC 48.790.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 1/1/87, Register 100
3 AAC 48.780 Application of rate increases
A rate increase granted under 3 AAC 48.700 - 3 AAC 48.790 must be applied as an across-the-board adjustment to all recurring charges, except the customer charge.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 1/1/87, Register 100
3 AAC 48.790 Cost-of-service filings
To ensure that a cooperative's rates properly reflect the cost to serve the various classes of customers, a cost-of-service study in accordance with 3 AAC 48.540(c) - (h) must be filed if
(1) the residential class kilowatt-hour sales as a percentage of total kilowatt-hour sales, on an annual basis, changes by more than 5 percent from the percentage that existed when the cooperative last filed a cost-of-service study; or
(2) the retail kilowatt-hour sales as a percentage of total retail and wholesale kilowatt hour sales, on an annual basis, changes by more than 5 percent from the percentage that existed when the cooperative last filed a cost-of-service study; or
(3) the cooperative files a rate case complying with the requirements of AS 42.05.411 and 3 AAC 48.275, and if 3 AAC 48.540(a) or (b) requires that cooperative to file a cost-of-service study.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 1/1/87, Register 100
Article 7 Miscellaneous Provisions
3 AAC 48.800 General administrative provisions
(a) Each utility and pipeline carrier has the continuing responsibility to conform the language of its tariff with the definitions in 3 AAC 48 and 3 AAC 52. A definition that is not substantially the same must be revised by means of an appropriate tariff filing.
(b) Definitions contained in 3 AAC 52.080, 3 AAC 52.150 and 3 AAC 52.340 also apply to the defined words as they are used in 3 AAC 48.010 - 3 AAC 48.820.
History
- Authority: AS 42.05.141; AS 42.06.140(a) AS 42.05.151; AS 42.06.350
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90
3 AAC 48.805 Waivers
(a) Except for those that are also required under AS 42.05, any requirement in 3 AAC 48 may be modified or waived, in whole or in part, by order of the commission upon application and a showing of good cause or on the commission's own motion.
(b) Application for waiver under this section must be in writing and must set out the pertinent facts in sufficient detail to support a finding by the commission that no legitimate public interest will be served by enforcing the requirement designated in the application. An application under this section may be made to the commission by motion, petition, or, where appropriate, by a tariff advice letter.
(c) If modification of a requirement in 3 AAC 48 cannot be granted without also exempting the applicant from a provision of AS 42.05, the application for the modification or waiver must include application for exemption from the provision of AS 42.05.
(d) The commission will grant or deny an application, in whole or in part. The commission's decision will be announced by order or in a letter written "By Direction of the Commission."
History
- Authority: AS 42.05.141; AS 42.05.711(d) AS 42.05.151; AS 42.06.140(a)
- Eff. 6/29/84, Register 90
3 AAC 48.810 Delegation of authority
The commission will, in its discretion, delegate to a commissioner or designated members of its staff any of its legal powers, duties, and responsibilities except that of making all final decisions.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.06.140(a)
- Eff. 1/13/73, Register 44; am 6/29/84, Register 90
3 AAC 48.812 Role of public advocacy section
Repealed.
History
- Eff. 3/21/2003, Register 165; repealed 4/20/2006, Register 178
3 AAC 48.814 Public advocacy section participation in proceedings
Repealed.
History
- Eff. 3/21/2003, Register 165; repealed 4/20/2006, Register 178
3 AAC 48.820 Definitions
Unless the context indicates otherwise, in this chapter
(1) "answer" means a document filed by a respondent or other party against whom a petition is directed or who is affected by the filing of a petition or application;
(2) "applicant" means a person requesting authorization the commission has authority to grant;
(3) "application" means a written document, signed by an applicant or the applicant's authorized representative, in which an authorization is requested which the commission has the jurisdictional authority to grant;
(4) "base rate area" or "primary rate area" means a developed area, specifically delineated in a local exchange telephone utility's certificate of public convenience and necessity and in the maps filed as part of its tariff, within which station service is furnished to subscribers without requiring them to pay mileage charges or to make any contribution in aid of construction;
(5) "central office" means a switching unit in a telephone system having the necessary equipment and operating arrangements for terminating and interconnecting the lines of subscribers or farmer lines and toll lines or interoffice trunks;
(6) "commission" means the Regulatory Commission of Alaska;
(7) "commissioner" means a member of the commission;
(8) "complainant" means a person who complains to the commission of anything done or not done in contravention or violation of the provisions of any statute or other delegated authority administered by the commission, or of any requirement of the commission or any other alleged wrong;
(9) repealed 6/29/84;
(10) "effective tariff" means a tariff that has been filed, noticed and placed in effect in full compliance with all the procedural requirements established by law and by this chapter;
(11) "exchange" or "local exchange" means an operating unit established by a utility for communication service within a specific geographic area; the unit usually embraces a city, town, village or community and its environs, and usually consists of one or more central offices together with the associated plant used in furnishing telephone communication service to the general public within that area;
(12) "exchange area" means a specific area in which a developed local exchange telephone service is furnished by a utility;
(13) "filing or submittal" means applications, declarations, complaints, petitions, and other papers seeking commission action; financial, statistical, and other reports to the commission; original cost and reclassification studies, proposed accounting entries, tariff filings, and other submittals to the commission in compliance with a statute, regulation, or other commission requirement; answers, replies, responses, objections, protests, motions, stipulations, exceptions, and other pleadings; exhibits, attachments and appendices; amendments to, corrections of, supplements to, or transmittals or withdrawals of, any of these documents, and any other document filed or submitted under AS 42.05 or AS 42.06 or the applicable provisions of 3 AAC 48, 3 AAC 49, 3 AAC 50, or 3 AAC 52;
(14) "hearing examiner" means any of the following individuals, if authorized and designated by the commission to preside at hearings and perform other duties associated with a formal proceeding:
(A) a member of the commission's staff;
(B) an individual whom the commission employs on a contractual basis;
(C) an employee or officer of an agency of this state, other than the commission;
(15) "informal complaint" means a complaint against a utility involving a jurisdictional matter by a person who, at least initially, prefers to invoke the commission's assistance by means other than a formal proceeding;
(16) "intervenor" means a person who is a party to a proceeding other than an applicant, complainant, petitioner, protestant, or respondent, and who is permitted by the commission, or a commissioner, by law or by order to intervene and become a party to a formal proceeding before the commission in accordance with the criteria set out in 3 AAC 48.110;
(17) "jurisdictional" means any matter which falls within the regulatory jurisdiction of the commission by virtue of a statute or any provision of 3 AAC 48, 3 AAC 49, 3 AAC 50, or 3 AAC 52;
(18) "line extension" means an extension of the lines, cables or radio link facilities of a utility's outside plant facilities which must be installed to provide service to customers so located that they cannot be served from plant facilities already installed and in service;
(19) "local exchange telephone utility" means a utility engaged in the business of furnishing communications service to the public for compensation through one or more local telephone exchanges which may be operated separately or in conjunction with one or more other local telephone exchanges through directly interconnected circuitry whereby extended area service is provided without requiring the payment of a toll charge;
(20) "motion" means a document filed, incidental to an action before the commission, for the purpose of obtaining a ruling or order directing that some action designated by the movant be taken;
(21) "movant" means the moving party in any pleading;
(22) "participant" means an interested member of the public who comments or advocates a position, orally or in writing, on an application, tariff filing, complaint, investigation, or other matter or proceeding before the commission;
(23) "party" means a person who is designated as a party by statute or by the commission by order in a proceeding; "party" includes an applicant, a complainant, a petitioner, a respondent, an intervenor, a protestant, and the attorney general;
(24) "person" includes a corporation (whether public, private, cooperative, or otherwise), body politic, political subdivision or governmental instrumentality, proprietorship, company, partnership, firm, incorporated or unincorporated association, group of persons, organization, business trust, society, trustee or receiver appointed by a court, a natural person, and the commission's entire staff or any member of the commission's staff;
(25) "petition" means a document filed to initiate a proceeding involving the jurisdiction of the commission;
(26) "petitioner" means a person who files a petition or an application for an affirmative act by the commission;
(27) "presiding officer" means a member of the commission who presides at a hearing or conference or an individual designated by the commission to preside at a hearing or conference;
(28) "procedural order" means an order fixing the time and place of a hearing, or the date, or dates, when pleadings must be filed, or any matter associated with the conduct of an investigation, prehearing conference, or proceeding prior to a final order of the commission containing its conclusions, findings and final decision in a proceeding;
(29) "proceeding" or "formal proceeding" means a jurisdictional formal action instituted by the commission under an assigned caption and docket number, either on complaint, on the commission's own motion, or pursuant to an application, or pleading which requires one or more orders and, in some cases, a hearing that culminates in a decision of the commission which is subject to appeal to a court having jurisdiction over the subject matter of the action;
(30) "proof of service" means a certificate or affidavit of service signed by a party, the party's attorney, or other authorized representative, specifying the time and manner of service and the parties served;
(31) "protestant" means a person who opposes a tariff filing or the granting of an application or petition involving a jurisdictional matter, and who complies with 3 AAC 48.130;
(32) "formal record" or "the record" means every
(A) application, complaint, petition and other papers seeking commission action;
(B) answer, reply, response, objection, protest, motion, stipulation, exception or other pleading, notice, deposition, certificate, proof of service, transcript or brief in a matter or proceeding;
(C) exhibit, attachment to an exhibit, every appendix to exhibit, amendment to an exhibit, correction to an exhibit, supplement to an exhibit, and every letter of transmittal or withdrawal of any matter;
(D) notice or commission order initiating a proceeding;
(E) commission order designating a presiding commissioner or designating a hearing officer, examiner, attorney or other individual for any purpose;
(F) transcript of a hearing;
(G) exhibit received in evidence;
(H) exhibit offered but not received in evidence;
(I) offer or proof; and
(J) motion, stipulation, subpoena, proof of service, and anything else upon which action of the presiding officer may be based, but not any proposed testimony or proposed exhibit which was not offered or was not received in evidence;
(33) "reply" means a document filed by a petitioner, or others, in response to an answer;
(34) "respondent" means a person against whom a complaint, motion, application for declaratory judgment, or a petition is filed or an investigation is initiated;
(35) "service" or "served," when used in connection with pleadings, notices, decisions, orders, and other papers, means the delivery of one or more copies of a document to the commission, a party, or the party's attorney of record or other authorized representative,
(A) either in person, by hand, by electronic means in accordance with this chapter, by depositing it in the United States mail, first class with postage prepaid, with or without certification, or registration and return receipt required, or by a similar delivery service; and
(B) addressed to the party, the party's attorney, or other authorized representative at the mailing address of record;
(36) "special contract" includes
(A) a written agreement between a utility and a customer which contains rates, tolls, rentals or charges, or terms and conditions that deviate substantially from those contained in the same utility's effective tariff for like service offered to the general public under comparable conditions, but excludes contracts that deviate from the serving utility's effective tariff only in respect to incidental matters such as access to the premises, points of delivery, measuring devices, etc., and do not have the effect of granting the contracting customer an unreasonable preference or advantage or of subjecting the customer to an unreasonable prejudice or disadvantage as to rates, service or facilities; or
(B) a written agreement between a utility and a customer entered into with express commission approval and providing for interim, retroactively reviewable and revisable rates for service or equipment for which the utility has filed a tariff the operation of which has been suspended by the commission;
(37) repealed 3/21/2003;
(38) repealed 7/12/92;
(39) "radio common carrier" means a radio paging, mobile radiotelephone, or improved mobile telephone public utility service;
(40) "cost-of-service study" means a study of the costs incurred by a utility or pipeline carrier in furnishing service to its customers or shippers, by customer or shipper class, in conformance with generally accepted allocation principles;
(41) "test year" means any 12 consecutive months of operating data selected to evaluate revenue requirements or cost of service; the period selected must be at least as recent as the utility's or pipeline carrier's latest calendar or fiscal year;
(42) "normalized test-year" means a historical test-year adjusted to reflect the effect of known and measurable changes and to delete or average the effect of unusual or nonrecurring events, for the purpose of determining a test year which is representative of normal operations in the immediate future;
(43) "economic regulation" means that the commission's jurisdiction extends to matters concerning rates and charges for public utility or pipeline carrier services, quality of service provided by the utility or pipeline carrier to its customers or shippers, management practices of the utility or pipeline carrier, and customer or shipper complaints concerning the services furnished by a utility or pipeline carrier;
(44) "shipper" means a person or entity which tenders oil or petroleum products to a pipeline carrier for transportation in intrastate commerce in accordance with the pipeline carrier's effective tariff;
(45) "adjudicatory matters" include commission proceedings that determine disputes between parties or involve rights, privileges, or duties of a party;
(46) repealed 4/24/2004;
(47) "nonpooling company" means a company that is not a participant in the access charge pool established by the Alaska Intrastate Interexchange Access Charge Manual adopted by reference in 3 AAC 48.440;
(48) "pooling company" means a company that is a participant in the access charge pool established by the Alaska Intrastate Interexchange Access Charge Manual adopted by reference in 3 AAC 48.440;
(49) "complete application" means an application that
(A) contains all the information and supporting documents required
(i) in the forms adopted by the commission under 3 AAC 48.620, 3 AAC 48.630, and 3 AAC 48.640; or
(ii) under AS 42.05.325, 3 AAC 48.625, 3 AAC 52.360, 3 AAC 53.210, or 3 AAC 53.810; and
(B) complies with the filing and general requirements of 3 AAC 48.090 and 3 AAC 48.100;
(50) repealed 4/20/2006;
(51) "bundled service" means an offering combining two or more services, one of which is a local or intrastate interexchange service, for a package price that may include a discount or some other benefit; "bundled service" does not include a combination of local service offerings at a package price, or a combination of intrastate interexchange service offerings at a package price;
(52) "local exchange carrier" means a local exchange telephone utility certificated to provide local exchange telephone service;
(53) "business day" means a day other than Saturday, Sunday, or a state legal holiday;
(54) "written communication," "writing," "written," or submissions by a "writer," as applied to documents filed with the commission by persons, includes documents filed on paper and documents filed electronically when electronic filing is authorized by the commission;
(55) "electric reliability organization" has the meaning given in AS 42.05.790.
History
- Authority: AS 42.04.070; AS 42.05.391; AS 42.06.055 AS 42.04.080; AS 42.05.411; AS 42.06.140 AS 42.05.141; AS 42.05.431; AS 42.06.350 AS 42.05.151; AS 42.05.441; AS 42.06.370 AS 42.05.361; AS 42.05.770; AS 42.06.390
- Eff. 1/13/73, Register 44; am 1/19/80, Register 73; am 6/29/84, Register 90; am 6/27/92, Register 122; am 7/12/92, Register 123; am 1/10/99, Register 149; am 5/5/2000, Register 154; am 3/21/2003, Register 165; am 4/24/2004, Register 170; am 11/24/2004, Register 172; am 9/16/2005, Register 175; am 4/20/2006, Register 178; am 2/16/2012, Register 201; am 3/11/2022, Register 241
Chapter 49 Deregulation
Article 1 Deregulation Ballot: Election Procedure
3 AAC 49.010 Purpose
(a) The purpose of 3 AAC 49.010 - 3 AAC 49.090 is to ensure that the election conducted under AS 42.05.712 will be organized and managed in such a manner that the public interest will be protected and that the integrity of the election process will be maintained. Thus, the utility subscriber or cooperative member will be assured that an election under AS 42.05.712 will be held in a fair, orderly, and impartial manner.
(b) The procedures set out in 3 AAC 49.010 - 3 AAC 49.090 must be adhered to. Adherence to these procedures is a prerequisite to obtaining commission certification of the election results under AS 42.05.712(e).
History
- Authority: AS 42.05.151(a)AS 42.05.712
- Eff. 8/14/80, Register 75
3 AAC 49.020 Certification of voter eligibility
(a) If a subscriber or member is a subscriber or member on the 30th day before the date ballots are mailed or delivered, that person must be sent notice of the election and a ballot.
(b) If a subscriber or member has more than one account or more than one membership with the utility or the cooperative, the subscriber or member may cast one ballot for each account or membership if
(1) the utility's rules filed with and approved by the commission under 3 AAC 48 permit that procedure; or
(2) the cooperative's bylaws adopted under AS 10.25 permit that member to have more than one vote at the cooperative's annual meeting.
(c) A utility or cooperative conducting an election under AS 42.05.712 shall provide the commission with a certified list of its subscribers or members, their account or membership numbers, as applicable, and addresses to which it mailed or delivered a ballot. This certified list must contain one entry for each allowable vote in accordance with the utility's rules or the cooperative's bylaws for those subscribers or members who are permitted to cast more than one vote as prescribed in (b) of this section.
History
- Authority: AS 42.05.151(a)AS 42.05.721
- Eff. 8/14/80, Register 75; am 1/7/81, Register 77
3 AAC 49.030 Ballot preparation, distribution
(a) The ballot must be printed on white paper. It may be printed on a punchcard. The ballot must be a separate document from the bill mailed to a subscriber or member. The ballot may contain only the text of the question as prescribed in AS 42.05.712(d) and such other neutral language as is actually necessary to identify the document as a deregulation ballot under AS 42.05.712 and to state the deadline for marking the ballot and returning it to the commission for tabulation.
(b) The ballot must be mailed with, or at the same time as, the subscriber's or member's bill. If for technical or mechanical reasons the ballot cannot be mailed or delivered with the subscriber's or member's bill as prescribed in AS 42.05.712(d), the ballot may be mailed or delivered separately from the bill, but it must be mailed or delivered at the same time as the bill. If the utility or the cooperative employs staggered or cyclical billing dates, all ballots must be mailed to subscribers or members on the applicable billing date.
(c) The envelope mailed or delivered to subscribers or members containing the ballot also may contain an instruction sheet explaining to the recipient that to ensure that a ballot will be counted, the voter must mark the ballot in the manner prescribed in 3 AAC 49.040(a), and that the voter's certificate must be executed and the ballot mailed in the manner prescribed in 3 AAC 49.040(c).
(d) The utility or cooperative shall mail or deliver to the commission all remaining ballots not mailed or delivered to its subscribers or members for disposition in accordance with 3 AAC 49.070. The utility or cooperative shall make this mailing or delivery to the commission within 15 days from the date it mailed or delivered ballots to its subscribers or members, together with a certification as to the number of ballots it printed, the number and date on which the ballots were mailed or delivered to subscribers or members, and the remaining number of ballots after that distribution was made.
(e) If a subscriber or member believes that he or she is eligible to vote in an election conducted under AS 42.05.712 but does not receive a ballot, that subscriber or member first must apply to the utility or cooperative for a ballot. If the utility or the cooperative rejects the subscriber's or member's request for a ballot, or if the supply of ballots has been turned over to the commission under (d) of this section, the subscriber or member may apply to the commission for determination of eligibility or for a ballot. If eligible, the commission will provide the subscriber or member with a ballot.
History
- Authority: AS 42.05.151(a)AS 42.05.712
- Eff. 8/14/80, Register 75; am 1/7/81, Register 77
3 AAC 49.040 Voting
(a) A paper ballot may be marked with pen or pencil. A voter may mark his or her ballot only by the use of crossmarks, "X" marks, diagonal, horizontal or vertical marks, solid marks, stars, circles, asterisks, checks or plus signs that are clearly placed in the square or space opposite the choice or alternative the voter desires to designate with respect to the deregulation question. If a punchcard ballot is used and provision is made for punching out or otherwise removing the paper square or circle opposite the choice the voter desires to make, the paper square or circle must be removed in a manner that clearly indicates the voter's choice and so that the ballot may be tabulated either by hand or by mechanical means. If the punchcard ballot does not provide for removal of a paper square or circle, that ballot may be marked with pen or pencil as provided in this subsection. The mark specified in this subsection will be counted only if it is substantially inside the square or space provided, or touching the square or space, so that the mark indicates clearly that the voter intended the particular square or space to be designated. Improper marks on the ballot will not be counted. The rules set out in this section are mandatory and there will be no exceptions to them. A ballot may not be counted unless marked in compliance with these rules.
(b) If a voter improperly marks or otherwise damages his or her ballot, the voter may return the erroneously marked or damaged ballot to the utility or the cooperative and obtain another ballot. If the utility or the cooperative no longer has extra ballots, the voter may return the erroneously marked or damaged ballot to the commission and obtain another ballot. The utility, the cooperative, or the commission, as the case may be, shall record and certify the number of erroneously marked or damaged ballots, and these ballots must be destroyed without examination. The utility or the cooperative shall report that certification to the commission, and that certification whether by the utility, cooperative, or the commission, will become part of the commission's certification of the election results under 3 AAC 49.050(f).
(c) The utility subscriber or cooperative member is entitled to cast a secret ballot in an election conducted under AS 42.05.712. When the voter has completed marking the ballot, the marked ballot initially must be placed in a small envelope which the utility or cooperative is to provide. The only printing or text permitted on this small envelope may indicate that this is the envelope in which the marked ballot is to be placed before mailing it in the larger return-addressed envelope. The utility or cooperative also shall provide a larger envelope in which the small envelope containing the marked ballot must be enclosed. If two or more elections are being held at the same time, the commission will, in its discretion, require the utility or cooperative to use a larger envelope of a distinctive color other than white. The larger envelope must be addressed to the commission (at an address the commission designates) with pre-paid postage as prescribed in AS 42.05.712(d). The front of the larger envelope also must identify the utility or cooperative to which it applies. That identification must be printed in substantially the following form: The utility's or cooperative's name followed by the phrase, "Election Ballot (AS 42.05.712)." A voter's certificate, including spaces for the voter's signature, the voter's name (either printed or typewritten), the voter's account or membership number, the voter's mailing address, and the date of signing, must be printed on the reverse side of the envelope. If the subscriber or member is eligible to cast more than one ballot under 3 AAC 49.020(c), each ballot must be mailed in a separate small envelope and enclosed in a separate large envelope containing the voter's certificate as prescribed in this subsection.
History
- Authority: AS 42.05.151(a)AS 42.05.712
- Eff. 8/14/80, Register 75
3 AAC 49.050 Ballot security, processing, tabulation; certification of results
(a) When marked ballots arrive either at the office of the commission or its designated ballot counting agent, the entire envelope must remain intact. Only those ballots that are delivered by hand to the commission, or those that are received without a postmark or with a postmark that is obliterated or illegible will be time and date stamped. Ballots then will be placed in a secure, locked container, including but not limited to, for example, a locked file, safe, or cabinet, and may not be removed until all ballots are received and the processing and tabulation begins. All ballots and ballot-related material must be returned to that container when the ballots are not being processed or used in processing, until disposed of under 3 AAC 49.070.
(b) The commission will, in its discretion, wait for 10 days after the deadline for receipt of ballots before beginning the processing and counting of ballots to ensure that all ballots postmarked by the deadline prescribed in AS 42.05.712(c) have been received.
(c) The commission will appoint a team of counters from among its staff, and will designate one of the team as its chief. A team of at least three but not more than five counters will be so designated. If the number of ballots requires it, the commission may appoint more than one team of counters. At the commission's option, or at the utility's or cooperative's written request accompanied by its agreement to assume the costs, instead of appointing ballot counters from among its staff, the commission will, in its discretion, contract with the Division of Elections (Office of the Lieutenant Governor) or with an independent accounting firm to act as a ballot counting agent for the commission to count the ballots, tabulate the results, and report them to the commission for certification in accordance with AS 42.05.712(e) and 3 AAC 49.010 - 3 AAC 49.080.
(d) The commission will notify the affected utility or cooperative and other interested parties as to the time, date, and place of ballot counting. Ballot counting will take place only during the commission's or a ballot counting agent's normal business hours.
(e) The utility or cooperative, or a group of subscribers or members in support of or in opposition to the deregulation question, may appoint, at its own expense, one or more poll watchers to observe the ballot counting process. No utility, cooperative, or group of subscribers or members may have more than one watcher on duty at a time to observe each counting team. The watcher may be present at the place of counting in a position which affords a full view of all action of the counters from the time the ballots are removed from their secure location until the ballots are finally counted and the results certified by the commission. The commission will, in its discretion, require each watcher to present written proof that he or she is the watcher appointed by the utility, cooperative, or group of subscribers or members he or she represents. The commission will ensure that proper decorum is maintained during the counting process to assure the privileges of the watchers and the proper, orderly conduct of the election.
(f) The ballot counting team first shall tabulate the total number of ballots received before the votes for and against the question are counted. If less than 15 percent of the eligible subscribers or members have returned ballots to the commission, the votes for and against the question need not be counted. If at least 15 percent have been returned, the team shall examine each mailing or outer envelope and will determine whether the voter is qualified to vote and whether the ballot has been properly cast by comparing the subscriber's or member's name and account or membership number on the outer envelope with the certified list of subscribers or members supplied by the utility or the cooperative. When this verification procedure is completed, the small envelope containing the ballot may be removed from the large mailing envelope in accordance with (i) of this section. The latter envelope must be retained until it is disposed of under 3 AAC 49.070.
(g) A ballot may not be counted if
(1) the voter has failed to properly execute the certificate containing his or her signature, printed or typed name, and account or membership number;
(2) the ballot, if postmarked, is not postmarked on or before the 30th day from the date of mailing or delivery of ballots to eligible voters; or
(3) the ballot is improperly marked under 3 AAC 49.040(a).
(h) If a ballot is rejected, the counters will place all rejected ballots in a separate envelope with a statement of the reason the ballot or ballots were rejected. The envelope must be labeled "rejected ballots" and must be retained until disposed of in accordance with 3 AAC 49.070.
(i) If a ballot is not rejected, the large envelope must be opened and the small envelope containing the ballot must be placed in a container and mixed with other small envelopes. The small envelopes must be drawn from the container, opened, and the ballots removed and counted.
(j) Upon completion of the ballot counting, the counting team or teams, or the ballot counting agent, will execute a certificate indicating the total number of ballots cast, the total number of ballots counted, the total number of ballots rejected either under (g) of this section or 3 AAC 49.040(a), and the total number of ballots cast for or against the ballot question. The commission will review the certified results, the tabulation, and the certification prepared by the counting team or teams or the counting agent, and issue its certification of the results, including certification that the procedural requirements set out in 3 AAC 49.010 - 3 AAC 49.060 have been adhered to or complied with. The commission will issue its certification by order or letter order.
History
- Authority: AS 42.05.151(a)AS 42.05.712
- Eff. 8/14/80, Register 75; am 1/7/81, Register 77
3 AAC 49.060 Recount
(a) Within 10 days after the commission's review and certification of the election results under AS 42.05.712(e), an interested party, a utility or cooperative, or 10 eligible subscribers or members who cast ballots in the election and who believe there has been a mistake made by the commission, by a counting team, or by a ballot counting agent in tabulating the votes in the election, may file an application for a recount of the votes on that ballot question.
(b) If there is a tie vote, the commission will initiate the recount and notify the interested parties of the time, date, and place of the recount.
(c) The date on which the commission receives an application for a recount, rather than the date of mailing or transmission of the application, determines whether the application is filed within the time allowed under (a) of this section. If the actual physical delivery of a copy in substance of the statements made in the application for recount is received in the commission's office before 5:00 p.m., Alaska Standard or Daylight Time, as the case may be, on the due date, the application will be accepted; however, the original signed application must be postmarked at or before midnight, Alaska Standard or Daylight Time, as the case may be, of the same day.
(d) An application for recount must include a deposit in cash, by certified check, or by bond with surety approved by the commission. The amount of the deposit is $1 per ballot based on the original count of valid ballots cast on the question. However, if the recount includes a question for which there was a tie vote on the issue, or the difference between the number of votes cast in favor of or in opposition to the question was 10 or less, or was less than.5 percent of the total votes cast in favor of or in opposition to the issue, the application need not include a deposit, and the commission will bear the cost of the recount. If the vote on the recount is determined to be four percent or more in excess of the vote on the question reported by the commission on initial certification of the results as stated in the application, the entire deposit will be refunded. If the entire deposit is not refunded, the commission will refund any money remaining after the cost of the recount has been paid from the deposit.
(e) If the commission determines that the application for a recount is substantially in the required form, the commission will set the date of the recount. It will be held within 10 days after receipt of an application requesting a recount of the votes cast on the question.
(f) Utilities or cooperatives, or organized groups of subscribers or members, having a direct interest in the recount and who are seeking to protect their interests during a recount may provide at their own expense one or more observers to witness the recount.
(g) The commission will give the utility or cooperative, or any other interested party, or the one or more persons appointed to represent the applicant during the recount, notice of the time and place of the recount by certified mail or telephone.
(h) In conducting the recount, the commission, or its appointed representative, will review all ballots, whether the ballots were counted by hand or by mechanical means, to determine which ballots were properly marked and which ballots are to be counted in the recount. The accuracy of the original count and the review of that count will be checked. The commission will check the number of ballots cast, the ballots rejected or questioned, those damaged or erroneously marked against the certified list of eligible voters, and the total number of ballots distributed. The rules governing the counting of hand-marked and punchcard ballots will be followed in the recount. The ballots and other election material will remain in the custody of the commission during the recount, and the highest degree of care will be exercised to protect the ballots against alteration or mutilation. The recount will be completed within 10 days after the date it begins. The commission will, in its discretion, employ additional personnel or contract with a ballot counting agent as under 3 AAC 49.050(b) to assist in the recount.
(i) On completion of the recount the commission will certify the results by order or letter order.
(j) A utility, a cooperative, or an interested party who requested a recount and who has reason to believe an error has been made in the recount involving the question or the validity of any ballot may appeal to the superior court in accordance with AS 44.62.560 - 44.62.570 and applicable court rules governing appeals in civil matters. Appeal must be filed within 10 days after the completion of the recount and its certification. Upon order of the court, the commission will furnish the record of the recount taken, including all ballots, registers, and other election material pertaining to the election. The inquiry in the appeal will extend to the questions whether or not the commission has properly determined what ballots or marks on ballots are valid, and to which division of the question the vote should be attributed.
History
- Authority: AS 42.05.151; AS 42.05.712
- Eff. 8/14/80, Register 75; am 11/6/2016, Register 220
3 AAC 49.070 Disposition of ballots, election materials
The commission will preserve all election certificates, tallies, registers or lists, and election materials for four years after the election conducted under AS 42.05.712. All ballots and return-addressed envelopes will, in the commission's discretion, be destroyed 30 days after the certification of the election results unless an application for recount has been filed and not completed, or unless their destruction is stayed by court order. The commission will, in its discretion, permit the inspection of election materials upon order of a court of competent jurisdiction.
History
- Authority: AS 42.05.151(a)AS 42.05.712
- Eff. 8/14/80, Register 75
3 AAC 49.080 Miscellaneous
(a) The utility or cooperative shall provide the commission with a copy of each notice it mails to its subscribers or members under AS 42.05.712, and a copy of the list of subscribers or members to whom it mails the notice. The utility or cooperative also shall provide the commission with a sample of the ballot it mails to its subscribers or members, of the small envelope in which the ballot is inserted, and the large, outer envelope (return-addressed to the commission) that contains the voter's certificate as prescribed in 3 AAC 49.040(c).
(b) If a deadline prescribed in AS 42.05.712 or in 3 AAC 49.010 - 3 AAC 49.080 falls on a Saturday, Sunday, or a legal holiday for Alaska state offices, the deadline will be the next regular business day of the commission.
(c) A utility or cooperative, or its officers, directors, management, or employees, or any person who, directly or indirectly, gives or offers to give, or offers any money or valuable thing (including but not limited to a refund, rebate, or remission in any manner or by any device of any rate or charge, or any portion of a rate or charge, or receipt of a greater or lesser compensation for a utility's or cooperative's services than is prescribed in its currently effective tariff), or extends, promises, or offers to extend to any utility subscriber or cooperative member any form of contract, agreement, inducement, privilege, or facility, or apply any rule or condition of service as an inducement to, or with the intent to induce, a subscriber or member to participate in an election conducted under AS 42.05.712 or to vote for or against, or refrain from voting for or against, any election question under AS 42.05.712, has engaged in a discriminatory practice under AS 42.05.391(a) or (c), or both, and is subject to the imposition of civil sanctions under AS 42.05.571.
History
- Authority: AS 01.10.080; AS 42.05.391 AS 42.05.151(a)AS 42.05.712
- Eff. 8/14/80, Register 75
3 AAC 49.090 Waiver
(a) By order of the commission, upon application in writing and a showing of good cause, any requirement of 3 AAC 49.010 - 3 AAC 49.080 will, in the commission's discretion, be waived in whole or in part, except the ballot marking and counting rules contained in 3 AAC 49.040(a).
(b) Applications submitted under this section shall set out the pertinent facts in sufficient detail to support a finding by the commission that no legitimate public interest will be served by enforcing the requirement designated in the application. An application as required by this section may be made to the commission by motion or petition.
(c) Application for the waiver of a requirement must also include application under AS 42.05.711(d) for exemption from a related provision of AS 42.05 if waiver of the requirement of 3 AAC 49.010 - 3 AAC 49.080 cannot be granted without also exempting the applicant from the governing law.
History
- Authority: AS 42.05.151(a)AS 42.05.712
- Eff. 8/14/80, Register 75
3 AAC 49.100 Definitions
In 3 AAC 49.010 - 3 AAC 49.100
(1) "ballot" means a ballot issued to a utility subscriber or cooperative member in an election conducted under AS 42.05.712 and 3 AAC 49.010 - 3 AAC 49.100;
(2) "commission" means the Regulatory Commission of Alaska;
(3) "cooperative" means an electric or telephone cooperative organized under AS 10.25, subject to the commission's regulatory jurisdiction under AS 42.05, which is authorized to conduct a deregulation ballot election under AS 42.05.711(h) and 42.05.712;
(4) "election" means an election conducted under AS 42.05.712 and 3 AAC 49.010 - 3 AAC 49.100;
(5) "question" means the question whether a utility or cooperative is to be exempt from regulation by the Regulatory Commission of Alaska, as prescribed in AS 42.05.712(d);
(6) "utility" means a public utility subject to the commission's regulatory jurisdiction under AS 42.05 which is authorized to conduct a deregulation ballot election under AS 42.05.711(f) and (g) and 42.05.712.
History
- Authority: AS 42.05.151; AS 42.05.712
- Eff. 8/14/80, Register 75; am 2/24/2004, Register 170
Chapter 50 Energy Conservation
Article 1 Regulatory Policy Standards
3 AAC 50.100 Application, purpose, and waiver
(a) The provisions of 3 AAC 50.200, 3 AAC 50.300, and 3 AAC 50.500 apply to electric utilities subject to the regulatory jurisdiction of the commission. The provisions of 3 AAC 50.500 apply to gas utilities subject to the regulatory jurisdiction of the commission. The purpose of 3 AAC 50.200 - 3 AAC 50.500 is to adopt the regulatory policy standards established in secs. 113(b) and 303(b) of the Public Utility Regulatory Policies Act of 1978 (16 USC $ 2623(b) and 15 USC $ 3203(b), as adopted November 9, 1978) and to extend these standards to the other electric and gas utilities in Alaska not directly subject to that Act. These regulations encourage
(1) conservation of energy supplied by electric and gas utilities;
(2) the optimization of the efficiency of use of facilities and resources by electric and gas utilities; and
(3) the establishment of equitable rates to electric and gas consumers.
(b) For good cause shown, the commission will, in its discretion, waive the application to a utility of all or part of 3 AAC 50.200 - 3 AAC 50.600 or will, in its discretion, establish interim standards for a utility.
History
- Authority: AS 42.05.141(a)AS 42.05.151(a)AS 42.05.711(d)
- Eff. 10/15/82, Register 84
3 AAC 50.200 Individual electric meters
(a) Except as provided in (b) of this section, an electric utility shall install an individual meter to measure the energy consumption attributable to each residential and commercial unit in a multiple-occupancy building and each mobile home unit in a mobile home park if construction of the building or mobile home park was begun after December 31, 1982.
(b) Individual meters are not required
(1) for transient multiple-occupancy buildings and transient mobile home parks, including, but not limited to, hotels, motels, dormitories, rooming houses, hospitals, nursing homes, and mobile home parks for travel trailers;
(2) for commercial unit space which is subject to alteration with changes in tenants as evidenced by temporary construction of nonload-bearing walls or floors separating the commercial unit spaces;
(3) where alternative renewable energy resources are used in connection with central heating, ventilating, and air conditioning systems; and
(4) in common building areas such as hallways, elevators, reception areas, water pumping facilities, and electric hookups for motor vehicles.
(c) For the purpose of this section, construction begins when the footings are poured.
History
- Authority: AS 42.05.141(a)AS 42.05.151(a)AS 42.05.291(c)
- Eff. 10/15/82, Register 84
3 AAC 50.300 Information to electric consumers
(a) An electric utility shall provide to each new electric consumer, coincident with the application for service, a clear and concise explanation of any rate schedule in its currently effective tariff which applies to that consumer.
(b) Not later than 30 days after the filing of a tariff advice letter in which a change in a rate schedule is requested, an electric utility shall transmit to its affected consumers a clear and concise explanation of the proposed change, This provision does not apply to rate adjustments resulting from an automatic fuel-cost rate adjustment clause.
(c) At least once each year an electric utility shall transmit to each of its electric consumers an informative summary of any rate schedule in its currently effective tariff which applies to those consumers.
(d) On request of an electric consumer, an electric utility shall transmit a clear and concise statement of the consumer's actual energy consumption and, if billed separately, power consumption for any billing period during the previous 12 months unless the information is not reasonably ascertainable by the utility.
History
- Authority: AS 42.05.141(a)AS 42.05.151(a)AS 42.05.411(a)
- Eff. 10/15/82, Register 84
3 AAC 50.400 Energy Conservation
Reserved.
3 AAC 50.500 Advertising
(a) In addition to the restrictions imposed under AS 42.05.381(a), neither an electric utility nor a gas utility may recover through rates any direct or indirect expenditure by the utility for promotional, political, or goodwill advertising.
(b) The commission will determine on a case-by-case basis whether the forms of advertising listed in (c)(3) of this section, as well as advertising not readily categorized as promotional, political, or goodwill, and any other form of advertising not covered by this section will be included in utility operating expenses for ratemaking purposes.
(c) In this section
(1) "advertising" means the commercial use by a utility of any media, including newspaper. printed matter, radio, and television, in order to transmit a message to a substantial number of members of the public or to the utility's customers;
(2) "goodwill advertising" means advertising directed toward improving or enhancing the public image of a utility or its employees;
(3) "goodwill advertising," "political advertising," and "promotional advertising" do not include
(A) advertising which informs an electric or gas consumer about methods which conserve electric energy or gas or which reduce peak demand for electric energy or gas;
(B) advertising required by law or regulation, including advertising required under Part I, Title II of the National Energy Conservation Policy Act (42 U.S.C. $ 8201. et seq.);
(C) advertising regarding service interruptions, safety measures, or emergency conditions;
(D) advertising concerning employment opportunities with a utility;
(E) advertising which promotes the use of energy-efficient appliances, equipment, or services;
(F) an explanation or justification of existing or proposed rate schedules or a notice of hearings concerning these rate schedules; and
(G) communications with members of a utility cooperative about the activities or internal affairs of the cooperative or which encourage or promote the participation of the members in the process of governing the cooperative;
(4) "political advertising" means advertising for the purpose of influencing public opinion with respect to legislative, administrative, or electoral matters, or with respect to a controversial issue of public importance; and
(5) "promotional advertising" means advertising for the purpose of encouraging a person to select or use the service or additional service of a utility, or the selection or installation of an appliance or equipment designed to use the utility's service, except as provided in (3)(E) of this subsection.
History
- Authority: AS 42.05.141(a)AS 42.05.151(a)AS 42.05.381
- Eff. 10/15/82, Register 84
3 AAC 50.600 Definitions
Unless the context indicates otherwise, in 3 AAC 50.100 - 3 AAC 50.600
(1) "building" means a single erected structure, roofed and enclosed within exterior walls, built for permanent use, framed of component structural parts and unified in its entirety both physically and in operation for residential or commercial occupancy;
(2) "commercial unit" means that portion of a building or premises which is normally used for commercial purposes;
(3) "electric consumer" means a person or a public or private entity to which electric energy is sold. other than for purposes of resale, by a regulated public utility;
(4) "gas consumer" means a person or a public or private entity to which natural gas is sold, other than for purposes of resale by a public utility;
(5) "mobile home park" means a parcel of land which is used for the accommodation of occupied mobile homes;
(6) "multiple-occupancy building" means a building which is designed to house more than one residential or commercial unit;
(7) "rate" means
(A) a price, rate, charge, or classification made, demanded, observed, or received with respect to the sale of utility services to a utility consumer;
(B) a rule, regulation, condition, or practice respecting a rate, charge, or classification; and
(C) a contract pertaining to the sale of utility services to a utility consumer;
(8) "rate schedule" means the designation of the rates which an electric utility charges for electric energy; and
(9) "residential unit" means one or more rooms for use by one or more persons as a housekeeping unit which provides living, sleeping, cooking and sanitation accommodations.
History
- Authority: AS 42.05.141(a)AS 42.05.291(c) AS 42.05.151(a)AS 42.05.411(a)
- Eff. 10/15/82, Register 84
Article 2 Cogeneration and Small Power Production
3 AAC 50.750 Application, purpose, and waiver
(a) 3 AAC 50.750 - 3 AAC 50.820 apply to all electric utilities subject to the regulatory jurisdiction of the commission under AS 42.05.361 - 42.05.441. These sections govern interconnection, integration, and purchases and sales of electric power between an electric utility and a qualifying facility.
(b) The purpose of 3 AAC 50.750 - 3 AAC 50.820 is to encourage cogeneration and small power production by setting out guidelines for the establishment of reasonable, nondiscriminatory charges, rates, terms, and conditions under which interconnection, integration, and purchases and sales of electric power will occur between an electric utility and a qualifying facility.
(c) Any requirement in 3 AAC 50.750 - 3 AAC 50.820 may be waived, in whole or in part, or be modified by order of the commission upon application and a showing of good cause. An entity shall file and the commission will consider an application in accordance with 3 AAC 48.805.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.711
- Eff. 11/20/82, Register 84; am 4/24/2004, Register 170; am 3/11/2016, Register 217
3 AAC 50.760 Interconnection
(a) An electric utility shall make interconnection with a qualifying facility as may be necessary to accomplish purchases or sales under 3 AAC 50.750 - 3 AAC 50.820.
(b) Notwithstanding (a) of this section, an electric utility is not required to interconnect with a qualifying facility if
(1) the electric utility, solely because of purchases and sales over the interconnection, would become subject to federal regulation under Subchapter II of the Federal Power Act, 16 U.S.C. $ 824. or
(2) a qualifying facility does not comply with the safety and reliability standards prescribed for interconnection in 3 AAC 52.485.
(c) An electric utility may assess a qualifying facility interconnection charges which are reasonable and nondiscriminatory with respect to other customers that have similar load characteristics.
(d) Interconnection charges may include the reasonable costs of connection, switching, metering, transmission, distribution, safety provisions, administration, and other costs incurred by the electric utility directly related to the installation and maintenance of the physical facilities necessary to permit interconnected operations with a qualifying facility, to the extent these costs are in excess of the corresponding costs which the electric utility would have incurred if it had not engaged in interconnected operations, but instead generated an equivalent amount of electric energy itself or purchased an equivalent amount of energy or capacity from other sources. Interconnection charges may not include any costs included in the calculation of avoided cost rates or integration fees or payments.
(e) An electric utility shall offer a qualifying facility the option of reimbursing the electric utility for interconnection charges over a reasonable period of time. The electric utility may charge reasonable interest, to be prescribed in its tariff or special contract, for the financing of the interconnection charges.
(f) Repealed 3/11/2016.
(g) An electric utility shall offer to operate in parallel with a qualifying facility.
(h) An electric utility shall offer a qualifying facility that has a generating capacity of 10 kilowatts or less the option of using a single detent meter during parallel operation.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.361 AS 42.05.151; AS 42.05.301; AS 42.05.381
- Eff. 11/20/82, Register 84; am 3/11/2016, Register 217
3 AAC 50.765 Integration
(a) An electric utility shall identify the costs of integrating the qualifying facility into the electric utility's system and shall quantify the benefits derived from integrating the qualifying facility into the electric utility's system. If the identified costs of integration exceed the quantified benefits of integration, the electric utility may assess integration fees to the qualifying facility. If the quantified benefits exceed the identified costs, the electric utility shall make integration payments to the qualifying facility.
(b) Costs used to calculate integration fees or integration payments include only costs that are reasonably necessary under accepted industry standards for maintaining the safety, integrity, and reliability of the electric utility's system. However, the costs must be
(1) directly related to and necessary for the operation of the qualifying facility within the electric utility's system;
(2) comprised of the net increase or decrease to the corresponding costs which the electric utility would have incurred if it had not engaged in interconnected operations with a qualifying facility, but instead generated an equivalent amount of electric energy itself or purchased an equivalent amount of electric energy or capacity from other sources; and
(3) not duplicative of the costs associated with facilities or measures used by the utility for reasons other than the integration of the qualifying facility.
(c) Identified costs and quantified benefits may not include any costs or benefits used to calculate avoided cost rates or interconnection charges.
(d) Integration fees and payments must be just and reasonable and in the public interest and must not discriminate against the qualifying facility.
(e) If an electric utility uses facilities or measures to support the integration of more than one qualifying facility or other generation facility, the electric utility must fairly allocate the costs among the qualifying facilities and generation facilities.
History
- Authority: AS 42.05.141; AS 42.05.301; AS 42.05.361 AS 42.05.151; AS 42.05.311; AS 42.05.381 AS 42.05.241; AS 42.05.321
- Eff. 3/11/2016, Register 217
3 AAC 50.770 Purchases
(a) Unless otherwise provided by law, an electric utility shall purchase, in accordance with (c) - (k) of this section, any electric power which is made available from a qualifying facility.
(b) Notwithstanding (a) of this section, an electric utility is not required to purchase electric power from a qualifying facility if
(1) due to operational circumstances, purchases from a qualifying facility result in costs greater than those which the electric utility would have incurred if it had not made such purchases but had instead generated or purchased an equivalent amount of power; if purchases have started, an electric utility seeking to stop purchase under this paragraph shall notify in writing each affected qualifying facility in time for the qualifying facility to stop the delivery of electric power to the electric utility, or the electric utility shall pay the expense it would have incurred had power continued to be purchased from the qualifying facility at established rates during the same period;
(2) during a system emergency, purchases from a qualifying facility would further contribute to the emergency; or
(3) with the agreement of the qualifying facility, the electric utility transmits the electric power to another electric utility which is obligated to purchase that electric power as if it were supplied directly by the qualifying facility.
(c) Rates for purchases of electric power must be just and reasonable and in the public interest and must not discriminate against qualifying facilities or adversely affect the consumers of the electric utility.
(d) For purchases from a qualifying facility, rates must be based on the cost of energy and capacity which the electric utility avoids by virtue of its interconnection with the qualifying facility. The following factors must, to the extent practicable, be taken into account:
(1) the data provided under 3 AAC 50.790(e);
(2) the availability of capacity or energy from a qualifying facility during the system daily and seasonal peak periods, including
(A) the ability of the utility to dispatch the qualifying facility;
(B) the expected or demonstrated reliability of the qualifying facility;
(C) the terms of any contract or other legally enforceable obligation, including the duration of the obligation, termination, termination notice requirements, and sanctions for non-compliance;
(D) the extent to which scheduled outages of the qualifying facility can be usefully coordinated with scheduled outages of the utility's facilities;
(E) the usefulness of energy and capacity supplied from a qualifying facility during system emergencies, including its ability to separate its load from its generation;
(F) the individual and aggregate value of energy and capacity from qualifying facilities on the electric utility's system; and
(G) the smaller capacity increments and the shorter lead times available with additions of capacity from gualifying facilities;
(3) the relationship of the availability of energy or capacity from the qualifying facility as derived in (2) of this subsection to the ability of the electric utility to avoid costs, including the deferral of capacity additions and the reduction of fossil fuel use; and
(4) The cost or savings resulting from variations in line losses from those that would have existed in the absence of purchases from a qualifying facility, if the purchasing electric utility generated an equivalent amount of energy itself or purchased an equivalent amount of electric energy or capacity.
(e) Repealed 3/11/2016.
(f) Repealed 3/11/2016.
(g) An electric utility which is legally obligated to obtain all of its requirements for electric power from another electric utility shall submit to the commission the requisite avoided cost data of its supplying utility and the rates at which it currently purchases such energy and capacity. The supplying electric utility shall make the necessary information available to the purchasing electric utility at the time its wholesale power rates are approved by the commission.
(h) An electric utility or qualifying facility may agree by special contract, subject to 3 AAC 48.390, to different rates, terms, or conditions for purchases than otherwise required by this section. A contract between an electric utility and a qualifying facility is valid if the commission determines the rates, terms, or conditions for purchases are just and reasonable to the customers of the electric utility and in the public interest. The contract may not be nullified under 3 AAC 50.770(b)(1) without prior commission approval.
(i) For purchases of energy from a qualifying facility with a design capacity of 100 kilowatts or less, the rates must be calculated, supported, and filed as follows:
(1) unless otherwise ordered by the commission, the avoided energy costs must be expressed in cents-per-kilowatt-hour and determined from the sum of fuel and variable operation and maintenance expenses and the energy portion of purchased-power expense for the same period used by the utility to project costs and sales in its adjustment clause methodology, approved by the commission, updated by subsequent fuel costs, and divided by the number of kilowatt-hours sold for the same time period; expenses and kilowatt-hours sold associated with generation that is not avoided by virtue of purchases from qualifying facilities with a design capacity of 100 kilowatts or less must be specifically excluded from the computation of avoided costs;
(2) an electric utility shall submit to the commission the following information for the same period used in support of the utility's adjustment clause filing, to support rates for purchases of energy:
(A) the data and computation of avoided energy costs specified in (1) of this subsection; and
(B) at its option, in addition to the information required in (A) of this paragraph, the data and computation of avoided energy costs based on any other methodology deemed appropriate and justifiable by the electric utility;
(3) The utility's request to use an alternate methodology in (2)(B) of this subsection is subject to review and advance approval of the commission.
(j) An electric utility shall submit to the commission the information necessary to support the methodology and calculations used in developing rates for purchased power based on avoided energy and capacity costs.
(k) Each qualifying facility shall have the option either
(1) to provide energy as the qualifying facility determines such energy to be available for such purchases, in which case the rates for such purchases shall be based on the purchasing utility's avoided costs calculated at the time of delivery; or
(2) to provide energy or capacity under a legally enforceable obligation for the delivery of energy or capacity over a specified term, in which case the rates for such purchases shall, at the option of the qualifying facility exercised before the beginning of the specified term, be based on either
(A) the avoided costs calculated at the time of delivery; or
(B) the avoided costs calculated at the time the obligation is incurred.
History
- Authority: AS 42.05.141; AS 42.05.301; AS 42.05.391 AS 42.05.151; AS 42.05.361 AS 42.05.291; AS 42.05.381
- Eff. 11/20/82, Register 84; am 3/11/2016, Register 217
3 AAC 50.780 Sales
(a) An electric utility shall provide service to a qualifying facility including, but not limited to, supplementary power, back-up power, maintenance power, and interruptible power.
(b) Notwithstanding (a) of this section, an electric utility is not obligated to provide supplementary power, back-up power, maintenance power, and interruptible power to a qualifying facility upon a showing to and determination by the commission, after reasonable notice and an opportunity for public comment, that compliance with that requirement will either impair the electric utility's ability to give adequate service to its customers or impose an undue burden on the electric utility.
(c) Rates for sales must be just and reasonable and in the public interest and must not discriminate against the other consumers of the utility or against a qualifying facility in comparison to rates for sales to other customers of the electric utility with similar load or other cost-related characteristics.
(d) An electric utility shall submit to the commission the information necessary to support the methodology and calculations used in developing rates for sales of electric power to a qualifying facility in conformance with applicable commission regulations.
(e) Rates for sales of back-up power and maintenance power
(1) must not be based upon an assumption that forced outages or other reductions in electric output by all qualifying facilities on an electric utility's system will occur simultaneously, or during the system peak, or both, unless the assumption is supported by factual data; and
(2) must take into account the extent to which scheduled outages of the qualifying facilities can be usefully coordinated with the scheduled outages of the electric utility's facilities.
(f) During any system emergency, an electric utility may discontinue sales to a qualifying facility, provided that the discontinuance is on a nondiscriminatory basis.
History
- Authority: AS 42.05.141(a)AS 42.05.301; AS 42.05.391(a) AS 42.05.151(a)AS 42.05.361(a) AS 42.05.291(c)AS 42.05.381(a)
- Eff. 11/20/82, Register 84
3 AAC 50.790 Implementation
(a) Not later than 60 days after receipt of a written request for interconnection from a qualifying facility, an electric utility shall file with the commission for its consideration a tariff for interconnection, integration, purchases, and sales with the requesting qualifying facility in accordance with applicable provisions of AS 42.05.361 - 42.05.441, 3 AAC 48.200 - 3 AAC 48.390, and 3 AAC 50.750 - 3 AAC 50.820.
(b) The proposed tariff filing of an electric utility filed in accordance with (a) of this section must delineate and authorize interconnection, integration, purchases, and sales between an electric utility and a qualifying facility, including provisions for
(1) the charges, terms, and conditions for interconnection to a qualifying facility, including the method and timing of payment of interconnection charges by a qualifying facility;
(2) the fees or payments for integration of the qualifying facility into the electric utility's system;
(3) the rates, terms, and conditions for purchases of energy and capacity from a qualifying facility; and
(4) the rates, terms, and conditions for sales of power to a qualifying facility.
(c) Notwithstanding (a) and (b) of this section, an electric utility may enter into a special contract with a qualifying facility specifying the charges, rates, terms, and conditions of interconnection, integration, purchases, and sales between an electric utility and a qualifying facility, provided use of a special contract otherwise conforms to applicable commission regulations, including 3 AAC 50.770(h).
(d) By April 1, 2016, each electric utility shall submit to the commission a proposed tariff filing that includes a standard rate for the purchase of energy from qualifying facilities with a design capacity of 100 kilowatts or less in accordance with 3 AAC 50.770(i).
(e) By April 1, 2016, each electric utility shall compile and maintain for public inspection and file with the commission all current purchase rates with qualifying facilities under 3 AAC 50.770 and the data and information specified in (1)-(3) of this subsection as follows, which must be updated every two years:
(1) the estimated avoided energy costs stated on a cents per kilowatt-hour basis for the current calendar or fiscal year and each of the next five years; for utilities with retail sales in excess of 500 million kilowatt-hours during the previous calendar year, the avoided energy costs shall be stated in blocks of not more than 10 percent of the system peak demand and reflect daily and seasonal peak and off-peak periods by year;
(2) the electric utility's plan for the addition of capacity by amount and type, for purchases of firm energy and capacity, and for capacity retirements for each year during the next 10 years;
(3) the estimated capacity costs at completion of the planned capacity additions and planned-capacity firm purchases, on the basis of dollars per kilowatt and the associated energy costs of each unit, on the basis of cents per kilowatt-hour; these costs must be expressed in terms of individual generating units and of individual planned firm purchases.
History
- Authority: AS 42.05.141; AS 42.05.291 AS 42.05.151; AS 42.05.361
- Eff. 11/20/82, Register 84; am 3/11/2016, Register 217
3 AAC 50.795 Reporting
(a) Within seven calendar days, an electric utility shall file with the commission in writing
(1) notification of a period in which purchases of power from a qualifying facility are curtailed under 3 AAC 50.770(b)(1);
(2) notification of a system emergency in which purchases of power from a qualifying facility are curtailed under 3 AAC 50.770(b)(2);
(3) notification of an agreement in which an electric utility transmits power from a qualifying facility under 3 AAC 50.770(b)(3);
(4) notification of a request for interconnection with an entity claiming qualifying facility rights under 3 AAC 50.750 - 3 AAC 50.820;
(5) notification of denial of interconnection with an entity claiming qualifying facility rights under 3 AAC 50.750 - 3 AAC 50.820.
(b) A qualifying facility shall comply with the state commission service requirement of 18 C.F.R. 292.207(c)(1) by concurrently filing with the commission an explanatory cover letter accompanied by a copy of all forms and documents filed with the Federal Energy Regulatory Commission under either 18 C.F.R. 292.207(a) or 18 C.F.R. 292.207(b)(1) and (2).
History
- Authority: AS 42.05.141; AS 42.05.151
- Eff. 3/11/2016, Register 217
3 AAC 50.800 Disconnection
(a) An electric utility has the right to disconnect a qualifying facility without notice if a hazardous condition exists in the equipment of the qualifying facility and immediate action is necessary to protect persons, utility facilities, or other customers' facilities from damage or interference imminently likely to result from the hazardous condition.
(b) Not later than 10 days after disconnection under (a) of this section, the electric utility shall notify the qualifying facility in writing of the reasons for the disconnection.
History
- Authority: AS 42.05.141(a)AS 42.05.291(a) AS 42.05.151(a)AS 42.05.301
- Eff. 11/20/82, Register 84
3 AAC 50.810 Disputes
(a) Disputes regarding implementation of 3 AAC 50.750 - 3 AAC 50.820 must be filed with the commission for consideration under the complaints procedures prescribed in 3 AAC 48.120 - 3 AAC 48.130.
(b) If a dispute arises under this section, an electric utility shall submit to the commission the cost justification necessary to support the methodology and calculations used in developing interconnection charges under 3 AAC 50.760, integration fees and payments under 3 AAC 50.765, purchase rates under 3 AAC 50.770, and sale rates under 3 AAC 50.780, to the extent relevant to resolving the complaint. The commission may review the data submitted by an electric utility under this subsection. The electric utility has the burden of providing justification for its data.
(c) A claim by an electric utility that a period under 3 AAC 50.770(b)(1) has occurred or will occur is subject to verification by the commission either before or after the occurrence, upon the commission's own motion or upon complaint by a qualifying facility.
History
- Authority: AS 42.05.141; AS 42.05.151
- Eff. 11/20/82, Register 84; am 3/11/2016, Register 217
3 AAC 50.820 Definitions
Unless the context indicates otherwise, in 3 AAC 50.750 - 3 AAC 50.820
(1) "avoided costs" means the incremental costs to an electric utility of electric energy or capacity or both, which, but for the purchase from the qualifying facility or qualifying facilities, the utility would generate or purchase from another source;
(2) "back-up power" means electric power supplied by an electric utility during an unscheduled power outage of a facility to replace energy ordinarily generated by the facility's own generation equipment;
(3) "cogeneration" means the production of electric energy and forms of useful thermal energy (such as heat or steam), employed for industrial, commercial, heating, or cooling purposes, through the sequential use of energy;
(4) "detent meter" means a watt-hour meter which can turn in only a forward direction and which is used to measure the number of kilowatt-hours sold to a qualifying facility by an electric utility;
(5) "electric power" means electric energy or capacity, or both;
(6) "firm power" means electric power supplied to the electric utility in predetermined and reliable quantities at specific times and intervals;
(7) "interruptible power" means electric power supplied by an electric utility subject to interruption by the electric utility under specified conditions;
(8) "maintenance power" means electric power supplied by an electric utility during scheduled power outages of the qualifying facility;
(9) Repealed 3/11/2016;
(10) "parallel operation" means a method of interconnection which enables a qualifying facility to generate electric power to meet its electrical consumption needs first and to automatically transmit any surplus electric power to the electric utility, and which also enables the qualifying facility to automatically purchase power from the electric utility if the qualifying facility cannot generate enough power to meet its electrical demands;
(11) "qualifying facility" has the meaning given in 18 C.F.R. 292.101(b)(l), revised as of April 1, 2015, and adopted by reference;
(12) "supplementary power" means electric energy or capacity supplied by an electric utility, regularly used by a qualifying facility in addition to that which the facility generates itself;
(13) "system emergency" means a condition on a utility's system which is likely to result in imminent significant disruption of service to customers or is imminently likely to endanger life or property;
(14) "design capacity" means the generator's nameplate rating measured in kilowatts.
History
- Authority: AS 42.05.141; AS 42.05.151
- Eff. 11/20/82, Register 84; am 3/11/2016, Register 217
Article 3 Net Metering Standards
3 AAC 50.900 Applicability and waiver
(a) Except as provided in (b) of this section, the net metering requirements set out in 3 AAC 50.900 - 3 AAC 50.949 apply to an electric utility that is subject to economic regulation.
(b) The net metering requirements set out in 3 AAC 50.900 - 3 AAC 949 do not apply to
(1) an independent electric system owned and operated by an electric utility that is subject to economic regulation if, except for fossil fuel generation for standby and emergency power, 100 percent of the independent electric system's power is supplied by a facility that produces electric energy derived from one or more of the sources listed in 3 AAC 50.920(1)(A) - (H);
(2) an independent electric system owned and operated by an electric utility that is subject to economic regulation, if the independent electric system had total retail sales of less than 5,000,000 kilowatt-hours during the previous calendar year; or
(3) any portion of the distribution system of an electric utility that is subject to economic regulation, if the electric utility demonstrates to the commission that limiting net metering installations in that portion of its distribution system is reasonably necessary to address system stability constraints or other operational issues.
(c) A requirement in 3 AAC 50.900 - 3 AAC 50.949, other than one also required by a provision of AS 42.05, may be modified or waived, in whole or in part, by order of the commission upon application and a showing of good cause or on the commissioner's own motion. Application for waiver must be in writing and set out the pertinent facts in sufficient detail to support a finding by the commission that no legitimate public interest will be served by enforcing the requirement designated in the application. A requirement in 3 AAC 50.900 - 3 AAC 50.949 that is also required by a provision of AS 42.05 may be modified or waived, in whole or in part, by order of the commission upon application in writing and a showing that the modification or waiver is in the public interest.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.711 AS 42.05.151; AS 42.05.691
- Eff. 6/16/2010, Register 194
3 AAC 50.910 Net metering of electric energy
(a) Except as provided in (b) of this section, an electric utility shall
(1) make a net metering program available to each of its retail consumers; and
(2) allow consumer generation systems eligible under 3 AAC 50.920 to be interconnected to the electric utility's facilities in accordance with interconnection standards contained in the electric utility's tariff.
(b) An electric utility may refuse to interconnect with a consumer requesting net metering, if interconnection would cause the total nameplate capacity of all eligible consumer generation systems participating in the net metering program to exceed 1.5 percent of the electric utility's average retail demand stated in the electric utility's tariff as required in (d) of this section. The electric utility shall notify the commission no later than 30 days after refusal if the electric utility refuses, for the reason set out in this subsection, to interconnect with a consumer requesting net metering.
(c) An electric utility that has a decrease in average retail demand that results in the total nameplate capacity of eligible consumer generation systems exceeding 1.5 percent of average retail demand shall allow existing net metering consumers to continue participating in the net metering program.
(d) On or before March 1 of each year, an electric utility shall file a tariff advice letter with accompanying tariff sheet stating the number of kilowatts equivalent to 1.5 percent of the electric utility's average retail demand for the previous calendar year and the total nameplate capacity of eligible consumer generation systems participating in the net metering program at the time of filing.
(e) An electric utility may request, by tariff advice letter, to use a limit on total nameplate capacity of eligible consumer generation systems participating in the net metering program above 1.5 percent of the electric utility's average retail demand.
(f) An electric utility may deny participation in a net metering program to a consumer that
(1) participates in another program that allows the consumer to collect, through voluntary contributions from other participating customers of the electric utility, more than the non-firm power rate per kilowatt-hour for the sale of electric energy; or
(2) sells electric energy under an existing contract that allows the consumer to collect more than the non-firm power rate per kilowatt-hour for the sale of electric energy.
(g) An electric utility may install additional metering equipment for net metering consumers, if the electric utility's tariff allows the electric utility to install the equipment. The electric utility
(1) is responsible for all costs related to the purchase, installation, and maintenance of the additional metering equipment; and
(2) may not assess a recurring charge for the additional metering equipment.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.321 AS 42.05.151; AS 42.05.311
- Eff. 6/16/2010, Register 194
3 AAC 50.920 Eligible consumer generation systems
To be eligible for interconnection under a net metering program, a consumer generation system must
(1) be a facility that produces electric energy derived from one or more of the following sources:
(A) solar photovoltaic and solar thermal energy;
(B) wind energy;
(C) biomass energy, including landfill gas or biogas produced from organic matter, wastewater, anaerobic digesters, or municipal solid waste;
(D) hydroelectric energy;
(E) geothermal energy;
(F) hydrokinetic energy;
(G) ocean thermal energy;
(H) other sources as approved by the commission that generally have similar environmental impact;
(2) be operated and either owned or leased by the consumer, and
(A) have a total nameplate capacity of no more than 25 kilowatts per consumer premises;
(B) be located on the consumer premises;
(C) be used primarily to offset part or all of the consumer's requirements for electric energy; and
(D) include an inverter;
(3) include an electric generator and its accompanying equipment package; and
(4) be physically interconnected to the consumer's side of the meter from which the electric utility provides electric service to the consumer.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.321 AS 42.05.151; AS 42.05.311
- Eff. 6/16/2010, Register 194
3 AAC 50.930 Charges or credits for net electric energy
(a) An electric utility with a consumer participating in a net metering program shall measure the net electric energy during each monthly billing period, and
(1) if the electric utility supplied more electric energy to the consumer than the consumer supplied to the electric utility during the monthly billing period, the electric utility shall bill the consumer for the number of kilowatt-hours of net electric energy supplied by the electric utility to the consumer at the applicable rates contained in the electric utility's currently effective tariff; or
(2) if the consumer supplied more electric energy to the electric utility than the electric utility supplied to the consumer during the monthly billing period, the electric utility shall credit the consumer's account with an amount derived by multiplying the kilowatt-hours of net electric energy supplied by the consumer to the electric utility by the non-firm power rate contained in the electric utility's currently effective tariff, unless a different non-firm power rate has been established in a commission-approved contract.
(b) Dollar amounts credited to the account of a net metering consumer for furnishing electric energy to the electric utility under (a)(2) of this section
(1) shall be used to reduce dollar amounts owed by the consumer in subsequent monthly billing periods; and
(2) do not expire or otherwise revert to the electric utility.
(c) Except as otherwise provided in (a) and (b) of this section regarding per-kilowatt hour charges, the electric utility may bill a net metering consumer for all applicable charges authorized by the electric utility's approved tariff.
(d) An electric utility administering a net metering program may not charge a consumer participating in the net metering program any additional fee for standby, capacity, interconnection, or other net metering expense unless approved by the commission.
(e) An electric utility may petition the commission to change electric rate designs, consistent with 3 AAC 48.500 - 3 AAC 48.560, to include appropriate rate classes for net metering consumers, if the utility can demonstrate an adverse material rate impact on utility consumers that do not participate in the net metering program.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.411 AS 42.05.151; AS 42.05.391; AS 42.05.431
- Eff. 6/16/2010, Register 194
3 AAC 50.940 Interconnection of eligible consumer generation systems
(a) No later than March 31, 2012, each electric utility required under 3 AAC 50.900 to provide net metering services shall submit a tariff revision to incorporate interconnection rules for eligible consumer generation systems. The interconnection rules must
(1) address any requirements for liability insurance coverage, if that coverage is readily available at a reasonable cost to the consumer;
(2) address the installation of an external disconnect switch, unless the utility determines additional disconnection capability is not necessary; consumers must be offered the option to
(A) install an external disconnect switch in a location readily accessible by utility personnel, as designated by the utility; or
(B) agree to allow the utility to disconnect both the consumer's non-utility generation and the consumer's load from the utility electric system when disconnection is necessary, under circumstances described in the utility's tariff;
(3) set out rules regarding the allocation of costs for the installation of the external disconnection switch in accordance with the following requirements:
(A) the utility may require the consumer to pay for the installed cost of the external disconnect switch and necessary wiring if the location designated by the utility under (2)(A) of this subsection is
(i) within five feet of the consumer's meter base;
(ii) at the consumer's main structure; or
(iii) at a location otherwise agreed to between the utility and the consumer;
(B) the utility may require the consumer to pay for the installed cost of the external disconnect switch but the utility shall pay for necessary wiring if the installed location of the external disconnect switch is a location other than one described in (A) of this paragraph;
(4) include an application form for interconnection of eligible consumer generation systems that is no more than two pages;
(5) include criteria and requirements for interconnection of non-utility generation with electric power systems; in developing those criteria and requirements, the utility may use, as applicable, standards from the Institute of Electrical and Electronics Engineers (IEEE) 1547 series of interconnection standards or other similar national standards; when determining the reasonableness of the tariff filing, the commission may refer to those standards and consider their applicability; and
(6) include requirements for inverters, converters, controllers, and interconnection system equipment for use by non-utility generation; in developing those requirements, the utility may use, as applicable, Underwriters' Laboratories (UL) standard 1741, Standard for Inverters, Converters, Controllers and Interconnection System Equipment for Use With Distributed Energy Resources, or other similar national standards; when determining the reasonableness of the tariff filing, the commission may refer to those standards and consider their applicability.
(b) Upon approval of an application for interconnection of an eligible consumer generation system by the utility,
(1) the provisions of 3 AAC 50.900 - 3 AAC 50.949 apply to the consumer and utility; and
(2) the provisions of 3 AAC 50.750 - 3 AAC 50.820 do not apply to the consumer and utility.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.321 AS 42.05.151; AS 42.05.311
- Eff. 6/16/2010, Register 194; am 10/3/2011, Register 200
3 AAC 50.949 Definitions
In 3 AAC 50.900 - 3 AAC 50.949, unless the context requires otherwise,
(1) "average retail demand" means the number expressed in kilowatts and determined by dividing the total retail sales of the electric utility, measured in kilowatt-hours, for a calendar year with
(A) 365 days, by 8,760 hours;
(B) 366 days, by 8,784 hours;
(2) "biomass energy"
(A) means energy derived from
(i) plant matter, including trees, grasses, and agricultural crops; or
(ii) animal matter, including fish;
(B) does not include energy derived from fossil fuels;
(3) "consumer" means a customer
(A) of an electric utility that is subject to economic regulation;
(B) who consumes the electricity purchased from the electric utility;
(4) "consumer-generated electric energy" means electric energy that is generated by a consumer eligible for participation in a net metering program;
(5) "consumer premises" means all buildings and associated grounds owned by, leased by, rented to, or licensed to a consumer at a single location where an electric utility provides service through one or more utility meters;
(6) "economic regulation" has the meaning given in 3 AAC 48.820;
(7) "electric system" means an integrated electrical system that includes at least generation and distribution;
(8) "eligible consumer generation system" means a system that complies with 3 AAC 50.920;
(9) "equipment package" means a group of components connecting an electric generator to an electric utility's electric distribution system; "equipment package" includes all interface equipment and the interface equipment's controls, switchgear, inverter, and other interface devices;
(10) "excess consumer-generated electric energy" means the amount of consumer-generated electric energy in excess of the consumer's consumption from the eligible consumer generation system during a monthly billing period, as measured at the electric utility's meter;
(11) "geothermal energy" means energy generated from heat stored in the earth, or the collection of absorbed heat derived from underground;
(12) "hydroelectric energy" means energy generated from falling or flowing water;
(13) "hydrokinetic energy" means energy generated from waves or directly from the flow of water in ocean currents, tides, or inland waterways;
(14) "independent electric system" means an electric system that is not interconnected with any other electric system;
(15) "inverter" means a device that converts direct-current power into alternating-current power so that the generated power is compatible with power generated by an electric utility;
(16) "nameplate capacity" means the maximum rated output of a generator, prime mover, or other electric power production equipment under specific conditions designated by the manufacturer;
(17) "net electric energy" means, as metered by the electric utility for a specified period and expressed in kilowatt-hours,
(A) the amount by which the quantity of electric energy supplied by the electric utility to the consumer exceeds the quantity of electric energy supplied by the consumer to the electric utility; or
(B) the amount by which the quantity of electric energy supplied by the consumer to the electric utility exceeds the quantity of electric energy supplied by the electric utility to the consumer;
(18) "net metering" means measuring the amount of net electric energy as described in 3 AAC 50.930(a) for the applicable billing period;
(19) "net metering program" means a program administered by an electric utility that allows a consumer operating and either owning or leasing an eligible consumer generation system to
(A) generate electric energy primarily for the consumer's own use;
(B) supply consumer-generated electric energy to the electric utility; and
(C) receive a credit under 3 AAC 50.930 if net metering results in excess consumer-generated electric energy during a billing period;
(20) "non-firm power rate" means the energy rate updated quarterly in an electric utility's tariff in accordance with 3 AAC 50.770(i), or established in a commission-approved contract as described in 3 AAC 50.930(a)(2);
(21) "ocean thermal energy" means the conversion of energy arising from the temperature difference between warm surface water of oceans and cold deep-ocean current into electrical energy or other useful forms of energy;
(22) "retail sales" means sales of electricity to the end-use consumer, exclusive of wholesale sales;
(23) "solar photovoltaic energy" means the conversion of sunlight into electricity through a photovoltaic cell;
(24) "solar thermal energy" means a technology for harnessing solar energy for thermal energy;
(25) "switchgear" means the combination of electrical disconnects, fuses, or circuit breakers used to
(A) isolate electrical equipment; and
(B) de-energize equipment to allow work to be performed;
(26) "external disconnect switch" means a visible-break, lockable device used to isolate a consumer generation system from the utility electric system.
History
- Authority: AS 42.05.141; AS 42.05.151
- Eff. 6/16/2010, Register 194; am 10/3/2011, Register 200; am 3/11/2016, Register 217
Article 4 Community Energy Program
3 AAC 50.950 Waiver
On application in writing by a subscriber, subscriber organization, or electric utility, or on its own motion, the commission may grant by order a modification or waiver of a requirement
(1) in AS 42.05.725 - AS 42.05.735 or 3 AAC 50.950 - 3 AAC 50.999, based on a finding by the commission that no legitimate public interest will be served by enforcing the requirement, unless the requirement is otherwise required by another provision of AS 42.05; or
(2) of AS 42.05 not described in paragraph (1) of this section, based on a finding by the commission that the modification or waiver is in the public interest.
History
- Authority: AS 42.05.141; AS 42.05.691; AS 42.05.727 AS 42.05.151; AS 42.05.711; AS 42.05.731 AS 42.05.291; AS 42.05.725
- Eff. 4/22/2026, Register 258
3 AAC 50.955 Community energy program
(a) An electric utility shall make a community energy program available to a subscriber in accordance with the utility's community energy tariff.
(b) An electric utility shall
(1) allow a community energy facility eligible under 3 AAC 50.960 to interconnect to the electric utility's facilities in accordance with interconnection standards set out in the electric utility's community energy tariff; and
(2) purchase the total electrical energy generated by a community energy facility.
(c) An electric utility shall notify the commission not later than 30 days after the electric utility issues a refusal to interconnect with a community energy facility.
History
- Authority: AS 42.05.141; AS 42.05.691; AS 42.05.727 AS 42.05.151; AS 42.05.711; AS 42.05.729 AS 42.05.291; AS 42.05.725
- Eff. 4/22/2026, Register 258
3 AAC 50.960 Community energy facilities
(a) To be eligible for interconnection under a community energy program, a community energy facility must
(1) be owned by
(A) a subscriber organization; or
(B) an electric utility;
(2) be located within an electric utility's certificated service area where a subscriber takes service;
(3) be managed and monitored by
(A) a subscriber organization; a subscriber organization may contract with a third party to perform management and monitoring functions, but is ultimately responsible for the management and monitoring of the program; or
(B) an electric utility, if owned by the electric utility;
(4) generate electric energy from a source eligible for interconnection under 3 AAC 50.920(1);
(5) have been constructed by contractors and subcontractors whose employees received the current prevailing rate of wages specified in the applicable determination of prevailing rate of wages for public construction projects issued by the Department of Labor and Workforce Development under AS 36.05.010;
(6) include a device, equipment, and required system upgrades to connect the community energy facility to the electric utility's distribution system; and
(7) meet the applicable safety and performance standards established by the National Electrical Code, the Institute of Electrical and Electronic Engineers, and Underwriters Laboratories, or other similar national standards.
(b) A subscriber organization shall interconnect the organization's community energy facilities to an electric utility in accordance with the interconnection standards set out in the electric utility's tariff. The community energy facility must provide a meter base for the electric utility to supply and read a utility-owned meter.
(c) The owner of a community energy facility is responsible for reasonable costs associated with the installation, administration, operation, and maintenance of the community energy facility.
(d) The annual energy production capacity of a community energy facility may not exceed 110 percent of the total modeled annual production output of the fully subscribed capacity of the facility. The electric utility does not owe an obligation to measure, allocate, or credit production to a community energy facility, subscriber organization, or a subscriber for production that exceeds 110 percent.
(e) An electric utility's community energy program must require the owner and operator of a community energy facility to report a list of subscribers as a condition for interconnection, including the share of energy that is attributable to each subscriber in the facility each month.
(f) An electric utility's community energy program must require the subscriber organization to provide information regarding the organization's community energy facility on the organization's Internet website as a condition for interconnection, including procedures, terms and conditions, calculation of credits, contact information, and subscription fees.
(g) The electric utility shall provide information for the utility's community energy program on the utility's Internet website, including the community energy facilities available in the utility's service area.
History
- Authority: AS 42.05.141; AS 42.05.691; AS 42.05.727 AS 42.05.151; AS 42.05.711; AS 42.05.731 AS 42.05.291; AS 42.05.725
- Eff. 4/22/2026, Register 258
3 AAC 50.970 Community energy tariff
(a) Not later than May 31, 2026, each electric utility required to provide a community energy program under 3 AAC 50.950 shall submit a community energy tariff under the procedures set out in 3 AAC 48.220 and 3 AAC 48.270 that includes
(1) interconnection rules, including criteria and requirements for interconnection, processes, and fees to facilitate cost-effective and nondiscriminatory interconnection of community energy facilities; interconnection rules may not place a greater burden on an interconnecting community energy facility than the utility's existing interconnection tariff placed on other nonutility generators of similar capacity and configuration;
(2) requirements for liability insurance coverage;
(3) requirements for the installation of an external disconnect switch, unless the utility determines additional disconnection capability is not necessary, and the option to
(A) install an external disconnect switch in a location readily accessible by utility personnel, as designated by the utility; or
(B) agree to allow the utility to disconnect both the community energy facility and the community energy facility's load from the utility electric system when disconnection is necessary under circumstances described in the utility's community energy tariff;
(4) rules for disconnection of service;
(5) the maximum aggregate nameplate capacity for all eligible community energy facilities; if the maximum nameplate capacity for all eligible community energy facilities identified in a utility's tariff is less than 5 MW, in addition to the information required by AS 42.05.727(a)(2), the utility shall provide:
(A) an explanation of how the requested maximum was derived;
(B) an objective measure of the impact on rates if the maximum is breached;
(C) an objective measure of the impact on reliability if the maximum is breached; and
(D) an explanation of why the impacts described in (B) and (C) would result in rates or service quality that are not just and reasonable;
(6) requirements for inverters, converters, controllers, and interconnection system equipment, and required system upgrades for use by non-utility generation; in developing those requirements, the utility may use Underwriters' Laboratories standard 1741, Standard for Inverters, Converters, Controllers and Interconnection System Equipment for Use With Distributed Energy Resources, as applicable and as supplemented or other similar national standards;
(7) information a subscriber organization must provide to the electric utility that is necessary to timely calculate the charges and credits established in 3 AAC 50.980;
(8) procedures for the subscriber organization to timely report planned and unplanned facility outages and unavailability;
(9) a procedure for consumers to enroll in the community energy program owned by an electric utility; and
(10) terms, conditions, fees and credits for subscription to the community energy program owned by an electric utility.
(b) An electric utility may impose reasonable interconnection charges as approved by the commission, including connection costs, switching, metering, transmission, distribution, safety provisions, administration, and other costs directly incurred as a result of the interconnection, but only to the extent that such costs are in excess of the corresponding costs which the utility would have incurred if the utility had not engaged in the interconnection.
(c) An electric utility may recover the utility's reasonable costs associated with administering a community energy program if the additional costs are in excess of the costs which the utility would have incurred if the utility had not engaged in the interconnection.
(d) An electric utility may provide a separate rate approved by commission for capacity provided by a community energy facility through energy storage.
(e) If approved by the commission, an electric utility may charge a subscriber organization that owns a community energy facility reasonable fees to cover the incremental costs of integrating the energy from the facility into the electric utility's operations. The utility must demonstrate that such costs only arise if the community energy facility interconnects with electric utility system. There is a rebuttable presumption that a community energy facility with a nameplate capacity of less 100 kW does not generate material incremental integration costs.
History
- Authority: AS 42.05.141; AS 42.05.691; AS 42.05.727 AS 42.05.151; AS 42.05.711; AS 42.05.729 AS 42.05.291; AS 42.05.725
- Eff. 4/22/2026, Register 258
3 AAC 50.980 Charges and credits for community energy program
(a) An electric utility shall require a subscriber organization to measure the electric energy produced by the organization's community energy facility and report the production and share of energy attributed to each subscriber in the community energy facility during each billing period to the electric utility. The electric utility shall bill each subscriber of the subscriber organization in accordance with (b) of this section.
(b) On receipt of a report under (a) of this section an electric utility shall
(1) if the electric utility supplied more electric energy to a subscriber than the energy attributed to the subscriber from the community energy facility during the monthly billing period, bill the subscriber for the remaining electric energy the electric utility supplied to the subscriber at the applicable rates set out in the electric utility's currently effective tariff; or
(2) if the electric energy attributed to a subscriber was greater than the electric energy supplied by the electric utility to the subscriber during the monthly billing period, credit the subscriber's account with the amount of the subscriber's proportional share for the excess electric energy supplied to the electric utility by the community energy facility multiplied by the avoided energy rate set out in the electric utility's currently effective tariff, unless a different avoided energy rate has been established in a commission-approved contract.
(c) A dollar amount credited to the account of a subscriber for furnishing electric energy to an electric utility under (b)(2) of this section
(1) shall be used to reduce the dollar amount owed by the subscriber in a subsequent monthly billing period; and
(2) does not expire or otherwise revert to the electric utility.
(d) Except as otherwise provided in (b) and (c) of this section regarding per-kilowatt hour charges, the electric utility may bill a subscriber for applicable charges authorized by the electric utility's approved tariff.
(e) An electric utility may not charge a subscriber that participates in a community energy program an additional fee for standby, capacity, interconnection, or other expenses unless approved by the commission. An electric utility must assess reasonable costs associated with the community energy program to the subscribers of the community energy program. Reasonable costs include administrative, interconnection, regulation, regulatory cost charges, and the determination and application of bill credit rates for the program, subscribers, and subscriber organizations. To ensure that a community energy program does not have an adverse effect on retail rates, the electric utility may not recover costs under this subsection from a nonsubscriber.
(f) An electric utility may petition the commission to change electric rate designs, consistent with 3 AAC 48.500 - 3 AAC 48.560, to include appropriate rate classes for subscribers, if the utility can demonstrate an adverse material rate impact on electric utility consumers that do not participate in the community energy program.
(g) An electric utility shall use unsubscribed energy generated by a community energy facility for the utility's retail energy supply. The electric utility shall compensate the subscriber organization for the unsubscribed energy at the utility's avoided energy rate set out in the electric utility's currently effective tariff.
History
- Authority: AS 42.05.141; AS 42.05.691; AS 42.05.727 AS 42.05.151; AS 42.05.711; AS 42.05.729 AS 42.05.291; AS 42.05.725
- Eff. 4/22/2026, Register 258
3 AAC 50.990 Filing and reporting requirements
(a) On or before March 1 of each year, an electric utility shall file a tariff advice letter with accompanying tariff sheet that includes the
(1) total number of interconnected community energy facilities;
(2) total nameplate capacity per type of renewable generation within the electric utility's service area;
(3) total energy fed into the grid per type of renewable generation;
(4) total number of customers per type of renewable generation; and
(5) retail bill impact of subscription with the community energy program.
(b) Beginning March 1, 2027, an electric utility shall report the updated nameplate capacity for community energy facilities to the commission in accordance with AS 42.05.727(a)(2). The electric utility shall update the report to the commission every two years.
History
- Authority: AS 42.05.141; AS 42.05.691; AS 42.05.727 AS 42.05.151; AS 42.05.711; AS 42.05.729 AS 42.05.291; AS 42.05.725
- Eff. 4/22/2026, Register 258
3 AAC 50.999 Definitions
In 3 AAC 50.950 - 3 AAC 50.990, unless the context requires otherwise,
(1) "avoided energy rate" has the same meaning given in 3 AAC 50.949(20);
(2) "biomass energy" has the meaning given in 3 AAC 50.949(2);
(3) "community energy facility" has the meaning given in AS 42.05.735(1);
(4) "community energy program" is a program that
(A) allows a community energy facility to
(i) primarily generate electricity to offset the electric energy requirements of a facility's subscriber; and
(ii) supply generated electric energy to an electric utility; and
(B) provides credit to a subscriber under 3 AAC 50.980 for the subscriber's portion of the electric energy generated by a community energy facility during a monthly billing period.
(5) "consumer" has the meaning given in AS 42.05.735(2);
(6) "electric system" has the meaning given in AS 42.05.735(3);
(7) "external disconnect switch" has the meaning given in 3 AAC 50.949(26).
(8) "excess electric energy" means the energy attributed to a subscriber's subscription in a community energy facility that exceeds the subscriber's electric energy requirements in a single billing period.
(9) "geothermal energy" has the meaning given in 3 AAC 50.949(11);
(10) "hydroelectric energy" has the meaning given in 3 AAC 50.949(12);
(11) "hydrokinetic energy" has the meaning given in 3 AAC 50.949(13);
(12) "inverter" has the meaning given in 3 AAC 50.949(15);
(13) "nameplate capacity" has the meaning given in AS 42.05.735(4);
(14) "ocean thermal energy" has the meaning given in 3 AAC 50.949(21);
(15) "solar photovoltaic energy" has the meaning given in 3 AAC 50.949(23);
(16) "solar thermal energy" has the meaning given in 3 AAC 50.949(24);
(17) "subscriber" has the meaning given in AS 42.05.735;
(18) "subscriber organization" has the meaning given in AS 42.05.735;
(19) "unsubscribed energy" means the proportion of electric energy generated by a community energy facility that is not allocated to subscribers.
History
- Authority: AS 42.05.141; AS 42.05.691; AS 42.05.727 AS 42.05.151; AS 42.05.711; AS 42.05.729 AS 42.05.291; AS 42.05.725; AS 42.05.735
- Eff. 4/22/2026, Register 258
Chapter 51 Telecommunications Relay Services
Article 1 Criteria for the Provision of Telecommunications Relay Service for the Deaf, Hard of Hearing, and Speech Impaired
3 AAC 51.010 Applicability, necessity, purpose, and waiver
(a) The provisions of 3 AAC 51.010 - 3 AAC 51.199 apply to all providers of any local intrastate telecommunication services. The provisions of 3 AAC 51.010 - 3 AAC 51.199 do not apply to intrastate interexchange carriers.
(b) The provision of telecommunications relay service (TRS) in accordance with 3 AAC 51.010 - 3 AAC 51.199 is required by the public convenience and necessity to meet the needs of persons who are deaf, hard-of-hearing, or speech disabled.
(c) The purpose of 3 AAC 51.010 - 3 AAC 51.199 is to implement the directives of AS 42.05.296 and the Americans with Disabilities Act of 1990 (47 U.S.C. 225) requiring the provision of telecommunications service to allow persons who are deaf, hard-of-hearing, or speech disabled to communicate with all other persons and each other.
(d) Except for requirements established under AS 42.05.296 and 47 U.S.C. 225 (1990), the commission will, in its discretion, waive the application of all or any part of 3 AAC 51.010 - 3 AAC 51.199 upon a showing of good cause under procedures set out in 3 AAC 48.805.
History
- Authority: AS 42.05.141; AS 42.05.296; AS 42.05.321 AS 42.05.151; AS 42.05.311; AS 42.05.711
- Eff. 12/2/92, Register 124; am 2/23/2001, Register 157; am 5/16/2020, Register 234
3 AAC 51.020 Selection of telecommunications relay service provider
(a) In accordance with the provisions of this section, the commission will issue an order requesting applications for the provision of TRS in this state and specifying the general, business, technical, and financial information to be provided by an applicant.
(b) If more than one entity applies to provide TRS in this state, the commission will hold a public hearing to examine the applications on a comparative basis. In accordance with (e) - (g) of this section, the commission will determine whether one or more applicants are qualified and which applicant is most fit, willing, and able to provide TRS in this state and can provide quality service at just and reasonable rates.
(c) If no applications are received, or if the commission determines that none of the applicants are fit, willing, and able to provide TRS, the existing certificated provider shall continue to provide service under the terms and conditions of its effective tariff. If no applications are received, the commission will issue an order requesting applications every 12 months, unless good cause indicates otherwise. A TRS provider required to serve beyond its initial term of service, as provided in this section, is exempt from the requirements of 3 AAC 48.275(a), but shall provide reasonable justification for any proposed change to its monthly revenue requirement.
(d) The commission will issue a certificate of public convenience and necessity to a TRS provider selected under this section for a period of at least five years.
(e) In addition to the application information required under (a) of this section, a TRS applicant shall provide documentation that verifies the applicant has
(1) the ability to meet or exceed federal requirements concerning all operational, technical, and functional minimum standards for TRS specified in 47 C.F.R. 64.604; and
(2) procedures to
(A) solicit input from users of the service and carriers whose customers use TRS;
(B) fairly and expeditiously resolve customer complaints;
(C) develop and implement community outreach and education services and programs; and
(D) provide distribution of one or more devices that permit persons who are deaf, hard-of-hearing, or speech disabled to communicate with each other and with persons of normal hearing.
(f) In reviewing applications, the commission will rank applicants using the following weighting criteria:
(1) price for basic TRS expressed in dollars and cents per billable minute - 40 percent;
(2) quality of service, which includes the requirements set out in (e) of this section - 40 percent;
(3) availability of, and price for, optional services and ability to meet or exceed any other criteria specifies in the request for applications - 20 percent.
(g) In its order requesting applications issued under (a) and (c) of this section, the commission will establish the terms and amount of an escrow or bond that it determines an applicant must provide to demonstrate an ability to ensure the provision of TRS in this state.
(h) The commission will reject all applications and renotice the application process if it determines that none of the applicants can provide quality service at just and reasonable rates.
History
- Authority: AS 42.05.141; AS 42.05.221 AS 42.05.151; AS 42.05.296
- Eff. 12/2/92, Register 124; am 2/23/2001, Register 157; am 5/16/2020, Register 234
3 AAC 51.030 Requirements of telecommunications relay service provider
(a) Following the issuance of a certificate of public convenience and necessity to provide TRS in this state, the provider shall file a tariff that incorporates the terms and conditions specified in its application. The TRS provider shall serve in conformance with its tariff until service expires under the terms of the certificate or until the commission decides otherwise. The TRS provider shall file with the commission, in accordance with 3 AAC 48.095, a monthly report that includes the following information:
(1) the TRS surcharges assessed and the total amount of TRS revenue collected based on the number of voice lines reported by telecommunications carriers under 3 AAC 51.040(k)(1); the report must specify the surplus revenue account balance;
(2) the number of calls processed; the report must specify TRS traffic by number of calls and minutes of use and each category must be further disaggregated by jurisdiction and type of call; for the purpose of this paragraph, "jurisdiction" includes local, intrastate toll, and interstate toll;
(3) the quality of service offered to customers; the report must show conformance with federal speed-of-answer and call-blocking standards specified in 47 C.F.R. 64.604(b)(2).
(b) On or before March 1 of each year, the TRS provider shall file a new proposed outreach and education program budget for the following fiscal year along with a report of its actual expenses for the preceding fiscal year.
(c) The TRS provider shall enter into an escrow arrangement or post a bond with the commission in accordance with the terms and amount specified by the commission in its order issued under 3 AAC 51.020.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.296
- Eff. 12/2/92, Register 124; am 2/23/2001, Register 157; am 11/6/2016, Register 220; am 11/22/2017, Register 224; am 5/16/2020, Register 234
3 AAC 51.040 Funding of telecommunications relay service
(a) The commission will establish a TRS surcharge by order and will consider the following criteria:
(1) the monthly revenue requirement of the TRS provider;
(2) the estimated number of voice lines of providers of local wireline and wireless telecommunications service;
(3) any amounts held by the TRS provider in the surplus revenue account.
(b) The commission will modify the surcharge whenever necessary to avoid insufficient or excessive money in the surplus revenue account.
(c) After the commission determines the surcharge, each local exchange carrier shall submit to the commission a compliance tariff filing that includes the surcharge using the procedures set out in 3 AAC 48.220 and 3 AAC 48.270.
(d) repealed 5/16/2020.
(e) Each telecommunications carrier shall list the surcharge as a separate line item on bills for service and entitle it "Universal Access Surcharge."
(f) Each telecommunications carrier shall collect the surcharge for each voice line from subscribers of telecommunications service.
(g) The TRS provider shall retain as compensation for services an amount equal to its authorized monthly revenue requirement.
(h) If the TRS provider collects an amount in excess of its monthly revenue requirement, the TRS provider shall hold that excess amount in a low-risk interest bearing account and entitle it the "surplus revenue account".
(i) The TRS provider may draw from the surplus revenue account in any month in which an underrecovery of surcharge revenue occurs. An underrecovery means that the total surcharge collections from local exchange carriers for a given month is less than the TRS provider's revenue requirement for that month. The amount drawn from the surplus revenue account may not exceed the amount of the underrecovery. The amount of the underrecovery is calculated as follows:
UNDERRECOVERY = MONTHLY REVENUE REQUIREMENT - MONTHLY SURCHARGE COLLECTION
(j) If sufficient money is not available in the surplus revenue account to cover the underrecovery in a given month, the TRS provider may assess an interest charge on the unrecovered amount. The interest charge is assessable at the rate of 0.0287 percent per day and collectible by the TRS provider in the next month in which sufficient money is available.
(k) Each telecommunications carrier shall disburse surcharge collections on a monthly basis to the TRS provider in the following manner:
(1) by the 10th calendar day of each month, or the next working day if the 10th falls on a Saturday, Sunday, or bank holiday, each telecommunications carrier shall pay to the TRS provider surcharge revenues collected from subscribers; each telecommunications carrier shall send a report, with the payment, showing the number of wireless and wireline voice lines to which a surcharge was assessed; the report must also include the number of uncollectible surcharges and the amount collected from previous months' uncollectible surcharges, separated by each month;
(2) payment is delinquent if it is not made by the 10th calendar day of each month or the next working day if the 10th falls on a Saturday, Sunday, or bank holiday; payment must be made by wire transfer or electronic funds transfer directly to the TRS provider's bank account;
(3) if electronic funds transfer is not technically feasible, payment must be made by check with immediately available money and mailed before the due date;
(4) if payment is not received in immediately available money on or before the due date, the TRS provider may assess a finance charge; the tariffed interest rate may not exceed the rate set by AS 45.45.010(a); a single late charge may be imposed when the account first becomes past due; charges for late payment must be deposited directly to the surplus revenue account unless sufficient money to cover the TRS provider's monthly revenue requirement is not available.
(l) An amount remaining in the surplus revenue account at the termination of a TRS provider's contract must be transferred within 30 days to the succeeding TRS provider.
History
- Authority: AS 42.05.141; AS 42.05.296; AS 42.05.321 AS 42.05.151; AS 42.05.311
- Eff. 12/2/92, Register 124; am 2/23/2001, Register 157; am 11/6/2016, Register 220; am 10/27/2017, Register 224; am 5/16/2020, Register 234
3 AAC 51.199 Definitions
(a) In this chapter, unless the context requires otherwise,
(1) "basic TRS" means the minimum operational, technical, and functional standards, and the services and programs required by 3 AAC 51.020(e);
(2) "billable minute" or "billable minute of use" means the time period measured in minutes beginning from the point when a communication assistant connects to an incoming relay call until the moment the communication assistant disconnects from the last party to the call; "billable minute"
(A) includes incomplete calls that do not reach the intended party, such as a busy signal, no answer, or wrong number; and
(B) does not include the time in queue, such as the incoming call is ringing or the time waiting for the call to connect to the communication assistant;
(3) "immediately available money" means a corporate or personal check drawn on a bank account for which money is available for use by the receiving party on the same day that the check is received and includes United States Federal Reserve Bank wire transfers, United States currency, and United States Postal Money Orders;
(4) "monthly revenue requirement" means the product of the number of billable minutes of use for a given month times the TRS provider's billable minute-of-use rate as specified in its application to provide TRS;
(5) "multi-line business subscriber" means a business subscriber that maintains more than one business telephone line from a local exchange carrier within the subscriber's serving area;
(6) "optional services" means a TRS that is not included in basic TRS;
(7) "single-line business subscriber" means a business subscriber that maintains only one business telephone line from a local exchange carrier within the subscriber's serving area;
(8) "surcharge" means the rate set by the commission to recover an estimated monthly revenue requirement of the TRS provider;
(9) "telecommunications relay service" or "TRS" means a telephone transmission service that provides the ability for an individual who is deaf, hard-of-hearing, or speech disabled to engage in communication by wire or radio with a hearing individual in a manner that is functionally equivalent to the ability of an individual who is not deaf, hard-of-hearing, or speech disabled to communicate using voice communication services by wire or radio; "TRS" includes services that enable two-way communication between an individual who uses a relay device and an individual who does not use such a device;
(10) repealed 5/16/2020.
(b) Definitions contained in 3 AAC 48.820, 3 AAC 52.340, and 3 AAC 52.399 also apply to the defined words as they are used in 3 AAC 51.010 - 3 AAC 51.199.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.296
- Eff. 12/2/92, Register 124; am 2/23/2001, Register 157; am 5/16/2020, Register 234
Chapter 52 Operation of Public Utilities
Article 1 Gas Utilities
3 AAC 52.010 Application
(a) The provisions of 3 AAC 52.010 - 3 AAC 52.080 apply to all utilities either now or hereafter subject to the regulatory jurisdiction of the Regulatory Commission of Alaska.
(b) Upon acceptable showing by a utility, the commission may waive, as to that utility and using the procedures and standards set out in 3 AAC 48.805, all or any portion of the provisions of 3 AAC 52.010 - 3 AAC 52.080.
(c) No utility may deviate from the regulations in 3 AAC 52.010 - 3 AAC 52.080 or the standards cited in (b) of this section without the commission's prior written approval.
(d) If nonjurisdictional entities at their discretion elect to conform to 3 AAC 52.010 - 3 AAC 52.080, the commission will cooperate with them in maintaining records and developing procedures to enhance the public safety.
History
- Authority: AS 42.05.141; AS 42.05.541; AS 42.05.711 AS 42.05.151; AS 42.05.691
- Eff. 2/21/69, Register 30; am 1/13/73, Register 44; am 4/24/2004, Register 170; am 11/22/2017, Register 224
3 AAC 52.020 Compliance with minimum federal safety standards for gas lines
Each utility shall construct and maintain gas transmission and distribution facilities in accordance with the minimum federal safety standards for gas lines, adopted by reference in 3 AAC 52.080.
History
- Authority: AS 42.05.291
- Eff. 2/21/69, Register 30; am 1/13/73, Register 44; am 11/22/2017, Register 224
3 AAC 52.030 Records, reports, and inspection for compliance
(a) Each utility shall establish and maintain records, make reports and provide information required by the commission to enable it to determine whether the utility has acted or is acting in compliance with the Natural Gas Pipeline Safety Act of 1968 and the standards adopted in 3 AAC 52.020. The records, reports and information shall be kept in accordance with AS 42.05.491.
(b) Repealed 11/22/2017.
History
- Authority: AS 42.05.141; AS 42.05.461; AS 42.05.501
- Eff. 2/21/69, Register 30; am 1/13/73, Register 44; am 11/6/2016, Register 220; am 11/22/2017, Register 224
3 AAC 52.040 Pipeline locating service
Each utility shall offer "line locating" service to any individual or utility requiring such service. The utility shall make a reasonable effort to assure that the availability of this service is made known throughout its area of operation. If a charge is made for this service, it shall be based on the cost to the utility of the personnel required to operate the equipment and shall not afford the utility any allowance for the utilization of equipment.
History
- Authority: AS 42.05.291
- Eff. 2/21/69, Register 30; am 1/13/73, Register 44
3 AAC 52.050 Distribution pipeline maintenance
Repealed 1/13/73.
3 AAC 52.060 Record of nonscheduled interruptions
Each gas utility shall keep a record of each nonscheduled interruption to service, showing the location, date, time, duration, and cause of each interruption. This record shall be retained by the utility for three years and shall be made available for inspection in accordance with AS 42.05.501.
History
- Authority: AS 42.05.141; AS 42.05.501
- Eff. 2/21/69, Register 30; am 1/13/73, Register 44; am 11/22/2017, Register 224
3 AAC 52.070 Incidents
(a) Each utility shall cooperate with the commission to promote a reduction in hazard within the industry and to the public.
(b) Not later than eight hours after discovery of the potential incident, each utility shall report each potential incident by electronic mail, by telephone, or in person, to the commission at the commission's office in Anchorage, Alaska, or to a person designated by the commission. If the potential incident occurs outside of normal business hours, the utility shall provide telephonic or electronic mail notification during the next business day following the potential incident. To the extent that the potential incident is not resolved at the time of the initial report, the utility shall continue to provide notification by electronic mail at least twice each business day after the initial report until the potential incident is resolved. The notification must include the location and time of the potential incident, a brief description of what occurred, the number of fatalities and personal injuries reported to the utility, and each individual to be contacted by the commission for additional information.
(c) If the potential incident reported under (b) of this section is found to meet the threshold of an incident under 49 C.F.R. 191.3, adopted by reference in 3 AAC 52.080, a written report of the incident shall be filed with the commission not later than 30 calendar days after discovery of the incident, in accordance with 3 AAC 48.095. The report shall be made on the United States Department of Transportation's Pipeline and Hazardous Materials Safety Administration Form PHMSA F 7100.1 for gas distribution systems and Form PHMSA F 7100.2 for gas transmission and gathering systems. If additional relevant information is obtained after the report is submitted, the utility shall simultaneously file with the commission any reports made to the Pipeline and Hazardous Materials Safety Administration.
(d) If upon further investigation a potential incident reported under (b) of this section did not meet the threshold of an incident under 49 C.F.R. 191.3, adopted by reference in 3 AAC 52.080, the utility shall notify the the commission by electronic mail not later than 30 calendar days after the initial report and explain how the potential incident fell short of the threshold for an incident.
History
- Authority: AS 42.05.141; AS 42.05.291
- Eff. 2/21/69, Register 30; am 1/13/73 Register 44; am 11/6/2016, Register 220; am 11/22/2017, Register 224
3 AAC 52.075 Other general information to be furnished to the commission
(a) A utility shall publish in its tariff, and on its website if available, the location and telephone number of each of its business offices, the telephone number of emergency contacts, and the normal hours of operation of each office.
(b) A utility shall submit the United States Department of Transportation's Pipeline and Hazardous Materials Safety Administration Forms PHMSA F 7100.1-1 and PHMSA F 7100.2-1 as applicable, as a part of the utility's annual report to the commission under AS 42.05.451.
History
- Authority: AS 42.05.141; AS 42.05.291 AS 42.05.151; AS 42.05.451
- Eff. 11/22/2017, Register 224
3 AAC 52.080 Definitions
Unless the context requires otherwise, in 3 AAC 52.010 - 3 AAC 52.080,
(1) "business hours" means from 8:00 a.m. to 5:00 p.m. on a day other than Saturday, Sunday, or a state legal holiday;
(2) "commission" means the Regulatory Commission of Alaska;
(3) "incident" has the meaning given in 49 C.F.R. 191.3, revised as of October 1, 2016, and adopted by reference;
(4) "minimum federal safety standards for gas lines" or "standards" means the requirements set out in 49 C.F.R. Part 192 (transportation of natural and other gas by pipeline: minimum federal safety standards), revised as of October 1, 2016, and adopted by reference;
(5) "potential incident" means an event involving the escape of gas from a gas gathering, transmission, or distribution facility, and resulting in hospitalization, fatality, or property damage that may meet the threshold of an incident, but sufficient time has not passed to verify the extent of injuries, fatalities, or property damage;
(6) "utility" means a public utility that owns, operates, manages, or controls a plant or system of facilities used for the transmission or distribution of natural or manufactured gas or other inflammable gas, to the extent that the system, plant, or facilities are included in the term "public utility" as defined by AS 42.05.990.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.990
- Eff. 2/21/69, Register 30; am 1/13/73, Register 44; am 2/24/2004, Register 170; am 11/22/2017, Register 224
Article 2 Allocation of Facilities and Services Between Competing Electric Utilities
3 AAC 52.110 Purpose
The purpose of 3 AAC 52.110 - 3 AAC 52.150 is to prevent duplication of electric facilities and services in those geographical areas of the state in which two or more electric utilities compete.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.221
- Eff. 8/11/76, Register 59; am 6/29/84, Register 90
3 AAC 52.120 Authority to construct facilities or serve customers
(a) No electric utility operating in direct competition with one or more electric utilities within the same geographical area may construct or install electric facilities or provide a service connection for a customer located within a disputed service area without the approval of the commission.
(b) The commission will grant approval to provide a service connection for a customer located within a disputed area if
(1) the utility requesting approval receives the concurrence of the competing utility and submits to the commission a signed "Waiver of Objection" on a form provided by the commission; or
(2) a determination is made by the commission, after hearing, that one or the other of the utilities is the appropriate one to provide the service.
History
- Authority: AS 42.05.151(a)AS 42.05.221(d)
- Eff. 8/11/76, Register 59
3 AAC 52.130 Hearing
(a) If an applicant utility is unable to obtain concurrence from a competing utility, the commission will appoint a member of its staff as an examiner to conduct a hearing.
(b) The staff examiner shall
(1) notice the hearing for a time convenient to all interested parties;
(2) hear all relevant evidence;
(3) record the testimony presented;
(4) within 24 hours after the close of the hearing, issue a decision as to which utility is the most appropriate one to serve the customers;
(5) stay the decision if, within 24 hours after the decision is announced, a party appeals the decision.
(c) The criteria to be weighed by the staff examiner in making a decision include
(1) the cost to the utility to provide the service connection;
(2) the cost to be assessed to the customer by the applicant utility;
(3) the proximity of the service connection point to each of the competing utilities' electric distribution facilities; and
(4) the geographical proximity of the service connection to the area generally served by each competing utility.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.221
- Eff. 8/11/76, Register 59; am 6/29/84, Register 90
3 AAC 52.140 Appeals
(a) Each party to a hearing conducted under 3 AAC 52.130 may appeal the staff examiner's decision to the commission within 24 hours after that decision is issued.
(b) Pending appeal, neither party may provide service to the applicant customer.
(c) All appeals will be heard within three business days of filing, the commission's docket schedule permitting.
(d) The scope of a public hearing held under (a) of this section in response to an appeal of a staff examiner's decision is limited to
(1) review and consideration of the evidence and argument presented at the hearing conducted under 3 AAC 52.130;
(2) affirming, reversing, or modifying the decision issued by the staff examiner.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.221
- Eff. 8/11/76, Register 59; am 6/29/84, Register 90
3 AAC 52.150 Definitions
Unless the context indicates otherwise, in 3 AAC 52.110 - 3 AAC 52.150
(1) "commission" means the Regulatory Commission of Alaska;
(2) "electric utility" means a public utility or utility as defined in AS 42.05.990;
(3) "disputed service area," unless otherwise defined by the commission by order, means that territory or part of that territory where two competing electric utilities have proximate electric distribution facilities and that is being served, or attempting to be served, simultaneously by the two competing electric utilities.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.221
- Eff. 8/11/76, Register 59; am 6/29/84, Register 90; am 4/24/2004, Register 170
Article 3 Telephone Utilities
3 AAC 52.200 Application, purposes, and policies
(a) Except as provided in 3 AAC 53.800(a), 3 AAC 52.200 - 3 AAC 52.340 apply to all telephone utilities subject to the regulatory jurisdiction of the commission. These sections govern the furnishing of telecommunications services and facilities to the public. The purpose of 3 AAC 52.200 - 3 AAC 52.340 is to establish service standards to ensure that reasonably continuous, uninterrupted, and prompt service will be rendered to the public.
(b) The provisions of (d) of this section, 3 AAC 52.333, 3 AAC 52.334, 3 AAC 52.340, and 3 AAC 53.190 apply to all telephone utilities whether or not they are otherwise exempt from regulation by the commission under AS 42.05.711.
(c) The standards in 3 AAC 52.200 - 3 AAC 52.340 do not create a private right of action on behalf of any utility subscriber. However, nothing in 3 AAC 52.200 - 3 AAC 52.340 relieves a utility from any of its duties under AS 42.05, or any other laws of the state, or from any other regulations, orders, or directives of the commission, nor does it preclude the commission from imposing sanctions or levying penalties under AS 42.05.561 - 42.05.611 or taking any other action authorized under AS 42.05, with respect to utility services and facilities.
(d) For good cause shown, the commission will, in its discretion, waive all or any portion of these standards as applicable to any individual utility or may establish interim standards.
(e) The procedures and practices prescribed in 3 AAC 52.200 - 3 AAC 52.340 are to be followed and implemented in good faith by the utility and require related prudent management in an effort to maintain the proper balance between economic effectiveness and an acceptable quality of service.
(f) Where appropriate, the standards define surveillance levels. Failure to provide service better than the levels defined generally indicates a need for investigation or corrective action on the part of the utility.
(g) The staff of the commission will monitor all telephone utilities' compliance with 3 AAC 52.200 - 3 AAC 52.340 and will take investigative action where it considers that action appropriate.
History
- Authority: AS 42.05.141; AS 42.05.311; AS 42.05.800 AS 42.05.151; AS 42.05.331; AS 42.05.810 AS 42.05.291; AS 42.05.511
- Eff. 1/5/79, Register 69; am 6/29/84, Register 90; am 6/27/92, Register 122; am 9/20/96, Register 139; am 11/11/2001, Register 160
3 AAC 52.210 Business office
(a) Utility business offices generally must be so located and staffed that customers and others have convenient access to qualified personnel, including supervisory personnel where warranted, to provide information relating to services and rates, to accept and process applications for service, to explain charges on customer's bills, to adjust charges made in error, and generally to act as the representative of the utility. Where alternate service which may meet a customer's requirements is available from the utility, the utility shall make a reasonable effort to advise the customer of the most economic service available and to assist the customer in making his choice of service.
(b) The utility shall notify the customer of any service connection or installation charge to be applied to his bill before undertaking any action so chargeable, and shall inform the customer of the estimated initial bill for local service and all other applicable charges. Before performing the work, the utility shall provide the customer with an estimate of the charges to be levied for extraordinary construction, maintenance, replacement costs, expenses, or overtime work unless these charges are specifically set out in the utility's tariff or unless the customer specifically requests billing on a "keep cost order" basis. No costs exceeding that estimate may be charged the customer without advance written customer approval. Costs below the estimate must be reflected in reduced charges or refunds to the customer.
(c) The utility shall notify its customers and the public of all reasonably available means of contacting its business offices. The utility shall provide toll-free calling from each community that it serves to its business office whenever the business office is located outside of those communities.
(d) Telephone utilities shall make all reasonable efforts to acknowledge, and where appropriate to answer, all correspondence within 10 working days or as soon as reasonably possible thereafter. The utility shall maintain records of the contact.
History
- Authority: AS 42.05.141; AS 42.05.291 AS 42.05.151; AS 42.05.381
- Eff. 1/5/79, Register 69; am 6/29/84, Register 90
3 AAC 52.220 Held applications
(a) Normally, when a standard tariff service cannot be provided within the standard installation interval, all reasonable efforts shall be made to advise the applicant within 15 working days from the date of the initial application for service as to
(1) the reason for the delay;
(2) a possible interim grade or type of service that is available; and
(3) the probable date the requested service will be provided.
(b) If the utility is unable to meet any previously given service date, it shall advise the applicant as to the information set forth in (a) of this section at a reasonable interval before the originally scheduled service date.
(c) When a utility is unable to supply telecommunications service as required by (a) of this section, the utility shall keep records by exchange or central office building identifying each applicant, the date of application, the date service was requested for, the class of service applied for, the reason for the inability to provide the service, a statement of the plans to provide service including a probable provision date, and copies of all correspondence with the applicant until service is provided.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.291
- Eff. 1/5/79, Register 69
3 AAC 52.230 Subscriber billing
(a) Each utility shall retain information used in the preparation of a subscriber's bill in sufficient detail to identify the subscriber and the applicable charges for all services rendered.
(b) Bills to subscribers must be rendered monthly and must contain a clear listing of all adjustments and other nonrecurring charges. One flat monthly charge may be shown for all local service furnished under the same telephone number, and this charge may be billed one month in advance. All toll charges must be itemized, specifying on a call-by-call basis the date of the call, the locations connected, the duration of the call, whether the call required special assistance (e.g., person-to-person, operated assisted, etc.), and the charge for the call.
(c) The utility shall grant credit for any toll call when the customer has reported as soon as reasonably possible that a wrong number was reached or that a portion of a call was inadequate for communication unless there is reason to believe that an adequate connection to the desired party was effected.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.381
- Eff. 1/5/79, Register 69
3 AAC 52.240 Public pay telephone service
Repealed.
History
- Eff. 1/5/79, Register 69; repealed 1/11/2001, Register 157
3 AAC 52.250 Directories
Repealed.
History
- Eff. 1/5/79, Register 69; repealed 1/1/2016, Register 217
3 AAC 52.260 Engineering and maintenance
(a) In order to maintain compatibility with the national telecommunications network, all telephone plants must be designed, constructed, maintained, and operated in accordance with the provisions outlined in the most current editions of such national industry recognized standards as the National Electrical Safety Code published by the Institute of Electrical and Electronics Engineers, Inc., the Rural Electrification Administration (REA) Telephone Bulletins, the REA Telephone Operations Manual, Bell System Practices, Continental Telephone System Practices, General Telephone Engineering Practices, Northern Electric Practices, or Notes on Transmission Engineering issued by the United States Independent Telephone Association.
(b) Each telephone utility shall provide equipment and facilities designed and engineered in accordance with forecasts based on known conditions of subscriber demand and shall maintain a stock of associated equipment adequate to meet that demand.
(c) Telephone utilities shall furnish and maintain in their service areas the necessary plant, equipment and facilities to provide modern, adequate, sufficient and efficient transmission of communications for any given grade of service between customers. Transmission for a given grade of service must be at adequate volume levels and free of excessive distortion. Levels of noise and cross-talk must not impair communications. The loss objective of trunks must be consistent with the requirements of the nationwide switching plan, and overall transmission losses within each trunk group may not vary by more than plus or minus two decibels.
(d) Telephone utilities may not provide switching service to service lines which do not meet standard technical criteria and shall eliminate nonconforming service lines.
(e) A telephone utility shall design and install facilities to comply with the requirements set out in the 3 AAC 53.700 - 3 AAC 53.720 (State Telecommunications Modernization Plan) or seek and obtain an extension of time under 3 AAC 53.700 to meet those requirements.
(f) Each telephone utility shall adopt and pursue a maintenance program of periodic tests, inspections, and field maintenance to achieve efficient operation of its system so as to permit safe, adequate, and continuous service at all times. The utility shall maintain reasonable records indicating compliance with this rule.
(g) Each utility shall maintain or have access to test facilities enabling it to determine the operating and transmission capabilities of all equipment and facilities, both for routine maintenance and for fault location.
(h) Telephone utilities shall maintain as part of each central office entity a test line providing connection on a dial-up basis to an accurate 1004 hertz milliwatt power source and a quiet termination. In addition, a loop-around test line must be maintained at all central office entities. Central offices not having test lines should have these installed along with any central office addition or change-out, but no later than January 1, 1981.
(i) Each telephone utility shall undertake additions to and modifications of its equipment and facilities as may be required to provide on customer-dialed toll calls from individual line stations a method to automatically identify the calling number for billing purposes. This program must be initiated without unreasonable delay; and it must be completed by January 1, 1982.
(j) Each utility shall maintain current equipment assignment records, cable assignment records, office equipment drawings, office trunking diagrams, and outside plant layout drawings.
(k) Where mechanical or electronic means are used for registering or recording information which will affect a subscriber's bill, that equipment must be in good mechanical and electrical condition, must be accurately read, and must be frequently inspected by the utility to ensure that it is functioning properly.
(l) Each utility shall maintain or have access to the necessary facilities, instruments, and equipment for testing its metering and recording equipment and shall adopt appropriate practices for periodic testing and maintenance to ensure the integrity of its operation.
(m) Upon the request of any subscriber, a utility shall test the billing devices associated with the subscriber's line, if the request is based upon reasonable grounds and the test is not requested by that subscriber more frequently than once each 12 months without clear cause.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.331 AS 42.05.145; AS 42.05.311; AS 42.05.800 AS 42.05.151; AS 42.05.321
- Eff. 1/5/79, Register 69; am 3/15/96, Register 137
3 AAC 52.270 Service interruptions
(a) Each utility shall establish procedures to minimize service interruptions, and, where those interruptions occur, to speed the restoration of service. Each utility shall make provisions to meet prolonged increases in traffic, absences of employees, or damage resulting from fire, storm or similar contingencies. Each utility shall establish procedures to be followed by its employees in the event of these contingencies in order to prevent or mitigate interruption or impairment of service.
(b) Each central office and interconnecting network equipment site shall contain provisions for reserve power to keep all equipment operating without interruption for at least eight hours at the busy-hour load following the failure of the primary electric power source.
(c) If telephone service must be interrupted for purposes of working on the lines or equipment, the utility shall attempt to do the work at a time which will cause minimal inconvenience to customers and to notify subscribers in advance of the interruption. The utility shall make available to the public emergency services for the duration of the interruption if reasonably possible.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.291
- Eff. 1/5/79, Register 69
3 AAC 52.280 Customer reports
(a) Each utility shall strive to reduce the rate of customer trouble reports to a monthly rate of six per 100 stations per reporting exchange. Trouble report records must include appropriate identification of the customer or service affected, the time, date, and nature of the report, the action taken to clear the trouble or satisfy the complaint, and the date and time of trouble clearance or other disposition. A rate of customer trouble reports for each reporting unit exceeding 12 trouble reports per 100 stations for each month of a consecutive three-month period indicates a need for investigative or corrective action by the telephone utility. These trouble report rates do not apply to reports resulting from interruptions caused by emergency situations, unavoidable casualties, acts of God, reports that do not affect service, or troubles to be found beyond the control of the utility or due to subscriber-owned equipment.
(b) The utility shall clear troubles associated with emergency services at all hours at all locations consistent with the bona fide needs of customers and the personal safety of utility personnel.
(c) The objective of each telephone utility must be to clear all out-of-service troubles within the periods specified below following the reporting of the trouble to the telephone utility (Sundays and holidays excepted)
(1) 48 hours at locations accessible by maintained highway from a manned utility repair facility;
(2) five days at all other locations.
(d) Excepted from (c) of this section are troubles caused by unavoidable casualties and acts of God affecting large groups of subscribers, troubles due to subscriber-owned equipment, or when access to telephone equipment repair personnel is restricted by the customer. The surveillance level is to meet the above objectives in 95 percent of all cases.
(e) If unusual repairs are required, or other factors preclude clearing of reported trouble promptly, reasonable efforts must be made to notify affected subscribers.
(f) Every reasonable effort must be made to meet appointments made with subscribers; and if, due to circumstances, the appointment cannot be kept by the telephone utility, every reasonable effort must be made by the utility to notify the subscriber in advance.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.331
- Eff. 1/5/79, Register 69
3 AAC 52.290 Installation service
(a) Where central office and outside plant facilities are readily available, the objective of each utility must be to satisfy 85 percent of all requests for primary service in any calendar month within an interval of five working days after receipt of application, except where special equipment or services are involved. Failure to complete 80 percent of all requests for primary service in any calendar month within 10 working days indicates a need for corrective action by the utility. Commitments are not considered missed when the failure to complete the requested installation or the service request results from subscriber action.
(b) The object of each utility must be to complete all regrade requests not requiring substantial amounts of construction within 30 days, except where the subscriber requests a later date. If the utility is unable to complete a regrade order within 30 days, the utility shall make all reasonable efforts to advise the subscriber of the reason for the unavailability of the requested service and whether that service may be available in the near future.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.331
- Eff. 1/5/79, Register 69
3 AAC 52.300 Operator handled calls
(a) Each utility shall maintain adequate personnel and equipment to answer 90 percent of all calls directed to the toll operator within 10 seconds. The surveillance level is reached when answering an average of less than 85 percent of all calls directed to the toll operator within 10 seconds for each month of any consecutive three-month period. An equivalent answering time objective is an average answer time of 2.8 seconds in each month of any consecutive three-month period; and the surveillance level is when the average answer time is greater than four seconds.
(b) Directory assistance, intercept calls, and auxiliary services must have an answering time objective of 85 percent of calls answered within 10 seconds. Excessive answer times that adversely affect toll trunk usage indicate a need for corrective action by the utility.
(c) For purposes of this section, "answer" means that the operator or representative is ready to render assistance or ready to accept the information necessary to process the call. An acknowledgement that the customer is waiting on the line does not constitute an "answer."
(d) Repealed 11/22/2017.
History
- Authority: AS 42.05.141; AS 42.05.291 AS 42.05.151; AS 42.05.331
- Eff. 1/5/79, Register 69; am 11/6/2016, Register 220; am 11/22/2017, Register 224
3 AAC 52.310 Switching design standards
(a) Each utility shall maintain records for each exchange regarding the service items contained in these standards. These records must be maintained in a manner that permits audit by the commission's advisory staff.
(b) Every properly dialed call shall terminate in one of the following, unless it encounters a trouble condition:
(1) the call will progress to the number dialed, the calling customer will receive an audible indication of a ring, and the called telephone will ring;
(2) if the called line is busy, the calling customer will receive a line-busy signal (60 impulses per minute);
(3) the call will progress only part of the way through the switch train and, having reached an overflow condition, the calling customer will receive an overflow signal (120 impulses per minute) or announcement readily differentiated from a subscriber busy signal;
(4) unassigned numbers in an end office will receive a line-busy signal or an intercept announcement.
(c) Each utility shall employ a design criterion for dial-tone delay for the average busy hour of the business days of the busy season of each of its originating central office entities to enable at least 98.5 percent of attempts to receive a dial tone within three seconds. Delays of more than five percent of attempts failing to receive dial tone within three seconds indicate a need for investigative or corrective action by the utility.
(d) Each utility shall employ a design criterion for blockages and equipment failures for the average busy hour of the business days of the busy season as follows:
(1) three percent or less for overall intraoffice switching;
(2) two percent or less for access to interoffice, toll, or attendant trunks;
(3) one percent for interoffice terminating calls;
(4) one percent for groups of five or more trunks;
(5) one percent for toll trunk switching.
(e) The surveillance level for each item in (d) of this section is when five percent or more of call attempts encounter blockages or equipment failures. The surveillance level for trunk groups of four or fewer trunks is such as to provide at least one working trunk for each 12 ccs of telephone traffic load during the average busy hour of the business days of the busy season.
(f) Selection of busy hours, business days, and busy season periods must be in accordance with recognized sampling techniques approved by the commission staff, such as those specified in Bell System Traffic Facilities Practices, Continental Telephone System Practices, General Telephone Engineering Practices or the Rural Electrification Administration Telephone Engineering and Construction Manual.
History
- Authority: AS 42.05.141; AS 42.05.291 AS 42.05.151; AS 42.05.331
- Eff. 1/5/79, Register 69; am 3/21/2003, Register 165; am 4/20/2006, Register 178
3 AAC 52.320 Information to be furnished
(a) Each telephone utility shall report to the commission, in accordance with 3 AAC 48.095, all instances where the quality of service it provides fails to meet the surveillance levels specified in 3 AAC 52.280(d), 3 AAC 52.300(a), or 3 AAC 52.310(e) for three consecutive months. That report must be filed with the commission not later than 30 days following the three-month period during which the surveillance levels have not been attained.
(b) Each local exchange carrier shall notify the commission as soon as reasonably possible any outage defined in 47 C.F.R. 4.5(a), of at least 30 minutes' duration that affects 25 percent or 100 end users of an exchange, whichever is less, that causes isolation of working lines in any exchange from 911 access, or that causes a complete loss of extended area service (EAS). The notification must include
(1) the date and time of onset of the outage;
(2) the geographic areas affected by the outage;
(3) cause of the outage and estimated restoration time, if known; and
(4) the number of customers affected.
(c) Repealed 11/22/2017.
(d) Each intrastate interexchange carrier shall notify the commission as soon as reasonably possible of any outage defined in 47 C.F.R. 4.5(a) that requires reporting to the Federal Communications Commission under 47 C.F.R. 4.9(b) or any outage that does not meet this threshold that causes a toll trunk outage of at least eight hours in duration. The notification must include
(1) the date and time of onset of the outage;
(2) the geographic areas affected by the outage; and
(3) cause of the outage and estimated restoration time, if known.
History
- Authority: AS 42.05.141; AS 42.05.291 AS 42.05.151; AS 42.05.331
- Eff. 1/5/79, Register 69; am 11/6/2016, Register 220; am 11/22/2017, Register 224
3 AAC 52.330 Capital program and planning statement
Repealed.
History
- Eff. 1/5/79, Register 69; am 11/6/2016, Register 220; repealed 11/22/2017, Register 224
3 AAC 52.333 Access to intrastate interexchange carriers
(a) As set out in (b) - (c) of this section, a local exchange telephone utility providing service to an exchange shall install and maintain plant, equipment, and facilities necessary to provide 2-PIC dialing in that exchange upon receipt of a bona fide request for interconnection.
(b) If a local exchange telephone utility receives a bona fide request for interconnection in an exchange where interstate equal access is available at the time of the request, that utility shall implement 2-PIC dialing in that exchange within 90 days after receipt of that request. Upon implementation of 2-PIC dialing, the access line or lines of each customer will be presubscribed to the incumbent carrier until the local exchange telephone utility receives a request from an interexchange carrier to change the customer's interexchange carrier.
(c) If a local exchange telephone utility receives a bona fide request for interconnection in an exchange where interstate equal access is not being provided at the time of the request, that utility shall provide 2-PIC dialing at the same time and on the same schedule as required by the Federal Communications Commission for the implementation of interstate equal access. In this event, presubscription balloting for intrastate interexchange carriers shall be conducted by that utility in coordination with balloting for interstate interexchange carriers, as follows:
(1) At least 45 days in advance of the mailing of interstate interexchange presubscription ballots, a local exchange telephone utility shall file with the commission for review and approval, in accordance with 3 AAC 48.095, a proposed intrastate interexchange presubscription ballot that lists the available intrastate interexchange carriers. The ballot must clearly state that a customer may select different interexchange carriers for intrastate and interstate interexchange services;
(2) Pending the conversion to 2-PIC equal access, 1-plus and no-plus intrastate interexchange calls and o-minus calls must be routed to the incumbent carrier. Other intrastate interexchange carriers shall obtain access through Feature Group A or Feature Group B access from the local exchange telephone utility, without discount, or through the incumbent carrier's 2-PIC equal access tandem.
(d) If a local exchange telephone utility desires a waiver of (b) of this section, that utility must file a motion for that waiver within 30 days after receipt of a bona fide request for interconnection and include a schedule that states when 2-PIC dialing can be provided, the financial and technical basis for the waiver request, and a proposed public notice of the interim dialing arrangements. The proposed public notice must explain the 1-PIC dialing arrangements, list carriers available to provide both intrastate and interstate interexchange services, and describe the actions necessary to change a presubscribed access line to a different interstate interexchange carrier.
(e) If a waiver of (b) of this section is granted, the local exchange telephone utility shall implement 1-PIC dialing for the period prior to 2-PIC implementation in accordance with the following rules:
(1) Within 14 days after commission approval of a waiver and associated public notice, the local exchange telephone utility shall mail copies of the approved notice to its customers. Each intrastate interexchange carrier listed on the notice will be billed by the local exchange telephone utility for an equal share of the cost of providing notice under this paragraph.
(2) The local exchange telephone utility shall implement 1-PIC dialing 45 days after the commission approves of the waiver.
History
- Authority: AS 42.05.141; AS 42.05.311; AS 42.05.800 AS 42.05.151; AS 42.05.321; AS 42.05.810
- Eff. 6/27/92, Register 122; am 10/29/94, Register 132; am 11/11/2001, Register 160; am 4/24/2004, Register 170; am 11/6/2016, Register 220
3 AAC 52.334 Customer notice of access options and presubscription
(a) For a period of three years after a local exchange telephone utility initially provides 2-PIC dialing, that utility must annually include in a periodic billing or in a separate mailing a notice to customers listing available intrastate interexchange carriers and explaining the actions that must be taken to change carriers and the cost of making the change.
(b) Repealed 11/11/2001.
(c) Repealed 11/11/2001.
(d) Repealed 11/11/2001.
History
- Authority: AS 42.05.141; AS 42.05.311; AS 42.05.800 AS 42.05.151; AS 42.05.321; AS 42.05.810
- Eff. 6/27/92, Register 122; am 7/8/93, Register 127; am 11/11/2001, Register 160
3 AAC 52.336 Presubscription of public telephones
(a) A public telephone is subject to presubscription. The owner of premises on which a public telephone is located has the right to presubscribe that telephone.
(b) If a local exchange telephone utility receives a bona fide request to provide service to public telephones on a presubscribed basis in an exchange where equal access is being provided at the time of the request, that utility shall implement public telephone presubscription within 30 days after receipt of the request. Upon implementation of public telephone presubscription, the routing of a public telephone access line will remain unchanged until the local exchange telephone utility receives a written letter of authorization signed by the owner of premises changing presubscription for that public telephone to another certificated interexchange carrier.
(c) Within 30 days of receipt of a request under (b) of this section, the local exchange telephone utility shall mail a notice to each owner of premises in its service area. The notice must inform each owner of premises that it may presubscribe the public telephones on its premises to the interexchange carrier of its choice. The notice must also list available interexchange carriers. The local exchange telephone utility shall provide each interexchange carrier with a complete list of the names and addresses to which the notice is mailed.
(d) If a local exchange telephone utility receives a bona fide request under 3 AAC 52.333(c), the local exchange telephone utility shall conduct presubscription balloting for public telephones in coordination with and on the same schedule as balloting for other phones, as required by 3 AAC 52.333(c). However, the interexchange carrier that made a bona fide request for equal access may delay provision of service to public telephones, in which case (b) of this section will apply. Technical difficulties associated with service to public telephones may not delay provision of 2-PIC dialing to other phones in accordance with 3 AAC 52.333(c).
(e) Each local exchange telephone utility shall affix on the face of each public telephone, in addition to any other required information, the name of the presubscribed interexchange carrier.
(f) Unless the context indicates otherwise, in this section
(1) "owner of premises" means the owner of premises on which a public telephone is located or, for leased premises, the lessee, unless otherwise provided in the lease;
(2) "public telephone" means a public or semi-public pay telephone.
History
- Authority: AS 42.05.141; AS 42.05.311; AS 42.05.800 AS 42.05.151; AS 42.05.321; AS 42.05.810
- Eff. 9/15/94, Register 131
3 AAC 52.340 Definitions
Unless the context indicates otherwise, in 3 AAC 52.300 - 3 AAC 52.340
(1) "access code for long-distance operator" means the preliminary digits that must be dialed to be connected to the long-distance operator;
(2) "access line" means a circuit between a subscriber's telephone or private branch exchange and the switching center which serves them;
(3) "attempt" means the offering or initiating of a telephone call by a calling customer;
(4) "attendant trunk" means a trunk connecting the caller to an operator;
(5) "average busy season busy hour" means the time-consistent hour, not necessarily a clock hour, having the highest business day load throughout the busy season; it is the same hour for the entire busy season;
(6) "blockage" means a failure in the sequence of connecting a calling customer to a called customer caused by equipment in the busy condition;
(7) "bona fide request" means a good-faith written request by a certificated intrastate interexchange carrier, other than the incumbent carrier, to a local exchange telephone utility for equal access service;
(8) "business day" means each day of a calendar week except Saturdays, Sundays, and holidays; holidays are the days which are observed by each individual telephone utility;
(9) "busy hour" means the continuous one-hour period of the day during which the greatest volume of traffic is handled by the facility;
(10) "busy season" means the period of the year consisting from one to three consecutive calendar months during which the greatest volume of traffic is handled in a given central office;
(11) "cable assignment records" means listings of all cable pairs and the interconnections that have been made between them and other cables or equipment;
(12) "call" means an attempted telephone message;
(13) "ccs" means a hundred call seconds; it is a unit of measurement of telephone traffic and represents the equivalent of one call lasting for 100 seconds;
(14) "central office" means a facility having the necessary equipment and operating arrangements for terminating and interconnecting customer lines and trunks or trunks only; however, there may be more than one central office in a building;
(15) "central office entity" means a group of lines using common originating equipment;
(16) "commission" means the Regulatory Commission of Alaska;
(17) "construction program" means a list of projects with their related expenditures that are planned for the budget year; project categories include land and building, central office equipment, outside plant, station equipment, and general equipment;
(18) "cross-talk" means an unwanted signal in one circuit coming from an adjacent circuit;
(19) "customer" means a person, firm, partnership, corporation, municipality, cooperative organization, or governmental agency supplied with telecommunication service by a telephone utility;
(20) "customer line" means a circuit connecting a customer's instrument to the central office;
(21) "customer trouble report" means an oral or written complaint from a customer or user of telecommunication service relating to a physical defect, a difficulty or dissatisfaction with the operation of the utility's facilities; one report must be counted for each oral or written report received even though it may duplicate a previous report or merely involve an inquiry concerning progress on a previous report; when several troubles are reported by one customer, a separate report must be counted for each trouble;
(22) "demand and facility chart" means a chart which presents in statistical and graphical form the past history, current status, and future projection of central office data; one chart includes data for one central office entity or toll switch and contains future expansion plans;
(23) repealed 1/1/2016;
(24) "directory assistance" means the furnishing of telephone numbers to customers;
(25) "equal access" means a method of interconnection between a local exchange telephone utility and all long distance carriers serving the exchange that
(A) allows a customer's interexchange calls to be automatically directed to the customer's chosen primary interexchange carrier when the customer dials 1-plus or any other abbreviated dialing arrangement authorized by the commission;
(B) requires local exchange telephone utility access service to be made available in equal kind, quality, and price to all interexchange telephone utilities; and
(C) is commonly provided using Feature Group D signalling and interconnection arrangements;
(26) "equipment assignment records" means listings which identify the connections made to each equipment unit;
(27) "exchange" means a unit established by a telephone utility for the administration of telecommunications service in a specified area for which a separate local rate schedule is provided; it may consist of one or more central offices;
(28) "extension station" means an additional station connected on the same circuit as the main station and subsidiary to it;
(29) "Feature Group A" means a line-side connection for interexchange service that is accessed via a 7-digit telephone number that may vary with each exchange;
(30) "Feature Group B" means a trunk-side connection for interexchange service that is accessed by dialing "950-XXXX," with the "XXXX" identifying the desired intrastate interexchange carrier;
(31) "Feature Group D" means a trunk-side connection for interexchange service that is accessed by 1-plus or no-plus dialing by customers presubscribed to the intrastate interexchange carrier or by dialing 10XXX by customers not presubscribed to the intrastate interexchange carrier with the "XXX" identifying the desired intrastate exchange carrier;
(32) "full selective ringing" means a system that permits ringing only one customer on a multi-party circuit;
(33) "held application" means an application for telephone service that cannot be satisfied within the standard installation interval;
(34) "incumbent carrier" means the telephone utility, or its successor, certificated in commission Docket U-69-24 to provide intrastate interexchange telephone service;
(35) "intercept calls" means calls that were improperly addressed and were redirected to an operator or machine which responds with an appropriate recorded message;
(36) "interexchange carrier" means any individual, partnership, association, joint-stock company, trust, governmental entity, or corporation engaged for hire in interexchange communication by wire, fiber, or radio, between two or more exchanges;
(37) "interoffice calls" means calls originating in one central office entity and terminating in another;
(38) "intraoffice switching" means the switching of a call that originates and terminates in the same central office entity;
(39) "keep cost order" means a work order in association with which exact records are kept of the time spent and costs incurred;
(40) "local call" means a telephone call between two stations both of which are located in an area within which intercommunications service is furnished under local rate schedules as specified in the telephone utility's tariffs;
(41) "local service" means telecommunications service furnished under local rate schedules;
(42) "long-distance call" means a telephone call between stations in different local service areas which is furnished under toll rate schedule in the utilities' tariff;
(43) "long lines carrier" means the utility which provides intrastate and interstate circuits;
(44) "loop-around test line" means a line, usually with two terminations accessible on a dial-up basis, that permits one person in a toll office to make two-way transmission tests;
(45) "loss objective of intertoll trunks consistent with the nationwide switching plan" means a transmission loss objective as specified in Notes on Distance Dialing published by the American Telephone and Telegraph Company (AT&T) or in Notes on Transmission Engineering published by the United States Independent Telephone Association;
(46) "main station" means the principal telephone to which a telephone number is assigned and which is connected to the central office equipment by an individual- or party-line circuit;
(47) "no-plus" means a system of dialing in which the calling party dials an interexchange call without any prefix;
(48) "office trunking diagram" means a simplified diagram of a central office entity showing the major components and their interconnections;
(49) "1-PIC dialing" means that a telephone customer's intrastate interexchange call and 0-minus call is routed to the customer's presubscribed interstate interexchange carrier for that access line;
(50) "1-plus" means a system of dialing in which the calling party dials the prefix "1" prior to the telephone number for an interexchange call;
(51) "outside plant" means the telecommunications equipment and facilities installed on, along, over, or under streets, alleys, or highways, or on private rights-of-way between the central office and customers' locations, or between central offices;
(52) "overflow" means the encountering of equipment or facilities in the busy condition during the progressive establishment of a call;
(53) "party-line service" means telephone service which provides that two or more main stations may be served by the same central office circuit;
(54) "PIC" means primary interexchange carrier;
(55) "presubscribed carrier" means the carrier selected by or assigned to a customer's access line through the presubscription process;
(56) "presubscription" means the process by which customers may select a primary interexchange carrier to handle toll calls for a particular access line on a 0-plus, 0-minus, and no-plus or 1-plus basis;
(57) "primary service" means individual-line service or party-line service;
(58) "public telephone" or "public pay telephone" means a telephone instrument, usually equipped with a coin-collecting device, that is installed by a utility certificated by the commission to provide local exchange service for the use of the general public; "public telephone" or "public pay telephone" does not include a private pay telephone instrument provided to the general public under 3 AAC 53.800 - 3 AAC 53.899;
(59) "quiet termination" means a line that terminates in an impedance that simulates the nominal office impedance;
(60) "regrade" means a change between one class of party-line service and another class of party-line service or between a party-line service and an individual-line service;
(61) "service interruption" means the inability to complete calls to or from a telephone station due to facility malfunctions or human error; except that the term as used in secs. 200 - 340 of this chapter does not include service difficulties such as slow dial tone, circuits busy or other network or switching capacity shortages, nor may it be construed to apply where service is interrupted by the negligence or willful act of the subscriber, emergency situation, unavoidable casualties and acts of God, or where the company, under provisions of its tariff, suspends or terminates service because of nonpayment of bills payable to the utility, unlawful or improper use of the facilities or service, or any other reason covered by filed and approved tariffs or regulations of the commission;
(62) "service standard" means a level of service which a telephone utility, under normal conditions, is expected to meet in its certificated territory as representative of adequate service;
(63) "standard installation interval" means 10 working days for the installation of primary service; for other tariffed services when a standard interval is not specified in the tariffs, it means a reasonable period that conforms to general practice in the telephone industry;
(64) "station" means an instrument consisting of a transmitter, receiver, and associated equipment wired to permit the sending or the receiving of messages;
(65) "subscriber" means a customer;
(66) "surveillance level" means a measured grade of service that is generally indicative of a weak spot in a utility's operation and requires investigation or corrective action by the utility;
(67) "telephone utility" means a public utility which furnishes telecommunications service;
(68) "toll operator" means a person who operates a device that establishes, supervises, and times toll calls and who renders assistance to customers in placing toll calls;
(69) "toll trunk" means a trunk which connects a local central office with its toll operating office or a trunk interconnecting toll-operating offices;
(70) "trouble" means the improper function or defective conditions with respect to the operation of telephone facilities over which the telephone utility has control;
(71) "trunk" means a communications channel between central office units or entities;
(72) "2-PIC dialing" means that a telephone customer may select, for each access line, an intrastate interexchange carrier that is different from the customer's presubscribed interstate interexchange carrier and, after selection, may connect to that intrastate interexchange carrier by dialing 0-plus, no-plus, or 1-plus before the telephone number for an intrastate interexchange call or by dialing 0-minus;
(73) "utility" means a telephone utility;
(74) "working days" means business days;
(75) "0-plus" means a method of dialing for an operator-assisted call in which the calling party dials "0" plus the phone number, an operator comes on line, and the caller states the type of call being attempted; this dialing pattern is used primarily for collect, credit-card, person-to-person, and third-party billed calls;
(76) "0-minus" means a method of dialing for an operator-assisted call in which the calling party dials only "0", an operator comes on line, and the caller states the type of call being attempted;
(77) repealed 4/20/2006.
History
- Authority: AS 42.04.070; AS 42.05.311; AS 42.05.810 AS 42.05.141; AS 42.05.321; AS 42.05.990 AS 42.05.151; AS 42.05.800
- Eff. 1/5/79, Register 69; am 6/29/84, Register 90; am 6/27/92, Register 122; am 10/29/94, Register 132; am 9/20/96, Register 139; am 3/21/2003, Register 165; am 4/24/2004, Register 170; am 4/20/2006, Register 178; am 1/1/2016, Register 217
Article 4 Criteria for Intrastate Interexchange Telephone Competition
3 AAC 52.350 Applicability, finding, purpose, and waiver
(a) The provisions of 3 AAC 52.350 - 3 AAC 52.399 apply to all interexchange carriers and alternate operator service providers that furnish intrastate interexchange telephone service within this state.
(b) The commission finds that the competitive provision of intrastate interexchange telephone service in accordance with the provisions of 3 AAC 52.350 - 3 AAC 52.399 is required by the public convenience and necessity.
(c) The purpose of 3 AAC 52.350 - 3 AAC 52.399 is to allow competition in the provision of intrastate interexchange telephone service to the extent possible while maintaining and promoting universal intrastate interexchange telephone service at geographically averaged rates.
(d) Notwithstanding (a) - (c) of this section, 3 AAC 52.350(b), 3 AAC 52.358, and 3 AAC 52.360 do not apply to an interexchange carrier that is also an incumbent local exchange carrier. An incumbent local exchange carrier may file an application to provide intrastate interexchange telephone service under 3 AAC 48.600 - 3 AAC 48.661.
(e) Unless otherwise required under AS 42.05, a requirement in 3 AAC 52.350 - 3 AAC 52.399 may be modified or waived, in whole or in part, by order of the commission and a showing of good cause or on the commission's own motion. An applicant shall file and the commission will consider an application in accordance with 3 AAC 48.805.
History
- Authority: AS 42.05.141; AS 42.05.221; AS 42.05.711 AS 42.05.151; AS 42.05.325; AS 42.05.810
- Eff. 3/16/91, Register 117; am 5/18/2003, Register 166
3 AAC 52.355 Scope of competition
Repealed.
History
- Eff. 3/16/91, Register 117; repealed 3/9/2001, Register 157
3 AAC 52.358 Registration
(a) Unless required by 3 AAC 52.360(a) to have a certificate of public convenience and necessity, an entity proposing to provide intrastate interexchange telephone service or alternate operator service shall register with the commission in accordance with this section.
(b) Except as provided in (c) of this section, an entity registering under this section shall submit a registration fee of $100, and shall file, in accordance with 3 AAC 48.095, the following information on a form prescribed by the commission:
(1) the entity's legal name and the name under which the entity proposes to do business;
(2) the addresses of the entity's principal national place of business and, if different, its place of business in this state;
(3) the name, title, and telephone number of the individual who is available to provide the commission with information about the registration;
(4) the entity's type of business structure, including proof of incorporation and the name and address of the entity's registered agent if applicable;
(5) proof of the entity's authority to do business in this state;
(6) a list of the owners of five percent or more of the entity's equity;
(7) a list of persons or entities that are affiliated interests of the registrant entity;
(8) a list of all administrative and judicial proceedings that resulted in
(A) suspension, revocation, or denial of the authority, license, or certification of the entity or its officers, directors, or affiliates to provide utility services;
(B) a reprimand, penalty, or conviction of the entity or its officers, directors, or affiliates related to operations, gross misrepresentations, fraudulent transactions, or securities violations; or
(C) an adjudication of bankruptcy or a reorganization in bankruptcy of the entity or its officers, directors, or affiliates;
(9) a list of all cases and locations in which the entity, or its officers, directors, or affiliates, have abandoned service in violation of applicable statutes, regulations, or orders;
(10) a list of the names, titles, and responsibilities of key management now employed or to be employed by the entity, and resumes for each person;
(11) a list of all services proposed, together with an explanation of the entity's technical ability to provide the proposed services;
(12) a copy of the entity's initial online tariff maintained in accordance with 3 AAC 52.367;
(13) a completed verification, on a form prescribed by the commission, and signed by the person authorized to sign on behalf of the entity, that the entity's tariff complies with AS 42.05 and this chapter;
(14) the Internet address of the entity's online tariff;
(15) an explanation as to whether resold services will be obtained from
(A) another carrier's intrastate wholesale tariff;
(B) another carrier's intrastate retail tariff;
(C) an interstate contract or tariff; or
(D) some other mechanism;
(16) a verification signed by the person authorized to sign on behalf of the entity that all of the information provided in the registration is true, accurate, and complete.
(c) An interexchange carrier that has obtained a certificate of public convenience and necessity to provide intrastate interexchange telecommunications service shall register under this subsection within six months after May 18, 2003, if after that date the carrier is no longer required to be certificated under 3 AAC 52.360(a). A certificated interexchange carrier registering under this subsection shall return its certificate and submit a registration fee of $100 to the commission. The carrier shall provide the information listed in (b)(1) - (b)(3), (b)(12), (b)(13), and (b)(14) of this section on a form prescribed by the commission.
(d) An entity registering under this section shall have tariffed rates no greater than the maximum rates listed in this subsection, except that these maximum rates do not apply to prepaid calling card services provided in accordance with 3 AAC 52.377:
(1) for flat-rate per minute calls, $.35 per minute;
(2) for daytime mile-sensitive calls, the rates shown in the following table:
Mileage BandInitial MinuteEach Additional Minute 0 - 34$0.33$0.13 35 - 64$0.37$0.17 65 - 94$0.41$0.21 95 - 124$0.44$0.24 125 - 154$0.47$0.27 155 - 184$0.50$0.29 185 - 214$0.54$0.33 215 - 274$0.57$0.36 275 - 334$0.59$0.38 335 - 394$0.59$0.38 395 - 454$0.59$0.38 455 or greater$0.59$0.38
(3) for evening mile-sensitive calls, 80 percent of the applicable daytime maximum rate set out in (2) of this subsection; the evening rate period is Sunday through Friday from 5:00 p.m. through 10:59:59 p.m.;
(4) for night and weekend mile-sensitive calls, 50 percent of the applicable daytime maximum rate set out in (2) of this subsection; the night and weekend rate period is
(A) Monday through Sunday, from 11:00 p.m. through 7:59:59 p.m.;
(B) all day Saturday;
(C) all day Sunday except 5:00 p.m. through 10:59:59 p.m.;
(D) January 1, known as New Year's Day;
(E) the third Monday in January, known as Martin Luther King, Jr.'s Birthday;
(F) the third Monday in February, known as Presidents' Day;
(G) the last Monday in May, known as Memorial Day;
(H) July 4, known as Independence Day;
(I) the first Monday in September, known as Labor Day;
(J) the second Monday in October, known as Columbus Day;
(K) October 18, known as Alaska Day;
(L) November 11, known as Veterans Day;
(M) the fourth Thursday in November, known as Thanksgiving Day; and
(N) December 25, known as Christmas Day;
(5) for directory assistance calls, $1 per call;
(6) for a surcharge for originating a call from a pay telephone, $.30 per call;
(7) for a surcharge for customer-dialed operator-assisted calls, $.50 per call;
(8) for a surcharge for operator-dialed customer-assisted calls, $1.55 per call;
(9) for a surcharge for person-to-person operator-assisted calls, $3 per call.
(e) An entity registering under this section shall
(1) submit a $5,000 bond if it requires the prepayment of services;
(2) submit a $1,000 bond if it does not require the prepayment of services;
(3) charge only rates that are geographically averaged statewide;
(4) maintain an online tariff in accordance with 3 AAC 52.367;
(5) list all state and local taxes and fees as separate line items on a customer's bill;
(6) modify its online tariff only after providing 30 days' notice to the commission and the public in accordance with 3 AAC 52.367;
(7) notify each new customer and annually notify existing customers that they may opt to receive notice of tariff revisions by electronic mail or by mail as provided in 3 AAC 52.367(e)(2); and
(8) repealed 11/22/2017;
(9) pay all intrastate access charges required under AS 42.05 and 3 AAC 48.440 and by applicable access charge tariffs.
(f) An entity registering under this section may not
(1) offer untariffed intrastate interexchange service; or
(2) tariff services that it is not prepared to provide as of the effective date in its tariff.
(g) An entity registered under this section shall, on or before January 31 of each year, renew its registration by filing, in accordance with 3 AAC 48.095, a form prescribed by the commission. The registration renewal must include a statement of any changes to information submitted with the entity's registration, an annual registration renewal fee of $50, a verification that the entity is in compliance with the requirements of (e) and (f) of this section, and a verification that the entity did not have more than 1,000,000 intrastate billable minutes per month for three consecutive months in the previous calendar year.
(h) The commission will verify receipt of a registration or registration renewal by returning a numbered registration or registration renewal receipt marked with the date the commission received the filing.
(i) Unless notified that its registration is rejected, the entity registering under this section may begin operation 45 days after the date the commission received the registration. Commission staff may reject an incomplete registration without prejudice to refiling. If the commission rejects the registration with a finding that the entity is not fit, willing, or able to provide the proposed service, the entity may request a hearing.
(j) If the commission learns of a defect in a registration or registration renewal after an entity begins operation, the commission may issue an appropriate order to address the defect, including an order suspending the entity's operating authority, or requiring additional information. If the commission suspends an entity's operating authority under this section, the suspension will be stayed if the entity requests a hearing within ten days after the date of the order. A defect in a registration includes incomplete, inaccurate, or misleading information.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.711 AS 42.05.151; AS 42.05.411; AS 42.05.810 AS 42.05.221; AS 42.05.431 AS 42.05.361; AS 42.05.661
- Eff. 5/18/2003, Register 166; am 11/6/2016, Register 220; am 11/22/2017, Register 224
3 AAC 52.360 Certificates of public convenience and necessity
(a) The following entities are not eligible to register or renew registration under 3 AAC 52.358, and must file an application in compliance with this section to obtain a certificate of public convenience and necessity to provide intrastate interexchange telephone service:
(1) an entity that proposes to provide facilities-based intrastate interexchange telephone service, whether or not the entity is registered under 3 AAC 52.358;
(2) an interexchange carrier or alternate operator service provider that is registered under 3 AAC 52.358, if that entity has more than one million intrastate billable minutes per month for three consecutive months;
(3) an incumbent local exchange carrier;
(4) an entity that provides service to inmates in a correctional facility;
(5) an entity affiliated with either a facilities-based interexchange carrier or an incumbent local exchange carrier.
(b) An application for a certificate must include
(1) the entity's legal name and the name under which the applicant proposes to do business;
(2) the address of the entity's principal national place of business, and, if different, its place of business in this state;
(3) the name, title, and telephone number of the individual who is available to provide the commission with information about the application;
(4) the applicant's type of business structure, including proof of incorporation and the name and address of the applicant's registered agent, if applicable;
(5) proof of the applicant's authority to do business in this state;
(6) a list of the owners of five percent or more of the applicant's equity;
(7) a list of persons or entities that are affiliated interests of the applicant;
(8) a list of all administrative and judicial proceedings that resulted in
(A) suspension, revocation, or denial of the authority, license, or certification of the applicant or its officers, directors, or affiliates to provide utility services;
(B) a reprimand, penalty, or conviction of an applicant or its officers, directors, or affiliates related to operations, gross misrepresentations, fraudulent transactions, or securities violations; or
(C) an adjudication of bankruptcy or a reorganization in bankruptcy of the applicant or its officers, directors, or affiliates;
(9) a list of all cases and locations in which the applicant, or its officers, directors, or affiliates, have abandoned service in violation of applicable statutes, regulations, or orders;
(10) a list of the names, titles, and responsibilities of key management now employed or to be employed by the applicant, and resumes for each person;
(11) for existing businesses, copies of
(A) the most recent year's balance sheet and income statement; or
(B) Federal Communications Commission Form M and, if available, Securities and Exchange Commission Form 10-K;
(12) for new businesses, copies of the most recent year's balance sheet and income statement for the owners of the business listed under (6) of this subsection;
(13) a list of all services proposed, together with an explanation of the applicant's technical ability to provide the proposed services;
(14) a list of all locations proposed to be served on an originating basis;
(15) a list of all locations proposed to be served on a terminating basis;
(16) a description of all existing facilities that will be used to provide intrastate interexchange telephone service;
(17) a description of all agreements or negotiations with other utilities for joint use and interconnection of facilities;
(18) a description of all facilities planned for construction within five years to provide intrastate interexchange telephone service;
(19) a description of all existing facilities, or facilities planned for construction within five years, that are or will be used to provide interstate interexchange service;
(20) a tariff of rates and services; and
(21) a verification signed by the person authorized to sign on behalf of the applicant that all of the information provided in the application is true, accurate, and complete.
(c) Notice of an application for a certificate of public convenience and necessity to provide intrastate interexchange telephone service will be given in accordance with 3 AAC 48.645(a).
(d) The commission will issue a certificate of public convenience and necessity within 90 days after the date of filing of a complete certificate application by an entity that proposes to provide intrastate interexchange telephone service under this section and that is found by the commission to be fit, willing, and able to provide the proposed service.
(e) The commission may place conditions on a certificate of public convenience and necessity that it considers appropriate, including a condition that the interexchange carrier post a bond to assure compliance with commission rules and payment of access charges.
History
- Authority: AS 42.05.141; AS 42.05.241; AS 42.05.990 AS 42.05.151; AS 42.05.711 AS 42.05.221; AS 42.05.810
- Eff. 3/16/91, Register 117; am 9/1/2002, Register 163; am 5/18/2003, Register 166
3 AAC 52.361 Notice of certain federal applications
Repealed.
History
- Eff. 3/16/91, Register 117; repealed 9/1/2002, Register 163
3 AAC 52.363 Determination of dominant status
Repealed.
History
- Eff. 3/16/91, Register 117; repealed 9/16/2005, Register 175
3 AAC 52.365 Discontinuance, suspension, or abandonment of service
(a) An intrastate interexchange carrier may not discontinue, suspend, or abandon telecommunications service without commission approval under AS 42.05.261. A carrier that files a request with the commission to discontinue, suspend, or abandon service under AS 42.05.261 shall give written notice of that request to
(1) repealed 9/16/2005;
(2) the carrier's subscribers at the location where the carrier proposes to discontinue, suspend, or abandon service; and
(3) each local exchange carrier and interexchange carrier serving the location where the carrier proposes to discontinue, suspend, or abandon service.
(b) Repealed 9/16/2005.
History
- Authority: AS 42.05.141; AS 42.05.241; AS 42.05.990 AS 42.05.151; AS 42.05.711 AS 42.05.221; AS 42.05.810
- Eff. 3/16/91, Register 117; am 9/1/2002, Register 163; am 9/16/2005, Register 175
3 AAC 52.367 Online tariff of registered entities
(a) Except as provided in 3 AAC 52.377, a registered entity shall maintain a tariff, in hypertext markup language (HTML), on the Internet at an address associated with the carrier. The entity may maintain the online tariff in additional electronic formats for the convenience of the public, if the versions in the additional formats do not deviate in content from, and are substantially consistent in layout with, the version in hypertext markup language.
(b) In its online tariff, a registered entity may include the following charges, if the entity fully describes those charges in its online tariff, and if the charge complies with the requirements applicable to that charge:
(1) a customer deposit, if the entity's online tariff sets out objective criteria for determining when a customer deposit will be required; the deposit may not exceed the entity's estimate of two months' billings and may not be retained longer than two years unless the customer is delinquent in payment more than once in any 12 consecutive months; however, an alternate operator service provider may not require a customer deposit;
(2) late payment charges for bills not paid 30 days after the later of the billing invoice date or the billing postmark date; the entity may include only the following in a late payment charge:
(A) a one-time late payment fee not exceeding one percent of the unpaid amount;
(B) a finance charge not exceeding .0287 percent of the unpaid amount per day that the amount remains unpaid;
(3) a termination fee for a service with a term commitment, if the
(A) termination fee is clearly stated in the term-of-service contract; and
(B) amount of the termination fee is reasonably related to the discount the customer received before termination and is not punitive.
(c) A registered entity's online tariff must include a table of contents and a section for setting out notices of any proposed tariff revisions, and must set out in plain language a statement of the following:
(1) customer complaint information, including
(A) an address and toll-free telephone number for customer complaints;
(B) a process for resolving complaints with customers;
(C) a statement that any unresolved disputes may be brought to the attention of the commission; and
(D) the commission's mailing address, Internet address of the commission's website, and toll-free telephone number;
(2) a list of each state and municipal tax upon, and fee for, service, and a statement that each state and municipal tax and fee will be listed as a separate line item on a customer's bill;
(3) a statement that any costs sought under AS 09.68.115(a)(2) for a customer's dishonored check may be charged as a separate line item on a customer's bill;
(4) unless a service is provided statewide, the specific locations where a service is provided;
(5) a list of any special contracts for retail services; the list must identify each customer and the retail service specially provided to that customer;
(6) a statement that any limitation of liability provision in the online tariff is subject to the following:
(A) a registered entity may not disclaim liability for its own gross negligence or willful misconduct;
(B) inclusion of a limitation of liability provision in a registered entity's online tariff does not prevent a court of competent jurisdiction from
(i) determining the validity of the limitation of liability provision, or of any exculpatory clause, under applicable law; or
(ii) adjudicating negligence and consequential damage claims.
(d) At least 30 days before revising a provision of its online tariff, a registered entity shall file with the commission in accordance with 3 AAC 48.220 and 3 AAC 48.270
(1) the proposed tariff revision;
(2) a completed verification, on a form prescribed by the commission, and signed by the person authorized to sign on behalf of the entity, that the entity's tariff complies with AS 42.05 and this chapter; and
(3) the public notice of the proposed tariff revision required by (e) and (f) of this section.
(e) Public notice of a proposed tariff revision must be given by
(1) including the notice in the section of the entity's online tariff for proposed tariff revisions; and
(2) delivering the notice to members of the public that request notification of tariff modifications; delivery may be made by mail or electronic mail, at the entity's option.
(f) Public notice of a registered entity's proposed tariff revision must include a plainly written general description of the proposed tariff revision that is accurate and sufficient to alert consumers of any change to a rate or rule applicable to them, and also must include the following specific information:
(1) the date the entity filed or will file the proposed tariff revision with the commission;
(2) the date the entity proposes to make the revision effective;
(3) a statement that the entity's current tariff and proposed revisions are available for review at the entity's office and Internet web site, the address and business hours of the entity's office, and the Internet address of the entity's web site;
(4) a statement that any person may, within 20 days after the date of the notice, file comments on the tariff revision with the commission by mail, through the commission's website, or by electronic mail;
(5) the commission's mailing address, Internet address of the commission's website, and electronic mail address where comments may be filed.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.711 AS 42.05.151; AS 42.05.411 AS 42.05.361; AS 42.05.431
- Eff. 5/18/2003, Register 166; am 11/6/2016, Register 220; am 10/27/2017, Register 224
3 AAC 52.370 Retail rates
(a) The retail rates for message telephone service of each interexchange carrier must be geographically averaged. If rates vary by the distance over which calls are placed, the rate for each mileage band must be equal to or greater than the rate for the next shorter mileage band. Discounts, if offered, must be available at all locations in the state where the carrier offers service.
(b) A certificated carrier shall maintain a current tariff of retail rates and all special contracts for retail rates on file with the commission. The certificated carrier may modify retail rates, offer new or repackaged services, and implement special contracts for retail service without approval of the commission after 30 days' notice to the commission of a tariff filing submitted in accordance with 3 AAC 48.220 and 3 AAC 48.270. A tariff filing by a registered entity must comply with 3 AAC 52.367 unless it is a special contract. A special contract filed by a registered entity must be submitted in accordance with 3 AAC 48.220 and 3 AAC 48.270. A modification in retail rates must be consistent with (a) of this section.
(c) Repealed 9/16/2005.
(d) Notwithstanding (b) of this section, the commission will disapprove and require modification of rates that are not just and reasonable or that grant an unreasonable preference or advantage to any customer or subject a customer to an unreasonable prejudice or disadvantage.
(e) Repealed 10/6/2013.
History
- Authority: AS 42.05.141; AS 42.05.241; AS 42.05.990 AS 42.05.151; AS 42.05.431 AS 42.05.221; AS 42.05.711
- Eff. 3/16/91, Register 117; am 7/8/93, Register 127; am 9/1/2002, Register 163; am 5/18/2003, Register 166; am 9/16/2005, Register 175; am 10/6/2013, Register 208; am 10/27/2017, Register 224
3 AAC 52.372 Long distance rate parity
(a) To the extent possible and reasonable, and taking into consideration (1) costs of service; (2) changes in calling volumes; (3) changes in intrastate access charge rates; (4) jurisdictional cost differences; and (5) other relevant factors, an interexchange carrier's retail intrastate long distance rates must be in parity with or lower than its applicable interstate long distance rates.
(b) Not later than April 30 of each year, an interexchange carrier not in conformance with (a) of this section shall file a report, in accordance with 3 AAC 48.095, providing the explanation of why it is not in conformance.
(c) Repealed 11/22/2017.
(d) Repealed 11/22/2017.
History
- Authority: AS 42.05.141; AS 42.05.321; AS 42.05.571 AS 42.05.145; AS 42.05.381; AS 42.05.581 AS 42.05.151; AS 42.05.391; AS 42.05.611 AS 42.05.311; AS 42.05.431; AS 42.05.840
- Eff. 7/31/2011, Register 199; am 11/6/2016, Register 220; am 11/22/2017, Register 224
3 AAC 52.375 Wholesale service and rates
(a) A certificated interexchange carrier shall offer all its services for resale to other carriers. Services must be offered for resale at wholesale rates to the extent determined appropriate in view of the facilities and general service offerings of the interexchange carrier.
(b) The certificated carrier shall maintain a current tariff of wholesale rates and all special contracts for wholesale rates on file with the commission. The carrier may reduce wholesale rates without approval of the commission after 30 days' notice to the commission of a tariff revision submitted in accordance with 3 AAC 48.220 and 3 AAC 48.270. A tariff revision to increase wholesale rates, to offer new or repackaged wholesale services, or to implement special contracts for wholesale service is subject to the provisions of 3 AAC 48.220, 3 AAC 48.270, and 3 AAC 48.280 - 3 AAC 48.410 and must also include quantitative data, including cost-of-service data, in support of the proposed rates.
(c) Repealed 9/16/2005.
(d) Notwithstanding (b) of this section, the commission will disapprove and require modification of wholesale rates that are not just and reasonable or that grant an unreasonable preference or advantage to any customer or subject a customer to an unreasonable prejudice or disadvantage.
(e) The wholesale rates for services for resale are not required to be averaged geographically.
(f) Within 60 days after receiving a written bona fide request for an unbundled rate element, a carrier shall offer the rate element by tariff if doing so is not unduly economically burdensome, is technically feasible, and is otherwise consistent with existing regulations. The time period for offering the element may be modified by agreement of the carrier and the entity making the bona fide request or by order of the commission. A carrier denying a bona fide request shall, within 30 days after receiving the request, deliver a written denial stating the reasons for denial to the entity making the request. The carrier shall also file a copy of the written denial with the commission.
(g) A carrier that does not own or control transmission facilities is exempt from the requirements of this section if the carrier has not received a bona fide request for intrastate wholesale service. If the carrier exempt under this subsection receives a bona fide request for intrastate wholesale service, the carrier shall comply with (a) - (f) of this section or apply to the commission for a continued exemption.
History
- Authority: AS 42.05.141; AS 42.05.241; AS 42.05.990 AS 42.05.151; AS 42.05.431 AS 42.05.221; AS 42.05.711
- Eff. 3/16/91, Register 117; am 7/8/93, Register 127; am 9/1/2002, Register 163; am 5/18/2003, Register 166; am 9/16/2005, Register 175; am 10/27/2017, Register 224
3 AAC 52.376 Promotions
(a) An interexchange carrier may offer promotions to induce customers to use its services only as provided in this section.
(b) A promotion must be set out in a utility's tariff as required in 3 AAC 52.370 and 3 AAC 52.375.
(c) A promotion that is a cash payment, credit to an account, gift, or combination of those items and that is not intended as a recurring benefit may be offered only once per customer per year and be of no greater value than $100 per year per line. Substantially similar promotions are the same promotion for purposes of this subsection. This subsection does not apply to "contests" or "sweepstakes" in which the carrier has no control over who receives the benefit.
(d) A promotion that provides a recurring benefit, including a monthly discount to rates or waiver of recurring charges, may be in effect for a maximum of 12 months. That promotion or a substantially similar promotion may be renewed no sooner than three months after the end of its previously effective period. Substantially similar promotions are the same promotion for purposes of assessing the 12-month limit.
(e) The commission may disapprove and require modification of a promotion that
(1) is not just, fair, and reasonable;
(2) grants an unreasonable preference or advantage to any customer; or
(3) subjects a customer to an unreasonable prejudice or disadvantage.
(f) If a carrier settles a bona fide dispute with a customer, the settlement is not a promotion for purposes of this section.
History
- Authority: AS 42.05.141; AS 42.05.241; AS 42.05.711 AS 42.05.151; AS 42.05.411; AS 42.05.990 AS 42.05.221; AS 42.05.431
- Eff. 9/1/2002, Register 163
3 AAC 52.377 Detariffing of prepaid calling card services
(a) Except as provided in (c) of this section, an interexchange carrier that offers a prepaid calling card service is not required to include those services in its tariff if the prepaid service is available for sale to the general public.
(b) Except for cards provided at no charge to the final customer, prepaid calling cards may not be limited to a single customer or group of customers.
(c) Prepaid calling card services sold to inmates in a correctional facility are not eligible for detariffing under this section.
(d) Each rate, term, condition, and limitation of service must be clearly posted at the point of sale, and the following information must be
(1) placed on the card:
(A) the name of the service provider;
(B) the access telephone number;
(C) the customer's personal identification number (PIN);
(D) a toll-free customer service telephone number;
(2) placed on the card or card packaging:
(A) the expiration policy, if any;
(B) the recharge policy, if any;
(C) the policy for rounding of billing increments;
(D) either the total number of billing units or the rate per billing unit;
(3) placed on the card packaging:
(A) the name of the service provider;
(B) a toll-free customer service telephone number; and
(4) posted at the point of sale:
(A) the name of the service provider;
(B) a toll-free customer service telephone number;
(C) a list of each surcharge and surcharge amount, expressed in minutes or in billing units if the billing unit is not a minute;
(D) the expiration policy, if any;
(E) the recharge policy, if any;
(F) the policy for rounding of billing increments;
(G) the card's total number of billing units;
(H) the rate per billing unit;
(I) sufficient information for the customer to easily determine the maximum rate per minute.
(e) An interexchange carrier shall refund the purchase price or provide a replacement prepaid calling card to a customer if the card does not work as represented or the requirements of (d) of this section are not met. The commission may direct that a refund be provided to a customer for good cause.
(f) In this section,
(1) "prepaid calling card" means a card
(A) that enables a purchaser to make domestic or international long distance telephone calls by
(i) dialing the toll-free number on the carrier's connecting switch; and
(ii) using a personal identification number (PIN) placed on the card;
(B) for which the purchaser prepays a specific dollar amount;
(C) that provides minutes of long distance service, or units per minute, that
(i) are based upon the specific rates set by the carrier; and
(ii) as a call is made, are automatically deducted from the card balance of usable minutes or units, with the balance being recorded either on the card itself or on a central computer through which the calls are routed; and
(D) that may be rechargeable, allowing the purchaser to add more minutes, or units per minute, of calling time by
(i) dialing a toll-free telephone number or visiting an Internet web site; and
(ii) using a credit card;
(2) "long distance service" has the meaning given in AS 42.05.890.
History
- Authority: AS 42.05.141; AS 42.05.711 AS 42.05.151; AS 42.05.810
- Eff. 5/18/2003, Register 166
3 AAC 52.380 Reporting, verification, and auditing requirements
(a) An interexchange carrier shall submit to the commission, to each exchange access service provider, and to each association of exchange access service providers data necessary for the calculation of access charges in accordance with the Alaska Intrastate Interexchange Access Charge Manual, adopted by reference in 3 AAC 48.440, and the effective access charge tariffs.
(b) An interexchange carrier shall retain for a period of three years the records, including billing tapes, from which the data specified in (a) of this section is obtained.
(c) All information submitted by an interexchange carrier under (a) of this section is available for public inspection.
(d) An interexchange carrier may petition the commission to authorize an independent audit of the information provided by another interexchange carrier under (a) of this section. The interexchange carrier requesting an audit must pay for the cost of the audit. If the commission determines, based on the audit, that the information provided by the audited interexchange carrier is inaccurate by a margin exceeding 2 percent or by a margin that resulted in an underpayment of access charges by an amount exceeding $200,000 on an annual basis, the audited interexchange carrier shall reimburse the cost of the audit and shall be subject to civil penalties in accordance with AS 42.05.571 - 42.05.621. In addition, an interexchange carrier that is determined to have underpaid access charges shall correct that underpayment in accordance with the tariff of the Alaska Exchange Carriers Association.
(e) Repealed 11/22/2017.
(f) Repealed 11/22/2017.
History
- Authority: AS 42.05.141; AS 42.05.221; AS 42.05.431 AS 42.05.151; AS 42.05.241; AS 42.05.990
- Eff. 3/16/91, Register 117; am 9/1/2002, Register 163; am 5/18/2003, Register 166; am 9/16/2005, Register 175; am 11/6/2016, Register 220; am 11/22/2017, Register 224
3 AAC 52.381 Interexchange carrier of last resort
(a) The incumbent interexchange carrier is the carrier of last resort unless the commission by order changes the carrier's responsibilities in whole or in part in accordance with 3 AAC 52.381 - 3 AAC 52.385.
(b) Unless directed by commission order, an interexchange carrier of last resort shall:
(1) provide and maintain adequate, efficient, and safe essential interexchange service of reasonable quality throughout its carrier of last resort area at rates that comply with 3 AAC 52.370 and 3 AAC 52.372, either through its own facilities or other reasonable arrangement, until relieved of that duty by order of the commission; and
(2) notify the commission as soon as reasonably possible of the inability to provide essential interexchange service of reasonable quality in its carrier of last resort area.
(c) Repealed 11/22/2017.
(d) The commission may, for good cause and after notice and an opportunity for hearing, investigate an interexchange carrier of last resort's ability to meet its carrier of last resort obligations.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.800 AS 42.05.145; AS 42.05.291
- Eff. 8/1/2015, Register 215; am 11/22/2017, Register 224
3 AAC 52.382 Reassignment of interexchange carrier of last resort duties
(a) The commission may, upon petition or its own motion and after notice and opportunity for hearing, reassign interexchange carrier of last resort obligations for a specified local exchange area to an alternative carrier based on a finding that the alternative carrier is able to fulfill carrier of last resort obligations currently and in the foreseeable future and that reassignment is consistent with the public interest.
(b) A petition to reassign interexchange carrier of last resort obligations to an alternative carrier must include
(1) a list of the local exchange areas that the petitioner seeks to reassign to an alternative carrier, including a map of the petitioner's facilities in each area;
(2) a written description of each facility that the petitioner uses to provide essential interexchange service, including information identifying the entity that owns or controls each facility;
(3) a written description of all state-regulated and other services provided over the identified facilities, including information identifying services provided by affiliates or, to the extent known, by third parties;
(4) the name of the carrier identified as an alternative interexchange carrier of last resort;
(5) a general written description of the capability of the alternative carrier to provide essential interexchange service to each local exchange area upon reassignment; and
(6) an explanation of how the relevant factors listed in (d) of this section support the petition, including a demonstration
(A) that the provision of essential interexchange service in the specified local exchange area will continue without interruption after the reassignment of carrier of last resort obligations; and
(B) how the relief requested is consistent with the public interest.
(c) An alternative carrier identified in a petition filed under (b) of this section shall, not later than 30 days after service of the petition, submit to the commission either
(1) a written description of
(A) each facility that the alternative carrier uses to provide essential interexchange service in the local exchange area identified in the petition, including information identifying the entity that owns or controls each facility and a map of the alternative carrier's facilities; and
(B) all state-regulated and other services provided over the identified facilities, including information identifying services provided by affiliates or, to the extent known, by third parties; or
(2) a dispositive motion filed under 3 AAC 48.091 detailing the reasons why the carrier should not be considered as a potential alternative interexchange carrier of last resort for the local exchange areas identified in the petition filed under (b) of this section.
(d) In determining the reassignment of carrier of last resort obligations the commission may consider the following factors for the current interexchange carrier of last resort and the alternative carrier:
(1) the experience and relevant technical expertise in the general interexchange market and in the identified local exchange area market;
(2) the financial strength and stability of each carrier;
(3) the intrastate interexchange facilities each carrier owns or controls in the identified local exchange area;
(4) the relative estimated remaining life of facilities owned or used to provide essential interexchange service;
(5) the method by which facilities that would be used to provide essential interexchange service were financed;
(6) each carrier's market presence, currently and over the past five years, both throughout the state and in the identified local exchange area;
(7) whether the facilities that would be used to provide essential interexchange service to the identified local exchange area will have sufficient capacity, currently and in the foreseeable future, to fulfill carrier of last resort obligations; and
(8) any other factor the commission determines relevant to reassigning carrier of last resort obligations.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.800 AS 42.05.145; AS 42.05.291
- Eff. 8/1/2015, Register 215
3 AAC 52.383 Elimination of interexchange carrier of last resort duties
(a) The commission may, upon petition or its own motion and after notice and opportunity for hearing, terminate carrier of last resort obligations without reassignment for a local exchange area based on a finding that
(1) more than one interexchange carrier, including the carrier of last resort, owns or controls all facilities necessary to provide essential interexchange service to the local exchange area for which interexchange carrier of last resort obligations are to be terminated without reassignment; and
(2) the termination of interexchange carrier of last resort obligations is consistent with the public interest.
(b) A petition to terminate interexchange carrier of last resort obligations without reassignment must include
(1) a list of the local exchange areas where the petitioner seeks to terminate its carrier of last resort obligations, including a map of the petitioner's facilities in each area;
(2) a written description of each facility that the petitioner uses to provide essential interexchange service in each local exchange area identified in the petition, including information regarding which facilities the carrier owns or controls;
(3) the name of each interexchange carrier currently providing essential interexchange service in each local exchange area identified in the petition; and
(4) a demonstration that
(A) more than one interexchange carrier, including the carrier of last resort, owns or controls all facilities necessary to provide essential interexchange service in each local exchange area identified in the petition and that market conditions conducive to competitive facilities-based intrastate interexchange service in each local exchange area will continue in the foreseeable future; and
(B) the requested relief is consistent with the public interest.
(c) An interexchange carrier that owns or controls facilities in a local exchange area where carrier of last resort obligations have been terminated shall notify the commission, in writing, 60 days in advance of its plan to exit the market for facilities-based essential interexchange service.
(d) The commission may designate an interexchange carrier of last resort for a local exchange area over which carrier of last resort obligations have been terminated, after considering the factors provided in 3 AAC 52.382(d) and finding that the designation is consistent with the public interest.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.800 AS 42.05.145; AS 42.05.291
- Eff. 8/1/2015, Register 215
3 AAC 52.384 Emergency interexchange carrier of last resort
(a) If an interexchange carrier of last resort is unable to perform the duties for all or a portion of its carrier of last resort area, the commission may require an alternative interexchange carrier to act as the emergency interexchange carrier of last resort.
(b) Designation as an emergency carrier of last resort under (a) of this section may not exceed a period of 12 months, unless extended by the commission, after notice, for good cause.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.800 AS 42.05.145; AS 42.05.291
- Eff. 8/1/2015, Register 215
3 AAC 52.385 Standards of service
(a) The provisions of 3 AAC 52.200 - 3 AAC 52.340 do not apply to an interexchange carrier who is not a carrier of last resort under 3 AAC 52.381 - 3 AAC 52.384 and is not assigned any responsibilities of a carrier of last resort, except that a carrier that owns or controls interexchange facilities in the state shall comply with 3 AAC 52.280(b) for its interexchange carrier operations.
(b) Traffic initially routed over the facilities of one interexchange carrier that is blocked due to busy circuits may not be automatically rerouted to the facilities of another interexchange carrier without the written agreement of the other carrier.
(c) A local exchange carrier may not disconnect a customer from local service for failure to pay interexchange carrier charges.
History
- Authority: AS 42.05.141; AS 42.05.221; AS 42.05.711 AS 42.05.151; AS 42.05.241; AS 42.05.990
- Eff. 3/16/91, Register 117; am 9/1/2002, Register 163; am 9/16/2005, Register 175; am 8/1/2015, Register 215; am 11/22/2017, Register 224
3 AAC 52.390 Miscellaneous provisions
(a) The provisions of 3 AAC 48.275, 3 AAC 48.277, and 3 AAC 48.430 do not apply to an interexchange carrier.
(b) Repealed 9/16/2005.
(c) Repealed 8/1/2015.
(d) Provisions governing the reassignment of a subscriber's access line or lines to a different interexchange carrier are set out in 3 AAC 52.334.
(e) No implicit modification or waiver of any statutory or regulatory requirements is intended by 3 AAC 52.350 - 3 AAC 52.399; absent specific modification or waiver, all statutory and regulatory requirements remain in effect.
(f) For each proposed retail tariff revision, an interexchange carrier shall give public notice of that tariff revision by publication in a widely distributed newspaper of general circulation and shall file with the commission a copy of each notice. The carrier shall publish and file each notice no later than five days after filing the proposed tariff revision with the commission.
(g) For each proposed wholesale tariff revision, an interexchange carrier shall provide public notice of that tariff revision on its Internet website and shall file with the commission a copy of the notice. The carrier shall post and file the notice no later than five days after filing the proposed tariff revision with the commission.
(h) In a notice required under (f) or (g) of this section, the carrier shall provide a general description of the proposed tariff revision that is accurate, written in plain English, and in sufficient detail to explain the proposal. The notice must include the following information:
(1) the date the carrier made or will make its filing with the commission;
(2) the date the revision is expected to become effective;
(3) a listing of the principal rates and rate changes proposed;
(4) a brief explanation of the principal changes proposed to the carrier's rules of service;
(5) a statement identifying where the proposed revision and the carrier's current tariff are available for public review in the state;
(6) a statement similar to the following: "Any person may file written comments on this tariff revision with the Regulatory Commission of Alaska on paper at 701 West Eighth Avenue, Suite 300, Anchorage, Alaska 99501 or electronically by means of the commission's website at (Internet website address). To assure that the Commission has sufficient time to consider the comments before the revision takes effect, your comments must be filed with the Commission no later than (a specific date, not a weekend or holiday, approximately 7-10 days before the filing takes effect)."
(i) An interexchange carrier providing wholesale services shall notify the commission in writing of the address of the carrier's Internet web site where the public notice of proposed wholesale rate and service provisions will be published.
(j) An interexchange carrier may not assess a termination penalty if a customer prematurely cancels a term contract with the carrier when the customer changes carriers as a result of equal access balloting.
(k) The commission may revoke a registered entity's operating authority for good cause, including failure to comply with the provisions of 3 AAC 52.350 - 3 AAC 52.399.
(l) An interexchange carrier that offers a bundled service shall, in its tariff provision describing the bundled service offering and in the public notice of any proposed bundled service tariff provision, separately identify the rates for local and intrastate interexchange services included in the bundle and offer the intrastate interexchange services and rates in all locations where the carrier offers intrastate interexchange service on a 1-plus direct-dialed basis. An interexchange carrier that offers a bundled service shall offer the customer the alternative of purchasing intrastate interexchange service on a stand-alone basis. An interexchange carrier that offers discounted intrastate interexchange service as part of a bundle is required to provide the discounted intrastate interexchange service on a stand-alone basis only in locations where the bundled offering is not available. An intrastate interexchange carrier that offers bundled services including local exchange service must also comply with 3 AAC 53.295.
(m) On or before April 30 of each year, an interexchange carrier not eligible to register under 3 AAC 52.358 shall file, in accordance with 3 AAC 48.095, a financial report of the carrier's intrastate interexchange operations in the state for the previous calendar year. Non-interexchange operations must be excluded from the financial report. The financial report must include the following detailed information:
(1) the beginning and end-of-year balances of
(A) gross plant in service;
(B) net plant in service;
(C) inventory;
(D) prepayments;
(E) current assets;
(F) deferred tax assets;
(G) long-term debt;
(H) current liabilities;
(I) deferred tax liabilities; and
(J) shareholder equity;
(2) from the income statement,
(A) retail revenues;
(B) revenues from resale;
(C) access revenues;
(D) uncollectible revenue;
(E) gross operating revenue;
(F) operating expenses;
(G) interest on long-term debt;
(H) current tax expense; and
(I) net income; and
(3) the following end-of-year customer metrics:
(A) number of customers; and
(B) number of residential customers.
(n) Repealed 8/1/2015.
(o) On or before April 30 of each year, an interexchange carrier shall file with the commission, in accordance with 3 AAC 48.095, a map or a listing identifying each location where the carrier owns or controls interexchange facilities and identifying each type of facility that is sited at each location. After an initial filing, absent changes to the facilities map or listing, the interexchange carrier shall file verification, in accordance with 3 AAC 48.095, that no changes to the map or listing have occurred. The map or listing must include
(1) satellite and earth station radio system facilities and links;
(2) microwave and other non-satellite-related radio facilities and links;
(3) metallic-based cable and wire facilities; and
(4) non-metallic-based cable and wire facilities.
(p) On or before July 1 each year, to satisfy the annual operations reporting obligation under AS 42.05.451(b),
(1) a publicly held intrastate interexchange carrier, including a subsidiary of a publicly held corporation, shall file in accordance with 3 AAC 48.095 its Securities and Exchange Commission Form 10-K annual report as of the end of the preceding fiscal year;
(2) a privately held intrastate interexchange carrier shall file in accordance with 3 AAC 48.095 a full and complete annual report of the company's financial condition and operations on a stand-alone basis, if available, or on a consolidated basis at the parent company level as of the end of the preceding fiscal year, as follows:
(A) if the carrier's financial statements are audited in the ordinary course of business, the carrier shall provide a copy of the carrier's audited financial statement, accompanied by a copy of a management letter issued by the independent certified public accountant that performed the company's financial audit; the carrier shall make its audit and related work papers and financial information available upon request by the commission;
(B) if the carrier's financial statements are not audited but are independently reviewed in the ordinary course of business, the carrier shall provide a copy of the carrier's financial statement that has been subject to review by an independent certified public accountant, accompanied by an officer certification that the carrier was not audited in the ordinary course of business for the preceding fiscal year and that the reported data is accurate; the carrier shall make the review and related work papers and financial information available upon request by the commission;
(C) if the carrier's financial statements are not audited or independently reviewed in the ordinary course of business, the carrier shall provide a copy of the carrier's financial statement containing a comparative balance sheet, income statement, and statement of cash flows, accompanied by an officer certification that the carrier was not audited by or had its financial statements reviewed by an independent certified public accountant in the ordinary course of business for the preceding fiscal year and that the reported data is accurate; the carrier shall make its underlying records and other financial information available upon request by the commission.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.800 AS 42.05.145; AS 42.05.291
- Eff. 3/16/91, Register 117; am 7/8/93, Register 127; am 9/1/2002, Register 163; am 5/18/2003, Register 166; am 8/27/2004, Register 171; am 9/16/2005, Register 175; am 10/6/2013, Register 208; am 8/1/2015, Register 215; am 11/6/2016, Register 220; am 10/27/2017, Register 224; am 11/13/2017, Register 224; am 11/22/2017, Register 224
3 AAC 52.399 Definitions
Unless the context indicates otherwise, in 3 AAC 52.350 - 3 AAC 52.399
(1) "commission" means the Regulatory Commission of Alaska;
(2) repealed 9/16/2005;
(3) "geographically averaged rates" means rates that use the same tariff provisions and rate schedules to apply to all message telephone service communications of the same distance, regardless of the originating and terminating points of the communication;
(4) "incumbent interexchange carrier"
(A) means the telephone utility, or its successor, certificated in commission Docket U-69-24 to provide intrastate interexchange telephone service;
(B) does not include an incumbent local exchange carrier;
(5) "interexchange carrier" means a carrier certificated or registered to provide intrastate interexchange telephone service;
(6) "local exchange carrier" means a local exchange telephone utility certificated to provide local exchange telephone service;
(7) repealed 9/1/2002;
(8) repealed 9/16/2005;
(9) "bona fide request" means a good-faith written request by a certificated or registered intrastate interexchange carrier;
(10) repealed 9/16/2005;
(11) "1-plus" means a system of dialing in which the calling party dials the prefix "1" before the telephone number for an interexchange call;
(12) "unbundled rate element" means a rate for a service that is priced separately from other services and allows a customer a reasonable opportunity to purchase a desired service without an obligation to purchase unwanted services;
(13) "affiliated interest" has the meaning given in AS 42.05.990;
(14) "alternate operator service" has the meaning given in AS 42.05.325(c);
(15) "incumbent local exchange carrier" means the telephone utility, or its successor, certificated to provide local exchange telephone service within its service area as of February 8, 1996;
(16) "bundled service" means an offering combining two or more services, one of which is intrastate interexchange service, for a package price that may include a discount or some other benefit; "bundled service" does not include a combination of intrastate interexchange service offerings at a package price;
(17) "affiliate" has the meaning given "affiliated interest" in AS 42.05.990;
(18) "control" by a carrier refers to the ability of the carrier or its affiliate to direct the use of facilities regardless of whether the carrier directly owns the facilities;
(19) "carrier of last resort area" means one or more local exchange areas in which an interexchange carrier of last resort must provide essential interexchange service;
(20) "essential interexchange service" means retail voice intrastate interexchange telecommunication service;
(21) "local exchange area" has the meaning given to "exchange" or "local exchange" in 3 AAC 48.820.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.800 AS 42.05.145; AS 42.05.291
- Eff. 3/16/91, Register 117; am 9/1/2002, Register 163; am 5/18/2003, Register 166; am 4/24/2004, Register 170; am 8/27/2004, Register 171; am 9/16/2005, Register 175; am 8/1/2015, Register 215
Article 5 Electric Utilities
3 AAC 52.400 Application, purpose, and waiver
(a) The provisions of 3 AAC 52.400 - 3 AAC 52.500 apply to all electric utilities subject to the regulatory jurisdiction of the commission and govern the furnishing of electric service and facilities to the public.
(b) The purpose of 3 AAC 52.400 - 3 AAC 52.500 is to establish certain minimum statewide standards which ensure that electric utilities will render safe, reliable, and prompt service to the public. Each electric utility must follow these standards and implement them with diligence and good faith to maintain the proper balance between economic effectiveness and the provision of safe, adequate service to the public.
(c) The standards of service, safety, and performance established in 3 AAC 52.400 - 3 AAC 52.500 are minimum levels of mandatory performance and service. A utility's failure to conform to these standards is a sufficient basis for issuance of a show cause order by the commission as to why civil penalties should not be invoked under AS 42.05.571.
(d) For good cause shown, the commission will, in its discretion, waive all or any portion of the standards in 3 AAC 52.400 - 3 AAC 52.500 applicable to an individual electric utility, or establish interim standards for that utility.
(e) As provided for under 3 AAC 48.320, 3 AAC 48.370, and 3 AAC 48.380, each utility's tariff must be amended, as appropriate, to include, and conform the provisions of the tariff to, standards set out in 3 AAC 52.400 - 3 AAC 52.500.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.711 AS 42.05.151; AS 42.05.571
- Eff. 1/1/87, Register 100
3 AAC 52.405 Business office standards
(a) A utility shall locate and staff business offices so that customers and other members of the public have reasonably convenient access to qualified personnel, including supervisors, if necessary, who are able to provide service and rate information, accept payments, process applications for service, explain charges in customers' bills, and adjust billings.
(b) A utility shall include in its tariff, and notify its customers and the public of, all reasonably available means of contacting its business office or service centers. The utility shall maintain business office hours on a regular schedule to include at least part of each weekday, except holidays, during the time period from 8:00 a.m. to 5:00 p.m. If a local utility representative is unavailable or unable to correct a service deficiency, the utility shall provide collect calling to a designated business office for customers who need to report an emergency situation or service deficiency.
(c) A utility shall list in its tariff a number that will enable a customer at any time to telephone the utility to notify it of an emergency condition.
(d) A utility shall maintain accurate records of service applications, the billing history for each customer, and service complaints. The utility shall respond to the substance of each service complaint and other customer correspondence within 10 working days after its receipt. In its response the utility shall state that a customer not satisfied with the response may file a complaint with the commission under 3 AAC 48.120 and 3 AAC 48.130. The utility shall retain these records for at least two years.
History
- Authority: AS 42.05.141; AS 42.05.291 AS 42.05.151; AS 42.05.361
- Eff. 1/1/87, Register 100; am 1/1/2016, Register 217
3 AAC 52.410 Establishment of permanent service
(a) A utility may require a new applicant for service to appear at the utility's designated place of business to produce proof of identity and complete the utility's application form. A utility may accept an application filed by an authorized representative of the applicant.
(b) A utility must obtain from each new applicant for service the following minimum information:
(1) name or names of applicant;
(2) service address or location, and telephone number;
(3) billing address and telephone number, if different than service address;
(4) address where service was provided previously;
(5) date when applicant will be ready to receive service;
(6) information as to whether service premises had been previously supplied with utility service;
(7) statement as to whether applicant is owner, tenant, or agent for the service premises; if the applicant is a tenant, name, address, and telephone number of owner or owner's agent;
(8) information concerning the purpose for which service is to be used, including the anticipated energy and demand requirements of the customer;
(9) type of life support equipment, if any, used by the customer or by a resident at the service premises; and
(10) the name and address of any third party that the customer wishes to designate to be copied with any termination notice issued under 3 AAC 52.450(c).
(c) At the time the customer applies for service, utility personnel shall advise the customer of the most economical class of service available and assist the customer in making an informed choice in service offerings if alternate classes of service are available to that customer.
(d) An applicant for service is responsible for all inside wiring, including the service entrance and meter socket.
(e) A utility may include in its tariff a charge for the establishment, disconnection, or reconnection of utility services.
(f) A utility shall establish service to existing facilities within five working days following a request by an applicant who has been accepted for service by the utility. For the purpose of this subsection, "existing facilities" means customer facilities that are ready and acceptable to the utility, where the utility needs only to install a meter, read a meter, or turn on the service.
(g) If, within the five-day period referred to in (f) of this section, a utility establishes service, during a period other than regular working hours at the customer's request, the utility may impose an after-hours charge for the service connection.
(h) If a utility cannot establish service to new customer facilities within 30 days after it receives an application, it shall, within 15 working days after the date of application, advise the applicant in writing of the reason for the delay, any interim type of service that may be available, and an estimated date when the requested service will be provided. For the purpose of this subsection, "new customer facilities" means customer facilities that require the utility to do more than install or read a meter before service can be provided.
(i) If a utility finds that it is unable to meet a previously scheduled date for establishment of service under (h) of this section, it shall advise the customer in a timely manner of the revised date upon which service will reasonably be available.
(j) A utility may refuse to establish new service only if any of the following conditions exist:
(1) an applicant falsifies any information required by (b) of this section and fails to subsequently correct the falsification with documentation acceptable to the utility;
(2) an applicant has an outstanding amount past due for utility service and has not made arrangements acceptable to the utility for payment of the outstanding balance;
(3) a condition exists or would exist upon establishment of service at the service premises which the utility believes is unsafe or hazardous to an applicant, a member of the public, the utility's personnel or facilities, or the integrity of the utility's energy delivery system;
(4) an applicant does not meet the credit criteria for waiver of deposit requirements under 3 AAC 52.420(c) and fails to provide the utility with a deposit;
(5) an applicant refuses to furnish money, services, equipment, or rights-of-way that have been specified by the utility in its tariff as a necessary condition for providing service; or
(6) an applicant refuses to become a member of an electric cooperative organized under AS 10.25 in an area for which the cooperative has a certificate to serve the applicant.
History
- Authority: AS 42.05.141; AS 42.05.291 AS 42.05.151; AS 42.05.361
- Eff. 1/1/87, Register 100; am 9/15/88, Register 107
3 AAC 52.415 Establishment of temporary service
(a) Before it establishes service, a utility may require an applicant for temporary service to pay the estimated cost of installing and removing the facilities necessary to furnish the desired service.
(b) If the duration of temporary service is to be less than one month, a utility may also require an applicant to advance a sum of money equal to the estimated bill for service. If the duration of temporary service is to exceed one month, the applicant may also be required to meet the deposit requirements set out in the utility's effective tariff.
(c) If, during the term of the temporary service agreement, the character of a temporary customer's operations changes or it appears that the duration of the service may be substantially longer than stated in the application, the utility shall classify the customer as permanent and may immediately apply the deposit and line extension rules in its effective tariff.
(d) No utility may allow a temporary service connection to continue longer than 12 months unless, for good cause shown, the utility has approved an extension of time for temporary service or unless application for permanent service has been made by the customer.
History
- Authority: AS 42.05.141; AS 42.05.291 AS 42.05.151; AS 42.05.361
- Eff. 1/1/87, Register 100
3 AAC 52.420 Deposit requirements
(a) A utility's electric service deposit payment and refund procedures, if any, must be set out in its effective tariff and must conform to the provisions of this section.
(b) A utility may require a separate deposit for each meter installed. The amount of a deposit required by the utility may not exceed the higher of two times the estimated average monthly bill at that location or two times the average monthly bill of that customer class.
(c) A utility shall refund a deposit for residential electric service within 90 days if the applicant is able to meet either of the following requirements:
(1) the applicant has previously established a good payment record with the utility by, for example, receiving service from the utility at another location within the past two years without delinquency in payment during the last 12 consecutive months of service; or
(2) the applicant provides a letter or other written verification from the electric utility that last provided comparable service to the applicant, stating that the applicant was not delinquent in payment for the last 12 consecutive months of service at the prior location.
(d) A utility shall issue to an applicant a written receipt for the amount of the deposit and a description of the utility's terms and conditions in its effective tariff for the refund of deposits. The utility may not require a customer to produce a deposit receipt in order to receive a refund of the deposit that is reflected on the utility's records.
(e) A utility's deposit policy must require refund of deposits and accrued interest within 30 days after the earlier of
(1) 12 months' continuous service, if the customer has not been past due in the payment of utility bills more than twice, has not been delinquent in the last six months, and is not past due at review; or
(2) termination of service, to the extent the amount held exceeds any balance due the utility for electric service and late fee for that account, including accrued finance charges.
(f) A utility may institute or adjust a deposit for an established customer consistent with 3 AAC 52.420(b) if the customer becomes delinquent in payment.
(g) A utility shall provide deferred payment deposit arrangements in cases of residential customer economic hardship.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.361 AS 42.05.151; AS 42.05.301
- Eff. 1/1/87, Register 100
3 AAC 52.425 Meter readings
(a) A utility shall separately bill for each meter at a customer's premises. The readings of two or more meters may not be combined unless otherwise provided for in a utility's effective tariff.
(b) If, for a reason described in 3 AAC 52.435(b)(2) or (b)(3), a utility is unable to read a meter during the scheduled meter reading cycle, the utility shall estimate the consumption for the billing period considering, where applicable, the customer's usage during the same month of the previous year or the amount of usage during the preceding month or months.
(c) After the second consecutive month of estimating a customer's bill, a utility must obtain an accurate reading of the meter unless the meter is inaccessible due to severe weather or other dangerous conditions.
(d) A utility may allow for customer reading of meters, subject to the following criteria:
(1) the utility shall inform the customer how to properly read the meter;
(2) the utility shall require that the customer read the meter on as close to the same day each month as practical;
(3) the utility shall specify the timing requirements for the customer to submit the monthly meter reading to conform with the utility's billing cycle;
(4) the utility shall verify the customer's reading of the meter at least once every six months; and
(5) if the customer fails to submit the meter reading on time, the utility may issue the customer an estimated bill, subject to the provisions of (c) of this section.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.291
- Eff. 1/1/87, Register 100
3 AAC 52.430 General billing and collection requirements
(a) A utility shall bill monthly for services rendered. Charges for service may commence when the service is installed and energized.
(b) Each bill for service must contain the following minimum information:
(1) customer's name;
(2) customer's service account number;
(3) rate schedule designation, if applicable;
(4) utility telephone number;
(5) meter reading at the start of the billing period;
(6) date and meter reading at the end of the billing period and number of days in the billing period;
(7) billing date;
(8) amount due and date after which payment is past due;
(9) past due amount, if applicable;
(10) delinquent amount, if applicable;
(11) late charge and finance charge, if applicable;
(12) customer charge, if applicable;
(13) total kilowatt-hour consumption;
(14) monthly kilowatt maximum demand and associated demand charge, if applicable;
(15) fuel or energy surcharge rate and associated total charge, if applicable;
(16) power cost equalization amount and statutory notice statement, if applicable;
(17) levelized billing amount due and accumulated variation in actual versus levelized billing amount, if applicable; and
(18) any other adjustment factor, applicable.
(c) A bill for utility service is due and payable on the date rendered, as designated under (g) of this section, but may not be considered past due or subject to a late charge or finance charge if paid within 25 days after the date rendered.
(d) All amounts due for service from one billing cycle which are not received by the utility as of the close of the subsequent billing cycle must be separately identified as past due on the subsequent monthly bill. Any late charge and finance charge must also be separately identified.
(e) All past due amounts and associated late and finance charges from one billing cycle which are not received by the utility as of the close of the following billing cycle must be separately identified on the next monthly bill and defined for billing purposes as "delinquent." A customer account with any unpaid delinquent charges is subject to disconnection under 3 AAC 52.450.
(f) A utility's tariff may provide for a finance charge for any payment that is past due or delinquent. The tariffed interest rate may not exceed the rate set by AS 45.45.010(a). A single late charge may be imposed when the account first becomes past due.
(g) A utility's tariff may designate either the postmark date or the billing date shown on the bill as the day the bill is rendered. However, the billing date may not differ from the postmark date by more than three working days.
(h) All payments by a customer must be made at, or mailed to, the office of the utility or to the utility's authorized representative.
(i) A customer's failure to receive a bill or notice that has been properly addressed and placed in the United States mail does not prevent the bill from becoming past due or delinquent, or excuse the customer's responsibility for payment.
(j) A customer who tenders a nonsufficient funds check is not relieved of the obligation to pay the utility under the original terms of the bill nor is that customer entitled to defer the utility's right to disconnect service for nonpayment of bills.
(k) A utility shall accommodate a customer's request to pay for utility services in advance.
(l) If a single application for service is made by two or more individuals together, a utility may collect the full amount owed from any one of the applicants. A utility shall notify customers of this provision at the time of application for service.
(m) If a customer, either in person or in writing, requests that service be disconnected, the utility may hold that customer responsible for all services up to the later of the date the disconnection is to be made or three working days after the customer places the request.
(n) Except as provided for in 3 AAC 52.465, a utility may render a "make-up" bill, without finance charge, for service that has not been billed as a result of utility billing error or more than two consecutive estimated bills. Make-up bills are subject to the following restrictions:
(1) the initial make-up bill must be issued within six months after provision of the previously unbilled service; and
(2) the period for payment of the make-up bill may, at the option of the customer,
(A) extend at least as long as the period during which the excess amount accrued; or
(B) extend as long as necessary so that the quantity of service billed in any one billing period is not greater than 150 percent of the normal estimated quantity for that period.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.291
- Eff. 1/1/87, Register 100
3 AAC 52.435 Estimated billings
(a) On each bill based on estimated usage, a utility shall indicate that it is an estimated bill.
(b) A utility may issue an estimated bill only if
(1) a customer who reads his or her own meter has failed to transmit the meter reading to the utility in accordance with the requirements of the utility's billing cycle;
(2) severe weather conditions prevent the utility from reading the meter; or
(3) circumstances make it dangerous or not reasonably feasible to read the meter.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.291
- Eff. 1/1/87, Register 100
3 AAC 52.440 Levelized billing
(a) A utility shall offer a levelized billing option to its residential electric heating customers and may offer the option to all customers. The utility's levelized billing option as described in its tariff must be periodically noticed to its customers. Upon customer request, a utility shall develop an estimate of the customer's levelized billing for a 12-month period, based upon the customer's actual consumption history for the most recent 12 months or other representative period. The utility may offer a levelized billing plan to customers with less than 12 months' consumption history.
(b) A utility shall inform customers applying for levelized billing as to how the levelized billing estimate was developed; how levelized billing will impact a customer's monthly utility bill; and that the utility may adjust the customer's monthly levelized bill under (c) of this section.
(c) A utility shall adjust a customer's levelized billing annually, or more frequently if the utility's estimate of the customer's usage or cost varies significantly from the customer's actual usage or cost. The utility or the customer may initiate the adjustment for causes including weather and rate changes.
(d) In the case of an overcollection determined at the time of the annual adjustment required by (c) of this section, a termination of service, or a termination of the levelized billing plan, a utility shall immediately refund or credit the excess payment to the customer account, as appropriate.
(e) A utility may not refuse enrollment in levelized billing to a customer whose current bill at the time of enrollment is past due or delinquent if the customer enters into a deferred payment agreement, as described in 3 AAC 52.445.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.291
- Eff. 1/1/87, Register 100
3 AAC 52.445 Deferred payment agreements
(a) For a residential customer who demonstrates that economic hardship prevents payment in full of a delinquent bill, a utility may not refuse to restore or continue service unless the customer refuses to agree to or comply with a deferred payment plan meeting the requirements of this section.
(b) A deferred payment agreement between a utility and a residential customer must provide that service will continue if the customer meets all of the following conditions:
(1) the customer agrees to pay one-third, or less at the option of the utility, of the outstanding bill at the time the parties enter into the deferred payment agreement;
(2) the customer agrees to pay all future bills for utility service in accordance with the effective billing and collection tariffs of the utility; and
(3) the customer agrees to pay the remaining outstanding balance in installments over a period not to exceed 12 months.
(c) The duration of a deferred payment agreement must be at least three months unless the customer agrees to a shorter period.
(d) A utility may include provisions for deferred payment agreements with non-residential customers in its tariff, or may negotiate them by special contract.
(e) In determining a reasonable deferred payment schedule, a utility and customer shall consider the following conditions, a list of which must be presented to the customer:
(1) size of the delinquent account;
(2) customer's ability to pay;
(3) customer's payment history;
(4) length of time the debt has been outstanding;
(5) circumstances that resulted in the outstanding debt; and
(6) any other relevant factors related to the circumstances of the customer.
(f) A deferred payment agreement must be in writing and must be signed by the customer and an authorized utility representative. A deferred payment agreement may include a finance charge as specified in the utility's effective tariff, but the charge may not exceed that allowed by AS 45.45.010(a).
(g) A utility shall offer comparable terms and conditions to customers with similar payment problems.
(h) If a customer fails to fulfill the terms of a deferred payment agreement, the utility may disconnect service under 3 AAC 52.450(d). The utility may offer a subsequent deferred payment agreement before disconnecting the customer's service.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.291
- Eff. 1/1/87, Register 100
3 AAC 52.450 Disconnection of service
(a) A utility may disconnect service to a customer without advance written notice under the following conditions:
(1) an immediate hazard exists which threatens the safety or health of the customer or the general population or the utility's personnel or facilities;
(2) the utility has evidence of meter tampering or fraud by the customer; or
(3) a customer has failed to comply with the curtailment procedures imposed by a utility during emergency supply shortages.
(b) A utility may commence disconnection procedures in accordance with the notice requirements of (c) of this section for any of the following reasons:
(1) failure of the customer to pay for utility service within 40 days after initial rendering of the bill unless the customer has entered into a deferred payment agreement;
(2) failure of the customer to meet or maintain the utility's deposit requirements;
(3) knowing and continued failure of the customer to provide the utility with reasonable access to its meter, equipment, or property;
(4) customer breach of a special contract between the utility and customer for utility service; or
(5) necessity of the utility to comply with an order or regulation of any governmental agency with proper jurisdiction.
(c) The following notice requirements apply to service disconnections permissible under (b) of this section:
(1) Except as provided in (2) of this subsection and in (d) of this section, a utility shall, at least 15 days before the scheduled date of disconnection, mail or deliver to the customer a written notice of its intent to disconnect service. A copy of the termination notice must be simultaneously forwarded to any third party designated by the customer on a service application. The notice must contain, at a minimum, the following information:
(A) the name and address of the customer whose service is to be disconnected and the service address, if different;
(B) the date on or after which service will be disconnected unless the customer takes appropriate action;
(C) an explanation of the reason for the proposed disconnection, including, if appropriate, a statement of the amount of the delinquent bill which the customer has failed to pay in accordance with the payment policy of the utility;
(D) if disconnection is premised on payment delinquency,
(i) a statement advising the customer to contact the utility for information regarding deferred payment and other procedures that the utility may offer to avoid disconnection of the customer's service; and
(ii) a list of any governmental or social assistance agencies, of which the utility is aware, that may offer energy assistance to qualified needy customers;
(E) a specific request that if a customer's residence is occupied by a person seriously ill, elderly, with a disability, or dependent on life support systems, the customer should notify the utility immediately of that circumstance for consideration in avoiding disconnection;
(F) a statement advising the customer that the utility's stated reason for the termination of service may be disputed and potentially resolved by contacting the utility at a specific address or telephone number;
(G) a statement that the utility retains the right to terminate service, after allowing a customer who disputes a bill the opportunity for a meeting, if the utility continues to find that the reason for the disconnection is just;
(H) the telephone number and mailing address of the commission, the Internet address of the commission's website, and a statement that the customer may file a complaint with the commission under 3 AAC 48.120 or 3 AAC 48.130 if not satisfied with the utility's response or resolution of a contested bill or tariff provision; and
(I) the amount of the utility's tariffed charges for disconnection and reconnection of service.
(2) If a utility has been informed that a residence is occupied by a person seriously ill, elderly, with a disability, or dependent on life support systems, the utility shall provide the notice required by (1) of this subsection at least 30 days before the scheduled date of disconnection. In any case in which a utility is notified after issuance of a termination notice that a customer's residence is occupied by a person seriously ill, elderly, with a disability, or dependent on life support systems, the utility shall extend the disconnection date by 15 days and notify the customer of the extension.
(3) Not less than three working days prior to disconnection, the utility shall attempt personal contact with the customer either by telephone or by visit of an authorized utility representative to the premises. If by telephone, the utility shall attempt to make contact no less than three times at various periods in the day or make other reasonable attempts to contact the customer. A utility shall keep records of all attempted and completed telephone contacts, showing at least the time, the person making the attempt, and the outcome. If by visit to the premises, the utility's authorized representative shall hand-deliver a "Shut-Off Notice" to the customer or, if no personal contact is possible, leave the notice in a prominent place. If the premises is 25 or more miles from the nearest location from which the utility delivers notices and if telephone contact cannot be made, a first class, postage-prepaid letter may serve as an alternative to a hand-delivered "Shut-Off" notice. This notice must be mailed no less than five working days before the date scheduled for disconnection. The "Shut-Off Notice" or completed telephone call must provide the customer with the following information:
(A) the name and address of the customer and the service address, if different;
(B) a concise statement of the reasons for the impending disconnection of service;
(C) the date on or after which service will be disconnected;
(D) the business office telephone number, after-business-hours telephone number if applicable, and the address of the utility where the customer may pay the delinquent bill, enter into a deferred payment agreement, or file a bill dispute complaint; and
(E) the amount of the charges for disconnection and reconnection of service.
(4) If a utility knows that a landlord/tenant relationship exists, the following additional provisions apply:
(A) For individually metered premises where the landlord is the customer, the utility shall notify the tenant in writing, at least 15 days before the scheduled date for disconnection of the service to the landlord, of the option of subscribing for service in the tenant's own name. However, the utility may not attempt to recover from the tenant or condition service to the tenant on the payment of any outstanding bills or other charges due from the outstanding account of the landlord. If, however, the tenant has a previously outstanding balance at the same service address, the utility may condition service to that tenant on terms acceptable to the utility for repayment of the outstanding balance plus a deposit in compliance with the utility's tariff. If the tenant declines to subscribe for individual service, or arrange for payment of the tenant's outstanding balance, if applicable, the utility may disconnect service without further notice, no earlier than the date scheduled for disconnection.
(B) For master-metered premises where the landlord is the customer, the utility
(i) after the expiration of the notice period provided in (1)-(3) of this subsection, shall additionally provide individual notice of the pending disconnection to each tenant served through the master meter at least 14 days before disconnection; or
(ii) at least 15 days before the scheduled date of disconnection of the landlord, shall give each tenant served through the master meter notice of the pending disconnection.
(C) If the tenant is the customer, the utility shall notify the landlord in writing, at least 15 days before the scheduled date of disconnect of the tenant, of the option of subscribing for the service provided at the tenant's premises. However, the utility may not attempt to recover from the landlord or condition service to the landlord on the payment of any outstanding bills or other charges due from the outstanding account of the tenant. If, however, the landlord has a previous outstanding balance at the same service address, the utility may condition service to that landlord on terms acceptable to the utility for repayment of the outstanding balance plus a deposit in compliance with the utility's tariff. If the landlord declines to subscribe for service or arrange for payment of the landlord's outstanding balance, if applicable, the utility may disconnect service without further notice.
(d) At least three working days before disconnection, a utility shall give written or telephone notice of disconnection, in accordance with (c)(3) of this section to a customer who has failed to comply with a deferred payment agreement.
(e) Within 10 days after the date specified on a "Shut-Off Notice", a utility may, without further notice, disconnect service to a customer between the daily business hours of 8:00 a.m. on Monday to 5:00 p.m. on Thursday. Service may not be disconnected on a Friday or a day preceding a holiday.
(f) A utility may not disconnect service to a customer for any of the following reasons:
(1) delinquency in payment for services rendered to a prior customer at the premises where service is being provided, except in the instance where the prior customer continues to reside on the premises;
(2) failure of the customer to pay for services or equipment not regulated by the commission;
(3) nonpayment of a bill related to another class of service at a different service location;
(4) the customer disputes the amount due on the delinquent account, complies with the utility's tariffed rules on customer bill disputes, and the dispute remains under investigation by the utility or by the commission; however, a customer shall pay any undisputed amount, and the utility may proceed to disconnect service in accordance with this section for failure to pay any undisputed amounts; or
(5) the customer is unable to pay the full delinquent amount due, qualifies under the utility's tariffed eligibility requirements for deferred payment agreements, and is in compliance with a signed, or is in the process of timely negotiating a, deferred payment agreement.
(g) A utility may remove any or all of its property installed on a customer's premises upon disconnection of service.
(h) A utility shall restore service within three working days after correction of the conditions that resulted in the disconnection. Correction includes execution of a deferred payment agreement. If service is restored during a period other than regular working hours at the customer's request, the utility may impose an after-hours charge for reconnection.
(i) Each utility shall maintain a record of each disconnection of service, including the reason for the disconnection. This record must be maintained for two years and must be available for commission inspection.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.291
- Eff. 1/1/87, Register 100; am 4/10/92, Register 122; am 11/6/2016, Register 220
3 AAC 52.455 Line extensions and service connections
(a) A utility's tariff for line extensions and service connections, or, if appropriate, special contracts under 3 AAC 48.390, must include the following:
(1) the amount of the costs, maximum footage, or equipment allowance for a line extension and a service connection, to be provided by the utility at no charge; the utility may specify different allowances for different customer classes;
(2) a requirement, subject to the provisions of (3) and (4) of this subsection and to (c) and (d) of this section, that a customer requesting a line extension or service connection must pay all costs which exceed the amount for which the utility is responsible under (a)(1) of this section;
(3) a statement that the customer is not responsible for the cost of system upgrade that is incidentally the result of the customer's addition to the system, if the customer has a load requirement comparable to those in the area being served by the facilities requiring upgrade;
(4) if required by the utility, an explanation that, in a service area where overhead installation is the standard, a customer requesting an underground line extension or service connection shall pay the difference between the cost for an overhead line extension or service connection and the actual cost of the underground installation in addition to the amount computed under (2) of this subsection;
(5) a statement that within a specified period, but in any event at least annually, any previously paid advances for construction of a completed line extension will be recomputed to reflect new customer additions; the utility shall require each new customer to pay, as an advance for construction, a prorated share of the original line extension cost; the utility shall refund or credit, as appropriate, any subsequent advances for construction to those customers who previously advanced money for connection to the completed line extension;
(6) a description of the period during which refunds of, or credits for, advances for construction will be paid;
(7) a description of the methodology the utility used to calculate the refund of, or credit for, an advance for construction required by (5) of this subsection; a customer who has advanced money for construction may request an annual report of customers added to the line extension;
(8) a statement that in no case may the amount of a refund or credit under (5) of this subsection exceed the amount originally advanced;
(9) a statement as to whether advances for construction will be interest bearing; and
(10) a statement that
(A) if a customer's authorized representative performs work adjacent to or within an easement or right-of-way, and it poses a hazard, is in violation of law, or significantly interferes with the utility's access to equipment, the utility shall notify the customer or the customer's authorized representative; and
(B) the customer does not promptly correct the situation, the utility may take the necessary actions to eliminate the hazard, obstruction, or violation at the customer's expense.
(b) A line extension and service connection agreement requiring payment by a customer must be in writing; must include the utility's estimate of the customer's share of the costs, the terms and conditions of payment, and the estimated date of completion of the work; and must be signed by the utility and by the customer or the customer's authorized representative.
(c) If the actual costs of construction of a line extension or service connection exceed the written estimate provided by the utility, no charges in excess of the written estimate plus 10 percent may be collected by the utility from the customer unless the additional charges are the result of additional construction work requested or caused by the customer subsequent to the initial written estimate. Other than additional costs necessitated by the customer, actual costs in excess of 110 percent of the initial written estimate must be borne by the utility as a cost of doing business. If the actual costs of construction for the customer's share are less than the written estimate, the customer will be charged the lesser amount, and, if the costs are prepaid, the difference between the actual cost of the construction and the advance payment made by the customer must be refunded to the customer.
(d) Instead of estimating line extension and service connection costs, a utility may elect to amend its tariff to provide a charge for line extensions and service connections based upon historical, average unit installation costs. A utility shall apply to the commission for periodic adjustments to its tariffed unit installation charge. Unless otherwise ordered by the commission, an application for a periodic adjustment is not subject to the provisions of 3 AAC 48.275(a).
(e) No utility may prohibit customers from constructing their own line extensions or service connections. A utility shall connect and maintain customer-constructed facilities under the same terms and conditions as utility-installed line extensions or service connections, except that the utility has the right to
(1) conduct reasonable inspections, charge inspection fees, assure that customer-constructed line extensions and service connections fully conform to the state minimum electrical standards adopted in AS 18.60.580; and
(2) require reasonable additional design, construction, and easement criteria established by the utility for customer-constructed facilities; any additional criteria must be set out in the utility's tariff and must be substantially equivalent to the utility's design standards for utility-installed line extensions and service connections; all criteria for customer-constructed line extensions and service connections must be published so as to be available upon request.
(f) A utility is responsible for energizing all customer-constructed line extensions or service connections after inspection and acceptance. The final inspection must be performed by the utility within five working days after receipt of notice of project completion from the customer. The energizing must be completed within five working days after inspection and acceptance by the utility or after a customer request for energizing, whichever is later.
(g) To assist those customers who construct their own line extensions or service connections, a utility shall aid in obtaining easements where none exist, and shall permit use of existing easements unless prohibited by law.
(h) To assure that all distribution plant of a utility is safely and adequately maintained on an equal basis, customer-installed plant must, upon acceptance by the utility, be given to the utility as a contribution-in-aid of construction.
(i) In those unusual circumstances where a utility believes that application of its line extension or service connection tariff will result in an inequitable apportionment of costs to one or more customers, the utility may request a waiver of its standard tariff provision and, upon proper application and advance approval of the commission, enter into a special contract with that customer under 3 AAC 48.390.
History
- Authority: AS 42.05.141; AS 42.05.291 AS 42.05.151; AS 42.05.311
- Eff. 1/1/87, Register 100
3 AAC 52.460 Quality of service
(a) A utility shall, except in the case of conditions caused by the utility's customers, maintain a steady-state standard frequency of 60 Hertz within the following tolerances:
(1) wherever 2,000 or more customers of one or more utilities are served by an isolated or interconnected transmission or distribution system, frequency must be held within plus or minus two percent of standard frequency; cumulative error registered by an electric clock over a 24-hour period may not exceed 90 seconds; and
(2) for other service areas, frequency must be held within plus or minus two cycles of standard frequency.
(b) A utility shall provide various standard voltages as stated in its tariff, and shall comply with the voltage standard set out in section C84.1-1982 of the American National Standards Institute.
(c) At intervals not to exceed one year a utility shall calculate customer primary voltage to determine the voltage profile of its primary distribution feeders over a 12-hour period during the season of peak demand and including the hours of maximum load. Records supporting the voltage profiles must include the location and parameters of any test and must be available for inspection by the commission for a period of two years after the date of the test.
(d) A utility shall establish planning and preventive maintenance procedures designed to provide a reasonable level of uninterrupted service and, if interruptions occur, to speed the restoration of service.
(e) If scheduled outages are necessary, a utility shall make a good faith effort to do the work at a time that will cause minimal inconvenience to customers, and to notify customers in advance of the interruption. A utility shall develop and maintain a plan for notifying customers of a scheduled outage that is appropriate to the utility's available personnel levels and geographic location. The utility's plan must include public notification when five percent or more of a utility's customers in its certificated service area or all customers within a reliability reporting area are affected.
(f) A utility shall develop and maintain an outage contingency plan, including a public information plan, which is appropriate to the utility's location and size.
(g) A utility shall maintain detailed records of planned and unplanned outages and of interruptions of service. These records must include the cause, whether planned or unplanned, duration, location of the outage, and the approximate number of customers affected. These records must be available to the public. For purposes of this subsection, a momentary fluctuation does not constitute an interruption of service.
History
- Authority: AS 42.05.141; AS 42.05.291 AS 42.05.151; AS 42.05.691
- Eff. 1/1/87, Register 100; am 11/22/2017, Register 224
3 AAC 52.462 Demand charge billings
A utility may not calculate demand charge billings for any self-generating customer based upon that customer's demand as measured during forced outages of customer generation facilities required to resynchronize and return the customer's self-generation output to parallel operation with the utility during the one-hour period after power to the self-generating customer is restored following a utility system outage that originates on the utility's side of its metering to the customer affecting service to the self-generating customer.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.391
- Eff. 11/9/2014, Register 212
3 AAC 52.465 Meter measurements, adjustments, and testing
(a) A utility shall sell all of its electricity on the basis of meter measurements, unless otherwise provided for in the utility's tariff or by special contract.
(b) Only meters that are known to be mechanically or electrically sound, calibrated correctly, and tested and adjusted, if necessary, in accordance with meter test standards as outlined in (c) of this section and in 3 AAC 52.475 may be installed by a utility.
(c) Repealed 4/24/2004.
(d) If a meter in service is tested and found to have over-registered the amount of power delivered by more than two percent, a utility shall recalculate the bills for service from the known date of error, and shall make a refund or credit for the entire over-registered amount if it exceeds $5. If the beginning date of error is unknown, the utility shall refund or credit the most recent customer of record for the billed error for the period since the meter was last tested, not to exceed six months, or the period during which the most recent customer of record received service through the meter, whichever period is less.
(e) If the meter of a residential or small commercial customer is tested and found to have under-registered the amount of energy or power delivered, a utility may not charge the customer for any underbillings unless there is evidence of meter or electric service tampering by the customer. If the meter of a wholesale, large power, or large commercial customer is tested and found to have under-registered the amount of energy or power delivered, a utility may charge the customer for underbillings for usage for no more than the four previous months unless there is evidence of meter or electric service tampering by the customer.
(f) A utility shall test a meter upon request of a customer, and may charge the customer for the meter test according to its effective tariff. However, the utility may not charge the customer for the meter test if the meter is found to over- or under-register by more than two percent and there is no evidence of meter or electric service tampering by the customer.
(g) Meters and associated service switches must be installed in a location where the meters will be readily and safely accessible for reading, testing, and inspection, and where such activities will cause the least interference and inconvenience to the customer. The customer shall provide sufficient and proper space for installation of meters, at a suitable and easily accessible location without cost to the utility.
(h) If where the meter or service line location on the customer's premises is changed at the request of the customer or is changed as a result of alterations to the customer's premises, the customer shall provide and have installed at his or her expense all wiring and equipment necessary for relocating the meter and service line connection, and the utility may charge for moving the meter and service line.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.341 AS 42.05.151; AS 42.05.331; AS 42.05.351
- Eff. 1/1/87, Register 100; am 9/15/88, Register 107; am 4/24/2004, Register 170
3 AAC 52.470 Engineering standards; energy purchase contracts
(a) A utility shall construct, maintain, and operate its plant in accordance with accepted engineering practices to reasonably assure service reliability, service quality, and the safety of persons and property.
(b) A utility shall design, construct, and maintain generation, transmission, and distribution facilities in conformance with the state minimum electrical safety standards as adopted in AS 18.60.580.
(c) A utility shall normally maintain generating capacity supplemented by the electric power regularly available from other sources, sufficient to meet all reasonable demands for service and provide a reasonable reserve for emergencies. In addition to any other standards imposed by the commission, noninterconnected utilities shall maintain, at a minimum, adequate reserve capacity to cover the loss of the utility's largest generating unit. Generating capacity assigned to interruptible customers may be considered for reserve capacity determination.
(d) Before entering into a contract with a regulated utility for the purchase of energy, including electrical energy or capacity, natural or manufactured gas, diesel oil or gasoline, or any other fuel source, for a term exceeding 12 months, a utility shall request commission approval in accordance with 3 AAC 48.200 - 3 AAC 48.390 and provide the following information:
(1) a copy of the proposed contract;
(2) the load forecasting data that justifies the need for the contract; and
(3) documentation that the proposed contract is the most feasible means available to the utility for meeting the forecasted load.
(e) Upon entering into a contract with a nonregulated vendor, other than a contract with a qualifying facility as defined in 3 AAC 50.820(11), for the purchase of energy, including electrical energy or capacity, natural or manufactured gas, diesel oil or gasoline, or any other fuel source, for a term exceeding 12 months, a utility shall file with the commission the following information, in accordance with 3 AAC 48.095:
(1) a copy of the contract;
(2) the load forecasting data which justifies the need for the contract; and
(3) documentation that the contract is the most feasible means available for meeting the forecasted load.
History
- Authority: AS 42.05.141; AS 42.05.291 AS 42.05.151; AS 42.05.691
- Eff. 1/1/87, Register 100; am 1/11/2004, Register 169; am 11/6/2016, Register 220
3 AAC 52.475 Maintenance and testing standards
(a) A utility shall adopt and pursue a maintenance program of periodic tests, inspections, and field maintenance to achieve efficient operation of its system so as to permit safe, adequate, and reliable service at all times. Each utility shall maintain reasonable records indicating compliance with this subsection.
(b) A utility with generating facilities shall maintain for each generating station a station log that must include the following information:
(1) the daily hours of operation of each machine;
(2) a record of any period during which a generating unit is unavailable for service and the reason why; and
(3) the dates when repair or maintenance work for a machine was performed and an explanation of the nature of the work.
(c) A utility shall maintain or have access to the necessary facilities, instruments, and equipment for testing its metering and recording equipment and shall adopt prudent utility practices for periodic testing and maintenance, with due regard to equipment manufacturers' recommendations and applicable safety codes, to ensure the integrity of its operation.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.341 AS 42.05.151; AS 42.05.331
- Eff. 1/1/87, Register 100
3 AAC 52.480 Safety standards for utility plant
(a) A utility shall exercise reasonable care to promote safe working conditions and reduce hazards to its employees, its customers, and the general public.
(b) A utility shall use the applicable provisions of the state minimum electrical safety standards adopted in AS 18.60.580 as a basis for determining safe practices.
(c) A utility shall maintain a record of all accidents involving the utility or utility plant and resulting in injuries to the public.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.291
- Eff. 1/1/87, Register 100
3 AAC 52.485 Safety standards for interconnecting to qualified cogenerators and small power producers
(a) No utility may interconnect with a qualifying facility that fails to conform to the edition of the National Electrical Code adopted in AS 18.60.580.
(b) No utility may interconnect with a qualifying facility that does not provide a means of disconnecting with provision for padlocking in the open position by the utility. This device, or a supplementary device, must be capable of switching under full load conditions and must be clearly labeled and accessible to utility personnel.
(c) No utility may interconnect with a qualifying facility that does not provide overcurrent protection of adequate interrupting capacity and design, in conformance with the utility's overcurrent practices for similar feeders and loads, for the feeder serving as the intertie to the utility system. Automatic reclosing by the qualifying facility is prohibited unless the facility has received prior approval from the utility as not posing a threat to life or property.
(d) A utility shall provide overcurrent protection in accordance with the utility's overcurrent practices for similar feeders and loads for the feeder extension serving as the intertie to a qualifying facility.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.291
- Eff. 1/1/87, Register 100
3 AAC 52.490 Other general information to be furnished to the commission
(a) A utility shall publish in its tariff and on its website as available the location and telephone number of each of its business offices, each telephone number to report service outages, and the normal hours of operation of each office.
(b) A utility shall submit information to the commission regarding service outages as follows:
(1) for an outage that is an immediate threat to the health or safety of customers within the utility's certificated service area, the utility shall notify the commission as soon as reasonably possible; the utility shall report the outage by electronic mail, by telephone, or in person, to the commission at the commission's office in Anchorage, Alaska; the notification must include
(A) the location and time of the outage;
(B) the number of fatalities and personal injuries reported to the utility; and
(C) each individual to be contacted by the commission for additional information;
(2) for an outage described in (1) of this subsection or an outage from whatever cause, that persists for 30 minutes or more, and affects five percent or more of a utility's customers within its certificated service area or all customers within a reliability reporting area, the utility shall file with the commission, in accordance with 3 AAC 48.095 and not later than five business days after the conclusion of the outage, a written report that must include
(A) the location and time of the outage;
(B) the duration of the outage;
(C) the total number of customers affected and the number of customers without service at periodic intervals;
(D) the cause of the outage, if known;
(E) the number of fatalities and personal injuries; and
(F) each individual to be contacted by the commission for additional information;
(3) as a part of the utility's annual report to the commission under AS 42.05.451, the utility shall file a cumulative 12-month report of its service outages; the report must include
(A) the results of the calculated SAIDI, SAIFI, and CAIDI indices required under 3 AAC 52.495(f);
(B) a summary of the estimation methodologies that the utility used under 3 AAC 52.495(d) for the calculation of reliability information;
(C) a summary addressing any changes that the utility has made in the collection of data and the calculation, estimation, and reporting of reliability information in comparison to the prior reporting period; the utility shall explain why the changes occurred and explain how the changes affect the comparison of newer and older information; and
(D) a map showing the reliability reporting areas.
(c) A utility shall file with the commission not later than April 30 of each year a copy of the report made to the United States Environmental Protection Agency in accordance with 40 C.F.R. Part 98 (mandatory greenhouse gas reporting).
History
- Authority: AS 42.05.141; AS 42.05.291 AS 42.05.151; AS 42.05.501
- Eff. 1/1/87, Register 100; am 11/6/2016, Register 220; am 11/22/2017, Register 224
3 AAC 52.495 Electric service reliability rules
(a) To the extent necessary to calculate and report reliability indices as required under 3 AAC 52.490 - 3 AAC 52.495, an electric utility shall comply with IEEE Standard 1366, IEEE Guide for Electric Power Distribution Reliability Indices, revised as of May 14, 2012 (IEEE 1366 - 2012) and adopted by reference. If there is a conflict between any provision in IEEE Standard 1366 and 3 AAC 52.490 - 3 AAC 52.495, the provisions of 3 AAC 52.490 - 3 AAC 52.495 govern.
(b) An electric utility shall include both "distribution system" outages and "interruptions caused by events outside of the distribution system" as defined in IEEE Standard 1366 in the electric utility's record keeping, calculations, reporting, and filing as required under 3 AAC 52.490.
(c) Except as provided in (d) of this section, an electric utility shall keep an accurate record of each outage that affects one or more customers. Each record must contain at least
(1) the date and time the outage occurred; if the exact time is unknown, the beginning of an outage is recorded as the earlier of an automatic alarm or the reported initiation time;
(2) the date and time service was restored;
(3) the number of customers affected by the outage; and
(4) the cause of the outage, if known.
(d) For outages after which an electric utility cannot obtain accurate data, the electric utility shall make reasonable estimates.
(e) An electric utility shall retain for at least five full calendar years the records associated with (c) of this section.
(f) Using records collected under (c) and (d) of this section, after December 31 of each year an electric utility shall calculate the system average interruption duration index (SAIDI), system average interruption frequency index (SAIFI), and customer average interruption duration index (CAIDI) for the previous reporting period. These indices are to be calculated for
(1) the certificated service area; and
(2) each reliability reporting area.
(g) When accurate data is not available, an electric utility may use estimates in calculating actual SAIDI, SAIFI, or CAIDI indices required under (f) of this section.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.291
- Eff. 11/22/2017, Register 224
3 AAC 52.500 Definitions
Unless the context indicates otherwise, in 3 AAC 52.400 - 3 AAC 52.500
(1) "advance for construction" means money provided to a utility by a customer for a line extension or service connection, the value of which may be refundable by the utility;
(2) "applicant" means a person requesting the utility to supply electric service;
(3) "application" means a request to the utility for electric service, but not a mere inquiry as to the availability or charges for the service;
(4) "billing cycle" means the time interval between two consecutive bills for electric service as prescribed in a utility's tariff;
(5) "cogeneration" means the production of electric energy and forms of useful thermal energy (such as heat or steam), employed for industrial, commercial, heating, or cooling purposes, through the sequential use of energy;
(6) "commission" means the Regulatory Commission of Alaska;
(7) "contribution-in-aid of construction" means money or facilities provided to a utility by a customer for a line extension or service connection, the value of which is not refundable by the utility;
(8) "customer" means a person, firm, partnership, association, corporation, municipality, cooperative organization or governmental agency supplied with electric service by a utility;
(9) "customer charge" means the amount a customer must pay a utility for the availability of electric service, excluding any electricity used, as provided for under 3 AAC 48.540(f) and as specified in the utility's effective tariff;
(10) "delinquent" means, for billing purposes, all past due amounts and associated finance and late charges that are not received by the utility within 40 days after the date the bill that is past due was rendered;
(11) "distribution lines" means the utility lines operated at distribution voltage which are constructed along public roadways or other bona fide rights-of-way, including easements on a customer's property;
(12) "effective tariff" means every rate schedule, or provision of one, and all terms, conditions, and regulations for furnishing electric service that have been filed, noticed, and placed in effect in full compliance with all procedural requirements established by law and commission regulations;
(13) "finance charge" means the tariffed percentage interest rate or charge, not to exceed that allowable under AS 45.45.010(a), levied by a utility on an account for which payment is past due or delinquent;
(14) "kilowatt" means a unit of power equal to 1,000 watts;
(15) "kilowatt-hour" means electric energy equivalent to the amount of electric energy delivered in one hour at a constant rate of one kilowatt;
(16) "late charge" means the tariffed penalty amount levied as a one-time charge to an account when the account first becomes past due;
(17) "line extension" means any additional lines and equipment capable of serving more than one customer and necessary to extend the electric distribution system of a utility to new customers;
(18) "meter" means a device that measures and registers electrical quantities;
(19) "meter tampering" means illegally altering a meter by methods such as bypassing a meter, using magnets to slow the meter recording, or breaking meter seals;
(20) "outage" means an interruption of electric service which requires utility intervention for resumption of service when service cannot be resumed by the automatic recycling of utility equipment;
(21) "past due" means, with respect to a customer's account for electric service, an amount billed for which payment was not received by the utility within 25 days after the date the bill was rendered;
(22) "premises" means a piece of land or real estate, including buildings and other improvements;
(23) "qualifying facility" means a cogeneration facility or a small power production facility as defined in 3 AAC 50.820(11);
(24) "rendered" means the date a bill is postmarked or the billing date shown on the bill, but the billing date cannot differ from the postmark or mailing date by more than three working days;
(25) "residential use" means use of electricity for domestic purposes such as space heating, air conditioning, water heating, cooking, and clothes drying, and includes service in apartment buildings, mobile home parks, and other multi-unit residential buildings;
(26) "service complaint" is a claim or dispute regarding a customer's electric service;
(27) "service connection" means the line extending from a distribution line or transformer to a customer's premises or point of delivery where the line, as constructed, is only capable of serving that customer's premises;
(28) "steady-state standard frequency" means the frequency measured over time, ignoring momentary fluctuations due to the addition or subtraction of large loads to the system;
(29) "temporary service" means service to premises or enterprises that are temporary in character, or where it is known in advance that the service will be of limited duration;
(30) "utility" means an electric utility subject to the jurisdiction of the commission; and
(31) "utility plant" means all real estate, fixtures, and property that is owned, controlled, operated, or managed in connection with or to facilitate the production, generation, transmission, and delivery of electricity for light, heat, or power.
(32) "self-generating customer" means a retail electric customer capable of generating some or all of its power requirements using electric generation equipment interconnected with the electric utility's plant in a manner that allows parallel operation.
(33) "business day" means a day other than Saturday, Sunday, or a state legal holiday;
(34) "business hours" means the hours of 8:00 a.m. to 5:00 p.m. on a business day;
(35) "CAIDI" means customer average interruption duration index as defined in IEEE Standard 1366, adopted by reference in 3 AAC 52.495(a);
(36) "immediate threat" means a situation which urgent corrective action is necessary;
(37) "public notification" means the use of broadcast or print media, public postings, or other means appropriate to effectively notify customers of a scheduled outage;
(38) "reliability reporting area" means
(A) a non-interconnected independent electric system within the utility's certificated service area; or
(B) a geographic subdivision of a utility's certificated service area that is a distinct area for administration, operation, or data collection within the utility's certificated service area;
(39) "reporting period" means the 12-month period, based on a calendar year, for which the electric utility is reporting reliability performance;
(40) "SAIDI" means system average interruption duration index as defined in IEEE Standard 1366, adopted by reference in 3 AAC 52.495(a);
(41) "SAIFI" means system average interruption frequency index as defined in IEEE Standard 1366, adopted by reference in 3 AAC 52.495(a).
History
- Authority: AS 42.05.141; AS 42.05.331; AS 42.05.361 AS 42.05.151; AS 42.05.341; AS 42.05.501 AS 42.05.291; AS 42.05.351; AS 42.05.691
- Eff. 1/1/87, Register 100; am 4/10/92, Register 122; am 4/24/2004, Register 170; am 11/9/2014, Register 212; am 11/22/2017, Register 224
Article 6 Adjustment Clause
3 AAC 52.501 Application and waiver
(a) Each electric utility subject to the regulatory jurisdiction of the commission must comply with the provisions of 3 AAC 52.501 - 3 AAC 52.504 and 3 AAC 52.507 - 3 AAC 52.519.
(b) Each gas utility subject to the regulatory jurisdiction of the commission must comply with the provisions of 3 AAC 52.501 - 3 AAC 52.502 and 3 AAC 52.505 - 3 AAC 52.519.
(c) Unless otherwise required under AS 42.05, a requirement in 3 AAC 52.501 - 3 AAC 52.519 may be modified or waived, in whole or in part, by order of the commission, on the commission's own motion or on a showing that the waiver or modification is in the public interest. A utility shall file and the commission will consider an application for waiver in accordance with 3 AAC 48.805.
History
- Authority: AS 42.05.141; AS 42.45.110; AS 42.45.170 AS 42.05.151; AS 42.45.130 AS 42.05.381; AS 42.45.160
- Eff. 1/11/2004, Register 169
3 AAC 52.502 Criteria for adjustment clauses
(a) Cost elements included in an adjustment clause must be
(1) subject to change at a rate that would cause financial harm to the utility if the costs were recovered exclusively in base rates;
(2) beyond the control of the utility; and
(3) easily verifiable.
(b) The commission will review cost elements included in a utility's adjustment clause in each general rate case. A utility may not include a cost element in its adjustment clause unless the commission has previously approved that cost element in a general rate case or in a separate tariff filing in accordance with 3 AAC 52.504(c) or 3 AAC 52.506(c).
(c) Notwithstanding (b) of this section, a utility with an approved adjustment clause on January 11, 2004 may, unless the commission orders otherwise, continue to use its approved methodology and include all approved cost elements in its filings until its next general rate case.
History
- Authority: AS 42.05.141; AS 42.45.110; AS 42.45.170 AS 42.05.151; AS 42.45.130 AS 42.05.381; AS 42.45.160
- Eff. 1/11/2004, Register 169
3 AAC 52.503 Adjustment clauses for electric utilities
(a) A cost-of-power adjustment (COPA) for an electric utility must provide for an adjustment, per kilowatt-hour of sales, equal to the difference between the utility's cost of power included in its base rates and the utility's projected cost of power according to the following formula:
COPA = (Cp + B) - CbSp
where:
Cp = the total projected cost of fuel and purchased power for the future period;
B = the balance in the cost-of-power balancing account;
Sp = the projected kilowatt-hour sales for the future period; and
Cb = the base cost of power.
(b) In the formula set out in (a) of this section,
(1) the balance in the cost-of-power balancing account must be entered into the COPA calculation and derived on a monthly basis, with the following entries made:
(A) a debit entry equal to the actual monthly amounts for all cost elements approved for recovery under 3 AAC 52.502;
(B) a credit entry equal to the total number of kilowatt-hours sold during the month multiplied by the cost of power per kilowatt-hour included in base rates;
(C) a credit entry equal to the total number of kilowatt-hours of energy sold during the month multiplied by the actual COPA assessed during that month;
(D) additional entries that the commission approves on a showing of good cause;
(2) the total projected cost of fuel and purchased power for the future period, and the projected kilowatt-hour sales for the future period, must be projected for the future period defined in the utility's COPA methodology approved by the commission; and
(3) in a general rate case, the electric utility must reset the base cost of power; the reset base cost of power includes all test year fuel and purchased power costs that the commission approves for recovery through the COPA; however, an electric utility may propose, or the commission may require, that the base cost of power be set at zero, to permit the entire approved cost of fuel and purchased power to be recovered through the COPA.
History
- Authority: AS 42.05.141; AS 42.45.110; AS 42.45.170 AS 42.05.151; AS 42.45.130 AS 42.05.381; AS 42.45.160
- Eff. 1/11/2004, Register 169
3 AAC 52.504 Filing requirements for electric utilities
(a) An electric utility shall submit each COPA as a tariff filing in compliance with the applicable provisions of 3 AAC 48.200 - 3 AAC 48.380. With its first COPA tariff filing after January 11, 2004, an electric utility must submit a copy of each contract required under 3 AAC 52.470(d) - (e), if that contract is not already on file with the commission.
(b) An electric utility may implement a COPA filing that does not include a new methodology or new cost element immediately upon filing with the commission. The COPA filing is subject to subsequent review, adjustment, and approval by the commission.
(c) If an electric utility seeks, outside of a general rate case, to change its COPA methodology or include any new cost element in its COPA, it must first obtain the commission's approval. In a separate tariff filing, the utility must identify the proposed change in methodology and any new cost element. An electric utility must justify the proposed change in methodology and show that any new cost element meets the criteria of 3 AAC 52.502(a).
(d) For a COPA filing under (b) of this section, an electric utility is not required to give public notice under AS 42.05.411. However, if an electric utility seeks, outside of a general rate case, a change to its COPA methodology, a change to a COPA cost element, or a change to its COPA that the commission considers to be of significant interest to the public, the commission will require notice to the public in a form that the commission considers sufficient for the particular changes proposed.
(e) With each COPA tariff filing, an electric utility must identify the percentage change in the average cost of power and explain the reasons for the change.
(f) Within 45 days after the last day of any month in which the absolute value of the cost-of-power balancing account balance exceeds 10 percent of the electric utility's annual fuel and purchased power costs, the electric utility shall submit a COPA tariff filing.
(g) With each COPA tariff filing, the electric utility must submit the following information to support entries in the cost-of-power balancing account for the historical period and projections for the future period:
(1) a copy of each invoice for costs recovered through the COPA;
(2) records of monthly fuel inventories, and of changes to those inventories;
(3) a report of actual monthly kilowatt-hour sales by customer class;
(4) reports by unit of actual monthly
(A) gross kilowatt-hour generation; and
(B) station service;
(5) a report showing the actual monthly cost per kilowatt-hour for each fuel and purchased power source, and a brief explanation for any change in that cost;
(6) a report calculating the monthly margins for economy energy sales and the average price per kilowatt-hour for economy energy purchases;
(7) the COPA calculation;
(8) documentation in support of projected costs and sales for the future period;
(9) a calculation of monthly balances in the cost-of-power balancing account;
(10) revised tariff sheets;
(11) other information that the commission considers necessary to explain entries in the cost-of-power balancing account or to explain the proposed COPA calculation.
(h) Repealed 11/6/2016.
(i) An electric utility may request, or the commission may order, the correction or adjustment of actual entries in the cost-of-power balancing account for a one-year period. The utility must describe, quantify, and justify each proposed adjustment. Unless the commission orders otherwise, an error must be corrected through an addition or subtraction to the cumulative over- or under-recovery balance.
History
- Authority: AS 42.05.141; AS 42.05.711; AS 42.45.160 AS 42.05.151; AS 42.45.110; AS 42.45.170 AS 42.05.381; AS 42.45.130
- Eff. 1/11/2004, Register 169; am 11/6/2016, Register 220
3 AAC 52.505 Adjustment clauses for gas utilities
(a) A gas cost adjustment (GCA) for a gas utility must provide for an adjustment, per Mcf of sales, equal to the difference between the utility's gas costs included in its base rates and the utility's projected gas costs according to the following formula:
GCA=(Cg + B)-Cb _______________ Sg
where:
Cg = the total projected cost of gas for the future period;
B = the balance in the cost-of-gas balancing account;
Sg = the projected Mcf sales for the future period; and
Cb = the base cost of gas.
(b) In the formula set out in (a) of this section, the
(1) the balance in the cost-of-gas balancing account must be entered into the GCA calculation and derived on a monthly basis, with the following entries made:
(A) a debit entry equal to the actual monthly amounts for all cost elements approved for recovery under 3 AAC 52.502;
(B) a credit entry equal to the total number of Mcf of gas sold during the month multiplied by the cost of gas per Mcf included in base rates;
(C) a credit entry equal to the total number of Mcf of gas sold during the month multiplied by the actual GCA assessed during that month; and
(D) additional entries that the commission approves on a showing of good cause;
(2) the total projected cost of gas for the future period, and the projected Mcf sales for the future period, must be projected for the future period defined in the utility's GCA methodology approved by the commission; and
(3) in a general rate case, the gas utility must reset the base cost of gas; the reset base cost of gas includes all test year gas costs that the commission approves for recovery through the GCA; however, a gas utility may propose, or the commission may require, that the base cost of gas be set at zero, to permit the entire approved cost of gas to be recovered through the GCA.
History
- Authority: AS 42.05.141; AS 42.45.110; AS 42.45.170 AS 42.05.151; AS 42.45.130 AS 42.05.381; AS 42.45.160
- Eff. 1/11/2004, Register 169
3 AAC 52.506 Filing requirements for gas utilities
(a) A gas utility shall submit each GCA as a tariff filing in compliance with the applicable provisions of 3 AAC 48.200 - 3 AAC 48.380. With its first GCA tariff filing after January 11, 2004, a gas utility must submit a copy of each gas supply contract required under 3 AAC 52.470(d) - (e), if that contract is not already on file with the commission.
(b) A gas utility may implement a GCA revision that does not include a new methodology or new cost element immediately upon filing with the commission. The GCA filing is subject to subsequent review, adjustment, and approval by the commission.
(c) If a gas utility seeks, outside of a general rate case, to change its GCA methodology or include any new cost element in its GCA, the utility must first obtain the commission's approval. In a separate tariff filing, the utility must identify the proposed change in methodology and any new cost element. A gas utility must justify the proposed change in methodology and show that any new cost element meets the criteria of 3 AAC 52.502(a).
(d) For a GCA filing under (b) of this section, a gas utility is not required to give public notice under AS 42.05.411. However, if a gas utility seeks, outside of a general rate case, a change to its GCA methodology, a change to a GCA cost element, or a change to its GCA that the commission considers to be of significant interest to the public, the commission will require notice to the public in a form that the commission considers sufficient for the particular changes proposed.
(e) With each GCA tariff filing, the gas utility must identify the percentage change in the average cost of gas and explain the reasons for the change.
(f) Within 45 days after the last day of any month in which the absolute value of the cost-of-gas balancing account balance exceeds 10 percent of the gas utility's annual gas costs, the gas utility shall submit a GCA tariff filing.
(g) With each GCA tariff filing, the gas utility must submit the following information to support entries in the cost-of-gas balancing account for the historical period and projections for the future period:
(1) a copy of each invoice for costs recovered through the GCA;
(2) a report of gas volumes sold by customer class;
(3) the GCA calculation;
(4) documentation in support of projected costs and sales for the future period;
(5) a calculation of monthly balances in the cost-of-gas balancing account;
(6) revised tariff sheets;
(7) other information that the commission considers necessary to explain entries in the cost-of-gas balancing account or to explain the proposed GCA calculation.
(h) Repealed 11/6/2016.
(i) A gas utility may request, or the commission may order, the correction or adjustment of actual entries in the cost-of-gas balancing account for a one-year period. The utility must describe, quantify, and justify each proposed adjustment. Unless the commission orders otherwise, an error must be corrected through an addition or subtraction to the cumulative over- or under-recovery balance.
History
- Authority: AS 42.05.141; AS 42.05.711; AS 42.45.160 AS 42.05.151; AS 42.45.110; AS 42.45.170 AS 42.05.381; AS 42.45.130
- Eff. 1/11/2004, Register 169; am 11/6/2016, Register 220
3 AAC 52.507 Affiliated interest transactions
(a) If an electric or gas utility includes in its COPA or GCA costs from transactions with affiliated interests, the utility must file the following information with each adjustment clause tariff filing:
(1) the identity of each affiliated interest;
(2) a description of the relationship between the utility and the affiliated interest;
(3) a list of the products and services provided to the utility by the affiliated interest;
(4) the prices and quantity of products or services provided to the utility by the affiliated interest;
(5) a list of alternative suppliers of the product purchased from the affiliated interest;
(6) if applicable, a report showing which products or services provided to the utility by the affiliated interest are also supplied to other customers by the affiliated interest, including prices and quantities.
(b) The commission may investigate, in a general rate proceeding or a separate formal proceeding, the reasonableness of costs that are associated with affiliated interest transactions and are recovered in a utility's COPA or GCA. In addition to the information required under (a) of this section, upon commencement of a formal investigation, the utility shall file
(1) a description of costs from affiliated interest transactions that the utility proposes to recover through the COPA or GCA;
(2) the computational methodology for the price the utility pays to the affiliated interest for the product or service; and
(3) a comparison of the price the utility pays to the affiliated interest with the prevailing market price, if any, and a comparison of other relevant characteristics, including quality and contractual terms and conditions.
History
- Authority: AS 42.05.141; AS 42.45.110; AS 42.45.170 AS 42.05.151; AS 42.45.130 AS 42.05.381; AS 42.45.160
- Eff. 1/11/2004, Register 169
3 AAC 52.519 Definitions
(a) In 3 AAC 52.501 - 3 AAC 52.519, unless the context requires otherwise,
(1) "adjustment clause" means a mechanism designed to recover changes in gas, fuel, and purchased power expenses; "adjustment clause" includes COPAs and GCAs;
(2) "affiliated interest" has the meaning given in AS 42.05.990;
(3) "base cost of gas" means a rate component that
(A) is used in the calculation of the GCA;
(B) reflects the gas cost per Mcf; and
(C) is included in the utility's base rates for gas service;
(4) "base cost of power" means a rate component that
(A) is used in the calculation of the COPA;
(B) reflects the cost per kilowatt-hour of fuel and purchased power; and
(C) is included in the utility's base rates for electric service;
(5) "base rates" means the utility's currently effective rates for gas or electric service as authorized by the commission in the utility's last general rate case;
(6) "COPA" means a cost-of-power adjustment for an electric utility;
(7) "GCA" means a gas cost adjustment for a gas utility;
(8) "general rate case" means a proceeding, initiated by a filing with supporting information described in 3 AAC 48.275, in which the commission reviews a utility's costs and revenues to establish the utility's base rates and adjustment clause methodology;
(9) "Mcf" or "Mcf of gas" means one thousand cubic feet of gas measured at 60° Fahrenheit and 14.65 pounds per square inch, absolute;
(10) "station service" means kilowatt-hour consumption by the utility to run the power house.
(b) Definitions set out in 3 AAC 48.820, 3 AAC 52.500, and 3 AAC 52.690 also apply to 3 AAC 52.501 - 3 AAC 52.519.
History
- Authority: AS 42.05.141; AS 42.45.110; AS 42.45.170 AS 42.05.151; AS 42.45.130 AS 42.05.381; AS 42.45.160
- Eff. 1/11/2004, Register 169
Article 7 Criteria for Determination of Power Cost Equalization
3 AAC 52.600 Applicability, purposes, and waiver
(a) The provisions of 3 AAC 52.600 - 3 AAC 52.690 apply to all electric utilities participating in the power cost equalization program established in AS 42.45.100 - 42.45.190.
(b) The purposes of 3 AAC 52.600 - 3 AAC 52.690 are to establish criteria for the determination of power cost equalization per kilowatt-hour and to encourage economic and efficient practices by participating electric utilities.
(c) Unless otherwise required under AS 42.05 or AS 42.45, a requirement in 3 AAC 52.600 - 3 AAC 52.690 may be modified or waived, in whole or in part, by order of the commission and a showing of good cause or on the commission's own motion. An applicant shall file and the commission will consider an application in accordance with 3 AAC 48.805. In considering an application, the commission will consider a participating electric utility's size, location, and accessibility, and other local conditions.
History
- Authority: AS 42.05.141; AS 42.45.110; AS 42.45.160 AS 42.05.151; AS 42.45.130; AS 42.45.170
- Eff. 10/28/89, Register 112; am 5/18/96, Register 138; am 9/11/2004, Register 171
3 AAC 52.610 Computation of power cost equalization
(a) Power cost equalization per kilowatt-hour is determined separately for each rate schedule.
(b) The power cost equalization per kilowatt-hour for each rate schedule is the least of
(1) the average rate per kilowatt-hour for that rate schedule;
(2) the amount equal to .95 x ($1 - B) where B is the base amount set by the commission under (c) of this section;
(3) the amount equal to .95 x (F + NF - A - B) where F is the total fuel cost per kilowatt-hour;
F is the total fuel cost per kilowatt-hour;NF is the total nonfuel cost per kilowatt-hour; andA is other assistance per kilowatt-hour that reduces a custom-
er's rate on a kilowatt-hour basis and that is provided to the
utility within 60 days before the commission determines the
power cost equalization per kilowatt-hour; andB is the base amount established by order of the commission
under (c) of this section.
(c) During each fiscal year the commission will notify the public and each utility receiving power cost equalization of a proposed base amount per kilowatt-hour and the basis for that amount. Within 45 days after notice of the proposed base amount is issued, the commission will hold a public hearing to receive comments on the proposed base amount. Within 60 days after notice of the proposed base amount is issued, the commission will issue an order establishing the base amount.
(d) In the case of all service provided under a flat kilowatt-hour rate structure and in the case of service provided under a declining block rate structure to a customer that is not a community facility, the average rate per kilowatt-hour is calculated by dividing the cost of the first 750 kilowatt-hours of service by 750 kilowatt-hours and subtracting the base amount established under (c) of this section from the result. In calculating the cost of the first 750 kilowatt-hours of service, all energy charges, including base rates, fuel surcharge rates, and customer charges, are included, but demand charges are not included.
(e) In the case of all service provided under an inclining block rate structure and in the case of service provided under a declining block rate structure to a community facility, the average rate per kilowatt-hour is determined separately for each block of the declining or inclining block rate structure. For each block of service within each rate schedule, the average rate per kilowatt-hour is the total energy charges for each kilowatt-hour in that block (including both base rates and fuel surcharge rates but not including demand charges) minus the base amount established under (c) of this section.
(f) For a regulated participating electric utility, total fuel cost is calculated in accordance with the fuel surcharge calculation made under 3 AAC 52.502 - 3 AAC 52.504 for that utility, subject to adjustment if the utility does not achieve the generation efficiency standards set out in 3 AAC 52.620.
(g) For a nonregulated participating electric utility, total fuel cost is calculated as follows:
(1) total fuel cost is calculated by multiplying the price of fuel per gallon times the lesser of the
(A) actual number of gallons consumed for electric generation; or
(B) number of gallons that would have been consumed if the utility had achieved the generation efficiency standards set out in 3 AAC 52.620;
(2) for a utility that does not have substantial inventory capacity, the price of fuel per gallon is the current invoiced price of fuel; for a utility that has substantial inventory capacity, the price of fuel per gallon is the most current weighted average cost of fuel; in either event, the price of fuel per gallon includes costs of delivery of the fuel to the utility;
(3) in determining total fuel cost per kilowatt-hour, both the number of gallons consumed and the kilowatt-hours sold are based on a 12-month period ending no more than 30 days before the date that the utility requests a change in its power cost equalization per kilowatt-hour;
(4) in determining whether the utility achieved the generation efficiency and line loss standards set out in 3 AAC 52.620, the number of gallons consumed, the kilowatt-hours generated, and the kilowatt-hours sold are based on the same 12-month period used in (3) of this subsection.
(h) Subject to the standards set out in 3 AAC 52.630, total nonfuel costs include all nonfuel costs, except return on equity, that regulated electric utilities are allowed to include in the revenue requirement recoverable from ratepayers.
(i) In calculating the fuel and nonfuel costs per kilowatt-hour under this section, neither the costs nor kilowatt-hour sales associated with a United States Department of Defense facility are considered.
(j) Fuel and nonfuel costs per kilowatt-hour are calculated by dividing total fuel and nonfuel cost by the greater of the
(1) actual number of kilowatt-hours sold; or
(2) number of kilowatt-hours that would have been sold if the utility had achieved the line loss standards set out in 3 AAC 52.620.
History
- Authority: AS 42.05.141; AS 42.45.110; AS 42.45.160 AS 42.05.151; AS 42.45.130; AS 42.45.170
- Eff. 10/28/89, Register 112; am 5/18/96, Register 138; am 9/11/2004, Register 171; am 10/9/2015, Register 216; am 4/2/2023, Register 246
3 AAC 52.620 Generation efficiency and line loss standards
(a) Generation efficiency and line loss standards are established to encourage efficient and economical generation, transmission, and distribution of electricity. The standards represent the minimum acceptable level of performance by a participating electric utility.
(b) A line loss standard of 12 percent applies to all electricity sold, and is measured according to the following formula:
A line loss standard of 12 percent applies to all electricity sold, and is measured according to the following formula:
Line Loss=G - (S + E) _______________ G
where
G equals all kilowatt-hours generated or purchased, from whatever source;
S equals kilowatt-hours sold; and
E equals station service, as defined in 3 AAC 52.519(a).
(c) The following generation efficiency standards apply only to the utility's diesel generation, are measured in kilowatt-hours generated per gallon of fuel consumed, and are based on the annual number of kilowatt-hours of diesel generation:
(1) for a utility that uses diesel fuel to generate 80 percent or more of total kilowatt-hours generated, and that generates
(A) less than 100,000 kilowatt-hours annually using diesel fuel, the minimum efficiency standard is 9.5 kilowatt-hours generated per gallon of diesel fuel consumed;
(B) 100,000 - 499,999 kilowatt-hours annually using diesel fuel, the minimum efficiency standard is 10.5 kilowatt-hours generated per gallon of diesel fuel consumed;
(C) 500,000 - 999,999 kilowatt-hours annually using diesel fuel, the minimum efficiency standard is 11.5 kilowatt-hours generated per gallon of diesel fuel consumed;
(D) 1,000,000 - 9,999,999 kilowatt-hours annually using diesel fuel, the minimum efficiency standard is 12.5 kilowatt-hours generated per gallon of diesel fuel consumed; or
(E) 10,000,000 kilowatt-hours or more annually using diesel fuel, the minimum efficiency standard is 13.5 kilowatt-hours generated per gallon of diesel fuel consumed;
(2) for a utility that uses diesel fuel to generate less than 80 percent of total kilowatt-hours generated, and that generates
(A) less than 100,000 kilowatt-hours annually using diesel fuel, the minimum efficiency standard is 8.5 kilowatt-hours generated per gallon of diesel fuel consumed;
(B) 100,000 - 499,999 kilowatt-hours annually using diesel fuel, the minimum efficiency standard is 10 kilowatt-hours generated per gallon of diesel fuel consumed;
(C) 500,000 - 999,999 kilowatt-hours annually using diesel fuel, the minimum efficiency standard is 11 kilowatt-hours generated per gallon of diesel fuel consumed;
(D) 1,000,000 - 9,999,999 kilowatt-hours annually using diesel fuel, the minimum efficiency standard is 12 kilowatt-hours generated per gallon of diesel fuel consumed; or
(E) 10,000,000 kilowatt-hours or more annually using diesel fuel, the minimum efficiency standard is 13 kilowatt-hours generated per gallon of diesel fuel consumed.
(d) In determining the generation efficiency standard for a participating electric utility that provides service to two or more locations by separate generation, transmission, and distribution systems and that charges the same rates and relies on diesel fuel to generate 80 percent or more of total generation at all locations, an average of kilowatt-hours generated will be used. That average is determined by dividing the total kilowatt-hours generated for all locations by the total number of locations. The generation efficiency standard that applies to a utility the size of that average is then applicable to the total system. The same methodology applies to uniform rate, multi-location utilities with locations that rely on diesel fuel to generate less than 80 percent of total generation, except that two separate averages are required, one average for those locations that rely on diesel fuel to generate 80 percent or more of total generation and one for those locations that do not. Separate computations for generation efficiency and line loss standards are also required for the latter group.
(e) A utility that does not meter street lights shall estimate the kilowatt-hours used by unmetered street lights and add those kilowatt-hours to kilowatt-hours sold for the purpose of determining compliance with the generation efficiency and, if appropriate, line loss standards in this section. Nonetheless, actual kilowatt-hours sold shall continue to be used for the purpose of computing power cost equalization per kilowatt-hour.
History
- Authority: AS 42.05.141; AS 42.45.110; AS 42.45.160 AS 42.05.151; AS 42.45.130; AS 42.45.170
- Eff. 10/28/89, Register 112; am 9/11/2004, Register 171; am 4/28/2005, Register 174; am 10/9/2015, Register 216
3 AAC 52.630 Standards for nonfuel costs
Nonfuel costs used in the calculation of power cost equalization per kilowatt-hour are subject to the following standards:
(1) depreciation rates must be in accordance with the guidelines established by the Rural Electrification Administration that were in effect as of January 1, 1988, or, if different, the standards established by the commission;
(2) depreciation expense is not allowed on plant funded with grants, contributions in aid of construction, or other nonutility money; and
(3) unless the commission authorizes a different method of cost recovery appropriate to the overhaul, costs for major overhauls on equipment must be amortized over an appropriate period approved by the commission.
History
- Authority: AS 42.05.141; AS 42.45.110; AS 42.45.160 AS 42.05.151; AS 42.45.130; AS 42.45.170
- Eff. 10/28/89, Register 112; am 9/11/2004, Register 171
3 AAC 52.640 Adjustments to power cost equalization
(a) A regulated participating electric utility shall request a change in its power cost equalization per kilowatt-hour in conjunction with a request for
(1) approval of tariff filing under 3 AAC 52.501 - 3 AAC 52.519; or
(2) a permanent or interim rate change that establishes higher or lower nonfuel costs for the utility.
(b) A nonregulated participating electric utility shall request, in accordance with 3 AAC 48.095, a change in its power cost equalization per kilowatt-hour if the utility has
(1) experienced a change in its fuel or purchased power costs; or
(2) changed its rates.
(c) The commission will, in its discretion, adjust the power cost equalization per kilowatt-hour of a participating electric utility based on
(1) a review by the commission or by the Alaska Energy Authority of monthly data submitted by the utility to the Alaska Energy Authority;
(2) a review of the annual filing submitted by the utility;
(3) any other evidence that the power cost equalization per kilowatt-hour of the utility is not just and reasonable; or
(4) a determination by the Alaska Energy Authority that appropriations are insufficient to finance full payments to eligible electric utilities, in which case the power cost equalization per kilowatt-hour of each participating utility will be reduced by an equal percentage.
(d) A regulated participating electric utility shall submit in support of each request for adjustment of its power cost equalization per kilowatt-hour
(1) a tariff advice letter under 3 AAC 48.270;
(2) tariff sheets that show the amount of power cost equalization per eligible kilowatt-hour requested;
(3) a schedule showing the computation of the requested power cost equalization per kilowatt-hour for each rate schedule;
(4) a summary of the data necessary for determination of the power cost equalization per kilowatt-hour; and
(5) documentation of all data submitted under (4) of this subsection, except that in the case of a request for an adjustment of power cost equalization per kilowatt-hour that is in conjunction with a request for a fuel surcharge rate change, the utility shall rely on the nonfuel costs per kilowatt-hour established in its most recent general rate case.
(e) A nonregulated participating electric utility shall submit in support of each request for an adjustment of its power cost equalization level
(1) a written statement of the power cost equalization per kilowatt-hour requested and the name of the person responsible for providing information in support of the request;
(2) a copy or summary of all effective rate schedules for each customer class, stating the current charges without power cost equalization;
(3) a schedule showing the computation of the power cost equalization per kilowatt-hour for each rate schedule;
(4) a summary of all data necessary for determination of power cost equalization per kilowatt-hour; and
(5) documentation, including a copy of the most recent fuel bill, of all data submitted under (4) of this subsection, except that in the case of a request for an adjustment of power cost equalization per kilowatt-hour that is in conjunction with a change in fuel or purchased power costs only, the utility shall rely on the nonfuel power costs per kilowatt-hour established in the approval of its most recent power cost equalization change.
(f) A participating electric utility shall file with the commission a periodic fuel or purchased power cost report as follows:
(1) for a regulated participating electric utility, the report required by this subsection is the tariff filing required under 3 AAC 52.501 - 3 AAC 52.519;
(2) for a nonregulated participating electric utility, except as provided in (g) of this section, the report required by this subsection shall be filed, in accordance with 3 AAC 48.095, on the dates and forms prescribed by the commission based on the historical frequency of a utility's fuel and power purchases and shall include all of the following information or supporting documents:
(A) the name of the utility;
(B) the reporting period;
(C) the weighted average cost per gallon of beginning fuel inventory;
(D) total beginning fuel inventory in gallons and dollars;
(E) for each fuel purchase during the reporting period, the
(i) invoice number;
(ii) delivery date;
(iii) gallons of fuel purchased;
(iv) cost per gallon;
(v) delivery or markup cost per gallon; and
(vi) total cost of the fuel purchase;
(F) total gallons and cost of fuel purchased during the reporting period;
(G) total kilowatt-hours and cost of power purchased during the reporting period;
(H) copies of invoices for each fuel purchase and delivery charges reported for the period;
(I) a schedule showing the calculation of any delivery charge or markup from affiliated fuel suppliers;
(J) copies of invoices for each power purchase in the reporting period.
(g) Notwithstanding (f)(2) of this section, a nonregulated utility with an approved methodology of prescheduled fuel cost reporting on April 28, 2005 may continue to use its approved methodology unless the commission orders otherwise.
History
- Authority: AS 42.05.141; AS 42.45.110; AS 42.45.160 AS 42.05.151; AS 42.45.130; AS 42.45.170
- Eff. 10/28/89, Register 112; am 5/18/96, Register 138; am 9/11/2004, Register 171; am 4/28/2005, Register 174; am 11/6/2016, Register 220
3 AAC 52.650 Processing of power cost equalization requests
(a) Within 45 days after a participating electric utility makes a complete request under 3 AAC 52.640 for an adjustment of its power cost equalization per kilowatt-hour, the commission by order will approve the filing, modify and approve it, or suspend it in whole or in part for further action. If the commission enters an order suspending a power cost equalization request only in part, the part that is not suspended takes effect at the end of the 45-day period.
(b) If the commission determines that a request for an adjustment of power cost equalization per kilowatt-hour should be suspended, the commission will, in its discretion, grant interim, refundable power cost equalization per kilowatt-hour.
History
- Authority: AS 42.05.141; AS 42.45.110; AS 42.45.160 AS 42.05.151; AS 42.45.130; AS 42.45.170
- Eff. 10/28/89, Register 112; am 9/11/2004, Register 171
3 AAC 52.660 Annual filing requirements
(a) In order for the commission to determine whether the power cost equalization per kilowatt-hour of a participating electric utility is just and reasonable, a utility shall annually file, in accordance with 3 AAC 48.095, a report for review.
(b) For a regulated participating electric utility, the report required by (a) of this section is the annual report required under AS 42.05.451(b).
(c) For a nonregulated participating electric utility, the report required by (a) of this section must be filed on the date specified by the commission by order and include the following information:
(1) a copy or summary of the effective rate schedule for each customer class, stating the current charges without power cost equalization;
(2) a statement of assets, liabilities, and other credits as of the end of the calendar or fiscal year being reported;
(3) a statement of income and operating expenses for the calendar or fiscal year being reported;
(4) a schedule of utility plant and depreciation for the calendar or fiscal year being reported, showing
(A) plant in service; and
(B) for each plant account,
(i) depreciation expense;
(ii) the depreciation method;
(iii) asset life;
(iv) net salvage used for computing depreciation expense;
(v) the end-of-year balance; and
(vi) the related account for accumulated depreciation;
(5) a schedule of monthly kilowatt-hour generation and sales, monthly fuel consumption, and monthly fuel balances and purchases; a utility that does not rely exclusively on diesel generation must separately report its hydroelectric generation, wind generation, and purchased power, as applicable.
(d) The report required by (a) of this section must be accompanied by
(1) audited financial statements if the utility had a financial audit performed for the calendar or fiscal year being reported; and
(2) a trial balance, if the utility maintains its records using a computerized accounting system; a nonregulated participating electric utility that does not maintain its records using a computerized accounting system must include manually prepared schedules showing the calculations used to prepare the statement of income and operating expenses required in (c)(3) of this section.
History
- Authority: AS 42.05.141; AS 42.45.110; AS 42.45.160 AS 42.05.151; AS 42.45.130; AS 42.45.170
- Eff. 10/28/89, Register 112; am 9/11/2004, Register 171; am 11/6/2016, Register 220
3 AAC 52.670 Other requirements
A participating electric utility shall
(1) install and maintain adequate meters to measure kilowatt-hours of generation, fuel consumption, and energy consumption by all ratepayers as prescribed by 3 AAC 107.200;
(2) make reasonable efforts to minimize administrative, operating, and overhead costs, including use of the best available technology consistent with sound utility management practices;
(3) cooperate with appropriate state agencies to implement cost-effective energy conservation measures and to plan for and implement feasible alternatives to diesel generation; and
(4) file a monthly report with the Alaska Energy Authority in accordance with the requirements of AS 42.45.110(h)(1) and 42.45.170(a)(2).
History
- Authority: AS 42.05.141; AS 42.45.110; AS 42.45.160 AS 42.05.151; AS 42.45.130; AS 42.45.170
- Eff. 10/28/89, Register 112; am 5/18/96, Register 138; am 9/11/2004, Register 171
3 AAC 52.680 Effect on power cost equalization for noncompliance
(a) If a participating electric utility fails to comply with any of the requirements of AS 42.45.100 - 42.45.190 or 3 AAC 52.600 - 3 AAC 52.670, the power cost equalization (PCE) of that utility becomes interim and refundable effective as of the initial date of the noncompliance.
(b) If a nonregulated participating electric utility fails to notify the commission at least 30 days before a change in its rates, the PCE becomes interim and refundable effective on the same day the utility implements the rate change
(c) If a participating electric utility fails to file its annual report when due, the PCE becomes interim and refundable on the date the annual report was due, and the commission may recommend that further PCE disbursements to the utility be suspended until the annual report is filed and the commission establishes permanent PCE rates.
(d) The PCE rate designated as interim and refundable under this section is subject to modification when a permanent PCE rate is approved by order of the commission. The modification will be made as follows:
(1) if the permanent PCE rate is less than the interim and refundable PCE rate, the effective date for the permanent PCE rate is the date that the interim and refundable PCE rate was established by the commission; the difference between the two rates will be recovered by the Alaska Energy Authority under the provisions of 3 AAC 107.210(d);
(2) if the permanent PCE rate is greater than the interim and refundable PCE rate, the effective date for the permanent PCE rate is the date that the permanent PCE rate is established by the commission; the lower interim and refundable PCE rate will be made permanent for the period from the date that the interim and refundable PCE rate was established to the date that the higher permanent PCE rate is effective.
(e) If a participating electric utility fails to file its periodic fuel or purchased power cost report when due, the PCE becomes interim and refundable on the date the report was due, and the commission may recommend that further PCE disbursements to the utility be suspended until the utility files its periodic fuel or purchased power cost report and the commission establishes permanent PCE rates.
History
- Authority: AS 42.05.141; AS 42.45.110; AS 42.45.160 AS 42.05.151; AS 42.45.130; AS 42.45.170
- Eff. 10/28/89, Register 112; am 5/18/96, Register 138; am 9/11/2004, Register 171
3 AAC 52.690 Definitions
Unless the context indicates otherwise, in 3 AAC 52.600 - 3 AAC 52.690
(1) "commission" means the Regulatory Commission of Alaska;
(2) "community facility" means a facility determined by the Alaska Energy Authority to be a community facility as defined in AS 42.45.150(1) and 3 AAC 107.270(b);
(3) "fuel surcharge" means a fuel cost rate adjustment, a cost-of-power adjustment, or any similar mechanism;
(4) "kilowatt-hour sold" means all electric energy delivered by a utility to consumers and includes energy furnished by the utility to a consumer free of charge;
(5) "nonregulated participating electric utility" means a utility that is exempt from the provisions of AS 42.05, except for the provisions of AS 42.05.221 - 42.05.281, or from all the provisions of AS 42.05;
(6) "participating electric utility" means an eligible electric utility as defined in AS 42.45.150(2) that receives payments from the power cost equalization fund;
(7) "regulated participating electric utility" means a utility as defined in AS 42.05.990(4)(A) that is subject to the provisions of AS 42.05;
(8) "substantial inventory capacity" means fuel storage capacity exceeding 10 percent of annual usage;
(9) "PCE" means power cost equalization.
History
- Authority: AS 42.05.141; AS 42.45.110; AS 42.45.170 AS 42.05.151; AS 42.45.130 AS 42.05.990; AS 42.45.160
- Eff. 10/28/89, Register 112; am 5/18/96, Register 138; am 4/24/2004, Register 170; am 9/11/2004, Register 171
Article 8 Water and Wastewater Utilities
3 AAC 52.700 Exempt water or wastewater utilities
(a) A water or wastewater utility, is exempt from provisions of AS 42.05 requiring a certificate of public convenience and necessity or relating to economic regulation within the meaning of 3 AAC 48.820, if the water or wastewater utility
(1) collects or transports wastewater only by tank, wagon, or similar conveyance, unless the water or wastewater utility provides the service to a public utility that is an affiliated interest;
(2) provides water or wastewater service to a mobile home community exclusively, without a charge separate from the rent paid by tenants of that community; in this paragraph "mobile home community" means a piece of real property on which the owner develops for lease two or more sites for locating but not permanently affixing mobile homes;
(3) provides bulk water sales exclusively to water haul vehicles or individuals who self-haul water;
(4) serves fewer than 15 service connections;
(5) is a water utility that
(A) is within the service area of and receives bulk water service from a water utility with
(i) a certificate of public convenience and necessity; or
(ii) provisional certification under 3 AAC 52.720 - 3 AAC 52.738;
(B) and does not
(i) create a different pressure zone from the main;
(ii) provide additional treatment to the water supply before distribution;
(iii) sub-meter the water; or
(iv) require payment as a separate line-item on a bill; or
(6) is a wastewater utility that
(A) is within the service area of and receives bulk wastewater service from a wastewater utility with
(i) a certificate of public convenience and necessity; or
(ii) provisional certification under 3 AAC 52.720 - 3 AAC 52.738; and
(B) does not:
(i) treat the wastewater; or
(ii) require payment as a separate line-item on a bill.
(b) Exemption from regulation under this section may be terminated as provided in AS 42.05.712(h) or by order of the commission for good cause.
(c) A utility that is exempt under this section may apply for provisional certification by filing an application that complies with 3 AAC 52.722.
History
- Authority: AS 42.05.141; AS 42.05.241; AS 42.05.712 AS 42.05.151; AS 42.05.691 AS 42.05.221; AS 42.05.711
- Eff. 6/19/2004, Register 170; am 6/3/2007, Register 182
3 AAC 52.710 Certificate of public convenience and necessity
(a) A water or wastewater utility must obtain a certificate of public convenience and necessity before it provides service to 15 or more service connections unless it is exempt from regulation under 3 AAC 52.700 or is qualified for provisional certification under 3 AAC 52.720. A utility that is provisionally certificated under 3 AAC 52.720 - 3 AAC 52.724 must obtain a certificate of public convenience and necessity if it no longer meets the criteria in 3 AAC 52.720 for provisional certification. A utility that is exempt under 3 AAC 52.700 or qualified for provisional certification under 3 AAC 52.720 may apply for a certificate of public convenience and necessity.
(b) Except as provided in (c) of this section, an applicant for a certificate of public convenience and necessity must provide the following information on a form prescribed by the commission:
(1) the applicant's legal name and the name under which it proposes to do business;
(2) the address of the applicant's principal national place of business, and, if different, its place of business in this state;
(3) the name, title, and telephone number of the individual who is available to provide the commission with information about the application;
(4) the applicant's type of business structure, including
(A) proof of incorporation, registration, or certification, if applicable; and
(B) the name and address of the applicant's registered agent, if applicable;
(5) the names, titles, responsibilities, and qualifications of key management the applicant employs or will employ, including the individuals responsible for the oversight of its financial and technical staff;
(6) a statement explaining why the public convenience and necessity requires the utility service the applicant will provide;
(7) the name of any other utility providing similar service in, or within one mile of, the area the applicant proposes to serve;
(8) the number and type of customers the applicant expects to serve, by geographic location;
(9) for an existing system, a copy of the approval from the Department of Environmental Conservation to operate a domestic wastewater system under 18 AAC 72.240 or to operate a public water system under 18 AAC 80.210, as applicable; if the applicant has not yet obtained operating approval, the applicant must file a schedule agreed to by the Department of Environmental Conservation to complete that department's technical requirements for all utility plant that is under construction;
(10) for a water utility, a description of each source of water for the proposed service area, including
(A) the quantity available;
(B) pumping capacity for each source;
(C) reservoir capacity;
(D) the available reserve capacity, in hours, in case of power outages or well failure; and
(E) information regarding the treatment necessary to bring the water into compliance with 18 AAC 80;
(11) for a wastewater utility,
(A) a description of the collection system and treatment facilities;
(B) information regarding the treatment necessary to bring the discharge into compliance with 18 AAC 70 and 18 AAC 72, and the method of disposal of treated effluent for the proposed service area; and
(C) information on the receiving environment into which the effluent will be discharged;
(12) documentation that the applicant complies with the Department of Environmental Conservation's operator certification requirements at 18 AAC 74.010; if the applicant is not in compliance with the operator certification requirements, the applicant must file a schedule to come into compliance with those requirements;
(13) a statement confirming that a water meter is installed, calibrated, and working at the entrance to the distribution system;
(14) a written description and a map of the utility's proposed service area;
(15) a tariff of rates and services that complies with 3 AAC 48.320 - 3 AAC 48.390 if the utility will be subject to economic regulations within the meaning of 3 AAC 48.820, or that complies with 3 AAC 52.730 - 3 AAC 52.740 if the utility will not be subject to economic regulations within the meaning of 3 AAC 48.820;
(16) pro forma financial schedules showing the calculation of the rate base for the utility using the appropriate uniform standard of accounts applicable under 3 AAC 48.277 to the utility;
(17) an income statement and balance sheet for the most recent fiscal year for existing systems; an actual income statement and balance sheet from the owner of the utility may be substituted for a new water or wastewater utility that has not begun providing service or that has not completed a full fiscal year of service;
(18) information on the sources of financing for the utility, including grants and loans;
(19) a verification signed by the person authorized to sign on behalf of the applicant that all of the information provided in the application is true, accurate, and complete;
(20) additional filings as required by the commission to explain or supplement the information filed under this subsection.
(c) An applicant that has previously obtained a finding of public convenience and necessity under 3 AAC 52.715 is not required to re-submit information required under (b) of this section unless the information is not currently correct.
(d) The commission will determine if an application for a certificate of public convenience and necessity is complete within 15 business days after the receipt of an application. An incomplete application will be handled as provided in 3 AAC 48.650.
(e) The commission will give notice of an application for a certificate of public convenience and necessity as provided in 3 AAC 48.645(a).
(f) If the commission denies an application, the utility may request a hearing as provided in AS 42.05.171.
History
- Authority: AS 42.05.141; AS 42.05.221 AS 42.05.151; AS 42.05.241
- Eff. 6/19/2004, Register 170
3 AAC 52.715 Public convenience and necessity finding for new utilities
(a) An entity that proposes to provide water or wastewater utility service through a system that is not yet built may not begin construction of the system until the commission determines that the public convenience and necessity requires the service.
(b) An entity described in (a) of this section must file an application for a finding of public convenience and necessity that includes the following:
(1) all information required by 3 AAC 52.710(b)(1) - (4), (6) - (8), (10) - (11), (14), and (18);
(2) an estimate of the cost to design and install the system in compliance with applicable requirements of 18 AAC 80 for a public water system or 18 AAC 72 for a domestic wastewater system;
(3) a projection of revenues and expenses, including capital recovery, for the first full fiscal year after the utility begins collecting fees from customers; if the estimated expenses exceed the estimated revenues, the source of supplemental money that is anticipated to sustain the utility's operation must be identified;
(4) if another utility provides similar service within one mile of the applicant's proposed service area, an explanation why connection to the existing service is not in the customer's interest;
(5) any additional filings the commission requires to explain or supplement the information filed under this subsection.
(c) The commission will determine if an application for a finding of public convenience and necessity is complete within 15 business days after the receipt of an application. An incomplete application will be handled as provided in 3 AAC 48.650.
(d) The commission will give notice of an application for a finding of public convenience and necessity as provided in 3 AAC 48.645(a).
(e) The commission will issue a finding of public convenience and necessity or deny the application within 90 days after the entity proposing to provide water or wastewater utility service files a complete application.
(f) If the commission determines that the public convenience and necessity does not require the entity's proposed utility service and denies the application, the entity may request a hearing in accordance with AS 42.05.171.
History
- Authority: AS 42.05.141; AS 42.05.221 AS 42.05.151; AS 42.05.241
- Eff. 6/19/2004, Register 170
3 AAC 52.720 Provisional certification: purpose and eligibility
(a) A provisional certificate is granted to a class of utility that is currently providing or will provide water or wastewater utility service required for the public convenience and necessity but that might not meet standards of financial fitness the commission otherwise applies in granting a certificate under AS 42.05.241. Through the provisional certification program, the commission collects and publishes, but does not verify, information reported by provisionally certificated utilities and applicants. A provisionally certificated utility is exempt from economic regulation within the meaning of 3 AAC 48.820 except as provided in AS 42.05.385 and 3 AAC 52.726. The commission does not inspect a provisionally certificated utility or certify its compliance with any health or safety requirements of state or federal law.
(b) A water or wastewater utility is eligible for a provisional certificate of public convenience and necessity if the utility owns water treatment and distribution or wastewater treatment and collection facilities and is
(1) a community association, cooperative, political subdivision, or government that has fair and equitable customer representation; for purposes of this paragraph, a utility has fair and equitable customer representation if each individual who is a utility customer has the opportunity to
(A) vote at a local election for members of a board, council, assembly, or body that controls the utility; or
(B) attend meetings and vote directly on matters affecting local utilities;
(2) any other form of business structure that has an annual gross revenue less than $50,000;
(3) any other form of business structure that has annual gross revenue greater than $50,000 but less than $150,000 if the utility petitions to be provisionally certificated, and the commission, after investigation and a hearing to solicit comments from consumers and other members of the public, grants the petition; the commission may, upon petition or its own motion, and after a hearing, require a utility provisionally certificated under this paragraph to return to economically regulated status; or
(4) an exempt utility that voluntarily seeks provisional certification under 3 AAC 52.700(c).
(c) Water and wastewater utilities that are financially and managerially consolidated and operating under one tariff or ordinance may file a single application providing the information required in 3 AAC 52.722, and may file jointly to comply with the ongoing requirements in 3 AAC 52.724, including application fees.
History
- Authority: AS 42.05.141; AS 42.05.221; AS 42.05.691 AS 42.05.151; AS 42.05.241; AS 42.05.711
- Eff. 6/19/2004, Register 170; am 6/3/2007, Register 182
3 AAC 52.722 Application for provisional certification
(a) A utility that is eligible under 3 AAC 52.720 to apply for provisional certification must provide the following information in accordance with 3 AAC 48.095 and on a form prescribed by the commission:
(1) the utility's legal name and the name under which it proposes to do business;
(2) the address of the utility's principal national place of business, and, if different, its place of business in this state;
(3) the name, title, and telephone number of the individual who is available to provide the commission with information about the application;
(4) the applicant's type of business structure, including
(A) proof of incorporation, registration, or certification, if applicable; and
(B) the name and address of the applicant's registered agent, if applicable;
(5) for entities qualified for provisional certification under 3 AAC 52.720(b)(2), an affidavit stating
(A) the utility's annual accounting period and annual gross revenue for the most recent fiscal year; or
(B) projected revenues for the first full fiscal year if the utility is a new water or wastewater utility that has not begun providing service or that has not completed a full fiscal year of service;
(6) a written description and a map of the utility's proposed service area;
(7) a copy of the bylaws for any community association or cooperative;
(8) the classes of service and the number of service connections the utility is serving in each class, along with information detailing any planned expansions;
(9) a tariff meeting the requirements of 3 AAC 52.730 - 3 AAC 52.740;
(10) an informational filing detailing the rates the utility will charge for the classes of service available and the amount and source of revenues that are not derived from customer charges;
(11) a verification signed by the person authorized to sign on behalf of the applicant that all of the information provided in the application is true, accurate, and complete;
(12) an application fee of $300.
(b) A previously certificated water or wastewater utility that is eligible for provisional certification under 3 AAC 52.720 and that does not have a proceeding pending before the commission may return the utility's certificate parchment to the commission and apply for provisional certification as provided in (a) of this section. The utility is not required to re-submit previously filed information unless the information is not currently correct.
(c) If the commission finds that an application for provisional certification is incomplete, the commission will, by letter, notify the applicant of the additional information needed to complete the application. A provisional certificate will be issued within 90 days after the receipt of a complete application that the commission finds to be in the public interest.
(d) An applicant for a provisional certificate of public convenience and necessity is exempt from the public notice provisions of 3 AAC 48.645.
(e) For good cause, the commission may revoke a provisional certificate, suspend the utility's operating authority, require additional information, or take other appropriate action to protect the public. If the commission issues an order under this section, the order will be stayed if the utility requests a hearing within 10 days after the date of the order.
History
- Authority: AS 42.05.141; AS 42.05.241; AS 42.05.691 AS 42.05.151; AS 42.05.254 AS 42.05.221; AS 42.05.271
- Eff. 6/19/2004, Register 170; am 6/3/2007, Register 182; am 11/6/2016, Register 220
3 AAC 52.724 Continuing requirements
(a) A provisionally certificated utility shall file, in accordance with 3 AAC 48.095, the following information each year, no later than 180 days after the close of the utility's annual accounting period:
(1) a fee of $100;
(2) an affidavit stating that the utility continues to meet the qualifications for provisional certification set out in 3 AAC 52.720;
(3) a statement of any changes to information submitted with the utility's application for provisional certification;
(4) a statement of revenue and expense for the last fiscal year on a form prescribed by the commission; the utility must identify all sources of revenue including customer fees and operational subsidies from other sources; the utility may file a combined water and wastewater statement or separate water and wastewater statements;
(5) the following information from the utility's reporting period, on a form prescribed by the commission:
(A) the number of active connections by customer class and the monthly user fees associated with them;
(B) the total water production for the fiscal year;
(C) the yearly water consumption of each individually metered user.
(b) Repealed 6/3/2007.
(c) A provisionally certified utility must submit an application as provided in 3 AAC 52.722 before modifying its service area. A utility filing for a service area amendment must include the revised portions of its tariff with its application.
(d) If a provisionally certificated utility does not timely file the information required in this section, the commission may post notice of the violation on the commission's web site, or may, after notice to the utility, issue an order revoking the utility's provisional certificate. If the commission revokes a utility's provisional certificate under this section, the order will be stayed if the utility requests a hearing within 10 days after the date of the order.
History
- Authority: AS 42.05.141; AS 42.05.241; AS 42.05.691 AS 42.05.151; AS 42.05.254 AS 42.05.221; AS 42.05.451
- Eff. 6/19/2004, Register 170; am 6/3/2007, Register 182; am 11/6/2016, Register 220; am 11/22/2017, Register 224
3 AAC 52.726 Customer complaints
(a) A provisionally certificated utility shall include the following statement on each bill sent to a customer:
"You should contact us first if you have a complaint about your water or wastewater service. If you are not satisfied after contacting us, you may then file a complaint with the Regulatory Commission of Alaska on paper at 701 West Eighth Avenue, Suite 300, Anchorage, Alaska 99501, electronically by means of the commission's website at (Internet website address), or telephonically at 1-800-390-2782, or TDD (907) 276-4533.
(b) Upon receipt of an informal complaint under 3 AAC 48.120 about a provisionally certificated utility, the commission will contact the provisionally certificated utility to verify that its most recently filed tariff is still effective or to obtain any updates to the tariff. The provisionally certificated utility shall provide any tariff updates within 10 business days after the commission's request. If an informal complaint is not resolved or is appealed by the customer or utility, a formal complaint may be made as provided in 3 AAC 48.130.
History
- Authority: AS 42.05.141; AS 42.05.151
- Eff. 6/19/2004, Register 170; am 11/6/2016, Register 220
3 AAC 52.730 Tariffs required
(a) A water or wastewater utility that has a provisional certificate or that is, under AS 42.05.711(b), certificated but not subject to economic regulation within the meaning of 3 AAC 48.820 shall comply with the tariff requirements set out in 3 AAC 52.730 - 3 AAC 52.740.
(b) A utility owned and operated by a political subdivision or government may submit approved ordinances that meet the requirements of 3 AAC 52.730 - 3 AAC 52.740, in place of a tariff.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.711 AS 42.05.151; AS 42.05.361
- Eff. 6/19/2004, Register 170
3 AAC 52.732 Tariffs revisions
A provisionally certificated utility may revise its tariffs without commission approval, but must file any revision within 30 days after the effective date of the revised tariff. The filing must be submitted in accordance with 3 AAC 48.220 and 3 AAC 48.270 and state the effective date of the revised tariff.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.361
- Eff. 6/19/2004, Register 170; am 11/6/2016, Register 220; am 10/27/2017, Register 224
3 AAC 52.734 Tariffs on file for public inspection
(a) A provisionally certificated utility shall keep its tariff available for public inspection in accordance with 3 AAC 48.250.
(b) The effective tariff of a provisionally certificated utility controls the utility's rates, charges, regulations, terms and conditions of service as provided in 3 AAC 48.320.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.361
- Eff. 6/19/2004, Register 170; am 10/27/2017, Register 224
3 AAC 52.736 Contents of tariffs
The tariff of a provisionally certificated utility must contain the following:
(1) a title page including the exact legal name of the utility, the service offered and the complete address of the utility;
(2) an index page with a complete and accurate list of contents;
(3) a map or set of maps depicting the utility's service area;
(4) a written description of the service area matching the area approved by the commission;
(5) a map depicting the areas, zones, or districts in which any different rate schedules apply;
(6) a complete set of the regulations governing the services offered;
(7) a schedule of all rates and charges for each class of service offered.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.361
- Eff. 6/19/2004, Register 170
3 AAC 52.738 Content of rules and regulations and rates
The tariff of a provisionally certificated utility must include the items listed in 3 AAC 48.370 and 3 AAC 48.380, as applicable.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.361
- Eff. 6/19/2004, Register 170
3 AAC 52.740 Waiver
Unless otherwise required under AS 42.05, a requirement in 3 AAC 52.730 - 3 AAC 52.738 may be modified or waived, in whole or in part, by order of the commission, on the commission's own motion or on a showing that the waiver or modification is in the public interest. An entity shall file and the commission will consider an application for waiver in accordance with 3 AAC 48.805.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.711
- Eff. 6/19/2004, Register 170
3 AAC 52.749 Definitions
Unless the context indicates otherwise, in 3 AAC 52.700 - 3 AAC 52.749,
(1) "affiliated interest" has the meaning given in AS 42.05.990;
(2) "annual gross revenues" means the revenues that would be accrued by the utility, assuming a 100 percent collection rate from customers;
(3) "business day" means a day other than Saturday, Sunday, or a state holiday;
(4) "classes of service" includes residential, commercial, industrial, institutional, or bulk water or sewer service;
(5) "service connection" means physically separated customer locations that are connected to the water or wastewater plant by a distribution or collection system;
(6) "system" means components used for the collection, treatment, storage, and distribution of drinking water or for the collection, treatment, and disposal of wastewater;
(7) "wastewater utility" means a utility that furnishes sewer service to the public for compensation;
(8) "water utility" means a utility that furnishes drinking water service to the public for compensation.
History
- Authority: AS 42.05.141; AS 42.05.151
- Eff. 6/19/2004, Register 170
3 AAC 52.750 Application and purpose
(a) The provisions of 3 AAC 52.750 and 3 AAC 52.755 apply to all refuse utilities subject to the regulatory jurisdiction of the commission and apply to the furnishing of refuse service to the public.
(b) The purpose of 3 AAC 52.750 and 3 AAC 52.755 is to establish procedural guidance for refuse utilities subject to exemption from certain regulatory requirements under AS 42.05.711(i). The provisions of 3 AAC 52.750 and 3 AAC 52.755 also provide procedural guidance to refuse utilities that become ineligible for exemption from certain regulatory requirements by virtue of exceeding the economic threshold prescribed in AS 42.05.711(i).
(c) For good cause, the commission may, using the procedures and standards set out in 3 AAC 48.805, waive all or any portion of the standards in 3 AAC 52.750 and 3 AAC 52.755 applicable to an individual refuse utility, or establish interim standards for that utility.
History
- Authority: AS 42.05.141; AS 42.05.221; AS 42.05.421 AS 42.05.151; AS 42.05.291; AS 42.05.711
- Eff. 11/22/2017, Register 224
3 AAC 52.755 Continuing requirements
(a) Each year, and not later than 90 days after the close of the utility's annual accounting period, a certificated refuse utility that qualifies for an exemption under AS 42.05.711(i) shall file an affidavit stating that the utility continues to meet the qualifications set out in AS 42.05.711(i). For purposes of identifying a utility's annual gross revenues used to determine the applicability of the exemption in AS 42.05.711(i), a refuse utility shall only consider revenues derived from regulated activities.
(b) A certificated refuse utility that previously qualified for an exemption under AS 42.05.711(i) but that has exceeded the economic threshold prescribed in AS 42.05.711(i) shall
(1) notify the commission not later than 30 days after exceeding the economic threshold; and
(2) not later than 180 days after the close of the utility's annual accounting period,
(A) file a tariff, as set out in 3 AAC 48.220 - 3 AAC 48.420;
(B) begin paying regulatory cost charges, as set out in AS 42.05.254 and 3 AAC 47; and
(C) file an annual report, as set out in AS 42.05.451.
History
- Authority: AS 42.05.141; AS 42.05.241; AS 42.05.691 AS 42.05.151; AS 42.05.361; AS 42.05.711 AS 42.05.221; AS 42.05.451
- Eff. 11/22/2017, Register 224
Article 9 Plant Replacement and Improvement Surcharge Mechanism
3 AAC 52.800 Application and waiver
(a) An eligible water or wastewater utility may establish a surcharge to recover capital costs associated with plant placed in service between general rates cases, if the surcharge complies with the provisions of 3 AAC 52.800 - 3 AAC 52.890.
(b) A requirement of 3 AAC 52.800 - 3 AAC 52.890 may be modified or waived, in whole or in part. A utility shall file and the commission will consider an application for waiver using the procedures and standards set out in 3 AAC 48.805.
History
- Authority: AS 42.05.141; AS 42.05.151
- Eff. 6/29/2014, Register 210
3 AAC 52.805 Criteria for plant improvement surcharges
(a) An eligible water or wastewater utility that proposes to include a surcharge authorized under 3 AAC 52.800 - 3 AAC 52.890 in its tariff shall, by tariff advice letter in compliance with 3 AAC 48.200 - 3 AAC 48.380, file one or more tariff sheets that
(1) identify the classes of property eligible for capital cost recovery through the surcharge;
(2) establish the initial effective date of the surcharge;
(3) describe the method for computing the surcharge;
(4) describe the method for updating the surcharge rate on a regular basis, not more often than quarterly, and not less often than annually; and
(5) describe consumer protections applicable to the surcharge.
(b) An eligible water or wastewater utility that proposes to revise any aspect of its surcharge shall file the revision by tariff advice letter in compliance with 3 AAC 48.200 - 3 AAC 48.380.
(c) Unless the initial surcharge tariff filing or revision is part of a general rate case, 3 AAC 48.275(a) does not apply to filings under (a) or (b) of this section, if the filings comply with 3 AAC 52.800 - 3 AAC 52.890.
(d) The filing of an initial or revised surcharge tariff must be accompanied by
(1) a copy of the utility's most recent long-term infrastructure improvement plan;
(2) a copy of the utility's most recent annual asset optimization plan;
(3) certification that a general rate case has been filed within the five years immediately preceding the establishment or revision of the surcharge tariff, or, if no general rate case has been filed within the five years before the establishment or revision of the surcharge, a general rate case containing at least the supporting information required by 3 AAC 48.275(a); and
(4) supporting information in the form of prefiled direct testimony, together with a list of witnesses filing testimony sufficient to demonstrate that the surcharge is in the public interest, and will facilitate utility compliance with
(A) the requirement in AS 42.05.291(a) to provide adequate, efficient, and safe services and facilities;
(B) the requirement in AS 42.05.291(a) that service be reasonably continuous and provided without unreasonable interruption or delay;
(C) any order of the commission or other state or federal agency related to safety or public health; and
(D) any other provision of state or federal law requiring provision and maintenance of adequate, efficient, safe, reliable, and reasonable service, including laws related to public health and environmental quality.
History
- Authority: AS 42.05.141; AS 42.05.151
- Eff. 6/29/2014, Register 210
3 AAC 52.810 Notice
(a) Initial and revised surcharge tariff filings are subject to 3 AAC 48.220, 3 AAC 48.270(a)(6), and 3 AAC 48.280.
(b) The utility shall notify customers by bill insert, or other method specified in the approved surcharge tariff, before filing periodic updates of a surcharge rate. An additional notice of a surcharge rate update will not be required unless ordered by the commission.
History
- Authority: AS 42.05.141; AS 42.05.151
- Eff. 6/29/2014, Register 170; am 10/27/2017, Register 224
3 AAC 52.815 Long-term infrastructure improvement plan and asset optimization plan
(a) Before filing an initial surcharge tariff, and at no less often than five-year intervals thereafter, an eligible water or wastewater utility shall file a long-term infrastructure improvement plan. The utility's plant improvement surcharge tariff must specify the minimum frequency and due date for filing long-term infrastructure improvement plans.
(b) Within one year after filing an initial long-term infrastructure improvement plan, and annually thereafter, an eligible water or wastewater utility shall file an asset optimization plan. The utility's plant improvement surcharge tariff must specify the annual date on which the asset optimization plan will be filed.
(c) A long-term infrastructure improvement plan must include
(1) a listing of the types and age of plant that the utility owns or operates, that the utility intends to improve, and for which the utility may propose to collect a surcharge;
(2) a prioritized schedule for the planned improvement of listed plant;
(3) a description of the location of the plant;
(4) an estimate of the quantity, unit cost, and total value of the plant to be improved;
(5) a projection of the annual expenditures necessary to implement the plan, including a description of the methods adopted to ensure that the plan is cost-effective; and
(6) a description of how the plan will be implemented, with emphasis on the benefits of planned improvements, the extent to which the surcharge will allow improvements to be accelerated, and the expected impact the improvements will have on quality of service.
(d) An asset optimization plan must include
(1) a detailed description of the eligible plant improved in the preceding 12-month period under the utility's long-term infrastructure improvement plan and the prior year's asset optimization plan, if any;
(2) a detailed description of all plant expected to be improved in the upcoming 12-month period; and
(3) an explanation for any plant that was, or is expected to be, improved in a sequence or manner that is not consistent with either the most recent long-term infrastructure improvement plan or the prior year's asset optimization plan.
(e) The commission staff shall review, and the commission may investigate, the long-term infrastructure improvement plan or the asset optimization plan for compliance with
(1) the provisions of 3 AAC 52.800 - 3 AAC 52.890;
(2) the uniform system of accounts established for water utilities under 3 AAC 48.277(a)(14) - (17) and for wastewater utilities under 3 AAC 48.277(a)(24) - (27), as applicable;
(3) generally accepted accounting principles; and
(4) reasonable management practices.
(f) The commission may, after notice and an opportunity to be heard, terminate the collection of a surcharge and order the removal of the utility's plant improvement surcharge tariff provision if the commission finds that the utility is not in material compliance with the regulatory and accounting standards set out in (e) of this section.
History
- Authority: AS 42.05.141; AS 42.05.151
- Eff. 6/29/2014, Register 210
3 AAC 52.820 Calculation and collection of surcharge rate
(a) Subject to the limitations in 3 AAC 52.840, eligible utilities may implement and update a plant improvement surcharge as described in the utility's approved plant improvement surcharge tariff to recover eligible capital costs.
(b) The plant improvement surcharge must be a percentage, expressed to two decimal places, that is applied to all classes of service as a percentage of each customer's billed revenue. The percentage is calculated by dividing total annual eligible capital costs by projected annual revenue. For utilities with periodic updates more frequent than annual, the surcharge rate must be calculated as follows:
(1) a utility updating its surcharge rate on a quarterly basis shall divide depreciation rates, approved return, and percentage allowance for taxes by four, and then apply the adjusted rates to eligible plant; the total eligible capital costs resulting from that calculation shall be divided by the projected quarterly revenue;
(2) a utility updating its surcharge rate on a semi-annual basis shall divide depreciation rates, approved return, and percentage allowance for taxes by two, and then apply the adjusted rates to eligible plant; the total eligible capital costs resulting from that calculation shall be divided by the projected semi-annual revenue;
(3) a utility updating its surcharge rate on a frequency other than quarterly or semi-annually shall divide depreciation rates, approved return, and percentage allowance for taxes by the length of the period between updates, expressed in days, divided by 365, and then apply the adjusted rates to eligible plant; the total eligible capital costs resulting from that calculation shall be divided by the projected revenue for the period the rates will be in effect.
(c) The depreciation rates, return, and allowance for taxes used for calculation of the plant improvement surcharge must be, in order of preference,
(1) the depreciation rates, return, and allowance for taxes approved in the utility's most recent fully litigated general rate case, if the general rate case was filed within five years of the initial rate or update, as applicable; depreciation rates from a more recent fully litigated depreciation proceeding under AS 42.05.471(a) may be used, unless otherwise provided by the commission order approving the depreciation rates;
(2) the depreciation rates, return, and allowance for taxes most recently stipulated by all parties and accepted by the commission in a general rate case, if the general rate case was filed within five years of the initial rate or update, as applicable, and the stipulation does not prohibit use of those elements in future plant improvement surcharge calculations; depreciation rates from a more recent stipulated depreciation proceeding under AS 42.05.471(a) may be used, unless otherwise provided by the commission order accepting the stipulated depreciation rates; for stipulations dated before June 29, 2014, the stipulated cost elements may be used only if all parties to the stipulation consent and the public interest does not require use of litigated cost elements;
(3) the depreciation rates, return, and allowance for taxes approved or accepted in the utility's most recent fully litigated or stipulated general rate case that was filed more than five years before the initial rate or update, as applicable, if, after notice and an opportunity to be heard, all parties to the most recent general rate case, and all current interested parties, consent and the commission finds that a general rate case is not in the public interest; the commission will specify the date for filing the utility's next general rate case, and the test year to be used, in the order approving the use of cost elements from a general rate case filed more than five years before the initial rate or update, as applicable; or
(4) depreciation rates, return, and allowance for taxes proposed by the utility and approved by the commission only for the purpose of calculating a specific periodic plant improvement surcharge rate update; the commission will specify the date for filing the utility's next general rate case and the test year to be used, in the order approving the use of cost elements proposed solely for the purpose of a specific periodic plant improvement surcharge rate update.
(d) The utility shall file revised tariff sheets, supporting data, and a copy of the customer notice required under 3 AAC 52.810(b) for each periodic update with the commission at least 10 days before the effective date of the update.
History
- Authority: AS 42.05.141; AS 42.05.151
- Eff. 6/29/2014, Register 210
3 AAC 52.825 Accounting for surcharge revenues, reconciliation, and correction
(a) The utility shall bill the plant improvement surcharge on a separate line on each customer bill.
(b) The utility shall separately account for all revenue from the plant improvement surcharge.
(c) The utility shall reconcile all plant improvement surcharge revenue to eligible capital costs no less often than annually. If revenue exceeds costs, the excess will be used to reduce the eligible capital costs over the next annual or other period, beginning with the next update following the reconciliation. If costs exceed revenue, notwithstanding the limitations of 3 AAC 52.840(a) or (b), as applicable, the excess will increase the eligible capital costs for purposes of calculating the surcharge rate over the next annual or other period, beginning with the next update following the reconciliation.
(d) The utility may request, or the commission may order, the correction or adjustment of actual entries used in the calculation of the surcharge rate for a period of one year following the effective date of the surcharge rate. The utility shall describe, quantify, and justify each proposed adjustment. Unless the commission orders otherwise, an error must be corrected by an adjustment to the surcharge rate at the next update.
History
- Authority: AS 42.05.141; AS 42.05.151
- Eff. 6/29/2014, Register 210
3 AAC 52.830 Eligible plant
(a) Eligible plant for water utilities includes
(1) utility service lines, meters, and hydrants installed as in-kind replacements for customers;
(2) mains and valves installed as replacements for existing facilities that remain in service beyond reasonable service life, are in prematurely deteriorated condition, or are required to be upgraded to meet quality-of-service standards or applicable law;
(3) main extensions installed to eliminate dead ends and to implement solutions to water supply problems that present a significant health or safety concern for customers currently receiving service from the utility;
(4) main replacement, cleaning, and relining projects;
(5) unreimbursed costs related to highway relocation projects where the utility must involuntarily relocate facilities; and
(6) other capitalized costs related to plant described in (1) - (5) of this subsection.
(b) Eligible plant for wastewater utilities includes
(1) collection sewers, collecting mains, and service laterals, including sewer taps, curbstops, and lateral cleanouts, installed as in-kind replacements for customers;
(2) collection mains and valves for gravity and pressure systems and related facilities such as manholes, grinder pumps, air and vacuum release chambers, cleanouts, main line flow meters, valve vaults, and lift stations installed as replacements or upgrades for existing facilities that remain in service beyond reasonable service life, are in prematurely deteriorated condition, or are required to be upgraded to meet quality-of-service standards or applicable law;
(3) collection main extensions installed to implement solutions to wastewater problems that present a significant health or safety concern for customers currently receiving service from the utility;
(4) collection main rehabilitation including inflow and infiltration projects;
(5) unreimbursed costs related to highway relocation projects where a wastewater must relocate its facilities; and
(6) other capitalized costs related to plant described in (1) - (5) of this subsection.
History
- Authority: AS 42.05.141; AS 42.05.151
- Eff. 6/29/2014, Register 210
3 AAC 52.835 Affiliated transactions
(a) If an eligible utility includes costs in its eligible capital costs from transactions with affiliated interests, the utility must file the following information with each periodic update of the surcharge rate:
(1) the identity of each affiliated interest;
(2) a description of the relationship between the utility and the affiliated interest;
(3) a list of the products and services provided to the utility by the affiliated interest;
(4) the prices and quantity of products or services provided to the utility by the affiliated interest;
(5) a list of alternative suppliers of the product or services purchased from the affiliated interest; and
(6) if applicable, a report showing which products or services provided to the utility by the affiliated interest are also supplied to other customers by the affiliated interest, including prices and quantities.
(b) The commission may investigate, in a general rate case or a separate formal proceeding, the reasonableness of costs that are associated with affiliated interest transactions that are recovered through a utility's plant improvement surcharge. In addition to the information required under (a) of this section, upon commencement of a formal investigation, the utility shall file
(1) a description of costs from affiliated interest transactions that the utility proposes to recover, or has recovered, through the plant improvement surcharge;
(2) the computational methodology for the price the utility pays to the affiliated interest for the product or service;
(3) a comparison of the price the utility pays to the affiliated interest with the prevailing market price, if any, and a comparison of other relevant characteristics, including quality and contractual terms and conditions; and
(4) an estimate of the cost the utility would have incurred to furnish the product or service with its own personnel and capital.
History
- Authority: AS 42.05.141; AS 42.05.151
- Eff. 6/29/2014, Register 210
3 AAC 52.840 Consumer protections
(a) The plant improvement surcharge rate for wastewater utilities may not exceed five percent of the amount billed to customers under the otherwise applicable tariff rates.
(b) The plant improvement surcharge rate for water utilities may not exceed 7.5 percent of the amount billed to customers under the otherwise applicable tariff rates.
(c) The plant improvement surcharge rate must be reset to zero at the effective date of revised base rates set in a general rate case that incorporates the capital costs previously recovered through the plant improvement surcharge.
(d) The plant improvement surcharge rate may be reset to zero, or another reduced rate that the commission establishes by order, if the commission, based on annual report data or otherwise, and after notice and an opportunity to be heard, finds that the utility's earned rate of return, including surcharge revenues, exceeds the rate of return used to calculate the surcharge rate.
History
- Authority: AS 42.05.141; AS 42.05.151
- Eff. 6/29/2014, Register 210
3 AAC 52.890 Definitions
(a) In 3 AAC 52.800 - 3 AAC 52.890, unless the context requires otherwise,
(1) "affiliated interest" has the meaning given in AS 42.05.990;
(2) "capital costs" means depreciation expense, return, and an allowance for taxes associated with utility plant;
(3) "eligible capital costs" means capital costs associated with eligible plant that has become used and useful in public utility service since the eligible water or wastewater utility's last general rate case, or plant that will become used and useful before the next periodic surcharge update, if, in either case, the plant is listed in the eligible water or wastewater utility's most recent long-term infrastructure improvement and asset optimization plans;
(4) "eligible water or wastewater utility"
(A) means a utility that holds a certificate of public convenience and necessity to provide water or wastewater public utility service and that is not exempt from economic regulation under any provision of AS 42.05.711;
(B) does not include a utility holding a provisional certificate issued under 3 AAC 52.720;
(5) "improve," "improvement," or "improved" means to repair or replace plant, or to modify or adapt plant to enhance its function or longevity;
(6) "quality of service" means the overall ability of a utility to provide and maintain adequate, efficient, safe, reliable, and reasonable service, including compliance with public health and environmental quality standards.
(b) Definitions set out in 3 AAC 48.820 also apply to 3 AAC 52.800 - 3 AAC 52.890.
History
- Authority: AS 42.05.141; AS 42.05.151
- Eff. 6/29/2014, Register 210
Article 10 Joint Use of Utility Facilities
3 AAC 52.900 Application and purpose
(a) The provisions of 3 AAC 52.900 - 3 AAC 52.940 apply to all utilities included in the definition of "public utility" in AS 42.05.990.
(b) The purpose of 3 AAC 52.900 - 3 AAC 52.940 is to establish a method for reasonable compensation for joint use if a utility owning a pole and another utility fail to agree on compensation for joint use of the pole. An agreement for joint use must be filed with the commission in accordance with 3 AAC 48.095. Absent unusual circumstances, the commission will assert its authority over joint use only if the utilities disagree on the terms of joint use or a joint use agreement, or if the commission has reason to believe that the utilities are not acting in accordance with the intent of AS 42.05.
History
- Authority: AS 42.05.151; AS 42.05.311; AS 42.05.321
- Eff. 5/8/88, Register 106; am 2/2/2003, Register 165; am 11/6/2016, Register 220
3 AAC 52.910 Joint use compensation
(a) The commission will require an attaching utility to compensate a pole-owning utility for joint use of a pole, in an amount comprised of the sum of the following two elements:
(1) the additional costs to the pole-owning utility for modifications or additions required by the attaching utility's joint use of a pole;
(2) an annual amount determined by multiplying the percentage of total usable space on a pole occupied by the attaching utility's facilities times the total annual cost of the jointly used pole.
(b) The formula for reimbursement under (a)(2) of this section is
Rate =attaching utility's occupied space XnetXcarryingtotal useable spaceinvestmentcharge ratio
In the formula in this subsection, "net investment" is the pole-owning utility's average net investment per pole when the formula is used to calculate a rate per pole.
(c) A pole-owning utility that maintains separate cost-of-service records for different geographic districts within the pole-owning utility's service territory shall use records from the geographic district in which the joint use poles are located in calculating the joint use compensation rate using the formula in (b) of this section.
History
- Authority: AS 42.05.151; AS 42.05.311; AS 42.05.321
- Eff. 5/8/88, Register 106; am 2/2/2003, Register 165
3 AAC 52.920 Elements used in developing annual joint use rate
(a) In the formula in 3 AAC 52.910(b), "total usable space" and "occupied space" are determined from studies performed by the utilities. If a utility does not have acceptable studies of actual usable and occupied space, the commission will apply the following presumptions:
(1) the occupied space for telecommunications pole attachments is one foot;
(2) the total usable space on a pole is 13.5 feet;
(3) the total unusable space on a pole is 24 feet;
(4) the total height of a pole is 37.5 feet.
(b) In the formula in 3 AAC 52.910(b), the average net investment per pole is determined by dividing the gross pole investment, less the associated depreciation reserve and the accumulated deferred income taxes, by the number of poles, and multiplying the total by a bare pole investment factor. The bare pole investment factor is a ratio that reflects the proportionate share of a utility's total net pole investment attributable to investment in bare poles, guys, and anchors, but not cross arms and other appurtenances that are not pole-related. If a utility does not have acceptable studies of the actual proportionate share of net pole investment attributable to bare poles, or an accounting system that separately records investment in appurtenances that are not pole-related, the bare pole investment factor is 0.85 for poles owned by an electric utility and 0.95 for poles owned by a telephone utility.
(c) In the formula in 3 AAC 52.910(b), the carrying charge ratio includes the sum of the following:
(1) the depreciation ratio, which, for poles, is calculated by multiplying the pole depreciation rate by the ratio of gross pole investment to net pole investment;
(2) the tax ratio, which is the ratio of actual taxes paid, except for income taxes, to total net utility plant investment;
(3) the return on investment ratio, which is
(A) the percentage rate of return that the commission most recently authorized for that utility, using either the
(i) weighted cost of debt and equity; or
(ii) actual return on net plant allowed by a different rate-setting methodology; or
(B) for a utility that is not subject to economic regulation within the meaning given in 3 AAC 48.820, a percentage rate of return that is 11.25 percent or the rate of return authorized by the utility's governing board if less than 11.25 percent;
(4) a provision for income taxes, if applicable;
(5) the maintenance ratio, which, for poles, is the ratio of annual maintenance expense for poles to the net pole investment; for electric utility-owned poles, the maintenance expense is determined by dividing the maintenance expense for overhead distribution lines by net plant investment of the associated overhead distribution lines;
(6) the administrative expense ratio, which is the ratio of administrative expense to net utility plant investment.
History
- Authority: AS 42.05.151; AS 42.05.311; AS 42.05.321
- Eff. 5/8/88, Register 106; am 2/2/2003, Register 165
3 AAC 52.930 Procedure
If an attaching utility and a pole-owning utility cannot reach agreement on a joint-use issue, including compensation, a complaint may be filed with the commission, and served on the other party, in accordance with 3 AAC 48.095, setting out the relevant facts and asking for relief. The other party may file an answer to the complaint within 20 days after service of that complaint.
History
- Authority: AS 42.05.151; AS 42.05.311; AS 42.05.321
- Eff. 5/8/88, Register 106; am 2/2/2003, Register 165; am 11/6/2016, Register 220
3 AAC 52.940 Definitions
Unless the context indicates otherwise, in 3 AAC 52.900 - 3 AAC 52.940,
(1) "administrative expense" means administrative expense as defined in the Uniform System of Accounts prescribed in 3 AAC 48.277 for a pole-owning utility, or as defined in a comparable accounting system if in use by the particular pole-owning utility;
(2) "gross pole investment" includes gross investment for bare distribution poles in the pole accounts in the Uniform System of Accounts prescribed in 3 AAC 48.277 for a pole-owning utility, or in a comparable accounting system if in use by the particular utility;
(3) "maintenance expense" means maintenance expense as defined in the Uniform System of Accounts prescribed in 3 AAC 48.277 for a utility, or as defined in a comparable accounting system if in use by the particular utility;
(4) "pole attachment" means any attachment by a utility to a utility pole;
(5) "usable space" for pole attachments means the space on a pole above the minimum grade level, as set out in the edition of the National Electrical Safety Code adopted in AS 18.60.580, which can be used for the attachment of wires, cables, and associated equipment;
(6) "attaching utility" means a public utility that attaches its facilities to, or places its facilities on, the pole of another utility; "attaching utility" does not include a utility that attaches to its own poles.
History
- Authority: AS 42.05.151; AS 42.05.311; AS 42.05.321
- Eff. 5/8/88, Register 106; am 2/2/2003, Register 165
Chapter 53 Telecommunications
Article 1 Simplified Rate Filing and Jurisdictional Cost Allocation Factor Adjustment Procedures for Local Exchange Carriers
3 AAC 53.010 Applicability, purpose, and waiver
(a) The provisions of 3 AAC 53.010 - 3 AAC 53.140 apply to all local exchange carriers subject to economic regulation by the commission.
(b) The purpose of 3 AAC 53.010 - 3 AAC 53.140 is
(1) to implement AS 42.05.381(e) by establishing a simplified rate filing procedure and a range or adjustment of local service rates; and
(2) to implement AS 42.05.381(f) by establishing a procedure to adjust local service rates for changes in jurisdictional cost allocation factors.
(c) Unless otherwise mandated under AS 42.05, any requirement in 3 AAC 53.010 - 3 AAC 53.140 may be modified or waived, in whole or in part, by order of the commission upon application and a showing of good cause or on the commission's own motion in accordance with the provisions of 3 AAC 48.805.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 4/8/93, Register 126
3 AAC 53.020 General provisions regarding simplified rate filing procedures
(a) A local service rate adjustment allowed under 3 AAC 53.010 - 3 AAC 53.100 may not exceed a six percent increase in any 12-month period or a cumulative 15 percent increase in a three-year period. For a cost company, the allowed adjustments exclude adjustments for changes in jurisdictional cost allocation factors processed under 3 AAC 53.110 - 3 AAC 53.130.
(b) For good cause shown, the commission will, in its discretion, revoke or deny a local exchange carrier's permission to use simplified rate filing procedures or its authority to adjust rates under the procedures in 3 AAC 53.030 - 3 AAC 53.100.
(c) A local exchange carrier that uses the procedures of 3 AAC 53.010 - 3 AAC 53.140 is not precluded from filing a general rate case under 3 AAC 43.275(a).
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 4/8/93, Register 126
3 AAC 53.030 Procedural requirements for cost companies
(a) A cost company shall provide notice of its intent to adjust its local service rates under the simplified rate filing procedures at the time that it files its annual access charge revenue requirement study with the commission. To implement that intent, the company shall file the supporting information required by 3 AAC 53.040(a) no later than 60 days after commission approval of intrastate access charges based on the study.
(b) A rate adjustment filing under 3 AAC 53.030 - 3 AAC 53.060 is governed by 3 AAC 48.220 - 3 AAC 48.440, except for 3 AAC 48.275(a).
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 4/8/93, Register 126
3 AAC 53.040 Supporting information for cost companies
(a) In addition to the information filed under (b) of this section, the basis of the simplified rate filing procedure for a cost company is the information filed by the company and approved by the commission in the company's annual access charge proceeding.
(b) A cost company using the simplified rate filing procedures to adjust its local service rates shall file with the commission the following information:
(1) a schedule showing the computation and narrative explanation of pro forma adjustments to test year local service operating revenue and the adjusted amount of local service operating revenues by account;
(2) a schedule showing Universal Service Fund receipts for the test year;
(3) a schedule showing total company operating expenses, operating taxes, and rate base, as approved by the commission in the determination of the company's intrastate access charge revenue requirement, and the amounts of each allocated to local exchange and local private line service for the test year;
(4) a schedule showing the calculation of pro forma income tax on local service operations for the test year;
(5) a calculation of the weighted average cost of debt at the end of the test year;
(6) a schedule showing the cost of capital based on actual capital structure at the end of the test year, which structure may not exceed 50 percent equity, actual weighted cost of debt, and a rate of return on equity of 13.5 percent;
(7) a schedule prepared in accordance with 3 AAC 53.050 showing the computation of local exchange service and local private line service revenue requirements and revenue deficiency or surplus, in both absolute dollars and percentage of revenues subject to rate adjustment for the test year;
(8) a schedule showing the percentage and amount of rate adjustment requested, if different from (7) of this subsection; and
(9) a schedule showing the amount of the proposed rate adjustment to all permanent recurring local rates and charges eligible for the rate adjustment.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 4/8/93, Register 126
3 AAC 53.050 Computation of local revenue requirement and rate adjustment for cost companies
(a) The company shall include the following items in calculating its local service revenue requirement:
(1) all items recorded or properly classified as "Local Network Service Revenues" by Part 32 of the Federal Communications Commission regulations (47 C.F.R. Part 32), as adopted by the commission at 3 AAC 48.277(a)(1) - 3 AAC 48.277 (a)(5), including items properly classified into accounts 5000 - 5069;
(2) all universal Service Fund receipts;
(3) all "Miscellaneous Revenues" that are of a local character or are not directly derived from interexchange, nonregulated, or other sources and are properly classified into accounts 5200 - 5265 by Part 32 of the Federal Communications Commission regulations (47 C.F.R. Part 32), as adopted by the commission at 3 AAC 48.277(a)(1) - 3 AAC 48.277(a)(5); and
(4) any other revenues specified by the commission as local in character.
(b) In computing the local service revenue requirement, only the expenses and investment associated with the local service revenues described in (a) of this section may be assigned to local service.
(c) Uncollectible revenue is allocated to local service based on a study done by the company within one year or less before the filing for rate relief under 3 AAC 53.010 - 3 AAC 53.140 or based on the ratio of local service revenues to total revenues.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 4/8/93, Register 126
3 AAC 53.060 Application of rate adjustments for cost companies
A rate adjustment granted to a cost company under 3 AAC 53.030 - 3 AAC 53.060 is computed separately for local exchange service and local private line service and applied as an across-the-board percentage adjustment to all recurring monthly charges within each of those classifications, including, unless specifically waived by the commission, items with rates established by special contract. However, a rate adjustment under this section may not be applied to directory assistance or public pay telephone charges.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 4/8/93, Register 126
3 AAC 53.070 Procedural requirements for average schedule companies
(a) A rate adjustment filing under 3 AAC 53.070 - 3 AAC 53.100 is governed by 3 AAC 48.220 - 3 AAC 48.440, except for 3 AAC 48.275(a) and 3 AAC 48.430.
(b) An average schedule company seeking to adjust its local service rates shall file the information required by 3 AAC 53.080 no later than 60 days after the filing of its annual report in accordance with AS 42.05.451(b).
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.35.151; AS 42.05.411; AS 42.05.431
- Eff. 4/8/93, Register 126
3 AAC 53.080 Supporting information for average schedule companies
(a) In addition to the information filed under (b) of this section, the basis of the simplified rate filing procedure for an average schedule company is the information filed by the company in its annual report under AS 42.05.451(b), with appropriate ratemaking adjustments.
(b) An average schedule company using the simplified rate filing procedures to adjust its local service rates shall file with the commission the following information:
(1) a schedule showing the computation and narrative explanation of pro forma adjustments to test year operating revenues, operating expenses, and rate base;
(2) a schedule showing the computation of a simple average rate base for the test year;
(3) a schedule showing the calculation of pro forma income tax for the test year;
(4) a schedule prepared in accordance with 3 AAC 53.090 showing the computation of total company revenue requirement and revenue deficiency or surplus, in both absolute dollars and percentage of revenues subject to rate adjustment for the test year;
(5) a schedule showing the percentage and amount of rate adjustment requested, if different from (4) of this section;
(6) a schedule showing the amount of the proposed rate adjustment to all recurring permanent tariffed rates and charges for local service;
(7) the audited, reviewed, or compiled financial statements of the company, including opinion and all footnotes, or an affidavit stating that such financial statements are not available; and
(8) a fluctuation analysis explaining any variation of more than 10 percent from the preceding year for each Class B operating account as described in Part 32 of the Federal Communications Commission regulations (47 C.F.R. Part 32) and adopted by the commission at 3 AAC 48.277(a)(1) - (a)(5). A company with less than $1,000,000 in annual revenues is exempt from this requirement.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 4/8/93, Register 126
3 AAC 53.090 Computation of revenue requirement and rate adjustment for average schedule companies
The revenue requirement and allowable rate adjustment for an average schedule company are computed based on total company regulated results of operations and rate base and a rate of return on simple average rate base of 11 percent, except that nonregulated transactions are excluded.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 4/8/93, Register 126
3 AAC 53.100 Application of rate adjustments for average schedule companies
A rate adjustment granted to an average schedule company under 3 AAC 53.070 - 3 AAC 53.100 is computed and applied as an across-the-board increase to all recurring tariffed charges for local service, including, unless specifically waived by the commission, items with rates established by special contract. However, a rate adjustment under this section may not be applied to directory assistance or public pay telephone charges.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 4/8/93, Register 126
3 AAC 53.110 Procedural requirements for changes in jurisdictional cost allocation factors
(a) A cost company may apply to adjust its local rates to comply with changes in jurisdictional cost allocation factors required by the Federal Communications Commission or the commission by filing the supporting information listed in 3 AAC 53.120.
(b) A filing under 3 AAC 53.110 - 3 AAC 53.130 is governed by 3 AAC 48.220 - 3 AAC 48.440, except for 3 AAC 48.275(a).
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 4/8/93, Register 126
3 AAC 53.120 Supporting information for changes in jurisdictional cost allocation factors
To adjust local service rates due to changes in jurisdictional cost allocation factors required by the Federal Communications Commission or the commission, a cost company shall file the following information:
(1) a copy of the Federal Communications Commission order requiring a change in jurisdictional cost allocation factors;
(2) a computation based on the most recent access charge filing of the company approved by the commission, showing the amount of the shift in costs due to changes in jurisdictional cost allocation factors, segregated by service classes or categories, with supporting schedules showing:
(A) the factors used to allocate costs, and the costs allocated, to local service before the change in factors;
(B) the factors used to allocate costs, and the costs allocated, to local service after the change in factors; and
(C) a computation and explanation of the different factors;
(3) a schedule showing the revenue base, consisting of all permanent recurring tariffed and special contract charges for local service, but excluding directory assistance and public pay telephone charges, to which the amount of the change is to be applied; and
(4) a schedule showing the computation of the percentage rate adjustment, calculated by dividing the amount of the change computed in (2) of this section by the amount of revenues to be increased as computed in (3) of this section.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 4/8/93, Register 126
3 AAC 53.130 Application of rate adjustments due to changes in jurisdictional cost allocation factors
A rate adjustment granted to a cost company under 3 AAC 53.110 - 3 AAC 53.130 is computed and applied as an across-the-board increase to all recurring tariffed charges for local service, including, unless specifically waived by the commission, items with rates established by special contract. However, a rate adjustment under this section may not be applied to directory assistance or public pay telephone charges.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 4/8/93, Register 126
3 AAC 53.140 Definitions
(a) Unless the context indicates otherwise, in 3 AAC 53.010 - 3 AAC 53.130
(1) "average schedule company" means a local exchange carrier that does not perform jurisdictional cost separations in accordance with 3 AAC 48.430 and is not required to file with the commission an annual access charge revenue requirement study in accordance with Sections 701 and 702 of the Alaska Intrastate Interexchange Access Charge Manual identified in 3 AAC 48.440;
(2) "cost company" means a local exchange carrier that performs jurisdictional cost separations in accordance with 3 AAC 48.430 and files with the commission an annual access charge revenue requirement study in accordance with Sections 701 and 702 of the Alaska Intrastate Interexchange Access Charge Manual identified in 3 AAC 48.440;
(3) "local service" means all services, both switched and unswitched, offered for sale by a local exchange carrier through its local tariff or special contracts;
(4) "simple average" means the arithmetic mean of beginning-of-year and end-of-year balance sheet accounts or groupings of accounts; and
(5) "Universal Service Fund receipts" means the annual revenues obtained by a local exchange carrier, because its loop costs exceed the national average, from funds administered by the National Exchange Carrier Association and computed in accordance with the provisions of 47 C.F.R. Parts 36 and 69 as required by the Federal Communications Commission.
(b) Definitions contained in 3 AAC 48.820, 3 AAC 52.340, and 3 AAC 52.399 also apply to the defined words as they are used in 3 AAC 53.010 - 3 AAC 53.140.
History
- Authority: AS 42.05.141; AS 42.05.381; AS 42.05.421 AS 42.05.151; AS 42.05.411; AS 42.05.431
- Eff. 4/8/93, Register 126
Article 2 Alternative Dispute Resolution Procedures for Telecommunications Carrier Disputes
3 AAC 53.180 Alternative dispute resolution procedures for telecommunications carrier disputes
Repealed.
History
- Eff. 9/1/2002, Register 163; repealed 8/31/2008, Register 187
Article 3 Procedures for Changing an Authorized Telecommunications Carrier
3 AAC 53.190 Procedures for changing an authorized telecommunications carrier
(a) The provisions of 47 C.F.R. 64.1100 - 64.1195, revised as of April 2, 2001, are adopted by reference and set out the procedures for changing a subscriber's authorized intrastate, local exchange, or interstate telecommunications carrier in this state. The procedures adopted by this section also apply to an interstate telecommunications carrier providing international telecommunications service in this state.
(b) Notwithstanding (a) of this section, an intrastate interexchange or local exchange carrier that has not received a certificate of public convenience and necessity from the commission may not solicit, collect, or submit authorization to reassign a subscriber's access line.
(c) The requirements of (a) and (b) of this section do not apply if a local exchange carrier requests another local exchange carrier to modify the underlying arrangement by which the requesting local exchange carrier provides services to its own existing customers, such as changing service from resale to unbundled loop.
(d) The commission will waive the assessment of penalties or other enforcement action against a telecommunications carrier that complies with carrier-change rules of the Federal Communications Commission that are more recent than those adopted under (a) of this section.
(e) Repealed 11/22/2017.
History
- Authority: AS 42.05.141; AS 42.05.241; AS 42.05.810 AS 42.05.151; AS 42.05.711; AS 42.05.990 AS 42.05.221; AS 42.05.800
- Eff. 11/11/2001, Register 160; am 11/22/2017, Register 224
3 AAC 53.199 Definitions
Unless defined otherwise in 47 C.F.R. 64.1100 - 64.1195, as adopted by reference in 3 AAC 53.190(a), terms used in 3 AAC 53.190 have the meanings given in 3 AAC 48.820, 3 AAC 52.340, 3 AAC 52.399, and 3 AAC 53.299.
History
- Authority: AS 42.05.141; AS 42.05.311; AS 42.05.800 AS 42.05.151; AS 42.05.321; AS 42.05.810
- Eff. 11/11/2001, Register 160
Article 4 Local Exchange Competition
3 AAC 53.200 Applicability of local exchange competition provisions, purpose, and waiver
(a) The provisions of 3 AAC 53.200 - 3 AAC 53.299 apply to all local exchange carriers that furnish local exchange telephone service within a competitive local exchange market as designated under 3 AAC 53.205. The provisions of 3 AAC 53.210, 3 AAC 53.245, 3 AAC 53.290(a)(2), and 3 AAC 53.220(d) apply in noncompetitive areas also.
(b) The purpose of 3 AAC 53.200 - 3 AAC 53.299 is to allow competition in providing local exchange telephone service to the extent possible while maintaining and promoting universal local exchange telephone service, fair treatment of competitors and consumers, and a modern telecommunications infrastructure.
(c) For good cause shown, the commission will, in its discretion, waive the application of all or any portion of 3 AAC 53.200 - 3 AAC 53.299 to a local exchange carrier and establish appropriate criteria for that carrier.
(d) The provisions of 3 AAC 53.220, 3 AAC 53.240, 3 AAC 53.243, 3 AAC 53.245, 3 AAC 53.290(b), 3 AAC 53.290(f), and 3 AAC 53.290(h) do not apply to a local exchange carrier exempt from regulation under AS 42.05.711.
History
- Authority: AS 42.05.141; AS 42.05.221; AS 42.05.990 AS 42.05.151; AS 42.05.711
- Eff. 6/21/98, Register 146; am 9/16/2005, Register 175; am 10/27/2017, Register 224
3 AAC 53.205 Competitive local exchange markets
For purposes of 3 AAC 53.200 - 3 AAC 53.299, a competitive local exchange market is, as designated by an order of the commission, a local exchange or a group of local exchanges within one certificated service area where multiple unaffiliated telecommunications providers are certificated to provide local exchange service. However, upon petition or on its own motion, the commission by order may designate an area as a competitive local exchange market or a noncompetitive area based on the nature and extent of competition available, including competition by a competitor that is not certificated.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.800 AS 42.05.145; AS 42.05.291
- Eff. 9/16/2005, Register 175
3 AAC 53.210 Local exchange telephone service: certificate of public convenience and necessity
(a) In competitive local exchange markets and in noncompetitive areas, an entity proposing to provide local exchange telephone service in competition with an existing local exchange carrier must file an application for a certificate of public convenience and necessity that includes
(1) the legal name and the name under which the applicant proposes to do business;
(2) the address of the principal national and Alaskan place of business;
(3) the name, title, and telephone number of the individual who is the liaison with the commission in regard to the application;
(4) the applicant's business structure (corporation, partnership, etc.), including proof of incorporation and name and address of registered agent, if applicable;
(5) proof of authority to do business in Alaska;
(6) a list of the owners of five percent or more of the applicant's equity;
(7) a list of persons or entities that are affiliated interests of the applicant;
(8) a list of all administrative and judicial proceedings that resulted in
(A) suspension, revocation, or denial of the authority, license, or certification of the applicant or its officers, directors, or affiliates to provide utility services;
(B) a reprimand, penalty, or conviction of an applicant or its officers, directors, or affiliates related to operations, gross misrepresentations, fraudulent transactions, or securities violations; or
(C) an adjudication of bankruptcy or a reorganization in bankruptcy of applicant or its officers, directors, or affiliates;
(9) a list of all cases and locations in which the applicant, its officers, directors, or affiliates, has abandoned service in violation of applicable statutes, regulations, or orders;
(10) a list of the names, titles, and responsibilities of key management now employed or to be employed by the applicant and resumes for each person;
(11) for existing businesses, copies of the most recent year's balance sheet and income statement or Federal Communications Commission Form M and, if available, Securities and Exchange Commission Form 10-K;
(12) for new businesses, copies of the most recent year's balance sheet and income statement for the owners of the business listed under (6) of this subsection;
(13) a list of all services proposed, together with an explanation of the applicant's technical ability to provide the proposed services;
(14) a description of the area within which the entity proposes to provide local exchange service;
(15) a description of all existing facilities that will be used to provide local exchange telephone service;
(16) a description of all agreements or negotiations with other utilities for joint use and interconnection of facilities;
(17) a tariff of rates and services; and
(18) a verification signed by the person authorized to sign on behalf of the applicant that all of the information provided in the application is true, accurate, and complete.
(b) The commission will give notice of an application for a certificate of public convenience and necessity to provide local exchange telephone service in accordance with 3 AAC 48.645(a).
(c) The commission will issue a certificate of public convenience and necessity to an entity that proposes to provide local exchange telephone service under 3 AAC 53.200 - 3 AAC 53.299 and that is found by the commission to be fit, willing, and able to provide the proposed service.
(d) The commission will, in its discretion, place conditions on a certificate of public convenience and necessity that it considers appropriate, including a condition that the local exchange carrier post a bond to assure compliance with commission rules.
History
- Authority: AS 42.05.141; AS 42.05.221; AS 42.05.711 AS 42.05.151; AS 42.05.241; AS 42.05.990
- Eff. 6/21/98, Register 146; am 9/16/2005, Register 175
3 AAC 53.220 Determination of dominant or nondominant carrier status
(a) A local exchange carrier is a dominant carrier for retail service in an exchange unless the commission orders, upon a petition or on its own motion, that the carrier is nondominant in an exchange
(1) served by a rural telephone company, as defined by 47 U.S.C. 153(44) and where a second unaffiliated certificated facilities-based local exchange carrier offers service to the public;
(2) where the local exchange carrier's and its combined affiliates' local exchange market share in the exchange is 60 percent or less; or
(3) where at least two unaffiliated local exchange carriers
(A) are eligible telecommunications carriers; and
(B) each individually have a market share of 20 percent or more in that exchange.
(b) For purposes of (a) of this section, market share is measured by the carrier's percentage of customer connections.
(c) Notwithstanding (a) of this section, a local exchange carrier that owns the only facilities used to provide local exchange service to the majority of customers in a competitive local exchange market is a dominant carrier with regard to the following services provided in that area unless the commission determines otherwise as a result of an investigation or review under (e) or (f) of this section:
(1) line extension services;
(2) construction services;
(3) subdivision services agreements;
(4) interexchange carrier access services, including special access services.
(d) Notwithstanding (a) of this section, during or after the commission's review of a competitor's application for certification or during the commission's review of a competitor's application for eligible telecommunications carrier designation, a carrier or an affected person may petition for review of any carrier's dominant or nondominant carrier status.
(e) Notwithstanding any other provisions of this section, the commission may, after investigation, determine a carrier to be a dominant or nondominant carrier for the provision of a service or group of services.
(f) In conducting a review of an incumbent local exchange carrier's status as a dominant carrier in response to a petition filed under (d) of this section or in response to any other petition for a change in status, the commission will determine whether a local exchange carrier will be unfairly competitively disadvantaged with respect to a service or group of services by considering the following factors:
(1) the market share of the carrier and the competitive entrants, as measured in a manner relevant to the service for which nondominant carrier status is requested;
(2) the number, size, nature, and capabilities of competing carriers;
(3) the existence and nature of barriers to entry in competition for the service;
(4) the availability of reasonably substitutable service;
(5) the availability of alternative competitive facilities;
(6) the existence of safeguards to restrain the exercise of market power;
(7) the number of the carrier's customers transferred to a competitor;
(8) the number of customers projected to be lost to a competitor in the next 12 months after the date the petition is filed; and
(9) other factors relevant to determining whether the carrier will be unfairly competitively disadvantaged, including the existence or absence of consumer complaints related to the service.
(g) A local exchange carrier holding dominant carrier status as of September 16, 2005 shall retain dominant carrier status until the carrier's status is changed by an order of the commission. A local exchange carrier holding nondominant carrier status as of September 16, 2005 shall retain nondominant carrier status until the carrier's status is changed by an order of the commission.
(h) Upon designation of a competitive local exchange market, a local exchange carrier owning the only facilities providing local exchange service to the majority of customers in the newly designated competitive local exchange market is a dominant carrier for services provided to that area, and all other local exchange carriers serving that area are nondominant carriers until otherwise ordered by the commission.
History
- Authority: AS 42.05.141; AS 42.05.221; AS 42.05.990 AS 42.05.151; AS 42.05.711
- Eff. 6/21/98, Register 146; am 9/16/2005, Register 175
3 AAC 53.230 Discontinuance, suspension, or abandonment of service
(a) A local exchange carrier may discontinue, suspend, or abandon a local exchange telephone service at a location with commission approval under AS 42.05.261.
(b) A local exchange carrier proposing to discontinue, suspend, or abandon service under (a) of this section must file a plan for the transfer of its customers to another carrier. The plan must be filed with the commission at the same time the carrier files its application to discontinue, suspend, or abandon local exchange telephone service.
History
- Authority: AS 42.05.141; AS 42.05.221; AS 42.05.711 AS 42.05.151; AS 42.05.241; AS 42.05.990
- Eff. 6/21/98, Register 146; am 9/16/2005, Register 175
3 AAC 53.240 Retail services for which there is a dominant carrier
(a) The provisions of (b) - (d) of this section apply to all retail services in a competitive local exchange market that are not subject to 3 AAC 53.243.
(b) A nondominant carrier shall maintain a current tariff of retail rates and all special contracts for retail rates on file with the commission. A nondominant carrier may modify retail rates and implement special contracts for retail services without approval of the commission after 30 days' notice to the commission of a tariff filing submitted in accordance with 3 AAC 48.220, 3 AAC 48.270, and 3 AAC 53.290(f).
(c) A dominant carrier shall maintain a current tariff of retail rates and all special contracts for retail rates on file with the commission. A dominant carrier may reduce retail rates, offer new or re-packaged services, and implement special contracts for retail services without approval of the commission after 30 days' notice to the commission of a tariff filing submitted in accordance with 3 AAC 48.220, 3 AAC 48.270, and 3 AAC 53.290(f). A tariff revision by a dominant carrier to increase a rate is subject to the provisions of 3 AAC 48.200 - 3 AAC 48.430.
(d) Notwithstanding (b) or (c) of this section, the commission will deny and require modification of rates or terms or conditions of service that
(1) are not just and reasonable;
(2) grant a customer an unreasonable preference or advantage; or
(3) subject a customer to an unreasonable prejudice or disadvantage.
History
- Authority: AS 42.05.141; AS 42.05.241; AS 42.05.990 AS 42.05.151; AS 42.05.431 AS 42.05.221; AS 42.05.711
- Eff. 6/21/98, Register 146; am 9/16/2005, Register 175; am 10/27/2017, Register 224
3 AAC 53.243 Retail services for which there is no dominant carrier
(a) This section applies to retail services, including any services specified in 3 AAC 53.220(c) or provided for under 3 AAC 53.220(e), if there is no local exchange carrier in the competitive local exchange market with dominant carrier status for the services. Notwithstanding any other provisions of this section or 3 AAC 53.220, in a competitive local exchange market that is served by a local exchange carrier that is exempt from economic regulation under the provision of AS 42.05.711(b) or under the provisions of AS 42.05.711(h) and 42.05.712, this section applies to all other local exchange carriers serving that local exchange market.
(b) A nondominant carrier shall maintain a current tariff of retail rates and services, and all special contracts for retail rates and services on the carrier's website. The carrier must also either maintain a written copy of its current tariff of retail rates and all special contracts for retail rates or provide customers electronic access to that tariff and each special contract at the carrier's primary business office. The carrier must notify the commission of the carrier's website address, including any changes to the address.
(c) Without approval of the commission, and after compliance with the requirements of (d) and (e) of this section, a local exchange carrier may implement
(1) a change to retail rates and terms and conditions for local exchange service;
(2) a new retail service;
(3) a modification to an existing retail service;
(4) a bundled service that includes a local exchange service component unless the bundled service also includes a discounted intrastate interexchange component;
(5) a special contract for retail rates and services, if it
(A) includes a statement that the special contract is, at all times, subject to revision by the commission; and
(B) is not associated with a petition for confidential treatment filed under 3 AAC 48.045; and
(6) a change in general rules and regulations for local exchange service.
(d) The provisions of 3 AAC 48.270(a) do not apply to filings made under this section. The provisions of 3 AAC 48.390(a) and 3 AAC 48.390(b)(1) do not apply to special contracts for services where there is no dominant carrier. When implementing any rate, service, condition or rule, or special contract under (c) of this section, a carrier shall
(1) post a notice
(A) summarizing the rate, service, rule or regulation changes, or the terms and parties to the special contract, as applicable, in a prominent and easily accessible location on the carrier's website for at least 30 days after implementation; and
(B) including statements that the filing is available for inspection at the commission's office, that comments may be filed with the commission, and identifying a carrier point of contact; and
(2) file with the commission, in accordance with 3 AAC 48.220, an informational filing that includes a copy of the tariff sheets and a consecutively numbered tariff advice letter providing
(A) a statement that the filing is submitted under 3 AAC 53.243;
(B) a summary of the tariff changes identified either in the body of the letter or by attaching to the letter a document that clearly identifies and highlights additions and deletions on tariff sheets by the use of underlining and bold print to show additions and bracketed all caps to show deletions;
(C) a working link to the notice required under (1) of this subsection to be posted on the carrier's website; and
(D) if the tariff revision is for a special contract,
(i) an update of the carrier's list of special contracts;
(ii) a statement identifying the provision of the special contract that complies with 3 AAC 48.390(b)(2); and
(iii) a complete copy of the new special contract.
(e) The provisions of 3 AAC 48.330 - 3 AAC 48.340, 3 AAC 48.360(a) - (f), and 3 AAC 48.380 do not apply to tariff sheets submitted under this section. Tariff sheets under this section must be submitted as follows:
(1) the tariff of a local exchange carrier operating under this section must contain
(A) a title page, including
(i) the carrier's physical address;
(ii) the carrier's website address;
(iii) the tariff number;
(iv) the title "Local Exchange Service Tariff"; and
(v) a listing of the exchanges to which the tariff applies;
(B) an index, with a complete and accurate list of the contents of the tariff;
(C) a map or set of maps depicting the carrier's certificated service area;
(D) a complete set of general rules and regulations;
(E) service terms and conditions governing the services offered by the carrier;
(F) a complete set of all rates and charges for each class of service offered, or for each customer group; and
(G) a list of current special contracts;
(2) each page of the local exchange service tariff must be legible and formatted to print eight and one-half by eleven inches in size, and must include the following information:
(A) the name of the carrier;
(B) the number of the carrier's certificate of public convenience and necessity;
(C) the tariff advice number;
(D) the tariff sheet number;
(E) the proposed effective date of the tariff sheet;
(F) the tariff revision numbers; and
(G) margin notations set out in 3 AAC 48.360(g) and (h) indicating changes.
(f) A tariff revision or special contract submitted under this section will be rejected by the commission, within five business days, if
(1) the revision or special contract does not qualify for filing under (a) and (c) of this section;
(2) the revision or special contract does not comply with the requirements in (d) of this section; or
(3) the special contract filed does not include the provision required in 3 AAC 48.390(b)(2).
(g) A tariff revision or special contract that does not comply with the requirements of (c) of this section or includes a service for which there is a dominant carrier must be submitted under 3 AAC 53.240.
(h) The commission may investigate any tariff or special contract implemented and in effect under this section. The commission will deny and require modification of any tariff revision or special contract if the commission determines that the tariff revision or special contract is unduly discriminatory and is not reasonable.
History
- Authority: AS 42.05.141; AS 42.05.241; AS 42.05.711 AS 42.05.151; AS 42.05.301; AS 42.05.990 AS 42.05.221; AS 42.05.431
- Eff. 9/16/2005, Register 175; am 8/20/2016, Register 219; am 11/6/2016, Register 220; am 10/27/2017, Register 224
3 AAC 53.245 Competitive entry rate modification
(a) An incumbent local exchange carrier may petition the commission to modify its existing retail local exchange rates to establish new rates for the noncompetitive area if the carrier
(1) is a rural telephone company as defined in 47 U.S.C. 153(44); and
(2) demonstrates that a competitor may enter the incumbent local exchange carrier's service area.
(b) An incumbent local exchange carrier that is not a rural telephone company as defined in 47 U.S.C. 153(44), or that cannot make the demonstration required by (a)(2) of this section, may petition the commission for approval to use the provisions of (d) - (h) of this section to propose modifications of the carrier's existing retail local exchange rates for the noncompetitive areas. The carrier must obtain approval of its petition before filing a rate modification proposal under this section. The commission may grant a petition filed under this subsection if the carrier demonstrates that using the provisions of (d) - (h) of this section is in the public interest.
(c) A petition for permanent rate modification, filed under this section by an incumbent local exchange carrier, and as approved by the commission, becomes effective only upon approval of the competitor's application for certification or eligible telecommunications carrier designation in the incumbent local carrier's service area.
(d) A petition for a rate modification filed under this section must also be filed in accordance with 3 AAC 48.220 and 3 AAC 48.270, and must include the following:
(1) a reference to this section and a description of the service or group of services that are or may become competitive in one or more portions of the incumbent carrier's service area and, if applicable, the docket number of the competitor's application proceeding;
(2) a study in support of the rate modification; the study must be based on
(A) the incumbent carrier's most recent revenue requirement study or cost-of-service and rate design study, including demand levels from the test year if the revenue requirement study or cost-of-service and rate design study was approved within the previous three years;
(B) a new revenue requirement developed under 3 AAC 48.275; or
(C) on a revenue requirement developed under 3 AAC 53.010 - 3 AAC 53.140;
(3) a detailed description and an explanation of the method used to determine the revenue requirement, demand, and rates proposed for each exchange including
(A) all accounts or subaccounts and the amounts that are directly assigned to each exchange;
(B) all accounts or subaccounts and the amounts that are allocated among the exchanges, together with a description of the allocation methodology and the basis for the factors used; and
(C) an analysis demonstrating that the sum of the revenue requirements for the exchanges in noncompetitive areas plus the exchanges in competitive local exchange markets equals
(i) the total company local revenue requirement approved by the commission within the three previous years; or
(ii) a local revenue requirement developed under either 3 AAC 48.275 or 3 AAC 53.010 - 3 AAC 53.140;
(4) a copy of the carrier's federal universal service fund disaggregation plan filing under 47 C.F.R. 54.315;
(5) an explanation of how the cost allocations and universal service fund assignments used in the proposed rate modification are consistent with or different from the cost allocations and universal service fund assignments from the carrier's federal universal service fund disaggregation plan filing;
(6) supporting data and reasons why the cost differences by exchange cannot or should not be addressed through the current or an amended federal universal service fund disaggregation plan filing;
(7) a description of the operating revenues by exchange based on billing records from the test year used to develop the revenue requirement;
(8) a description of the methodology used to allocate all operating revenues that are not specifically related to an exchange;
(9) existing rates for discretionary services and non-recurring charges;
(10) a cost allocation manual, developed consistent with the cost allocation principles of 47 C.F.R. 64.901, as revised as of October 1, 2004 and adopted by reference, with costs for competitive local exchange markets treated like nonregulated costs; the cost allocation manual must specify how the incumbent local exchange carrier will separate nonregulated costs and costs for competitive local exchange markets from regulated costs for noncompetitive areas; the cost allocation manual must remain in effect until completion of the carrier's next general rate case or until otherwise ordered by the commission; however, if an incumbent local exchange carrier received approval under (b) of this section to use the provisions of (d) - (h) of this section to propose modifications to the carrier's existing retail local exchange rates, the carrier is not required to file a cost allocation manual under this paragraph.
(e) A petition for a rate modification filed under this section may include
(1) deaveraged rates for private line services based on differences in cost between exchanges; and
(2) a differential between basic residential rates and business rates within the same exchange area with a detailed explanation and a justification for any change in the differential between basic residential rates and business rates.
(f) A local exchange carrier may petition the commission to implement, on an interim and refundable basis, its rate modification proposal in the noncompetitive areas
(1) on the date a competitor is granted a certificate of public convenience and necessity;
(2) when a competitor is designated as an eligible telecommunications carrier in the local exchange carrier's service area; or
(3) on the date a competitor offers services to a customer for compensation, if
(A) a complete petition for rate modification is filed with the commission; and
(B) the commission has not previously approved or denied the petition to modify rates.
(g) Any information required under (d) of this section may also be filed in the docket relating to the competitor's application for certification or for eligible telecommunications carrier designation to aid in the commission's consideration of the application.
(h) Upon petition, or on its own motion, for good cause, the commission may delay or advance the implementation of a rate modification proposal that is the subject of a petition under (f) of this section.
(i) In this section, "general rate case" means a proceeding, initiated by a filing with supporting information described in 3 AAC 48.275, in which the commission reviews the local exchange carrier's costs and revenues to establish rates
History
- Authority: AS 42.05.141; AS 42.05.381 AS 42.05.151; AS 42.05.421
- Eff. 9/16/2005, Register 175; am 11/6/2016, Register 220; am 10/27/2017, Register 224
3 AAC 53.250 Wholesale service and rates
(a) A local exchange carrier shall offer all its services for resale to other carriers consistent with 47 U.S.C. 251 and 252 (Telecommunications Act of 1996).
(b) Repealed 9/16/2005.
History
- Authority: AS 42.05.141; AS 42.05.241; AS 42.05.990 AS 42.05.151; AS 42.05.431 AS 42.05.221; AS 42.05.711
- Eff. 6/21/98, Register 146; am 9/16/2005, Register 175
3 AAC 53.260 Changes in local exchange carrier
Repealed.
History
- Eff. 6/21/98, Register 146; repealed 11/11/2001, Register 160
3 AAC 53.265 Local exchange carriers of last resort
(a) A local exchange carrier that is designated as a carrier of last resort
(1) shall provide and maintain adequate, efficient, and safe facilities-based essential retail and carrier-to-carrier telecommunication services of similar quality throughout its carrier of last resort area; and
(2) may not allow any diminution of quality or availability of essential retail and carrier-to-carrier telecommunication services throughout its carrier of last resort area after designation.
(b) The commission will not designate a carrier of last resort in a study area that is not served by a rural telephone company as defined in 47 U.S.C. 153(44). The commission will designate one carrier of last resort for each carrier of last resort area that is in the study area of a rural telephone company as defined in 47 U.S.C. 153(44). Absent a request under (q) of this section, the carrier of last resort area is the same area as the incumbent local exchange carrier's study area.
(c) In a study area that does not include a competitive local exchange market, the incumbent local exchange carrier is designated the carrier of last resort, without the need to file a petition under this section, unless otherwise ordered by the commission.
(d) In a carrier of last resort area identified in (b) of this section that includes one or more competitive local exchange markets, the commission will, by order, designate the incumbent local exchange carrier as the temporary carrier of last resort until the commission selects a permanent carrier of last resort. Upon designation of a temporary carrier of last resort, the commission will open a docket of investigation on its own motion and will, for a period of 30 days, invite notices of intent to file petitions from parties seeking permanent carrier of last resort status for that study area. The designation of a carrier as a temporary carrier of last resort is not a factor in the decision the commission makes on selection of a permanent carrier of last resort in the event of competing applications. If a temporary carrier of last resort is the only carrier to file a notice of intent to file a petition seeking permanent carrier of last resort status, the petition for permanent carrier of last resort status must include the information in (o) of this section. If more than one carrier files a notice of intent, or if a carrier other than the temporary carrier of last resort is the only carrier to file a notice of intent, a petition filed by a carrier for permanent carrier of last resort status must include the information in (p) of this section. If no carrier files a petition to be the permanent carrier of last resort, the commission will, absent a determination of good cause to the contrary, select the temporary carrier as the permanent carrier of last resort.
(e) If the permanent carrier of last resort is unable to perform the duties of a local exchange carrier of last resort for a particular portion of a carrier of last resort area or throughout the carrier of last resort area, the commission may require a carrier that is not the carrier of last resort to act as the emergency carrier of last resort for essential retail and carrier-to-carrier services. The commission may limit the essential retail services the emergency carrier of last resort must provide. During the period of designation, the emergency carrier of last resort shall receive proportionately the identical level of Alaska Universal Service Fund support as the permanent carrier of last resort receives under 3 AAC 53.350, based on the ratio of the number of retail lines served by the emergency carrier of last resort to the total number of retail lines in the carrier of last resort area. However, if the commission determines that the average cost per line of lines served by the emergency carrier of last resort is materially different from the average cost per line of lines served by the permanent carrier of last resort, the commission may apply an appropriate weighting factor to the support computation. During the period when an emergency carrier of last resort is designated, the permanent carrier of last resort's Alaska Universal Service Fund support shall be reduced by the amount that the emergency carrier of last resort receives under 3 AAC 53.350.
(f) Designation as temporary carrier of last resort under (d) of this section or designation as an emergency carrier of last resort under (e) of this section may not exceed a period of 36 months, unless extended by the commission, after notice, for good cause.
(g) A local exchange carrier of last resort shall provide essential retail and carrier-to-carrier services throughout its carrier of last resort area without reliance on any other carrier network, if all other carriers operating in the area leave the market. However, nothing in this subsection prohibits a local exchange carrier of last resort from continuing to rely on the facilities of an affiliate or other third party that it has historically used to provide essential retail and carrier-to-carrier services in a discrete portion of its carrier of last resort area. Notwithstanding the requirements of this subsection, the commission may allow, after notice and an opportunity for hearing, a local exchange carrier of last resort or carrier of last resort applicant to fulfill its carrier of last resort responsibilities to cover a discrete portion of a carrier of last resort area with facilities owned by a third party or an affiliate, if
(1) essential retail and carrier-to-carrier services have not historically been provided to the specific area through wireline facilities;
(2) the third-party or affiliate facilities are able to provide essential retail and carrier-to-carrier services in accordance with the requirements of this section;
(3) a contract exists between the local exchange carrier of last resort and the third party or affiliate to provide essential retail and carrier-to-carrier services in accordance with the requirements of this section, and to maintain the facilities to the extent necessary for the local exchange carrier of last resort to meet its carrier of last resort responsibilities and at a similar level of quality as available in the remainder of the study area; and
(4) provision of carrier of last resort service using third-party or affiliate facilities is consistent with the public interest.
(h) Notwithstanding (g) of this section, the commission, for good cause and after notice and an opportunity for hearing, may revoke a local exchange carrier of last resort's ability to meet its carrier of last resort responsibilities using the facilities of a third party or an affiliate, and may require a carrier of last resort to provide service by another means.
(i) A local exchange carrier of last resort shall offer each of the following essential retail services using its own facilities within each exchange of its carrier of last resort area and as part of any extended area service arrangement:
(1) two-way, voice grade access to the public switched network;
(2) unlimited local calling;
(3) dual-tone multi-frequency signaling or its functional equivalent;
(4) single-party service or its functional equivalent;
(5) private line service or its functional equivalent;
(6) access to emergency services;
(7) access to operator services;
(8) access to interexchange services;
(9) special access;
(10) access to directory assistance;
(11) toll-blocking limitation for qualifying low-income customers;
(12) lifeline and link up services;
(13) special construction;
(14) provision of service to subdivisions;
(15) line extension services;
(16) substitute services to the customers of a failing competitor, if directed by the commission;
(17) other services that the commission determines to be in the public interest.
(j) A local exchange carrier of last resort shall offer, upon reasonable request, each of the following essential carrier-to-carrier services within each exchange of its carrier of last resort area and as part of any extended area service arrangement:
(1) local private line service, or its functional equivalent;
(2) intrastate access services;
(3) interstate access services;
(4) resale of retail services;
(5) other services as may be required under federal law or by the commission, after notice and an opportunity for hearing.
(k) A local exchange carrier of last resort shall have a line extension policy in its effective tariff or, in the case of a carrier of last resort not subject to economic regulation by the commission, approved by its governing body. The carrier's line extension policy
(1) may not unduly discourage customers from obtaining service;
(2) may not unduly impact existing customers for the cost of serving prospective remotely located customers; and
(3) must adequately take into consideration universal service support payments to the carrier, including the potential for cost of construction to be paid in part or in whole through universal service support.
(l) Notwithstanding (k) of this section, a local exchange carrier of last resort may not charge a line extension fee to a customer where a line extension would be reasonably profitable without a line extension fee and taking into consideration universal service support payments to the carrier.
(m) No later than 14 business days after denying a request for service, a local exchange carrier of last resort shall submit, to the commission's staff with oversight of consumer protection, and in accordance with 3 AAC 48.095, a report regarding the denial of the request for service. The report must include
(1) a detailed explanation of why the service request was determined unreasonable; and
(2) a preliminary cost estimate if the service request was for a line extension.
(n) After designating a permanent carrier of last resort under (d) of this section, the commission may, upon petition or its own motion, after notice and an opportunity for hearing, withdraw a carrier's permanent carrier of last resort designation and reassign it to a carrier that is an eligible telecommunications carrier in the carrier of last resort area, if
(1) the commission finds that
(A) the current carrier of last resort
(i) is financially or technically unable to provide carrier of last resort services in a carrier of last resort area; or
(ii) has failed to provide all required essential retail and carrier-to-carrier services throughout the carrier of last resort area; and
(B) withdrawal is in the public interest; or
(2) an alternative carrier petitions under (r) of this section to replace the designated carrier of last resort and the commission approves the petition.
(o) If a temporary carrier of last resort is the only carrier to file a notice of intent under (d) of this section, a petition filed by a temporary carrier of last resort proposing to be designated as permanent carrier of last resort must include
(1) the petitioning carrier's legal name, name under which business is conducted, and address;
(2) the name, title, and telephone number of the individual who is the liaison with the commission regarding the request;
(3) a description of the proposed carrier of last resort area; and
(4) a sworn statement by an officer of the carrier that the carrier fulfills all of the requirements imposed under this section on a local exchange carrier of last resort and that the carrier will continue to fulfill those requirements.
(p) If more than one carrier files a notice of intent under (d) of this section, or if a carrier other than the temporary carrier of last resort is the only carrier to file a notice of intent under (d) of this section, a petition filed by a carrier proposing to be designated as carrier of last resort must include
(1) the petitioning carrier's legal name, name under which business is conducted, and address;
(2) the name, title, and telephone number of the individual who is the liaison with the commission regarding the request;
(3) a legal description by township and range of the proposed carrier of last resort area;
(4) one or more maps of the proposed carrier of last resort area in sufficient geographic detail to confirm the legal description in township and range of the proposed carrier of last resort area, or a statement that those maps are on file with the commission as they are identical to the incumbent carrier's certificated service area; if the incumbent carrier is the incumbent for more than one study area per certificated service area, the petitioning carrier must clearly identify the proposed carrier of last resort area;
(5) a map of the carrier's network and verification that services are provided over the carrier's own facilities, with the map showing the proposed carrier of last resort area boundary;
(6) a description of the carrier's major network facilities by exchange within the proposed carrier of last resort area;
(7) a demonstration that the petitioning carrier
(A) occupies, in the market for local telephone exchange service within the carrier of last resort area under petition, a position that is comparable to the position occupied by the existing carrier of last resort; and
(B) can provide the essential retail and carrier-to-carrier services required of a local exchange carrier of last resort upon designation or with minimal facility upgrade;
(8) a demonstration that the petitioning carrier is committed and able to meet the requirements imposed under this section on a local exchange carrier of last resort in the proposed carrier of last resort area upon designation or with minimal facility upgrade; and
(9) an explanation why granting the petition for carrier of last resort status
(A) is consistent with the public interest and with public convenience and necessity; and
(B) advances universal service principles under 47 U.S.C. 254(b) based on the ubiquity of service, quality of service, extent to which the petitioning carrier relies on the facilities of another carrier, cost of operating the petitioning carrier's network, and other relevant factors.
(q) A petitioning carrier may petition for a carrier of last resort area that is less than the temporary or permanent carrier of last resort's entire study area, but not including partial exchanges, if the temporary or permanent carrier of last resort has disaggregated its federal high-cost support under 47 C.F.R. 54.315 and has deaveraged its local or access rates. The petitioning carrier must show that designating an area that is less than the entire study area is in the public interest and advances universal service principles under 47 U.S.C. 254(b).
(r) The commission will accept a petition under (n)(2) of this section to replace the permanent carrier of last resort only after the carrier of last resort has been so designated for a period of five years. A carrier must file, 90 days before filing that petition, a notice of intent to file a petition to replace the permanent carrier of last resort. The commission will issue a notice of the filing of a notice of intent to file a petition, and will set deadlines for comments.
(s) The commission will open an investigation on its own motion if it receives a petition filed under (r) of this section. In the initiating order, the commission will
(1) invite the existing carrier of last resort to file a competing petition to remain the carrier of last resort for that carrier of last resort area;
(2) invite other carriers wishing to be designated as a carrier of last resort to file competing petitions to become the carrier of last resort for that carrier of last resort area;
(3) establish a deadline for the filing under (1) and (2) of this subsection of competing petitions; those petitions must include the information required under (p) of this section; and
(4) provide an opportunity for the petitioning carrier to update, on or before the deadline set under (3) of this subsection, the information filed in the carrier's petition.
(t) A petition by a carrier of last resort to discontinue, suspend, abandon, or diminish the quality of essential retail and carrier-to-carrier services in any portion of its carrier of last resort area must
(1) include a plan to transfer customers to another carrier that is fit, willing, and capable of functioning as a local exchange carrier of last resort in that portion of the carrier of last resort area or a demonstration that continued service to that portion of the carrier of last resort area is no longer in the public interest;
(2) include a demonstration of why the relief requested is in the public interest and will not result in a diminution of essential retail and carrier-to-carrier services to the public;
(3) be filed at least six months before the date proposed for the discontinuance, suspension, abandonment, or diminution, if another facilities-based carrier is fit, willing, and capable of immediately serving the exiting carrier's customer base; and
(4) be filed at least 18 months before the date proposed for the discontinuance, suspension, abandonment, or diminution, if no other facilities-based carrier is fit, willing, and capable of immediately serving the exiting carrier's customer base.
(u) A local exchange carrier of last resort may not discontinue, suspend, abandon, or diminish the quality of essential retail and carrier-to-carrier services in any portion of its carrier of last resort area until
(1) the commission finds that the public interest requires the modification, termination, or transfer of the carrier of last resort designation;
(2) the commission has designated, by order, an alternative carrier of last resort, if necessary to ensure continued carrier of last resort service;
(3) the alternative carrier of last resort is meeting, throughout the carrier of last resort area, the requirements imposed under this section on a local exchange carrier of last resort, including provision of essential retail and carrier-to-carrier services; and
(4) the commission issues an order withdrawing carrier of last resort status.
(v) Nothing in this section relieves a carrier from compliance with the requirements of AS 42.05.
History
- Authority: AS 42.05.141; AS 42.05.261; AS 42.05.301 AS 42.05.145; AS 42.05.271 AS 42.05.151; AS 42.05.291
- Eff. 7/31/2011, Register 199; am 11/6/2016, Register 220
3 AAC 53.290 Miscellaneous provisions
(a) Except as provided in 3 AAC 48.440 and the Alaska Intrastate Interexchange Access Charge Manual, adopted by reference in 3 AAC 48.440, the provisions of
(1) 3 AAC 48.275 do not apply to those services for which the carrier is a nondominant carrier; and
(2) 3 AAC 48.277 and 3 AAC 48.430
(A) do not apply to a local exchange carrier
(i) after its application for certification to provide local exchange telephone service in competition to an existing local exchange carrier is granted; or
(ii) for services in an area designated by the commission as a competitive local exchange market; and
(B) apply, notwithstanding (A) of this paragraph, to a local exchange carrier whose
(i) costs are used as the basis for determining intrastate access charge rate caps; or
(ii) costs or rates are used as the basis for determining state universal service support under 3 AAC 53.300 - 3 AAC 53.399.
(b) The provisions of 3 AAC 48.275(a) do not apply to the dominant carrier for rate decreases, new services, and repackaging of existing services.
(c) Repealed 7/31/2011.
(d) The provisions of 3 AAC 53.190 govern the reassignment of a subscriber's access line or lines to a different local exchange carrier.
(e) No implicit modification or waiver of any statutory or regulatory requirements is intended by 3 AAC 53.200 - 3 AAC 53.299 for either dominant or nondominant carriers. Absent specific modification or waiver, all statutory and regulatory requirements remain in effect for both dominant and nondominant carriers.
(f) Unless otherwise provided in 3 AAC 53.243, a local exchange carrier shall publish a public notice of all proposed tariff revisions in a local, general circulation newspaper no later than three days after filing it with the commission. The public notice must contain a general description of the filing that is accurate, written in plain English, and sufficient to alert consumers of tariff revisions that may affect either the rules or rates applicable to them. The notice must include sentences containing the following information: the date the utility made or will make its filing with the commission; the date the revisions are expected to become effective; and a statement that both the proposed revisions and the utility's current tariff are available for review at the utility's office for which an address and office hours are provided. The notice must contain sentences similar to the following: "Any person may file comments on this tariff revision with the Regulatory Commission of Alaska (mailing address and Internet website address). To assure that the commission has sufficient time to consider the comments before the revisions take effect, (utility name) suggests that you file comments no later than (a specific date, not a weekend or holiday, approximately 7-10 days before the filing takes effect)."
(g) Where all necessary facilities and equipment are in place, a local exchange carrier shall complete the transfer of a customer to another local exchange carrier within seven working days of receiving a valid order for transfer of service.
(h) The provision of 3 AAC 48.270(a)(5) that requires a tariff advice letter to include the estimated number of customers or shippers who will be affected by each separate schedule listed does not apply to a retail service offering of a local exchange carrier unless the carrier proposes to discontinue or increase the rates for a service. However, the commission may require a local exchange carrier filing a tariff under 3 AAC 53.240 to provide that information after the carrier submits its tariff proposal.
(i) On or before April 30 of each year, in accordance with 3 AAC 48.095, a local exchange carrier shall file a financial report of the carrier's operations in the state for the previous calendar year. The carrier's out-of-state operations must be excluded from the financial report. The carrier's financial report must include the following detailed information regarding its local exchange operations:
(1) the beginning and end-of-year balances of
(A) gross plant in service;
(B) net plant in service;
(C) inventory;
(D) prepayments;
(E) current assets;
(F) deferred tax assets;
(G) long-term debt;
(H) current liabilities;
(I) deferred tax liabilities; and
(J) shareholder equity;
(2) from the income statement,
(A) retail revenues;
(B) revenues from resale;
(C) access revenues;
(D) billing and collection revenues;
(E) directory revenues;
(F) uncollectible revenue;
(G) gross operating revenue;
(H) operating expenses;
(I) interest on long-term debt;
(J) current tax expense; and
(K) net income; and
(3) the following end-of-year customer metrics:
(A) number of customers; and
(B) number of residential customers.
(j) If the commission, by order, finds that an exchange is no longer served by multiple certificated facilities-based local exchange carriers, the remaining certificated facilities-based local exchange carrier shall be a dominant carrier for all retail services and shall also be the carrier of last resort. The provisions of 3 AAC 48.275, 3 AAC 48.277, and 3 AAC 48.430 apply to the remaining certificated facilities-based local exchange carrier. The provisions of 3 AAC 53.240 and 3 AAC 53.243 no longer apply to the remaining certificated facilities-based local exchange carrier. The commission will determine, upon petition or on its own motion, whether the exchange remains a competitive local exchange market.
(k) On or before July 1 each year, to satisfy the annual operations reporting obligation under AS 42.05.451(b),
(1) a publicly held local exchange carrier, including a subsidiary of a publicly held corporation, shall file in accordance with 3 AAC 48.095 its Securities and Exchange Commission Form 10-K annual report as of the end of the preceding fiscal year;
(2) a privately held local exchange carrier shall file in accordance with 3 AAC 48.095 a full and complete annual report of the company's financial condition and operations on a stand-alone basis if available, or on a consolidated basis at the parent company level as of the end of the preceding fiscal year, as follows:
(A) if the carrier is a recipient of loans from the United States Department of Agriculture, Rural Utilities Service (RUS), the carrier shall provide a copy of its RUS Operating Report for Telecommunications Borrowers as filed with the Rural Utilities Service; the carrier shall make its underlying audit and related work papers and financial information available upon request by the commission;
(B) if a carrier is not a recipient of loans from the Rural Utilities Service and if the carrier's financial statements are audited in the ordinary course of business, the carrier shall provide a copy of the carrier's audited financial statement, accompanied by a copy of a management letter issued by the independent certified public accountant that performed the company's financial audit; the carrier shall make its audit and related work papers and financial information available upon request by the commission;
(C) if the carrier is not a recipient of loans from the Rural Utilities Service and if the carrier's financial statements are not audited but are independently reviewed in the ordinary course of business, the carrier shall provide a copy of the carrier's financial statement that has been subject to review by an independent certified public accountant, accompanied by an officer certification that the carrier was not audited in the ordinary course of business for the preceding fiscal year and that the reported data is accurate; the carrier shall make the review and related work papers and financial information available upon request by the commission;
(D) if the carrier is not a recipient of loans from the Rural Utilities Service, and if the carrier's financial statements are not audited or independently reviewed in the ordinary course of business, the carrier shall provide a copy of the carrier's financial statement containing a comparative balance sheet, income statement, and statement of cash flows, accompanied by an officer certification that the carrier was not audited by or had its financial statements reviewed by an independent certified public accountant in the ordinary course of business for the preceding fiscal year and that the reported data is accurate; the carrier shall make its underlying records and other financial information available upon request by the commission;
(3) a local exchange carrier designated as an eligible telecommunications carrier under 3 AAC 53.410 that has filed an annual report of the company's financial conditions and operations under 3 AAC 53.460 fulfills the requirement of this subsection by filing a certification to this fact.
(l) an incumbent local exchange carrier with a certificated interexchange carrier affiliate under 3 AAC 52.360 shall file with its annual report, in accordance with 3 AAC 48.095, a certificate of compliance with the cost allocation principles prescribed by 47 C.F.R. 64.901 and in a form substantially identical to the certification required by 47 C.F.R. 64.905.
History
- Authority: AS 42.05.141; AS 42.05.221; AS 42.05.711 AS 42.05.151; AS 42.05.241; AS 42.05.990
- Eff. 6/21/98, Register 146; am 11/11/2001, Register 160; am 4/24/2004, Register 170; am 9/16/2005, Register 175; am 7/31/2011, Register 199; am 11/6/2016, Register 220; am 10/27/2017, Register 224; am 11/13/2017, Register 224; am 12/20/2018, Register 228
3 AAC 53.295 Bundled services
(a) A local exchange carrier that offers service in a competitive local exchange market may bundle services subject to the limitations stated in (b) and (c) of this section.
(b) A local exchange carrier that offers a bundled service shall, in its tariff provision describing the bundled service offering and in the public notice of any proposed bundled service tariff provision, separately identify the rates for local or intrastate interexchange services included in the bundle. Any intrastate interexchange service included in the bundle must be offered in all locations where the carrier offers intrastate interexchange service on a 1-plus direct-dialed basis at the rate specified in the tariff.
(c) A local exchange carrier that offers a bundled service shall offer retail customers the alternative of purchasing local exchange service on a stand-alone basis at the carrier's tariffed rate.
(d) Repealed 9/16/2005.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.800 AS 42.05.145; AS 42.05.291
- Eff. 8/27/2004, Register 171; am 9/16/2005, Register 175; am 10/6/2013, Register 208
3 AAC 53.299 Definitions
In 3 AAC 53.200 - 3 AAC 53.299, unless the context requires otherwise,
(1) "access to directory assistance" means access to a service that includes making available to customers, upon request, information contained in directory listings;
(2) "access to emergency services" includes access to 911 and enhanced 911 services to the extent that, in a carrier of last resort area, a local government or other public safety organization has implemented 911 or enhanced 911 service; in this paragraph,
(A) "911" means a service that permits a telecommunications user, by dialing the three-digit code "911," to call emergency services through a public service access point operated by the local government or other public safety organization;
(B) "enhanced 911" means 911 service that includes the ability to provide
(i) automatic numbering information to enable the public service access point to call back if the call is disconnected; and
(ii) automatic location information to permit emergency service providers to identify the geographic location of the calling party;
(3) "access to interexchange services" means the use of the loop, as well as that portion of the switch that is paid for by the end user, or the functional equivalent of these network elements in the case of a wireless carrier, that are necessary to access an interexchange carrier's network;
(4) "access to operator services" means access to any automatic or live assistance to a consumer to arrange for billing or completion, or both, of a telephone call;
(5) "affiliate" has the meaning given "affiliated interest" in AS 42.05.990;
(6) "bundled service" means an offering combining two or more services, one of which is local service, for a package price that may include a discount or some other benefit; "bundled service" does not include a combination of local service offerings at a package price;
(7) "business day" means a day other than Saturday, Sunday, or a state holiday;
(8) "carrier of last resort area" means the geographic area for which a local exchange carrier is designated a carrier of last resort;
(9) "commission" means the Regulatory Commission of Alaska;
(10) "control" by a carrier refers to the ability of the carrier or its affiliate to direct the use of facilities regardless of whether the carrier directly owns the facilities;
(11) "customer connection" means any connection used to provide local exchange service; "customer connection"
(A) includes
(i) a line sold to another carrier that uses the line to provide service to a residential or business customer through total service resale; and
(ii) each voice line equivalent, if a line is used to provide multiple communication channels to a residential or business customer and is weighted based on the line's voice line equivalent weighting used by a carrier for network access fees; and
(B) does not include lines sold as unbundled network element loops;
(12) "dominant carrier" means a local exchange carrier that the commission designates under 3 AAC 53.220 as a dominant carrier for a service;
(13) "dual-tone multi-frequency signaling or its functional equivalent" means a method of signaling that facilitates the transportation of signaling through the network, shortening call set-up time;
(14) "economic regulation" has the meaning given in 3 AAC 48.820;
(15) "eligible telecommunications carrier" means a carrier that is designated as an eligible telecommunications carrier by the commission under 47 U.S.C. 214(e) and 3 AAC 53.400 - 3 AAC 53.499;
(16) "exchange" or "local exchange" has the meaning given in 3 AAC 48.820;
(17) "incumbent carrier" means the telephone utility, or its successor, certificated to provide local exchange telephone service within its service area as of February 8, 1996;
(18) "interexchange carrier" means a carrier certificated by the commission to provide intrastate interexchange telephone service;
(19) "lifeline" has the meaning given in 47 C.F.R. 54.401;
(20) "line extension" has the meaning given in 3 AAC 48.820;
(21) "link up" has the meaning given in 47 C.F.R. 54.411;
(22) "local exchange carrier" means a local exchange telephone utility certificated to provide local exchange telephone service;
(23) "noncompetitive areas" means one or more areas that are not designated as a competitive local exchange market;
(24) "nondominant carrier" means a local exchange carrier other than a dominant carrier;
(25) "private line" means a service that provides dedicated circuits, predefined transmission paths, whether virtual or physical, or equivalent arrangements that allow for the provision of communications between predetermined specific customer locations;
(26) "recorded authorization" means a voice communication that clearly grants the authority to transfer a customer's local exchange service from one local exchange carrier to another and that may be accurately retrieved for later review;
(27) "single-party service or its functional equivalent" means telecommunications service that permits users to have
(A) exclusive use of a wireline subscriber loop or access line for each call placed; or
(B) in the case of wireless telecommunications carriers, a dedicated message path for the length of a user's particular transmission;
(28) "special access" has the meaning given in section 801(ff) of the Alaska Intrastate Interexchange Access Charge Manual, adopted by reference in 3 AAC 48.440;
(29) "special construction" means one or more of the following types of construction:
(A) construction of facilities to provide services or channels for the customer when there is no other requirement for the facilities so constructed;
(B) construction of channel facilities of a type other than that which the carrier would otherwise utilize in order to provide services or channels for the customer;
(C) construction of facilities to meet requirements specified by the customer that involves a route other than that which the carrier would normally utilize in order to provide services or channels;
(30) "study area" has the meaning given in 3 AAC 53.499;
(31) "toll-blocking limitation for qualifying low-income customers" has the meaning given "toll limitation for qualifying low-income consumers" in 47 C.F.R. 54.101(a);
(32) "unaffiliated" means not an affiliate;
(33) "voice grade access to the public switched network" means a functionality
(A) that enables a user of telecommunications services to
(i) transmit voice communications, including signaling the network that the caller wishes to place a call; and
(ii) receive voice communications, including receiving a signal indicating there is an incoming call; and
(B) with a minimum bandwidth of 300 - 3,000 Hertz;
(34) "1-plus" has the meaning given in 3 AAC 52.399.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.800 AS 42.05.145; AS 42.05.291; AS 42.05.990
- Eff. 6/21/98, Register 146; am 4/24/2004, Register 170; am 8/27/2004, Register 171; am 9/16/2005, Register 175; am 7/31/2011, Register 199; am 10/6/2013, Register 208
Article 5 Universal Service Fund
3 AAC 53.300 Applicability, finding, purpose, and waiver
(a) The provisions of 3 AAC 53.300 - 3 AAC 53.399 apply to all public utilities that provide intrastate telecommunications service in this state.
(b) The purpose of 3 AAC 53.300 - 3 AAC 53.399 is to promote the efficiency, availability, and affordability of universal telephone service in this state through the establishment of the Alaska Universal Service Fund (AUSF); and not to raise revenue for the maintenance of government service offered to the general public.
(c) Repealed 7/1/2023.
(d) The provisions of 3 AAC 53.300 - 3 AAC 53.399 do not apply after June 30, 2028.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.840
- Eff. 1/10/99, Register 149; am 12/20/2018, Register 228; am 7/1/2023, Register 247; am 3/22/2026, Register 257
3 AAC 53.310 Approval of administrator; withdrawal of approval; bonding
(a) To serve as an administrator of the AUSF, the applicant must be approved by the commission. The commission will approve the selection of an administrator of the AUSF, if the applicant meets the requirements of this section.
(b) To be approved under this section, an applicant for the administrator must
(1) be able to operate the AUSF in a neutral and impartial manner;
(2) have the skills to bill, collect, and distribute large financial sums on a monthly basis; and
(3) provide documentation of the ability to obtain and maintain a bond in the amount ordered by the commission in an amount equal to three months of estimated payments into the AUSF.
(c) If more than one applicant applies under (a) of this section, the commission may approve the applicant who meets the qualifications of (b) of this section and is best able to administer the AUSF.
(d) The commission may withdraw its approval of the administrator if good cause is shown or the commission determines that the approval is no longer in the best interests of the AUSF.
(e) If approved, the administrator must immediately provide to the commission documentation of obtaining the bond described in (b) of this section. The administrator must immediately notify the commission if the bond is no longer
(1) sufficient to meet the requirements of this section; or
(2) effective.
History
- Authority: AS 42.05.840
- Eff. 1/10/99, Register 149; am 7/1/2023, Register 247
3 AAC 53.320 Budget approval; administrative costs
(a) In order to meet the requirements of AS 42.05.820 - 42.05.890, the budget for administrative costs, including compensation of the administrator, must be approved by the commission.
(b) Not later than October 1 of each year, the administrator shall submit the proposed budget described in (a) of this section to the commission for approval for the following year.
(c) The commission will only approve the proposed budget described in (a) of this section, if the commission finds that the proposed budget is reasonable and in the public interest.
(d) To maintain approval of the budget by the commission, payment for the administrator's compensation may not exceed the amount specified in the budget approved by the commission.
(e) The administrative costs approved by the commission shall be included, along with the estimated amount of universal service support disbursement from the AUSF, in the calculation of the universal service surcharge factor described in 3 AAC 53.340.
History
- Authority: AS 42.05.840
- Eff. 1/10/99, Register 149; am 7/31/2011, Register 199; am 11/6/2016, Register 220; am 7/1/2023, Register 247; am 9/15/2023, Register 247
3 AAC 53.330 Reports, audits, and separation of money
(a) To maintain approval under 3 AAC 53.310,
(1) the administrator shall keep the amount allocated for universal service support in the AUSF in an account separate from other money under the control of the administrator;
(2) the AUSF and the accounting practices of the administrator are subject to a yearly audit by an independent accounting firm; the AUSF and the accounting practices of the administrator are subject to a close-out audit at the end of the administrator's term;
(3) the administrator shall provide the commission full access to the data collected under or prepared through the administration of the AUSF;
(4) the administrator shall report quarterly to the commission on the disbursement of money from the AUSF along with any recommended changes to the universal service surcharge factor; and
(5) at the request of the commission, the administrator may audit one or more public utilities required to pay the universal service surcharge and one or more public utilities that have received disbursements from the AUSF; the administrator shall establish procedures to verify universal service surcharge payments in to the AUSF and universal service support disbursed from the AUSF; the administrator may suspend or delay disbursements for universal service support to a public utility if that utility fails to adequately verify the amount of universal service support claimed.
(b) The commission will provide to the public a monitoring report at least once a year on the administrator's reports under this section.
(c) Repealed 7/1/2023.
History
- Authority: AS 42.05.840
- Eff. 1/10/99, Register 149; am 11/6/2016, Register 220; am 12/20/2018, Register 228; am 7/1/2023, Register 247; am 9/15/2023, Register 247
3 AAC 53.340 Universal service surcharge
(a) A public utility that provides intrastate telecommunications service to the public, or to those classes of users as to be effectively available to the public for a fee, shall pay a universal service surcharge to the AUSF. The public utility must pay the surcharge on its annual gross revenues that are generated from end users on the following intrastate telecommunications services and charges:
(1) cellular telephone and paging services;
(2) mobile radio services;
(3) operator services;
(4) personal communications services (PCS);
(5) special access service;
(6) wide area telecommunications service (WATS);
(7) toll-free service;
(8) 900 service;
(9) message telephone service (MTS);
(10) private line service;
(11) telex;
(12) telegraph;
(13) video services;
(14) satellite service;
(15) resale of intrastate services;
(16) pay phone services;
(17) local exchange services;
(18) any network access fee assessed on end users;
(19) interconnected Voice over Internet Protocol (VoIP).
(b) Notwithstanding (a) of this section, a public utility providing intrastate telecommunications services in the form of open video systems (OVS), cable leased access, or direct broadcast satellite (DBS) services is not required to pay the universal service surcharge.
(c) A public utility providing a service for which a universal service surcharge payment is due shall provide to the administrator a verified accounting of its annual gross revenues from intrastate end users. If a public utility's payments to the AUSF in a calendar year are less than $100, that public utility is not required to submit a payment or the AUSF worksheets for that calendar year, unless the public utility has received universal service support from the AUSF in that calendar year.
(d) By October 1 of each year, the administrator shall calculate a proposed budget for the estimated total amount of the universal service support payment that will be needed from the AUSF for the following calendar year and for administrative costs. The administrator shall recommend the annual universal service surcharge factor for the following year to cover the proposed budget. The universal service surcharge factor is calculated based on the ratio of the total estimated amount of disbursements for the AUSF to the total annual gross revenues from intrastate end users subject to the universal service surcharge. The administrator shall recommend to the commission adjustments to the universal service surcharge factor on a quarterly basis, as necessary, as described in 3 AAC 53.330. The universal service surcharge factor is capped at and may not exceed 10 percent.
(e) A public utility subject to the universal service surcharge under this section shall remit its monthly universal service surcharge payment to the administrator of the AUSF not later than 15 days after the end of each calendar month.
(f) The administrator must hold universal service surcharge payments required from the AUSF in excess of disbursements for a current month in a low-risk interest bearing account and use the excess for disbursements under 3 AAC 53.300 - 3 AAC 53.399 in a following month.
History
- Authority: AS 42.05.840
- Eff. 1/10/99, Register 149; am 1/30/99, Register 149; am 7/31/2011, Register 199; am 3/1/2017, Register 221; am 12/20/2018, Register 228; am 7/1/2023, Register 247; am 9/15/2023, Register 247
3 AAC 53.345 Local exchange carrier of last resort support and rate cap increase
Repealed.
History
- Eff. 7/31/2011, Register 199; am 10/27/2017, Register 224; repealed 12/20/2018 Register 228
3 AAC 53.346 Essential network support for local exchange carriers
A local exchange carrier that previously received essential network support shall receive, on a monthly basis, essential network support in an amount equal to one-twelfth the amount of essential network support received for the year ended December 31, 2022. Essential network support is frozen at that level and is subject to reduction under the 10 percent rate cap provided for under 3 AAC 53.340(d).
History
- Authority: AS 42.05.840
- Eff. 7/31/2011, Register 199; am 10/27/2017, Register 224; am 12/20/2018, Register 228; am 7/1/2023, Register 247
3 AAC 53.350 Disbursements from the AUSF
(a) Monthly, subject to the availability of funds, the administrator shall disburse from the AUSF its approved administrative costs and essential network support.
(b) The administrator shall disburse the AUSF in the following order of priority:
(1) administrative costs;
(2) essential network support, oldest claims first, pro-rated among claimants within a monthly accounting period based on the total unpaid claims for that period.
(c) The administrator may not pay any claim that remains unpaid more than six months after accrual.
History
- Authority: AS 42.05.840
- Eff. 1/10/99, Register 149; am 1/11/2001, Register 157; am 7/31/2011, Register 199; am 3/17/2018, Register 225; am 12/20/2018, Register 228; am 7/1/2023, Register 247
3 AAC 53.390 Lifeline and link up eligibility
Repealed.
History
- Eff. 1/28/2005, Register 173; repealed 12/20/2018, Register 228
3 AAC 53.399 Definitions
In 3 AAC 53.300 - 3 AAC 53.399,
(1) "administrator" means the applicant approved by the commission under 3 AAC 53.310 to serve as administrator of AUSF;
(2) "AUSF" means the Alaska Universal Service Fund;
(3) "universal service surcharge" or "surcharge" means a rate paid by a public utility for the use of the public telecommunications network;
(4) "exchange" or "local exchange" means an operating unit established by a utility for communication service within a specific geographic area; the unit usually embraces a city, town, village or community and its environs, and usually consists of one or more central offices together with the associated plant used in furnishing telephone communication service to the general public within that area;
(5) "local exchange carrier" has the meaning given in AS 42.05.890;
(6) "interconnected Voice over Internet Protocol" has the same meaning as set out in 47 C.F.R. 9.3.
History
- Authority: AS 42.05.840
- Eff. 1/10/99, Register 149; am 1/28/2005, Register 173; am 7/31/2011, Register 199; am 3/1/2017, Register 221; am 12/20/2018, Register 228; am 7/1/2023, Register 247
Article 6 Eligible Telecommunications Carrier Designation
3 AAC 53.400 Applicability, finding, purpose, and waiver
(a) The provisions of 3 AAC 53.400 - 3 AAC 53.499 apply to a common carrier seeking to obtain or maintain designation as an eligible telecommunications carrier under 47 U.S.C. 214(e)(2).
(b) The purpose of 3 AAC 53.400 - 3 AAC 53.499 is to establish requirements for a common carrier requesting or seeking to maintain designation as an eligible telecommunications carrier in the state.
(c) For good cause shown, the commission by order may waive any portion of 3 AAC 53.400 - 3 AAC 53.499 for a common carrier requesting or seeking to maintain designation as an eligible telecommunications carrier. A waiver granted under this subsection may be conditioned upon the common carrier fulfilling requirements not stated in 3 AAC 53.400 - 3 AAC 53.499.
History
- Authority: AS 42.05.141; AS 42.05.145; AS 42.05.151
- Eff. 7/12/2009, Register 191
3 AAC 53.410 Designation of eligible telecommunications carriers
(a) A common carrier seeking designation as an eligible telecommunications carrier must file, for each study area or portion of a study area where eligible telecommunications carrier designation is sought, a request, in accordance with 3 AAC 48.095, that include
(1) the common carrier's legal name, name under which business is conducted, and address;
(2) the name, title, and telephone number of the individual who is the liaison with the commission regarding the request;
(3) a legal description by township and range of the proposed eligible telecommunications carrier service area;
(4) one or more maps of the proposed eligible telecommunications carrier service area, in hard copy and electronic format, that are legible and provide
(A) sufficient geographic detail to confirm the legal description in township and range of the proposed eligible telecommunications carrier service area;
(B) sufficient geographic detail to confirm the legal description in township and range of the study area of any incumbent local exchange carrier providing service in the proposed eligible telecommunications carrier service area, including exchange area boundaries;
(C) the common carrier's current coverage area and authorized service area, including material geographic obstacles;
(D) the common carrier's proposed coverage area by technology, including material geographical obstacles to serving the proposed coverage area; and
(E) the coverage area of any carrier whose services will be resold;
(5) a certification that the common carrier is
(A) capable of providing the supported services in the eligible telecommunications carrier service area upon designation; and
(B) committed to providing the supported services throughout the eligible telecommunications carrier service area in accordance with (7) of this subsection;
(6) a detailed explanation of how the common carrier is capable of and proposes to provide each supported service throughout the eligible telecommunications carrier service area; the explanation must include by wire center area
(A) the technology to be deployed;
(B) the supported services to be provided through resale of another carrier's services, if any;
(C) any limitations on the ability to provide supported services upon designation; and
(D) any federal waivers of requirements applicable to the provision of emergency services;
(7) a commitment to
(A) provide service on a timely basis to requesting customers throughout the common carrier's eligible telecommunications carrier service area using its own facilities or a combination of its own facilities and resale in accordance with the common carrier's network deployment plan filed under 3 AAC 53.420 and reported and certified under 47 C.F.R. 54.316 and 54.321; and
(B) file a report to the commission in accordance with 47 C.F.R. 54.313(a)(3) and 3 AAC 48.095 of any instance in which the carrier is unable to fulfill a customer request for service;
(8) a description of what facilities will be used to deliver supported services in the proposed eligible telecommunications carrier service area, including a description of the common carrier's existing facilities by wire center area;
(9) a description of authorities, licenses, and interconnection, resale, and other agreements that enable the common carrier to provide the supported services throughout the proposed eligible telecommunications carrier service area, including the docket of any related commission proceedings;
(10) a detailed description of how universal service support will be used, including the information required by 3 AAC 53.420;
(11) a certification that the common carrier will, within 90 days after designation and annually thereafter, advertise in a medium of general distribution the availability of and charges for supported, lifeline, and link up services throughout the eligible telecommunications carrier service area;
(12) a certification that the common carrier has and will continue to take steps to remain functional in emergency situations by
(A) maintaining at least eight hours of backup power to ensure functionality without local alternating current (AC) commercial power;
(B) establishing to the extent feasible the ability to reroute traffic around damaged facilities and to manage traffic spikes resulting from emergency situations; and
(C) establishing procedures for employees to follow in an emergency to prevent or minimize interruption or impairment of telecommunications services;
(13) a certification that the common carrier will comply with applicable consumer protection and service quality standards set out in 3 AAC 53.450;
(14) information confirming that the common carrier offers one or more calling plans comparable to those of the incumbent local exchange carrier; the information must include
(A) a certification that, among its comparable calling plans, the common carrier offers a calling plan with at least 500 free minutes of local usage per month; and
(B) a comparison of the incumbent local exchange carrier's basic local usage plans and the requesting carrier's local usage plans that includes the local calling area, minutes of use included, plan rates, rate for excess minutes, features, and any other information demonstrating how proposed plans compare to calling plans of the incumbent local exchange carrier;
(15) information on how the common carrier will administer the lifeline and link up programs, including
(A) a certification that the common carrier offers a calling plan with at least 500 free minutes of local usage per month to lifeline-eligible customers;
(B) a description of the local calling area, plan rate, rate for excess minutes, and available features;
(C) an explanation of how eligibility for lifeline and link up will be determined;
(D) examples applying lifeline discounts to service offerings; and
(E) a statement of whether a lifeline customer has a choice of plan offerings or must subscribe to one standard plan;
(16) a certification that the common carrier acknowledges it may be required to provide equal access to long distance carriers if no other eligible telecommunications carrier provides equal access within the eligible telecommunications carrier service area;
(17) with respect to universal service support for high-cost areas, a commitment to use that high-cost universal service support for the provision, maintenance, and upgrade of facilities and services that benefit the eligible telecommunications carrier service area from which the support was derived;
(18) if service area redefinition is requested, the information required by 3 AAC 53.430;
(19) any additional information that the common carrier considers important in support of the request for designation as an eligible telecommunications carrier; and
(20) the information and fees required by (b) and (c) of this section.
(b) The common carrier must demonstrate that designation as an eligible telecommunications carrier is in the public interest by filing information explaining
(1) how designation would benefit consumers;
(2) the advantages and disadvantages of the requesting common carrier's service offerings compared to the offerings of other common carriers in the area;
(3) whether the common carrier's particular plan for providing supported services upon request throughout the proposed eligible telecommunications carrier service area is in the public interest; and
(4) any additional information that the common carrier considers important to demonstrate designation is in the public interest.
(c) A common carrier that does not pay regulatory cost charges under AS 42.05.254 and 3 AAC 47 shall submit a fee of $5,000 with a request for designation as an eligible telecommunications carrier.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.431 AS 42.05.145; AS 42.05.306; AS 42.05.661 AS 42.05.151; AS 42.05.381
- Eff. 7/12/2009, Register 191; am 11/6/2016, Register 220; am 11/22/2017, Register 224
3 AAC 53.420 Deployment plan
(a) A common carrier seeking designation as an eligible telecommunications carrier must file a network deployment plan explaining its plans to provide service throughout the proposed eligible telecommunications service area. The network deployment plan must include
(1) an explanation of how service availability, service quality, coverage, or capacity will improve over the duration of the deployment plan with the receipt of universal service support for high-cost areas;
(2) the projected start and completion date for each major expansion of the network deployment plan;
(3) the total estimated investment for each planned major expansion of the network and the estimated amount of universal service support for high-cost areas that is available to fund the investment;
(4) specific geographic locations for each major expansion;
(5) areas receiving facilities-based coverage as a result of network expansion; and
(6) specific areas where resale will be the primary means of providing service.
(b) When evaluating the network deployment plan the commission will consider
(1) the scope of the geographic area the common carrier will serve by resale;
(2) the common carrier's schedule for commencing facilities-based service and resold service within the eligible telecommunications carrier service area;
(3) the overall reasonableness of the network deployment plan; and
(4) other factors demonstrating whether the network deployment plan is consistent with the public interest; in areas served by a rural telephone company, the commission will consider whether the deployment plan provides a competitive advantage to the requesting common carrier or unfairly disadvantages the incumbent in the provision of universal service.
History
- Authority: AS 42.05.141; AS 42.05.151 AS 42.05.145; AS 42.05.291
- Eff. 7/12/2009, Register 191
3 AAC 53.430 Request to redefine service area
If a common carrier proposes an eligible telecommunications carrier service area that differs from the study area of the incumbent local exchange carrier, the requesting carrier must provide
(1) the population, square miles, and road miles of each wire center area where the common carrier seeks eligible telecommunications carrier designation;
(2) the population, square miles, and road miles of each wire center area where the common carrier does not seek eligible telecommunications carrier designation;
(3) the source of the information provided in (1) and (2) of this section;
(4) information on the approved plan for disaggregation of support by the incumbent local exchange carrier under 47 C.F.R. 54.315;
(5) if the study area is the area served by a rural telephone company, an acknowledgement that commission approval of a proposed rural service area is conditioned upon approval by the Federal Communications Commission after taking into account the recommendations of the Federal-State Joint Board on Universal Service in accordance with 47 U.S.C. 214(e)(5);
(6) a demonstration that the proposed eligible telecommunications carrier service area is in the public interest; and
(7) a discussion of creamskimming that includes
(A) a demonstration that the proposed redefinition of a service area does not result in an opportunity for creamskimming; or
(B) if the opportunity for creamskimming does exist, an explanation of how
(i) the public interest would be served by designating the common carrier as an eligible telecommunications carrier for an area other than the incumbent local exchange carrier study area; and
(ii) disaggregation of the incumbent local exchange carrier's universal service support under 47 C.F.R. 54.315 would affect the opportunity for creamskimming.
History
- Authority: AS 42.05.141; AS 42.05.151 AS 42.05.145; AS 42.05.291
- Eff. 7/12/2009, Register 191
3 AAC 53.440 Procedural requirements for requests for eligible telecommunications carrier designation
(a) A request for designation as an eligible telecommunications carrier must be in writing, must be verified by an authorized officer of the requesting common carrier, and must conform to the general requirements of pleadings set out in 3 AAC 48.100. A request for designation as an eligible telecommunications carrier will be considered a petition as defined in 3 AAC 48.820.
(b) The requesting common carrier shall serve a copy of its petition, in accordance with 3 AAC 48.090, on any common carrier that has been designated as an eligible telecommunications carrier in any part of the proposed eligible telecommunications carrier service area.
(c) The commission will publicly notice a request for designation as an eligible telecommunications carrier and invite comment on the request, providing a comment period of at least 21 days.
(d) If the request for designation as an eligible telecommunications carrier does not contain all information required by 3 AAC 53.410, 3 AAC 53.420, and 3 AAC 53.430, the commission will require the requesting carrier to submit the missing information within five business days after the commission requests the missing information.
(e) If the commission needs information that is not required by 3 AAC 53.410, 3 AAC 53.420, or 3 AAC 53.430 to determine whether to grant a request for eligible telecommunications carrier designation, the commission will require the requesting carrier to submit further information within five business days after the commission requests further information.
(f) The requesting carrier bears the burden of proof with respect to all issues raised by its petition for designation as an eligible telecommunications carrier.
History
- Authority: AS 42.05.141; AS 42.05.145; AS 42.05.151
- Eff. 7/12/2009, Register 191; am 11/6/2016, Register 220
3 AAC 53.450 Consumer protection and service quality
(a) An eligible telecommunications carrier shall maintain at least one business office, with toll-free calling if necessary, staffed during commission business hours, to provide customers with access to personnel who can timely provide information on services and rates, accept and process service applications, explain and adjust bills, and generally represent the carrier.
(b) A wireless carrier that is designated as an eligible telecommunications carrier shall comply with the Cellular Telecommunications and Internet Association's Consumer Code for Wireless Service by
(1) disclosing rates and terms of service to customers;
(2) making available maps showing where service is generally available;
(3) providing contract terms to customers and confirming changes in service;
(4) allowing a trial period for new service;
(5) providing specific disclosures in advertising;
(6) separately identifying carrier charges from taxes on billing statements;
(7) providing customers the right to terminate service for changes to contract terms;
(8) providing ready access to customer service;
(9) promptly responding to consumer inquiries and complaints received from government agencies; and
(10) abiding by policies for protection of consumer privacy.
(c) An eligible telecommunications carrier shall commit to maintaining, in an easily accessible location on the company website, consumer complaint procedures.
History
- Authority: AS 42.05.141; AS 42.05.151 AS 42.05.145; AS 42.05.291
- Eff. 7/12/2009, Register 191
3 AAC 53.460 Reporting requirements
(a) A common carrier designated as an eligible telecommunications carrier in this state and that files a report with the Federal Communications Commission under 47 C.F.R. 54.313 shall provide a copy of that report to the commission on or before July 1 of each year, in accordance with 3 AAC 48.095. The filing must be supplemented with
(1) a report identifying any designated areas that remain unserved;
(2) a report of the common carrier's non-compliance with the requirements set out 3 AAC 53.410(a)(12), with a detailed explanation of the steps being taken to achieve compliance; and
(3) a certification that the common carrier advertised the availability of supported services throughout the eligible telecommunications carrier service area in the prior calendar year.
(b) A common carrier designated as an eligible telecommunications carrier shall file with the commission, on or before July 1 of each year and in accordance with 3 AAC 48.095, an eligible telecommunications carrier (ETC) high-cost support self-certification affidavit affirming that the high-cost universal service funds that were received in the previous year and that will be received in the future year will be used only for the provision, maintenance, and upgrading of facilities and services for which the support is intended under 47 U.S.C. 254(e)(Communications Act of 1934).
History
- Authority: AS 42.05.141; AS 42.05.151 AS 42.05.145; AS 42.05.291
- Eff. 7/12/2009, Register 191; am 11/6/2016, Register 220; am 11/22/2017, Register 224
3 AAC 53.470 Audits
The commission may, on its own motion or in response to a petition from an interested entity, request the Alaska Universal Service Fund administrator approved under 3 AAC 53.310 or an appropriate entity to perform an audit of a designated eligible telecommunications carrier's compliance with eligible telecommunications carrier requirements.
History
- Authority: AS 42.05.141; AS 42.05.151 AS 42.05.145; AS 42.05.291
- Eff. 7/12/2009, Register 191
3 AAC 53.480 Revocation, suspension, or modification of designation as an eligible telecommunications carrier
If the commission determines that an eligible telecommunications carrier failed to comply with the requirements of 47 U.S.C. 214(e), 3 AAC 53.400 - 3 AAC 53.499, commission orders, or other applicable law, or failed to fulfill commitments made in filings with the commission regarding eligible telecommunications carrier status, the commission, after notice and opportunity to be heard, may revoke, suspend or modify the carrier's eligible telecommunications carrier designation.
History
- Authority: AS 42.05.141; AS 42.05.145; AS 42.05.151
- Eff. 7/12/2009, Register 191
3 AAC 53.499 Definitions
In 3 AAC 53.400 - 3 AAC 53.499, unless the context requires otherwise,
(1) "business day" means a day other than Saturday, Sunday, or a state holiday;
(2) "common carrier" has the meaning given in 47 U.S.C. 153(11);
(3) "coverage area" means one or more locations where the common carrier is capable of providing the supported services;
(4) "creamskimming" means the practice of targeting the customers that are the least expensive or the most profitable for the incumbent local exchange carrier to serve, thereby undercutting the incumbent local exchange carrier's ability to provide service throughout its study area;
(5) "eligible telecommunications carrier service area" or "service area" means the geographical boundaries specified in an common carrier's request for designation as an eligible telecommunications carrier;
(6) "exchange" or "local exchange" has the meaning given in 3 AAC 48.820;
(7) "facilities" means any physical components of the telecommunications network that are used in the transmission or routing of the services that are designated for support;
(8) "lifeline" has the meaning given in 47 C.F.R. 54.401;
(9) "link up" has the meaning given in 47 C.F.R. 54.411;
(10) "rural telephone company" has the meaning given in 47 U.S.C. 153(44);
(11) "service area redefinition" means a change to an eligible telecommunications carrier service area that would cause the area to differ from the incumbent local exchange carrier study area;
(12) "study area" means the geographic area over which the incumbent local exchange carrier calculates its costs and performs jurisdictional separations, and is generally composed of the exchanges in the state served by that incumbent local exchange carrier; "study area" does not include areas outside the incumbent local exchange carrier's certificated service area;
(13) "supported services" means the basic services supported by the federal universal service fund in accordance with 47 C.F.R. 54.101(a), including
(A) voice grade access;
(B) local usage;
(C) dual-tone multi-frequency signaling;
(D) single-party service;
(E) access to emergency services;
(F) access to operator services;
(G) access to interexchange service;
(H) access to directory assistance; and
(I) toll limitation or a similar service for low-income customers;
(14) "wire center" means the location of a local switching facility containing one or more central offices;
(15) "wire center area" means the area within which all customers served by a given wire center are located.
History
- Authority: AS 42.05.141; AS 42.05.151 AS 42.05.145; AS 42.05.291
- Eff. 7/12/2009, Register 191
Article 7 Criteria for the Provision of Pay-Per-Call Telephone Service
3 AAC 53.500 Applicability, purpose, and waiver
(a) The provisions of 3 AAC 53.500 - 3 AAC 53.530 and 3 AAC 53.599 apply to a local exchange carrier or an intrastate interexchange carrier that provides billing and collection services to a pay-per-call information provider either directly or on behalf of an interexchange carrier.
(b) The provisions of 3 AAC 53.500, 3 AAC 53.540 - 3 AAC 53.570, and 3 AAC 53.599 apply to a local exchange carrier or an intrastate interexchange carrier that provides transmission services to a pay-per-call information provider.
(c) The purpose of 3 AAC 53.500 - 3 AAC 53.599 is to establish criteria for the provision of intrastate pay-per-call telephone service.
(d) Unless otherwise required under AS 42.05, any requirement in 3 AAC 53.500 - 3 AAC 53.599 may be modified or waived, in whole or in part, by order of the commission upon application and a showing of good cause or on the commission's own motion under procedures set out in 3 AAC 48.805.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.371 AS 42.05.145; AS 42.05.311; AS 42.05.431 AS 42.05.151; AS 42.05.321 AS 42.05.221; AS 42.05.361
- Eff. 9/25/93, Register 127
3 AAC 53.510 Prohibition against disconnection of service
(a) A local exchange carrier may not disconnect a customer's basic local telephone service for nonpayment of pay-per call telephone service charges.
(b) An interexchange carrier may not disconnect a customer's interexchange telephone service for nonpayment of pay-per-call telephone service charges.
(c) A local exchange carrier or an interexchange carrier may not threaten to disconnect basic local or interexchange telephone service or imply that service may be disconnected due to nonpayment of pay-per-call telephone service charges.
(d) Pay-per-call telephone service charges may not be included in the amount that must be paid to avoid disconnection of basic local or interexchange telephone service.
(e) Pay-per-call telephone service charges may not be included in the calculation of deposits to establish or reconnect basic local or interexchange telephone service.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.371 AS 42.05.145; AS 42.05.311; AS 42.05.431 AS 42.05.151; AS 42.05.321 AS 42.05.221; AS 42.05.361
- Eff. 9/25/93, Register 127
3 AAC 53.520 Billing requirements
(a) On a billing statement, charges for pay-per-call telephone service must be segregated from charges for basic local or interexchange telephone service charges and be listed in a clear and conspicuous manner under a separate heading that reads "Pay-Per-Call Telephone Service Charges."
(b) A billing statement that includes charges for pay-per-call telephone services must include a clear and conspicuous notice that states: "Your telephone service may not be disconnected for failure to pay for Pay-Per-Call Telephone Service Charges." "Pay-Per-Call Telephone Charges" may be disputed if you believe the charges are unauthorized, fraudulent, or illegal.
(c) A billing statement must provide a local or toll-free telephone number that a customer may call with inquiries or disputes regarding pay-per-call telephone service charges.
(d) The name, address, and business telephone number of the information service provider must be provided at a customer's oral or written request in a reasonable amount of time and free of charge.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.371 AS 42.05.145; AS 42.05.311; AS 42.05.431 AS 42.05.151; AS 42.05.321 AS 42.05.221; AS 42.05.361
- Eff. 9/25/93, Register 127
3 AAC 53.530 Complaint procedure and adjustment policy
(a) When a customer questions or disputes a pay-per-call telephone service charge, the billing agent shall inform the customer of the blocking options that are available.
(b) The billing agent shall waive pay-per-call telephone service charges for the period of time from a customer's first inadvertent, mistaken, or unauthorized call to the date on which the customer notifies the billing agent that the charges are disputed.
(c) A customer may be blocked from access to pay-per-call telephone service, but not basic local telephone or interexchange telephone service, if inadvertent, mistaken, or unauthorized use occurs after the first waiver under (b) of this section and the customer refuses to pay the charges.
(d) In exchanges where customer-specific blocking of pay-per-call services is available, the billing agent shall provide adjustments for pay-per-call telephone service charges for reasonably disputed charges. The basis for a reasonably disputed charge includes
(1) the customer did not receive a price advertisement in the preamble, the price of the call was misrepresented to the customer in the preamble, or the price advertisement received by the customer in the preamble was false, misleading, or deceptive;
(2) the customer was misled, deceived, or confused by the preamble;
(3) the pay-per-call telephone service program was incomplete, garbled, inaudible, or unintelligible;
(4) the customer was disconnected or cut off from the pay-per-call telephone service;
(5) the pay-per-call telephone service provided out-of-date information;
(6) the customer terminated the call during the preamble described in 3 AAC 53.560(c) but was charged for the pay-per-call telephone service; or
(7) the customer did not take affirmative action to accept a collect pay-per-call telephone service.
(e) In exchange where customer-specific blocking of pay-per-call services is not available, the billing agent shall provide unlimited, automatic adjustments for pay-per-call telephone service charges upon a customer complaint.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.371 AS 42.05.145; AS 42.05.311; AS 42.05.431 AS 42.05.151; AS 42.05.321 AS 42.05.221; AS 42.05.361
- Eff. 9/25/93, Register 127
3 AAC 53.540 Blocking requirements
(a) Where technically feasible, a local exchange carrier shall provide free, first-time, customer-specific blocking of pay-per-call telephone service and annually notify its customers that initial blocking is available free of charge.
(b) A local exchange carrier may charge customers an appropriate tariffed fee for customer-specific reconnection to pay-per-call telephone service.
(c) A local exchange carrier may charge customers an appropriate tariffed fee for customer-specific blocking after having provided that customer initial blocking and reconnection to pay-per-call telephone service.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.371 AS 42.05.145; AS 42.05.311; AS 42.05.431 AS 42.05.151; AS 42.05.321 AS 42.05.221; AS 42.05.361
- Eff. 9/25/93, Register 127
3 AAC 53.550 Prohibition against automated collect calls or the broadcasting of tones
(a) A local exchange carrier or interexchange carrier may not provide transmission services for pay-per-call telephone service originated by an information service provider and charged to a customer unless the called party has taken affirmative action clearly indicating that it accepts the charges for collect pay-per-call telephone service.
(b) A local exchange carrier or interexchange carrier may not provide transmission services for a pay-per-call telephone service that uses the broadcasting of tones to dial a pay-per-call telephone service number.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.371 AS 42.05.145; AS 42.05.311; AS 42.05.431 AS 42.05.151; AS 42.05.321 AS 42.05.221; AS 42.05.361
- Eff. 9/25/93, Register 127
3 AAC 53.560 Preamble requirements
(a) At the beginning of each pay-per-call telephone service, a preamble is required that provides disclosure information pertaining to the specific service provided.
(b) The preamble must be clearly understandable and audible.
(c) The disclosure information contained in the preamble must include
(1) the name of the pay-per-call telephone service provider;
(2) the nature of the pay-per-call telephone service provided; and
(3) the maximum charge per initial and subsequent minute and per call.
(d) A preamble for programming aimed at or likely to be of interest to children must include a warning that parental permission must be given before completing the call. The warning must be clear, conspicuous, and in language easily understandable by children.
(e) A customer may disconnect the call during or at the conclusion of the preamble without incurring a charge.
(f) A preamble is not required for programs with a flat rate of $2 or less.
(g) A preamble bypass mechanism may be installed allowing repeat customers to affirmatively bypass the preamble during subsequent calls.
(h) A preamble bypass mechanism must be disabled for a period of 30 days following a price increase of any pay-per-call telephone service.
(i) A preamble bypass mechanism may not be used in any pay-per-call telephone service aimed at children.
(j) A preamble that complies with 47 C.F.R. 64.711, in effect as of June 30, 1992, is considered to be in compliance with this section.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.371 AS 42.05.145; AS 42.05.311; AS 42.05.431 AS 42.05.151; AS 42.05.321 AS 42.05.221; AS 42.05.361
- Eff. 9/25/93, Register 127
3 AAC 53.570 Enforcement
Local exchange carriers and interexchange carriers are prohibited from providing transmission services for pay-per-call telephone service that does not comply with 3 AAC 53.500 - 3 AAC 53.599.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.371 AS 42.05.145; AS 42.05.311; AS 42.05.431 AS 42.05.151; AS 42.05.321 AS 42.05.221; AS 42.05.361
- Eff. 9/25/93, Register 127
3 AAC 53.599 Definitions
(a) Unless the context indicates otherwise, in 3 AAC 53.500 - 3 AAC 53.570
(1) "billing agent" means the local exchange carrier or the intrastate interexchange carrier doing billing and collection on behalf of the information provider;
(2) "blocking" means the denial of customer access to certain telephone services;
(3) "children" means persons under the age of 18;
(4) "information provider" means a person who furnishes, conducts, or offers a pay-per-call telephone service or who holds itself out as engaged in the business of furnishing, conducting, or offering pay-per-call telephone service;
(5) "pay-per-call telephone service" means a service that permits simultaneous calling by a number of callers to a single telephone number and for which the customer is assessed, on a per-call or a per-time-interval basis, a charge that is greater than or in addition to the charge for the transmission of the call; "pay-per-call telephone service" excludes directory assistance or conference call services that are offered by a telecommunications utility and excludes services for which the charge is dependent upon a presubscription relationship between the customer and a service provider; and
(6) "preamble" means an initial, free-of-charge disclosure message preceding the pay-per-call telephone service that informs the customer about the information service provider, the program being purchased, and all charges related to the program.
(b) Definitions contained in 3 AAC 52.340, 3 AAC 52.399, and 3 AAC 48.820 also apply to the words used in 3 AAC 53.500 - 3 AAC 53.570.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.371 AS 42.05.145; AS 42.05.311; AS 42.05.431 AS 42.05.151; AS 42.05.321 AS 42.05.221; AS 42.05.361
- Eff. 9/25/93, Register 127
Article 8 Criteria for the Provision of Statewide Directory Assistance
3 AAC 53.610 Applicability and waiver
(a) The provisions of 3 AAC 53.610 - 3 AAC 53.660 apply to all local exchange carriers, interexchange carriers, alternate operator service providers, pay telephone providers, and directory assistance providers.
(b) Unless otherwise required under AS 42.05, a requirement in 3 AAC 53.610 - 3 AAC 53.660 may be modified or waived, in whole or in part, by order of the commission and a showing of good cause or on the commission's own motion. An applicant shall file and the commission will consider an application in accordance with 3 AAC 48.805.
(c) Nothing in 3 AAC 53.610 - 3 AAC 53.660 precludes or otherwise limits a directory assistance provider from using partially or fully automated technologies in the provision of directory assistance services.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.311 AS 42.05.145; AS 42.05.291; AS 42.05.321
- Eff. 5/24/95, Register 134; am 11/24/2004, Register 172
3 AAC 53.620 Provision of intrastate directory assistance
(a) A local exchange carrier shall provide 411 dialed intrastate directory assistance to its local subscribers either through an internal directory assistance bureau or through a directory assistance agent. On or before December 1, 2004, each local exchange carrier must notify the commission of the name and address of the carrier's directory assistance provider. Within seven days after any change in the name or address of its directory assistance provider, a local exchange carrier must notify the commission of that change. A local exchange carrier shall include in its tariff its rates for 411 dialed intrastate directory assistance, unless the carrier is exempt from tariff filing requirements under AS 42.05.711. A local exchange carrier shall ensure that subscriber listings obtained by its subscribers through 411 dialed intrastate directory assistance are current within five business days after a change in subscriber status.
(b) An interexchange carrier may provide 907-555-1212 dialed intrastate directory assistance to its customers. On or before December 1, 2004, each interexchange carrier that provides 907-555-1212 dialed intrastate directory assistance must notify the commission of the name and address of the carrier's directory assistance provider. Within seven days after any change in the name or address of its directory assistance provider, an interexchange carrier must notify the commission of that change. Except for intrastate directory assistance provided through a prepaid calling card service subject to 3 AAC 52.377, an interexchange carrier shall include in its tariff its rates for 907-555-1212 dialed intrastate directory assistance. An interexchange carrier shall ensure that subscriber listings obtained by its subscribers through 907-555-1212 dialed intrastate directory assistance are current within five days after a change in subscriber status.
(c) Only a local exchange carrier may provide 411 dialed intrastate directory assistance. Only an interexchange carrier may provide 907-555-1212 dialed intrastate directory assistance. Charges for intrastate directory assistance provided through other numbers are not required to be included in a tariff or approved in advance by the commission.
(d) The rates for 411 dialed and 907-555-1212 dialed intrastate directory assistance from a pay telephone must be clearly posted.
(e) The answering time objective set out in 3 AAC 52.300(b) applies to all 411 dialed and 907-555-1212 dialed intrastate directory assistance.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.311 AS 42.05.145; AS 42.05.291; AS 42.05.321
- Eff. 5/24/95, Register 134; am 11/24/2004, Register 172
3 AAC 53.625 Directory assistance providers
(a) Upon petition or on its own motion, the commission may investigate the wholesale rates a directory assistance provider charges to local exchange carriers for 411 dialed intrastate directory assistance or to intrastate interexchange carriers for 907-555-1212 dialed intrastate directory assistance.
(b) A directory assistance provider may not charge unjust or unreasonable rates for 411 dialed or 907-555-1212 dialed intrastate directory assistance, grant an unreasonable preference or advantage, or subject a customer to an unreasonable prejudice or disadvantage.
History
- Authority: AS 42.05.141; AS 42.05.361; AS 42.05.421 AS 42.05.145; AS 42.05.381; AS 42.05.431 AS 42.05.151; AS 42.05.391 AS 42.05.291; AS 42.05.411
- Eff. 11/24/2004, Register 172; am 11/6/2016, Register 220; am 11/22/2017, Register 224
3 AAC 53.630 Certification requirements for directory assistance
Repealed.
History
- Eff. 5/24/95, Register 134; repealed 11/24/2004, Register 172
3 AAC 53.640 Statewide directory assistance bureau
Repealed.
History
- Eff. 5/24/95, Register 134; repealed 11/24/2004, Register 172
3 AAC 53.645 Discontinuance of service
A directory assistance agent may discontinue, suspend, or abandon service only after six months' notice to its customers and to the commission. The commission may require a directory assistance agent to continue providing service until another available directory assistance agent is capable of providing all services needed for the public convenience and necessity.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.261
- Eff. 11/24/2004, Register 172
3 AAC 53.650 Provision and use of subscriber data
(a) A local exchange carrier shall provide directory assistance, directory listings, and directory assistance databases to a competing provider of telephone exchange service, a competing provider of telephone toll service, or a directory assistance agent in a nondiscriminatory manner as required by 47 C.F.R. 51.217, revised as of October 1, 2003 and adopted by reference. The subscriber data that a local exchange carrier must provide under this subsection includes the directory listings and directory assistance databases of any total service reseller for which the provisioning local exchange carrier is the underlying carrier, unless the total service reseller undertakes the obligation to provide the data for its customers and requests the underlying carrier not to provide the data.
(b) A local exchange carrier shall ensure that the information provided to its own directory assistance provider, and to any competitive directory assistance provider, is accurate and updated within five business days after a change in subscriber status. A local exchange carrier shall make initial and updated subscriber listings available to each directory assistance provider within the same period.
(c) Unless it is exempt under AS 42.05.711 from tariff filing requirements, a local exchange carrier shall include charges for the directory listings and directory databases provided under (a) of this section in its tariff. Those charges must be a rate
(1) not to exceed $.04 per listing for an initial list, and $.06 per listing for a list of updates; or
(2) based on the following direct costs of producing a directory list:
(A) processing of the list or database request, including order-taking and invoicing;
(B) production of the list or database;
(C) cost of the distribution format such as diskette, compact disc, or paper;
(D) amortized programming costs necessary to set up the list or database.
(d) The charges for the directory listings and databases may not
(1) include any consideration of the market value or the intangible value associated with the local exchange carrier's exclusive access to the subscriber information;
(2) include the costs associated with the direct provision of directory assistance; or
(3) exceed the rate the local exchange carrier charges to itself, its own directory assistance agent, or an affiliated interest.
(e) If a local exchange carrier's proposed charges for directory listings and databases exceed the limits set out in (c)(1) of this section, the local exchange carrier has the burden of showing that its charges are based solely on the direct costs set out in (c)(2) of this section and do not include any of the costs set out in (d)(1) and (2) of this section.
(f) A directory assistance provider may not provide information contained in the directory listings and directory databases to any affiliated interest or other third party not otherwise entitled to obtain it directly under (a) of this section, except in the provision of directory assistance to that third party or a service ancillary to directory assistance, including call completion.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.371 AS 42.05.145; AS 42.05.311; AS 42.05.391 AS 42.05.151; AS 42.05.321; AS 42.05.431
- Eff. 5/24/95, Register 134; am 11/24/2004, Register 172
3 AAC 53.660 Definitions
Unless the context indicates otherwise, in 3 AAC 53.610 - 3 AAC 53.660,
(1) "affiliated interest" has the meaning given in AS 42.05.990;
(2) "alternate operator service" has the meaning given in AS 42.05.325(c);
(3) "business day" means each day of a calendar week except a Saturday, a Sunday, and each holiday that is observed by a local exchange carrier or interexchange carrier;
(4) "commission" means the Regulatory Commission of Alaska;
(5) "direct cost" means a cost specifically attributed to the production of an individual service or product without requiring the use of allocations to separate it from costs incurred in the production of other services or products;
(6) "directory assistance agent" means an entity that operates as an agent of a local exchange carrier or an interexchange carrier to maintain a database and provide operator services for the provision of intrastate directory assistance to end users;
(7) "directory assistance provider" means an entity that maintains a database and provides operator services for the provision of intrastate directory assistance to end users;
(8) "interexchange carrier" means a carrier certificated or registered to provide intrastate interexchange telephone service;
(9) "intrastate directory assistance" means the audio provision of statewide directory information to a customer calling from the 907 area code;
(10) "local exchange carrier" means a carrier certificated to provide local exchange telephone service;
(11) "total service reseller" means a local exchange carrier that purchases local service on a wholesale basis from a facilities-based local exchange carrier for resale to local customers;
(12) "underlying carrier" means a facilities-based local exchange carrier that provides local services to another local exchange carrier for resale to end users.
History
- Authority: AS 42.05.141; AS 42.05.151 AS 42.05.145; AS 42.05.291
- Eff. 5/24/95, Register 134; am 11/24/2004, Register 172
Article 9 State Telecommunications Modernization Plan
3 AAC 53.700 Applicability, purpose, and extensions
(a) The provisions of 3 AAC 53.700 - 3 AAC 53.720 apply to all local exchange carriers and facilities-based intrastate interchange carriers certificated by the commission.
(b) The purpose of 3 AAC 53.700 - 3 AAC 53.720 is to
(1) establish a plan defining requirements for the modernization of the public-switched telephone network in the state;
(2) improve the quality and availability of telecommunications services uniformly deployed throughout the rural and non-rural areas of the state;
(3) assure the establishment of telecommunications services and facilities that may be required by the public convenience and necessity and the furnishing of service at rates that are just and reasonable; and
(4) lead to uniform deployment of an intelligent telecommunications network throughout the rural and non-rural areas of the state.
(c) Unless otherwise mandated under AS 42.05, a requirement in 3 AAC 53.700 - 3 AAC 53.720 may be extended for up to five years by order of the commission upon application under 3 AAC 48.805 and a showing that the required technology is not commercially feasible.
History
- Authority: AS 42.05.141; AS 42.05.221; AS 42.05.311 AS 42.05.145; AS 42.05.241; AS 42.05.321 AS 42.05.151; AS 42.05.291; AS 42.05.800
- Eff. 3/15/96, Register 137
3 AAC 53.705 Modernization requirements
(a) A telecommunications provider shall design its telephone network to allow for the expeditious deployment and integration of emerging technologies as they become commercially feasible.
(b) A telecommunications provider may develop affordable tariff rates specifically for medical links and distance learning services, provided that they comply with AS 42.05.361 - 42.05.421.
(c) A telephone company shall provide reliable powering of ordinary voice telephone service operating over those portions of the telecommunications network that are not network powered.
(d) After February 13, 1997, a telephone company shall only place
(1) new wireline facilities into service that can provide
(A) every subscriber with one-party service; and,
(B) as-built or with additional equipment, transmission and reception of data at a rate no lower than one megabit per second; and
(2) switching equipment into service that can provide
(A) custom-calling features that, at a minimum, include call waiting, call forwarding, abbreviated dialing, and three-way calling; and
(B) enhanced 911 service (E911 service) for areas served by the telephone company when requested by the governmental agency responsible for that service.
(e) After February 13, 2003, a telephone company shall only place new wireline facilities into service that can provide, as-built or with additional equipment, the ability to transmit video capable of depicting a reasonable representation of motion.
(f) By February 13, 2003, a
(1) telephone company shall provide
(A) service using switching equipment that can provide E911 service if requested by the governmental agency responsible for that service;
(B) one-party service upon demand to subscribers; and
(C) an end-to-end data transfer rate of no less that 28.8 kilobits per second; and
(2) telecommunications provider shall provide switched digital service that operates at a rate of at least 56 kilobits per second to any customer upon request.
(g) A telecommunications provider shall work towards
(1) elimination of party-line service; and
(2) universal availability, upon request, of
(A) digital voice and data service of at least 56 - 164 kilobits per second;
(B) transmission and reception of high-bit-rate data at no less than 1 megabit per second; and
(C) reception of video as described in (e) of this section.
(h) Compliance with the requirements of 3 AAC 53.700 - 3 AAC 53.720 may not be used to justify unreasonable or imprudent construction of facilities.
History
- Authority: AS 42.05.141; AS 42.05.221; AS 42.05.311 AS 42.05.145; AS 42.05.241; AS 42.05.321 AS 42.05.151; AS 42.05.291; AS 42.05.800
- Eff. 3/15/96, Register 137
3 AAC 53.710 Reporting requirements
Repealed.
History
- Eff. 3/15/96, Register 137; repealed 11/22/2017, Register 224
3 AAC 53.720 Definitions
(a) Unless the context indicates otherwise, in 3 AAC 53.700 - 3 AAC 53.720,
(1) "bit rate" means the rate of transmission of telecommunications signals or intelligence in binary (two-state) form in bits per unit of time; for example, megabits per second (Mb/sec), kilobits per second (kb/sec);
(2) "commercially feasible" means equipment is available and its cost and installation are reasonable;
(3) "emerging technologies" means new or not fully developed methods of telecommunications;
(4) "E911 service" or "enhanced 911 service" means a service that provides call routing to an emergency response answering point based upon the calling telephone number, provides for the display of the physical location of the calling telephone at the answering point, and is authorized in AS 29.35.131 - 29.35.137;
(5) "intrastate interexchange carrier" means a carrier as defined in 3 AAC 52.340;
(6) "telephone company" means a carrier that provides telephone local exchange service as defined in 3 AAC 48.820;
(7) "telecommunications" has the meaning given in AS 42.05.990;
(8) "telecommunications provider" means a telephone company as defined in (6) of this subsection and an intrastate interexchange carrier as defined in 3 AAC 52.340 that is facilities based;
(9) "wireline service" means telecommunications service provided over telephone lines, characterized by a wire or wirelike connection carrying electricity or light between the subscriber and the public switched network, and implies a physical connection; although radio may form part of the circuit, radio may not be the major method of transmission, such as in radiotelephone.
(b) Definitions contained in 3 AAC 48.820, 3 AAC 52.340, and 3 AAC 52.399 also apply to the defined words as they are used in 3 AAC 53.700 - 3 AAC 53.720.
History
- Authority: AS 42.05.141; AS 42.05.221; AS 42.05.311 AS 42.05.145; AS 42.05.241; AS 42.05.321 AS 42.05.151; AS 42.05.291; AS 42.05.800
- Eff. 3/15/96, Register 137
Article 10 Public Interest Pay Telephone Service
3 AAC 53.740 Applicability, purpose, and waiver
Repealed.
History
- Eff. 1/11/2001, Register 157; repealed 12/20/2018, Register 228
3 AAC 53.745 Criteria for designation of a public interest pay telephone
Repealed.
History
- Eff. 1/11/2001, Register 157; repealed 12/20/2018, Register 228
3 AAC 53.750 Designation of public interest pay telephones
Repealed.
History
- Eff. 1/11/2001, Register 157; am 11/6/2016, Register 220; repealed 12/20/2018, Register 228
3 AAC 53.755 Assignment of public interest pay telephones
Repealed.
History
- Eff. 1/11/2001, Register 157; repealed 12/20/2018, Register 228
3 AAC 53.760 Funding for public interest pay telephones
Repealed.
History
- Eff. 1/11/2001, Register 157; repealed 12/20/2018, Register 228
3 AAC 53.765 Service requirements
Repealed.
History
- Eff. 1/11/2001, Register 157; repealed 12/20/2018, Register 228
3 AAC 53.770 Maximum charge for a public interest pay telephone
Repealed.
History
- Eff. 1/11/2001, Register 157; repealed 12/20/2018, Register 228
3 AAC 53.775 Miscellaneous provisions
Repealed.
History
- Eff. 1/11/2001, Register 157; repealed 12/20/2018, Register 228
3 AAC 53.799 Definitions
Repealed.
History
- Eff. 1/11/2001, Register 157; repealed 12/20/2018, Register 228
Article 11 Criteria for the Provision of Private Pay Telephone Service
3 AAC 53.800 Applicability and waiver
(a) The provisions of 3 AAC 53.810 - 3 AAC 53.899 apply to private pay telephone service. However, the provisions of 3 AAC 52.200 - 3 AAC 52.340, which set out service standards for the furnishing of telecommunications services and facilities to the public, do not apply to private pay telephone service.
(b) Unless otherwise required under AS 42.05, any requirement in 3 AAC 53.800 - 3 AAC 53.899 may be modified or waived, in whole or in part, by order of the commission upon application and a showing of good cause or on the commission's own motion in compliance with 3 AAC 48.805.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.291
- Eff. 9/20/96, Register 139
3 AAC 53.810 Certification requirements for private pay telephone service providers
(a) A person may not provide private pay telephone service without obtaining a certificate of public convenience and necessity from the commission.
(b) To obtain a certificate of public convenience and necessity to provide private pay telephone service, the person shall file the following information on a form available from the commission:
(1) the applicant's legal name, type of business structure, and any other name under which the applicant proposes to do business;
(2) the address of the applicant's principal national place of business and, if different, its place of business in this state;
(3) the name, title, and telephone number of the individual who is available to provide the commission with information about the application;
(4) proof of authority to do business in this state;
(5) a list of the owners of five percent or more of the applicant's equity;
(6) a list of persons or entities that are affiliated interests of the applicant;
(7) the name of any operator-service provider that the applicant will use in providing private pay telephone service, and proof that the operator-service provider is registered with or certificated by the commission;
(8) a list, and a report on the current status, of all complaints and reports of violations regarding private or public pay telephone service that the applicant or any affiliated interest has received in this or any other state in the two years before application is made;
(9) a verification by an individual authorized to sign on behalf of the applicant that all of the information provided in the application is accurate and complete.
(c) Repealed 7/15/98.
(d) A certificate of public convenience and necessity authorizing private pay telephone service does not authorize the holder to provide or resell intrastate interexchange telecommunications service.
History
- Authority: AS 42.05.141; AS 42.05.221; AS 42.05.241 AS 42.05.151; AS 42.05.231
- Eff. 9/20/96, Register 139; am 7/15/98, Register 147
3 AAC 53.820 Limits on rates and charges
(a) A private pay telephone service provider may not charge more than $.25 for each local call.
(b) A private pay telephone must provide access free of charge and without the use of a coin to
(1) repealed 7/15/98;
(2) the 911 emergency number; and
(3) the operator.
(c) End-user charges for intrastate interexchange calls placed from a private or public pay telephone through the presubscribed operator-service provider may not exceed the per-minute rates and surcharges of the interexchange carrier of last resort serving the exchange where the private or public pay telephone is located.
(d) A private pay telephone service provider may not require a deposit of coins in the telephone that results in the caller's paying a higher rate for a call that is advertised by the private pay telephone service provider.
(e) Except as provided in (b) of this section, a private pay telephone service provider shall charge only for completed calls. A completed call is one that reaches an individual or answering device. A private pay telephone must return all coins or other payment used to make uncompleted calls.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.391 AS 42.05.151; AS 42.05.381; AS 42.05.431
- Eff. 9/20/96, Register 139; am 7/15/98, Register 147; am 11/29/2006, Register 180
3 AAC 53.830 Service requirements
(a) A private pay telephone service provider shall use coin telephone instruments registered with the Federal Communications Commission, under the provisions of 47 C.F.R. 68 in effect on October 11, 1995.
(b) Repealed 1/1/2016.
(c) A private pay telephone must accept incoming calls unless the premises owner or tenant-in-charge requests, or the commission orders under AS 42.05.291, the private pay telephone service provider to block incoming calls.
(d) The private pay telephone service provider may limit the duration of incoming calls; however, the limit may not be less than three minutes. For a limited duration call, a disconnection warning must be given one minute before disconnection and 30 seconds before disconnection. No other calls may be limited in duration.
(e) A private pay telephone service provider must use a positive acceptance system for an automated collect call. A positive acceptance system permits completion of the call only if the called party affirmatively accepts the call by an oral statement or a signal entered from the called party's telephone keypad.
(f) A private pay telephone must be compatible with hearing-aid devices.
(g) A private pay telephone must be accessible to persons with disabilities as required by the following federal statutes and regulations, in effect as of October 11, 1995:
(1) 42 U.S.C. 12101 - 12213 (Americans with Disabilities Act of 1990);
(2) 36 C.F.R. 1191; and
(3) 28 C.F.R. 36.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.291
- Eff. 9/20/96, Register 139; am 1/1/2016, Register 217
3 AAC 53.840 Operation and maintenance requirements
(a) A private pay telephone service provider shall maintain, in a clean and operable condition, all private pay telephones that the provider has installed.
(b) A private pay telephone must be lit adequately to enable a caller to read all posted notices and keypads or dials on the instrument.
(c) Upon request, a private pay telephone service provider shall make available to the commission and the public a list of currently installed instruments that identifies the telephone number, the location, and the operator-service provider for each private pay telephone in service.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.461 AS 42.05.151; AS 42.05.451
- Eff. 9/20/96, Register 139; am 11/22/2017, Register 224
3 AAC 53.850 Access to interexchange carriers; charges
(a) A private pay telephone must provide a caller making a credit card, calling card, or other type of operator-assisted call access to all authorized interexchange carriers providing 0-plus and 0-minus services within the area where the private pay telephone is located.
(b) A private pay telephone service provider may not block a caller from dialing an access code or a toll-free number. The private pay telephone service provider may not impose a greater charge for dialing access codes and toll-free numbers than the provider charges for calls using the presubscribed operator-services provider.
(c) Repealed 7/15/98.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.321 AS 42.05.151; AS 42.05.311
- Eff. 9/20/96, Register 139; am 7/15/98, Register 147
3 AAC 53.860 Operator-service provider requirements
(a) A private pay telephone shall route an intrastate call only to an operator-service provider registered with or certificated by the commission.
(b) A private pay telephone service provider using a presubscribed operator-service provider shall supply the operator-service provider with complete and accurate information on the location of each private pay telephone, as well as the location and telephone number of the nearest emergency services, including police, fire protection, and ambulance services.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.291
- Eff. 9/20/96, Register 139
3 AAC 53.870 Interconnection and directory assistance requirements
(a) A local exchange carrier shall permit a private pay telephone service provider to have access to the telephone network by means of an access line at a local tariffed rate. The local exchange carrier shall require the private pay telephone service provider to furnish proof of its operating authority as a condition of receiving the access line.
(b) A private pay telephone must be connected to one-party service. Only one private pay telephone per line is permitted.
(c) A local exchange carrier shall make directory assistance available to a private pay telephone service provider as part of the local tariffed rate in (a) of this section.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.321 AS 42.05.151; AS 42.05.311
- Eff. 9/20/96, Register 139
3 AAC 53.880 Posting and notice requirements
A private pay telephone shall conspicuously display the following information:
(1) the name and address of the private pay telephone service provider responsible for that equipment;
(2) a statement that calls can be made at no charge and without the use of a coin to the 911 emergency number or the operator;
(3) specific dialing and coin deposit and return information, including instructions for reaching the interexchange carrier operator and directory assistance;
(4) a statement that, under 3 AAC 53.820(a), the rate for a local call may not exceed $.25;
(5) the identity of the presubscribed operator-service provider and instructions for reaching other operator-service providers by dialing an access code or toll-free number;
(6) a toll-free number at which the caller may obtain information on the rates, terms, or conditions applicable to calls placed from the private pay telephone;
(7) a toll-free number at which the caller may attempt to resolve billing or service complaints arising from use of the private pay telephone;
(8) a statement that, upon the caller's request, the operator servicing the call is required to supply rate information free of charge;
(9) if the private pay telephone blocks or limits the duration of incoming calls, a notice that incoming calls cannot be received, or a statement of the applicable time limit;
(10) a number for contacting the commission.
History
- Authority: AS 42.05.141; AS 42.05.151; AS 42.05.291
- Eff. 9/20/96, Register 139; am 7/15/98, Register 147
3 AAC 53.890 Complaint procedures; enforcement
(a) A private pay telephone service provider shall have simple procedures to accept, investigate, and resolve complaints promptly about its private pay telephone service.
(b) A private pay telephone service provider shall maintain accurate complaint records, including at least the following information:
(1) the date of the complaint;
(2) the name and address of the complainant;
(3) the location and phone number of the private pay telephone involved in the complaint;
(4) a description of the complaint;
(5) a description of how the complaint was resolved.
(c) A private pay telephone service provider shall retain its complaint record for two years after the complaint is resolved. The provider shall make its complaint records available to the commission or its staff immediately upon request.
(d) When a complaint is resolved by a refund, the private pay telephone service provider shall send that refund to the complainant postage-paid by regular mail.
(e) Repealed 11/22/2017.
(f) The commission will, in its discretion, order the disconnection from a public access line of a private pay telephone service provider that fails to comply with the provisions of 3 AAC 53.800 - 3 AAC 53.899. In addition, the commission will, in its discretion, revoke the certificate of public convenience and necessity of a private pay telephone service provider and impose penalties authorized by AS 42.05.571 and 42.05.581 for violations of the requirements of 3 AAC 53.800 - 3 AAC 53.899.
History
- Authority: AS 42.05.141; AS 42.05.291; AS 42.05.501 AS 42.05.151; AS 42.05.361; AS 42.05.571 AS 42.05.271; AS 42.05.371; AS 42.05.581
- Eff. 9/20/96, Register 139; am 11/22/2017, Register 224
3 AAC 53.899 Definitions
(a) Unless the context indicates otherwise, in 3 AAC 53.800 - 3 AAC 53.899,
(1) "access code" means a sequence of numbers that, when dialed, connects the caller to the operator-service provider associated with that sequence, rather than the operator-service provider presubscribed to the originating line;
(2) "affiliated interests" has the meaning given in AS 42.05.990;
(3) "commission" means the Regulatory Commission of Alaska;
(4) "operator-service provider" means either an interexchange carrier certificated to provide intrastate operator services or an alternative operator providing intrastate services under AS 42.05.325;
(5) "private pay telephone" or "privately-owned pay telephone" means a type of pay telephone instrument, other than a public telephone, that can be connected to an ordinary local exchange carrier telephone line and can provide local exchange and interexchange service by use of a coin, credit card, or other means of payment.
(b) Terms used in 3 AAC 53.800 - 3 AAC 53.890 but not defined in this section have the meanings given in 3 AAC 48.820, 3 AAC 52.340, and 3 AAC 52.399.
History
- Authority: AS 42.05.141; AS 42.05.151
- Eff. 9/20/96, Register 139; am 2/24/2004, Register 170
Article 12 Regulation of Cable Television
3 AAC 53.900 Adoption of applicable rules
The Cable Television Service rules, Subpart N - Cable Rate Regulation, as set out in Part 76 of the Federal Communications Commission rules (47 C.F.R. 76.900 - 76.985), in effect as of May 15, 1994, are adopted by reference for use in regulating cable television utilities that are not exempt under AS 42.05.711(k) from economic regulation by the commission.
History
- Authority: AS 42.05.141; AS 42.05.151
- Eff. 4/2/94, Register 129; am 11/6/94, Register 132
Part 8 Division of Tourism
Chapter 54 Tourism Grants
3 AAC 54.010 Grant application requirements
(a) An application for a grant under AS 44.33.135 must be submitted on a form provided by the division. The application must include:
(1) the applicant's United States internal revenue employer identification number;
(2) either a statement from the State of Alaska Department of Commerce, Community, and Economic Development declaring tax exempt nonprofit status, or a declaration of nonprofit status from the United States Internal Revenue Service for the applicant; and
(3) a work plan that divides the project into discrete time periods during which the applicant can produce items or perform services.
(b) An application for a visitor information center grant must include a one-page statement-of-operations summary that lists the applicant's revenues and expenditures by category during the preceding calendar year.
(c) If requested by the division, an applicant shall submit a feasibility study.
(d) An applicant submitting more than one application may set priorities for funding.
History
- Authority: AS 44.33.119; AS 44.33.120; AS 44.33.135
- Eff. 5/11/90, Register 114
3 AAC 54.020 Application review, action, and reconsideration
(a) A grant applicant who has not satisfied the requirements of an earlier grant is not eligible for a grant award.
(b) The division shall review applications and award grants under the program at least two times each fiscal year.
(c) A grant application must be received at least 30 days before a grant award meeting, to be reviewed at that meeting.
(d) For each grant application, the division may award a full or partial grant, may deny the application, or may request that the applicant submit additional information. A response to a request for additional information must be received by the division not later than 15 days after the issuance of the request.
(e) Within 15 days after receiving notification of denial of a grant application in whole or in part, the applicant may request reconsideration by the division. The request for reconsideration must specify grounds that would support reversal of the denial. Within 45 days after receipt of a request for reconsideration, the director of the division shall issue a written decision; that decision constitutes final administrative action by the department.
History
- Authority: AS 44.33.119; AS 44.33.120; AS 44.33.135
- Eff. 5/11/90, Register 114
3 AAC 54.030 Eligible matching money
(a) Matching money provided by the recipient may include fees, contributions, donations, gifts of money, and special user charges. Unless otherwise agreed to by the division, grants may only be applied to costs of a recipient that are incurred during the grant period.
(b) An in-kind contribution may be used for the matching money unless the in-kind contribution is used for a convention and incentive travel project. The in-kind contribution must be valued at the current sale or rental value of the service or product at the locality where it is tendered.
(c) Money received from the state may not be counted toward matching money.
History
- Authority: AS 44.33.119; AS 44.33.120; AS 44.33.135
- Eff. 5/11/90, Register 114
3 AAC 54.040 Eligible costs
(a) Grant money may be applied to those costs that the division, in its discretion, determines are necessary and reasonable. Eligible costs include
(1) wages for the recipient's employees that do not exceed those paid for similar work in the local economy,
(2) printing and distributing travel promotion material,
(3) consultant fees,
(4) telecommunications equipment and services,
(5) materials and supplies used solely for the project, and
(6) other incidental costs incurred by the recipient.
(b) Except as specifically authorized in (a) of this section, grants under this program may not pay a recipient's general administrative costs, overhead, or membership fees in a trade organization.
History
- Authority: AS 44.33.119; AS 44.33.120; AS 44.33.135
- Eff. 5/11/90, Register 114
3 AAC 54.050 Regional screening agency
If a political subdivision of the state sets priorities among matching grant project proposals for a region of the state, the division shall consider those priorities.
History
- Authority: AS 44.33.119; AS 44.33.120; AS 44.33.135
- Eff. 5/11/90, Register 114
3 AAC 54.060 Grant administration
(a) At any time during the grant period, the division may require the recipient to file a status report concerning project performance and the expenditure of grant money.
(b) The division may, at any time, audit the recipient's accounting books and records that relate to the grant project.
(c) The division may pay a grant award in a lump sum or in increments during the grant period. The division may make incremental payments contingent upon satisfactory progress on the project through the date of payment.
(d) No later than 90 days after the completion of the project paid by a grant, the recipient shall submit a final report that gives a detailed accounting of the expenditure of grant and matching fund money and includes financial documents that validate these expenditures.
History
- Authority: AS 44.33.119; AS 44.33.120; AS 44.33.135
- Eff. 5/11/90, Register 114
3 AAC 54.070 Acknowledgement of support
A printed or audio/visual reference to a project funded under this program must include the following acknowledgement: "This [brochure, film, etc.] was funded, in part, by a grant from the Alaska Division of Tourism."
History
- Authority: AS 44.33.119; AS 44.33.120; AS 44.33.135
- Eff. 5/11/90, Register 114
3 AAC 54.100 Definitions
As used in this chapter
(1) "department" means the Department of Commerce, Community, and Economic Development, State of Alaska;
(2) "division" means the division of tourism, Department of Commerce, Community, and Economic Development, State of Alaska;
(3) "grant period" means from the day the grant award project begins to the day the grant award project terminates;
(4) "project" means the planned undertaking of the grant award recipient;
(5) "state" means the State of Alaska.
History
- Authority: AS 44.33.119; AS 44.33.120; AS 44.33.135
- Eff. 5/11/90, Register 114
Part 9 Division of Trade and Development
Chapter 57 Alaska Regional Economic Assistance Program
3 AAC 57.010 Purpose
This chapter is intended to implement, interpret, and make specific the Alaska regional economic assistance program under AS 44.33.026.
History
- Authority: AS 44.33.020; AS 44.33.026
- Eff. 2/22/89, Register 109
3 AAC 57.020 Duties and responsibilities of the department
(a) The department will provide assistance to organizations and individuals interested in the formation of an Alaska regional development organization by providing the following:
(1) information, procedures, forms, and other material as required, on how to apply and qualify for an Alaska regional development grant;
(2) counseling and technical assistance to the regional economic organization in establishing and operating an Alaska regional development organization program; and
(3) available data and information on the region's economy in support of the regional organizational efforts.
(b) The department will:
(1) receive and process Alaska regional development organization designation, and grant, applications;
(2) disburse and receive regional development fund money;
(3) supervise and service grants;
(4) provide a written determination of compliance for each application for designation, and funding, of an Alaska regional development organization.
(c) Upon designation of an Alaska regional development organization, the department will assist in coordinating the organization's plans, programs, activities, and projects with other local, state, and federal agency efforts.
History
- Authority: AS 44.33.020; AS 44.33.026
- Eff. 2/22/89, Register 109
3 AAC 57.030 Eligibility
(a) The department will accept applications from an applicant seeking designation and funding as an Alaska regional development organization, if the applicant is one of the following: a nonprofit corporation incorporated under the laws of Alaska, including a regional Native nonprofit corporation; an association of municipal governments; a public/private association such as an association of municipal governments and chambers of commerce; an association of local chambers of commerce; an association of local economic development councils or private economic development councils; a body formed by an organized municipality; or any other entity that meets the criteria of AS 44.33.026(e)(2).
(b) An economic development district, as designated by the Economic Development Administration, United States Department of Commerce, is, under AS 44.33.026(b), automatically designated as an Alaska regional development organization. If a federally funded economic development district includes more than one designated Alaska regional development organization, the preexisting Alaska regional development organizations may not receive more than two grant awards after the date of the first federal grant award to that economic development district. Thereafter, that economic development district will be the sole designated Alaska regional development organization and the sole eligible grant applicant for that region.
(c) It is the responsibility of the applicant to show that the proposed regional development organization complies with the criteria in 3 AAC 57.040 and 3 AAC 57.050, and AS 44.33.026(a).
History
- Authority: AS 44.33.020; AS 44.33.026
- Eff. 2/22/89, Register 109; am 11/26/93, Register 128
3 AAC 57.040 Regional size requirements
(a) To assure that an Alaska regional development organization is able to plan and carry out development projects of broad geographic significance, the organization must be of sufficient size or population, and must contain adequate resources, to support an active regional economic development program.
(b) The applicant must submit proof that the proposed organization's boundaries include a large enough population to form an economically viable unit with shared interests, resources, traditions, and goals. At a minimum, the applicant must provide evidence that the proposed organization's boundaries (1) contain a regional economic center with a population of at least 2,500 people which serves the area, and (2) have either a geographic area of at least 12,000 square miles or a total population of 80,000 or more. The boundaries must also conform to AS 44.33.026(a)(2).
(c) If the proposed boundaries do not include a regional economic center with a population of at least 2,500 people, the applicant must identify the regional economic center and submit information to convince the department that there are sufficient population and resources to fulfill the intent of (a) and (b) of this section.
History
- Authority: AS 44.33.020; AS 44.33.026
- Eff. 2/22/89, Register 109
3 AAC 57.050 Board representation
(a) It is the intent of the Alaska regional economic assistance program that Alaska regional development organization boards have private sector economic development and business orientation. To conform to AS 44.33.026(e), representation on the board should include locally elected public officials; the principal economic interests of the region, including business, service industry, transportation, utilities, and labor; the professions; and educational institutions.
(b) If an Alaska regional development organization is composed of a single organized municipality or a regional Native corporation, it is the responsibility of the applicant to demonstrate how the interests listed in (a) of this section will be represented on the board.
(c) An Alaska regional development organization board with a large number of members, as determined by the department, must appoint an executive committee to be responsible for program administration.
History
- Authority: AS 44.33.020; AS 44.33.026
- Eff. 2/22/89, Register 109
3 AAC 57.060 Alaska regional development organization designation process
(a) An application for designation of a regional organization as an Alaska regional development organization shall be filed with the department. The application material must contain a map delineating boundaries; a description of the proposed Alaska regional development organization, its board representation, and its bylaws; formal resolutions supporting the application from three-fourths of the organized communities in the region (in the case of an unincorporated community, the resolution must be from the traditional governing body); and formal resolutions supporting the application from three-fourths of the nonprofit organizations in the region that are, as outlined in their articles of incorporation, directly involved in community or regional economic development activities. An application for funding the proposed Alaska regional development organization may accompany the application for designation.
(b) Within 10 working days of its receipt, the department will review an application for designation and make a determination as to whether it is in compliance with the requirements in 3 AAC 57.030, 3 AAC 57.040, and 3 AAC 57.050.
(c) If the department determines that the application does not meet the requirements in (b) of this section, it will be returned to the applicant with an explanation of its deficiency and further processing will be suspended until the deficiency is addressed.
(d) If the department determines that the application meets the requirements in (b) of the section, it will publish a public notice of the department's intent to designate the applicant an Alaska regional development organization. The public notice will describe the application of the proposed Alaska regional development organization, its boundaries, and board make-up; will state that the application is available for inspection; and will provide 30 days for submission of comments regarding the proposal to the department. A copy of the public notice will be given to any person who has requested it in writing. The public notice will be published through conspicuous advertisement in a newspaper of general circulation in the region, and on radio and tv stations in the region. To the extent practicable, notice will be posted by the department in villages and municipalities in the region.
(e) If, at the end of the comment period, there are no unresolved conflicts or major areas of concern, the department will designate the applicant an Alaska regional development organization.
(f) If substantive objections are received during the comment period, or if a competing application is submitted before the end of the comment period which meets program requirements in 3 AAC 57.030, 3 AAC 57.040 and 3 AAC 57.050 and (a) of this section, the department will suspend any action concerning designation of an Alaska regional development organization in that region. The department will provide written notification of the suspension to the applicant and all persons who commented on the application. The department will also provide a copy of all written comments to the applicant. A suspended application is subject to (g) of this section.
(g) The department will not mediate conflicts. Conflicts arising from substantive objections or competing applications for designation of an Alaska regional development organization must be resolved by the given region. An application will not be reconsidered until that region can provide proof that general agreement has been reached by a majority of parties on record who expressed a substantive objection during the public comment period or submitted a competing application before the end of the comment period.
(h) When the substantive objections are addressed to the satisfaction of the department, or, in the case of competing applications, when a resolution that is acceptable to the department is reached, the application will be processed in accordance with (e) of this section.
History
- Authority: AS 44.33.020; AS 44.33.026
- Eff. 2/22/89, Register 109; am 11/26/93, Register 128
3 AAC 57.070 Funding procedures
(a) The department will, in its discretion, make a grant to a designated Alaska regional development organization in accordance with AS 44.33.026(b). Applications for funding will be accepted by the department from designated Alaska regional development organizations on a year-around basis. Funding for this program is limited and the department makes no guarantee that any application will be funded. Applications will be processed on a first-come, first-served basis until the regional development fund is depleted. Subject to appropriations for that purpose, an organization that receives funding will have a first priority for funding in the subsequent fiscal year. Nonfunded applications will have the next lower priority for funding in the next state fiscal year. The department will, in its discretion, adjust priorities and lower the funding level requested by a previously funded Alaska regional development organization, to accommodate nonfunded applications.
(b) As provided in AS 44.33.026(c), a grant of up to $100,000 will, within the department's discretion, be provided to a designated Alaska regional development organization during a single fiscal year.
(c) To qualify for a grant, a designated Alaska regional development organization must provide funding that is not less than 33 and one-third percent of the money to be provided by the department. The matching money must
(1) be in cash and must be from nonstate sources; and
(2) include a sum equal to 20 percent of the matching share, but not to exceed $10,000, from the municipalities, other local entities and the private sector in the region, to demonstrate the designated Alaska regional development organization's commitment to the program.
(d) Under special circumstances, the department will consider a written request from a designated Alaska regional development organization for a waiver from the matching grant requirement specified in (c)(2) of this section. The request for a waiver must demonstrate that a significant effort was made to obtain funds from those sources and document the response to that effort.
(e) Matching grants will, in the department's discretion, be awarded to designated Alaska regional development organizations according to the following formula:
(1) if the population within the region of the Alaska regional development organization is 40,000 or greater, funding will be awarded on a dollar for dollar matching basis;
(2) if the population within the region of the Alaska regional development organization is less than 40,000 but the region includes all or part of an organized borough, funding will be awarded on the basis of two department dollars for each matching dollar;
(3) if the population within the region of the Alaska regional development organization's region is less than 40,000 and the region includes no part of an organized borough, funding will be awarded on the basis of three department dollars for each matching dollar.
(f) Under special circumstances, the department will review a written request from a designated Alaska regional development organization for a waiver, allowing the organization to substitute up to 20 percent of the match requirement with in-kind service contributions. Such waivers will be limited to the first two years of funding for Alaska regional development organizations awarded grants requiring match under (e)(1) or (e)(2) of this section. In-kind contributions may not be used to substitute for the funding required in (c)(2) of this section.
(g) After an Alaska regional development organization has received an initial grant, the organization may file an annual application for continuation of funding. The following procedure will be used for second and subsequent-year funding:
(1) before the end of the project year, the designated Alaska regional development organization must file an application with the department for refunding;
(2) the department will review the application for compliance with the provisions of 3 AAC 57.090 and 3 AAC 57.100;
(3) if the review reveals no area of concern, the department will execute a new grant with the designated Alaska regional development organization; the new grant will begin upon either the termination of the old grant year or the date of execution of the new grant, whichever is specified in the new grant agreement.
(h) Funding will only be given to a designated Alaska regional development organization after a grant agreement has been executed by the department under AS 44.33.026(b). The grant agreement will contain the obligations and requirements of the grantee under the Alaska regional economic assistance program (AS 44.33.026) and the department's grant procedures. The grant agreement will include a detailed work program of tasks to be completed by the designated Alaska regional development organization during the grant period, methods and procedures for receiving payments, accounting and reporting procedures, and audit requirements, and will provide that the department will retain 10 percent of the state matching portion until project completion.
History
- Authority: AS 44.33.020; AS 44.33.026
- Eff. 2/22/89, Register 109; am 11/26/93, Register 128
3 AAC 57.080 Basic requirements
A designated and funded Alaska regional development organization is responsible, at a minimum, for the following:
(1) providing services designed to encourage economic development to the local villages, communities, and businesses in the region;
(2) collecting and distributing economic information relevant to the region; and
(3) serving as an effective liaison between state government and the region.
History
- Authority: AS 44.33.020; AS 44.33.026
- Eff. 2/22/89, Register 109
3 AAC 57.090 Functions and responsibilities
(a) A designated and funded Alaska regional development organization shall develop and implement a regional economic development strategy. The organization shall prepare, and submit to the department, a completed strategy within 18 months after receipt of funding. The organization shall coordinate the development and implementation of the strategy with other local, state, federal, and private development agencies and organizations. The strategy must contain the following elements:
(1) fact-gathering, to assure that the area understands the current development situation as a base upon which to make decisions;
(2) identification of potentials (such as resources or location) that can be the bases of economic development;
(3) establishment of goals and objectives to point out the direction of economic development activities;
(4) production of a strategy for local economic development which includes a work plan that proposes the methods, resources, responsibilities, and schedules for implementing the development strategy; and
(5) development of a set of community and village economic profiles for every organized municipality in the region which has agreed to participate in the organization.
(b) A designated and funded Alaska regional development organization shall
(1) adopt the strategy by formal action of the Alaska regional development organization's board;
(2) submit a copy of the strategy to the department; and
(3) update the strategy every two years and resubmit it to the department.
(c) A designated and funded Alaska regional development organization shall implement economic development activities in the region as detailed in its regional development strategy, which might include
(1) carrying out economic-development-related research, planning, implementation, and advisory functions, and responding to information requests;
(2) coordinating the organization's development activities with the development activities of local villages, communities, other regions, and the private sector within the region as appropriate;
(3) providing advice and recommendations to the department on state plans, programs, and projects that affect the region, or villages and municipalities in the region;
(4) coordinating those state economic or business development projects or programs in the region which are considered appropriate and important.
(d) A designated and funded Alaska regional development organization shall carry out certain administrative activities, including
(1) preparation of application materials for funding the Alaska regional development organization;
(2) preparation of grant application materials, and accepting grant offers, from state and federal agencies and other sources, as appropriate;
(3) arranging for the contribution of the required matching share of program costs;
(4) receiving, and managing, money from the department and other grant programs for the operation of the Alaska regional development organization;
(5) complying with grant conditions and terms, including financial management and work program requirements;
(6) keeping records, and preparing and submitting reports as required by the Alaska regional development organization grant;
(7) retaining professional staff with appropriate economic development experience to carry out the functions of the organization and the annual plan of work as specified in its application and grant agreement; and
(8) maintaining an office with regular office hours in a public location.
(e) The board of directors of a funded and designated Alaska regional development organization shall adopt and enforce policies to ensure that principal professional staff do not engage in or solicit outside employment or render services for outside interests when such employment, service, or interest creates a conflict with, impairs, or detracts from the discharge of their duties to that Alaska regional development organization.
History
- Authority: AS 44.33.020; AS 44.33.026
- Eff. 2/22/89, Register 109; am 11/26/93, Register 128
3 AAC 57.100 Termination or suspension of organizations
If it becomes necessary to terminate or suspend a designated and funded organization, the commissioner will, at least 30 days before the effective date of the action, provide written notice to the Alaska regional development organization that it is being terminated or suspended due to one or more of the following:
(1) the Alaska regional development organization no longer meets the criteria for designation set out in 3 AAC 57.030, 3 AAC 57.040, and 3 AAC 57.050;
(2) the Alaska regional development organization has failed to develop and implement a regional economic development strategy, or has failed to carry out its approved work plan as required in 3 AAC 57.090;
(3) the Alaska regional development organization board has requested termination; or
(4) the Alaska regional development organization has failed to comply with other terms and conditions of the grant agreement with the department.
History
- Authority: AS 44.33.020; AS 44.33.026
- Eff. 2/22/89, Register 109
3 AAC 57.900 Definitions
In this chapter,
(1) "commissioner" means the commissioner of the Department of Commerce, Community, and Economic Development;
(2) "department" means the Department of Commerce, Community, and Economic Development;
(3) "project year" means a 12-month period for grant funding, beginning on the date of execution of the grant agreement by the department;
(4) "regional development organization" or "organization" means the same as in AS 44.33.026(e);
(5) "regional economic center" means a local government unit that is incorporated under either state or federal statutes and that is a major supply point, financial center, and transportation hub whose sphere of influence encompasses the region in question;
(6) "significant amendment" means an amendment that results in a major revision, addition, or deletion to the Alaska regional development organization's bylaws or board make-up, or alters the boundaries of the region other than by technical adjustment;
(7) "substantive objection" means expression of opposition by a community or an organization which provides refutable information regarding the integrity or viability of application material, including material regarding boundaries, the proposed Alaska regional development organization, its board representation, or bylaws.
History
- Authority: AS 44.33.020; AS 44.33.026
- Eff. 2/22/89, Register 109
Chapter 58 Silver Hand and “Made in Alaska” Programs
3 AAC 58.005 Purpose
This chapter implements the silver hand handicrafts and "Made in Alaska" products programs authorized under AS 45.65.010 - 45.65.070.
History
- Authority: AS 44.33.020; AS 45.65.020
- Eff. 10/1/93, Register 127
3 AAC 58.020 Silver hand program
(a) The silver hand program is designed to identify authentic Alaska Native handicrafts.
(b) The official Native handicraft symbol is the silver hand seal. The seal must meet the requirements of AS 45.65.030. The seal consists of a black oval containing a hand in silver and the words "Authentic Native Handicraft from Alaska." The seal is of the following design:
Click to view SEAL
(c) A permit to use the silver hand seal on the handicrafts the applicant produces will be issued to an Alaska Native who
(1) applies to the commissioner or a silver hand agent on a form approved by the department, unless the applicant was certified to be eligible by the silver hand agent;
(2) documents that the applicant is an Alaska Native with a blood quantum of one-fourth or greater; documentation proving eligibility includes
(A) a United States Department of the Interior, Bureau of Indian Affairs Certificate of Indian Blood;
(B) an official letter from a village or regional corporation established under 43 U.S.C. 1606 - 1607 (Alaska Native Claims Settlement Act of 1971, sections 7 and 8); or
(C) an official letter from a village council or tribe in which the applicant is a member;
(3) certifies on the application that the applicant will affix the silver hand seal only on a handicraft that was or will be made
(A) entirely by the applicant;
(B) within this state; and
(C) in whole or of significant part of natural materials.
(d) A permit to use the silver hand seal is valid for two years from the date the permit is issued. The permit may be renewed by submitting a completed permit renewal application on a form approved by the department within 30 days of the end of the two-year period.
(e) The commissioner or a silver hand agent must approve or disapprove an application or renewal application to use silver hand seals within 30 days from the date of receipt of a completed application.
History
- Authority: AS 44.33.020; AS 45.65.030 AS 45.65.020; AS 45.65.040
- Eff. 10/1/93, Register 127
3 AAC 58.025 Use of the silver hand seal or representation
(a) A permit holder, other than a silver hand agent, may use the representation of a silver hand seal on catalogs, letterheads, business cards, in-store and other advertising, and for other similar purposes related to the permit holder's handicrafts. The permit holder, other than a silver hand agent, may use a representation of the silver hand symbol only in advertising of that permit holder's handicrafts.
(b) The silver hand agent may use a representation of the silver hand symbol only on letterheads, business cards, and other advertising solely for the purposes of identifying that person as a silver hand agent and fulfilling that agent's duties under AS 45.65.010 - 45.65.070 and this chapter.
(c) The silver hand seal or a representation of that seal may not be used in a manner that is false or misleading. The silver hand seal or a representation of that seal may only be used without any modification to the design specified in 3 AAC 58.020(b).
(d) The silver hand seal or a representation of that seal may not be incorporated into a business, company, or product logo or label.
(e) The silver hand seal or a representation of that seal may not be sold as art or as a dominant feature of a handicraft unless approved by the commissioner in writing.
(f) A permit holder may obtain 150 silver hand seals annually from the department at no cost. Additional seals may be purchased from the department at the cost of printing and distribution of the seals.
History
- Authority: AS 44.33.020; AS 45.65.020
- Eff. 10/1/93, Register 127
3 AAC 58.030 Silver hand agent permits
(a) The commissioner will issue a permit for an agent for the silver hand program if the person pays the application and permit issuance fees and certifies on an application form approved by the department that the applicant
(1) is a resident of the state; and if regions are established by the commissioner, the region identified in the permit;
(2) has sufficient knowledge about the handicrafts, customs, and populace of the state, or if applicable, the region identified in the permit; and
(3) has a current Alaska business license, if required under AS 43.70.
(b) The commissioner will, in the commissioner's discretion, require a silver hand agent or applicant for an agent permit to attend a training session provided by the department on the silver hand program.
(c) A silver hand agent permit is valid for three years from the date that the permit is approved by the commissioner. The silver hand agent permit may be renewed by
(1) completing an agent permit renewal application on a form approved by the department; and
(2) paying the renewal fee.
(d) The commissioner will approve or disapprove an application or a renewal application for a silver hand agent within 30 days from the date of receipt of a completed application.
History
- Authority: AS 44.33.020; AS 45.65.020; AS 45.65.030
- Eff. 10/1/93, Register 127
3 AAC 58.035 Duties of a silver hand agent
The duties of a silver hand agent include
(1) providing information to the public on the silver hand program, such as application and eligibility requirements for permits, availability of silver hand seals, and similar activities;
(2) distributing application forms and instructions for a permit to use silver hand seals;
(3) determining the eligibility of applicants for a permit to use the silver hand seal in accordance with AS 45.65.010 - 45.65.070 and 3 AAC 58.020(c) by approving or disapproving applications, or by certifying the eligibility of a Native craftsperson;
(4) submitting on a quarterly basis on or before January 1, April 1, July 1, and October 1, of each year
(A) a copy of each application and the action taken on the application during the period; and
(B) information requested by the department about each Native craftsperson that the agent certified as eligible to use silver hand seal during that period; the agent shall supply the information on a form approved by the department;
(5) distributing seals to the permit holder in accordance with 3 AAC 58.025(f) or personally affixing the seal on eligible handicrafts;
(6) assisting the commissioner in the renewal process for silver hand permits as specified in 3 AAC 58.020(d);
(7) assisting the department in marketing, promoting, and advertising the silver hand program to the general public;
(8) submitting other information and reports as required by the commissioner; and
(9) reporting any alleged violations of AS 45.65.010 - 45.65.070 and this chapter to the commissioner.
History
- Authority: AS 44.33.020; AS 45.65.020; AS 45.65.030
- Eff. 10/1/93, Register 127
3 AAC 58.040 "Made in Alaska" program
(a) The "Made in Alaska" program is designed to promote products made or manufactured in the state and handicrafts produced by both Native and non-Native craftspersons.
(b) The official emblem for the "Made in Alaska" program depicts a mother bear and her cub in a rectangular format with the words "Made in Alaska" underneath. The "Made in Alaska" emblem has no established colors. The emblem is of the following design:
Click to view SEAL
(c) Except as provided in (i) of this section, a person who makes or manufactures a product or produces a handicraft in the state may apply to the commissioner or a "Made in Alaska" agent for a permit to use the "Made in Alaska" emblem on the product.
(d) A separate permit is required for each handicraft type or product line of the applicant.
(e) A permit to use the "Made in Alaska" emblem will be issued to an applicant who
(1) locates and maintains the handicraft or product making or manufacturing operation within the state;
(2) produces a handicraft in the state or a product in which the value-added processes were accomplished in the state;
(3) uses Alaska resources and materials in the manufacturing or production of the product or handicraft, or provides documentation that the raw resources and materials do not exist within the state either in the form, quality, or quantity required for the production of the product or the handicraft;
(4) has a current Alaska business license if required by AS 43.75;
(5) submits a completed application on a form approved by the department and the required annual fees;
(6) permits the inspection of the production or manufacturing site by the commissioner or a "Made in Alaska" agent; and
(7) complies with the requirements of AS 45.65.010 - 45.65.070 and this chapter to determine the eligibility of the product.
(f) A finished product that is only partially manufactured within the state may be authorized to use the "Made in Alaska" emblem if
(1) the producer demonstrates that no manufacturing facility exists in this state with the capacity or expertise to do the work being accomplished outside the state; the commissioner or "Made in Alaska" agent will not consider cost alone as a valid justification for using out-of-state manufacturing facilities; and
(2) the majority of the value-added processes are accomplished in the state.
(g) A permit to use the "Made in Alaska" emblem is valid for one year from the date the permit is issued. A permit may be renewed by
(1) submitting a completed permit renewal application on a form approved by the department; and
(2) paying the required fees.
(h) The commissioner or a "Made in Alaska" agent must approve or disapprove an application or renewal application to use "Made in Alaska" emblems within 30 days of the date of receipt of a completed application.
(i) The printing industry is not eligible for a permit to use the "Made in Alaska" emblem for routine printing projects which involve printing or duplication of items or writings not created by the printer.
History
- Authority: AS 44.33.020; AS 45.65.030 AS 45.65.020; AS 45.65.045
- Eff. 10/1/93, Register 127; am 7/23/97, Register 143
3 AAC 58.045 Use of the "Made in Alaska" emblem or representation
(a) A permit holder, other than a "Made in Alaska" agent, may use a representation of the "Made in Alaska" emblem on labels, letterheads, business cards, in-store and other advertising, and for other similar purposes.
(b) The "Made in Alaska" agent may use a representation of the "Made in Alaska" emblem only on letterheads, business cards, and other advertising solely for the purpose of identifying that person as a "Made in Alaska" agent and to fulfill that agent's duties under AS 45.65.010 - 45.65.070 and this chapter.
(c) The "Made in Alaska" emblem or a representation of that emblem may not be used in a manner that is false or misleading. The "Made in Alaska" emblem or a representation of that emblem may only be used without any modification to the design specified in 3 AAC 58.040(b).
(d) The "Made in Alaska" emblem or a representation of that emblem may not be incorporated into any business, company or product logo or label.
(e) The "Made in Alaska" emblem or a representation of that emblem may not be sold as art or as a dominant feature of a product, unless approved by the commissioner in writing.
(f) The permit holder may obtain "Made in Alaska" emblems from any source so long as they conform to the requirements of AS 45.65.010 - 45.65.070 and this chapter.
History
- Authority: AS 44.33.020; AS 45.65.020; AS 45.65.045
- Eff. 10/1/93, Register 127
3 AAC 58.050 "Made in Alaska" agent permits
(a) The commissioner will, in the commissioner's discretion, issue a permit to an agent for the "Made in Alaska" program if the applicant pays the required application and permit issuance fees and certifies on an application form approved by the department that the applicant
(1) is a resident of the state; and
(2) has a current Alaska business license, if required under AS 43.75.
(b) The commissioner will, in the commissioner's discretion, require that a "Made in Alaska" agent or applicant attend a training session provided by the department on the "Made in Alaska" program.
(c) A "Made in Alaska" agent permit is valid for three years from the date that the permit is approved by the commissioner. A "Made in Alaska" agent permit may be renewed by
(1) submitting a completed permit renewal application to the commissioner, on a form approved by the department; and
(2) paying the required renewal fee.
(d) The commissioner will approve or disapprove an application or renewal application to be a "Made in Alaska" agent within 30 days from the receipt of a completed application.
History
- Authority: AS 44.33.020; AS 45.65.020; AS 45.65.045
- Eff. 10/1/93, Register 127
3 AAC 58.055 "Made in Alaska" agent duties
The duties of the "Made in Alaska" agent include
(1) promoting and advertising the "Made in Alaska" program;
(2) providing information to the public on the "Made in Alaska" program such as application and eligibility requirements for a permit, the availability of application forms, where to obtain information and assistance, and other similar duties;
(3) distributing application forms and instructions for a permit to use the "Made in Alaska" emblems;
(4) receiving and recording completed application forms, collecting any required application fees, maintaining proper fiscal procedures to account for all fees collected, and depositing all fees with the department within two weeks of their receipt;
(5) performing site inspections or taking other action to verify the accuracy of information on the application;
(6) determining if the product meets the eligibility requirements under 3 AAC 58.040(e) and either approving or disapproving the application; submitting a copy of each application and the action taken to the commissioner within 30 days from the date of the action;
(7) submitting other information and reports as required by the commissioner;
(8) assisting the commissioner in the renewal process for permits to use the "Made in Alaska" emblem under 3 AAC 58.040(g); and
(9) reporting alleged violations of AS 45.65.010 - 45.65.070 or this chapter to the commissioner.
History
- Authority: AS 44.33.020; AS 45.65.020; AS 45.65.045
- Eff. 10/1/93, Register 127
3 AAC 58.060 Permit fees
The fees for permit applications for the silver hand and the "Made in Alaska" programs are as follows:
(1) silver hand agent permit application fee, $50
(2) silver hand agent permit issuance fee, $150
(3) silver hand agent permit triennial renewal fee, $150
(4) "Made in Alaska" permit:
(A) annual fee per handicraft type or product line, $25
(B) annual maximum fee per permit holder, $75
(5) "Made in Alaska" agent permit application fee, $50
(6) "Made in Alaska" agent permit issuance fee, $150
(7) "Made in Alaska" agent permit triennial renewal fee, $150.
History
- Authority: AS 44.33.020; AS 45.65.020
- Eff. 10/1/93, Register 127; am 7/23/97, Register 143
3 AAC 58.070 Application review
(a) Within 30 days after receiving notification of denial of an application or renewal for authorization to use the silver hand seal, to use the "Made in Alaska" emblem, or to become an agent for either the silver hand or the "Made in Alaska" program, the applicant may request reconsideration by the commissioner.
(b) The request for reconsideration must specify grounds that would support reversal of the denial.
(c) Within 30 days after receipt of a completed request for reconsideration, the commissioner will issue a written decision. The commissioner's decision on reconsideration constitutes final administrative action by the department.
History
- Authority: AS 44.33.020; AS 45.65.040 AS 44.65.020; AS 45.65.045
- Eff. 10/1/93, Register 127
3 AAC 58.075 Revocation and debarment
(a) The permit of a person authorized to use the silver hand seal or the "Made in Alaska" emblem or to act as an agent for either the silver hand or the "Made in Alaska" program who is convicted of an offense under AS 45.65.060 is automatically revoked as of the date of the conviction.
(b) Any person who is convicted of an offense under AS 45.65.060 is barred from any further participation in either the silver hand or the "Made in Alaska" program.
(c) After notice and opportunity for hearing, the commissioner will, in the commissioner's discretion revoke a permit for failure to comply with the requirements of AS 45.65.010 - 45.65.070 including the payment of fees, and this chapter.
History
- Authority: AS 44.33.020; AS 45.65.040; AS 45.65.060 AS 44.65.020; AS 45.65.045
- Eff. 10/1/93, Register 127
3 AAC 58.080 Transaction
Repealed
History
- Eff. 10/1/93, Register 127; repealed 7/23/97, Register 143
3 AAC 58.900 Definitions
In this chapter
(1) "commissioner" means the commissioner of the Department of Commerce, Community, and Economic Development;
(2) "department" means the Department of Commerce, Community, and Economic Development;
(3) "handicrafts" means products that are produced for sale by a skilled craftsperson, usually as a home occupation or in a small shop; each product requires individual attention, is produced in small quantities, and utilizes a minimum of power tools;
(4) "Made in Alaska" agent means a person who holds a valid permit issued under this chapter to serve as an agent for the "Made in Alaska" program;
(5) "manufactured product" means a product that is built, formed, fabricated, or assembled from raw or semi-finished material which is changed in character in the final product;
(6) "natural material" means material produced or existing in nature, not artificial or manufactured, and derived from lands, plants, animals or other natural resources;
(7) "product line" means a product or group of products that is manufactured utilizing similar materials and manufacturing processes and producing a finished product that is similar in form, content, and use;
(8) "silver hand agent" means a person who holds a valid permit issued under this chapter to serve as an agent for the silver hand program;
(9) "value-added process" means a process that changes a raw material or a basic industrial material into a more finished product or alters the function, shape, or appearance resulting in a product with increased value;
(10) "handicraft type" means a handicraft or a group of handicrafts that is crafted utilizing similar materials and crafting processes and producing a finished product that is similar in form, content, and use.
History
- Authority: AS 44.33.020; AS 44.65.020
- Eff. 10/1/93, Register 127; am 7/23/97, Register 143
Chapter 59 Alaska New Business Incentive Program
3 AAC 59.010 Purpose
This chapter is intended to implement, interpret, and make specific the new business incentive program as established by AS 45.81.010.
History
- Authority: AS 45.81.010; AS 45.81.020
- Eff. 6/11/2000, Register 154
3 AAC 59.020 Duties and responsibilities of the department
(a) The department will provide assistance to businesses applying for a new business incentive grant by providing the following:
(1) information, forms, and other material as required to apply for a grant under this chapter;
(2) available data and information on the region's economy.
(b) The department will
(1) review and process applications for grants under the new business incentive program and render a determination within 60 days after the department receives a complete application; and
(2) supervise and monitor a grantee's use of grant money.
History
- Authority: AS 45.81.010; AS 45.81.020; AS 45.81.030
- Eff. 6/11/2000, Register 154
3 AAC 59.030 Eligibility for grants
(a) For purposes of meeting the eligibility requirements set out in AS 45.81.020(a), a new business or a business that is opening a new branch in the state
(1) must have a valid business license
(A) issued by the department under AS 43.70 and 12 AAC 12; and
(B) specifying manufacturing as the line of business within the meaning of 12 AAC 12.990, as indicated by the department's corresponding
(i) two-digit business category code for that line of business; and
(ii) four-digit or six-digit business classification codes for related primary and secondary business activities within that line of business;
(2) must be primarily engaged in manufacturing a product for export outside the state, or manufacturing items for a business for use in manufacturing a product for export outside the state;
(3) may not directly compete, as determined by the department, with an existing business that is located in the state and that is assigned the same four-digit or six-digit business activity code as described in (1)(B)(ii) of this subsection;
(4) if that business or branch is to be located within a municipality, may not receive a new business incentive grant unless the municipality
(A) through its governing body, consents to the location of the business and provides support to the business in the form of cash or in-kind services in an amount not less than 25 percent of the amount of the grant to be awarded under this section; and
(B) memorializes the consent required by (A) of this paragraph through a written agreement with the business;
(5) if that business or branch is to be financed, must receive at least 75 percent of the financing from private sources; for purposes of this paragraph, "financing provided by private sources" includes loans from private financial institutions that are either guaranteed or participating with a state or federal government agency; and
(6) may not receive a new business incentive grant unless the Alaska Industrial Development and Export Authority reviews the new business incentive grant application and submits in writing to the department a recommendation that the business has complied with the requirements of this chapter for award of a new business incentive grant.
(b) For purposes of this section, the department's two-digit business category codes for lines of business within the meaning of 12 AAC 12.990 and four-digit and six-digit business classification codes for related activities within those lines of business, as revised as of June 30, 1999, are adopted by reference.
History
- Authority: AS 45.81.010; AS 45.81.020; AS 45.81.040
- Eff. 6/11/2000, Register 154
3 AAC 59.040 Grant application process
To apply for a grant under AS 45.81.010, an applicant must file with the department an application, on a form provided by the department, and the following information:
(1) a letter stating the proposed use of the grant, including a complete list of specific expenditures that the grant would reimburse;
(2) a copy of a complete business plan in form and substance acceptable to the department;
(3) for a business to be located in a municipality, a copy of the agreement required by 3 AAC 59.030(a)(4)(B);
(4) a description of the items that the business proposes to manufacture in the state and the destinations to which the products are to be exported;
(5) a list of required employee position descriptions and anticipated salaries for the first five years for all employees to be located in the state, including key personnel;
(6) the names of the key personnel of the business, and for each of these individuals, a brief resume of the individual's professional background and experience;
(7) other information as requested by the department as necessary for the department to determine compliance with AS 45.81 and this chapter.
History
- Authority: AS 45.81.010; AS 45.81.020; AS 45.81.040
- Eff. 6/11/2000, Register 154
3 AAC 59.050 Terms and conditions
(a) In addition to the recommendation that the Alaska Industrial Development and Export Authority provides under AS 45.81.020(a)(5), the department will consider each of the following guidelines in determining whether to award a new business incentive grant:
(1) for a new business or new branch of a business located in a municipality, the amount or extent of support or financial incentives to be provided by that municipality;
(2) the number and quality of jobs in the state that are likely to be generated directly or indirectly as a result of the new business or new branch.
(b) If the department determines the application does not meet the requirements of AS 45.81 and this chapter, the department will return the application to the applicant with an explanation of the deficiency, and will suspend further processing of the application until the deficiency is addressed.
(c) After approval of a new business incentive grant, the business that receives that grant shall
(1) employ no fewer than 50 full-time employees by July 1 of the fifth year following the effective date of the new business incentive grant agreement;
(2) provide, in a form acceptable to the department, an annual report including the number of employees, gross salaries, and taxes paid to the municipality in which the new business is located.
(d) If a business that receives a new business incentive grant must repay that grant under AS 45.81.040(a) or (f) of this section, the department will charge compound interest on the grant money at an amount equal to five percentage points above the annual rate charged member banks for advances by the 12th Federal Reserve District on the day on which the department determines that business is not operating in the state in the manner required by AS 45.81.040(a).
(e) A business that agrees, as required by AS 45.81.040(a), to be responsible for its branch or subsidiary's obligation to repay grant money and interest shall submit that agreement to the department by notarized letter.
(f) If a business that receives a new business incentive grant fails to comply with (c) of this section, the business shall repay the grant, with interest, unless the business demonstrates to the department's satisfaction that good cause exists for the failure to comply. Repayment, if required, must be made by October 1 of the fifth year following the effective date of the new business incentive grant agreement.
History
- Authority: AS 45.81.010; AS 45.81.030 AS 45.81.020; AS 45.81.040
- Eff. 6/11/2000, Register 154
3 AAC 59.060 Grant administration
(a) The department will, in its discretion, award a new business incentive grant in accordance with AS 45.81.010. The department will process applications for new business incentive grants on a year-round basis. The department will review applications on a first-come first-served basis until the new business incentive fund is depleted.
(b) If the new business incentive fund is depleted before the department finishes reviewing an application, the applicant must reapply during the next fiscal year when money is appropriated to the fund. If an application form and supporting documentation, as required by 3 AAC 59.040, are already on file with the department, the applicant may reapply by submitting supporting documentation to update information already on file.
History
- Authority: AS 45.81.010; AS 45.81.020; AS 45.81.040
- Eff. 6/11/2000, Register 154
3 AAC 59.900 Definitions
In AS 45.81 and this chapter, unless the context indicates otherwise,
(1) "ceasing to operate" means
(A) losing or letting lapse a business license issued under AS 43.70 and 12 AAC 12; or
(B) discontinuing business operations in the state, resulting in the furlough or dismissal of the employed workforce;
(2) "department" means the Department of Commerce, Community, and Economic Development;
(3) "directly compete" means to manufacture a product substantially similar to a product that an existing business manufactures for twelve months or more before the date of the grant request;
(4) "equipment" means machinery, and appurtenances to that machinery, used in the manufacture of products for export outside the state by the business;
(5) "existing business" means a corporation, person, or other legal entity, domestic or foreign, that itself or through its subsidiary or affiliate, holds an active business license issued under AS 43.70 and 12 AAC 12;
(6) "finance" means to provide with capital or loan money as needed to carry on the business;
(7) "governing body" means, if the business is to be located in
(A) a city in the unorganized borough, the council of that city; or
(B) an organized borough or unified municipality, the assembly of that borough or municipality;
(8) "initial inventory" means raw or partially manufactured materials required by the business during the first year of operation, to the extent that those materials must be imported from outside the state;
(9) "key personnel" means officers, supervisory management employees, or technical personnel, that are necessary for the successful conduct of business operations in the state;
(10) "municipality" has the meaning given that term in AS 01.10.060;
(11) "new branch" means a commercial enterprise that is operated for profit, organized under the laws of this state, and headquartered in another state or another location within this state;
(12) "new business" means a commercial enterprise that is operated for profit, organized under the laws of the state, and headquartered in the state;
(13) "operating" means maintaining employees in the state, continuing to manufacture and export products from the state, and maintaining an active business license with the department in accordance with AS 43.70 and 12 AAC 12;
(14) "primarily engaged" means deriving greater than 80 percent of the business's revenue from the business's primary business activity, as indicated through the business classification code specified for that activity under 3 AAC 59.030(a)(1)(B)(ii);
(15) "salaries"
(A) means the total compensation paid or stipulated to be paid by the business to employees, before deductions; for services rendered while on the payroll of the business; and
(B) does not include any amount paid by the business on behalf of employees for fringe benefits; for purposes of this subparagraph, "fringe benefits" includes contributions for group health or life insurance, employee retirement, social security, and worker's compensation.
History
- Authority: AS 45.81.010; AS 45.81.040 AS 45.81.020; AS 45.81.050
- Eff. 6/11/2000, Register 154
Part 10 Economic Development
Chapter 74 Alaska Microloan Revolving Loan Fund
3 AAC 74.010 Application process
(a) To apply for a loan under AS 44.33.950 - 44.33.990 for working capital, equipment, construction, or other commercial purposes, the applicant shall file with the department
(1) a completed application for a microloan revolving loan, on a form provided by the department;
(2) a completed residency questionnaire, on a form provided by the department;
(3) a letter of intent stating the amount requested and intended use consistent with AS 44.33.950 - 44.33.990 of the proposed loan money, on a form provided by the department;
(4) a schedule of acceptable collateral, including collateral now owned and other collateral to be acquired with the loan proceeds, on a form provided by the department;
(5) an individual financial statement consisting of a current balance sheet and a profit and loss statement, on a form provided by the department;
(6) a statement of projected income and expenses for the following year's operating plan, on a form provided by the department;
(7) a signed credit authorization, on a form provided by the department;
(8) a consent to release information, on a form provided by the department;
(9) copies of the applicant's federal income tax returns for the preceding three years, and for additional years if necessary to establish eligibility;
(10) copies of purchase agreements, estimates, invoices, or other documentation regarding the intended use of loan proceeds;
(11) the application fee required by 3 AAC 74.055(b); and
(12) any other information requested by the department needed to process the loan application.
(b) The department may process loan requests without the information described in (a) of this section if the department determines that the information is not necessary for making the lending decision.
History
- Authority: AS 44.33.955
- Eff. 11/3/2012, Register 204
3 AAC 74.015 Examination
(a) The materials described in 3 AAC 74.010 will be processed and evaluated by a loan officer. The loan officer will evaluate the applicant's eligibility, financial and credit history, experience, ability to repay, and proposed collateral.
(b) On the basis of the evaluation, the loan officer will either
(1) inactivate the application due to
(A) lack of information required under 3 AAC 74.010; or
(B) ineligibility of the applicant; or
(2) recommend proposed action on the loan request to the appropriate loan committee; however, the recommendation of a loan officer is not binding on a loan committee.
History
- Authority: AS 44.33.955
- Eff. 11/3/2012, Register 204
3 AAC 74.020 Loan committee
(a) A loan committee consists of one or more persons appointed by the director to act on a loan request.
(b) A loan committee may approve, deny, or modify a loan request, or may table a loan request subject to obtaining additional information.
(c) A loan committee may impose reasonable conditions on the approval of a loan, including
(1) additional collateral to secure the loan;
(2) additional guarantors; and
(3) subordination of prior lien holders' rights to the interests of the state.
(d) A loan committee shall consider the applicant's eligibility for a loan, financial and credit record, ability to repay, experience, and the adequacy of collateral offered to secure the loan. A loan committee may also consider the recommendations of the loan officer assigned to process the application and any other relevant information.
(e) A loan committee may fix, within the limitations set by AS 44.33.965, the term of a loan and repayment schedule.
(f) If a loan request is denied or significantly modified by a loan committee, the loan committee shall provide the applicant with a statement of the reasons for the action and the information relied on.
(g) A material misstatement or omission of fact made by an applicant constitutes grounds for denial of a loan request.
History
- Authority: AS 44.33.955; AS 44.33.965
- Eff. 11/3/2012, Register 204
3 AAC 74.025 Residency requirements
(a) In determining if an applicant fulfills the 12 consecutive month residency requirements under AS 44.33.960, the loan committee may consider any information that would indicate the applicant's residency, including where the applicant
(1) is registered to vote;
(2) maintains a permanent place of abode;
(3) files tax returns, and the address that is listed on the returns;
(4) registers or licenses personal property, including cars, boats, trucks, and trailers;
(5) is licensed to drive;
(6) maintains bank accounts, savings accounts, lines of credit, and other financial relationships;
(7) has claimed or received benefits as a resident;
(8) has received permanent fund dividends; and
(9) owns real property.
(b) If two or more individuals apply jointly or as a partnership or corporation, all parties to the application must establish residency.
History
- Authority: AS 44.33.955; AS 44.33.960
- Eff. 11/3/2012, Register 204
3 AAC 74.030 Financial and credit record
(a) The department may consider the following factors in evaluating an applicant's financial and credit record:
(1) existing and prior debts;
(2) credit reports obtained from creditors and private credit reporting services;
(3) prior loan history with the department;
(4) timeliness in making payments on loans and other debts;
(5) existence of tax liens;
(6) judgments and foreclosures;
(7) financial and credit reputation.
(b) Information establishing unacceptable credit will be more heavily weighed by the department if it has occurred not later than the past 10 years from the date of application.
History
- Authority: AS 44.33.955
- Eff. 11/3/2012, Register 204
3 AAC 74.035 Ability to repay
The department may consider the following factors in evaluating an applicant's ability to repay:
(1) income history, including present income;
(2) prospects for future income;
(3) assets;
(4) liabilities;
(5) reasonableness of the projected profit and loss statement;
(6) other relevant information or experience.
History
- Authority: AS 44.33.955
- Eff. 11/3/2012, Register 204
3 AAC 74.040 Collateral
A loan must be secured by collateral acceptable to the department, which may include a mortgage or other security instrument in real property, equipment, buildings or other tangible assets.
History
- Authority: AS 44.33.955; AS 44.33.965
- Eff. 11/3/2012, Register 204
3 AAC 74.045 Lending practices
(a) The proceeds of the loan may be used by the borrower for working capital, equipment, construction, or other commercial purposes relating to the borrower's business.
(b) A loan will not be approved for refinancing long-term debt. Interim or construction financing is not considered long-term debt if the term is less than the longer of 12 months or the length of actual construction and the earliest promissory note or other document evidencing the creation of the debt was executed less than six months before receipt of the application by the department.
(c) Loan proceeds may not be used to reimburse an applicant for purchases more than six months before receipt of the application by the department.
(d) The department will set the interest rate for loans under this chapter on the first day of each calendar quarter. The interest rate set for a quarter remains in effect until the department changes the rate, will not exceed the maximum or minimum interest allowed under AS 44.33.965(b)(2), and will be established at the nearest one-quarter point. The interest rate will be based on the prime rate, as defined in AS 44.88.599, during the previous quarter.
(e) The interest rate for a loan is the interest rate in effect at the time the loan commitment is made. The interest rate for a loan will be at a fixed rate for the term of the loan.
History
- Authority: AS 44.33.955; AS 44.33.965
- Eff. 11/3/2012, Register 204
3 AAC 74.050 Disbursement of loan money
Loan money will be disbursed when
(1) the state has perfected a security interest in the collateral;
(2) requirements of the department as specified by the loan committee have been met; and
(3) the borrower is in compliance with provisions of the loan documents, AS 44.33.950 - 44.33.990, and this chapter.
History
- Authority: AS 44.33.955; AS 44.33.965
- Eff. 11/3/2012, Register 204
3 AAC 74.055 Costs and fees
(a) All expenses incurred by the department in processing an application must be paid by the applicant. These expenses include the cost of title reports and insurance, recording fees, appraisals, surveys, travel, and other direct costs.
(b) A nonrefundable application fee of $100 is due to the department at the time an application for a loan is submitted to the department under this chapter.
(c) An origination fee of one percent of the total loan amount or an assumption fee of one percent of the loan balance is due from the borrower when provisions of this chapter have been met.
(d) A late fee not to exceed five percent of the payment amount will be charged to a borrower for each loan payment that is received more than 15 days after the due date for the payment.
(e) A fee not to exceed $100 will be charged to a borrower to process a loan extension application.
(f) The department will not charge the late fee described in (d) of this section if
(1) the department receives from the borrower a loan extension application or a payment not more than 15 days after the due date for the payment;
(2) the department approves the loan extension application or payment plan; and
(3) one or more of the following occurs:
(A) the borrower meets all conditions for the loan extension or the payment plan;
(B) the department receives payment during its review of the loan extension application or payment plan.
History
- Authority: AS 44.33.955
- Eff. 11/3/2012, Register 204
3 AAC 74.060 Assumptions
(a) A request for permission to assume the obligations and benefits of a loan made under AS 44.33.950 - 44.33.990 and this chapter will be processed in the same manner as an application for a loan.
(b) A loan committee may permit an assumption if the applicant meets eligibility requirements under AS 44.33.960 and this chapter, is a good financial risk, and the security of the state's investment is preserved.
(c) Wraparound financing that includes a loan made under AS 44.33.950 - 44.33.990 and this chapter is prohibited and constitutes a default on the loan.
History
- Authority: AS 44.33.955; AS 44.33.960
- Eff. 11/3/2012, Register 204
3 AAC 74.070 Modifications
(a) A request for a modification to a loan made under AS 44.33.950 - 44.33.990 and this chapter will be processed in the same manner as an application for a loan. The department will require the applicant to file one or more of the items specified in 3 AAC 74.010 if information on those items has changed since they were previously filed, or if the department needs additional information not appearing in the previously filed items in order to review the request for modification.
(b) A loan committee may permit a loan modification only if the security of the state and the state's investment is preserved.
History
- Authority: AS 44.33.955
- Eff. 11/3/2012, Register 204
3 AAC 74.080 Reconsideration of a loan request
(a) If a loan request is denied, inactivated, or significantly modified by the department, an applicant may file a written request for reconsideration not later than 30 days after receipt of notice of the decision of the department.
(b) The department will reconsider the request on a showing by the applicant that
(1) There has been a substantial change in the circumstances leading to the decision of the department;
(2) additional relevant information that was not initially available can be provided to the department; or
(3) administrative errors were made by the department.
History
- Authority: AS 44.33.955; AS 44.33.960
- Eff. 11/3/2012, Register 204
3 AAC 74.090 Confidentiality of loan information
(a) The following information is not confidential and is available for public inspection upon request:
(1) a document that is already a public record, including a deed of trust, financing statement, limited entry permit, quota share, warranty deed, bill of sale, mortgage, lien, vehicle title, or vessel documentation;
(2) general information regarding loans, including the original loan amount, loan terms, personal guarantees, and disbursement and repayment schedules;
(3) insurance matters, including title insurance policies and correspondence with insurance companies or borrowers regarding losses, accident reports, and nonpayment of premiums;
(4) foreclosure and default proceedings.
(b) The following information is confidential and is not subject to public disclosure:
(1) personal and financial information, including income tax returns, financial statements, business income statements, pro forma profit and loss statements, credit information obtained from banks and other creditors, reports from consumer reporting agencies, processor statements, and commercial fish tickets;
(2) loan committee memoranda and minutes containing information relating to creditworthiness of an applicant;
(3) the payment history on a loan, unless the loan is in default.
(c) Information not described in (a) or (b) of this section may be subject to public disclosure. Requests for disclosure must be made, and will be determined, in accordance with 2 AAC 96. On receipt of a request for disclosure, the department will notify the loan applicant and other persons with a privacy interest in the request to permit them to present reasons why the requested information should not be disclosed.
History
- Authority: Art. 1, sec. 22AS 40.25.110; AS 44.33.955 Ak Const.AS 44.25.120
- Eff. 11/3/2012, Register 204
3 AAC 74.900 Definitions
In this chapter, unless the context requires otherwise,
(1) "director" means the director of the division assigned economic development functions or its successor agency in the department;
(2) "wraparound financing" means a contract that includes the balance due on an existing debt and an additional amount to cover the difference between the selling price and the existing debt.
History
- Authority: AS 44.33.955
- Eff. 11/3/2012, Register 204
Chapter 75 Capstone Avionics Loans
3 AAC 75.010 Application process
(a) To apply for a loan for the purchase and installation of capstone avionics equipment, the applicant shall file
(1) a completed application for a capstone avionics loan, on a form provided by the department;
(2) documentation to verify that the aircraft on which the capstone avionics equipment is to be installed meets the eligibility requirements contained in AS 44.33.665(a) and 3 AAC 75.025;
(3) a letter of intent stating the amount requested and the intended use of the proposed loan money on a form provided by the department;
(4) a schedule of acceptable collateral, including a copy of the aircraft title or the aircraft lease and capstone avionics equipment to be acquired with the loan proceeds, on a form provided by the department;
(5) an individual financial statement consisting of a current balance sheet and a profit and loss statement, on a form provided by the department;
(6) a signed authorization, on a form provided by the department, for any individual or institution to release to the department credit information concerning the applicant;
(7) a copy of the applicant's federal income tax return for the preceding year; as necessary to verify the applicant's income, or if a federal income tax return for the preceding year is not available, the department will request copies of federal income tax returns for earlier years or other documentation of the applicant's income;
(8) a signed consent, on a form provided by the department, for the department to obtain information from, or release information to, other government agencies;
(9) copies of the purchase agreement, cost estimates, invoice, or other documentation to verify the cost of equipment being purchased and installed with loan proceeds;
(10) the application fee required by 3 AAC 75.055(a);
(11) any other information that might be helpful to the applicant in demonstrating eligibility for a loan, as requested by the department; and
(12) a copy of the airworthiness certificate issued under 49 U.S.C. 44704(d) by the Federal Aviation Administration for the aircraft on which the capstone avionics equipment is to be installed.
(b) An applicant who submits a false sworn or unsworn statement on or in support of a loan application is subject to AS 11.56.200 - 11.56.210 and may be denied any future loans.
History
- Authority: AS 44.33.660; AS 44.33.665
- Eff. 8/22/2008, Register 187; am 10/30/2010, Register 196
3 AAC 75.015 Examination
(a) A loan officer shall evaluate and process the materials described in 3 AAC 75.010. The loan officer shall evaluate the applicant's eligibility, financial and credit history, financial statement, ability to repay, and proposed collateral.
(b) On the basis of the evaluation, the loan officer shall either
(1) inactivate the application due to
(A) lack of information required under 3 AAC 75.010;
(B) ineligibility of the applicant; or
(C) failure by the aircraft to meet the eligibility requirements under 3 AAC 75.025; or
(2) recommend proposed action on the loan request to the appropriate loan committee; however, the recommendation of a loan officer is not binding on a loan committee.
History
- Authority: AS 44.33.660; AS 44.33.665
- Eff. 8/22/2008, Register 187
3 AAC 75.020 Loan committee
(a) A loan committee consists of one or more persons appointed by the director to act on a loan request.
(b) A loan committee may approve, deny, or modify and approve a loan request, or may table a loan request subject to obtaining additional information.
(c) A loan committee may impose reasonable conditions on the approval of a loan, including
(1) additional collateral to secure the loan;
(2) additional guarantors; and
(3) adding the department as loss payee on an existing aircraft insurance policy.
(d) A loan committee shall consider the applicant's eligibility for a loan, financial and credit record, and ability to repay, and the adequacy of collateral offered to secure the loan. A loan committee may also consider the recommendations of the loan officer assigned to process the application and any other relevant information.
(e) A loan committee may fix, within the limitations set by AS 44.33.670, the term of a loan and repayment schedule.
(f) If a loan request is denied or significantly modified by a loan committee, the loan committee shall provide the applicant with a statement of the reasons for the action and the information relied upon.
(g) A material misstatement or omission of fact made by an applicant constitutes grounds for denial of a loan request.
History
- Authority: AS 44.33.660; AS 44.33.665; AS 44.33.670
- Eff. 8/22/2008, Register 187
3 AAC 75.025 Eligibility of aircraft and equipment
(a) For an aircraft to be eligible for a loan under AS 44.33.650 - 44.33.690, the applicant must document that the aircraft has logged a substantial percentage of flight hours in the state. For purposes of this section, an applicant shall document that the aircraft has logged substantial flight hours by submitting to the department a declaration certifying that at least 51 percent of the aircraft's flight hours in the previous 12 months were flown in this state.
(b) Capstone avionics equipment eligible for a loan includes one or more of the following:
(1) an automatic dependent surveillance - broadcast (ADS-B) data link system;
(2) global positioning system/wide area augmentation system (GPS/WAAS) navigation equipment;
(3) a moving map multifunction display (MFD);
(4) other equipment as determined by the department in consultation with the Department of Transportation and Public Facilities.
(c) An aircraft eligible for a loan under AS 44.33.650 - 44.33.690 must, at a minimum, already be equipped with an ADS-B system, the capstone avionics equipment being purchased and installed must include an ADS-B system, or the aircraft owner must sign an intent to equip the aircraft with an ADS-B system. Other capstone avionics equipment is optional.
History
- Authority: AS 44.33.660; AS 44.33.665
- Eff. 8/22/2008, Register 187; am 6/28/2009, Register 190
3 AAC 75.030 Financial and credit record
(a) The department may consider the following factors in evaluating an applicant's financial and credit record:
(1) existing and prior debts;
(2) credit reports obtained from creditors and private credit reporting services;
(3) prior loan history with the department;
(4) timeliness in making payments on loans and other debts;
(5) existence of tax liens;
(6) judgments and foreclosures;
(7) financial and credit reputation.
(b) Information establishing unacceptable credit will be more heavily weighed by the department if it has occurred within the past 10 years.
History
- Authority: AS 44.33.660; AS 44.33.665
- Eff. 8/22/2008, Register 187
3 AAC 75.035 Ability to repay
The department may consider the following factors in evaluating an applicant's ability to repay:
(1) income history, including present income;
(2) prospects for future income;
(3) assets and their liquidity;
(4) liabilities;
(5) reasonableness of profit and loss statement;
(6) other relevant experience.
History
- Authority: AS 44.33.660; AS 44.33.665
- Eff. 8/22/2008, Register 187
3 AAC 75.040 Collateral
A loan must be secured by collateral acceptable to the department, which may include a lien on the equipment being financed and the aircraft on which the capstone avionics equipment is to be installed.
History
- Authority: AS 44.33.660; AS 44.33.665
- Eff. 8/22/2008, Register 187
3 AAC 75.045 Lending practices
(a) A loan will not be approved for refinancing of debt of an existing loan, the proceeds of which were used to purchase or install capstone avionics equipment described in 3 AAC 75.025.
(b) A loan may be approved under AS 44.33.650 - 44.33.690 and this chapter for capstone avionics equipment purchased and installed not more than 120 days before receipt of the application by the department.
(c) The interest rate for the loan program is four percent.
(d) A loan for the purchase and installation of capstone avionics equipment will be made only if the aircraft or lease is in the name of the applicant and the equipment to be purchased is offered as security for the loan.
(e) If the lease agreement expires during the term of the loan, the borrower has 120 days to pay the loan in full, or provide proof of lease renewal or purchase of aircraft. If the borrower fails, during the 120-day period, to pay the loan in full or provide proof of lease renewal or purchase of the aircraft, the department will consider the loan to be in default.
History
- Authority: AS 44.33.660; AS 44.33.665
- Eff. 8/22/2008, Register 187; am 10/30/2010, Register 196
3 AAC 75.050 Disbursement of loan proceeds
Loan proceeds will be disbursed when
(1) requirements of the loan committee have been met; and
(2) the borrower is in compliance with all other provisions of AS 44.33.650 - 44.33.690, this chapter, and the loan documents.
History
- Authority: AS 44.33.660; AS 44.33.665; AS 44.33.670
- Eff. 8/22/2008, Register 187
3 AAC 75.055 Fees
(a) A $50 application fee will be charged to a borrower to process each loan application.
(b) A late fee not to exceed five percent of the payment amount will be charged to a borrower for each loan payment that is received more than 15 days after the due date. If requested by the borrower and the borrower has not previously received a partial or full waiver of a late fee, the department will waive up to all of the late fee as follows:
(1) 100 percent if the loan payment was received no more than l8 days after the due date;
(2) 90 percent if the loan payment was received no more than 29 days after the due date.
(c) The department will not charge the late fee described in (b) of this section if
(1) the department receives from the borrower a loan extension application or a payment plan no more than 15 days after the due date;
(2) the department approves the loan extension application or payment plan; and
(3) one or more of the following occurs:
(A) the borrower meets all conditions for the loan extension or the payment plan;
(B) the department receives payment during its review of the loan extension application or payment plan.
(d) A fee, not to exceed $50, will be charged to a borrower to process a loan modification.
History
- Authority: AS 44.33.660; AS 44.33.665
- Eff. 8/22/2008, Register 187
3 AAC 75.060 Assumptions
(a) A request for permission to assume the obligations and benefits of a loan made under AS 44.33.650 - 44.33.690 and this chapter will be processed in the same manner as a loan application.
(b) A loan committee may permit an assumption if the
(1) applicant is a good financial risk; and
(2) security of the state's investment is preserved.
(c) Wraparound financing that includes a loan made under AS 44.33.650 - 44.33.690 and this chapter is prohibited and constitutes a default on the loan.
History
- Authority: AS 44.33.660
- Eff. 8/22/2008, Register 187
3 AAC 75.065 Modifications
(a) A request for a modification to a loan made under AS 44.33.650 - 44.33.690 and this chapter will be processed in the same manner as a loan application. The department will require the applicant to file one or more of the items specified in 3 AAC 75.010 if information on those items has changed since they were previously filed, or if the department needs additional information not appearing in the previously filed items in order to review the request for modification.
(b) A loan committee may permit a loan modification only if the security of the state and its investment is preserved.
History
- Authority: AS 44.33.660
- Eff. 8/22/2008, Register 187
3 AAC 75.070 Reconsideration of loan request
(a) If a loan request is denied, inactivated, or significantly modified by the department, an applicant may file a written request for reconsideration within 30 days after receipt of notice of the department's decision.
(b) The department will reconsider a request upon a showing by the applicant that
(1) there has been a substantial change in the circumstances leading to the department's decision;
(2) additional relevant information can be provided to the department that was not initially available; or
(3) administrative errors were made by the department.
History
- Authority: AS 44.33.660; AS 44.33.665
- Eff. 8/22/2008, Register 187
3 AAC 75.075 Confidentiality of loan information
(a) The following information is not confidential and is available for public inspection upon request:
(1) a document that is already a public record, including a financing statement, aircraft title, or aircraft documentation;
(2) general information regarding loans, including the original loan amount, loan terms, personal guarantees, and disbursement and repayment schedules;
(3) insurance matters, including insurance policies and correspondence with insurance companies or borrowers regarding losses, accident reports, and nonpayment of premiums;
(4) foreclosure and default proceedings.
(b) The following information is confidential and is not subject to public disclosure:
(1) personal and financial information, including income tax returns, financial statements, business income statements, profit and loss statements, credit information obtained from banks and other creditors, and reports obtained from consumer reporting agencies;
(2) loan committee memoranda and minutes containing information relating to creditworthiness of an applicant;
(3) the payment history on a loan, unless the loan is in default.
(c) Information not described in (a) or (b) of this section may be subject to public disclosure. Requests for disclosure must be made and will be determined in accordance with 2 AAC 96. Upon receipt of a request for disclosure, the department will notify the loan applicant and other persons with a privacy interest in the request, to permit them to present reasons why the requested information should not be disclosed.
History
- Authority: Art. I, sec. 22,AS 40.25.110; AS 44.33.660 Ak Const.AS 40.25.120
- Eff. 8/22/2008, Register 187
3 AAC 75.900 Definitions
In this chapter, unless the context requires otherwise,
(1) "ADS-B system" means an automatic dependent surveillance-broadcast (ADS-B) data link system;
(2) "default" includes a violation of any provision of AS 44.33.650 - 44.33.690, this chapter, or the loan documents, or failure to make the necessary payment within 15 days after it is due;
(3) "department" means the Department of Commerce, Community, and Economic Development;
(4) "director" means the director of the division assigned economic development functions or its successor agency in the department;
(5) "guarantor" means a person who legally assures that the loan requirements will be met if the borrower fails to pay or perform as contracted;
(6) "wraparound financing" means a contract that includes the balance due on an existing debt and any additional amount to cover the difference between the selling price and the existing debt.
History
- Authority: AS 44.33.660
- Eff. 8/22/2008, Register 187; am 6/28/2009, Register 190; am 10/16/2012, Register 204
Chapter 77 Repossessed Property
3 AAC 77.010 Acquiring repossessed property
In connection with a default on a loan made by the department, it will, in its discretion, repossess property in any of the following ways:
(1) judicial or nonjudicial foreclosure on real estate;
(2) U.S. Marshal's foreclosure sale on documented vessels under Federal Maritime Law;
(3) Uniform Commercial Code (UCC) foreclosure, which may include documented vessels, AK-registered vessels, vehicles, mobile homes, airplanes, inventory and equipment;
(4) abandonment;
(5) deed, bill of sale, or transfer instead of foreclosure;
(6) repossession of title vehicle;
(7) bankruptcy proceeding;
(8) limited entry permit foreclosure; or
(9) other manner consistent with federal and state law.
History
- Authority: AS 16.10.310(a)AS 26.15.040; AS 45.87.060 AS 16.10.335; AS 27.09.050; AS 45.88.020(a) AS 16.10.339; AS 44.33.020(1)AS 45.88.150 AS 16.10.510(4)AS 44.33.245(a)AS 45.98.030(3) AS 26.15.010; AS 45.81.120 AS 26.15.030; AS 45.81.210
- Eff. 3/29/86, Register 97
3 AAC 77.020 Prior owner's right of redemption
(a) Sale of repossessed property acquired by the department is subject to any right of redemption allowed by law.
(b) For the purposes of AS 16.10.337(b), sale of the permit occurs and the right of redemption ends when a contract is formed as described in 3 AAC 77.060(b).
(c) If a contract formed under 3 AAC 77.060 is not fulfilled and no other contract is immediately formed, the prior owner will be notified that redemption will be allowed until another contract is formed.
History
- Authority: AS 16.10.310(a)AS 26.15.085; AS 45.81.230 AS 16.10.337; AS 27.09.050; AS 45.88.020(a) AS 16.10.339; AS 44.33.020(1)AS 45.88.150 AS 16.10.510(4)AS 44.33.245(a)AS 45.98.030(3) AS 26.15.010; AS 45.81.120 AS 26.15.030; AS 45.81.200
- Eff. 3/29/86, Register 97; am 7/4/91, Register 119
3 AAC 77.030 Disposal of repossessed property
(a) Unless otherwise prohibited, the department will dispose of all repossessed property by
(1) public auction, including advertised foreclosure sale or U.S. Marshal's sale with or without a minimum bid requirement;
(2) advertised sales through solicitation of competitive offers;
(3) negotiated or private sales, if no acceptable offers are received after advertising under (1) or (2) of this subsection;
(4) destruction;
(5) lease;
(6) lease with an option to purchase;
(7) redemption;
(8) transfer to other state department or agency; or
(9) other manner determined by the department to be in the best interests of the state.
(b) All disposals of repossessed property are made on an "as is, where is" basis, with no implied or expressed warranties of condition.
History
- Authority: AS 16.10.310(a)AS 26.15.085; AS 45.87.040 AS 16.10.335; AS 27.09.050; AS 45.87.060 AS 16.10.337; AS 27.09.055; AS 45.88.020(a) AS 16.10.339; AS 44.33.020(1)AS 45.88.050 AS 16.10.355; AS 44.33.245(a)AS 45.88.140 AS 16.10.510(4)AS 44.33.272; AS 45.88.150 AS 16.10.555; AS 45.81.120; AS 45.98.030(3) AS 26.15.010; AS 45.81.190; AS 45.98.055 AS 26.15.030; AS 45.81.210 AS 26.15.040; AS 45.81.230
- Eff. 3/29/86, Register 97
3 AAC 77.040 Advertising
(a) Notice and advertising for judicial and nonjudicial foreclosure sales, U.S. Marshal foreclosure sales on documented vessels, and other public auction sales will be in accordance with all laws that govern the particular kind of sale.
(b) The department will advertise a sale under 3 AAC 77.030(a)(2) by
(1) posting notice of the sale on the Alaska Online Public Notice System established under AS 44.62.175; and
(2) providing notice of the sale by at least one of the following means:
(A) publication in a newspaper or periodical of general circulation in the area where the repossessed property is located;
(B) radio announcement;
(C) written notice, delivered by one or more of the following methods:
(i) mail;
(ii) electronic mail;
(iii) facsimile transmission;
(D) written notices posted in public places where potentially interested parties will view;
(E) other appropriate media, including electronic media.
(c) A printed or written advertisement of a sale under 3 AAC 77.030(a)(2) will, in the department's discretion, include
(1) a description of the item offered, including the city or town where the item is located;
(2) if real property, the legal description of the property or location address;
(3) terms of sale, including minimum acceptable offer, if any, and whether financing is available from the department;
(4) the last known value, and date of valuation;
(5) the deadline for submission of offers;
(6) the contact name and telephone number for additional information on the item and on available financing from the department, if any;
(7) the date when offers will be reviewed;
(8) a statement that no specific form of offer is required, but an offer must be made in writing and must include name, mailing address, phone number, signature, and any terms or conditions of the offer, including whether the offeree is seeking financing;
(9) a statement that the department reserves the right to refuse any and all offers;
(10) a statement that all items are sold "AS IS, WHERE IS," with no implied or expressed warranty of condition whatsoever;
(11) a statement that offers are not binding unless accepted by the department's loan committee;
(12) a statement that if no acceptable offers are received, the department will, in its discretion, solicit additional offers without readvertising; and
(13) a statement that the sale is governed by 3 AAC 77.
(d) Repealed 7/4/91.
History
- Authority: AS 16.10.310; AS 26.15.030; AS 45.81.120 AS 16.10.337; AS 27.09.050; AS 45.81.220 AS 16.10.339; AS 44.33.020; AS 45.88.020 AS 16.10.510; AS 44.33.245; AS 45.88.150 AS 26.15.010; AS 44.33.660; AS 45.98.030
- Eff. 3/29/86, Register 97; am 7/4/91, Register 119; am 9/27/2008, Register 187
3 AAC 77.050 Criteria for evaluating offers
The loan committee will consider the following factors in making its decision on an offer regarding repossessed property:
(1) the outstanding loan balance on the repossessed property;
(2) the current assessed, appraised, surveyed, replacement, forced sale, or market value;
(3) the present supply and demand for similar property;
(4) the length of time the state has owned the property;
(5) the length of time the property has been on the market;
(6) the ongoing management costs of the property to the state;
(7) any minimum acceptable offer set by the department;
(8) whether the offer is for cash or requires departmental financing;
(9) the credit history and financial condition of the person making the offer, if known;
(10) other factors that the loan committee determines to be significant.
History
- Authority: AS 16.10.310(a)AS 26.15.040; AS 45.81.210 AS 16.10.339; AS 27.09.050; AS 45.87.060 AS 16.10.510(4)AS 44.33.020(1)AS 45.88.020(a) AS 26.15.010; AS 44.33.245(a)AS 45.88.150 AS 26.15.030; AS 45.81.120; AS 45.98.030(3)
- Eff. 3/29/86, Register 97
3 AAC 77.060 Notification of acceptance or rejection of an offer
(a) Within 15 days after the deadline for submission of offers regarding repossessed property, the loan committee will review all offers received.
(b) The loan committee may reject all offers, accept an offer as presented, make a counter offer to the apparent best offer, or accept a counter offer. A contract is formed when acceptance of an offer or a counter offer is communicated to the other contracting party.
(c) Within six working days after the date that a contract is formed or a decision is made to reject all offers notice will be mailed by first class mail to all offerors or their designated agent of the accepted offer, if any, the property sold, and any similar property still available, with the highest offer received but not accepted, if any. The decision to accept or reject an offer is subject to appeal under 3 AAC 77.080.
(d) If all offers are rejected, new offers will continue to be considered and the department will, in its discretion, resolicit offers without readvertising. If a subsequent offer or counter offer is accepted and a contract is formed, notice will be mailed only to persons who submitted an offer after the original deadline for submission of offers and to persons who have appeals pending in regard to the same matter.
History
- Authority: AS 16.10.310; AS 26.15.085; AS 45.81.200 AS 16.10.339; AS 27.09.050; AS 45.81.230 AS 16.10.510(4)AS 44.33.020(1)AS 45.88.020(a) AS 26.15.010; AS 44.33.245(a)AS 45.88.150 AS 26.15.030; AS 45.81.120; AS 45.98.030(3)
- Eff. 3/29/86, Register 97; am 7/4/91, Register 119
3 AAC 77.070 Reimbursable fees and expenses
The department will, in its discretion, reimburse or pay
(1) a caretaker or custodian of repossessed property;
(2) brokerage fees or expenses related to repossessed property;
(3) an individual hired to perform services for or repairs to repossessed property; or
(4) any other person incurring expenses authorized by the department related to repossessed property.
History
- Authority: AS 16.10.310(a)AS 26.15.085; AS 45.81.200 AS 16.10.339; AS 27.09.050; AS 45.81.230 AS 16.10.510(4)AS 44.33.020(1)AS 45.88.020(a) AS 26.15.010; AS 44.33.245(a)AS 45.88.150 AS 26.15.030; AS 45.81.120; AS 45.98.030(3)
- Eff. 3/29/86, Register 97; am 7/4/91, Register 119
3 AAC 77.080 Appeals
(a) A person making an offer may appeal a loan committee decision made under 3 AAC 77.060.
(b) All appeals must be made in writing and addressed to the department in Juneau, Alaska.
(c) An appeal must include the date, the appellant's full name, address, telephone number, and signature, a description of the repossessed property involved, and a complete explanation of why the appellant believes that the loan committee's decision should be amended or reversed.
(d) An appeal must be received by the department, at the address specified, not later than the close of business on the 15th day after the mailing of the notice under 3 AAC 77.060(c).
(e) If an appeal is received, the party whose offer was proposed to be accepted will be notified as soon as possible.
(f) The senior loan committee shall review and decide all appeals within five working days after the deadline for receipt of appeals under (d) of this section.
(g) The department will send to all parties involved, by first class mail, a letter stating the senior loan committee's decision under (f) of this section, within five working days after the decision.
(h) If the senior loan committee amends or reverses the loan committee's decision, the party whose offer was initially proposed to be accepted has a right of appeal under this section.
History
- Authority: AS 16.10.310; AS 26.15.085; AS 45.81.200 AS 16.10.339; AS 27.09.050; AS 45.81.230 AS 16.10.510; AS 44.33.020; AS 45.88.020 AS 26.15.010; AS 44.33.245; AS 45.88.150 AS 26.15.030; AS 45.81.120; AS 45.98.030
- Eff. 3/29/86, Register 97; am 7/4/91, Register 119; am 8/10/97, Register 143; am 10/16/2012, Register 204
3 AAC 77.090 Financing of repossessed property
(a) A party requesting financing from the department to purchase property repossessed under 3 AAC 77.010 shall file a completed application on forms provided by the department.
(b) A request for departmental financing for repossessed property will be handled in a manner similar to that used for other loan requests.
(c) A person requesting financing from the department is responsible for all fees and costs associated with the loan application and, in the department's discretion, the loan closing.
History
- Authority: AS 16.10.310(a)AS 27.09.050; AS 45.86.040(a) AS 16.10.339; AS 27.09.055; AS 45.87.040 AS 16.10.355; AS 44.33.020(1)AS 45.87.060 AS 16.10.510(4)AS 44.33.245(a)AS 45.88.020(a) AS 16.10.555; AS 44.33.272; AS 45.88.050 AS 26.15.010; AS 45.81.120; AS 45.88.140 AS 26.15.030; AS 45.81.190; AS 45.88.150 AS 26.15.040; AS 45.81.210; AS 45.98.030(3) AS 26.15.085; AS 45.81.230; AS 45.98.055
- Eff. 3/29/86, Register 97
3 AAC 77.100 Foreclosure expenses
On all defaulted loans, the department will, in its discretion, charge to the debtor's account all reasonable expenses, including
(1) attorney fees and costs;
(2) collection officer time directly associated with the debtor's account;
(3) maintenance costs;
(4) costs to protect collateral;
(5) repossession costs;
(6) sales costs; and
(7) other direct costs attributed to the defaulted loan.
History
- Authority: AS 16.10.310(a)AS 26.15.030; AS 45.81.210 AS 16.10.337; AS 26.15.040; AS 45.86.040(a) AS 16.10.339; AS 27.09.050; AS 45.87.060 AS 16.10.342; AS 44.33.020(1)AS 45.88.020(a) AS 16.10.510(4)AS 44.33.245(a)AS 45.88.150 AS 26.15.010; AS 45.81.120; AS 45.98.030(3)
- Eff. 3/29/86, Register 97
3 AAC 77.900 Definitions
In 3 AAC 77.010 - 3 AAC 77.900
(1) "debtor" means an individual, partnership, corporation or other entity which contracts for a loan, assumes a loan, or guarantees or co-signs a loan administered by the department;
(2) "default" means a violation of a provision of the loan documents, including failure to make any payment within 15 days after it is due or failure to maintain insurance required by the department;
(3) "department" means the Department of Commerce, Community, and Economic Development;
(4) "loan committee" means those persons designated by the department to serve as a loan committee;
(5) "repossessed property" means collateral on a loan or other property obtained by the department through legal process, including default or other means; and
(6) "senior loan committee" means those persons designated by the department to serve as a senior loan committee.
History
- Authority: AS 16.10.310(a)AS 27.09.050; AS 45.87.060 AS 16.10.339; AS 44.33.020(1)AS 45.88.020(a) AS 16.10.510(4)AS 44.33.245(a)AS 45.88.150 AS 26.15.010; AS 45.81.120; AS 45.98.030(3) AS 26.15.030; AS 45.81.210 AS 26.15.040; AS 45.86.040(a)
- Eff. 3/29/86, Register 97
Chapter 78 Alternative Energy Loans
3 AAC 78.010 Application process
(a) To apply for a loan for the purchase, construction, and installation of alternative energy systems or energy conservation improvements in commercial buildings, an applicant shall file with the department
(1) a completed application for an alternative energy conservation loan, on a form provided by the department;
(2) a letter of intent stating the amount requested and intended use consistent with AS 45.88.010 - 45.88.090 of the proposed loan money on a form provided by the department;
(3) an energy audit, a conceptual design and engineering feasibility report, manufacturer's specifications, or other proof of concept or conservation acceptable to the department;
(4) copies of cost estimates, invoices, or other documentation to verify the cost of any equipment being purchased and installed with loan proceeds;
(5) an individual financial statement, on a form provided by the department;
(6) a business financial statement, on a form provided by the department;
(7) a signed credit authorization, on a form provided by the department, for any individual, institution, or other person to release to the department credit information concerning the applicant;
(8) a copy of the applicant's federal income tax return for the preceding year, as necessary to verify the applicant's income; if a federal income tax return for the preceding year is not available, the department will request copies of federal income tax returns for earlier years or other documentation to verify the applicant's income;
(9) a signed consent, on a form provided by the department, for the department to obtain information from, or release information to, other government agencies;
(10) a schedule of collateral on a form provided by the department;
(11) the application fee required by 3 AAC 78.075(e); and
(12) any other information that might be helpful to the applicant in qualifying for an assumption, as requested by the department.
(b) An applicant who submits a false sworn or unsworn statement on or in support of a loan application is subject to AS 11.56.200 - 11.56.210 and may be denied any future loans.
History
- Authority: AS 45.88.020
- Eff. 9/11/85, Register 95; am 1/11/87, Register 101; am 8/10/97, Register 143; am 9/7/2012, Register 203
3 AAC 78.015 Examination
(a) A loan officer shall evaluate and process the materials described in 3 AAC 78.010. The loan officer shall evaluate the applicant's eligibility, financial and credit history, financial statement, ability to repay, and proposed collateral.
(b) On the basis of these evaluations, the loan officer shall recommend proposed action on the loan request to the appropriate loan committee. However, the recommendation of a loan officer is not binding on a loan committee.
History
- Authority: AS 45.88.020
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143; am 9/7/2012, Register 203
3 AAC 78.020 Loan committee
(a) A loan committee consists of one or more persons appointed by the director to act on a loan request.
(b) A loan committee may approve, deny, or modify and approve a loan request, or may table a loan request subject to obtaining additional information.
(c) A loan committee may impose reasonable conditions on the approval of a loan, including
(1) additional collateral to secure the loan;
(2) additional guarantors; and
(3) subordination of prior lien holders' rights to the interests of the state.
(d) A loan committee may consider the appropriateness and cost effectiveness of the energy conservation or the alternative energy system to be installed, the applicant's eligibility for a loan, financial and credit record, ability to repay, and the adequacy of the collateral offered to secure the loan. The loan committee may also consider the recommendations of the loan officer assigned to process the application, and any other relevant for information.
(e) Repealed 8/10/97.
(f) If a loan request is denied or significantly modified by a loan committee, the loan committee shall provide the applicant with statement of the reasons for the action and the information relied upon.
(g) A material misstatement or omission of fact made by an applicant constitutes ground for denial of a loan request.
(h) A loan committee may fix, within the limitations set by AS 45.88.030, the term of a loan and repayment schedule.
History
- Authority: AS 45.88.020; AS 45.88.030
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143; am 9/7/2012, Register 203
3 AAC 78.025 Residency requirements
(a) If an applicant is an individual, in determining whether the applicant fulfills the one-year residency requirement under AS 45.88.025, the loan committee may consider any information that would indicate the applicant's residency, including where the applicant
(1) is registered to vote;
(2) maintains a permanent place of abode;
(3) files tax returns, and the address that is listed on the returns;
(4) registers or licenses personal property, including cars, boats, trucks, and trailers;
(5) is licensed to drive;
(6) maintains bank accounts, savings accounts, lines of credit, and other financial relationships;
(7) has claimed or received benefits as a resident;
(8) has received permanent fund dividends; or
(9) owns real property.
(b) If an applicant is a partnership, corporation, or joint venture, 51 percent of the applicant must be owned by an individual or individuals meeting the residency requirements set out in (a) of this section.
History
- Authority: AS 45.88.020; AS 45.88.025
- Eff. 9/7/2012, Register 203
3 AAC 78.026 Eligibility
To be eligible for a loan an applicant must intend to purchase, install, construct, or complete alternative energy systems or energy conservation improvements permissible and defined in AS 45.88.010 - 45.88.090.
History
- Authority: AS 45.88.020
- Eff. 9/7/2012, Register 203
3 AAC 78.035 Eligibility
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 78.036 Solar loan requirements
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 78.037 Solar heating unit requirements
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 78.038 Sunspace requirements
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 78.039 Centralized multifuel heating system requirements
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 78.040 Financial and credit record
(a) The department may consider the following factors in evaluating an applicant's financial and credit record:
(1) existing and prior debts;
(2) credit reports obtained from creditors and private credit reporting services;
(3) prior loan history with the department;
(4) timeliness in making payments on loans and other debts;
(5) existence of tax liens;
(6) unpaid judgments and prior foreclosures; and
(7) financial and credit reputation.
(b) Information establishing unacceptable credit will be more heavily weighed by the department if it has occurred not later than 10 years from the date of application.
History
- Authority: AS 45.88.020
- Eff. 9/11/85, Register 95; am 9/7/2012, Register 203
3 AAC 78.045 Ability to repay
The department may consider the following factors in evaluating an applicant's ability to repay:
(1) income history, including present income;
(2) prospects for future income;
(3) assets and their liquidity;
(4) liabilities;
(5) reasonableness of profit and loss statement;
(6) expected energy cost savings from the installation of the alternative energy systems or energy efficiency measures; and
(7) other relevant experience.
History
- Authority: AS 45.88.020
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143; am 9/7/2012, Register 203
3 AAC 78.050 Collateral
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 78.051 Collateral
A loan must be secured by collateral acceptable to the department, which must include a lien on real property, the equipment, and the improvements being financed.
History
- Authority: AS 45.88.020
- Eff. 9/7/2012, Register 203
3 AAC 78.055 Lending practices
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 78.056 Lending practices
(a) A loan will not be approved for refinancing of long-term debt. Interim or construction financing is not considered long-term debt if the term of the financing is 24 months or less and the proceeds of the financing were 100 percent used to purchase, install, construct, or complete alternative energy systems or energy conservation improvements described in AS 45.88.010 - 45.88.090.
(b) A loan may be approved under AS 45.88.010 - 45.88.090 and this chapter for alternative energy systems or energy conservation improvements purchased, installed, or constructed not more than 120 days before receipt of the application by the department.
(c) An applicant will be considered eligible to apply for a loan in excess of $30,000 if the department receives acceptable documentation that the applicant has been denied a loan for the same project or the financial institution is unwilling to fund the entire project.
(d) A borrower may not modify, sell, or otherwise dispose of a structure or improvement financed, in whole or part, with loan money in any manner during the life of the loan without prior written approval of the department.
(e) A loan to purchase, install, construct, or complete alternative energy systems or energy conservation improvements must establish to the satisfaction of the department that the project to be financed with the loan will result in alternative energy production and energy conservation permissible and defined in AS 45.88.010 - 45.88.090.
(f) The department will set the interest rate for loans under this chapter on the first day of each calendar quarter. The interest rate set for a quarter remains in effect until the department changes the rate, and will not be less than five percent per year. The interest rates set by the department are based on the bank prime rate listed in the Wall Street Journal during the previous quarter, plus one percentage point.
(g) A loan under this chapter may only include items directly related to alternative energy systems or energy efficiency improvements.
History
- Authority: AS 45.88.020
- Eff. 9/7/2012, Register 203
3 AAC 78.065 Disbursement of loan money
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 78.066 Disbursement of loan money
Loan money will only be disbursed when
(1) a security interest in the collateral on behalf of the state has been perfected;
(2) the borrower has complied with the insurance requirements contained in an instrument signed by the borrower;
(3) the requirements of the department as specified by the loan committee have been met; and
(4) the borrower is in compliance with all other provisions of the loan documents, AS 45.88.010 - 45.88.090, and this chapter.
History
- Authority: AS 45.88.020
- Eff. 9/7/2012, Register 203
3 AAC 78.070 Supervision of loans
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 9/7/2012, Register 203
3 AAC 78.075 Costs
(a) All expenses incurred by the department in processing an application must be paid by the applicant. These expenses include the cost of title reports and insurance, recording fees, appraisals, surveys, travel, and other direct costs.
(b) An origination fee of one percent of the total loan amount or an assumption fee of one percent of the loan balance is due from the borrower when provisions of AS 45.88.010 - 45.88.090 and this chapter have been met.
(c) A late fee not to exceed five percent of the payment amount will, in the department's discretion, be charged to a borrower for each loan payment that is more than 15 days past due.
(d) An extension fee not to exceed $100 will be charged to a borrower to process a loan extension.
(e) An application fee not to exceed $100 will be charged to a borrower to process an application for a loan.
History
- Authority: AS 45.88.020
- Eff. 9/11/85, Register 95; am 1/11/87, Register 101; am 11/5/87, Register 104; am 7/4/91, Register 119; am 8/10/97, Register 143; am 9/7/2012. Register 203
3 AAC 78.080 Assumptions
(a) A request for an assumption of a loan made under AS 45.88.010 - 45.88.090 and this chapter will be processed in the same manner as an application for a loan.
(b) A loan committee may permit an assumption if the applicant meets residency requirements under AS 45.88.025 and 3 AAC 78.025, is a good financial risk, and the security of the state's investment is preserved.
(c) Wraparound financing that includes a loan made under AS 45.88.010 - 45.88.090 and this chapter is prohibited, and constitutes a default on the loan.
History
- Authority: AS 45.88.020
- Eff. 9/11/85, Register 95; am 11/5/87, Register 104; am 9/7/2012, Register 203
3 AAC 78.081 Closing an assumption
Repealed.
History
- Eff. 8/10/97, Register 143; repealed 9/7/2012, Register 203
3 AAC 78.082 Modifications
(a) A request for a modification to a loan made under AS 45.88 and this chapter will be processed in the same manner as a loan application. The department will, in its discretion, require one or more of the items specified in 3 AAC 78.010.
(b) A loan committee may permit a loan modification only if the security of the state and its investment is preserved.
History
- Authority: AS 45.88.020
- Eff. 1/11/87, Register 101
3 AAC 78.085 Reconsideration of a loan request
(a) If a loan request is denied, inactivated, or significantly modified by the department, an applicant may file a written request for reconsideration not later than 30 days after receipt of notice of the department's decision.
(b) The department will reconsider a request upon a showing by the applicant that
(1) there has been a substantial change in the circumstances leading to the department's decision;
(2) additional relevant information can be provided to the department that was not initially available; or
(3) administrative errors were made by the department.
History
- Authority: AS 45.88.020; AS 45.88.030
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143; am 9/7/2012, Register 203
3 AAC 78.090 Confidentiality of loan information
(a) The following information is not confidential and is available for public inspection upon request:
(1) a document that is already a public record including deeds of trust, financing statements, warranty deeds, bills of sale, mortgages, liens, and vehicle titles;
(2) general information regarding loans, including the original loan amount, loan terms, personal guarantees, and disbursement and repayment schedules;
(3) insurance matters including title insurance policies and correspondence with insurance companies or borrowers regarding losses, accident reports, and nonpayment of premiums; and
(4) foreclosure and default proceedings.
(b) The following information is confidential and is not subject to public disclosure:
(1) personal and financial information, including income tax returns, financial statements, business income statements, pro forma profit and loss statements, credit information obtained directly from banks and other creditors, and reports obtained from consumer reporting agencies;
(2) loan committee memoranda and minutes containing information relating to creditworthiness of an applicant; and
(3) the payment history on a loan, unless the loan is in default.
(c) Information not described in (a) or (b) of this section may be subject to public disclosure. Requests for disclosure must be made, and will be determined, in accordance with 2 AAC 96. Upon receipt of a request for disclosure, the department will notify the loan applicant and other persons with a privacy interest in the request to permit them to present reasons why the requested information should not be disclosed.
History
- Authority: Ak. Const., art. I,AS 40.25.110; AS 45.88.020 $ 22AS 40.25.120
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 78.900 Definitions
Unless the context requires otherwise, in this chapter
(1) repealed 8/10/97;
(2) "default" includes a violation of any provision of this chapter, AS 45.88, or the loan document, failure to make the necessary payment within 15 days after it is due, or failure to maintain the insurance required by the department;
(3) "department" means the Department of Commerce, Community, and Economic Development;
(4) "wraparound financing" means a contract that includes the balance due on an existing debt and an additional amount to cover the difference between the selling price and the existing debt; and
(5) "director" means the director of the division assigned economic development functions or its successor agency in the department.
History
- Authority: AS 45.88.020
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143; am 9/7/2012, Register 203
Chapter 79 Residential Energy Conservation Loans
3 AAC 79.010 Application process
(a) To apply for an assumption of an existing residential energy loan assumption, an applicant shall file with the department
(1) a completed application for an energy conservation loan assumption, on a form provided by the department;
(2) a financial statement, on a form provided by the department;
(3) a signed credit authorization, on a form provided by the department;
(4) an employment verification, on a form provided by the department;
(5) a signed copy of the applicant's federal income tax return for the most recent year;
(6) a $100 nonrefundable application fee; and
(7) any other information that might be helpful to the applicant in qualifying for an assumption, as requested by the department.
(b) The department will, in its discretion, process an application for an assumption without the information described in (a) of this section, if the department determines that the department can make an informed lending decision without access to the information.
History
- Authority: AS 45.88.120; AS 45.88.150
- Eff. 9/11/85, Register 95; am 1/11/87, Register 101; am 8/10/97, Register 143
3 AAC 79.015 Examination
(a) The materials described in 3 AAC 79.010 will be processed and evaluated by a loan officer. The loan officer will evaluate the applicant's financial and credit history, ability to repay, and proposed collateral.
(b) On the basis of the evaluation, the loan officer will either inactivate the application, due to lack of information required under 3 AAC 79.010, or recommend proposed action on the loan request to the appropriate loan committee. However, the recommendation of a loan officer is not binding on a loan committee.
History
- Authority: AS 45.88.120; AS 45.88.150
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 79.020 Loan committee
(a) A loan committee consists of one or more persons appointed by the director to act on a loan request.
(b) A loan committee may approve, deny, or modify and approve a loan request, or may table a loan request subject to obtaining additional information.
(c) A loan committee may impose reasonable conditions on the approval of a loan, including
(1) additional collateral to secure the loan;
(2) additional guarantors; and
(3) subordination of prior lienholders' rights to the interests of the state.
(d) A loan committee shall consider the applicant's financial and credit record, ability to repay, and proposed collateral. A loan committee may consider recommendations of the loan officer assigned to process the application, and other relevant information.
(e) repealed 8/10/97.
(f) If a loan request is denied or significantly modified by a loan committee, the loan committee shall provide the applicant with a statement of the reasons for the action and the information relied on.
(g) A material misstatement or omission of fact made by an applicant constitutes grounds for denial of a loan request.
History
- Authority: AS 45.88.120; AS 45.88.150
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 79.030 Loan amounts
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 79.035 Eligibility
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 79.040 Financial and credit record
(a) The department will, in its discretion, consider the following factors in evaluating an applicant's financial and credit record:
(1) existing and prior debts;
(2) credit reports obtained from creditors and private credit reporting services;
(3) prior loan history with the department;
(4) timeliness in making payments on loans and other debts;
(5) prior bankruptcies;
(6) existence of tax liens;
(7) unpaid judgments and prior foreclosures; and
(8) financial and credit reputation.
(b) Information establishing unacceptable credit will be more heavily weighed by the department if it has occurred in recent years.
History
- Authority: AS 45.88.120; AS 45.88.150
- Eff. 9/11/85, Register 95
3 AAC 79.045 Ability to repay
The department will, in its discretion, consider the following factors in evaluating an applicant's ability to repay a proposed assumption:
(1) income history, including present income;
(2) prospects for future income;
(3) assets and their liquidity; and
(4) liabilities.
History
- Authority: AS 45.88.120; AS 45.88.150
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 79.050 Collateral
A loan must be secured by collateral acceptable to the department, such as a mortgage or other security instrument in real property, buildings, machinery, equipment, or fixtures.
History
- Authority: AS 45.88.120; AS 45.88.150
- Eff. 9/11/85, Register 95
3 AAC 79.055 Lending practices
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 79.065 Disbursement of loan money
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 79.070 Supervision of loans
If a loan is in default, the department will, in its discretion, require a borrower to furnish annual financial statements consisting of a balance sheet, profit-and-loss statement, sources and application of all money received, and a schedule of change of owner's equity. The department will, in its discretion, also require an audit to determine whether the borrower has complied with the provisions of the loan, and conduct periodic inspection of collateral securing repayment of the loan.
History
- Authority: AS 45.88.120; AS 45.88.150
- Eff. 9/11/85, Register 95
3 AAC 79.075 Costs
(a) All expenses incurred by the department in processing an application must be paid by the applicant. These expenses include the cost of title reports and insurance, recording fees, appraisals, surveys, travel, and other direct costs.
(b) An assumption fee of one percent of the loan balance is due from the borrower when all applicable provisions of this chapter have been met.
(c) A late fee not to exceed five percent of the payment amount will, in the department's discretion, be charged to a borrower for each loan payment that is more than 15 days past due.
(d) An extension fee not to exceed $100 will, in the department's discretion, be charged to a borrower to process a loan extension.
History
- Authority: AS 45.88.120; AS 45.88.150
- Eff. 9/11/85, Register 95; am 1/11/87, Register 101; am 11/5/87, Register 104; am 7/4/91, Register 119; am 8/10/97, Register 143
3 AAC 79.080 Assumptions
(a) The department will, in its discretion and when it is in the state's best interests, allow an assumption of a loan made under AS 45.88 and this chapter.
(b) A request for an assumption of a loan made under AS 45.88 and this chapter will be processed in the same manner as a loan application. The department will, in its discretion, require one or more of the items specified in 3 AAC 79.010.
(c) Wraparound financing that includes a loan made under AS 45.88 and this chapter is prohibited, and constitutes a default on the loan.
History
- Authority: AS 45.88.120; AS 45.88.150
- Eff. 9/11/85, Register 95; am 11/5/87, Register 104
3 AAC 79.081 Closing an assumption
An assumption agreement will be considered by the department to be closed when
(1) all required signatures have been obtained and the assumption agreement has been properly recorded;
(2) all requirements of the loan committee have been met; and
(3) the borrower is in compliance with all provisions of the loan documents, including insurance requirements, and this chapter.
History
- Authority: AS 45.88.120; AS 45.88.150
- Eff. 8/10/97, Register 143
3 AAC 79.082 Modifications
(a) A request for a modification to a loan made under AS 45.88 and this chapter will be processed in the same manner as a loan application. The department will, in its discretion, require one or more of the items specified in 3 AAC 79.010.
(b) A loan committee may permit a loan modification only if the security of the state and its investment is preserved.
History
- Authority: AS 45.88.120; AS 45.88.150
- Eff. 1/11/87, Register 101
3 AAC 79.085 Reconsideration of an assumption request
(a) If an assumption of a loan request is denied, inactivated, or significantly modified by the department, an applicant may file a written request for reconsideration within 30 days after receipt of notice of the department's decision.
(b) The department will, in its discretion, reconsider a request upon a showing by the applicant that
(1) there has been a substantial change in the circumstances leading to the department's decision;
(2) additional relevant information can be provided to the department that was not initially available; or
(3) administrative errors were made by the department.
History
- Authority: AS 45.88.120; AS 45.88.150
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 79.090 Confidentiality of loan information
(a) The following information is not confidential and is available for public inspection upon request:
(1) a document that is already a public record, including deeds of trust, financing statements, warranty deeds, bills of sale, mortgages, liens, and vehicle titles;
(2) general information regarding loans, including the original loan amount, loan terms, personal guarantees, and disbursement and repayment schedules;
(3) insurance matters, including title insurance policies and correspondence with insurance companies or borrowers regarding losses, accident reports, and nonpayment of premiums; and
(4) foreclosure and default proceedings.
(b) The following information is confidential and is not subject to public disclosure:
(1) personal and financial information, including income tax returns, financial statements, business income statements, pro forma profit and loss statements, credit information obtained directly from banks and other creditors, and reports obtained from consumer reporting agencies;
(2) loan committee memoranda and minutes containing information relating to creditworthiness of an applicant; and
(3) the payment history on a loan, unless the loan is in default.
(c) Information not described in (a) or (b) of this section may be subject to public disclosure. Requests for disclosure must be made, and will be determined, in accordance with 2 AAC 96. On receipt of a request for disclosure, the department will notify the loan applicant and other persons with a privacy interest in the request, to permit them to present reasons why the requested information should not be disclosed.
History
- Authority: Ak. Const., art. I,AS 40.25.110; AS 45.88.120 $ 22AS 40.25.120; AS 45.88.150
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 79.900 Definitions
Unless the context requires otherwise, in this chapter
(1) repealed 8/10/97;
(2) "default" includes a violation of any provision of this chapter, AS 45.88, or the loan document, failure to make the necessary payment within 15 days after it is due, or failure to maintain the insurance required by the department;
(3) "department" means the Department of Commerce, Community, and Economic Development;
(4) "wraparound financing" means a contract that includes the balance due on an existing debt and an additional amount to cover the difference between the selling price and the existing debt; and
(5) "director" means the director of the division assigned economic development functions or its successor agency in the department.
History
- Authority: AS 45.88.120; AS 45.88.150
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143; am 10/16/2012, Register 204
Chapter 80 Commercial Fishing Loans
Article 1 Community Fishing Revolving Loan Fund
3 AAC 80.010 Application process
(a) To apply for a loan the applicant shall file with the department
(1) a completed application for a commercial fishing loan, on a form provided by the department;
(2) a completed residency questionnaire, on a form provided by the department;
(3) a letter of intent stating the amount requested and intended use of the proposed loan money, on a form provided by the department;
(4) a schedule of acceptable collateral, including collateral now owned and other collateral to be acquired with the loan proceeds, on a form provided by the department;
(5) an individual financial statement consisting of a current balance sheet and a profit and loss statement, on a form provided by the department;
(6) a statement of projected income and expenses for the following year's operating plan, on a form provided by the department;
(7) a signed credit authorization, on a form provided by the department;
(8) copies of the applicant's federal income tax returns for the preceding three years, and for additional years if necessary to establish eligibility;
(9) a commercial fishing resume identifying all permits and licenses held by the applicant, summarizing the applicant's experience as a commercial fisher in Alaska for each year, on a form provided by the department;
(10) consent to release information, on a form provided by the department;
(11) copies of the purchase agreement or cost estimates and down-payment receipt, with signatures by all parties;
(12) if a vessel is used for collateral, a marine survey less than 90 days old, acceptable to the department, including pictures of the vessel;
(13) a $100 nonrefundable application fee; and
(14) any other information that might be helpful to the applicant in demonstrating eligibility for a loan, as requested by the department.
(b) To prequalify for a loan for the purchase of a limited entry permit or quota shares, an applicant shall file with the department
(1) the materials listed in (a) of this section, except the materials listed in paragraphs (11) and (13); and
(2) a $200 nonrefundable prequalification application fee.
(c) If the department determines an applicant previously submitted a false sworn or unsworn statement on or in support of a loan application, the department may deny any future loan application submitted by the applicant. An applicant who submits a false sworn or unsworn statement on or in support of a loan application is subject to AS 11.56.200 - 11.56.210.
(d) A request for prequalification will be processed in the same manner as a loan request. A prequalification commitment shall not exceed 60 days.
(e) The department will, in its discretion, process loan requests without the information described in (a) of this section in cases where it determines that the information is not necessary in order for the department to make the lending decision.
(f) To receive preauthorization to purchase a commercial fishing vessel, the applicant must file with the department the materials listed in (a) of this section, except the items in paragraph (11).
(g) A request for preauthorization will be processed in the same manner as a loan request. A preauthorization shall not exceed 90 days.
(h) The department will process a loan application without the application fee required in (a)(13) of this section, if the department determines that the payment of costs of processing the application would be an undue hardship to the applicant.
History
- Authority: AS 16.10.310; AS 16.10.339
- Eff. 9/11/85, Register 95; am 1/11/87, Register 101; am 5/23/88, Register 106; am 3/16/95, Register 133; am 8/10/97, Register 143; am 9/27/2008, Register 187
3 AAC 80.015 Examination
(a) The materials described in 3 AAC 80.010 will be processed and evaluated by a loan officer. The loan officer will evaluate the applicant's eligibility, financial and credit history, operating plan, ability to repay, and proposed collateral.
(b) On the basis of the evaluation, the loan officer will either inactivate the application, due to lack of information required under 3 AAC 80.010 or ineligibility of the applicant, or recommend proposed action on the loan request to the appropriate loan committee. However, the recommendation of a loan officer is not binding on a loan committee.
History
- Authority: AS 16.10.310; AS 16.10.339
- Eff. 9/11/85, Register 95; am 3/16/95, Register 133
3 AAC 80.020 Loan committee
(a) A loan committee consists of one or more persons appointed by the director to act on a loan request.
(b) A loan committee may approve, deny, or modify and approve a loan request, or may table a loan request subject to obtaining additional information.
(c) A loan committee may impose reasonable conditions on the approval of a loan, including
(1) additional collateral to secure the loan;
(2) additional guarantors; and
(3) subordination of prior lienholders' rights to the interests of the state.
(d) A loan committee shall consider the applicant's eligibility for a loan, financial and credit record, ability to repay, operating plan, and the adequacy of collateral offered to secure the loan. A loan committee may also consider the recommendations of the loan officer assigned to process the application and any other relevant information.
(e) A loan committee may fix, within the limitations set by AS 16.10.320, the term of a loan and repayment schedule.
(f) If a loan request is denied or significantly modified by a loan committee, the loan committee shall provide the applicant with a statement of the reasons for the action and the information relied on.
(g) A material misstatement or omission of fact made by an applicant constitutes grounds for denial of a loan request.
History
- Authority: AS 16.10.310; AS 16.10.339
- Eff. 9/11/85, Register 95; am 3/16/95, Register 133
3 AAC 80.030 Residency requirements
(a) In determining if an applicant fulfills the two-year residency requirements under AS 16.10.310, the loan committee may consider any information that would indicate the applicant's residency, including where the applicant
(1) is registered to vote;
(2) maintains a permanent place of abode;
(3) files tax returns, and the address that is listed on the returns;
(4) registers or licenses personal property, including but not limited to cars, boats, trucks and trailers;
(5) is licensed to drive;
(6) maintains bank accounts, savings accounts, lines of credit, and other financial relationships;
(7) has claimed or received benefits as a resident;
(8) has received permanent fund dividends; and
(9) owns real property.
(b) If two or more individuals apply jointly or as a partnership or corporation, all parties to the application must establish residency.
History
- Authority: AS 16.10.310; AS 16.10.339
- Eff. 9/11/85, Register 95; am 3/16/95, Register 133; am 8/10/97, Register 143
3 AAC 80.035 Eligibility
(a) To have "actively participated in the fishery" under AS 16.10.310(a)(1)(A) or (a)(1)(C) an applicant must have fished in Alaskan waters during the qualifying years.
(b) The department may rely on the following documents to verify that an applicant has actively participated in the fishery:
(1) tax returns;
(2) verified affidavits from the applicant and other individuals certifying the applicant's commercial fishing experience;
(3) fishing and gear licenses;
(4) commercial fish tickets;
(5) wage receipts;
(6) cannery statements.
(c) For a loan under AS 16.10.310(a)(1)(B)(i), the applicant must establish that
(1) there are no employment opportunities in the area of the applicant's residence, other than commercial fishing; or
(2) the applicant does not have training sufficient to qualify for employment opportunities in the area of the applicant's residence, other than commercial fishing.
(d) For purposes of AS 16.10.310(a)(1)(B)(ii), an applicant is "economically dependent on commercial fishing for a livelihood" if at least 25 percent of the applicant's total gross income during the previous two years was derived from commercial fishing.
History
- Authority: AS 16.10.310; AS 16.10.339
- Eff. 9/11/85, Register 95; am 1/11/87, Register 101; am 5/23/88, Register 106; am 11/6/89, Register 112; am 3/16/95, Register 133; am 9/27/2008, Register 187
3 AAC 80.040 Financial and credit record
(a) The department may consider the following factors in evaluating an applicant's financial and credit record:
(1) existing and prior debts;
(2) credit reports obtained from creditors and private credit reporting services;
(3) prior loan history with the department;
(4) timeliness in making payments on loans and other debts;
(5) existence of tax liens;
(6) judgments and foreclosures;
(7) financial and credit reputation.
(b) Information establishing unacceptable credit will be more heavily weighed by the department if it has occurred within the past 10 years.
History
- Authority: AS 16.10.310; AS 16.10.339
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143; am 9/27/2008, Register 187
3 AAC 80.045 Ability to repay
(a) The department may consider the following factors in evaluating an applicant's ability to repay:
(1) income history, including present income;
(2) prospects for future income;
(3) assets and their liquidity;
(4) liabilities;
(5) reasonableness of the projected profit and loss statement;
(6) other relevant experience.
(b) The department may compare revenue projections contained in an applicant's profit and loss statement with information it acquires through its own efforts or from the Department of Fish and Game, the Commercial Fisheries Entry Commission, or the Alaska Commercial Fishing and Agriculture Bank on the success of other fishermen in similar circumstances to determine the reasonableness of the applicant's projections.
History
- Authority: AS 16.10.310; AS 16.10.339
- Eff. 9/11/85, Register 95; am 9/27/2008, Register 187
3 AAC 80.050 Collateral
(a) A loan must be secured by collateral acceptable to the department, such as a mortgage or other security instrument in real property, limited entry permits, quota shares, or commercial fishing vessels with gear.
(b) A vessel that can be documented must be documented to be acceptable collateral. If a vessel is offered as collateral for a loan, the department or its designee shall be permitted to inspect the vessel or vessel construction project before making the loan.
(c) A loan for the purchase of a limited entry permit, quota shares, or a vessel will be made only if the permit, quota shares, or vessel is placed in the name of the applicant and the permit, quota shares, or vessel is offered as security for the loan.
History
- Authority: AS 16.10.310; AS 16.10.320; AS 16.10.339
- Eff. 9/11/85, Register 95; 3/16/95, Register 133
3 AAC 80.055 Lending practices
(a) If the balance of the commercial fishing revolving loan fund is not adequate to meet the anticipated loan demand for the remainder of the fiscal year, the department will process loan applications in the following order according to the purpose of the loan:
(1) first, the purchase of limited entry permits;
(2) second, satisfaction of federal tax obligations;
(3) third, vessel upgrade or purchase;
(4) fourth, the purchase of gear;
(5) fifth, the purchase of fishing quota shares;
(6) sixth, refinancing as permitted under AS 16.10.310(a)(11).
(b) An applicant will be considered eligible for a loan to purchase a limited entry permit, vessel, or gear under AS 16.10.310(a)(1)(B) or purchase quota shares under AS 16.10.310(a)(1)(C) if the department determines that the applicant is not eligible for an alternative source of financing. An applicant's ability to provide a guarantor for a loan does not make the applicant ineligible for a loan under AS 16.10.310(a)(1)(B) or (a)(1)(C).
(c) A loan will not be approved if its primary purpose would be to
(1) speculate in the acquisition and sale of limited entry permits, quota shares, vessels, or gear;
(2) lease out a limited entry permit; or
(3) purchase a commercial fishing vessel, gear, a limited entry permit, or quota shares that will not be put to use in the fishing season immediately following the loan approval date.
(d) Except as provided in AS 16.10.310(a)(10) and (11), a loan will not be approved for refinancing long-term debt. Interim or construction financing is not considered long-term debt if the term is 24 months or less and the promissory note or the original agreement was executed less than 12 months before receipt of the application by the department, except that the department may waive these restrictions if
(1) the applicant shows that the application of these restrictions would result in undue hardship for the applicant;
(2) the applicant is a good financial risk; and
(3) the state's investment is preserved.
(e) In determining the maximum loan amount that may be approved for the purchase of a limited entry permit, the department will rely on the value established by the Alaska Commercial Fisheries Entry Commission or other appropriate sources as determined by the department.
(f) Repealed 7/30/2000.
(g) Repealed 7/30/2000.
(h) A loan for the purchase of a vessel for use in a limited entry fishery will not be approved unless the applicant has access to a limited entry permit for that fishery and the primary use of the vessel will be commercial fishing by the borrower.
(i) A vessel that is being purchased under this chapter cannot be leased unless the vessel is primarily used by the borrower for commercial fishing. All lease agreements must have prior approval by the department.
(j) Except as provided in AS 16.10.310(a)(11), loan proceeds may not be used to reimburse an applicant for expenses paid more than one year before receipt of the application by the department. The department may waive this restriction if
(1) the applicant shows that the application of this restriction would result in undue hardship for the applicant;
(2) the applicant is a good financial risk; and
(3) the state's investment is preserved.
(k) The department will quarterly set the interest rate for loans under 3 AAC 80.010 - 3 AAC 80.180 on the first day of each calendar quarter. The interest rate set for a quarter remains in effect until the department changes the rate, will not exceed the maximum or minimum interest allowed under AS 16.10.320(a)(2), and will be established at the nearest one-quarter point, before any credits are applied by the department. The interest rate will be based on the bank prime rate, as defined in AS 44.88.599, during the previous quarter as follows:
(1) the interest rate is based on the cost of funds to the state as defined in AS 16.10.320(m) for loans made
(A) to upgrade existing vessels and gear for the purpose of improving the quality of Alaska seafood products; or
(B) for engine efficiency upgrades;
(2) for all other loans under 3 AAC 80.010 - 3 AAC 80.180, the interest rate is based on the bank prime rate plus two percentage points.
(l) The interest rate for a loan is the quarterly interest rate in effect at the time the loan commitment is made. The interest rate for a loan will be at a fixed rate for the term of the loan.
(m) Repealed 7/30/2000.
(n) If refinancing funds are limited, the department will process refinancing requests in the following order:
(1) first, applicants who have existing loans made under AS 16.10.300 - 16.10.370;
(2) second, applicants who are under-collateralized on their existing loan, but who would meet the collateral requirements of AS 16.10.310 - 16.10.370 by the addition of a limited entry permit;
(3) third, applicants who could significantly improve their loan terms by receiving a loan under AS 16.10.310(a)(11);
(4) fourth, applicants in default on their existing loan who otherwise meet the requirements of AS 16.10.310 - 16.10.370.
(o) To be eligible for a lower interest loan under (k) of this section for
(1) an upgrade to an existing vessel or gear for the purpose of improving the quality of Alaska seafood products, an applicant must establish to the satisfaction of the department that the upgrade to be financed with the loan will enhance product quality; types of acceptable upgrades include refrigeration, hold insulation, and slider reels;
(2) an engine efficiency upgrade or replacement, an applicant must establish to the satisfaction of the department that the upgrade or replacement to be financed with the loan will reduce emissions or improve fuel productivity.
(p) Beginning July 30, 2000, the department will grant a credit on an existing loan with payments due annually if, before the late fee date as described in 3 AAC 80.075(c), the borrower paid in full the amount due for the current calendar year. Beginning July 30, 2000, the department will grant a credit on an existing loan with payments due monthly, quarterly, or semi-annually if, for each payment due within a 12-month period, the borrower paid in full the amount due before the late fee date for that payment as described in 3 AAC 80.075(c). The amount due includes principal, interest due, deferred interest due, fees, costs, and other accounts receivable due. If the department grants a credit under this subsection, the department will apply that credit beginning from the late fee date, as described in 3 AAC 80.075(c), for the payment that qualified the borrower for the credit. Every 12 months after that date, the department will review the borrower's loan payment history, and will discontinue a credit granted under this subsection if during that 12-month period the borrower failed to make in full a payment due by the late fee date for that payment as described in 3 AAC 80.075(c). The maximum credit that will be granted under this subsection is one percentage point of the annual interest rate.
History
- Authority: AS 16.10.310; AS 16.10.325 AS 16.10.320; AS 16.10.339
- Eff. 9/11/85, Register 95; am 5/23/88, Register 106; am 11/28/92, Register 124; am 3/16/95, Register 133; am 8/10/97, Register 143; am 10/17/98, Register 148; am 7/30/2000, Register 155; am 9/27/2008, Register 187; am 3/28/2009, Register 189; am 10/16/2012, Register 204
3 AAC 80.065 Disbursement of loan money
Loan money will be disbursed when
(1) a security interest in the collateral on behalf of the State has been perfected, except that, in the case of a mortgage on a documented vessel, this requirement may be satisfied by the establishment of the mortgage as a preferred mortgage under the provisions of the Ship Mortgage Act of 1920, (46 U.S.C. 911 - 984);
(2) the borrower has complied with the marine insurance requirements contained in an instrument signed by the borrower;
(3) requirements of the loan committee have been met; and
(4) the borrower is in compliance with all other provisions of the loan documents and this chapter.
History
- Authority: AS 16.10.310; AS 16.10.320
- Eff. 9/11/85, Register 95
3 AAC 80.070 Supervision of loans
Repealed.
History
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143; repealed 9/27/2008, Register 187
3 AAC 80.075 Costs
(a) All expenses incurred by the department in processing an application must be paid by the applicant. These expenses include the cost of title reports and insurance, recording fees, appraisals, surveys, travel, and other direct costs.
(b) Except as provided in AS 16.10.310(a)(10), an origination fee of one percent of the total loan amount or an assumption fee of one percent of the loan balance is due from the borrower when all provisions of 3 AAC 80.065 have been met.
(c) A late fee not to exceed five percent of the payment amount will be charged to a borrower for each loan payment that is received more than 15 days after the due date. If requested by the borrower and the borrower has not previously received a partial or full waiver of a late fee, the department will waive up to all of the late fee as follows:
(1) 100 percent if the loan payment was received no more than 18 days after the due date;
(2) 90 percent if the loan payment was received no more than 29 days after the due date.
(d) A fee not to exceed $100 will be charged to a borrower to process a loan extension application.
(e) The department will not charge the late fee described in (c) of this section if
(1) the department receives from the borrower a loan extension application or a payment plan no more than 15 days after the due date;
(2) the department approves the loan extension application or payment plan; and
(3) one or more of the following occurs:
(A) the borrower meets all conditions for the loan extension or the payment plan;
(B) the department receives payment during its review of the loan extension application or payment plan.
History
- Authority: AS 16.10.310; AS 16.10.339
- Eff. 9/11/85, Register 95; am 1/11/87, Register 101; am 7/4/91, Register 119; am 3/16/95, Register 133; am 9/27/2008, Register 187
3 AAC 80.080 Assumptions
(a) A request for permission to assume the obligations and benefits of a loan made under AS 16.10.300 - 16.10.370 and this chapter will be processed in the same manner as a loan request.
(b) A loan committee may permit an assumption if the applicant meets residency requirements as outlined in this chapter, is a good financial risk, and the security of the state's investment is preserved.
(c) Wraparound financing that includes a loan made under AS 16.10.300 - 16.10.370 and this chapter is prohibited and constitutes a default on the loan.
History
- Authority: AS 16.10.310
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 80.082 Modifications
(a) A request for a modification to a loan made under AS 16.10.300 - 16.10.370 and this chapter will be processed in the same manner as a loan application. The department will require the applicant to file one or more of the items specified in 3 AAC 80.010 if information on those items has changed since they were previously filed, or if the department needs additional information not appearing in the previously filed items in order to review the request for modification.
(b) A loan committee may permit a loan modification only if the security of the state and its investment is preserved.
History
- Authority: AS 16.10.310; AS 16.10.339
- Eff. 1/11/87, Register 101; am 9/27/2008, Register 187
3 AAC 80.085 Reconsideration of loan request
(a) If a loan request is denied, inactivated, or significantly modified by the department, an applicant may file a written request for reconsideration within 30 days after receipt of notice of the department's decision.
(b) The department will reconsider a request upon a showing by the applicant that
(1) there has been a substantial change in the circumstances leading to the department decision;
(2) additional relevant information can be provided to the department that was not initially available; or
(3) administrative errors were made by the department.
History
- Authority: AS 16.10.310; AS 16.10.339
- Eff. 9/11/85, Register 95; am 9/27/2008, Register 187
3 AAC 80.090 Confidentiality of loan information
(a) The following information is not confidential and is available for public inspection upon request:
(1) a document that is already a public record, including a deed of trust, financing statement, limited entry permit, quota share, warranty deed, bill of sale, mortgage, lien, vehicle title, or vessel documentation;
(2) general information regarding loans, including the original loan amount, loan terms, personal guarantees, and disbursement and repayment schedules;
(3) insurance matters, including title insurance policies and correspondence with insurance companies or borrowers regarding losses, accident reports, and nonpayment of premiums; and
(4) foreclosure and default proceedings.
(b) The following information is confidential and is not subject to public disclosure:
(1) personal and financial information, including income tax returns, financial statements, business income statements, pro forma profit and loss statements, credit information obtained from banks and other creditors, reports from consumer reporting agencies, cannery statements, and commercial fishing pink slips (fish tickets);
(2) loan committee memoranda and minutes containing information relating to creditworthiness of an applicant; and
(3) the payment history on a loan, unless the loan is in default.
(c) Information not described in (a) or (b) of this section may be subject to public disclosure. Requests for disclosure must be made, and will be determined, in accordance with 2 AAC 96. Upon receipt of a request for disclosure, the department will notify the loan applicant and other persons with a privacy interest in the request, to permit them to present reasons why the requested information should not be disclosed.
History
- Authority: Ak. Const., art. I,AS 16.10.310; AS 40.25.120 $ 22AS 40.25.110
- Eff. 9/11/85, Register 95; am 3/16/95, Register 133; am 8/10/97, Register 143
3 AAC 80.105 Request for a hearing
(a) A request for a hearing under AS 16.10.335 must be made in writing to the address of the Department of Commerce, Community, and Economic Development as set out in the notice of default and final demand for payment. The request must include a statement explaining why the debtor believes default has not occurred. The request must be postmarked within 15 days after the postmark date on the notice of default and final demand for payment. The request should include copies of any documentary evidence in the debtor's possession showing that the debtor has not defaulted.
(b) The debtor, a person on behalf of a debtor, or the debtor's estate may request a hearing.
(c) The time within which the debtor may reinstate or pay off in full a loan under AS 16.10.335, as specified in the notice of default and final demand for payment, will stop running as of the day the request for a hearing is received by the department.
(d) The commissioner may extend the 15-day period to request a hearing if good cause is shown. Good cause is defined as
(1) an illness that prevents the debtor from timely requesting a hearing;
(2) circumstances beyond the debtor's control that prevent the debtor from timely requesting a hearing; or
(3) other circumstances that the commissioner considers to constitute good cause.
(e) If the commissioner grants a request for a hearing, the time periods specified in the notice of default and final demand for payment will not resume until a final decision has been issued in accordance with 3 AAC 80.150.
(f) If the commissioner denies a request for a hearing, the time periods specified in the notice of default and final demand for payment will resume as of the day the denial is mailed.
History
- Authority: AS 16.10.335; AS 16.10.339
- Eff. 11/2/84, Register 92; am 9/27/2008, Register 187
3 AAC 80.110 Appointment of hearing officer
A hearing officer will be appointed by the commissioner. The commissioner may appoint
(1) a hearing officer by contract with another agency;
(2) an attorney by contract;
(3) an impartial individual within the department; or
(4) any other qualified individual.
History
- Authority: AS 16.10.335; AS 16.10.339
- Eff. 11/2/84, Register 92; am 9/27/2008, Register 187
3 AAC 80.120 Notice of hearing, location, and time
(a) Hearings will be held in Anchorage, Fairbanks, or Juneau, which ever is closest to the debtor's place of residence If the debtor resides outside Alaska, the hearing will be held in Juneau.
(b) If all parties agree, or upon order of the hearing officer, the hearing may be scheduled in a different location than those listed in (a) of this section.
(c) If, because of the distance involved or for other substantial reasons, it is impractical for the debtor to appear at the place of hearing, the hearing officer may schedule and conduct a telephonic hearing.
(d) The hearing officer shall notify the department and the debtor in writing of the time and place of hearing at least 30 days before the hearing date.
History
- Authority: AS 16.10.335; AS 16.10.339
- Eff. 11/2/84, Register 92
3 AAC 80.130 Hearing procedures
(a) Hearings will be conducted informally and in a manner that protects the rights of the parties.
(b) Oral evidence may be taken only upon oath or affirmation.
(c) The Alaska Rules of Evidence apply except when the hearing officer determines that their application is not required in order to assure fair treatment of a party and that the evidence offered is relevant and the sort on which responsible persons are accustomed to rely in the conduct of serious matters.
(d) The debtor, any other party, or the hearing officer may
(1) call and examine witnesses;
(2) introduce exhibits;
(3) cross-examine opposing witnesses on matters relevant to the issues even though the matter was not covered in the direct examination.
(e) If the debtor or any other party does not testify, the party may be called and examined by the hearing officer.
(f) The debtor bears the burden of proving by a preponderance of the evidence that a determination of the department is erroneous.
(g) AS 44.62.590, relating to contempt during proceedings before a hearing officer, applies to hearings under this chapter.
(h) If a debtor or any other party does not appear at a scheduled hearing, and good cause is not shown, the hearing officer may act upon the evidence of record without further notice to the debtor or other party.
History
- Authority: AS 16.10.335; AS 16.10.339
- Eff. 11/2/84, Register 92
3 AAC 80.140 Subpoenas, depositions, affidavits, and documents
(a) At the request of the debtor or any other party, for good cause shown or upon the hearing officer's own motion, the hearing officer may issue subpoenas and subpoenas duces tecum to compel testimony or other evidence at a hearing. The issuance of subpoenas will be governed by AS 44.62.430.
(b) The hearing officer may order that the testimony of a material witness be taken by deposition in accordance with AS 44.62.440.
History
- Authority: AS 16.10.335; AS 16.10.339
- Eff. 11/2/84, Register 92
3 AAC 80.150 Recommended and final decisions
(a) Upon conclusion of the hearing, the hearing officer shall prepare a proposed decision in writing, setting out findings of fact and conclusions of law.
(b) The commissioner may accept or reject the written recommendation of the hearing officer in its entirety or in part. The commissioner's decision will be mailed or delivered to all parties of record and will constitute a final administrative decision in the case.
History
- Authority: AS 16.10.335; AS 16.10.339
- Eff. 11/2/84, Register 92; am 9/27/2008, Register 187
3 AAC 80.160 Reconsideration
(a) The commissioner may order reconsideration of the decision upon the commissioner's own motion or upon the written request of the debtor or any other party. A request for reconsideration by the debtor or another party must set out specifically the grounds upon which the requesting party believes the decision to be erroneous and, if new evidence is being offered, identify that evidence with particularity and explain how the inclusion of the new evidence in the record would change the decision.
(b) The commissioner may reconsider a matter based on the original record, may accept additional evidence to supplement the original record, or may order the hearing officer to reopen the hearing for the taking of further evidence and issuance of a second proposed decision.
(c) The power to reconsider a decision expires 30 days after the date of the decision. If no action is taken on a request for reconsideration within the time allowed for ordering reconsideration, the request is considered denied.
History
- Authority: AS 16.10.335; AS 16.10.339
- Eff. 11/2/84, Register 92; am 9/27/2008, Register 187
3 AAC 80.170 Extension of notice of default and final demand for payment
(a) Whether or not the debtor requests a hearing, the debtor may request an extension of time to reinstate the note or pay it in full beyond that specified in the notice of default and final demand for payment.
(b) The request for an extension and a completed extension package must be postmarked or delivered to the department no later than the 120th day after the notice of default and final demand for payment has been issued.
(c) If the department grants an extension to the debtor, the notice of default and final demand for payment will be extended in accordance with the terms of the extension.
History
- Authority: AS 16.10.335; AS 16.10.339
- Eff. 11/2/84, Register 92; am 8/10/97, Register 143
3 AAC 80.180 Loans with collateral in addition to limited entry permits
If a loan is secured by collateral in addition to a limited entry permit, foreclosure on the other collateral will be in accordance with the laws that govern that particular type of collateral.
History
- Authority: AS 16.10.335; AS 16.10.339
- Eff. 11/2/84, Register 92
Article 2 Community Quota Entity Revolving Loan Fund
3 AAC 80.200 Application process
(a) To apply for a loan for the purchase of quota shares, the applicant shall file with the department
(1) a completed application for a community quota entity loan, on a form provided by the department;
(2) a letter of denial from a recognized quota share lender recognized by the department;
(3) a copy of the applicant's National Marine Fisheries Service application to be designated as a community quota entity and all attachments;
(4) a list of the applicant's key personnel, directors, and officers;
(5) the corporate resolution supporting the application;
(6) applicant's corporate by-laws;
(7) copies of the applicant's federal income tax returns for the preceding three years;
(8) a financial statement consisting of a current balance sheet and a profit and loss statement, on a form provided by the department;
(9) a statement of projected income and expenses for the following year's operating plan, on a form provided by the department;
(10) a copy of the purchase agreement signed by all parties and the down payment receipt or earnest money receipt;
(11) authorization to release information or obtain credit information, on a form provided by the department;
(12) the application fee required by 3 AAC 80.245(b); and
(13) any other information requested by the department needed to process the application.
(b) The department may process loan requests without the information described in (a) of this section if the department determines that the information is not necessary for making the lending decision.
(c) To prequalify for a loan for the purchase of quota shares, an applicant shall file with the department
(1) the materials listed in (a) of this section, except the materials listed in (a)(10) and (12) of this section; and
(2) the prequalification application fee required by 3 AAC 80.245(e).
(d) If the department determines an applicant previously submitted a false sworn or unsworn statement on or in support of a loan application, the department may deny any future loan application submitted by the applicant. An applicant who submits a false sworn or unsworn statement on or in support of a loan application is subject to AS 11.56.200 - 11.56.210.
(e) A request for prequalification will be processed in the same manner as a loan request. A prequalification commitment may not exceed 90 days.
History
- Authority: AS 16.10.310
- Eff. 10/16/2012, Register 204
3 AAC 80.205 Examination
(a) The materials described in 3 AAC 80.200 will be processed and evaluated by a loan officer.
(b) On the basis of the evaluation, the loan officer will either
(1) inactivate the application due to
(A) lack of information required under 3 AAC 80.200; or
(B) the ineligibility of the applicant; or
(2) recommend proposed action on the loan request to the appropriate loan committee; however, the recommendation of a loan officer is not binding on a loan committee.
History
- Authority: AS 16.10.310
- Eff. 10/16/2012, Register 204
3 AAC 80.210 Loan committee
(a) A loan committee consists of one or more persons appointed by the director to act on a loan request.
(b) A loan committee may approve, deny, or modify a loan request, or may table a loan request subject to obtaining additional information.
(c) A loan committee may impose reasonable conditions on the approval of a loan, including
(1) additional collateral to secure the loan; and
(2) subordination of prior lien holders' rights to the interests of the state.
(d) A loan committee shall consider the applicant's eligibility for a loan, financial and credit record, ability to repay, management plan, program organization, and the adequacy of collateral offered to secure the loan. A loan committee may also consider the recommendations of the loan officer assigned to process the application and any other relevant information.
(e) A loan committee may fix, within the limitations set by AS 16.10.320, the term of a loan and repayment schedule.
(f) If a loan request is denied or significantly modified by a loan committee, the loan committee shall provide the applicant with a statement of the reasons for the action and the information relied on.
(g) A material misstatement or omission of fact made by an applicant constitutes grounds for denial of a loan request.
History
- Authority: AS 16.10.310; AS 16.10.320
- Eff. 10/16/2012, Register 204
3 AAC 80.215 Eligibility
(a) The applicant must be a community quota entity as certified by the National Marine Fisheries Service or its successors.
(b) The community quota entity must be in good standing with both state and federal governments.
History
- Authority: AS 16.10.310
- Eff. 10/16/2012, Register 204
3 AAC 80.220 Financial and credit record
(a) The department may consider the following factors in evaluating an applicant's financial and credit record:
(1) existing and prior debts;
(2) credit reports obtained from creditors and private credit reporting services;
(3) prior loan history with the department;
(4) timeliness in making payments on loans and other debts;
(5) existence of tax liens;
(6) judgments and foreclosures;
(7) financial and credit reputation.
(b) Information establishing unacceptable credit will be more heavily weighed by the department if it has occurred not later than 10 years from the date of application.
History
- Authority: AS 16.10.310
- Eff. 10/16/2012, Register 204
3 AAC 80.225 Ability to repay
(a) The department may consider the following factors in evaluating an applicant's ability to repay:
(1) income history, including present income;
(2) prospects for future income;
(3) assets;
(4) liabilities;
(5) reasonableness of the projected profit and loss statement;
(6) other relevant information or experience.
(b) The department may compare revenue projections contained in an applicant's profit and loss statement with information it acquires through its own efforts or from the National Marine Fisheries Service or its successors, or the performance of other community quota entities in similar circumstances to determine the reasonableness of the applicant's projections.
History
- Authority: AS 16.10.310
- Eff. 10/16/2012, Register 204
3 AAC 80.230 Collateral
(a) A loan must be secured by collateral acceptable to the department, such as a mortgage or other security instrument in real property or commercial fishing vessels with gear. The collateral must include the quota shares purchased.
(b) A loan for the purchase of quota shares will be made only if the quota shares are placed in the name of the applicant.
History
- Authority: AS 16.10.310
- Eff. 10/16/2012, Register 204
3 AAC 80.235 Lending practices
(a) A loan will not be approved for refinancing long-term debt. Interim financing is not considered long-term debt if the term is 12 months or less and the promissory note or the original agreement was executed less than 12 months before the department received the application.
(b) In determining the maximum loan amount that may be approved for the purchase of quota shares, the department will rely on market analysis through appropriate sources as determined by the department.
(c) Loan proceeds may not be used to reimburse an applicant for the purchase of quota shares if they were purchased more than 12 months before receipt of the application by the department.
(d) The department will set the interest rate for loans under 3 AAC 80.200 - 3 AAC 80.265 on the first day of each calendar quarter. The interest rate set for a quarter remains in effect until the department changes the rate, will not exceed the maximum or minimum interest allowed under AS 44.33.965(b)(2), and will be established at the nearest one-quarter point. The interest rate will be based on the prime rate, as defined in AS 44.88.599, during the previous quarter.
(e) The interest rate for a loan is the interest rate in effect at the time the loan commitment is made. The interest rate for a loan will be at a fixed rate for the term of the loan.
History
- Authority: AS 16.10.310; AS 16.10.320
- Eff. 10/16/2012, Register 204
3 AAC 80.240 Disbursement of loan money
Loan money will be disbursed when
(1) the state has perfected a security interest in the collateral;
(2) the requirements of the department as specified by the loan committee have been met; and
(3) the borrower is in compliance with provisions of the loan documents, AS 16.10.310 and 16.10.320, and 3 AAC 80.200 - 3 AAC 80.265.
History
- Authority: AS 16.10.310; AS 16.10.320
- Eff. 10/16/2012, Register 204
3 AAC 80.245 Costs and fees
(a) All expenses incurred by the department in processing an application must be paid by the applicant. These expenses include the cost of title reports and insurance, recording fees, appraisals, surveys, travel, and other direct costs.
(b) A nonrefundable loan application fee of $100 is due to the department at the time an application under 3 AAC 80.200 - 3 AAC 80.265 is submitted.
(c) An origination fee of one percent of the total loan amount or an assumption fee of one percent of the loan balance is due from the borrower when provisions of 3 AAC 80.200 - 3 AAC 80.265 have been met.
(d) A late fee not to exceed five percent of the payment amount will be charged to a borrower for each loan payment that is received more than 15 days after the due date for the payment.
(e) A nonrefundable prequalification application fee of $200 is due to the department at the time a prequalification application is submitted under 3 AAC 80.200 - 3 AAC 80.265
(f) A fee not to exceed $100 will be charged to a borrower to process a loan extension application.
(g) The department will not charge the late fee described in (d) of this section if
(1) the department receives from the borrower a loan extension application or a payment plan not more than 15 days after the due date for the payment;
(2) the department approves the loan extension application or payment plan; and
(3) one or more of the following occurs:
(A) the borrower meets all conditions for the loan extension or the payment plan;
(B) the department receives payment during its review of the loan extension application or payment plan.
History
- Authority: AS 16.10.310
- Eff. 10/16/2012, Register 204
3 AAC 80.250 Assumptions
(a) A request for permission to assume the obligations and benefits of a loan made under AS 16.10.310(a)(1)(E) and 3 AAC 80.200 - 3 AAC 80.265 will be processed in the same manner as an application for a loan.
(b) A loan committee may permit an assumption if the applicant meets eligibility requirements as outlined in 3 AAC 80.200 - 3 AAC 80.265, is a good financial risk, and the security of the state's investment is preserved.
(c) Wraparound financing that includes a loan made under AS 16.10.310(a)(1)(E) is prohibited and constitutes a default on the loan.
History
- Authority: AS 16.10.310
- Eff. 10/16/2012, Register 204
3 AAC 80.255 Modifications
(a) A request for a modification to a loan made under AS 16.10.310(a)(1)(E) and 3 AAC 80.200 - 3 AAC 80.265 will be processed in the same manner as an application for a loan. The department will require the applicant to file one or more of the items specified in 3 AAC 80.200 if information on those items has changed since they were previously filed, or if the department needs additional information not appearing in the previously filed items in order to review the request for modification.
(b) A loan committee may permit a loan modification only if the security of the state and the state's investment is preserved.
History
- Authority: AS 16.10.310
- Eff. 10/16/2012, Register 204
3 AAC 80.260 Reconsideration of a loan request
(a) If a loan request is denied, inactivated, or significantly modified by the department, an applicant may file a written request for reconsideration not later than 30 days after receipt of notice of the decision of the department.
(b) The department will reconsider the request on a showing by the applicant that
(1) there has been a substantial change in the circumstances leading to the decision of the department;
(2) additional relevant information that was not initially available can be provided to the department; or
(3) administrative errors were made by the department.
History
- Authority: AS 16.10.310
- Eff. 10/16/2012, Register 204
3 AAC 80.265 Confidentiality of loan information
(a) The following information is not confidential and is available for public inspection upon request:
(1) a document that is already a public record, including a deed of trust, financing statement, limited entry permit, quota share, warranty deed, bill of sale, mortgage, lien, vehicle title, or vessel documentation;
(2) general information regarding loans, including the original loan amount, loan terms, personal guarantees, and disbursement and repayment schedules;
(3) insurance matters, including title insurance policies and correspondence with insurance companies or borrowers regarding losses, accident reports, and nonpayment of premiums;
(4) foreclosure and default proceedings.
(b) The following information is confidential and is not subject to public disclosure:
(1) personal and financial information, including income tax returns, financial statements, business income statements, pro forma profit and loss statements, credit information obtained from banks and other creditors, reports from consumer reporting agencies, cannery statements, and commercial fishing pink slips (fish tickets);
(2) loan committee memoranda and minutes containing information relating to creditworthiness of an applicant;
(3) the payment history on a loan, unless the loan is in default.
(c) Information not described in (a) or (b) of this section may be subject to public disclosure. Requests for disclosure must be made, and will be determined, in accordance with 2 AAC 96. Upon receipt of a request for disclosure, the department will notify the loan applicant and other persons with a privacy interest in the request to permit them to present reasons why the requested information should not be disclosed.
History
- Authority: Art. I, sec. 22,AS 16.10.345; AS 40.25.120 Ak Const.AS 40.25.110
- Eff. 10/16/2012, Register 204
Article 3 Community Charter Fisheries Revolving Loan Fund
3 AAC 80.310 Application process
(a) To apply for a loan under AS 16.10.801 - AS 16.10.890, the applicant shall file with the department
(1) a completed application for a commercial charter fisheries loan, on a form provided by the department;
(2) a completed residency questionnaire, on a form provided by the department;
(3) a letter of intent stating the amount requested and intended use consistent with AS 16.10.801 - 13.10.890 of the proposed loan money, on a form provided by the department;
(4) a schedule of acceptable collateral, including collateral now owned and other collateral to be acquired with the loan proceeds, on a form provided by the department;
(5) an individual financial statement consisting of a current balance sheet and a profit and loss statement, on a form provided by the department;
(6) a statement of projected income and expenses for the following year's operating plan, on a form provided by the department;
(7) copies of the applicant's federal income tax returns for the preceding three years, and for additional years if necessary to establish eligibility;
(8) a signed credit authorization, on a form provided by the department;
(9) a resume identifying all permits and licenses held by the applicant, summarizing the applicant's experience in commercial charter fisheries in Alaska for each year, on a form provided by the department;
(10) consent to release information, on a form provided by the department;
(11) copies of the purchase agreement or cost estimates and down-payment receipt, with signatures by all parties;
(12) if a vessel is used for collateral, a marine survey of the vessel less than 90 days old, acceptable to the department, including pictures of the vessel;
(13) the application fee required by 3 AAC 80.355(b); and
(14) any other information requested by the department needed to process the loan application.
(b) The department may process loan requests without the information described in (a) of this section if the department determines that the information is not necessary for making the lending decision.
History
- Authority: AS 16.10.805
- Eff. 10/16/2012, Register 204
3 AAC 80.315 Examination
(a) The materials described in 3 AAC 80.310 will be processed and evaluated by a loan officer. The loan officer will evaluate the applicant's eligibility, financial and credit history, operating plan, ability to repay, and proposed collateral.
(b) On the basis of the evaluation, the loan officer will either
(1) inactivate the application due to
(A) lack of information required under 3 AAC 80.310; or
(B) the ineligibility of the applicant; or
(2) recommend proposed action on the loan request to the appropriate loan committee; however, the recommendation of a loan officer is not binding on a loan committee.
History
- Authority: AS 16.10.805
- Eff. 10/16/2012, Register 204
3 AAC 80.320 Loan committee
(a) A loan committee consists of one or more persons appointed by the director to act on a loan request.
(b) A loan committee may approve, deny, or modify a loan request, or may table a loan request subject to obtaining additional information.
(c) A loan committee may impose reasonable conditions on the approval of a loan, including
(1) additional collateral to secure the loan;
(2) additional guarantors; and
(3) subordination of prior lien holders' rights to the interests of the state.
(d) A loan committee shall consider the applicant's eligibility for a loan, financial and credit record, ability to repay, operating plan, and the adequacy of collateral offered to secure the loan. A loan committee may also consider the recommendations of the loan officer assigned to process the application and any other relevant information.
(e) A loan committee may fix, within the limitations set by AS 16.10.815, the term of a loan and repayment schedule.
(f) If a loan request is denied or significantly modified by a loan committee, the loan committee shall provide the applicant with a statement of the reasons for the action and the information relied on.
(g) A material misstatement or omission of fact made by an applicant constitutes grounds for denial of a loan request.
History
- Authority: AS 16.10.805; AS 16.10.810; AS 16.10.815
- Eff. 10/16/2012, Register 204
3 AAC 80.325 Residency requirements
(a) In determining if an applicant fulfills the 24 consecutive month residency requirements under AS 16.10.810, the loan committee may consider any information that would indicate the applicant's residency, including where the applicant
(1) is registered to vote;
(2) maintains a permanent place of abode;
(3) files tax returns, and the address that is listed on the returns;
(4) registers or licenses personal property, including cars, boats, trucks, and trailers;
(5) is licensed to drive;
(6) maintains bank accounts, savings accounts, lines of credit, and other financial relationships;
(7) has claimed or received benefits as a resident;
(8) has received permanent fund dividends; and
(9) owns real property.
(b) If two or more individuals apply jointly or as a partnership or corporation, all parties to the application must establish residency.
History
- Authority: AS 16.10.805; AS 16.10.810
- Eff. 10/16/2012, Register 204
3 AAC 80.330 Financial and credit record
(a) The department may consider the following factors in evaluating an applicant's financial and credit record:
(1) existing and prior debts;
(2) credit reports obtained from creditors and private credit reporting services;
(3) prior loan history with the department;
(4) timeliness in making payments on loans and other debts;
(5) existence of tax liens;
(6) judgments and foreclosures;
(7) financial and credit reputation.
(b) Information establishing unacceptable credit will be more heavily weighed by the department if it has occurred not later than the past 10 years from the date of application.
History
- Authority: AS 16.10.805
- Eff. 10/16/2012, Register 204
3 AAC 80.335 Ability to repay
(a) The department may consider the following factors in evaluating an applicant's ability to repay:
(1) income history, including present income;
(2) prospects for future income;
(3) assets;
(4) liabilities;
(5) reasonableness of the projected profit and loss statement;
(6) other relevant information or experience.
(b) The department may compare revenue projections contained in an applicant's profit and loss statement with information it acquires through its own efforts or from the National Marine Fisheries Service, or the success of other commercial charter operators in similar circumstances to determine the reasonableness of the applicant's projections.
History
- Authority: AS 16.10.310
- Eff. 10/16/2012, Register 204
3 AAC 80.340 Collateral
(a) A vessel that can be documented must be documented to be acceptable collateral. If a vessel is offered as collateral for a loan, the department or its designee shall be permitted to inspect the vessel before making the loan.
(b) A loan for the purchase of charter halibut permits will be made only if the permits are placed in the name of the applicant.
History
- Authority: AS 16.10.805; AS 16.10.815
- Eff. 10/16/2012, Register 204
3 AAC 80.345 Lending practices
(a) Except as provided in AS 16.10.805(1)(B), a loan will not be approved for refinancing long-term debt. Interim financing is not considered long-term debt if the term is 24 months or less and the promissory note or the original agreement was executed less than 12 months before the department receives the application.
(b) A loan will not be approved if its primary purpose would be to
(1) speculate in the acquisition and sale of charter halibut permits, vessels, or gear;
(2) lease out a charter halibut permit; or
(3) purchase a charter halibut permit, vessel, or gear, that will not be put to use in the fishing season immediately following the loan approval date.
(c) In determining the maximum loan amount that may be approved for the purchase of a charter halibut permit, the department will rely on transfer information from the National Marine Fisheries Service or its successors, or other appropriate sources as determined by the department.
(d) A loan for the refinance of a charter halibut fishing vessel will not be approved unless the applicant has permanent access to a charter halibut permit and the primary use of the vessel will be commercial charter fishing.
(e) Loan proceeds may not be used to reimburse an applicant for the purchase of charter halibut permits if the permits were purchased more than 12 months before the department received the application.
(f) The department will set the interest rate for loans under 3 AAC 80.310 - 3 AAC 80.380 on the first day of each calendar quarter. The interest rate set for a quarter remains in effect until the department changes the rate, will not exceed the maximum or minimum interest allowed under AS 16.10.815(a)(4), and will be established at the nearest one-quarter point. The interest rate will be based on the bank prime rate, as defined in AS 44.88.599, during the previous quarter.
(g) The interest rate for a loan is the interest rate in effect at the time the loan commitment is made. The interest rate for a loan will be at a fixed rate for the term of the loan.
History
- Authority: AS 16.10.805; AS 16.10.815
- Eff. 10/16/2012, Register 204
3 AAC 80.350 Disbursement of loan money
Loan money will be disbursed when
(1) the state has perfected a security interest in the collateral, except that, in the case of a mortgage on a documented vessel, this requirement may be satisfied by the establishment of the mortgage as a preferred mortgage under the provisions of 46 U.S.C. 911 - 984 (Ship Mortgage Act of 1920);
(2) requirements of the department as specified by the loan committee have been met; and
(3) the borrower is in compliance with provisions of the loan documents, AS 16.10.801 - 16.10.890, and 3 AAC 80.310 - 3 AAC 80.380.
History
- Authority: AS 16.10.805; AS 16.10.815
- Eff. 10/16/2012, Register 204
3 AAC 80.355 Costs and fees
(a) All expenses incurred by the department in processing an application must be paid by the applicant. These expenses include the cost of title reports and insurance, recording fees, appraisals, surveys, travel, and other direct costs.
(b) A nonrefundable loan application fee of $100 is due to the department at the time an application is submitted under 3 AAC 80.310 - 3 AAC 80.380.
(c) An origination fee of one percent of the total loan amount or an assumption fee of one percent of the loan balance is due from the borrower when the provisions of 3 AAC 80.310 - 3 AAC 80.380 have been met.
(d) A late fee not to exceed five percent of the payment amount will be charged to a borrower for each loan payment that is received more than 15 days after the due date for the payment.
(e) A fee not to exceed $100 will be charged to a borrower to process a loan extension application.
(f) The department will not charge the late fee described in (d) of this section if
(1) the department receives from the borrower a loan extension application or a payment plan not more than 15 days after the due date for the payment;
(2) the department approves the loan extension application or payment plan; and
(3) one or more of the following occurs:
(A) the borrower meets all conditions for the loan extension or the payment plan;
(B) the department receives payment during its review of the loan extension application or payment plan.
History
- Authority: AS 16.10.805
- Eff. 10/16/2012, Register 204
3 AAC 80.360 Assumptions
(a) A request for permission to assume the obligations and benefits of a loan made under AS 16.10.801 - 16.10.890 and 3 AAC 80.310 - 3 AAC 80.380 will be processed in the same manner as an application for a loan.
(b) A loan committee may permit an assumption if the applicant meets eligibility requirements under AS 16.10.801 and 3 AAC 80.310 - 3 AAC 80.380, is a good financial risk, and the security of the state's investment is preserved.
(c) Wraparound financing that includes a loan made under AS 16.10.801 - 16.10.890 and 3 AAC 80.310 - 3 AAC 80.380 is prohibited and constitutes a default on the loan.
History
- Authority: AS 16.10.805; AS 16.10.810
- Eff. 10/16/2012, Register 204
3 AAC 80.370 Modifications
(a) A request for a modification to a loan made under AS 16.10.801 - 16.10.890 and 3 AAC 80.310 - 3 AAC 80.380 will be processed in the same manner as an application for a loan. The department will require the applicant to file one or more of the items specified in 3 AAC 80.310 if information on those items has changed since they were previously filed, or if the department needs additional information not appearing in the previously filed items in order to review the request for modification.
(b) A loan committee may permit a loan modification only if the security of the state and the state's investment is preserved.
History
- Authority: AS 16.10.805
- Eff. 10/16/2012, Register 204
3 AAC 80.375 Reconsideration of a loan request
(a) If a loan request is denied, inactivated, or significantly modified by the department, an applicant may file a written request for reconsideration not later than 30 days after receipt of notice of the decision of the department.
(b) The department will reconsider the request on a showing by the applicant that
(1) there has been a substantial change in the circumstances leading to the decision of the department;
(2) additional relevant information that was not initially available can be provided to the department; or
(3) administrative errors were made by the department.
History
- Authority: AS 16.10.805; AS 16.10.810
- Eff. 10/16/2012, Register 204
3 AAC 80.380 Confidentiality of loan information
(a) The following information is not confidential and is available for public inspection upon request:
(1) a document that is already a public record, including a deed of trust, financing statement, limited entry permit, quota share, warranty deed, bill of sale, mortgage, lien, vehicle title, or vessel documentation;
(2) general information regarding loans, including the original loan amount, loan terms, personal guarantees, and disbursement and repayment schedules;
(3) insurance matters, including title insurance policies and correspondence with insurance companies or borrowers regarding losses, accident reports, and nonpayment of premiums;
(4) foreclosure and default proceedings.
(b) The following information is confidential and is not subject to public disclosure:
(1) personal and financial information, including income tax returns, financial statements, business income statements, pro forma profit and loss statements, credit information obtained from banks and other creditors, reports from consumer reporting agencies, logbooks, cannery statements, and commercial fishing pink slips (fish tickets);
(2) loan committee memoranda and minutes containing information relating to creditworthiness of an applicant;
(3) the payment history on a loan, unless the loan is in default.
(c) Information not described in (a) or (b) of this section may be subject to public disclosure. Requests for disclosure must be made, and will be determined, in accordance with 2 AAC 96. Upon receipt of a request for disclosure, the department will notify the loan applicant and other persons with a privacy interest in the request to permit them to present reasons why the requested information should not be disclosed.
History
- Authority: Art. I, sec. 22,AS 16.10.805; AS 40.25.120 Ak Const.AS 40.25.110
- Eff. 10/16/2012, Register 204
Article 4 Mariculture Revolving Loan Fund
3 AAC 80.410 Application process
(a) To apply for a loan for a mariculture business under AS 16.10.910(a)(1), an applicant shall file with the department
(1) a completed mariculture revolving loan application, on a form provided by the department;
(2) a completed residency questionnaire, on a form provided by the department;
(3) a letter of intent that states the amount requested and the intended use of the proposed loan money consistent with AS 16.10.900 - 16.10.945, on a form provided by the department;
(4) a schedule of acceptable collateral that includes collateral now owned and other collateral to be acquired with the loan proceeds, on a form provided by the department;
(5) an individual financial statement that includes a current balance sheet and a profit and loss statement, on a form provided by the department;
(6) a statement of projected income and expenses for the following year's. operating plan, on a form provided by the department;
(7) a copy of the Department of Natural Resources aquatic farm application and all attachments;
(8) a copy of the aquatic farm lease;
(9) a copy of the aquatic farm operation permit;
(10) a copy of the special area permit, if applicable;
(11) a copy of the applicant's federal income tax returns for the preceding three years, and for additional years if necessary to establish eligibility;
(12) a signed credit authorization, on a form provided by the department;
(13) a resume that identifies any permit, certificate, or license held by the applicant and summarizes the applicant's experience and education in the mariculture industry, on a form provided by the department;
(14) consent to release information, on a form provided by the department;
(15) a copy of any purchase agreement, estimate, invoice, or other documentation regarding the intended use of loan proceeds;
(16) if a vessel is used for collateral, a marine survey of the vessel that is acceptable to the department; the survey must be less than 90 days old and include pictures of the vessel;
(17) the application fee required by 3 AAC 80.455(b); and
(18) any other information requested by the department needed to process the application.
(b) To apply for a loan for the operation of a hatchery for the purpose of propagation of marine aquatic plants or shellfish, or a shellfish enhancement project under AS 16.10.910 (a)(2) an applicant shall file with the department
(1) a completed mariculture hatchery revolving loan application, on a form provided by the department;
(2) a completed residency questionnaire, on a form provided by the department;
(3) a letter of intent stating the amount requested and the intended use of the proposed loan money consistent with AS 16.10.900 - 16.10.945, on a form provided by the department;
(4) a copy of any permit necessary to operate the hatchery, including any permit necessary for construction of the hatchery facility;
(5) a schedule of acceptable collateral that includes collateral now owned and other collateral to be acquired with the loan proceeds, on a form provided by the department;
(6) a financial statement that includes the most recent annual statement, current month end statement, on a form provided by the department;
(7) a statement of projected income and expenses for the following year's operating plan that includes actual figures currently available and forecasted future funding requirements, using the sample format provided by the department or a similar format acceptable to the department;
(8) a consent to release information, on a form provided by the department;
(9) the application fee required by 3 AAC 80.455(b);
(10) a signed copy of the applicant's federal income tax return for the most recent year; and
(11) any other information requested by the department needed to process the application.
(c) In addition to the requirements under (b) of this section, if the applicant for the operation of a hatchery for the purpose of propagation of marine aquatic plants or shellfish, or a shellfish enhancement project under AS 16.10.910 (a)(2) is an entity organized under the law of this state, the applicant shall file with the department
(1) a copy of the statements or articles issued by the state to organize the applicant entity;
(2) the name and resume of each officer and principal employee of the corporation that includes each officer or employee's professional background and experience; and
(3) a corporate resolution signed by the corporate president and secretary that authorizes the corporation to apply for a loan and authorizes an officer or agent to provide information and documentation necessary for loan approval.
(d) The department may process a loan request without the information described in (a) through (c) of this section if the department determines that the information is not necessary for making the lending decision.
History
- Authority: AS 16.10.905
- Eff. 10/16/2012, Register 204; am 7/24/2024, Register 251
3 AAC 80.415 Examination
(a) A loan officer will process and evaluate the material described in 3 AAC 80.410. The loan officer will evaluate the applicant's eligibility, corporate management, financial and credit history, operating plan, experience, ability to repay, and proposed collateral.
(b) On the basis of the evaluation, the loan officer will
(1) inactivate an application if
(A) the application doe not contain information required under 3 AAC 80.410; or
(B) the applicant is ineligible for the loan for which the applicant applied; or
(2) recommend proposed action on the applicant's loan application to the appropriate loan committee; a loan officer's recommendation is not binding on a loan committee.
History
- Authority: AS 16.10.905
- Eff. 10/16/2012, Register 204; am 7/24/2024, Register 251
3 AAC 80.420 Loan committee
(a) The director shall appoint a loan committee of one or more persons to act on a loan application.
(b) A loan committee may approve, deny, or modify a loan request. If the loan committee requires additional information regarding a loan application, the loan committee may table the loan application until the applicant submits the additional information.
(c) A loan committee may impose reasonable conditions on the approval of a loan, including
(1) additional collateral to secure the loan;
(2) additional guarantors; and
(3) subordination of prior lien holders' rights to the interests of the state.
(d) A loan committee shall consider the applicant's eligibility for a loan, corporate management, financial and credit record, ability to repay, operating plan, experience, and the adequacy of collateral offered to secure the loan. A loan committee may also consider the recommendation of the loan officer assigned to process the application and any other relevant information.
(e) A loan committee may fix the term of a loan and repayment schedule within the limitations set by AS 16.10.915.
(f) If a loan request is denied or significantly modified by a loan committee, the loan committee shall provide the applicant with a statement of the reasons for the action and the information relied on.
(g) A material misstatement or omission of fact made by an applicant constitutes grounds for denial of a loan request.
History
- Authority: AS 16.10.905; AS 16.10.915
- Eff. 10/16/2012, Register 204; am 7/24/2024, Register 251
3 AAC 80.425 Residency requirements
(a) To determine if an applicant fulfills the 24 consecutive month residency requirement under AS 16.10.910, the loan committee may consider any information that would indicate the applicant's residency, including whether the applicant
(1) registered to vote in the state;
(2) maintains a permanent place of abode in the state;
(3) files tax returns with a return address located in the state;
(4) has registered or licensed personal property in the state, including a car, boat, truck, or trailer;
(5) has a valid driver's license issued by the state;
(6) maintains a bank account, savings account, a line of credit, or other financial relationship with an institution located in the state;
(7) has claimed or received any state benefit as a resident;
(8) has received a permanent fund dividend;
(9) owns real property in the state; or
(10) is a registered entity organized under the laws of the state.
(b) If two or more individuals apply jointly or as an entity, all parties must establish residency.
History
- Authority: AS 16.10.905; AS 16.10.910
- Eff. 10/16/2012, Register 204; am 7/24/2024, Register 251
3 AAC 80.430 Financial and credit record
(a) To evaluate an applicant's financial and credit record, the department may consider the applicant's
(1) existing and prior debts;
(2) credit reports obtained from creditors and private credit reporting services;
(3) prior loan history with the department;
(4) timeliness in making payments on loans and other debts;
(5) existence of tax liens;
(6) judgments and foreclosures; and
(7) financial and credit reputation.
(b) The department will weigh activity that establishes unacceptable credit more heavily if the activity occurred within ten years of the application date.
History
- Authority: AS 16.10.905
- Eff. 10/16/2012, Register 204; am 7/24/2024, Register 251
3 AAC 80.435 Ability to repay
(a) To evaluate an applicant's ability to repay a loan, the department may consider the applicant's
(1) income history, including present income;
(2) prospects for future income;
(3) assets;
(4) liabilities;
(5) reasonableness of the projected profit and loss statement; and
(6) other relevant information or experience.
(b) To determine the reasonableness of an applicant's revenue projection, the department may compare the revenue projections in the applicant's profit and loss statement with
(1) information the department acquires independently; or
(2) the actual revenue of other mariculture operators in similar circumstances.
History
- Authority: AS 16.10.905
- Eff. 10/16/2012, Register 204; am 7/24/2024, Register 251
3 AAC 80.440 Collateral
(a) A vessel that can be documented must be documented to be acceptable collateral. If a vessel is offered as collateral for a loan, the department or the department's designee shall be permitted to inspect the vessel before making the loan.
(b) A loan will only be made if the items purchased with loan proceeds are placed on the loan as collateral and are placed in the name of the applicant.
History
- Authority: AS 16.10.905; AS 16.10.915
- Eff. 10/16/2012, Register 204; am 7/24/2024, Register 251
3 AAC 80.445 Lending practices
(a) The department will not approve a loan to refinance long-term debt. Interim financing is not considered long-term debt if the term is 24 months or less and the promissory note or the original agreement was executed less than 12 months before the department received the application.
(b) An applicant may not use loan proceeds for the reimbursement of purchases made more than 12 months before the department received the application.
(c) The department will set the interest rate for loans under 3 AAC 80.410 - 3 AAC 80.480 on the first day of each calendar quarter. The interest rate set for a quarter will remain in effect until the department changes the rate, will not exceed the maximum or minimum interest allowed under AS 16.10.915(a)(3), and will be established at the nearest onequarter point. The interest rate set will be based on the bank prime rate during the previous quarter as defined in AS 44.88.599.
(d) A loan's interest rate is the interest rate in effect at the time the loan commitment is made and will be at a fixed rate for the loan's term.
(e) At the time the loan is made, the department may consider the following factors in setting repayment terms of the loan as allowed under AS 16.10.920:
(1) the time needed to build stock;
(2) the financial need and viability of the permit holder;
(3) public or economic benefit;
(4) any other factor the department considers appropriate to preserve the security of the state and its investment.
(f) The department may modify the loan deferral period at any time during the first six years of the loan as allowed under AS 16.10.920.
History
- Authority: AS 16.10.905; AS 16.10.915; AS 16.10.920
- Eff. 10/16/2012, Register 204; am 7/24/2024, Register 251
3 AAC 80.450 Disbursement of loan money
Loan money will be disbursed when
(1) the state has perfected a security interest in the collateral, except that, in the case of a mortgage on a documented vessel, an applicant may satisfy this requirement by establishing the mortgage as a preferred mortgage under the provisions of 46 U.S.C. 911 - 984 (Ship Mortgage Act of 1920);
(2) the department's requirements, as specified by the loan committee, have been met; and
(3) the borrower is in compliance with all provisions of the loan documents and this chapter.
History
- Authority: AS 16.10.905; AS 16.10.915
- Eff. 10/16/2012, Register 204; am 7/24/2024, Register 251
3 AAC 80.455 Costs and fees
(a) An applicant shall pay for the department's application processing expenses, including the cost of title reports and insurance, recording fees, appraisals, surveys, travel, and other direct costs.
(b) An applicant shall submit a $100 nonrefundable loan application fee to the department with a loan application submitted under either AS 16.10.910(a)(1) or 16.10.910(a)(2).
(c) A borrower shall pay an origination fee of one percent of the total loan amount or an assumption fee of one percent of the loan balance when the borrower meets the provisions of 3 AAC 80.410 - 3 AAC 80.480.
(d) A late fee not to exceed five percent of the payment amount will be charged to a borrower for each loan payment that is received more than 15 days after the due date for the payment.
(e) The department will charge a loan extension application processing fee of up to $100 to a borrower who applies for a loan extension.
(f) The department will not charge the late fee in (d) of this section if
(1) the borrower submits a loan extension application or a payment plan to the department not more than 15 days after the payment is due;
(2) the department approves the borrower's loan extension application or payment plan; and
(3) if the borrower
(A) meets all conditions for the loan extension or the payment plan; or
(B) submits a payment during the department's review of the borrower's loan extension application or payment plan.
History
- Authority: AS 16.10.905
- Eff. 10/16/2012, Register 204; am 7/24/2024, Register 251
3 AAC 80.460 Assumptions
(a) The department will process a request for permission to assume the obligations and benefits of a loan made under AS 16.10.890 - 16.10.945 and 3 AAC 80.410 - 3 AAC 80.480 in the same manner as an application for a loan.
(b) A loan committee may permit an assumption if the applicant
(1) meets eligibility requirements under AS 16.10.910 and 3 AAC 80.410 - 3 AAC 80.480;
(2) is a good financial risk; and
(3) the security of the state 's investment is preserved.
(c) Wraparound financing that includes a loan made under AS 16.10.890 - 16.10.945 and 3 AAC 80.410 -3 AAC 80.480 is prohibited and constitutes a default on the loan.
History
- Authority: AS 16.10.905; AS 16.10.910
- Eff. 10/16/2012, Register 204; am 7/24/2024, Register 251
3 AAC 80.470 Modifications
(a) The department will process a request for a modification to a loan made under AS 16.10.890-16.10.945 and 3 AAC 80.410 - 3 AAC 80.480 in the same manner as an application for a loan. The department will require the applicant to file one or more of the items specified in 3 AAC 80.410 if
(1) the information on the document has changed since it was filed; or
(2) the department needs additional information that is not included in the document on file to review the request for modification.
(b) A loan committee may only permit a loan modification if the security of the state and the state's investment is preserved.
History
- Authority: AS 16.10.905
- Eff. 10/16/2012, Register 204; am 7/24/2024, Register 251
3 AAC 80.475 Reconsideration of a loan request
(a) If the department denies, inactivates, or significantly modifies a loan request, an applicant may file a written request for reconsideration not later than 30 days after receiving notice of the department's decision.
(b) The department will reconsider the applicant's request if the applicant
(1) shows that there has been a substantial change in the circumstances leading to the department's decision;
(2) provides additional relevant information to the department that was not initially available; or
(3) shows that the department made an administrative error.
History
- Authority: AS 16.10.905; AS 16.10.910
- Eff. 10/16/2012, Register 204; am 7/24/2024, Register 251
3 AAC 80.480 Confidentiality of loan information
(a) The following information is not confidential and is available for public inspection upon request:
(1) a document that is already a public record, including a
(A) deed of trust;
(B) financing statement;
(C) limited entry permit;
(D) quota share.;
(E) warranty deed;
(F) bill of sale;
(G) mortgage;
(H) lien;
(I) vehicle title; or
(J) vessel documentation;
(2) general information regarding a loan, including the original loan amount, loan terms, personal guarantees, and disbursement and repayment schedules;
(3) insurance matters, including title insurance policies and correspondence with insurance companies or borrowers regarding losses, accident reports, and nonpayment of premiums;
(4) foreclosure and default proceedings.
(b) The following information is confidential and is not subject to public disclosure:
(1) personal and financial information, including
(A) income tax returns;
(B) financial statements;
(C) business income statements;
(D) pro forma profit and loss statements;
(E) credit information obtained from banks and other creditors;
(F) reports from consumer reporting agencies;
(G) processor statements; and
(H) commercial fishing pink slips (fish tickets);
(2) loan committee memoranda and minutes containing information relating to an applicant's creditworthiness;
(3) the payment history on a loan unless the loan is in default.
(c) Information not described in (a) or (b) of this section may be subject to public disclosure. A person may request disclosure of information under 2 AAC 96. After the department receives a request for disclosure, the department will
(1) notify the loan applicant and any other person with a privacy interest in the request; and
(2) allow the applicant or other interested person to present reasons why the requested information should not be disclosed.
History
- Authority: Art. I, sec. 22,AS 16.10.905; AS 40.25.120 Ak Const.AS 40.25.110
- Eff. 10/16/2012, Register 204; am 7/24/2024, Register 251
Article 5 General Provisions
3 AAC 80.900 Definitions
Unless the context requires otherwise in 3 AAC 80.010 - 3 AAC 80.480:
(1) "affidavit" means a sworn statement in writing and signed before a notary public;
(2) "commercial fishery" or "commercial fisheries" means those fisheries in Alaska requiring that a participant hold a commercial fishing permit or license issued by the State of Alaska;
(3) "commercial fishing" means the actual catching of fish, shellfish, crab or other fishery resources with the intent of disposing of those resources for profit by sale in commercial channels, while holding all required licenses and permits; for purposes of this paragraph, "actual catching" means having gear in the water with the intent to catch fish;
(4) "commissioner" means the commissioner of the Department of Commerce, Community, and Economic Development;
(5) repealed 10/16/2012;
(6) "default" includes a violation of any provision of this chapter, AS 16.10.300 - 16.10.370, or the loan documents, failure to make the necessary payment within 15 days after it is due, or failure to maintain the insurance required by the department;
(7) "department" means the Department of Commerce, Community, and Economic Development;
(8) "documented vessel" means a vessel permanently or temporarily registered, enrolled, or licensed by the United States Coast Guard and that has been issued an official number by the United States Coast Guard;
(9) "extension package" means such forms as the department may require in order to make a decision on an extension request;
(10) "guarantor" means a person who legally assures that the loan requirements will be met if the borrower fails to pay or perform as contracted;
(11) "resident" means an individual who, except for brief intervals of military service, attendance at an educational institution, or absence for good cause, has been physically present in Alaska with the intent to remain indefinitely and make a primary and permanent home in the state;
(12) "total gross income" means income from all sources, including wages, rental income, business income, dividends, and interest payments;
(13) "wraparound financing" means a contract that includes the balance due on an existing debt and an additional amount to cover the difference between the selling price and the existing debt;
(14) "director" means the director of the division assigned economic development functions or its successor agency in the department;
(15) "charter halibut fishing vessel" means a vessel primarily used for commercial charter fishing that requires halibut charter permits;
(16) "charter halibut permit" means a permit issued by the National Marine Fisheries Service under 50 C.F.R. 300.67;
(17) "community quota entity" means a nonprofit organization approved by the National Marine Fisheries Service or its successors to hold and lease a quota share on behalf of an eligible community;
(18) "quota share" means a permit issued by the National Marine Fisheries Service or its successors used for the annual calculation of the allowable catch of halibut or sablefish in this state.
History
- Authority: AS 16.10.310; AS 16.10.339; AS 16.10.805 AS 16.10.335; AS 16.10.345; AS 16.10.905
- Eff. 9/11/85, Register 95; am 3/16/95, Register 133; am 8/10/97, Register 143; am 10/16/2012, Register 204
Chapter 81 Fisheries Enhancement Loans and Grants
3 AAC 81.010 Loan application process
(a) To apply for a loan for planning, construction, or operation of a hatchery, preconstruction activities necessary to obtain a permit, or for planning and implementation of nonhatchery fisheries enhancement activities and rehabilitation, including lake fertilization and habitat improvement, an applicant shall file with the department
(1) a completed application for a fisheries enhancement loan, on a form provided by the department;
(2) a letter of intent stating the amount requested, a schedule of acceptable collateral and the intended use of the proposed loan money, on a form provided by the department;
(3) copies of all permits, including copies of permits necessary to construct the hatchery facility;
(4) a copy of the general contractor's bid or an estimate of construction costs for the hatchery and an estimate of operating costs; costs in excess of $100,000 may be required to be supported by a minimum of two competitive bids;
(5) a copy of the statement of nonprofit status issued by the United States Internal Revenue Service or the department;
(6) a letter from the qualified regional association in that area approving the local nonprofit association, if the loan request is from a local nonprofit corporation and is for preconstruction activities or exceeds $1,000,000;
(7) a financial statement, including the most recent annual statement, the current month-end statement, and the terms of all outstanding state loans, on a form provided by the department;
(8) a projected statement of profit and loss, including actual figures currently available, and forecasted future state loan requirements, using the sample format provided by the department or a similar format acceptable to the department;
(9) the names of officers and principal employees of the corporation, and a brief resume of their professional background and experience, on a form provided by the department;
(10) a corporate resume, on a form provided by the department or other form acceptable to the department;
(11) a signed credit authorization, on a form provided by the department;
(12) a corporate resolution signed by the corporate president and secretary, authorizing the corporation to apply for a loan and authorizing an officer or agent to provide information and documentation necessary for loan approval, on a form provided by the department;
(13) a consent to release information, on a form provided by the department;
(14) a $100 nonrefundable application fee;
(15) a signed copy of the applicant's federal income tax returns for the most recent year; and
(16) any other information that might be helpful to an applicant in demonstrating eligibility for a loan, as requested by the department.
(b) A loan for preconstruction activities may be initiated by filing the materials listed in (a) of this section, except for the materials listed in paragraphs (a)(3) and (4) of this section.
(c) A loan for planning and implementation of nonhatchery fisheries enhancement and rehabilitation activities may be initiated by filing the materials listed in (a) of this section, except for the material listed in (a)(4) of this section. An applicant for a loan under this subsection shall also submit a statement, as detailed as possible, indicating the benefits to the fisheries of the area likely to result from the enhancement and rehabilitation activities.
(d) The department will, in its discretion, process an application for a loan without the information described in (a) of this section, if the department determines that the department can make an informed lending decision without access to the information.
History
- Authority: AS 16.10.510
- Eff. 9/11/85, Register 95; am 1/11/87, Register 101; am 8/10/97, Register 143
3 AAC 81.012 Grant application process
(a) To apply for a grant under AS 16.10.510(9) an applicant shall file with the department
(1) a letter stating the proposed use of the grant, including a list of goals and objectives to be accomplished through the use of the grant;
(2) a proposed budget;
(3) a copy of a letter from the Department of Fish and Game certifying the applicant as a regional association under AS 16.10.380;
(4) the names of officers and principal employees of the association and a brief resume of their professional background and experience;
(5) a proposed disbursement schedule, not to exceed one year, for the grant; and
(6) other information that may be relevant to the grant application.
(b) A grant application may be approved by a loan committee if the loan committee determines that the grant would contribute to the future development of the state's fisheries.
(c) A loan committee may rely on technical assistance provided by the Department of Fish and Game in acting on a grant application.
History
- Authority: AS 16.10.510
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 81.015 Examination
(a) The materials described in 3 AAC 81.010 will be processed and evaluated by a loan officer. The loan officer will evaluate the applicant's eligibility, financial and credit history, operating plan, ability to repay, and proposed collateral.
(b) On the basis of the evaluation, the loan officer will either inactivate the application, due to lack of information required under 3 AAC 81.010 or ineligibility of the applicant, or recommend proposed action on the loan request to the appropriate loan committee; however, the recommendation of a loan officer is not binding on a loan committee.
History
- Authority: AS 16.10.510
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 81.020 Loan committee
(a) A loan committee consists of one or more persons appointed by the director to act on loan and grant requests.
(b) A loan committee may approve, deny, or modify and approve a loan or grant request, or may table a loan or grant request subject to obtaining additional information.
(c) A loan committee may impose reasonable conditions on the approval of a loan or grant request, including
(1) additional collateral to secure the loan;
(2) additional guarantors; and
(3) subordination of prior lienholders' rights to the interests of the state.
(d) A loan committee shall consider an applicant's eligibility for a loan, corporate management, financial and credit record, ability to repay, operating plan, and the adequacy of collateral offered to secure the loan. A loan committee may also consider the recommendations of the loan examiner assigned to process the loan application and any other relevant information.
(e) A loan committee may fix, within the requirements set by AS 16.10.510 and 16.10.520, the term of a loan and repayment schedule.
(f) If a loan or grant request is denied or significantly modified by a loan committee, the loan committee will provide the applicant with a statement of the reasons for the action and the information relied on.
(g) A material misstatement or omission of fact made by an applicant constitutes grounds for denial of a loan or grant request.
History
- Authority: AS 16.10.510
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 81.025 Corporate management
The department will, in its discretion, consider the previous fisheries and nonfisheries business experience of the corporate officers and principal employees in evaluating assessing an applicant's corporate management.
History
- Authority: AS 16.10.510; AS 16.10.520(d)
- Eff. 9/11/85, Register 95
3 AAC 81.035 Eligibility
To be eligible for a loan or grant under AS 16.10.510, an applicant shall provide proof of
(1) issuance of a Department of Fish and Game permit under AS 16.10.400 if applying for a loan for the construction and operation of hatchery facilities;
(2) certification of the applicant as a regional association under AS 16.10.380 or approval by the qualified regional association, if applying for a loan for fisheries enhancement and rehabilitation activities or preconstruction activities necessary to obtain a hatchery permit from the Department of Fish and Game; or
(3) certification of the applicant as a regional association under AS 16.10.380 if applying for a grant for organizational and planning purposes.
History
- Authority: AS 16.10.510
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 81.040 Financial and credit record
(a) The department will, in its discretion, consider the following factors in evaluating an applicant's financial and credit record:
(1) existing and prior debts;
(2) credit reports obtained from creditors and private credit reporting services;
(3) prior loan history with the department;
(4) timeliness in making payments on loans and other debts;
(5) prior bankruptcies;
(6) existence of tax liens;
(7) unpaid judgments and prior foreclosures; and
(8) financial and credit reputation.
(b) Information establishing unacceptable credit will be more heavily weighed by the department if it has occurred in recent years.
History
- Authority: AS 16.10.510; AS 16.10.520
- Eff. 9/11/85, Register 95
3 AAC 81.045 Ability to repay
(a) The department will, in its discretion, consider the following factors in evaluating an applicant's ability to repay a proposed loan:
(1) income history, including present income;
(2) prospects for future income;
(3) assets and their liquidity;
(4) liabilities;
(5) reasonableness of projected profit and loss statement; and
(6) other relevant experience.
(b) The department will, in its discretion, compare revenue projections contained in an applicant's profit and loss statement with information it acquires through its own efforts or from the Department of Fish and Game.
History
- Authority: AS 16.10.510
- Eff. 9/11/85, Register 95
3 AAC 81.050 Collateral
A loan must be secured by collateral acceptable to the department, such as an assignment of future revenue and the proceeds of sale of surplus fish and eggs, and may include a mortgage or other security instrument in real property, buildings, machinery and equipment, and fixtures.
History
- Authority: AS 16.10.510; AS 16.10.520
- Eff. 9/11/85, Register 95
3 AAC 81.055 Lending practices
(a) Loans may be made for planning and construction of fish hatchery facilities, including preconstruction activities necessary to obtain a permit.
(b) Repealed 7/4/91.
(c) Loan money may not be used to reimburse an applicant for expenses paid more than six months before receipt of the application by the department.
(d) A loan will not be approved for refinancing long-term debt. Interim or construction financing is not considered long-term debt if the term is 12 months or less and the promissory note or the original agreement was executed less than six months before receipt of the application by the department.
(e) The department will quarterly set the interest rate for a loan under this chapter. The interest rate set for a quarter remains in effect until the department changes the rate. The interest rate set by the department is based on the bank prime rate listed in the Wall Street Journal during the previous quarter plus one percentage point, not to exceed the maximum interest allowed under AS 16.10.510(6). The interest rate will be established at the nearest 1/2 point. The interest rate will not be less than five percent a year.
(f) The interest rate for a loan is the quarterly interest rate in effect at the time the loan commitment is made. The interest rate for a loan will be at a fixed rate for the term of the loan.
History
- Authority: AS 16.10.510
- Eff. 9/11/85, Register 95; am 7/4/91, Register 119; am 11/29/92, Register 124; am 3/28/2009, Register 189
3 AAC 81.060 Initial loan period
(a) At the time a loan is made the department will, in its discretion, consider the following factors in setting the initial loan period:
(1) The time needed to build brood stock to a production level;
(2) the financial need of the permit holder; and
(3) other factors the department considers appropriate to preserve the security of the state and its investment.
(b) The department will, in its discretion, extend the term of the initial loan period at any time during the first 10 years of the loan only if an extension of the initial loan period is in the best interest of the state. The term of the initial period, as extended, will not exceed 10 years.
History
- Authority: AS 16.10.510; AS 16.10.525
- Eff. 11/28/92, Register 124
3 AAC 81.065 Disbursement of loan money
Loan money will be disbursed when
(1) a security interest in the collateral on behalf of the state has been perfected;
(2) the borrower has complied with the insurance requirements contained in an instrument signed by the borrower;
(3) requirements of the loan committee have been met; and
(4) the borrower is in compliance with all other provisions of the loan documents and this chapter.
History
- Authority: AS 16.10.510; AS 16.10.520
- Eff. 9/11/85, Register 95
3 AAC 81.070 Supervision of loans and grants
(a) As a condition of a loan and while there is an outstanding loan balance or if the loan is in default, the department will, in its discretion, require the borrower to furnish annual financial statements consisting of a balance sheet, profit and loss statement, sources and application of all money received and a schedule of change of owner's equity. The department will, in its discretion, also require an audit or audits to determine whether the borrower has complied with the provisions of the loan, and conduct periodic inspection of collateral securing repayment of the loan.
(b) The department will, in its discretion, exchange information with the Department of Fish and Game, including copies of reports filed under AS 16.10.470, to assure compliance with loan terms.
History
- Authority: AS 16.10.510
- Eff. 9/11/85, Register 95
3 AAC 81.075 Costs
(a) All expenses incurred by the department in processing an application must be paid by the applicant. These expenses include the cost of title reports and insurance, recording fees, appraisals, surveys, travel, and other direct costs.
(b) An origination fee of not more than one percent of the total loan amount, to be set annually by the department, or an assumption fee of not more than one percent of the loan balance, to be set annually by the department, is due from the borrower when all provisions of 3 AAC 81.065 have been met.
(c) A late fee not to exceed five percent of the payment amount will, in the department's discretion, be charged to a borrower for each loan payment that is more than 15 days past due.
(d) An extension fee not to exceed $100 will, in the department's discretion, be charged to a borrower to process a loan extension.
History
- Authority: AS 16.10.510
- Eff. 9/11/85, Register 95; am 1/11/87, Register 101; am 7/4/91, Register 119; am 8/10/97, Register 143; am 10/16/2012, Register 204
3 AAC 81.080 Assumptions
(a) A request to assume the obligations and benefits of a loan made under AS 16.10.500 - 16.10.620 and this chapter will be processed in the same manner as a loan request.
(b) A loan committee may permit an assumption if the applicant is a good financial risk and the security of the state's investment is preserved.
(c) Wraparound financing that includes a loan made under AS 16.10.500 - 16.10.620 and this chapter is prohibited, and constitutes a default on the loan.
History
- Authority: AS 16.10.510
- Eff. 9/11/85, Register 95; am 7/4/91, Register 119
3 AAC 81.081 Closing an assumption
An assumption agreement will be considered by the department to be closed when
(1) all required signatures have been obtained and the assumption agreement has been properly recorded;
(2) the borrower has complied with the insurance requirements contained in an instrument signed by the borrower;
(3) all requirements of the loan committee have been met; and
(4) the borrower is in compliance with all other provisions of the loan documents and this chapter.
History
- Authority: AS 16.10.510
- Eff. 8/10/97, Register 143
3 AAC 81.082 Modifications
(a) A request for a modification to a loan made under AS 16.10.500 - 16.10.620 and this chapter will be processed in the same manner as a loan application. The department will, in its discretion, require one or more of the items specified in 3 AAC 81.010.
(b) A loan committee may permit a loan modification only if the security of the state and its investment is preserved.
History
- Authority: AS 16.10.510
- Eff. 1/11/87, Register 101
3 AAC 81.085 Reconsideration of loan or grant request
(a) If a loan or grant request is denied, inactivated, or significantly modified by the department, an applicant may file a written request for reconsideration within 30 days after receipt of notice of the department's decision.
(b) The department will, in its discretion, reconsider a request upon a showing by the applicant that
(1) there has been a substantial change in the circumstances leading to the department's decision;
(2) additional relevant information can be provided to the department that was not initially available; or
(3) administrative errors were made by the department.
History
- Authority: AS 16.10.510
- Eff. 9/11/85, Register 95
3 AAC 81.090 Confidentiality of loan information
(a) The following information is not confidential and is available for public inspection upon request:
(1) a document that is already a public record, including deeds of trust, financing statements, warranty deeds, bills of sale, mortgages, liens, and vehicle titles;
(2) general information regarding loans, including the original loan amount, loan terms, personal guarantees, and disbursement and repayment schedules;
(3) insurance matters, including title insurance policies and correspondence with insurance companies or borrowers regarding losses, accident reports, and nonpayment of premiums; and
(4) foreclosure and default proceedings.
(b) The following information is confidential and is not subject to public disclosure:
(1) personal and financial information, including income tax returns, financial statements, business income statements, pro forma profit and loss statements, credit information obtained directly from banks and other creditors, and reports obtained from consumer reporting agencies;
(2) loan committee memoranda and minutes containing information relating to creditworthiness of the applicant; and
(3) the payment history on a loan unless the loan is in default.
(c) Information not described in (a) or (b) of this section may be subject to public disclosure. Requests for disclosure must be made, and will be determined, in accordance with 2 AAC 96. Upon receipt of a request for disclosure, the department will notify the loan applicant and other persons with a privacy interest in the request, to permit them to present reasons why the requested information should not be disclosed.
History
- Authority: Ak. Const., art. I,AS 16.10.510; AS 40.25.120 $ 22AS 40.25.110
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 81.900 Definitions
Unless the context requires otherwise, in this chapter
(1) repealed 8/10/97;
(2) "default" includes a violation of any provision of AS 16.10.500 - 16.10.620 and this chapter, or the loan documents, failure to make the necessary payment within 15 days after it is due, or failure to maintain the insurance required by the department;
(3) "department" means the Department of Commerce, Community, and Economic Development;
(4) "wraparound financing" means a contract that includes the balance due on an existing debt and an additional amount to cover the difference between the selling price and the existing debt;
(5) "production level" means a level of broodstock development that will sustain brood stock and cost recovery needs without using more than 50 percent of the forecasted resource; and
(6) "director" means the director of the division assigned economic development functions or its successor agency in the department.
History
- Authority: AS 16.10.510
- Eff. 9/11/85, Register 95; am 11/28/92, Register 124; am 8/10/97, Register 143; am 10/16/2012, Register 204
Chapter 82 Child Care Facility Loans
3 AAC 82.010 Application process
(a) To apply for an assumption of an existing child care facility loan, an applicant shall file with the department
(1) a completed application for an assumption of a child care facility loan, on a form provided by the department;
(2) an individual financial statement, on a form provided by the department;
(3) a business financial statement, on a form provided by the department;
(4) an actual statement of profit and loss, on a form provided by the department;
(5) a projected statement of profit and loss, on a form provided by the department;
(6) a personal resume, including three personal references, on a form provided by the department;
(7) a business resume, on a form provided by the department;
(8) a signed credit authorization, on a form provided by the department;
(9) signed copies of the applicant's federal income tax returns for the preceding three years;
(10) an earnest money agreement explaining all terms and conditions of the transaction with signatures by all parties;
(11) a copy of the application for the license required to operate the facility or, if the facility has already been licensed, a copy of the license;
(12) a $100 nonrefundable application fee; and
(13) any other information that might be helpful to the applicant in demonstrating eligibility for an assumption, as requested by the department.
(b) The department will, in its discretion, process an application for an assumption without the information described in (a) of this section, if the department determines that the department can make an informed lending decision without access to the information.
History
- Authority: AS 44.33.245
- Eff. 9/11/85, Register 95; am 1/11/87, Register 101; am 8/10/97, Register 143
3 AAC 82.015 Examination
(a) The materials described in 3 AAC 82.010 will be processed and evaluated by a loan officer. The loan officer will evaluate the applicant's eligibility, financial and credit history, operating plan, ability to repay, and proposed collateral.
(b) On the basis of the evaluation, the loan officer will either inactivate the application, due to lack of information required under 3 AAC 82.010 or ineligibility of the applicant, or recommend proposed action on the loan request to the appropriate loan committee. However, the recommendation of a loan officer is not binding on a loan committee.
History
- Authority: AS 44.33.245
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 82.020 Loan committee
(a) A loan committee consists of one or more persons appointed by the director to act on a loan request.
(b) A loan committee may approve, deny, or modify and approve a loan request, or may table a loan request subject to obtaining additional information.
(c) A loan committee may impose reasonable conditions on the approval of a loan, including
(1) additional collateral to secure the loan;
(2) additional guarantors; and
(3) subordination of prior lienholders' rights to the interests of the state.
(d) A loan committee shall consider an applicant's eligibility, financial and credit record, ability to repay, operating plan, and the proposed collateral. A loan committee may also consider the recommendations of the loan officer assigned to process the application, and any other relevant information.
(e) Repealed 8/10/97.
(f) If a loan request is denied or significantly modified by a loan committee, the loan committee shall provide the applicant with a statement of the reasons for the action and the information relied on.
(g) A material misstatement or omission of fact made by an applicant constitutes grounds for denial of a request for an assumption.
History
- Authority: AS 44.33.245; AS 44.33.255
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 82.040 Financial and credit record
(a) The department will, in its discretion, consider the following factors in evaluating an applicant's financial and credit record:
(1) existing and prior debts;
(2) credit reports obtained from creditors and private credit reporting services;
(3) prior loan history with the department;
(4) timeliness in making payments on loans and other debts;
(5) prior bankruptcies;
(6) existence of tax liens;
(7) unpaid judgments and prior foreclosures; and
(8) financial and credit reputation.
(b) Information establishing unacceptable credit will be more heavily weighed by the department if it has occurred in recent years.
History
- Authority: AS 44.33.245; AS 44.33.260
- Eff. 9/11/85, Register 95
3 AAC 82.045 Ability to repay
The department will, in its discretion, consider the following factors in evaluating an applicant's ability to repay a proposed loan:
(1) income history, including present income;
(2) prospects for future income;
(3) assets and their liquidity;
(4) liabilities;
(5) reasonableness of projected profit and loss statement;
(6) other relevant experience.
History
- Authority: AS 44.33.245; AS 44.33.260
- Eff. 9/11/85, Register 95
3 AAC 82.050 Collateral
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 82.055 Lending practices
An assumption will not be approved to finance a facility that does not comply with state or local licensing requirements.
History
- Authority: AS 44.33.245; AS 44.33.260
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 82.065 Disbursement of loan money
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 82.070 Supervision of loans
If a loan is in default, the department will, in its discretion, require a borrower to furnish annual financial statements consisting of a balance sheet, profit and loss statement, sources and application of all money received, and a schedule of change of owner's equity. The department will, in its discretion, also require an audit or audits to determine whether the borrower has complied with the provisions of the loan, and may conduct periodic inspection of collateral securing repayment of the loan.
History
- Authority: AS 44.33.245
- Eff. 9/11/85, Register 95
3 AAC 82.075 Costs
(a) All expenses incurred by the department in processing an application must be paid by the applicant. These expenses include the cost of title reports and insurance, recording fees, appraisals, surveys, travel, and other direct costs.
(b) An assumption fee of one percent of the loan balance is due from the borrower when all applicable provisions of this chapter have been met.
(c) A late fee not to exceed five percent of the payment amount will, in the department's discretion, be charged to a borrower for each loan payment that is more than 15 days past due.
(d) An extension fee not to exceed $100 will, in the department's discretion, be charged to a borrower to process a loan extension.
History
- Authority: AS 44.33.245
- Eff. 9/11/85, Register 95; am 1/11/87, Register 101; am 7/4/91, Register 119; am 8/10/97, Register 143
3 AAC 82.080 Assumptions
(a) A request to assume the obligations and benefits of a loan made under AS 44.33.240 - 44.33.275 and this chapter will be processed in the same manner as a loan request.
(b) A loan committee may permit an assumption if the applicant is a good financial risk and the security of the state's investment is preserved.
(c) Wraparound financing that includes a loan made under AS 44.33.240 - 44.33.275 and this chapter is prohibited, and constitutes a default on the loan.
History
- Authority: AS 44.33.245
- Eff. 9/11/85, Register 95; am 7/4/91, Register 119
3 AAC 82.081 Closing an assumption
An assumption agreement will be considered by the department to be closed when
(1) all required signatures have been obtained and the assumption agreement has been properly recorded;
(2) all requirements of the loan committee have been met; and
(3) the borrower is in compliance with all provisions of the loan documents, including insurance requirements, and this chapter.
History
- Authority: AS 44.33.245
- Eff. 8/10/97, Register 143
3 AAC 82.082 Modifications
(a) A request for a modification to a loan made under AS 44.33.240 - 44.33.275 and this chapter will be processed in the same manner as a loan application. The department will, in its discretion, require one or more of the items specified in 3 AAC 82.010.
(b) A loan committee may permit a loan modification only if the security of the state and its investment is preserved.
History
- Authority: AS 44.33.245
- Eff. 1/11/87, Register 101
3 AAC 82.085 Reconsideration of an assumption request
(a) If an assumption of a loan request is denied, inactivated, or significantly modified by the department, an applicant may file a written request for reconsideration within 30 days after receipt of notice of the department's decision.
(b) The department will, in its discretion, reconsider a request upon a showing by the applicant that
(1) there has been a substantial change in the circumstances leading to the department's decision;
(2) additional relevant information can be provided to the department that was not initially available; or
(3) administrative errors were made by the department.
History
- Authority: AS 44.33.245
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 82.090 Confidentiality of loan information
(a) The following information is not confidential and is available for public inspection upon request:
(1) a document that is already a public record, including deeds of trust, financing statements, warranty deeds, bills of sale, mortgages, liens, and vehicle titles;
(2) general information regarding loans, including the original loan amount, loan terms, personal guarantees, and disbursement and repayment schedules;
(3) insurance matters, including title insurance policies and correspondence with insurance companies or borrowers regarding losses, accident reports, and nonpayment of premiums;
(4) foreclosure and default proceedings.
(b) The following information is confidential and is not subject to public disclosure:
(1) personal and financial information, including income tax returns, financial statements, business income statements, pro forma profit and loss statements, credit information obtained directly from banks and other creditors and reports obtained from consumer reporting agencies;
(2) loan committee memoranda and minutes containing information relating to creditworthiness of an applicant;
(3) the payment history on a loan, unless the loan is in default.
(c) Information not described in (a) or (b) of this section may be subject to public disclosure. Requests for disclosure must be made, and will be determined, in accordance with 2 AAC 96. Upon receipt of a request for disclosure, the department will notify the loan applicant and other persons with a privacy interest in the request, to permit them to present reasons why the requested information should not be disclosed.
History
- Authority: Ak. Const., art. I,AS 40.25.110; AS 44.33.245 $ 22AS 40.25.120
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 82.900 Definitions
Unless the context requires otherwise, in this chapter
(1) repealed 8/10/97;
(2) "default" includes a violation of any provision of this chapter, AS 44.33.240 - 44.33.275 or the loan document, failure to make the necessary payment within 15 days after it is due, or failure to maintain the insurance required by the department;
(3) "department" means the Department of Commerce, Community, and Economic Development;
(4) "wraparound financing" means a contract that includes the balance due on an existing debt and an additional amount to cover the difference between the selling price and the existing debt;
(5) "director" means the director of the division assigned economic development functions or its successor agency in the department.
History
- Authority: AS 44.33.245
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143; am 10/16/2012, Register 204
Chapter 83 Historical District Loans
3 AAC 83.010 Application process
(a) To apply for an assumption of a historical district loan, an applicant shall file with the department
(1) a completed application for an assumption of a historical district loan, on a form provided by the department;
(2) an individual financial statement from each individual applicant, including each member of a partnership or other association, or, if the applicant is a corporation, each individual owning 10 percent or more of outstanding shares, on a form provided by the department;
(3) a business financial statement, on a form provided by the department;
(4) an actual statement of profit and loss, on a form provided by the department;
(5) a projected statement of profit and loss, on a form provided by the department;
(6) a personal resume, including three personal references, on a form provided by the department;
(7) a business resume, on a form provided by the department;
(8) a signed credit authorization, on a form provided by the department;
(9) signed copies of the applicant's federal income tax returns for the preceding three years, including returns for each member of a partnership or other association;
(10) an earnest money agreement explaining all terms and conditions of the transaction with signatures by all parties;
(11) a $100 nonrefundable application fee; and
(12) any other information that might be helpful to the applicant in qualifying for an assumption, as requested by the department.
(b) The department will, in its discretion, process an application for an assumption without the information described in this section, if the department determines that the department can make an informed lending decision without access to the information.
History
- Authority: AS 45.98.020; AS 45.98.030
- Eff. 9/11/85, Register 95; am 1/11/87, Register 101; am 8/10/97, Register 143
3 AAC 83.015 Examination
(a) The materials described in 3 AAC 83.010 will be processed and evaluated by a loan officer. The loan officer will evaluate the applicant's financial and credit history, ability to repay, and proposed collateral.
(b) On the basis of the evaluation, the loan officer will either inactivate the application, due to lack of information required under 3 AAC 83.010, or recommend proposed action on the loan request to the appropriate loan committee. However, the recommendation of a loan officer is not binding on a loan committee.
History
- Authority: AS 45.98.020; AS 45.98.030
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 83.020 Loan committee
(a) A loan committee consists of one or more persons appointed by the director to act on a loan request.
(b) A loan committee may approve, deny, or modify and approve a loan request, or may table a loan request subject to obtaining additional information.
(c) A loan committee may impose reasonable conditions on the approval of a loan, including
(1) additional collateral to secure the loan;
(2) additional guarantors; and
(3) subordination of prior lienholders' rights to the interests of the state.
(d) A loan committee shall consider the applicant's financial and credit record, ability to repay, and proposed collateral. A loan committee may consider the recommendations of the loan officer assigned to process the application, and any other relevant information.
(e) Repealed 8/10/97.
(f) If a loan request is denied or significantly modified by a loan committee, the loan committee shall provide the applicant with a statement of the reasons for the action and the information relied on.
(g) A material misstatement or omission of fact made by an applicant constitutes grounds for denial of a request for an assumption.
History
- Authority: AS 45.98.020; AS 45.98.030
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 83.035 Eligibility
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 83.040 Financial and credit record
(a) The department will, in its discretion, consider the following factors in evaluating an applicant's financial and credit record:
(1) existing and prior debts;
(2) credit reports obtained from creditors and private credit reporting services;
(3) prior loan history with the department;
(4) timeliness in making payments on loans and other debts;
(5) prior bankruptcies;
(6) existence of tax liens;
(7) unpaid judgments and prior foreclosures; and
(8) financial and credit reputation.
(b) Information establishing unacceptable credit will be more heavily weighed by the department if it has occurred in recent years.
History
- Authority: AS 45.98.020; AS 45.98.030
- Eff. 9/11/85, Register 95
3 AAC 83.045 Ability to repay
The department will, in its discretion, consider the following factors in evaluating an applicant's ability to repay:
(1) income history, including present income;
(2) prospects for future income;
(3) assets and their liquidity;
(4) liabilities;
(5) reasonableness of projected profit and loss statement; and
(6) other relevant experience.
History
- Authority: AS 45.98.020; AS 45.98.030
- Eff. 9/11/85, Register 95
3 AAC 83.050 Collateral
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 83.055 Lending practices
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 83.065 Disbursement of loan money
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 83.070 Supervision of loans
If a loan is in default, the department will, in its discretion, require the borrower to furnish annual financial statements consisting of a balance sheet, profit and loss statement, sources and application of all money received, and a schedule of change of owner's equity. The department will, in its discretion, also require an audit or audits to determine whether the borrower has complied with the provisions of the loan, and conduct periodic inspection of collateral securing repayment of the loan.
History
- Authority: AS 45.98.020; AS 45.98.030
- Eff. 9/11/85, Register 95
3 AAC 83.075 Costs
(a) All expenses incurred by the department in processing an application must be paid by the applicant. These expenses include the cost of title reports and insurance, recording fees, appraisals, surveys, travel, and other direct costs.
(b) An assumption fee of one percent of the loan balance is due from the borrower when all applicable provisions of this chapter have been met.
(c) A late fee not to exceed five percent of the payment amount will, in the department's discretion, be charged to a borrower for each loan payment that is more than 15 days past due.
(d) An extension fee not to exceed $100 will, in the department's discretion, be charged to a borrower to process a loan extension.
History
- Authority: AS 45.98.020; AS 45.98.030
- Eff. 9/11/85, Register 95; am 1/11/87, Register 101; am 7/4/91, Register 119; am 8/10/97, Register 143
3 AAC 83.080 Assumptions
(a) A request to assume the obligations and benefits of a loan made under AS 45.98 and this chapter will be processed in the same manner as a loan request.
(b) A loan committee may permit an assumption if the applicant is a good financial risk and the security of the state's investment is preserved.
(c) Wraparound financing that includes a loan made under AS 45.98 and this chapter is prohibited, and constitutes a default on the loan.
History
- Authority: AS 45.98.020; AS 45.98.030
- Eff. 9/11/85, Register 95; am 7/4/91, Register 119
3 AAC 83.081 Closing an assumption
An assumption agreement will be considered by the department to be closed when
(1) all required signatures have been obtained and the assumption agreement has been properly recorded;
(2) all requirements of the loan committee have been met; and
(3) the borrower is in compliance with all provisions of the loan documents, including insurance requirements, and this chapter.
History
- Authority: AS 45.98.020; AS 45.98.030
- Eff. 8/10/97, Register 143
3 AAC 83.082 Modifications
(a) A request for a modification to a loan made under AS 45.98 and this chapter will be processed in the same manner as a loan application. The department will, in its discretion, require one or more of the items specified in 3 AAC 83.010.
(b) A loan committee may permit a loan modification only if the security of the state and its investment is preserved.
History
- Authority: AS 45.98.020; AS 45.98.030
- Eff. 1/11/87, Register 101
3 AAC 83.085 Reconsideration of an assumption request
(a) If an assumption of a loan request is denied, inactivated, or significantly modified by the department, an applicant may file a written request for reconsideration within 30 days after receipt of notice of the department's decision.
(b) The department will, in its discretion, reconsider a request upon a showing by the applicant that
(1) there has been a substantial change in the circumstances leading to the department's decision;
(2) additional relevant information can be provided to the department that was not initially available; or
(3) administrative errors were made by the department.
History
- Authority: AS 45.98.020; AS 45.98.030
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 83.090 Confidentiality of loan information
(a) The following information is not confidential and is available for public inspection upon request:
(1) a document that is already a public record including deeds of trust, financing statements, warranty deeds, bills of sale, mortgages, liens, and vehicle titles;
(2) general information regarding loans, including the original loan amount, loan terms, personal guarantees, and disbursement and repayment schedules;
(3) insurance matters including title insurance policies, and correspondence with insurance companies or borrowers regarding losses, accident reports, and nonpayment of premiums; and
(4) foreclosure and default proceedings.
(b) The following information is confidential and is not subject to public disclosure:
(1) personal and financial information, including income tax returns, financial statements, business income statements, pro forma profit and loss statements, credit information obtained directly from banks and other creditors, and reports obtained from consumer reporting agencies;
(2) loan committee memoranda and minutes containing information relating to creditworthiness of an applicant;
(3) the payment history on a loan, unless the loan is in default.
(c) Information not described in (a) or (b) of this section may be subject to public disclosure. Requests for disclosure must be made, and will be determined, in accordance with 2 AAC 96. Upon receipt of a request for disclosure, the department will notify the loan applicant and other persons with a privacy interest in the request, to permit them to present reasons why the requested information should not be disclosed.
History
- Authority: Ak. Const., art. I,AS 40.25.110; AS 45.98.030 $ 22AS 40.25.120
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 83.900 Definitions
Unless the context requires otherwise, in this chapter
(1) repealed 8/10/97;
(2) "default" includes a violation of any provision of AS 45.98, this chapter or the loan documents, failure to make the necessary payment within 15 days after it is due, or failure to maintain the insurance required by the department;
(3) "department" means the Department of Commerce, Community, and Economic Development;
(4) "wraparound financing" means a contract that includes the balance due on an existing debt and an additional amount to cover the difference between the selling price and the existing debt; and
(5) "director" means the director of the division assigned economic development functions or its successor agency in the department.
History
- Authority: AS 45.98.020; AS 45.98.030
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143; am 10/16/2012, Register 204
Chapter 84 Tourist Industry Loan Assumptions
3 AAC 84.010 Application process
Repealed.
History
- Eff. 9/11/85, Register 95; am 1/11/87, Register 101; repealed 8/10/97, Register 143
3 AAC 84.015 Examination
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 84.020 Loan committee
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 84.035 Eligibility
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 84.040 Financial and credit record
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 84.045 Ability to repay
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 84.050 Collateral
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 84.065 Closing an assumption
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 84.070 Supervision of loans
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 84.075 Costs
Repealed.
History
- Eff. 9/11/85, Register 95; am 1/11/87, Register 101; am 7/4/91, Register 119; repealed 8/10/97, Register 143
3 AAC 84.080 Assumptions
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 84.082 Modifications
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 84.085 Reconsideration of assumption request
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 84.090 Confidentiality of loan information
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 84.900 Definitions
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
Chapter 86 Small Business Loan Assumptions
3 AAC 86.010 Application process
(a) To apply for an assumption of an existing small business loan, an applicant shall file with the department
(1) a completed application for a small business loan assumption, on a form provided by the department;
(2) repealed 8/10/97;
(3) an individual financial statement from each individual applicant, including each member of a partnership or other association, or, if the applicant is a corporation, each individual owning 10 percent or more of any outstanding shares, on a form provided by the department;
(4) a business financial statement, if applicable, on a form provided by the department;
(5) an actual statement of profit and loss, on a form provided by the department;
(6) a projected statement of profit and loss, on a form provided by the department;
(7) a personal resume, on a form provided by the department;
(8) a business resume, on a form provided by the department;
(9) a signed credit authorization, on a form provided by the department;
(10) repealed 8/10/97;
(11) an earnest money agreement explaining all terms and conditions of the transaction, with signatures by all parties;
(12) signed copies of the applicant's federal income tax returns for the preceding three years, including returns for each member of a partnership or other association;
(13) a $100 nonrefundable application fee; and
(14) repealed 8/10/97;
(15) any other information that might be helpful to the applicant in demonstrating eligibility for the assumption, as requested by the department.
(b) The department will, in its discretion, process an application for an assumption without the information described in (a) of this section, if the department determines that the department can make an informed lending decision without access to the information.
History
- Authority: AS 45.81.200; AS 45.81.210
- Eff. 9/11/85, Register 95; am 1/11/87, Register 101; am 8/10/97, Register 143
3 AAC 86.015 Examination
(a) The materials described in 3 AAC 86.010 will be processed and evaluated by a loan officer. The loan officer will evaluate the applicant's financial and credit history, ability to repay, and proposed collateral.
(b) On the basis of the evaluation, the loan officer will either inactivate the application, due to lack of information required under 3 AAC 86.010, or recommend proposed action on the request for assumption to the appropriate loan committee. However, the recommendation of a loan officer is not binding on a loan committee.
History
- Authority: AS 45.81.200; AS 45.81.210
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 86.020 Loan committee
(a) A loan committee consists of one or more persons appointed by the director to act on a request for assumption.
(b) A loan committee may approve, deny, or modify and approve a request for assumption, or may table a request subject to obtaining additional information.
(c) A loan committee may impose reasonable conditions on the approval of an assumption, including
(1) additional collateral to secure the loan;
(2) additional guarantors; and
(3) subordination of prior lienholders' rights to the interests of the state.
(d) A loan committee shall consider the applicant's financial and credit record, ability to repay, and the proposed collateral. A loan committee may also consider the recommendations of the loan officer assigned to process the application, and any other relevant information.
(e) If a request for an assumption is denied or significantly modified by a loan committee, the loan committee will provide the applicant with a statement of the reasons for the action and the information relied on.
(f) A material misstatement or omission of fact made by an applicant constitutes grounds for denial of a request for an assumption.
History
- Authority: AS 45.81.200; AS 45.81.210
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 86.035 Eligibility
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 86.040 Financial and credit record
(a) The department will, in its discretion, consider the following factors in evaluating an applicant's financial and credit record:
(1) existing and prior debts;
(2) credit reports obtained from creditors and private credit reporting services;
(3) prior loan history with the department;
(4) timeliness in making payments on loans and other debts;
(5) bankruptcies;
(6) existence of tax liens;
(7) judgments and foreclosures; and
(8) financial and credit reputation.
(b) Information establishing unacceptable credit will be more heavily weighed by the department if it has occurred in recent years.
History
- Authority: AS 45.81.200; AS 45.81.210
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 86.045 Ability to repay
The department will, in its discretion, consider the following factors in evaluating an applicant's ability to repay a proposed assumption:
(1) income history, including present income;
(2) prospects for future income;
(3) assets and their liquidity; and
(4) liabilities.
History
- Authority: AS 45.81.200; AS 45.81.210
- Eff. 9/11/85, Register 95
3 AAC 86.050 Collateral
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 86.065 Closing an assumption
An assumption agreement will be considered by the department to be closed when
(1) all required signatures have been obtained and the assumption agreement has been properly recorded;
(2) the borrower has complied with the insurance requirements contained in an instrument signed by the borrower;
(3) requirements of the loan committee have been met; and
(4) the borrower is in compliance with all other provisions of the loan documents and this chapter.
History
- Authority: AS 45.81.200; AS 45.81.210
- Eff. 9/11/85, Register 95
3 AAC 86.070 Supervision of loans
If a loan is in default, the department will, in its discretion, require the borrower to furnish annual financial statements consisting of a balance sheet, profit-and-loss statement, sources and application of all money received, and a schedule of change of owner's equity. The department will, in its discretion, also require an audit or audits to determine whether the borrower has complied with the provisions of the assumption, and conduct periodic inspection of collateral securing repayment of the loan.
History
- Authority: AS 45.81.200; AS 45.81.210
- Eff. 9/11/85, Register 95
3 AAC 86.075 Costs
(a) All expenses incurred by the department in processing an application must be paid by the applicant. These expenses include the cost of title reports and insurance, recording fees, appraisals, surveys, travel, and other direct costs.
(b) An assumption fee of one percent of the remaining loan balance is due from the borrower when all provisions of 3 AAC 86.065 have been met.
(c) A late fee not to exceed five percent of the payment amount will, in the department's discretion, be charged to a borrower for each loan payment that is more than 15 days past due.
(d) An extension fee not to exceed $100 will, in the department's discretion, be charged to a borrower to process a loan extension.
History
- Authority: AS 45.81.200; AS 45.81.210
- Eff. 9/11/85, Register 95; am 1/11/87, Register 101; am 7/4/91, Register 119; am 8/10/97, Register 143
3 AAC 86.080 Assumptions
(a) The department will, in its discretion, allow an assumption of a loan made under AS 45.81 and this chapter, if the department determines the assumption is in the best interest of the state.
(b) A request for an assumption of a loan made under AS 45.81 and this chapter will be processed in the same manner as a loan application. If necessary to evaluate the request, the department will, in its discretion, require that the applicant supply one or more of the items specified in 3 AAC 86.010, before the request will be processed.
(c) Wraparound financing that includes a loan made under AS 45.81 and this chapter is prohibited and constitutes a default on the loan.
History
- Authority: AS 45.81.200; AS 45.81.210
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 86.082 Modifications
(a) A request for a modification to a loan made under AS 45.81 or assumed under this chapter will be processed in the same manner as a loan application. The department will, in its discretion, require one or more of the items specified in 3 AAC 86.010.
(b) A loan committee may permit a loan modification only if the security of the state and its investment is preserved.
History
- Authority: AS 45.81.200; AS 45.81.210
- Eff. 1/11/87, Register 101
3 AAC 86.085 Reconsideration of assumption request
(a) If an assumption request is denied, inactivated, or significantly modified by the department, an applicant may file a written request for reconsideration within 30 days after receipt of notice of the department's decision.
(b) The department will, in its discretion, reconsider a request upon a showing by the applicant that
(1) there has been a substantial change in the circumstances leading to the department's decision;
(2) additional relevant information can be provided to the department that was not initially available; or
(3) administrative errors were made by the department.
History
- Authority: AS 45.81.200; AS 45.81.210
- Eff. 9/11/85, Register 95
3 AAC 86.090 Confidentiality of loan information
(a) The following information is not confidential and is available for public inspection upon request:
(1) a document that is already a public record including deeds of trust, financing statements, warranty deeds, bills of sale, mortgages, liens, and vehicle titles;
(2) general information regarding loans, including the original loan amount, loan terms, personal guarantees, and disbursement and repayment schedules;
(3) insurance matters, including title insurance policies and correspondence with insurance companies and borrowers regarding losses, accident reports, and nonpayment of premiums; and
(4) foreclosure and default proceedings.
(b) The following information is confidential and is not subject to public disclosure:
(1) personal and financial information, including income tax returns, financial statements, business income statements, pro forma profit and loss statements, credit information obtained directly from banks and other creditors, and reports obtained from consumer reporting agencies;
(2) loan committee memoranda and minutes containing information relating to creditworthiness of an applicant; and
(3) payment history on a loan, unless the loan is in default.
(c) Information not described in (a) or (b) of this section may be subject to public disclosure. Requests for disclosure must be made, and will be determined, in accordance with 2 AAC 96. Upon receipt of a request for disclosure, the department will notify the loan applicant and other persons with a privacy interest in the request, to permit them to present reasons why the requested information should not be disclosed.
History
- Authority: Ak. Const., art. I,AS 40.25.110; AS 45.81.200 $ 22AS 40.25.120
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 86.900 Definitions
(a) Unless the context requires otherwise, in this chapter
(1) repealed 8/10/97;
(2) "default" includes a violation of any provision of AS 45.81, this chapter, or the loan documents, failure to make the necessary payment within 15 days after it is due, or failure to maintain the insurance required by the department;
(3) "department" means the Department of Commerce, Community, and Economic Development;
(4) "small business" means a commercial enterprise operated for profit and engaged in lawful business activity with not more than $10,000,000 in annual gross sales, and does not include a business that is a division or subsidiary of a larger parent company that does not qualify as a small business;
(5) "wraparound financing" means a contract that includes the balance due on an existing debt and an additional amount to cover the difference between the selling price and the existing debt;
(6) "director" means the director of the division assigned economic development functions or its successor agency in the department.
(b) In AS 45.81.260, "resident" means a corporation, partnership, or limited partnership organized under the laws of Alaska and headquartered in Alaska or a person who, except for brief intervals, periods of military service, or attendance at an educational or training institution, has been physically present in Alaska with the intent to remain indefinitely and make a primary and permanent home in the state.
History
- Authority: AS 45.81.200
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143; am 10/16/2012, Register 204
Chapter 87 Mining Loans
3 AAC 87.010 Application process
(a) To apply for an assumption of a mining loan, an applicant shall file with the department
(1) a completed application for a mining loan assumption, on a form provided by the department;
(2) an individual financial statement from the applicant and from each person owning 10 percent or more of the mining firm, on a form provided by the department;
(3) a business financial statement, on a form provided by the department;
(4) an actual statement of profit and loss, on a form provided by the department;
(5) a projected statement of profit and loss on a form provided by the department;
(6) a personal resume from the applicant, the business manager, and each person owning 10 percent or more of the mining firm, on a form provided by the department;
(7) a mining resume from the applicant;
(8) a signed credit authorization, on a form provided by the department;
(9) signed copies of the applicant's federal income tax returns for the preceding three years, including returns for each member of a partnership or other association;
(10) an earnest money agreement explaining all terms and conditions of the transaction with signatures by all parties;
(11) a $100 nonrefundable application fee; and
(12) any other information that might be helpful to the applicant in qualifying for an assumption, as requested by the department.
(b) The department will, in its discretion, process an application for an assumption without the information described in (a) of this section, if the department determines that the department can make an informed lending decision without access to the information.
History
- Authority: AS 27.09.020; AS 27.09.050
- Eff. 9/11/85, Register 95; am 1/11/87, Register 101; am 8/10/97, Register 143
3 AAC 87.015 Examination
(a) The materials described in 3 AAC 87.010 will be processed and evaluated by a loan officer. The loan officer will evaluate the applicant's financial and credit history, operating plan, ability to repay, and proposed collateral.
(b) On the basis of the evaluation, the loan officer will either inactivate the application, due to lack of information required under 3 AAC 87.010, or recommend proposed action on the loan request to the appropriate loan committee; however, the recommendation of a loan officer is not binding on a loan committee.
History
- Authority: AS 27.09.050
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 87.020 Loan committee
(a) A loan committee consists of one or more persons appointed by the director to act on a request for an assumption.
(b) A loan committee may approve, deny, or modify and approve a request for an assumption, or may table a loan request subject to obtaining additional information.
(c) A loan committee may impose reasonable conditions on the approval of an assumption, including
(1) additional collateral to secure the loan;
(2) additional guarantors; and
(3) subordination of prior lienholders' rights to the interests of the state.
(d) A loan committee shall consider an applicant's financial and credit record, ability to repay, operating plan, and proposed collateral. A loan committee may consider the recommendations of the loan officer assigned to process the application, and any other relevant information.
(e) Repealed 8/10/97.
(f) If a request for an assumption is denied or significantly modified by a loan committee, the loan committee shall provide the applicant with a statement of the reasons for the action and the information relied on.
(g) A material misstatement or omission of fact made by an applicant constitutes grounds for denial of a request for an assumption.
History
- Authority: AS 27.09.040; AS 27.09.050
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 87.030 Residency eligibility
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 87.035 Experience eligibility
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 87.040 Financial and credit record
(a) The department will, in its discretion, consider the following factors in evaluating an applicant's financial and credit record:
(1) existing and prior debts;
(2) credit reports obtained from creditors and private credit reporting services;
(3) prior loan history with the department;
(4) timeliness in making payments on loans and other debts;
(5) bankruptcies;
(6) existence of tax liens;
(7) judgments and foreclosures; and
(8) financial and credit reputation.
(b) Information establishing unacceptable credit will be more heavily weighed by the department if it has occurred in recent years.
History
- Authority: AS 27.09.040; AS 27.09.050
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 87.045 Ability to repay
The department will, in its discretion, consider the following factors in evaluating an applicant's ability to repay a proposed assumption:
(1) income history, including present income;
(2) prospects for future income;
(3) assets and their liquidity;
(4) liabilities;
(5) reasonableness of projected profit and loss statement; and
(6) other relevant experience.
History
- Authority: AS 27.09.040; AS 27.09.050
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 87.050 Collateral
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 87.055 Lending practices
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 87.065 Disbursement of loan money
Repealed.
History
- Eff. 9/11/85, Register 95; repealed 8/10/97, Register 143
3 AAC 87.070 Supervision of loans
If the loan is in default, the department will, in its discretion, require a borrower to furnish annual financial statements consisting of a balance sheet, profit and loss statement, source and application of all money received and a schedule of change of owner's equity. The department will, in its discretion, require an audit or audits to determine whether the borrower has complied with the provisions of the loan, and conduct periodic inspection of collateral securing repayment of the loan.
History
- Authority: AS 27.09.040; AS 27.09.050
- Eff. 9/11/85, Register 95
3 AAC 87.075 Costs
(a) All expenses incurred by the department in processing an application must be paid by the applicant. These expenses include the cost of title reports and insurance, recording fees, appraisals, surveys, travel, and other direct costs.
(b) An assumption fee of one percent of the loan balance is due from the borrower when all applicable provisions of this chapter have been met.
(c) A late fee not to exceed five percent of the payment amount will, in the department's discretion, be charged to a borrower for each loan payment that is more than 15 days past due.
(d) An extension fee not to exceed $100 will, in the department's discretion, be charged to a borrower to process a loan extension.
History
- Authority: AS 27.09.050
- Eff. 9/11/85, Register 95; am 1/11/87, Register 101; am 7/4/91, Register 119; am 8/10/97, Register 143
3 AAC 87.080 Assumptions
(a) A request to assume the obligations and benefits of a loan made under AS 27.09 and this chapter will be processed in the same manner as a loan request.
(b) A loan committee may permit an assumption if the applicant is a good financial risk and the security of the state's investment is preserved.
(c) Wraparound financing that includes a loan made under AS 27.09 and this chapter is prohibited, and constitutes a default on the loan.
History
- Authority: AS 27.09.050
- Eff. 9/11/85, Register 95; am 7/4/91, Register 119
3 AAC 87.081 Closing an assumption
An assumption agreement will be considered by the department to be closed when
(1) all required signatures have been obtained and the assumption agreement has been properly recorded;
(2) all requirements of the loan committee have been met; and
(3) the borrower is in compliance with all provisions of the loan documents, including insurance requirements and this chapter.
History
- Authority: AS 27.09.050
- Eff. 8/10/97, Register 143
3 AAC 87.082 Modifications
(a) A request for a modification to a loan made under AS 27.09 and this chapter will be processed in the same manner as a loan application. The department will, in its discretion, require one or more of the items specified in 3 AAC 87.010.
(b) A loan committee may permit a loan modification only if the security of the state and its investment is preserved.
History
- Authority: AS 27.09.040; AS 27.09.050
- Eff. 1/11/87, Register 101
3 AAC 87.085 Reconsideration of an assumption request
(a) If an assumption of a loan request is denied, inactivated, or significantly modified by the department, an applicant may file a written request for reconsideration within 30 days after receipt of notice of the department's decision.
(b) The department will, in its discretion, reconsider a request upon a showing by the applicant that
(1) there has been a substantial change in the circumstances leading to the department's decision;
(2) additional relevant information can be provided to the department that was not initially available; or
(3) administrative errors were made by the department.
History
- Authority: AS 27.09.040; AS 27.09.050
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 87.090 Confidentiality of loan information
(a) The following information is not confidential and is available for public inspection upon request:
(1) a document that is already a public record including deeds of trust, financing statements, warranty deeds, bills of sale, mortgages, liens, and vehicle titles;
(2) general information regarding loans, including the original loan amount, loan terms, personal guarantees, and disbursement and repayment schedules;
(3) insurance matters, including title insurance policies and correspondence with insurance companies or borrowers regarding losses, accident reports, and nonpayment of premiums; and
(4) foreclosure and default proceedings.
(b) The following information is confidential and is not subject to public disclosure:
(1) personal and financial information, including income tax returns, financial statements, business income statements, pro forma profit and loss statements, credit information obtained directly from banks and other creditors, and reports obtained from consumer reporting agencies;
(2) loan committee memoranda and minutes containing information relating to creditworthiness of the applicant;
(3) the payment history on a loan, unless the loan is in default; and
(4) information regarding the applicant's operating plan required under AS 27.09.030.
(c) Information not described in (a) or (b) of this section may be subject to public disclosure. Requests for disclosure must be made, and will be determined, in accordance with 2 AAC 96. On receipt of a request for disclosure, the department will notify the loan applicant and other persons with a privacy interest in the request, to permit them to present reasons why the requested information should not be disclosed.
History
- Authority: Ak. Const., art. I,AS 27.09.030; AS 40.25.110 $ 22AS 27.09.050; AS 40.25.120
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143
3 AAC 87.900 Definitions
Unless the context requires otherwise, in this chapter
(1) repealed 8/10/97;
(2) "default" includes a violation of any provision of AS 27.09, this chapter, or the loan documents, failure to make the necessary payment within 15 days after it is due, or failure to maintain the insurance required by the department;
(3) "department" means the Department of Commerce, Community, and Economic Development;
(4) "mining" means the extraction of ore and preparation of a mineral product for market;
(5) "residency" means, in the case of an individual, physical presence in Alaska with the intent to remain indefinitely and make a home in the state;
(6) "wraparound financing" means a contract that includes the balance due on an existing debt and an additional amount to cover the difference between the selling price and the existing debt; and
(7) "director" means the director of the division assigned economic development functions or its successor agency in the department.
History
- Authority: AS 27.09.050
- Eff. 9/11/85, Register 95; am 8/10/97, Register 143; am 10/16/2012, Register 204
Chapter 89 Fisheries Enhancement Tax Appropriations
3 AAC 89.010 Execution of grants
Repealed.
History
- Eff. 6/18/82, Register 82; am 7/4/91, Register 119; repealed 8/2/2008, Register 187
3 AAC 89.020 Budget format
Repealed.
History
- Eff. 6/18/82, Register 82; am 7/4/91, Register 119; am 8/10/97, Register 143; repealed 8/2/2008, Register 187
3 AAC 89.030 Cost accounting standards
Repealed.
History
- Eff. 6/18/82, Register 82; repealed 8/2/2008, Register 187
3 AAC 89.040 Reserve account
Repealed.
History
- Eff. 6/18/82, Register 82; am 7/4/91, Register 119; repealed 8/2/2008, Register 187
3 AAC 89.050 Supplemental appropriations
Repealed 7/4/91.
3 AAC 89.060 Budget modifications
Repealed 7/4/91.
3 AAC 89.070 Disbursement of money
Repealed.
History
- Eff. 6/18/82, Register 82; am 7/4/91, Register 119; am 8/10/97, Register 143; repealed 8/2/2008, Register 187
3 AAC 89.080 Quarterly reporting requirements
Repealed.
History
- Eff. 6/18/82, Register 82; am 8/10/97, Register 143; repealed 8/2/2008, Register 187
3 AAC 89.090 Final reporting requirements
Repealed.
History
- Eff. 6/18/82, Register 82; am 7/4/91, Register 119; am 8/10/97, Register 143; repealed 8/2/2008, Register 187
3 AAC 89.100 Record retention
Repealed.
History
- Eff. 6/18/82, Register 82; am 7/4/91, Register 119; repealed 8/2/2008, Register 187
3 AAC 89.110 Audit report
Repealed 7/4/91.
3 AAC 89.120 Annual financial report
Repealed.
History
- Eff. 6/18/82, Register 82; am 7/4/91, Register 119; am 8/10/97, Register 143; repealed 8/2/2008, Register 187
3 AAC 89.130 Definitions
Repealed.
History
- Eff. 6/18/82, Register 82; am 7/4/91, Register 119; am 8/10/97, Register 143; repealed 8/2/2008, Register 187
Part 11 Miscellaneous
Chapter 90 Emergency Rent Review
3 AAC 90.010 Application of chapter
This chapter applies to all residential housing accommodations, as defined in 3 AAC 90.150, the property is located in an area declared by the governor to be in a state of housing emergency, pursuant to AS 34.06.020. Except as provided in 3 AAC 90.115, nothing in this chapter affects application of the Uniform Residential Landlord and Tenant Act (AS 34.03). The following are exempt from the provisions of this chapter:
(1) the first rent assessed and collected upon the initial occupancy of a residential housing accommodation;
(2) evictions from or rent charged for transient occupancy in hotels, motels and motor inns, as defined in 3 AAC 90.150;
(3) evictions from or rent charged in federal or state-owned or subsidized residential housing accommodations where the amount of rent charged is regulated by a public authority; and
(4) evictions from or rent charged in residential housing accommodations provided by a landlord to his employees whose right to occupancy is conditioned upon his employment for his landlord.
History
- Authority: AS 34.06.020; AS 34.06.030
- Eff. 5/6/75, Register 54; am 11/15/75, Register 56
3 AAC 90.020 Procedure for increase in rent
Before imposing any rental increase for a unit, a landlord shall deliver to a current tenant a signed, dated notice of the proposed increase at least 30 days before its effective date which shall be the next regularly scheduled due date. A landlord shall deliver such a notice in writing to a prospective tenant before the landlord-tenant relationship is created. The notice shall state
(1) the amount of the proposed increase and its effective date;
(2) the specific reasons for the increase; and
(3) the tenant's right to present the matter to the board within 15 days, and that the tenant is not subject to eviction or other retaliatory conduct on the part of the landlord for the tenant's pursuit of rights and remedies under the rent review statutes and regulations.
History
- Authority: AS 34.06.030
- Eff. 5/6/75, Register 54; am 11/15/75, Register 56
3 AAC 90.030 Rental complaints by tenants
(a) Upon delivery of the notice required in sec. 20 of this chapter, a tenant or prospective tenant who believes that the proposed rent increase for the rental unit occupied or about to be occupied is unjustified may file a complaint with the Emergency Rent Review Board for his or her area. A complaint must be filed within 15 days after the receipt of a notice of intent to increase the rent; however, complaints as to rent increases which become effective within 120 days before a declaration of housing emergency must be filed within 30 days of that declaration.
(b) Complaints may be on forms provided by the board, but any written statement which clearly delineates the complaint of the tenant shall be accepted as a properly filed complaint.
(c) A person who is unable to prepare a written complaint may make an oral statement to the board which clearly delineates his or her complaint, and this complaint shall be accepted by the board. The board shall prepare a memorandum of an oral complaint which shall be signed by the complaining party.
History
- Authority: AS 34.06.030
- Eff. 5/6/75, Register 54; am 11/15/75, Register 56
3 AAC 90.040 Notice of filing a complaint
(a) Within five days after a tenant has filed a complaint with the board under sec. 30 of this chapter, the board shall mail to the landlord, or the landlord's agent who collects rent on the property, a notice of the filing of a complaint, a copy of the complaint and property income/expense analysis forms.
(b) The landlord may not implement a proposed rent increase upon which a complaint has been filed until issued a rent order approving the increase from the commissioner or his designee as set out in this chapter.
(c) Within 10 days after the mailing of the notice by the board as provided in (a) of this section, the landlord or the landlord's agent shall prepare and file with the board a property income/expense analysis on forms prescribed by the commissioner.
(d) The board shall provide the complaining tenant with a copy of the landlord's property income/expense analysis form prior to any hearing on the proposed increase.
History
- Authority: AS 34.06.030
- Eff. 5/6/75, Register 54; am 11/15/75, Register 56
3 AAC 90.050 Retroactivity
(a) When a requested increase is approved, the increase is retroactive to the effective date specified in the notice of increase.
(b) Rent increases having an effective date within the 120 days before the declaration of a housing emergency, which are paid but which are later denied in whole or in part, shall not be refunded to the tenant.
(c) Proposed rent increases having an effective date after the declaration of a housing emergency, which a tenant mistakenly pays and is subsequently denied in whole or in part, shall be refunded to the tenant.
History
- Authority: AS 34.06.030
- Eff. 5/6/75, Register 54; am 11/15/75, Register 56
3 AAC 90.060 Emergency Rent Review Board
(a) Appointments. A three-member Emergency Rent Review Board is created in each area in which a housing emergency is declared by the governor to exist. Within 20 days after the housing emergency is declared, members will be appointed by the governor in the following manner, assuring insofar as possible an equal representation of the interests of landlords and tenants:
(1) one member will be appointed from a list of three names submitted by the borough assembly;
(2) one member will be appointed from a list of three names submitted by the city council;
(3) one member will be appointed at-large by the governor.
(b) Failure to Nominate. If the governing body of a municipality fails to provide the governor with its list of candidates within 10 days after the housing emergency is declared, the governor will appoint another at-large member.
(c) Single Government Areas. If only a single municipal government exists in the emergency area, two members of the board will be appointed by the governor from a list of five names submitted by the municipal government within 10 days after the housing emergency is declared.
(d) Vacancies. If a vacancy occurs, the original recommending authority shall, within 10 days, submit a list of three names to the governor for appointment. If the vacancy is in the position of the at-large member, the governor will appoint a person to fill the vacancy within 10 days. A board member who has three consecutive, unexcused absences is considered to have resigned from his or her board.
History
- Authority: AS 34.06.020; AS 34.06.030
- Eff. 5/6/75, Register 54; am 11/15/75, Register 56
3 AAC 90.070 Operation of the board
(a) Compensation and Residence. All members serve without pay at the pleasure of the governor and must reside within the area declared to be under a housing emergency.
(b) Quorum. Two members of each board constitute a quorum for the transaction of business.
(c) Meetings. Each board shall meet at least once every 15 days. The first meeting of the board shall be held within 10 days after the official appointment date of the second member appointed.
(d) Duties. Each board shall review all rental complaints submitted pursuant to the authority of this chapter within 20 days of submission and shall, within a reasonable period, make its recommendation that the proposed increase be denied or allowed in whole or in part. The board shall review eviction complaints as set out in sec. 125 of this chapter and determine those which shall be heard by a hearing officer pursuant to sec. 85 of this chapter. The board shall notify the parties of its recommendation and notify them of the right of the aggrieved party to appeal to the commissioner as set out in sec. 90 of this chapter.
(e) Jurisdiction. In areas which have been declared by the governor to be in a state of housing emergency, each board is authorized to review complaints involving any rent increases for residential housing accommodations which have or are proposed to become effective within 120 days before the declaration.
(f) Publication of Board Activities. Each board shall publish, once a month, during the period of housing emergency, in a newspaper of general circulation within its area, the names of its members, the dates of its meetings, the precise address to which all correspondence, complaints and reports should be directed, and a statement of the availability of a monthly journal. Each board shall prepare a monthly journal which lists the increases requested and the commissioner's final disposition of complaints disposed of during the previous month.
History
- Authority: AS 34.06.030
- Eff. 5/6/75, Register 54; am 11/15/75, Register 56
3 AAC 90.080 Hearings on rent complaints
(a) Each board shall hold a hearing if it is requested by either party. Parties may be represented by counsel or by any other individual or agency if they desire representation. All hearings will be conducted in accordance with AS 44.62.450 and shall be heard by a hearing officer in conjunction with the board as provided in that section. Evidence shall be accepted in accordance with the rules set forth in AS 44.62.460.
(b) The time and place of the hearings shall be set with regard to the convenience of the board and the parties except that the board shall give the parties reasonable notice before any hearing.
(c) After the hearing the board shall, in conjunction with the hearing officer, make a recommended decision in writing to the commissioner. The decision shall contain the board's findings of fact and conclusions regarding the issues presented and shall be in accordance with AS 44.62.500 through AS 44.62.510. The proposed decision shall be sent to the commissioner with copies to the parties.
History
- Authority: AS 34.06.030; AS 34.06.040
- Eff. 5/6/75, Register 54; am 11/15/75, Register 56
3 AAC 90.085 Hearings on evictions
(a) A hearing on a proposed eviction shall be held after a statement of issues prepared by the hearing officer has been served on the parties as provided in AS 44.62.380. Parties may be represented by counsel or by any other individual or agency if they desire representation. All hearings shall be conducted in accordance with AS 44.62.450 and shall be presided over by a hearing officer who will hear the case alone. Evidence shall be accepted in accordance with the rules set forth in AS 44.62.460.
(b) The time and place of the hearings shall be set according to AS 44.62.410 and the hearing officer shall mail a notice of hearing to all parties at least 10 days before the hearing.
(c) After the hearing, the hearing officer shall prepare a proposed decision for the commissioner in accordance with AS 44.62.500 through AS 44.62.510.
History
- Authority: AS 34.06.030; AS 34.06.040
- Eff. 11/15/75, Register 56
3 AAC 90.090 Objections to adverse recommendations
(a) Procedure for Objecting to a Recommendation. A party aggrieved by a recommendation of the board or hearing officer may object to the commissioner within 10 days from the notification of the recommendation. The objections shall be in writing and shall state in a brief and informal manner the reasons for the objection. Upon receipt of the objection, the commissioner will review the record and issue a final determination concerning the proposed rental increase.
(b) Record. The record for purposes or reviewing objections or for purposes of judicial review consists of all written statements, evidence, and reports submitted to the board or hearing officer, and the recording of the hearing.
History
- Authority: AS 34.06.030; AS 34.06.040
- Eff. 5/6/75, Register 54; am 11/15/75, Register 56
3 AAC 90.100 Orders of commissioner of commerce, community, and economic development
(a) Review of Objections to Recommendations. All recommendations of Emergency Rent Review Boards shall be forwarded to the commissioner for final action. The commissioner or his authorized designee will review on the record each recommendation of the board or hearing officer and issue a rent order approving or denying, in whole or in part, the proposed rental increase or, in the case of an eviction, a certificate of eviction approving or denying the proposed eviction. Within 15 days of receipt of a recommendation a copy of the commissioner's order or certificate of eviction will be sent by certified mail to the landlord and the tenant. A rent order or certificate of eviction is considered a final order for purposes of judicial review and will include a statement of the party's right to have the order reviewed in court, if a notice of appeal is filed in the superior court within 30 days after the issuance of the rent order.
(b) Effect of Orders in Actions for Eviction. An order by the commissioner prohibiting an increase in rent or an eviction is a defense in an action for eviction for failure to pay that rent increase or for failure to vacate the premises for the reasons stated before the board. An order by the commissioner allowing an increase in rent may be pleaded by the landlord in support of an action for eviction for failure to pay that rent increase. A tenant has 10 days from receipt of the order in which to pay the required increase. A certificate of eviction by the commissioner allowing an eviction may be pleaded by the landlord in support of a court action for an eviction upon the cause stated before the board. Nothing in this section interferes with an aggrieved party's right under AS 34.06.043, AS 34.06.045, or other applicable provisions consistent with AS 34.06 and this chapter.
History
- Authority: AS 34.06.030
- Eff. 5/6/75, Register 54; am 11/15/75, Register 56
3 AAC 90.110 Standard for review of proposed increases in rent
(a) It is the intent of this chapter to allow landlords in housing emergency areas to implement only those rent increases sufficient to enable them to recover increased costs for items reasonably and actually related to the operation of their properties and to permit them a reasonable profit on their investment. However, it is not the intent of this chapter to inhibit nor discourage the construction and the availability of financing of new housing accommodations.
(b) A rent increase will be approved by the commissioner if it does not exceed increased costs for the property or would not result in a profit on investment which is higher than that required to attract capital to the rental market in the housing emergency area. In determining what profit on investment would attract capital to the rental market in a particular emergency area, a board may consider evidence of normal return on investment, normal return on equity, or normal cash flow needs or any other relevant evidence. The burden of proof to establish, by a preponderance of the evidence, the profit on investment which would attract capital to that rental market is on the party alleging the appropriateness of a particular level of profit.
(c) In this section, "increased costs" means
(1) increases in taxes assessed;
(2) municipal property assessments imposed since the last rent increase;
(3) increase in utility costs;
(4) increases in maintenance and repair costs;
(5) the cost of capital improvements on residential housing accommodations amortized over the useful life of the improvement;
(6) the cost of fixtures and furnishings for residential housing accommodations amortized over the useful life of the item;
(7) increases in premiums for insurance on the property involved;
(8) increases in credit losses occurring since the last rent increase;
(9) increases in personnel or other management costs; and
(10) any other necessary expenses related to the continued operation and possession of rented or leased properties.
(d) In considering the items set out in (b) and (c)(1) through (c)(10) of this section, allowable increases include but are not limited to the tenant's pro rata share of that proposed increase. In this subsection, "pro rata share" means the portion of the increase which bears the same ratio to the total increase as the complaining tenant's rent bears to the total rents set for all units sharing the increase.
(e) The recommended decision of the board either to approve or disapprove a requested increase shall be set out in writing with the board's findings of facts and its conclusions regarding the issues presented.
History
- Authority: AS 34.06.030
- Eff. 5/6/75, Register 54; am 11/15/75, Register 56
3 AAC 90.115 Procedure for eviction
(a) During the period of a declared housing emergency, a landlord may not evict a tenant unless the landlord's reasons for doing so are valid and consistent with purposes of AS 34.06. Before proceeding to evict a tenant, a landlord shall, in accordance with the appropriate eviction notice time requirements in AS 34.03.220 or 34.03.290, deliver to a current tenant notice in writing of the proposed eviction. The notice shall state
(1) the specific reason for the proposed eviction and its effective date;
(2) the tenant's right to present the matter to the board within five days.
(b) A person who willfully violates a provision of AS 34.06 or this chapter, or who falsifies a notice of eviction is subject to the civil damages and criminal penalties as set out in AS 34.06.045 through AS 34.06.047.
History
- Authority: AS 34.06.030
- Eff. 11/15/75, Register 56
3 AAC 90.120 Evictions and vacations
Repealed 11/15/75.
3 AAC 90.125 Eviction complaints by tenants
(a) Upon delivery of a notice of eviction, an aggrieved tenant who believes that the proposed eviction is not valid or consistent with the purposes of AS 34.06 as set out in sec. 145 of this chapter may file a complaint with the board so long as formal eviction proceedings have not been filed against the tenant in a court of competent jurisdiction.
(b) Complaints may be on forms provided by the board, but any written statement which clearly delineates the complaint of the tenant shall be accepted as a properly filed complaint. A person who is unable to prepare a written complaint may make an oral statement to the board which clearly delineates his or her complaint, and this complaint shall be accepted by the board. The board shall prepare a memorandum of an oral complaint which shall be signed by the complaining party.
(c) Within five days after a tenant has filed a complaint with the board regarding a proposed eviction, the board, acting through its designated staff, shall review the notice of eviction and the complaint to determine if there is reasonable cause to believe that the reasons for the eviction are not valid or not consistent with the purposes of AS 34.06 as set out in sec. 145 of this chapter. It shall be presumed that there is reasonable cause to believe that the reasons given for the eviction are not valid or are not consistent with the purposes of AS 34.06 if the proposed eviction involves a tenant who has previously filed a complaint against the same landlord pursuant to sec. 30 of this chapter.
(d) If it is determined that there is not reasonable cause to believe that the reasons for the eviction are not valid or not consistent with the purposes of AS 34.06, the board, acting through the staff, shall notify the complaining tenant that the complaint will not be heard by the board, but that this determination does not preclude the tenant's pursuing his legal remedies in court under AS 34.03 or AS 34.06.
(e) If it is determined that there is reasonable cause to believe that the reasons for the eviction are not valid or are not consistent with the purposes of AS 34.06, the board shall send to the landlord a notice of the filing of the complaint and a copy of the complaint. A hearing shall then be held in accordance with sec. 85 of this chapter to determine if the reasons for the eviction are valid and consistent with the purposes of AS 34.06 as set out in sec. 145 of this chapter. After receiving notice of the complaint, the landlord may not implement the proposed eviction until issued a certificate of eviction specifying that the reasons for the eviction are valid and consistent with the purposes of AS 34.06.
History
- Authority: AS 34.06.030
- Eff. 11/15/75, Register 56
3 AAC 90.130 Retaliatory conduct prohibited
A landlord may not retaliate by increasing rent or decreasing services or by bringing or threatening to bring an action for possession after the tenant has exercised his rights under this chapter or AS 34.06.
History
- Authority: AS 34.06.030
- Eff. 5/6/75, Register 54
3 AAC 90.140 No waiver of rights
No landlord or tenant may waive his or her rights under this chapter or AS 34.06.
History
- Authority: AS 34.06.030
- Eff. 5/6/75, Register 54
3 AAC 90.145 Standard of review for evictions
(a) Evictions during a housing emergency will be allowed only if the reasons for the eviction are valid and consistent with the purposes of this chapter. Nonvalid reasons for eviction include (1) retaliation against a tenant for exercising his rights under this chapter; or (2) repossession for the purpose of obtaining a new or previously disapproved rent increase. A landlord may not retaliate by increasing rent or decreasing services or by bringing or threatening to bring an action for possession after the tenant has exercised his rights under AS 34.03 or AS 34.06. A landlord may not evict a tenant for failure to pay a rent increase which the commissioner has by order prohibited. A landlord also may not evict a tenant solely for the purpose of obtaining a new rent increase.
(b) Valid reasons for evictions include but are not limited to the following:
(1) if the tenant is in default in rent;
(2) if compliance with the applicable building or housing code requires alterations, remodeling, or demolition which would effectively deprive the tenant of the use of the dwelling unit;
(3) if the tenant is committing waste or a nuisance, or is using the dwelling unit for an illegal purpose or for other than living or dwelling purposes in violation of his rental agreement;
(4) if the landlord seeks in good faith to recover possession of the dwelling unit for personal purposes;
(5) if the landlord in good faith seeks to recover possession of the dwelling unit for the purpose of substantially altering, remodeling, or demolishing the premises;
(6) if the landlord seeks in good faith to recover possession of the dwelling unit for the purpose of immediately terminating for at least six months use of the dwelling unit as a dwelling unit; or
(7) if the landlord has in good faith contracted to sell the property and the contract of sale contains a representation by the purchaser corresponding to (4), (5) or (6) of this subsection.
History
- Authority: AS 34.06.030
- Eff. 11/15/75, Register 56
3 AAC 90.150 Definitions
Unless the context otherwise requires, the terms used in this chapter have the same meaning as set forth in AS 34.06 and AS 34.03. In this chapter
(1) "board" means an Emergency Rent Review Board established under sec. 60 of this chapter;
(2) "delivery" means actual personal service upon the tenant or person in possession, or left in a secure place at the premises if the tenant is absent from the premises, or by registered or certified mail in which case an additional three days shall be added to the time limit for filing a complaint;
(3) "eviction" means termination of tenancy or termination of a rental agreement;
(4) "rent increase" means either an actual monetary increase in the amount of rent or a constructive increase obtained by diminution in the size of the dwelling unit, reduction of services or other change without a commensurate adjustment of the rent charged for the dwelling unit;
(5) "residential housing accommodation" means a single or multiple unit private dwelling, including a mobile home or a lot or space upon which a mobile home is placed, or a structure on the land that may be leased for any term of one week or longer, or other condition of tenancy, that is used for dwelling purposes; and
(6) "transient occupancy in hotels, motels, and motor inns" means the customary short-term presence or short-durational stay of guests in these facilities and does not mean arrangements which substantially compete with other residential housing accommodations even though the terms of the tenancy of these accommodations may be less than 30 days.
History
- Authority: AS 34.06.030; AS 34.06.050(3)
- Eff. 5/6/75, Register 54; am 11/15/75, Register 56
Chapter 91 Cultural Facilities Grant Program
3 AAC 91.010 Applicant eligibility
Municipalities having authority under AS 29.41 or AS 29.48 to provide and maintain a cultural facility are eligible to apply for state cultural facilities construction and development grant funds.
History
- Authority: AS 43.18.500
- Eff. 5/21/80, Register 74
3 AAC 91.020 Eligible projects
Grants for cultural facilities must be used for
(1) the construction of new buildings; or
(2) the development of existing buildings including rehabilitation and remodeling.
History
- Authority: AS 43.18.500
- Eff. 5/21/80, Register 74
3 AAC 91.030 Preapplication form
(a) In order to apply for a cultural facility grant, an applicant must submit a preapplication form.
(b) Upon submission of a preapplication form, the department and advisory council will determine the eligibility of the proposed project. If the project is eligible, a grant application form will be mailed to the applicant.
(c) If a preapplication form is incomplete or the project ineligible, the preapplication form will be returned to the applicant together with a statement of the reasons for rejection.
History
- Authority: AS 43.18.500
- Eff. 5/21/80, Register 74
3 AAC 91.040 Content and form of application
(a) Grant applications for cultural facilities must be made on forms prescribed by the commissioner.
(b) The following documents must accompany the application:
(1) a preliminary feasibility analysis, which includes
(A) an analysis of the existing and projected activities of local professional, educational, amateur performing groups, historical societies, and visitor organization;
(B) a description of the facilities currently in use and a projection of the requirements for future facilities; and
(C) a statement identifying the audiences and visitors to be served;
(2) relevant land documents, such as the title, any lease, and any special use permit, demonstrating the applicant's authority to build upon or use the property;
(3) preliminary drawings or schematics sufficiently detailed to verify estimates of construction costs;
(4) if the applicant provides matching funds as required by AS 43.18.500, the application must include
(A) a copy of an appraisal estimating the fair market value of any real property claimed as a credit; and
(B) a summary statement of how the local match will be provided;
(5) a statement of the fiscal plans for maintaining and operating the facility upon completion.
History
- Authority: AS 43.18.500
- Eff. 5/21/80, Register 74
3 AAC 91.050 Review procedures
(a) When the department and the advisory council determine that the grant application is ready for final review, the application will be forwarded to
(1) the state assessor for verification of the fair market value of any real property;
(2) the Department of Transportation and Public Facilities for review in accordance with provisions of AS 35.10.190.
(b) If further information is required, the applicant may be requested to resubmit the application or to submit additional information.
History
- Authority: AS 43.18.500; AS 44.34.410
- Eff. 5/21/80, Register 74
3 AAC 91.060 Criteria for ranking projects
If funds appropriated or provided by bond issue for grants under this chapter are inadequate to satisfy amounts required by approved grant applications, the advisory council will evaluate and recommend projects for funding based upon the following criteria:
(1) community planning and support, which include
(A) the methods used for community planning input;
(B) the percentage of user groups contributing to the planning process;
(C) the municipality's governing body's assessment of the facility; and
(D) the length of planning time and readiness to start construction;
(2) quality and suitability of facilities, which include
(A) the primary and secondary uses of the building;
(B) the time available to theater and museum organizations for use of the facility;
(C) the quality of proposed building design; and
(D) the quality and availability of existing facilities;
(3) funds presently available for operating and maintenance expenses;
(4) availability of land;
(5) alternatives to completion of proposed facility which include
(A) the rehabilitation and remodeling of existing structures;
(B) the condition of existing buildings and cost of redevelopment; and
(C) the historical value of existing buildings and cost of restoring or remodeling;
(6) per capita cost and total project cost.
History
- Authority: AS 43.18.500; AS 44.33.410
- Eff. 5/21/80, Register 74
3 AAC 91.080 Grant award
Before disbursing the grant award, the commissioner and applicant must sign a letter of agreement.
History
- Authority: AS 43.18.500
- Eff. 5/21/80, Register 74
3 AAC 91.100 Monitoring of grant
(a) The grant will be monitored by the department. At any time during business hours, all records will be available to the department and its representatives. The department reserves the right to audit, examine, and make excerpts from transcripts from any record relating to matters covered by the letter of agreement.
(b) Upon failure to comply with the letter of agreement, the department will notify the applicant by certified mail of the specific noncompliance. Corrective actions must be taken by the applicant within 10 days of date of receipt of the written notice. The department may withhold payment of grant funds until the grantee complies with the letter of agreement.
History
- Authority: AS 43.18.500; AS 44.33.410
- Eff. 5/21/80, Register 74
3 AAC 91.110 Technical assistance
The advisory council and the department will assist an eligible applicant in assessing the need for a cultural facility, and will review proposals and plans for construction or development of a cultural facility, for which financial assistance is requested.
History
- Authority: AS 43.18.500; AS 44.33.410
- Eff. 5/21/80, Register 74
3 AAC 91.120 Completion of grant
The grant is complete when
(1) the structure is finished and the letter of agreement is fully complied with;
(2) a final account of expenditures is filed with the department; and
(3) the applicant returns any unused funds to the department.
History
- Authority: AS 43.18.500
- Eff. 5/21/80, Register 74
3 AAC 91.150 Definitions
Unless the context indicates otherwise, in this chapter
(1) "advisory council" means the Advisory Council on Cultural Facilities established by AS 44.33.400;
(2) "commissioner" means the commissioner of commerce, community, and economic development;
(3) "department" means the Department of Commerce, Community, and Economic Development.
History
- Authority: AS 43.18.500; AS 44.33.410
- Eff. 5/21/80, Register 74
Chapter 92 Alaska Product Preference
3 AAC 92.010 Alaska product preference list
(a) The department will publish a semiannual "Alaska product preference list" required by AS 36.30.332 on the first working day of April and on the first working day of October. The department will also publish monthly updates to the list. Copies of the current list, with updates, are available from any office of the department.
(b) Only products included in the most recently published updated list may be given a preference under AS 36.30.328 and 36.30.332.
(c) A product will be included in the updated list within 90 days after the product is certified by the department under 3 AAC 92.020 as eligible for a Class I, Class II, or Class III preference.
(d) If the department inspects premises of a firm whose product has been included in the list under (c) of this section and determines that the product no longer qualifies for its certified product preference, the department will make the appropriate change when it publishes the next semiannual list.
(e) Forty-five (45) days before the publication day for a semiannual list under (a) of this section, a preliminary list will be published and distributed to those whose products are included and to other interested parties who have provided their addresses to the department. Objections to any aspect of a preliminary list must be made in writing to the commissioner no later than 30 days before the publication date for the semiannual list. The commissioner will make a written ruling on an objection no later than 15 days before the publication of the semiannual list. The semiannual list may be appealed to the superior court under AS 22.10.020.
History
- Authority: AS 36.30.332(a)
- Eff. 1/3/88, Register 104; am 12/23/88, Register 108
3 AAC 92.020 Certification of eligibility for product preference
(a) A person or firm wishing to receive an Alaska product preference and be included on the list must
(1) apply for certification on a form provided by the department; and
(2) have its production or manufacturing facility inspected by, or receive a waiver of inspection from, the department under 3 AAC 92.040.
(b) A certification is valid for two years after publication of the first semiannual list on which the product is included. A person or firm wishing to renew a certification must apply for renewal to the department by completing a renewal form provided by the department.
(c) The certification of eligibility for an Alaska product preference will contain the date of the semiannual list on which the product will first be included and the deadline for submission of an application for renewal of the certification.
(d) To qualify for certification of eligibility for an Alaska product preference, a product must be produced or manufactured at a facility that is separate from the job site where the product is installed or delivered.
History
- Authority: AS 36.30.332(a)
- Eff. 1/3/88, Register 104; am 12/23/88, Register 108
3 AAC 92.030 Product classification
(a) The commissioner will only classify a product that is verified by the applicant, under the penalties for unsworn falsification, on the form required by 3 AAC 92.020(a)(1), to be an "Alaska product" as defined in AS 36.30.338(1).
(b) The commissioner will classify an Alaska product as a Class III product if
(1) it is produced or manufactured, as defined in AS 36.30.338(2), in Alaska;
(2) responsibility for the final outcome of the production or manufacturing process is controlled by an Alaskan producer or manufacturer; and
(3) either
(A) no manufacturing step is performed outside Alaska; or
(B) a manufacturing step or section, the absence of which would not alter the distinctiveness of the character of the product, is sub-contracted out of state.
(c) The commissioner will classify an Alaska product as a Class II product if
(1) it is primarily produced or manufactured, as defined in AS 36.30.338(2), in Alaska; and
(2) responsibility for the final outcome of the production or manufacturing process is controlled by an Alaskan producer or manufacturer but a significant step or section is sub-contracted out of state.
(d) The commissioner will classify an Alaskan product as a Class I product if
(1) it is produced or manufactured, as defined in AS 36.30.338(2), in Alaska;
(2) responsibility for the final outcome of the production or manufacturing process is controlled by an Alaskan producer or manufacturer; and
(3) the product either
(A) involves the custom assembly in Alaska of prefabricated parts that are primarily manufactured outside Alaska such that the finished product is still defined by the same generic name as the prefabricated parts; or
(B) a majority of the total steps of the manufacturing process are subcontracted outside Alaska, but a significant portion of the steps, or the final assembly or finishing, which determine the distinct character of the product are performed in Alaska.
History
- Authority: AS 36.30.332(a)
- Eff. 1/3/88, Register 104
3 AAC 92.040 Inspection of manufacturing facilities
(a) A person or firm must be inspected by, or receive a waiver of inspection from, the department before their product can receive a certification of eligibility for the Alaska product preference list described in 3 AAC 92.010. The department will grant a waiver of inspection if, in its discretion, it determines that an inspection would not be necessary or feasible.
(b) When a manufacturing facility is being inspected, the manufacturer must provide access as required by 2 AAC 12.510.
(c) A product that has been certified as eligible for an Alaska product preference must be manufactured at the location that was inspected by the department as the production or manufacturing site for that product.
(d) If the facility at which a product certified as eligible for an Alaska product preference is produced or manufactured is relocated after certification, the producer or manufacturer must request an inspection of the relocated facility at least 15 days before either
(1) the publication of the invitation to bid or request for proposals for which the producer or manufacturer is seeking a product preference; or
(2) the production or manufacture of the product if a contract has already been let at the time of the relocation.
(e) After a relocated production or manufacturing facility has been inspected under (d) of this section or the department has waived the inspection under (a) of this section, the department will issue a revised product certification. A copy of the revised certification must be included in the contract documentation by a contractor who has received an Alaska product preference for an Alaska product produced or manufactured at the facility, if the relocation occurred during performance of the contract.
History
- Authority: AS 36.30.332
- Eff. 1/3/88, Register 104
3 AAC 92.050 Records provided by the contractor
(a) A firm or person that received an Alaska product preference in a bid or offer shall keep records documenting the use of the Alaska product. These records must be provided to the procurement officer of the department awarding the contract
(1) on the written request of the procurement officer;
(2) on the anniversary date of the contract award if the contract performance has not been completed; and
(3) on final completion of contract performance.
(b) A contractor who, under AS 36.30.322(a), has supplied Alaska timber, lumber, or manufactured lumber products to a state agency or for a state project that involves Alaska forest products shall provide the records required by AS 36.30.322(c) to the appropriate procurement officer as required by (a) of this section.
History
- Authority: AS 36.30.322(c)AS 36.30.332(a)
- Eff. 1/3/88, Register 104
3 AAC 92.060 Disputes regarding classification
(a) If a dispute arises about the classification under 3 AAC 92.030 of a type of product, the classification determination made by the department shall be the classification in effect until the department adopts more detailed regulations for classification for that particular product type. Any interested person or firm may petition the commissioner under AS 44.62.220 to adopt such regulations.
(b) A dispute regarding classification of, or certification of, an Alaska product or regarding any other aspect of the Alaska product preference list must be resolved under 3 AAC 92.010(e) and is not grounds for a protest to a procurement officer under AS 36.30.560 - 36.30.699 of a contract award, proposed award, or solicitation by an agency.
History
- Authority: AS 36.30.332(a)
- Eff. 1/3/88, Register 104
3 AAC 92.070 Classification determination for printing and duplication
(a) If a section of a larger publication or document is printed outside Alaska but all other steps are performed in Alaska, the product will be classified as a Class II Alaska product.
(b) If printing of a publication or document is performed in Alaska but a finish step including binding, finishing, and trimming is performed outside Alaska, the product will be classified as a Class II Alaska product.
(c) If printing of a publication or document is performed in Alaska but steps executed by a color trade house including preparation and proofing of plate ready film occur outside Alaska, the product will be classified as a Class II Alaska product.
History
- Authority: AS 36.30.332(a)
- Eff. 1/3/88, Register 104
3 AAC 92.080 Forest products
(a) A manufacturer or supplier of timber, lumber, and manufactured lumber products originating from Alaska forests shall file with the commissioner by March 1 of each year an annual statement of willingness to manufacture or supply Alaska forest products to state agencies or for state projects. The commissioner will include those who file such a statement in a separate section of the April Alaska product preference list. Procurement officers of state agencies may use that section of the list to give the notice of forest products needs required by AS 36.30.322(a).
(b) Procurement preference for timber and lumber harvested in Alaska, and for products manufactured in Alaska from timber and lumber that has been harvested in Alaska, is governed by AS 36.15.050, not by this chapter or by AS 36.30.326 - 36.30.332.
History
- Authority: AS 36.15.050; AS 36.30.332(a) AS 36.30.322; AS 36.30.336
- Eff. 1/3/88, Register 104; am 12/23/88, Register 108
3 AAC 92.090 Eligibility for preference on a bid
(a) The Alaska product preference list, with updates, that was published at least 30 days before an invitation to bid or request for proposal for commodities and services, and at least 90 days before an invitation to bid for construction, is issued will be the basis for establishing the percentage of Alaska product preference for the products to be included in responses to the invitation or request.
(b) The Alaska products preference percentages set out in AS 36.30.332 will be applied to the declared value of the Alaska product or products designated for use by the contractor in his or her bid or proposal and not to the contractor's total bid or proposal.
History
- Authority: AS 36.30.332
- Eff. 1/3/88, Register 104; em am 3/29/88-7/26/88, Register 106; am 12/23/88, Register 108
3 AAC 92.900 Definitions
(a) In this chapter
(1) "commissioner" means the commissioner of commerce, community, and economic development;
(2) "department" means the Department of Commerce, Community, and Economic Development;
(3) "product" does not include redi-mix concrete.
(b) In AS 36.30.332(b), "value added" does not include the cost of transportation.
History
- Authority: AS 36.30.332
- Eff. 1/3/88, Register 104; am 12/23/88, Register 108
Chapter 93 Alaska Railroad Labor Relations Agency
Article 5 Right of Nonassociation
3 AAC 93.500 Exemption from association
(a) An employee claiming the right of nonassociation with a labor organization or employee association under AS 42.40.880 shall file the claim with the labor relations agency and shall include the following information:
(1) name, address, and position control number of the employee;
(2) name of the collective bargaining unit concerned, and the name and address of the collective bargaining representative;
(3) name and address of the church or religious body of which the employee is a member, together with the name and address of the official of the church or religious body who may be called upon to certify the employee's membership and its duration;
(4) a statement supported by documentation, setting out those tenets or teachings of the church or religious body which are pertinent to the right of nonassociation based upon bona fide religious convictions;
(5) a statement of the length of time the employee has been a member of the church or religious body;
(6) a sworn statement signed by a responsible officer of the church or religious body of which the employee is a member stating that the employee is a member of the religious body and that the teachings or tenets of the religion prohibit the employee from paying dues to a labor organization or employee association; a copy of the sworn statement must be submitted to the labor organization or employee association representing the bargaining unit of which the employee is a member.
(b) Within 30 days after receipt of the information required under (a) of this section, the labor relations agency will declare whether or not the information constitutes proper proof of a right to nonassociation. If the labor relations agency finds a lack of sufficient evidence, it will, in its discretion, request supplemental information or upon its own motion schedule a hearing after reasonable notice to the employee. The employee may petition, within 30 days after receipt of a labor relations agency decision, for a hearing to present additional evidence. Within 30 days after receipt of additional evidence or conclusion of a hearing the labor relations agency will declare its findings.
(c) After filing a claim of exemption under this section, an employee shall pay to the labor organization or employee association amounts equivalent to the amount of dues, initiation fees, and assessments then being assessed members of the labor organization or employee association. Amounts paid after filing a claim of exemption are eligible for transfer to a charitable organization qualifying under AS 42.40.880 and this section.
(d) Upon declaration by the labor relations agency that the employee is exempt from becoming a member of a labor organization or employee association, the agency will notify the employee and the organization or association and will require that it contribute to a charitable organization amounts of money paid by the employee under (c) of this section. The amount contributed must be equivalent to those payments, retroactive on a pro rata basis, to the date of the filing of the employee's application for exemption.
(e) Within 30 days after the filing of a claim under (a) of this section, the labor organization or employee association representing the bargaining unit that contains the employee shall
(1) submit to or have on file with the labor relations agency a list of the employees who have claimed exemption under this section;
(2) submit to or have on file with the labor relations agency a list of the charitable organizations to which it will transmit the alternative payments permitted under this section;
(3) open and maintain an account into which money received from those individuals claiming exemption will be placed and from which amounts will be remitted to the charitable organizations contained in a list filed with the labor relations agency under this section.
(f) If the labor relations agency is in doubt as to whether the charitable organizations designated under (e)(2) of this section meet the requirements of AS 42.40.880, it will notify the labor organization or employee association. Upon receipt of the notice, the labor organization or employee association may submit additional information to satisfy the labor relations agency. If it is unable to satisfy the labor relations agency, it is entitled to a hearing before the labor relations agency on the question. Following the hearing, the labor relations agency will issue a ruling on the matter.
(g) Each organization or employee association representing a unit of Alaska Railroad Corporation employees containing religious objectors who are contributing sums equivalent to dues, initiation fees, and assessments, for transmittal to an appropriate charity, shall submit an annual report to the labor relations agency, not later than 30 days after the close of its fiscal year, showing proof of contribution in a form prescribed by the labor relations agency.
History
- Authority: AS 42.40.820; AS 42.40.880
- Eff. 2/6/87, Register 101
Part 12 Alaska State Housing Authority
Chapter 95 (Repealed and Deleted)
Article 1 (Repealed and Deleted)
3 AAC 95.010 Contract by sealed competitive bids
Repealed 11/26/81.
3 AAC 95.015 Contract award by competitive solicitation
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.020 Solicitation of bids
Repealed 11/26/81.
3 AAC 95.025 Competitive sealed bidding defined
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.030 Conflict of interest
Repealed 11/26/81.
3 AAC 95.035 Competitive sealed proposal defined
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.040 Bid procedure
Repealed 11/26/81.
3 AAC 95.045 Invitation to bid and request for proposals defined
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.050 Receipt of bids
Repealed 11/26/81.
3 AAC 95.055 Public notice
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.060 Late bids
Repealed 11/26/81.
3 AAC 95.065 Submission of bids and proposals
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.070 Rejection of bids
Repealed 11/26/81.
3 AAC 95.075 Late bids and proposals
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.080 Criteria for awards
Repealed 11/26/81.
3 AAC 95.085 Receipt of bids and proposals
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.090 Alaska bidder preference
Repealed 11/26/81.
3 AAC 95.095 Modification and withdrawal of bids and proposals
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.100 Tied bids
Repealed 11/26/81.
3 AAC 95.105 Opening of bids and proposals
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.110 Tentative and final awards
Repealed 11/26/81.
3 AAC 95.115 Rejection of bids and proposals
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.120 Contract
Repealed 11/26/81.
3 AAC 95.125 Responsibility of bidders and offerors
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.130 Competitive bids
Repealed 11/26/81.
3 AAC 95.135 Award
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
Article 2 (Repealed and Deleted)
3 AAC 95.140 Purchasing centralized at ASHA
Repealed 11/26/81.
3 AAC 95.145 Negotiated contracts
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.150 Emergency purchases
Repealed 11/26/81.
3 AAC 95.155 Small procurement contracts
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.160 Conflict of interest
Repealed 11/26/81.
3 AAC 95.165 Professional services contracts
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.170 Purchases greater than $300
Repealed 11/26/81.
3 AAC 95.175 Governmental contracts
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.180 Purchases greater than $2,500
Repealed 11/26/81.
3 AAC 95.185 Emergency contracts
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.190 Receipt of bids
Repealed 11/26/81.
3 AAC 95.195 No-competition contracts
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.200 Late bids
Repealed 11/26/81.
3 AAC 95.205 Negotiation after unsuccessful bidding
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
Article 3 (Repealed and Deleted)
3 AAC 95.210 Rejection of bids
Repealed 11/26/81.
3 AAC 95.215 Right to protest
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.220 Selection of successful bidder
Repealed 11/26/81.
3 AAC 95.225 Form of protest
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.230 Alaska bidder preference
Repealed 11/26/81.
3 AAC 95.235 Time for filing
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.240 Tied bids
Repealed 11/26/81.
3 AAC 95.245 Stay of procurement
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.250 Tentative and final awards
Repealed 11/26/81.
3 AAC 95.255 Decision
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
Article 4 (Repealed and Deleted)
3 AAC 95.260 Contract
Repealed 11/26/81.
3 AAC 95.265 Federal assistance
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.270 An aggrieved bidder
Repealed 11/26/81.
3 AAC 95.275 Definitions
Deleted.
History
- Eff. 11/26/81, Register 80; deleted as of Register 130, July 1994
3 AAC 95.280 Posting of bonds
Repealed 11/26/81.
3 AAC 95.290 Appeal to the superior court
Repealed 11/26/81.
3 AAC 95.300 Record of bids
Repealed 11/26/81.
3 AAC 95.310 Federal funds
Repealed 11/26/81.
3 AAC 95.320 Definitions
Repealed 11/26/81.
Part 13 Alaska Industrial Development and Export Authority
Chapter 99 Commercial and Industrial Financing
Article 1 Conduit Revenue Bond Program
3 AAC 99.100 Scope of article
3 AAC 99.100 - 3 AAC 99.160 apply to applications submitted to the authority for financing of a project under the conduit revenue bond program. In 3 AAC 99.100 - 3 AAC 99.160, "conduit revenue bond program" means the authority's program of financing or participating in the financing of projects through the issuance of bonds the interest of which may or may not be excluded from gross income for federal income tax purposes under the Internal Revenue Code of 1986, as amended, and which are not in any way a liability of the authority.
History
- Authority: AS 44.88.080; AS 44.88.090 AS 44.88.085; AS 44.88.095
- In effect before 1988; am 1/11/88, Register 106; am 11/30/90, Register 118; am 11/1/99, Register 153; am 12/3/2010, Register 197
3 AAC 99.110 Application
(a) To request the authority's assistance under the conduit revenue bond program, a person must submit an application to the authority. The person may apply on a form provided by the authority.
(b) The application must contain information sufficient to allow the authority to determine whether the proposed project and the applicant appear to be eligible to participate in the conduit revenue bond program and whether interest on the authority's bonds issued for the proposed project would be excluded from gross income for federal income tax purposes under the code. The applicant must submit a nonrefundable $1,100 fee to the authority with the application. If the application is for a refunding of a bond previously issued by the authority for the project, the authority may waive all or part of the fee set out in this subsection.
(c) The authority will review the application and will make a preliminary determination of whether the proposed project and applicant are eligible to participate in the conduit revenue bond program and whether interest on the authority's bonds issued for the project would be excluded from gross income for federal income tax purposes under the code. The authority may contact the applicant to discuss the application or to request additional information. Until the applicant provides information sufficient in the judgment of the authority, the authority will not make a preliminary determination. At any time the authority may (1) notify the board of the application, (2) provide information to the board regarding the applicant and the project, or (3) seek direction from the board regarding the application.
(d) If the authority determines under (c) of this section that the proposed project and applicant are eligible to participate in the conduit revenue bond program and that interest on the authority's bonds issued for the project would be excluded from gross income for federal income tax purposes under the code, the authority will make a recommendation regarding the application to the board. The recommendation may be for the adoption of an eligibility resolution under 3 AAC 99.115, the adoption of a bond authorization resolution under 3 AAC 99.130, or other action as the authority considers appropriate under the circumstances. The board may accept the recommendation and take the recommended action or may reject the recommendation and take no action or take a different action.
(e) If the authority determines under (c) of this section that the proposed project and applicant are eligible to participate in the conduit revenue bond program but that interest on the authority's bonds issued for the project would not be excluded from gross income for federal income tax purposes under the code, the authority will notify the applicant of such determination and will take no further action with respect to the application unless the applicant notifies or has previously notified the authority that the applicant wishes to finance the applicant's project with proceeds of conduit revenue bonds the interest on which would be included in gross income for federal income tax purposes under the code.
(f) If the authority determines under (c) of this section that the proposed project or applicant is not eligible to participate in the conduit revenue bond program, the authority will notify the applicant of the determination. The applicant may appeal that determination to the board by delivering to the authority a notice of appeal. The authority must receive the notice of appeal not more than 30 days after the date on which the authority notified the applicant of its determination. The authority will transmit the notice of appeal, a summary of the application, and the authority's preliminary determination to the board. The board will make the final determination of whether either the proposed project or the applicant is ineligible for participation in the conduit revenue bond program. If the board determines that either the proposed project or the applicant is ineligible for participation in the conduit revenue bond program, the authority will take no further action with respect to the application and will notify the applicant that this is the final decision on the application.
History
- Authority: AS 44.88.080; AS 44.88.090 AS 44.88.085; AS 44.88.095
- In effect before 1988; am 1/11/88, Register 106; am 11/30/90, Register 118; am 2/11/99, Register 150; am 11/1/99, Register 153; am 8/8/2003, Register 168; am 12/3/2010, Register 197; am 4/25/2013, Register 207; am 11/6/2014, Register 213; am 6/28/2018, Register 227
3 AAC 99.115 Eligibility resolution
The board of the authority may adopt an eligibility resolution for a project at any time. An application under 3 AAC 99.110 is not required before the board of the authority may adopt an eligibility resolution. An eligibility resolution may include other determinations or statements by the board to support the project or to permit costs of the project to be financed using proceeds of conduit revenue bonds, the interest on which is not included in gross income for federal income tax purposes under the code.
History
- Authority: AS 44.88.080; AS 44.88.085; AS 44.88.090
- Eff. 12/3/2010, Register 197
3 AAC 99.120 Financing preparation
(a) An applicant for financing under the conduit revenue bond program must provide information requested by the authority and must notify the authority of any change in the project or the applicant that occurs after the original submission of the application that may affect the eligibility of the project or the applicant for participation in the conduit revenue bond program. The authority may request information that the authority considers necessary or appropriate to permit preparation of the necessary loan and bond documents. The authority will work with the applicant and the bond purchaser to prepare substantially completed drafts of the loan and bond documents for the applicant's project for presentation to the board under 3 AAC 99.130.
(b) The authority may terminate the application process if the authority determines that either the project or the applicant is not eligible for participation in the conduit revenue bond program or if the authority determines that the applicant has failed to provide the information required by (a) of this section or if the authority determines that the applicant has failed to cooperate with the authority sufficiently to permit preparation of the documents described in (a) of this section. The authority will notify the applicant if the authority terminates the application process.
History
- Authority: AS 44.88.080; AS 44.88.090 AS 44.88.085; AS 44.88.095
- In effect before 1988; am 1/11/88, Register 106; am 11/30/90, Register 118; am 2/11/99, Register 150; am 11/1/99, Register 153; am 12/3/2010, Register 197
3 AAC 99.130 Review by authority
(a) The authority will determine the appropriate bond, loan, and other documents to be presented to the board for approval of a conduit bond financing. The executive director will present documents to the board in substantially final form, together with a bond authorization resolution. The bond authorization resolution is a resolution of the board that approves the bond and loan documents substantially in the form presented to the board, and authorizes the authority to issue bonds under the conduit revenue bond program to provide financing for the proposed project.
(b) The board will review the bond, loan, and other documents presented to it and may adopt, decline to adopt, or postpone taking action on the bond authorization resolution. If the board postpones taking action on a bond authorization resolution for a project, the authority will work with the applicant to obtain additional information or materials necessary to permit the board to make a final determination with respect to the bond authorization resolution.
(c) If the board declines to adopt a bond authorization resolution, the authority will notify the applicant of that action.
(d) If the board adopts a bond authorization resolution for a project, the authority may require that the applicant enter into an agreement in writing with the authority for the payment of fees and expenses of the authority relating to the issuance of the bonds and other administrative matters with respect to the financing. If a project approved by the authority requires the issuance of bonds that exceed $6,000,000, the applicant must obtain and file with the authority a certified copy of a resolution consenting to the location of the project passed by the governing body of the political subdivision, if any, in which the project is located. If the project is located within two political subdivisions, the applicant must obtain and file with the authority a certified copy of a resolution consenting to the location of the project passed by the governing body of each political subdivision.
(e) If the bonds to be issued by the authority are intended to bear interest that is not included in gross income for federal income tax purposes under the code. the issuance of the bonds is conditioned upon compliance with the applicable provisions of the code.
History
- Authority: AS 44.88.080; AS 44.88.090 AS 44.88.085; AS 44.88.095
- In effect before 1988; am 1/11/88, Register 106; am 11/30/90, Register 118; am 7/19/91, Register 119; am 11/1/99, Register 153; am 12/3/2010, Register 197; am 4/25/2013, Register 207
3 AAC 99.135 Documentation
The authority shall prepare all documents required and be responsible for the closing of the transaction.
History
- Authority: AS 44.88.080; AS 44.88.090 AS 44.88.085; AS 44.88.095
- Eff. 11/30/90, Register 118; am 12/3/2011, Register 197
3 AAC 99.140 Costs and issuance fees
(a) At the time the authority issues bonds to provide financing for a project under 3 AAC 99.100 - 3 AAC 99.160, the applicant shall pay an issuance fee determined as follows:
(1) if the bonds are subject to the volume cap provisions of 26 U.S.C. 147, the issuance fee is equal to 50 basis points applied to the first $10,000,000 of the principal amount of those bonds, 20 basis points applied to the next $40,000,000 of the principal amount of those bonds, and 15 basis points applied to the principal amount of those bonds issued in excess of $50,000,000;
(2) if the bonds are not subject to the volume cap provision of 26 U.S.C. 147, the issuance fee is equal to 40 basis points applied to the first $10,000,000 of the principal amount of those bonds, 10 basis points applied to the next $40,000,000 of the principal amount of those bonds, and 9 basis points applied to the principal amount of those bonds issued in excess of $50,000,000;
(3) if a portion of the bonds is subject to the volume cap of 26 U.S.C. 147 and a portion is not, the issuance fee is equal to the sum of the issuance fee determined under (1) of this subsection for the portion of the bonds that is subject to the volume cap provisions of 26 U.S.C. 147 and the issuance fee determined under (2) of this subsection for the remaining portion of the bonds.
(b) A person may apply to the authority to modify the terms of its pending application with the authority or to take an action relating to a bond previously issued by the authority. If the request is to modify the terms of a pending application and if the modification, in the sole determination of the authority, requires action by the board, the applicant shall pay to the authority a nonrefundable $550 fee. If the request is for the authority to take an action relating to outstanding bonds and the authority, in its discretion, elects to take such action or, under the applicable documentation, is required to take such action, the applicant shall pay the reasonable costs of the authority, including costs for authority personnel, bond counsel costs, and other costs.
(c) An applicant shall pay other costs and fees prescribed by law or agreement that are not provided in (a) of this section. These costs or fees may include financial advisor fees, bond counsel fees, and other expenses of the authority related to bond issuance.
History
- Authority: AS 44.88.080; AS 44.88.090 AS 44.88.085; AS 44.88.212
- In effect before 1988; am 1/11/88, Register 106; am 9/25/92, Register 124; am 11/1/99, Register 153; am 12/3/2010, Register 197; am 11/6/2014, Register 213; am 6/28/2018, Register 227
3 AAC 99.150 Review by financial advisor
Repealed 1/11/88.
3 AAC 99.160 Composite bond issue
(a) If the authority intends to issue bonds for a project under the tax-exempt loan participation program (3 AAC 99.200 - 3 AAC 99.290) or the taxable loan participation program (3 AAC 99.300 - 3 AAC 99.390), the project is eligible for a composite bond issue subject to approval by the authority, the originator, and the borrower.
(b) In a composite bond issue, the authority will issue bonds to finance all or part of the amount of the total loan to the borrower from the originator not financed under the tax-exempt loan participation program or the taxable loan participation program as described in (a) of this section. The originator shall purchase bonds issued under this subsection and must agree to retain those bonds as long as the total loan is outstanding.
(c) The issuance of bonds under (b) of this section is subject to the provisions of 3 AAC 99.100 - 3 AAC 99.140, except with regard to the nonrefundable financing fee. The financing fee for bonds issued under (b) of this section is 50 basis points applied to the first $1,000,000 of the principal amount of the bonds issued and 25 basis points applied to the principal amount of the revenue bonds issued in excess of the first $1,000,000.
History
- Authority: AS 44.88.080; AS 44.88.090 AS 44.88.085; AS 44.88.155
- In effect before 1988; am 1/11/88, Register 106; am 11/30/90, Register 118; am 12/3/2010, Register 197; am 6/28/2018, Register 227
Article 2 Tax-Exempt Loan Participation Program
3 AAC 99.200 Scope of article
The provisions of 3 AAC 99.200 - 3 AAC 99.290 apply to an application submitted to the authority for authority participation in a loan that is or could be financed by the issuance of bonds the interest on which is excluded from gross income for federal income tax purposes under the code, and which bonds are not secured solely by a project applicant or a project or by a qualified energy development applicant or a qualified energy development. A loan under the tax-exempt loan participation program is for permanent financing.
History
- Authority: AS 44.88.080; AS 44.88.090 AS 44.88.085; AS 44.88.155
- In effect before 1988; am 1/11/88, Register 106; am 11/30/90, Register 118; am 10/23/96, Register 141; am 2/11/99, Register 150; am 11/1/99, Register 153; am 4/25/2013, Register 207
3 AAC 99.205 Waiver of requirements
If the authority under AS 44.88.155(g) waives or modifies the requirements of AS 44.88.155 to finance a project the authority intends to own or to finance a qualified energy development, the authority may waive the requirements of any substantially similar or implementing provisions of 3 AAC 99.200 - 3 AAC 99.290 as the authority considers appropriate and prudent.
History
- Authority: AS 44.88.085; AS 44.88.155
- Eff. 12/3/2010, Register 197; am 4/25/2013, Register 207
3 AAC 99.210 Preliminary application
(a) A business enterprise may apply for a loan under the umbrella loan program by submitting a loan application to an originator. The originator shall review the proposed use of the money and the applicant's eligibility.
(b) The originator shall submit a preliminary application to the authority on a form provided by the authority. The preliminary application must contain sufficient information to allow the authority to determine that the proposed project or qualified energy development and the applicant appear to be eligible to receive a loan under AS 44.88 and that interest on the authority's bonds issued or that could be issued to provide money for the loan would be excluded from gross income for federal income tax purposes under the code. The originator shall submit a $250 nonrefundable fee to the authority with the preliminary application.
(c) If the authority's portion of the loan is equal to or greater than $1,000,000, the authority will review the preliminary application and will transmit a summary of the preliminary application with a recommendation to the board. If, after reviewing the summary, the board determines to participate in the loan after successful completion of the application process and acquisition or construction of the project or qualified energy development, the board will adopt an eligibility resolution. The eligibility resolution is a statement of intent by the authority to issue bonds if conditions specified in the resolution are satisfied by the originator and the applicant. The authority will notify the originator of the action taken by the board.
(d) If the authority's portion of the loan is less than $1,000,000, the authority will review the preliminary application. If, after reviewing the preliminary application, the authority determines the project is of a type that could be funded with the issuance of tax-exempt bonds, the authority will notify the originator.
History
- Authority: AS 44.88.080; AS 44.88.095 AS 44.88.085; AS 44.88.150
- In effect before 1988; am 1/11/88, Register 106; am 11/30/90, Register 118; am 2/11/99, Register 150; am 11/1/99, Register 153; am 4/25/2013, Register 207; am 6/28/2018, Register 227
3 AAC 99.220 Application for authority participation
(a) After adoption by the authority of an eligibility resolution under 3 AAC 99.210(c), or a determination of eligibility by the authority under 3 AAC 99.210(d), the originator and the applicant may prepare an application for authority participation in the loan.
(b) An application for authority participation must be submitted by the originator to the authority along with a non-refundable $1,100 fee. If the authority issues a commitment to purchase a participation in the originator's loan, and the loan commitment issued by the authority is accepted and signed by the originator and borrower and returned to the authority, the non-refundable $1,100 application fee will be credited against the authority's commitment fee as required by 3 AAC 99.260(b). The financial institution must reimburse all third-party expenses of the authority related to the issuance of the authority's loan participation. The authority may require the originator to include with the application any of the following:
(1) a letter of transmittal;
(2) a loan summary, including originator approval at the appropriate level of authority;
(3) a list of other unpaid loans to the applicant or, if the applicant is not a sole proprietorship, to any member of the applicant's business enterprise, from the state or other public corporation of the state along with applicant certification that each unpaid loan is current and no other loans exist;
(4) a current credit report of the applicant and the guarantors, if any;
(5) a signed current balance sheet and year-to-date profit and loss statement on the applicant, not more than 90 days old from the date of application, fiscal year end balance sheet and profit and loss statement for the prior three years on the applicant; current balance sheet and federal income tax return for the prior two years on all guarantors and co-borrowers;
(6) copies of the applicant's federal income tax returns for the prior three years, if the balance sheet and profit and loss statement required from the applicant in (5) of this subsection are not audited by a certified public accountant;
(7) copies of the earnest money receipt and agreement, option to purchase, contract to purchase, or invoice for purchase of land, land and improvements, or tangible personal property related to the project or qualified energy development;
(8) a copy of a lease or easement for land and improvements related to the project or qualified energy development and, in the case of a hydropower project licensed or to be licensed by the Federal Energy Regulatory Commission, a copy of the documents designating a project boundary with a lease and or easement to be completed before closing giving the applicant control of the area within the project boundary;
(9) a detailed description of real or tangible personal property to be acquired for the project or qualified energy development;
(10) a detailed construction cost estimate;
(11) an estimate of the number of jobs to be created or retained by this project or qualified energy development;
(12) if the loan is to be secured by real property, a written appraisal report acceptable to the authority estimating the value of the real property:
(A) if the total loan amount is equal to or less than $1,000,000, the appraisal may be a summary appraisal report;
(B) if the total loan amount is greater than $1,000,000, the appraisal must be a detailed appraisal describing the information analyzed, the appraisal procedures followed, and the reasoning that supports the analysis, opinions expressed, and conclusions in conformity with current professional standards;
(13) if the loan is for the purchase of tangible personal property, an appraisal in a format acceptable to the authority prepared by an appraiser who is acceptable to the authority;
(14) copies of leases, or agreements to lease or to renew a lease between the applicant and tenants of the project or qualified energy development, including a list of tenants, lease rates, terms, and options;
(15) a financial feasibility analysis satisfactory to the authority;
(16) an environmental risk assessment satisfactory to the authority, followed by an environmental audit if required by the authority;
(17) if the loan is for improvements in energy efficiency, an analysis of the energy efficiencies that are expected to be achieved, including the units of energy expected to be saved over the life of the improvements and the dollar savings expected to be realized; and
(18) any other information considered necessary by the authority to evaluate the application.
(c) The applicant shall submit to the authority, in addition to the materials required in (b) of this section, a statement that the applicant is in compliance with any applicable capital expenditure restrictions of the code.
(d) Evidence of compliance with the code must be submitted before the authority issues bonds for a project or qualified energy development. The authority will hold a public hearing concerning the project or qualified energy development. After the public hearing is completed, and before the authority issues the bonds, the governor must certify that the public hearing was conducted in compliance with the provisions of the code and must approve the issuance of the bonds.
(e) If the authority issues bonds in respect of a loan, the authority may charge a loan participation bond issuance fee for the costs of issuance of the bonds.
(f) If the application concerns a loan for a qualified energy development, the authority, in addition to the requirements of (b) of this section, may require the originator to provide any of the following:
(1) a description of the technology to be used in the qualified energy development;
(2) the purpose of the qualified energy development;
(3) a description of the type of qualified energy development as being one for
(A) the transmission, generation, conservation, or storage or distribution of electricity;
(B) the transmission, generation, conservation or distribution of heat;
(C) liquefaction, regasification, distribution, storage, or use of natural gas, excluding a natural gas pipeline project for transporting natural gas from the North Slope or Cook Inlet to market;
(D) distribution of refined petroleum products; or
(E) storage of refined petroleum products;
(4) if the applicant is a regulated or tariffed utility under AS 42.05, documents establishing that status; and
(5) a copy of any contract for the sale of power, electricity or heat from the qualified energy development for which the loan is sought.
History
- Authority: AS 44.88.080; AS 44.88.095; AS 44.88.155 AS 44.88.085; AS 44.88.150
- In effect before 1988; am 1/11/88, Register 106; am 11/30/90, Register 118; am 7/19/91, Register 119; am 9/25/92, Register 124; am 2/11/99, Register 150; am 11/1/99, Register 153; am 2/8/2001, Register 158; am 12/3/2010, Register 197; am 4/25/2013, Register 207; am 6/28/2018, Register 227; am 5/16/2023, Register 248
3 AAC 99.230 Terms of real property loans
(a) The authority may participate in a loan made by an originator to acquire land, or to acquire or construct buildings, improvements, and structures on land, or to make improvements in the energy efficiency of buildings, improvements, and structures on land, if the loan satisfies the conditions prescribed in this section.
(b) The authority may participate in a loan made by an originator to refinance an outstanding loan described in (a) of this section if, in addition to other requirements of this section, the authority is satisfied that (1) the loan to be refinanced was not made with proceeds of outstanding general obligation indebtedness of the authority nor relates to a project that was originally financed with outstanding general obligation indebtedness of the authority, (2) the borrower will receive economic benefit from the refinancing, and (3) the loan is permitted under the code. The authority may participate in a loan for improvements in energy efficiency that will be secured by a lien on real property subordinate to a lien securing an existing loan of the authority or another lender if the requirements of (j) of this section are satisfied, if the borrower will receive economic benefit from the subordinate loan, and if the subordinate loan is permitted under the code. The economic benefit to the borrower may be in the form of an interest rate reduction, a reduction of debt service payments, an extension of the maturity of the loan, the elimination of call or balloon payment provisions, or other economic benefits, including improvements in the energy efficiency of an existing building and improvements and structures on existing real estate.
(c) The amount of the authority's participation in a real property loan will not exceed $25,000,000, except that the authority may participate in a real property loan in an amount greater than $25,000,000 if the loan is for the financing of a qualified energy development and if the legislature has approved the authority's participation. The principal amount of a real property loan may not exceed 75 percent of the appraised value of the collateral offered as security for the loan unless the amount of the real property loan in excess of this limit is federally insured or guaranteed or is insured by a qualified mortgage insurance company, except that in no event may the real property loan to be purchased under this section exceed the total of loan proceeds used to refinance an existing debt plus the cost of new construction, expansion, or acquisition, unless the additional amounts of the loan to be purchased are restricted to uses approved by the authority to finance commercial activity in the state by a business enterprise.
(d) A real property loan must be secured by a mortgage which is a first lien on real property in fee simple or on a leasehold estate or, in the case of a qualified energy development, on an easement, except as provided in (j) of this section. The authority may review and approve other encumbrances against the real property that do not affect the authority's security for the loan.
(e) The loan terms for any real property loan must require complete amortization provisions and require periodic payments by the borrower. The term for a real property loan shall not exceed the following calculated from the date the loan is made:
(1) a loan to finance a qualified energy development may not exceed 50 years or 75 percent of the estimated economic life of the collateral offered as security for the loan, whichever is less, as determined by the authority;
(2) a loan to finance a tourism destination facility may not exceed 40 years or 75 percent of the estimated economic life of the collateral offered as security for the loan, whichever is less, as determined by the authority; and
(3) a loan to finance real property, other than described in (1) and (2) of this subsection, may not exceed 25 years or 75 percent of the estimated economic life of the collateral offered as security for the loan, whichever is less, as determined by the authority.
(f) The authority may allow the loan originator to amortize its portion of the loan using a shorter amortization schedule than the amortization schedule for the authority's portion provided
(1) in the authority's opinion, the project or qualified energy development financed can support the increased debt service;
(2) the accelerated amortization schedule is required to induce the originator to make the loan; and
(3) the originator's term is at least one-half of the amortization term of the authority's participation or 10 years, whichever is less.
(g) Before closing a real property loan where construction of the improvements in part or whole has taken place, an originator shall obtain a statement in writing from
(1) the author of the original appraisal, or other appraiser acceptable to the authority, that construction was substantially completed according to the plans and specifications included in the original appraisal required by 3 AAC 99.220(b)(12) and that the completed value is at least equal to an amount which would meet the requirements of (c) of this section;
(2) an authorized official that the buildings and structures may be occupied and that the occupancy, buildings, and structures conform to all requirements of federal, state and municipal law; or if there is no authorized official or if requested by the authority, a registered architect or professional engineer that the property offered as security for the real property loan is structurally sound and that buildings or structures conform to applicable building standards.
(h) The terms and conditions of a land lease or, in the case of a qualified energy development, an easement that secures a real property loan for a project or qualified energy development are subject to approval by the authority. The term of the lease or easement must exceed the effective term of the loan by at least 10 years. However, the authority may approve a land lease or easement for a shorter term if there is an irrevocable option to renew the lease or easement that is acceptable in the sole discretion of the authority.
(i) Unless waived by the authority, the applicant shall obtain insurance coverage for the improvements on the real property from responsible companies in such amounts and against such risks as is satisfactory to the authority. An American Land Title Association title insurance loan policy is required if real property is involved.
(j) The authority may, in its discretion, allow secondary financing on a project financed by a real property loan if the applicant demonstrates to the satisfaction of the authority that the additional debt can be repaid from the revenue earned by the real property offered as security for the real property loan.
(k) If required by the authority, the originator must obtain a guarantee for repayment of an applicant from the following persons:
(1) a partner or member of the applicant;
(2) a joint venturer with the applicant;
(3) any stockholder of the capital stock of the applicant; or
(4) the parent corporation if the applicant is a subsidiary corporation.
(l) When a real property loan is for a qualified energy development, the originator shall require the applicant to grant the authority a first position security interest in the applicant's rights under, and the proceeds of, any contract for the sale of power, electricity, or heat from the qualified energy development.
History
- Authority: AS 44.88.080; AS 44.88.085; AS 44.88.155
- In effect before 1988; am 1/11/88, Register 106; am 11/30/90, Register 118; am 7/19/91, Register 119; am 12/2/94, Register 134; am 2/11/99, Register 150; am 11/1/99, Register 153; am 2/8/2001, Register 158; am 8/8/2003, Register 168; am 4/25/2013, Register 207; am 9/24/2015, Register 217
3 AAC 99.240 Terms of tangible personal property loans
(a) The authority may participate in a loan made by an originator to acquire or build fixtures, machinery, equipment, or other tangible personal property, including tangible personal property that constitutes improvements in energy efficiency, if the loan satisfies the conditions prescribed in this section.
(b) The authority may participate in a loan made by an originator to refinance an outstanding loan described in (a) of this section if, in addition to other requirements of this section, the authority is satisfied that (1) the loan to be refinanced was not made with proceeds of outstanding general obligation indebtedness of the authority nor relates to a project or qualified energy development that was originally financed with outstanding general obligation indebtedness of the authority, (2) the borrower will receive economic benefit from the refinancing, and (3) the loan is permitted under the code. The economic benefit to the borrower may be in the form of an interest rate reduction, a reduction of debt service payments, an extension of the maturity of the loan, the elimination of call or balloon payment provisions, or other economic benefits, including improvements in the energy efficiency of an existing building, improvement, or structure.
(c) The principal amount of a tangible personal property loan may not exceed 75 percent of the appraised value of the tangible personal property collateral offered as security for the loan, except that in no event may the tangible personal property loan to be purchased under this section exceed the total of loan proceeds used to refinance an existing debt plus the cost of new construction, expansion, or acquisition, unless the additional amounts of the loan to be purchased are restricted to uses approved by the authority to finance commercial activity in Alaska by a business enterprise.
(d) A tangible personal property loan must be secured by a security agreement that is a first lien on the tangible personal property.
(e) The term of a tangible personal property loan may not exceed 15 years or 75 percent of the economic life of the collateral offered as security for the tangible personal property loan, whichever is less, as determined by the authority.
(f) The authority may allow the loan originator to amortize its portion of the loan using a shorter amortization schedule than the amortization schedule for the authority's portion provided
(1) in the authority's opinion, the project or qualified energy development financed can support the increased debt service;
(2) the accelerated amortization schedule is required to induce the originator to make the loan; and
(3) the originator's term is at least one-half of the amortization term of the authority's participation or seven and one-half years, whichever is less.
(g) The terms and conditions of a lease that secures a tangible personal property loan must be approved by the authority.
(h) Unless waived by the authority, the applicant shall obtain insurance coverage on the tangible personal property securing the tangible personal property loan from responsible companies in such amounts and against such risks as is satisfactory to the authority.
(i) The authority may, in its discretion, allow secondary financing on a project financed by a tangible personal property loan if the applicant shows that the additional debt can be repaid from the revenue earned by the tangible personal property offered as security for the tangible personal property loan.
(j) If required by the authority, the originator must obtain a guarantee for repayment of an applicant from the following persons:
(1) a partner or member of the applicant;
(2) a joint venturer with the applicant;
(3) any stockholder of the capital stock of the applicant; or
(4) the parent corporation if the applicant is a subsidiary corporation.
(k) When a tangible personal property loan is for a qualified energy development, the originator shall require the applicant to grant the authority a first position security interest in the applicant's rights under, and the proceeds of, any contract for the sale of power, electricity, or heat from the qualified energy development.
History
- Authority: AS 44.88.080; AS 44.88.085; AS 44.88.155
- In effect before 1988; am 1/11/88, Register 106; am 11/30/90, Register 118; am 7/19/91, Register 119; am 9/25/92, Register 124; am 12/2/94, Register 134; am 2/11/99, Register 150; am 11/1/99, Register 153; am 8/8/2003, Register 168; am 4/25/2013, Register 207
3 AAC 99.250 Participation requirements
(a) The originator of a loan shall initially retain at least a 10 percent share of the principal amount of the loan and may not sell, transfer, or permit prepayment or other early retirement of any portion of its participation interest without the permission of the authority. However, the originator of a loan for improvements in energy efficiency may request that the authority permit the originator to retain an interest of less than 10 percent of the principal amount of the loan, which request the authority may approve or disapprove depending on its evaluation of the factors stated in 3 AAC 99.260(a).
(b) The initial rate of interest on the authority's participation in a real property or tangible personal property loan is set at the time the authority issues a loan commitment at a rate equal to the sum of the "true interest cost rate" and the "authority cost amount". The rate of interest on the originator's portion of a loan is set by the originator, but may not exceed a market rate. If the authority issues bonds in respect of a loan, the authority will set the interim rate of interest, pending sale of the bonds, at the time that the authority issues a loan commitment. The authority will set the final rate of interest after issuance of the bonds. If the authority does not issue bonds in respect of a loan, the authority will set the rate of interest at the time that the authority issues a loan commitment.
(c) The authority will, in its discretion, require prepayment fees on its participation share in a real property or tangible personal property loan in amounts and for a period of time it determines appropriate, except that the authority will not charge a prepayment fee later than five years from the date the authority funds its participation.
(d) In this section
(1) "true interest cost rate" means
(A) if the authority issues bonds to fund a participation in a loan, the rate on the bonds of the authority; or
(B) if the authority uses authority assets to fund a participation in a loan, 65 percent of the rate identified on the daily Federal Home Loan Bank of Des Moines' Fixed-Rate Advances Index which most closely matches the term of the loan, and whether the type of loan has a fixed or variable interest rate, as determined by the authority, with the following adjustments:
(i) for a fixed rate loan, the rate during any fiscal year may not be lower than the five year return on the investment funds of the authority, expressed as an annual interest rate, as determined in the authority's review of its investments at the end of the third quarter of the prior fiscal year and, for a variable rate loan, the rate during any fiscal year will not be lower than 475 basis points;
(ii) for a variable rate loan, 200 basis points will be added to the rate;
(2) "authority cost amount" means an amount, determined by the authority and expressed as an annual rate of interest, that is necessary to pay for the allocable expenses of operation, costs of issuance not subject to a loan participation bond issuance fee under 3 AAC 99.220(e), and loan servicing with respect to loans for which interest rates are determined under this section; however, the annual rate of interest may not exceed the maximum amount above the yield on the tax-exempt bonds described in (1)(A) of this subsection that would be permitted under section 148 of the Internal Revenue Code of 1986, as amended, without causing the bonds to lose their tax-exempt status.
History
- Authority: AS 44.88.080; AS 44.88.155 AS 44.88.085; AS 44.88.159
- In effect before 1988; am 1/11/88, Register 106; am 11/30/90, Register 118; am 7/19/91, Register 119; am 9/25/92, Register 124; am 11/1/99, Register 153; am 8/8/2003, Register 168; am 9/9/2010, Register 197 [not printed]; am 12/3/2010, Register 197; am 12/15/2010, Register 197; am 1/13/2011, Register 198; am 1/31/2011, Register 198; am 3/8/2011, Register 198; am 4/25/2013, Register 207; am 5/16/2023, Register 248
3 AAC 99.260 Application review and fees
(a) The authority will determine whether to approve an application for the authority to participate in a real property or tangible personal property loan by evaluating
(1) whether the requirements of AS 44.88.155 and 3 AAC 99.200 - 3 AAC 99.290 have been met;
(2) the applicant's credit standing;
(3) the economic and financial viability of the proposed project or qualified energy development;
(4) the impact the proposed loan would have on the loan participation portfolio of the authority on the concentration by industry area and geographic region, and on the concentration of loans to a single borrower and related obligors;
(5) whether and the extent to which the loan is consistent with the fulfillment of the authority's purposes established in AS 44.88.070; and
(6) any other commercially reasonable underwriting criteria the authority, in its discretion, determines to be pertinent to the application, given the terms of the financing or the nature of the applicant or the proposed project or qualified energy development.
(b) If a loan application is approved, the authority will provide a loan commitment which is effective upon payment of a commitment fee by the applicant. The commitment fee is one percent of the principal amount of the authority's participation in the loan. A loan commitment is an agreement by the authority that it will participate in a loan to the applicant in an amount specified in the loan commitment under terms and conditions prescribed by the authority. The commitment fee is nonrefundable.
(c) The authority may issue a loan commitment as described in (b) of this section for a term determined by the authority. Before expiration of the loan commitment term, the originator may request an extension of the loan commitment term for a subsequent period of 30 days if the authority does not fund the authority's participation in the loan. The authority will grant a loan commitment term extension effective upon receipt by the authority of 12.5 basis points applied to the committed loan amount as a non-refundable fee. The authority may grant subsequent loan commitment term extensions for additional 30-day periods effective upon receipt by the authority of an additional 12.5 basis points applied to the committed loan amount as a non-refundable fee.
History
- Authority: AS 44.88.070; AS 44.88.085 AS 44.88.080; AS 44.88.212
- In effect before 1988; am 1/11/88, Register 106; am 7/19/91, Register 119; am 11/1/99, Register 153; am 2/8/2001, Register 158; am 10/12/2004, Register 173; am 4/25/2013, Register 207; am 6/28/2017, Register 227
3 AAC 99.270 Appeals
The originator of a loan who has submitted an application for a loan which is not approved by the authority may appeal that decision to the board by filing a written notice of appeal with the authority not later than 10 working days after the originator is notified that the loan application has been disapproved. The board will issue its decision on the appeal within 45 working days. When deciding the originator's appeal, the board will consider only the loan application documents filed by the originator on or before the date of the authority's decision with respect to the application. The decision of the board on the appeal is final.
History
- Authority: AS 44.88.080; AS 44.88.085
- In effect before 1988; am 1/11/88, Register 106; am 11/1/99, Register 153
3 AAC 99.280 Loan closing and disbursement of funds
Upon certification by the originator and the applicant that all provisions of the loan commitment has been complied with, the loan will be scheduled for closing review and payment of money to the originator.
History
- Authority: AS 44.88.080; AS 44.88.085
- In effect before 1988; am 1/11/88, Register 106; am 11/30/90, Register 118; am 9/25/92, Register 124; am 2/11/99, Register 150; am 2/8/2001, Register 158
3 AAC 99.290 Servicing of loans
(a) The authority will enter into a servicing agreement with each originator that
(1) provides that all servicing will be by the originator;
(2) provides methods for the collection of delinquent payments of principal and interest and foreclosure or exercise of security rights undertaken by the originator;
(3) provides for periodic reports to the authority by the originator; and
(4) requires the originator to service the loan in accordance with accepted business practices, including, but not limited to, prompt collection of amounts due under the loan.
(b) The originator must provide a bond and/or insurance policy considered sufficient by the authority which protects the authority against errors, omissions, fraud, or dishonesty committed by the originator, including any of the originator's officers, directors, employees, and agents.
(c) The authority may enter into a loan modification agreement with the originator and the borrower if the authority determines that the loan modification will assist in the economic survival of the borrower during a period of economic hardship while maximizing the ultimate return to the authority. The authority must receive a non-refundable $500 modification fee before entering a loan modification agreement.
(d) The authority may include in a loan commitment provisions relating to the differential amortization provisions as between the authority's portion of the loan and the originator's portion as permitted in 3 AAC 99.230(f) and 3 AAC 99.240(f). Such provisions may include, but are not limited to, provisions relating to servicing fees, prepayments, security, and remedies.
(e) The authority may approve the assumption of an outstanding loan in which the authority participates after evaluating the collateral securing the loan and the financial and credit history and ability to repay of the entity proposing to assume the loan. The authority must receive a nonrefundable assumption fee of one percent of the outstanding balance before entering a loan assumption agreement.
History
- Authority: AS 44.88.080; AS 44.88.085
- In effect before 1988; am 1/11/88, Register 106; am 11/22/88, Register 109; am 11/30/90, Register 118; am 7/19/91, Register 119; am 2/11/99, Register 150; am 2/8/2001, Register 158; am 6/28/2018, Register 227
Article 3 Taxable Loan Participation Program
3 AAC 99.300 Scope of article
The provisions of 3 AAC 99.300 - 3 AAC 99.390 apply to an application submitted to the authority for authority participation in a loan that is or could be financed by the issuance of bonds the interest on which is not excluded from gross income for federal income taxes under the code, and which bonds are not secured solely by a project applicant or a project or by a qualified energy development applicant or a qualified energy development.
History
- Authority: AS 44.88.080; AS 44.88.085
- In effect before 1988; am 1/11/88, Register 106; am 10/23/96, Register 141; am 11/1/99, Register 153; am 4/25/2013, Register 207
3 AAC 99.302 Waiver of requirements
If the authority under AS 44.88.155(g) waives or modifies the requirements of AS 44.88.155 to finance a project the authority intends to own or to finance a qualified energy development project, the authority may waive the requirements of any substantially similar or implementing provisions of 3 AAC 99.300 - 3 AAC 99.390 as the authority considers appropriate and prudent.
History
- Authority: AS 44.88.080; AS 44.88.085; AS 44.88.155
- Eff. 12/3/2010, Register 197; am 4/25/2013, Register 207
3 AAC 99.305 Eligible projects and energy developments
A loan under the taxable loan participation program is for permanent financing for a newly-constructed project or qualified energy development, the acquisition of an existing project or qualified energy development, or the refinancing of an existing project or qualified energy development. A loan under the taxable loan participation program may also be for financing improvements in energy efficiency. No refinancing of a loan that is financed with proceeds of outstanding general obligation indebtedness of the authority or that relates to a project or qualified energy development that was originally financed with outstanding general obligation indebtedness of the authority will be permitted under this section unless the bonds are subject to optional redemption at par by the authority at the time the bonds are issued.
History
- Authority: AS 44.88.080; AS 44.88.085; AS 44.88.155
- In effect before 1988; am 1/11/88, Register 106; am 11/30/90, Register 118; am 11/1/99, Register 153; am 4/25/2013, Register 207
3 AAC 99.310 Preliminary application
Repealed 1/11/88.
3 AAC 99.320 Application for authority participation
(a) A business enterprise may apply for a loan under the taxable umbrella loan program by contacting an originator. The originator shall review the proposed use of the loan, the applicant's eligibility, and any other matters the originator may determine necessary. When the originator, with the concurrence of the business enterprise, decides it is appropriate to do so, the originator and the applicant shall prepare an application for authority participation in the loan.
(b) An application for authority participation must be submitted by the originator to the authority along with a non-refundable $1,100 fee. If the authority issues a commitment to purchase a participation in the originator's loan, and the loan commitment issued by the authority is accepted and signed by the originator and borrower and returned to the authority, the non-refundable $1,100 application fee will be credited against the authority's commitment fee as required by 3 AAC 99.360(b). The authority may require the originator to include with the application any of the following:
(1) a letter of transmittal;
(2) a loan summary, including originator approval at the appropriate level of authority;
(3) a list of other unpaid loans to the applicant or, if the applicant is not a sole proprietorship, to any member of the applicant's business enterprise, from the state or other public corporation of the state along with applicant certification that each unpaid loan is current and no other loans exist;
(4) a current credit report of the applicant and the guarantor, if any;
(5) a signed current balance sheet and year-to-date profit and loss statement on the applicant, not more than 90 days old from the date of application, fiscal year end balance sheet and profit and loss statement for the prior three years on the applicant; current balance sheet and federal income tax return for the prior two years on all guarantors and co-borrowers;
(6) copies of the applicant's federal income tax returns for the prior three years, if the balance sheet and profit and loss statement required from the applicant in (5) of this subsection are not audited by a certified public accountant;
(7) copies of the earnest money receipt and agreement, option to purchase, contract to purchase, or invoice for purchase of land, land and improvements, or tangible personal property related to the project or qualified energy development;
(8) a copy of a lease or easement for land and improvements related to the project or qualified energy development and, in the case of a hydropower project licensed or to be licensed by the Federal Energy Regulatory Commission, a copy of the documents designating the project boundary with a lease or easement to be completed before closing giving the applicant control of the area within the project boundary;
(9) a detailed description of the project or qualified energy development and a detailed description of real or tangible property to be acquired for the project or qualified energy development;
(10) a detailed estimate of the cost of construction;
(11) an estimate of the number of jobs to be created or retained by this project or qualified energy development;
(12) if the loan is to be secured by real property, a written appraisal report acceptable to the authority estimating the value of the real property
(A) if the total loan amount is equal to or less than $1,000,000, the appraisal may be a summary appraisal report;
(B) if the total loan amount is greater than $1,000,000, the appraisal must be a detailed appraisal describing the information analyzed, the appraisal procedures followed, and the reasoning that supports the analysis, opinions expressed, and conclusions in conformity with current professional standards;
(13) if the loan is for the purchase of tangible personal property, an appraisal in a format acceptable to the authority prepared by an appraiser who is acceptable to the authority;
(14) copies of leases or agreements to lease or renew a lease between the applicant and tenants of the project or qualified energy development, including a list of tenants, lease rates, terms, and options;
(15) a financial feasibility analysis satisfactory to the authority;
(16) an environmental risk assessment satisfactory to the authority, followed by an environmental audit if required by the authority;
(17) if the loan is to finance improvements in energy efficiency, an analysis of the energy efficiencies that are expected to be achieved, including the units of energy expected to be saved over the life of the improvements and the dollar savings expected to be realized; and
(18) any other information considered necessary by the authority to evaluate the application.
(c) If the authority issues bonds in respect of a loan, the authority may charge a loan participation bond issuance fee for the costs of issuance of the bonds.
(d) If the application concerns a loan for a qualified energy development, the authority, in addition to the requirements of (b) of this section, may require the originator to provide any of the following:
(1) a description of the technology to be used in the qualified energy development;
(2) the purpose of the qualified energy development;
(3) a description of the type of qualified energy development as being one for
(A) the transmission, generation, conservation, or storage or distribution of electricity;
(B) the transmission, generation, conservation or distribution of heat;
(C) liquefaction, regasification, distribution, storage, or use of natural gas, excluding a natural gas pipeline project for transporting natural gas from the North Slope or Cook Inlet to market;
(D) distribution of refined petroleum products;
(E) storage of refined petroleum products;
(4) if the applicant is a regulated or tariffed utility under AS 42.05, documents establishing that status; and
(5) a copy of any contract for the sale of power, electricity, or heat from the qualified energy development for which the loan is sought.
History
- Authority: AS 44.88.080; AS 44.88.085; AS 44.88.155
- In effect before 1988; am 1/11/88, Register 106; am 11/30/90, Register 118; am 7/19/91, Register 119; am 9/25/92, Register 124; am 2/11/99, Register 150; am 11/1/99, Register 153; am 2/8/2001, Register 158; am 12/3/2010, Register 197; am 4/25/2013, Register 207; am 6/28/2018, Register 227; am 5/16/2023, Register 248
3 AAC 99.330 Terms of real property loans
(a) The authority may participate in a loan made by an originator to acquire land, or to acquire or construct buildings, improvements, and structures on land, or to make improvements in the energy efficiency of buildings, improvements, and structures on land, if the loan satisfies the conditions prescribed in this section.
(b) The authority may participate in a loan made by an originator to refinance an outstanding loan described in (a) of this section, if, in addition to other requirements of this section, the authority is satisfied that (1) the loan to be refinanced was not made with proceeds of outstanding general obligation indebtedness of the authority nor relates to a project that was originally financed with outstanding general obligation indebtedness of the authority, and (2) the borrower will receive economic benefit from the refinancing. The authority may participate in a loan for improvements in energy efficiency that will be secured by a lien on real property subordinate to a lien securing an existing loan of the authority or another lender if the requirements of (j) of this section are satisfied, and if the borrower will receive economic benefit from the subordinate loan. The economic benefit to the borrower may be in the form of an interest rate reduction, a reduction of debt service payments, an extension of the maturity of the loan, the elimination of call or balloon payment provisions, or other economic benefits, which may include improvements in the energy efficiency of an existing building, improvement, or structure.
(c) The amount of the authority's participation in a real property loan will not exceed $25,000,000, except that the authority may participate in a real property loan in an amount greater than $25,000,000 if the loan is for the financing of a qualified energy development and if the legislature has approved the authority's participation. The principal amount of a real property loan may not exceed 75 percent of the appraised value of the collateral offered as security for the loan unless the amount of the real property loan in excess of this limit is federally insured or guaranteed or is insured by a qualified mortgage insurance company, except that in no event may the real property loan to be purchased under this section exceed the total of loan proceeds used to refinance an existing debt plus the cost of new construction, expansion, or acquisition, unless the additional amounts of the loan to be purchased are restricted to uses approved by the authority to finance commercial activity in the state by a business enterprise.
(d) A real property loan must be secured by a mortgage which is a first lien on real property in fee simple or on a leasehold estate or, in the case of a qualified energy development, on an easement, except as provided in (j) of this section. The authority may review and approve other encumbrances against the real property that do not affect the authority's security for the loan.
(e) The loan terms for any real property loan must require complete amortization provisions and require periodic payments by the borrower. The term for a real property loan may not exceed the following calculated from the date the loan is made:
(1) a loan to finance a qualified energy development may not exceed 50 years or 75 percent of the estimated economic life of the collateral offered as security for the loan, whichever is less, as determined by the authority;
(2) a loan to finance a tourism destination facility may not exceed 40 years or 75 percent of the estimated economic life of the collateral offered as security for the loan, whichever is less, as determined by the authority; and
(3) a loan to finance real property, other than described in (1) and (2) of this subsection, may not exceed 25 years or 75 percent of the estimated economic life of the collateral offered as security for the loan, whichever is less, as determined by the authority.
(f) The authority may allow the loan originator to amortize its portion of the loan using a shorter amortization schedule than the amortization schedule for the authority's portion provided
(1) in the authority's opinion, the project or qualified energy development financed can support the increased debt service;
(2) the accelerated amortization schedule is required to induce the originator to make the loan; and
(3) the originator's term is at least one-half of the amortization term of the authority's participation or 10 years, whichever is less.
(g) Before closing a real property loan where construction of the improvements in part or whole has taken place, an originator shall obtain a statement in writing from
(1) the author of the original appraisal, or other appraiser acceptable to the authority, that construction was substantially completed according to the plans and specifications included in the original appraisal required by 3 AAC 99.320(b)(12) and that the completed value is at least equal to an amount which would meet the requirements of (c) of this section;
(2) an authorized official that the buildings and structures may be occupied and that the occupancy, buildings, and structures conform to all requirements of federal, state and municipal law; or if there is no authorized official or if requested by the authority, a registered architect or professional engineer that the property offered as security for the real property loan is structurally sound and that buildings or structures conform to applicable building standards.
(h) The terms and conditions of a land lease or, in the case of a qualified energy development, an easement that secures a real property loan for a project or qualified energy development are subject to approval by the authority. The term of the lease or easement must exceed the effective term of the loan by at least 10 years. However, the authority may approve a land lease or easement for a shorter term if there is an irrevocable option to renew the lease or easement that is acceptable in the sole discretion of the authority.
(i) Unless waived by the authority, the applicant shall obtain insurance coverage for the improvements on the real property from responsible companies in such amounts and against such risks as is satisfactory to the authority. An American Land Title Association title insurance loan policy is required if real property is involved.
(j) The authority may allow and participate in financing on a project or qualified energy development where the security for the authority's financing will be subordinate to a lien or security interest in favor of senior financing if
(1) one of the following is satisfied:
(A) the project or qualified energy development is currently financed by the authority;
(B) the loan is secured by real property;
(C) the loan is for expansion and improvements of the project or qualified energy development; and
(2) the applicant demonstrates to the satisfaction of the authority that the additional debt can be repaid from the revenue earned by the real property offered as security for the loan.
(k) If required by the authority, the originator must obtain a guarantee for repayment of an applicant from the following persons:
(1) a partner or member of the applicant;
(2) a joint venturer with the applicant;
(3) any stockholder of the capital stock of the applicant; or
(4) the parent corporation if the applicant is a subsidiary corporation.
(l) When a real property loan is for a qualified energy development, the originator shall require the applicant to grant the authority an acceptable security interest in the applicant's rights under, and the proceeds of, any contract for the sale of power, electricity, or heat from the qualified energy development.
History
- Authority: AS 44.88.080; AS 44.88.085; AS 44.88.155
- In effect before 1988; am 1/11/88, Register 106; am 11/30/90, Register 118; am 7/19/91, Register 119; am 9/25/92, Register 124; am 12/2/94, Register 134; am 2/11/99, Register 150; am 2/8/2001, Register 158; am 8/8/2003, Register 168; am 4/25/2013, Register 207; am 9/24/2015, Register 217
3 AAC 99.340 Terms of tangible personal property loans
(a) The authority may participate in a loan made by an originator to acquire or build fixtures, machinery, equipment, or other tangible personal property, including tangible personal property that constitutes improvements in energy efficiency, if the loan satisfies the conditions prescribed in this section.
(b) The authority may participate in a loan made by an originator to refinance an outstanding loan described in (a) of this section if, in addition to other requirements of this section, the authority is satisfied that (1) the loan to be refinanced was not made with proceeds of outstanding general obligation indebtedness of the authority nor relates to a project or qualified energy development that was originally financed with outstanding general obligation indebtedness of the authority, and (2) the borrower will receive economic benefit from the refinancing. The economic benefit to the borrower may be in the form of an interest rate reduction, a reduction of debt service payments, an extension of the maturity of the loan, the elimination of call or balloon payment provisions, or other economic benefits, which may include improvements in the energy efficiency of an existing building, improvement, or structure.
(c) The principal amount of a tangible personal property loan may not exceed 75 percent of the appraised value of the tangible personal property collateral offered as security for the loan, except that in no event may the tangible personal property loan to be purchased under this section exceed the total of loan proceeds used to refinance an existing debt plus the cost of new construction, expansion, or acquisition, unless the additional amounts of the loan to be purchased are restricted to uses approved by the authority to finance commercial activity in Alaska by a business enterprise.
(d) A tangible personal property loan must be secured by a security agreement that is a first lien on the tangible personal property.
(e) The term of a tangible personal property loan may not exceed 15 years or 75 percent of the economic life of the collateral offered as security for the tangible personal property loan, whichever is less, as determined by the authority.
(f) The authority may allow the loan originator to amortize its portion of the loan using a shorter amortization schedule than the amortization schedule for the authority's portion provided
(1) in the authority's opinion, the project or qualified energy development financed can support the increased debt service;
(2) the accelerated amortization schedule is required to induce the originator to make the loan; and
(3) the originator's term is at least one-half of the amortization term of the authority's participation or seven and one-half years, whichever is less.
(g) The terms and conditions of a lease that secures a tangible personal property loan must be approved by the authority.
(h) Unless waived by the authority, the applicant shall obtain insurance coverage on the tangible personal property securing the tangible personal property loan from responsible companies in such amounts and against such risks as is satisfactory to the authority.
(i) The authority may, in its discretion, allow secondary financing on a project financed by a tangible personal property loan if the applicant shows that the additional debt can be repaid from the revenue earned by the tangible personal property offered as security for the tangible personal property loan.
(j) If required by the authority, the originator must obtain a guarantee for repayment of an applicant from the following persons:
(1) a partner or member of the applicant;
(2) a joint venturer with the applicant;
(3) any stockholder of the capital stock of the applicant; or
(4) the parent corporation if the applicant is a subsidiary corporation.
(k) When a tangible personal property loan is for a qualified energy development, the originator shall require the applicant to grant the authority a first position security interest in the applicant's rights under, and the proceeds of, any contract for the sale of power, electricity, or heat from the qualified energy development.
History
- Authority: AS 44.88.080; AS 44.88.085; AS 44.88.155
- In effect before 1988; am 1/11/88, Register 106; am 11/30/90, Register 118; am 7/19/91, Register 119; am 9/25/92, Register 124; am 12/2/94, Register 134; am 2/11/99, Register 150; am 8/8/2003, Register 168; am 4/25/2013, Register 207
3 AAC 99.350 Participation requirements
(a) The originator of a loan shall initially retain at least a 10 percent share of the principal amount of the loan and may not sell, transfer, or permit prepayment or other early retirement of any portion of its participation interest without the permission of the authority. However, the originator of a loan to finance improvements in energy efficiency may request that the authority permit the originator to retain an interest of less than 10 percent of the principal amount of the loan, which request the authority may approve or disapprove depending on its evaluation of the factors stated in 3 AAC 99.360(a).
(b) The initial rate of interest on the authority's participation in a real property or tangible personal property loan will be set at the time the authority issues a loan commitment at a rate equal to the sum of the "true interest cost rate" and the "authority cost amount". The rate of interest on the originator's portion of a loan is set by the originator, but may not exceed a market rate.
(c) The authority will, in its discretion, require prepayment fees on its participation share in a real property or tangible personal property loan in amounts and for a period of time it determines appropriate, except that the authority will not charge a prepayment fee later than five years from the date the authority funds its participation.
(d) The authority will, in its discretion, approve a modification of the interest rate and loan term on the authority's portion of a loan under 3 AAC 99.300 - 3 AAC 99.390 as follows:
(1) effective upon the authority's approval of a written request from the borrower and originator for an interest rate modification or extension of loan term, or both, the authority will
(A) change the interest rate to either a current variable interest rate published by the authority, or the current fixed interest rate published by the authority for a loan with a term equal to the original term of the authority's portion of the loan, plus extensions of the original term, if any, as allowed in (B) of this paragraph; and
(B) extend the loan term up to the maximum term permitted under 3 AAC 99.330(e) and 3 AAC 99.340(e), except that in no case will the total aggregate loan term exceed the maximum term as permitted under 3 AAC 99.330(e) and 3 AAC 99.340(e);
(2) the authority will, in its discretion, adjust the scheduled payment on the loan to reflect a change in interest rate or loan term, or both, in order to maintain the proper loan amortization;
(3) upon authority approval of a modification described in either (1)(A) or (1)(B) of this subsection, the originator must remit to the authority a one percent fee, calculated on the outstanding principal balance of the authority's portion of the loan;
(4) the borrow and originator may request modification of the interest rate and loan term more than once during the term of the loan, subject to the maximum loan term permitted in 3 AAC 99.330(e) and 3 AAC 99.340(e), and remittance to the authority of a one percent fee calculated as described in (3) of this subsection for each such modification.
(e) In this section
(1) "true interest cost rate" means
(A) if the authority issues bonds to fund a participation in a loan, the rate on the bonds of the authority; or
(B) if the authority uses authority assets to fund a participation in a loan, the rate identified on the daily Federal Home Loan Bank of Des Moines' Fixed-Rate Advances Index which most closely matches the term of the loan, and whether the type of loan has a fixed or variable interest rate, as determined by the authority, with the following adjustments:
(i) for a fixed rate loan, the rate during any fiscal year may not be lower than the five year return on the investment funds of the authority, expressed as an annual interest rate, as determined in the authority's review of its investments at the end of the third quarter of the prior fiscal year and for a variable rate loan, the rate during any fiscal year will not be lower than 375 basis points;
(ii) for a variable rate loan, 100 basis points will be added to the rate;
(2) "authority cost amount" means an amount, determined by the authority and expressed as an annual rate of interest, that is necessary to pay for the allocable expenses of operation, costs of issuance not subject to a loan participation bond issuance fee under 3 AAC 99.320(c), and loan servicing with respect to loans for which interest rates are determined under this section.
History
- Authority: AS 44.88.080; AS 44.88.150; AS 44.88.159 AS 44.88.085; AS 44.88.155
- In effect before 1988; am 1/11/88, Register 106; am 11/30/90, Register 118; am 7/19/91, Register 119; am 9/25/92, Register 124; am 2/11/99, Register 150; am 11/1/99, Register 153; am 8/8/2003, Register 168; am 9/9/2010, Register 197 [not printed]; am 12/3/2010, Register 197; am 12/15/2010, Register 197; am 1/13/2011, Register 198; am 1/31/2011, Register 198; am 3/8/2011, Register 198; am 4/25/2013, Register 207; am 6/28/2018, Register 227; am 5/16/2023, Register 248
3 AAC 99.360 Application review and fees
(a) The authority will determine whether to approve an application for the authority to participate in a real property or tangible personal property loan by evaluating
(1) whether the application requirements of AS 44.88.155 and 3 AAC 99.300 - 3 AAC 99.390 have been met;
(2) the applicant's credit standing;
(3) the economic and financial viability of the proposed project or qualified energy development;
(4) the impact the proposed loan would have on the loan participation portfolio of the authority on the concentration by industry area and geographic region, and on the concentration of loans to a single borrower and related obligors;
(5) whether and the extent to which the loan is consistent with the fulfillment of the authority's purposes established in AS 44.88.070; and
(6) any other commercially reasonable underwriting criteria the authority, in its discretion, determines to be pertinent to the application, given the terms of the financing or the nature of the applicant or the proposed project or qualified energy development.
(b) If a loan application is approved, the authority will provide a loan commitment that is effective upon payment, by the applicant, of a commitment fee. The commitment fee is one percent of the principal amount of the authority's participation in the loan. A loan commitment is an agreement by the authority that it will participate in a loan to the applicant in an amount specified in the loan commitment under terms and conditions prescribed by the authority. The commitment fee is nonrefundable.
(c) The authority will, in its discretion, issue a loan commitment as described in (b) of this section for a term determined by the authority. Before expiration of the loan commitment term, the originator may request an extension of the loan commitment term for a subsequent period of 30 days if the authority has not funded the authority's participation in the loan. The authority will grant a loan commitment term extension effective upon receipt by the authority of 12.5 basis points of the loan commitment as a non-refundable fee. The authority will grant subsequent loan commitment term extensions for one or more additional 30-day periods effective upon receipt by the authority of an additional 12.5 basis points of the loan commitment as a nonrefundable fee.
History
- Authority: AS 44.88.070; AS 44.88.085 AS 44.88.080; AS 44.88.212
- In effect before 1988; am 1/11/88, Register 106; am 11/30/90, Register 118; am 11/1/99, Register 153; am 10/12/2004, Register 173; am 4/25/2013, Register 207; am 6/28/2018, Register 227
3 AAC 99.370 Appeals
The originator of a loan who has submitted an application for a loan that is not approved by the authority may appeal that decision to the board by filing a written notice of appeal with the authority not later than 10 working days after the originator is notified that the loan application has been disapproved. The board will issue its decision on the appeal within 45 working days. When deciding the originator's appeal, the board will consider only the loan application documents filed by the originator on or before the date of the authority's decision with respect to the application. The decision of the board on the appeal is final.
History
- Authority: AS 44.88.080; AS 44.88.085; AS 44.88.155
- In effect before 1988; am 1/11/88, Register 106; am 11/1/99, Register 153
3 AAC 99.380 Loan closing and disbursement of funds
Upon certification by the originator and the applicant that all provisions of the loan commitment has been complied with, the loan will be scheduled for closing review and payment of money to the originator.
History
- Authority: AS 44.88.080; AS 44.88.085
- In effect before 1988; am 1/11/88, Register 106; am 11/30/90, Register 118; am 9/25/92, Register 124; am 2/11/99, Register 150; am 2/8/2001, Register 158
3 AAC 99.390 Servicing of loans
(a) The authority will enter into a servicing agreement with each originator that
(1) provides that all servicing be by the originator;
(2) provides methods for the collection of delinquent payments of principal and interest, and foreclosure or exercise of security rights undertaken by the originator;
(3) provides for periodic reports to the authority by the originator; and
(4) requires the originator to service the loan in accordance with accepted business practices, including, but not limited to, prompt collection of amounts due under the loan.
(b) The originator must provide a bond and/or insurance policy considered sufficient by the authority which protects the authority against errors, omissions, fraud, or dishonesty committed by the originator, including any of the originator's officers, directors, employees, and agents.
(c) The authority may enter into a loan modification agreement with the originator and the borrower if the authority determines that such a modification will assist in the economic survival of the borrower during a period of economic hardship while maximizing the ultimate return to the authority. The authority must receive a non-refundable $500 modification fee before entering a loan modification agreement.
(d) The authority may include in a loan commitment provisions relating to the differential amortization provisions as between the authority's portion of the loan and the originator's portion as permitted in 3 AAC 99.330(f) and 3 AAC 99.340(f). Such provisions may include, but are not limited to, provisions relating to servicing fees, prepayments, security, and remedies.
(e) The authority may approve the assumption of an outstanding loan in which the authority participates after evaluating the collateral securing the loan and the financial and credit history and ability to repay of the entity proposing to assume the loan. The authority must receive a non-refundable assumption fee of one percent of the outstanding loan balance before entering a loan assumption agreement.
History
- Authority: AS 44.88.080; AS 44.88.085
- In effect before 1988; am 1/11/88, Register 106; am 11/22/88, Register 109; am 11/30/90, Register 118; am 7/19/91, Register 119; am 2/11/99, Register 150; am 2/8/2001, Register 158; am 6/28/2018, Register 227
Article 5 Development Finance Program
3 AAC 99.500 Scope of article; waiver of requirement
(a) 3 AAC 99.500 - 3 AAC 99.599 apply to development projects that the authority intends to own and operate and to development projects for which the authority will or may provide project financing.
(b) If authorized or permitted by law, the authority may waive any requirements of 3 AAC 99.500 - 3 AAC 99.599 to the extent the authority considers it appropriate and prudent to do so.
History
- Authority: AS 44.88.080; AS 44.88.085; AS 44.88.095
- Eff. 1/11/88, Register 106; am 12/5/2013, Register 209
3 AAC 99.510 Finance plan
Before approving a project financed under AS 44.88.172, the authority shall prepare a finance plan in conformance with AS 44.88.173(a) - (c). If the project involves a partnership or joint venture with another entity, the finance plan will provide the information required in AS 44.88.173 on the entire project. The finance plan shall be submitted to the State Bond Committee, the governor, and legislature before issuing bonds or otherwise incurring debt for the project.
History
- Authority: AS 44.88.080; AS 44.88.085; AS 44.88.173
- Eff. 1/11/88, Register 106
3 AAC 99.520 Local participation and approval
(a) Before entering into an agreement to finance or develop a development project for which the authority expects to issue bonds, the authority will obtain the approval of the municipality in which the proposed project is to be located. If the development project for which the authority expects to issue bonds is located within the unorganized borough, the authority will comply with AS 44.88.174. The authority will not enter into the agreement unless the municipality in which the proposed development project is to be located conducts a public hearing on the proposed project. If the development project is located within the unorganized borough, the authority will not enter into the agreement unless the regional resource advisory council under AS 44.88.174 conducts a public hearing within the region.
(b) The authority will solicit the review and advice of either local government or the regional resource advisory council in the area within which a development project is located before
(1) entering into an agreement to finance or develop a development project for which the authority does not expect to issue bonds; or
(2) executing other contracts, agreements, resolutions, or other matters that directly concern the development, maintenance, and operation of a development project.
(c) The authority may enter into joint financing arrangements with interested public and private participants with respect to development projects.
History
- Authority: AS 44.88.080; AS 44.88.095; AS 44.88.177 AS 44.88.085; AS 44.88.174
- Eff. 1/11/88, Register 106; am 11/30/90, Register 118; am 12/5/2013, Register 209; am 6/28/2018, Register 227
3 AAC 99.530 Authority findings
Before approving a development project for which bonds must be issued, the authority must find, on the basis of all information reasonably available to it, that
(1) the project and its development under AS 44.88 will be economically advantageous to the state and to the general public welfare and will contribute to the economic growth of the state;
(2) the project applicant is financially responsible;
(3) the project is economically and financially feasible and able to produce revenue adequate to repay the bonds or loans with which it is financed;
(4) increased demand on public facilities that might result from the project will be provided for;
(5) the project will provide or retain employment reasonably related to the amount of the financing by the authority, considering the amount of investment per employee for comparable facilities, and other relevant factors;
(6) the scope of the project is sufficient to provide a reasonable expectation of a benefit to the economy of the state;
(7) the project is in compliance with applicable law; and
(8) issuance of the bonds is not expected to adversely affect the ability of the state or any political subdivision of the state to market other bonds.
History
- Authority: AS 44.88.080; AS 44.88.095 AS 44.88.085; AS 44.88.175
- Eff. 1/11/88, Register 106; am 11/30/90, Register 118
3 AAC 99.540 Financing
Before issuing bonds for a development project, the authority will enter into an agreement with any partners, joint venturers, or users of the facility to be constructed, providing for adequate guarantee of revenues to repay any indebtedness incurred by the authority for the project.
History
- Authority: AS 44.88.080; AS 44.88.090 AS 44.88.085; AS 44.88.172
- Eff. 1/11/88, Register 106; am 11/30/90, Register 118; am 9/25/92, Register 124; am 11/9/2011, Register 201
3 AAC 99.550 Legislative approval
The authority will not issue bonds in an amount greater than $25,000,000 to assist in the acquisition, financing, or operation of a development project without prior legislative approval.
History
- Authority: AS 44.88.080; AS 44.88.090 AS 44.88.085; AS 44.88.172
- Eff. 1/11/88, Register 106; am 11/30/90, Register 118; am 9/24/2015, Register 217
3 AAC 99.555 Application
(a) For a development project the authority intends to own and operate, no formal application is required. A proponent of a development project that authority will own and operate may initiate and pursue discussions with the authority regarding the proposed project in any manner. The authority may require a proponent of a development project the authority is expected to own and operate to provide any information the authority determines to be relevant to the proposed project.
(b) For a development project that the authority is not expected to own and operate, a project applicant may seek development project financing from the authority by completing a two-step procedure using first the submission of a preliminary application. The preliminary application must be on a form supplied by the authority describing the nature of the development project, its location, its size, and its ownership. There is no fee for the submission of a preliminary application. The authority will review the preliminary application and advise the project applicant whether to proceed with a full application.
(c) If the authority has not requested that a project applicant submit a full application within 90 days after the project applicant submitted the preliminary application, the preliminary application will be deemed to be denied. A project applicant whose preliminary application is expressly denied by the authority, or whose preliminary application is deemed to be denied under this subsection, may nevertheless elect to submit a full application to the authority so long as the project applicant does so no later than 20 working days after the date of the denial. Submission of a full application shall be a project applicant's sole remedy for the authority denying a preliminary application or failing to act on a preliminary application. If a project applicant does not submit a full application within the required time period after the preliminary application is denied or deemed to be denied, the matter will be forever closed and the project applicant will be entitled to no further consideration of it.
(d) If the authority determines, based on the preliminary application, that the development project may be suitable for project financing, the authority may request the project applicant submit a full application in a form the authority approves. The project applicant must pay a non-refundable application fee under 3 AAC 99.590(a) at the time the application is submitted. The authority may require any or all of the following as a part of the application:
(1) a letter of transmittal;
(2) current balance sheet and profit and loss statement for the project applicant, not more than 90 days old; a fiscal-year balance sheet and profit and loss statement for the project applicant's prior three years of operation; current balance sheet and federal income tax return for the prior two years for any proposed guarantors and co-borrowers;
(3) copies of the project applicant's federal income tax returns for the prior three years;
(4) the project applicant's financial statement in a form acceptable to the authority;
(5) proof of ownership of land on which the development project is to be sited, or a copy of the lease or other real property documents for the land related to the development project;
(6) a detailed description of the development project, including detailed legal description of all real property and detailed specifications for all tangible personal property that will be part of the development project;
(7) a detailed estimate of the cost of construction, improvement, or expansion of the development project;
(8) the estimated number of construction and permanent jobs to be created or retained by the development project;
(9) a copy of any pre-existing appraisals estimating the value of the real property where the development project is to be located;
(10) a financial feasibility analysis in a form and with a level of detail satisfactory to the authority;
(11) an environmental risk assessment satisfactory to the authority, followed by an environmental audit at the level specified by the authority, if required by the authority;
(12) a detailed development schedule, to include site selection, geotechnical investigation, and status of project permits; the application may also be required to include a discussion of whether an environmental impact statement or environmental assessment is necessary and a proposed schedule for the completion of any environmental impact statement or environmental assessment;
(13) a public benefit statement enumerating the community and statewide benefits that the proposed development project will create, which benefits may include
(A) construction and permanent job creation;
(B) improvement of environment;
(C) reduction in flow of money out of communities;
(D) economic development; and
(E) attraction of job creating industries to communities or regions;
(14) any other information the authority requests.
(e) Without the necessity of submitting an application, the proponent of a development project that was originally expected to be owned and operated by the authority may seek development project financing, once the authority has determined it will not own and operate the development project, if
(1) the authority determines it already has the information regarding the project applicant and the proposed development project that an application would provide; and
(2) the proponent pays to the authority a non-refundable fee equal to the application fee due under 3 AAC 99.590(a).
History
- Authority: AS 44.88.080; AS 44.88.085; AS 44.88.172
- Eff. 12/5/2013, Register 209
3 AAC 99.560 Evaluation standards
(a) The authority may approve or reject a full application for development project financing for a development project that the authority will not own and operate by evaluating the following:
(1) whether the application requirements of this chapter have been met;
(2) the project applicant's credit standing;
(3) the economic and financial viability of the proposed development project;
(4) the impact of the proposed development project on the authority's portfolio of development projects, considering the concentration by industry area, technology, and geographic region and the concentration of financing provided to a single borrower and related obligors with respect to all of the authority's financing programs;
(5) whether and the extent to which the development project financing is consistent with the fulfillment of the authority's purposes under AS 44.88.070, including the number of temporary and permanent jobs created by the proposed development project;
(6) the interests of local governments impacted by the proposed development project; and
(7) any other commercially reasonable underwriting criteria the authority, in its discretion, determines to be pertinent to the application, given the terms of the financing or the nature of the project applicant or the proposed development project.
(b) In evaluating an application for development project financing, the authority may utilize experts, professionals, counsel, or consultants the authority determines will be of assistance to the evaluation. The authority may require the project applicant to reimburse the authority for all or a designated portion of the cost of any expert, professional, counsel, or consultant used in the evaluation process.
History
- Authority: AS 44.88.070; AS 44.88.085 AS 44.88.080; AS 44.88.172
- Eff. 12/5/2013, Register 209
3 AAC 99.565 Project financing committee
(a) Once the authority determines that the requested development project financing is proper under the project development financing program and that a complete application has been submitted for review, the authority will notify the project applicant in writing that the full application is deemed complete.
(b) After payment of the application fee, a completed full application will be reviewed by a project financing committee for the purpose of making a recommendation to the board about the requested financing. The project financing committee for the development project finance program will consist of one or more of the authority's employees the executive director may designate. With the executive director's approval, the project financing committee may engage and consult professional advisors, counsel, and consultants in considering an application.
(c) The project financing committee may request modifications to the completed full application or changes in the terms of the requested financing.
History
- Authority: AS 44.88.080; AS 44.88.085; AS 44.88.172
- Eff. 12/5/2013, Register 209
3 AAC 99.570 Application processing
(a) If the project financing committee's recommendation is that the development project financing be approved, the application will be put on the board's agenda for consideration. If the recommendation is that the development project financing not be approved, the application will not be put on the board's agenda, unless the project applicant requests board consideration. To request board consideration in such a case, the project applicant must notify the executive director in writing that it seeks board consideration. The project applicant's notice to the executive director seeking board consideration must be provided not later than 20 working days after the project applicant is informed in writing of the adverse recommendation on the application for development project financing.
(b) The board may accept or reject an application for development project financing regardless of the recommendation made by the project financing committee. In considering an application, the board may allow the project applicant to make a presentation to the board or the board may limit its consideration to the documents submitted to the authority in connection with the application. The decision of the board to accept or reject a full application for development project financing will constitute the final decision of the authority on the application.
(c) If the board approves the recommendation of the project financing committee, the authority will issue a commitment letter to the project applicant that states the material terms and conditions under which the authority will provide the development project financing.
History
- Authority: AS 44.88.080; AS 44.88.085; AS 44.88.172
- Eff. 12/5/2013, Register 209
3 AAC 99.575 Interest rates and prepayment fees
(a) If the authority provides development project financing for a development project that the authority will not own and operate, the initial interest rate on the financing will be set at the time the authority issues a development project financing commitment letter. The initial interest rate will be no less than 250 basis points above the interest rate paid on the securities of the United States Treasury that have a maturity date comparable to the term of the authority's financing. In the event that no United States Treasury security is directly comparable in maturity to the authority's development project financing, the authority may use the United States Treasury security the authority in its discretion determines to be most directly comparable as possible. The authority will establish the initial interest rate for the financing within this range based on the authority's evaluation of the relative risk of the transaction. In evaluating the risk of the transaction, the authority may consider the nature of the project applicant and its creditworthiness; the nature of the development project and its financial strengths or weaknesses; the size, length, and other terms of the financing; the collateral for the financing; and any other factors the authority reasonably determines to bear on the risk in the transaction.
(b) If the authority provides development project financing for a development project that the authority will not own and operate, the authority may charge a fixed interest rate for the entire term of the financing or the authority may require that the rate of interest on the financing be adjusted from time to time at intervals the authority decides are appropriate. The authority will select a fixed or adjustable interest rate for the financing, establish the intervals for adjusting the interest rate, and determine the method by which the interest rate is adjusted based on the authority's evaluation of the risk of the transaction and based on the practices of private commercial lenders with respect to comparable financing. In the commitment letter for the development project financing the authority provides to the project applicant, the authority will state whether the rate of interest is fixed or adjustable, the intervals for adjusting the interest rate, and the method by which the interest rate is to be adjusted.
(c) The authority may require a prepayment fee on a development project financing. The prepayment fee will be in the amount the authority determines is appropriate and will be stated in the commitment letter for the development project financing. The authority will not charge a prepayment fee on any prepayment that occurs later than five years after the date of the finance closing or as specified in the covenants of bonds issued for the project financing.
History
- Authority: AS 44.88.080; AS 44.88.172 AS 44.88.085; AS 44.88.212
- Eff. 12/5/2013, Register 209; am 6/28/2018, Register 227
3 AAC 99.580 Terms of financing
Development project financing the authority provides for a development project the authority will not own and operate must satisfy the following requirements unless the authority, in its discretion, approves deviating from these requirements:
(1) the principal amount of a development project financing may not exceed 75 percent of the estimated cost of the project;
(2) unless modified as provided in (3) of this section, the development project financing the authority provides must be secured by a mortgage that is a first lien on the real property in fee simple or on a leasehold estate where the development project is located;
(3) the authority may review and approve other security provisions and arrangements as well as encumbrances against the real property that do not affect the authority's security; the authority may provide financing for a development project where the security for the financing will be subordinate to a lien or security interest in favor of senior financing if the project applicant demonstrates to the satisfaction of the authority that the additional debt can be repaid from the revenue earned by the project;
(4) the terms and conditions of any land lease that secures the financing the authority provides must be acceptable to the authority, and the term of the lease must exceed the effective term of the financing by at least five years;
(5) the financing the authority provides must be secured by a security interest in the equipment and personal property that are part of, or are used in connection with, the development project, and the financing the authority provides may be secured by any other collateral the authority requires;
(6) the development project financing the authority provides must require complete amortization provisions and require periodic payments by the project applicant;
(7) the term of the financing the authority provides may not exceed the estimated useful life of the development project;
(8) the project applicant must provide and pay for title insurance the authority requires and must insure the improvements on the real property where the development project is to be located, with responsible companies and in such amounts and against such risks as the authority requires;
(9) if required by the authority, the project applicant must obtain a guarantee for repayment of the financing the authority provides from the following persons:
(A) a partner or member of the project applicant;
(B) a joint venture with the project applicant;
(C) any stockholder of the capital stock of the project applicant;
(D) the parent entity if the project applicant is a subsidiary; or
(E) any such other credit support from any such other party as the authority may accept;
(10) in the agreement to provide development project financing, the authority may require the proposed owner or operator of the development project to provide covenants regarding the organization, business, or finances of the owner or operator or of the development project;
(11) the authority may defer principal payments or capitalize interest on development project financing;
(12) in addition to the requirements stated in this section, the authority may require the project applicant to commit to any other terms and conditions the authority determines to be necessary in providing the development project financing.
History
- Authority: AS 44.88.080; AS 44.88.085; AS 44.88.172
- Eff. 12/5/2013, Register 209
3 AAC 99.585 Combination financing
The authority may provide development project financing in combination with financing that is available under any other program of the authority. To receive combined financing, a development project must meet the requirements of each program under which the authority is to provide financing. The authority may waive or modify the application requirements of a program based on the submission of another application under a separate program of the authority.
History
- Authority: AS 44.88.080; AS 44.88.085; AS 44.88.172
- Eff. 12/5/2013, Register 209
3 AAC 99.590 Fees and other charges
(a) The nonrefundable application fee for development project financing is
(1) $5,500 for financing of less than $10,000,000;
(2) $11,000 for financing from $10,000,000 to $20,000,000;
(3) $22,000 for financing in excess of $20,000,000;
(b) If the authority is to provide development project financing in combination with financing under another financing program of the authority, the application fee due under (a) of this section may be waived by the authority if the application fee due under the other program is paid.
(c) A commitment fee is due upon acceptance of the authority's commitment letter to provide development project financing for a development project the authority does not intend to own or operate. The commitment fee is one percent of the principal amount of the financing the authority is providing. The commitment fee is non-refundable. The authority will credit the non-refundable application fee paid under (a) of this section against the commitment fee due for the development project.
(d) At the closing of any type of financing, the project applicant must pay for all transaction costs of the closing and must reimburse the authority for its costs of underwriting and closing the financing. After a commitment letter is issued and before closing, the authority will provide the project applicant with an estimate of the closing costs. The estimate will not be binding on the authority. Actual costs will be charged to the project applicant.
(e) The project applicant may elect to have the closing costs required by (d) of this section paid from the proceeds of the development project financing, and the project applicant may have the commitment fee reimbursed from the proceeds of the financing.
(f) The authority may require the project applicant to reimburse the authority for other costs, including those described in 3 AAC 99.560(b).
History
- Authority: AS 44.88.080; AS 44.88.172 AS 44.88.085; AS 44.88.212
- Eff. 12/5/2013, Register 209; am 6/28/2018, Register 227
3 AAC 99.595 Closing
(a) Upon written certification by both the authority and the project applicant that all provisions of the commitment letter have been complied with, the financing will be scheduled for closing and disbursement of the financing proceeds.
(b) When the financing involves a development project that the authority does not intend to own or operate and that will generate power for sale into an existing public utility transmission or distribution grid, the project applicant shall, before closing, provide the authority with an executed off-take agreement, either in the form of a power supply or power purchase agreement, the terms of which are, in all material respects, in accordance with the expected terms provided with the application, or with only those deviations from the expected terms that are acceptable to the authority.
(c) The authority may require in the financing agreement or other closing documents signed by the project applicant that the project applicant periodically provide financial, operational, or other information in a form acceptable to the authority in its sole discretion to the authority over the term of the financing.
(d) The authority may require in the financing agreement or other closing documents that the project applicant allow the authority, or its designated agent, to periodically review the development project by
(1) conducting an on-site visit and inspection of the development project; and
(2) reviewing updated financial, operational, or other information on the project applicant or the development project.
History
- Authority: AS 44.88.080; AS 44.88.172 AS 44.88.085; AS 44.88.212
- Eff. 12/5/2013, Register 209
3 AAC 99.599 Definitions
In 3 AAC 99.500 - 3 AAC 99.599,
(1) "development project" has the meaning given in AS 44.88.900;
(2) "development project financing" has the meaning given in AS 44.88.900;
(3) "full application" means an application containing all the information required under 3 AAC 99.555(d);
(4) "project applicant" has the meaning given in AS 44.88.900;
(5) "proponent" means a person or entity that sponsors, advances, or advocates for a development project; "proponent" also means project applicant;
(6) "real property" has the meaning given in AS 44.88.900;
(7) "working day" does not include a Saturday, Sunday, or state holiday.
History
- Authority: AS 44.88.080; AS 44.88.172 AS 44.88.085; AS 44.88.900
- Eff. 12/5/2013, Register 209
Article 6 Export Assistance Program
3 AAC 99.600 Scope of article
Repealed.
History
- Eff. 1/11/88, Register 106; repealed 2/11/99, Register 150
3 AAC 99.610 Eligibility
Repealed.
History
- Eff. 1/11/88, Register 106; am 11/30/90, Register 118; am 7/19/91, Register 119; repealed 2/11/99, Register 150
3 AAC 99.620 Application
Repealed.
History
- Eff. 1/11/88, Register 106; repealed 2/11/99, Register 150
3 AAC 99.630 Review by authority
Repealed.
History
- Eff. 1/11/88, Register 106; repealed 2/11/99, Register 150
3 AAC 99.640 Costs and fees
Repealed.
History
- Eff. 1/11/88, Register 106; am 9/25/92, Register 124; repealed 2/11/99, Register 150
3 AAC 99.650 Terms of loans and guarantees
Repealed.
History
- Eff. 1/11/88, Register 106; am 12/2/94, Register 134; repealed 2/11/99, Register 150
3 AAC 99.660 Guarantee contract
Repealed.
History
- Eff. 1/11/88, Register 106; repealed 2/11/99, Register 150
3 AAC 99.670 Appeals
Repealed.
History
- Eff. 1/11/88, Register 106; repealed 2/11/99, Register 150
Article 7 Business Assistance Program
3 AAC 99.700 Scope of article
3 AAC 99.700 - 3 AAC 99.790 apply to guarantees by the authority, under the business and export assistance program authorized by AS 44.88.500 - 44.88.599, of a new loan or a loan made to refinance existing debt.
History
- Authority: AS 44.88.080; AS 44.88.085; AS 44.88.560
- Eff. 8/1/88, Register 107; am 2/11/99, Register 150
3 AAC 99.710 Eligibility
(a) The authority may guarantee a new loan or a loan to refinance existing debt if the loan is made to an Alaska business enterprise whose majority interest is held by individual state residents.
(b) The borrower must have the financial and business ability, as determined by the authority, to successfully repay the loan.
(c) Guarantees for loans may be issued only if the loans
(1) are for commercially reasonable purposes;
(2) will help to stabilize the economic base of the area and create or maintain employment; and
(3) allow the borrower to create additional economic opportunity, improve the economic viability of the borrower's domestic/or export business, and/or facilitate business expansion.
(d) The authority will ensure that all loan guarantees are distributed statewide in an equitable manner.
(1) One-half of the total available guarantee dollars is allocated on the basis of geographic distribution and one-half of the total available guarantee dollars is allocated on the basis of population distribution. The authority will annually determine and report to the board the allocations of total available guarantee dollars between the following seven economic regions used by the State of Alaska, Department of Labor and Workforce Development in reporting population information:
(A) The Municipality of Anchorage.
(B) The Matanuska-Susitna Borough.
(C) The Gulf Coast Region which includes the Kenai Peninsula Borough, the Kodiak Island Borough, and the Valdez-Cordova Census Area.
(D) The Interior Region which includes the Denali Borough, The Fairbanks North Star Borough, the Southeast Fairbanks Census Area, and the Yukon-Koyukuk Census Area.
(E) The Northern Region which includes the Nome Census Area, the North Slope Borough, and the Northwest Arctic Borough.
(F) The Southeast Region which includes the Haines Borough, the Juneau Borough, the Ketchikan Gateway Borough, the Prince of Wales-Outer Ketchikan Census Area, the Sitka Borough, the Skagway-Hoonah-Angoon Census Area, the Wrangell-Petersburg Census Area, and the Yakutat Borough.
(G) The Southwest Region which includes the Aleutians East Borough, the Aleutians West Census Area, the Bethel Census Area, the Bristol Bay Borough, the Dillingham Census Area, the Lake and Peninsula Borough, and the Wade Hampton Census Area.
(2) The authority may, in its discretion, reallocate among the seven economic regions described in subsection (1) the amounts of available guarantee dollars, taking into consideration economic and other pertinent factors.
(3) The seven economic regions described in subsection (1) are further depicted on the map set out in this subsection.
Click to view FORM
(e) Within each region, when the total cumulative dollar amount of guarantees reaches the total amount of available guarantee dollars allocated to the region pursuant to (d) of this section, no further loan guarantees will be issued for loans allocated to that region. The authority will allocate a loan guarantee to a region based on the location of the project financed or refinanced by the guaranteed loan.
(f) The authority will allocate 10 percent of the regional allocation to loan guarantees of $100,000 or less with respect to new loans.
(g) The authority will monitor the size of its guarantees to ensure compliance with AS 44.88.540.
(h) The authority will not guarantee a loan to refinance a loan that was originally financed by outstanding bonds issued under the authority's loan participation programs described in 3 AAC 99.200 - 3 AAC 99.390, unless the bonds are subject to optional redemption at par by the authority at the time the guarantee is issued.
(i) The authority will not guarantee a loan made before issuance of a guarantee authorization under 3 AAC 99.740(b).
History
- Authority: AS 44.88.080; AS 44.88.505; AS 44.88.560 AS 44.88.085; AS 44.88.515; AS 44.88.570
- Eff. 8/1/88, Register 107; am 11/30/90, Register 118; am 7/19/91, Register 119; am 9/25/92, Register 124; am 10/23/96, Register 141; am 2/11/99, Register 150; am 11/1/99, Register 153; am 2/8/2001, Register 158; am 6/28/2018, Register 227
3 AAC 99.720 Application
(a) The authority will accept an application for a guarantee only from the financial institution that will make the loan and that has the ability to originate, service and collect the loan. An application must contain information sufficient to allow the authority to determine whether the loan is eligible for a guarantee under the limitations stated in AS 44.88.500 - 44.88.599. An application must be accompanied by evidence, satisfactory to the authority, that the financial institution has conducted a credit investigation and by a statement of the financial institution's determinations based upon the credit investigation.
(b) The application for a loan guarantee of $100,000 or less for a new loan may consist of the following:
(1) a loan summary, including the financial institution's loan approval;
(2) certification from the bank that a credit check has been performed, that the borrower's credit record is satisfactory to the bank, that any other bank-held debt is current, and that all statutory requirements have been met; and
(3) such other information the authority considers necessary to evaluate the borrower and the project.
(c) The application for a loan guarantee of more than $100,000 for a new loan must contain
(1) a loan summary, including the financial institution's loan approval;
(2) a copy of the signed loan application;
(3) a balance sheet and a profit-and-loss statement of the borrower's business, that is current to within 90 days of the application date and signed by the borrower;
(4) a description of the project;
(5) a current credit report of the borrower and of any other guarantors and co-borrowers;
(6) copies of the borrower's federal income tax returns or financial statements for the preceding three fiscal years;
(7) a detailed description of the use of the loan proceeds;
(8) a description and evaluation of the collateral to be used to secure the loan;
(A) if the loan is to be secured by real property, a written appraisal report acceptable to the authority estimating the fair market value of the real property;
(i) if the total loan amount is equal to or less than $1,000,000, the appraisal shall be a summary appraisal report prepared in accordance with the most current edition of the Uniform Standards of Professional Appraisal Practice established by the Appraisal Standards Board of The Appraisal Foundation;
(ii) if the total loan amount is greater than $1,000,000, the appraisal must be a detailed appraisal describing the information analyzed, the appraisal procedures followed, and the reasoning that supports the analysis, opinions expressed, and conclusions in conformity with current professional standards;
(B) if the loan is to be secured by tangible personal property, an appraisal in a format acceptable to the authority prepared by an appraiser who is acceptable to the authority;
(9) a finding that the borrower has adequate projected cash flow to service the debt;
(10) an environmental risk assessment satisfactory to the authority, followed by an environmental audit if required by the authority; and
(11) any other information considered necessary by the authority in order to evaluate the borrower and the project.
(d) The application for a guarantee of a loan to refinance existing debt must contain the items described or listed in 3 AAC 99.720(a), (b) and (c)(1) - (c)(11) and must also contain the following:
(1) a debt schedule that
(A) correlates to the business' latest balance sheet; and
(B) reflects the debt to be refinanced, including name of creditor, original loan amount and loan balance, date of loan, and maturity date, together with statements as to whether the loan is paid monthly, annually, or otherwise, as to payment status and payment history of the loan, and as to the collateral that secured the loan;
(2) an evaluation completed by the financial institution which illustrates how the guarantee of a loan to refinance existing debt will satisfy AS 44.88.525; and
(3) a statement by the financial institution whether the loan being refinanced has been criticized or classified by any regulatory agency or internal audit as a high risk or under-collateralized loan.
(e) The authority may waive any provision in this section.
(f) Repealed 2/8/2001.
History
- Authority: AS 44.88.080; AS 44.88.510 AS 44.88.085; AS 44.88.520
- Eff. 8/1/88, Register 107; am 11/30/90, Register 118; am 7/19/91, Register 119; am 9/25/92, Register 124; am 12/2/94, Register 134; am 10/23/96, Register 141; am 2/11/99, Register 150; am 2/8/2001, Register 158; am 5/16/2023, Register 248
3 AAC 99.730 Conditions of guarantee
(a) The authority may not guarantee loans to refinance existing debt unless the conditions under AS 44.88.525 have been met.
(b) The authority may not guarantee loans unless the conditions under AS 44.88.535 have been met.
(c) A guarantee issued by the authority for loans must comply with the limitations set forth in AS 44.88.540 and 44.88.545.
(d) The loan to be guaranteed by the authority must be secured by a perfected first lien or security interest in the real or tangible personal property offered as security, unless the authority specifically waives the priority of the lien or security interest.
(e) Payment of guarantees will come exclusively from reserves set aside by the authority for this purpose. The holders of a loan guarantee issued by the authority can look only to the reserves set aside by the authority for this purpose for payment of the guarantee and not to the general assets of the authority. The guarantee authorization shall expressly limit the liability of the authority as provided in this paragraph. The authority will set aside adequate reserves to cover outstanding guarantees. Upon request, the authority will provide information as to the amount of the reserves set aside for this purpose.
History
- Authority: AS 44.88.525; AS 44.88.535; AS 44.88.545 AS 44.88.530; AS 44.88.540
- Eff. 8/1/88, Register 107; am 11/30/90, Register 118; am 10/23/96, Register 141; am 2/11/99, Register 150; am 11/1/99, Register 153
3 AAC 99.740 Review by authority
(a) Repealed 9/25/92.
(b) If the authority approves an application, the authority will issue a guarantee authorization to the financial institution stating that a guarantee will be provided for a specified portion of the loan under terms and conditions specified by the authority in the guarantee authorization. Such terms and conditions, under which the guarantee will be valid and binding, will be set out in the loan guarantee agreement and guarantee authorization. No guarantee will be effective until the loan guarantee agreement is executed by the financial institution and returned to the authority and until the terms of the guarantee authorization are met. Any violation by the financial institution of the terms and conditions set forth in the loan guarantee agreement or in the guarantee authorization which causes or contributes to a subsequent loss, will, at the option of the authority, cause the guarantee to become null and void and absolutely unenforceable against the authority as of the date of the violation. If the authority disapproves an application, the authority will notify the financial institution of the disapproval.
History
- Authority: AS 44.88.080; AS 44.88.085
- Eff. 8/1/88, Register 107; am 11/30/90, Register 118; am 9/25/92, Register 124
3 AAC 99.750 Costs and fees
(a) The financial institution that submits an application under 3 AAC 99.720 must also submit a nonrefundable $250 fee with the application. In addition, the financial institution, or any substitute financial institution, or the borrower must pay a nonrefundable $500 fee for any modification of the terms of the guarantee.
(b) The financial institution originating a loan or the borrower must pay a guarantee fee equal to two percent of the guaranteed amount of the loan as provided in the guarantee authorization. The board shall review the fee structure periodically and may establish other fees it determines commercially appropriate.
(c) The financial institution renewing a loan secured solely by inventory or accounts receivable or renewing a loan for working capital, or the borrower, must pay a fee of one-half percent of the guaranteed amount of the loan for each renewal as provided in the loan guarantee agreement. The board shall review the fee structure periodically and may establish other fees it determines commercially appropriate.
(d) The financial institution or the borrower must also pay all third party expenses of the authority related to the issuance of the authority's guarantee of a loan.
History
- Authority: AS 44.88.080; AS 44.88.085; AS 44.88.560
- Eff. 8/1/88, Register 107; am 11/30/90, Register 118; am 9/25/92, Register 124; am 2/11/99, Register 150; am 6/28/2018, Register 227
3 AAC 99.760 Terms of guarantee
(a) A guarantee under this article guarantees payment of outstanding principal, unpaid interest as described in (b) of this section, and liquidation expenses acceptable to the authority on a loan up to the amounts stated in the guarantee authorization in accordance with the terms and conditions set out in the loan guarantee agreement. A guarantee or portion of a guarantee that relates to an export transaction guarantees against commercial and political loss. The guarantee does not apply to penalties, late fees or interest accruing under a default interest rate. Liquidation expenses must receive written approval from the authority before expenditure, to be reimbursable pro rata.
(b) A guarantee issued under this article guarantees payment of accrued and unpaid interest for a period of time not to exceed
(1) 90 days for loans or parts of loans not made to support an export transaction;
(2) 180 days for loans or parts of loans made for a post-shipment loan guarantee to support an export transaction; or
(3) 270 days for loans or parts of loans made for a pre-shipment loan guarantee to support an export transaction.
(c) A loan guaranteed by the authority may be made for the purpose of either financing or refinancing real property, tangible personal property, or working capital, or for the purpose of financing or refinancing an export transaction and shall contain the terms set out in this section to the fullest extent permitted under AS 44.88.500 - 44.88.599.
(1) If the loan is to be secured by real property, then the terms of the loan must comply with 3 AAC 99.330 except that the loan term may not exceed 20 years, and the authority will, in its discretion, waive the priority of lien or security interest under 3 AAC 99.730(d).
(2) If the loan is to be secured by tangible personal property, then the terms of the loan must comply with 3 AAC 99.340, except that the authority will, in its discretion, waive the priority of lien or security interest under 3 AAC 99.730(d).
(3) If the loan is to be secured solely by inventory and accounts receivable, then the loan term may not exceed one year; however, the loan may be renewed, in an amount no greater than the original loan, by the financial institution up to four times for up to one year for each renewal.
(4) If the loan is for working capital, then the term of the loan may not exceed five years; however, the loan term must be commensurate with the economic life of the collateral offered as security for the loan. The loan must contain other terms satisfactory to the authority.
(5) If the loan is for an export transaction, then
(A) a pre-shipment export guarantee becomes effective before commencement of providing services or the export contract date of shipment of the goods or products. The term of a pre-shipment export guarantee may not exceed 270 days before providing services or the export contract date of shipment of the goods or products. However, the financial institution servicing the loan may apply for a 90-day extension of the pre-shipment export guarantee;
(B) a post-shipment guarantee becomes effective after completion of providing services or the date of shipment of the goods or products. The term of post-shipment export guarantee may not exceed 180 days from the date of completion of services or shipment of the goods or products. However, the financial institution servicing the loan may apply for a 90-day extension of the post-shipment guarantee.
(d) A loan guaranteed by the authority must be secured to the satisfaction of the authority by either real or tangible personal property or inventory and accounts receivable except that the requirement of collateral may be waived, solely at the authority's discretion, on a case-by-case basis for a loan guarantee of $100,000 or less if the loan term does not exceed five years.
(e) If collateral is required, no loan-to-value may exceed 75 percent.
(f) A guarantee for a loan will be effective and will remain in effect upon the execution of and as long as there is strict adherence to the terms and conditions of the guarantee authorization.
(g) The authority may require the borrower, on a guarantee or portion of guarantee that relates to an export transaction, to obtain insurance against some or all of the commercial and political loss guaranteed under this section.
(h) The authority may guarantee up to 80 percent of any loan that qualifies under AS 44.88.500 - 44.88.599. No guarantee by the authority will exceed $1,000,000. No guarantee will be issued to a borrower that cumulatively, with the outstanding principal balance of other authority guaranteed indebtedness of that borrower, exceeds $1,000,000. Only one guarantee under 3 AAC 99.720(b) will be issued to the same or related borrowers. For the purposes of this subsection, a borrower is related to another borrower if
(1) the relationship between such borrowers would result in a disallowance of losses under section 267 or 707(b) of the Internal Revenue Code of 1986, as amended; or
(2) such borrowers are members of the same controlled group of corporations (as defined in section 1563(a) of the Internal Revenue Code of 1986, as amended, except that more than 50 percent shall be substituted for at least 80 percent each place it appears in that section).
(i) A loan for working capital, loans secured by inventory and account receivable, and loans made to support an export transaction must contain payment provisions satisfactory to the authority. All other loans to be guaranteed by the authority must contain complete amortization provisions satisfactory to the authority requiring periodic payments by the borrower.
History
- Authority: AS 44.88.080; AS 44.88.085; AS 44.88.535
- Eff. 8/1/88, Register 107; am 11/22/88, Register 109; am 11/30/90, Register 118; am 7/19/91, Register 119; am 9/25/92, Register 124; am 12/2/94, Register 134; am 10/23/96, Register 141; am 2/11/99, Register 150; am 11/1/99, Register 153; am 2/8/2001, Register 158
3 AAC 99.770 Interest on guaranteed loans
(a) The maximum interest rate on a loan which is guaranteed by the authority, shall be two and three-quarters percentage points above the prime rate of interest as reported in the current Wall Street Journal, on a freely floating basis.
(b) The maximum fixed rate of interest shall be two and three quarters percentage points above the prime rate of interest as reported in the current Wall Street Journal on the day of funding.
History
- Authority: AS 44.88.080; AS 44.88.085; AS 44.88.550
- Eff. 8/1/88, Register 107; am 9/25/92, Register 124
3 AAC 99.780 Loan guarantee agreement
(a) The authority will not guarantee a loan made by a financial institution unless it has executed a loan guarantee agreement with the financial institution. The loan guarantee agreement will set forth provisions governing guarantees of loans made by the financial institution, including provisions
(1) for payment of fees to the authority;
(2) setting out conditions and procedures precedent to the honoring of the guarantee;
(3) requiring the financial institution to service the loan according to AS 44.88.555, to receive all payment of principal and interest, and to continue to service the loan in the event of a default;
(4) requiring the financial institution to immediately notify the authority if the borrower fails to make any payment of principal or interest on the due date if the non-payment continues for 60 days or more; and
(5) setting forth terms under which the guarantee may be declared null and void.
(b) Payments honoring a guarantee shall be made in accordance with the terms and conditions of the loan guarantee agreement.
History
- Authority: AS 44.88.080; AS 44.88.360 AS 44.88.085; AS 44.88.560
- Eff. 8/1/88, Register 107; am 11/30/90, Register 118; am 9/30/97, Register 144
3 AAC 99.785 Appeals
A financial institution that submits an application for guarantee of a loan that is not approved by the authority may appeal that decision to the board by filing a written notice of appeal with the authority no later than 10 working days after the financial institution is notified that the guarantee application has been disapproved. The board will issue its decision on the appeal within 45 working days. When deciding the financial institution's appeal, the board will consider only the guarantee application documents filed by the financial institution on or before the date of the authority's decision with respect to the application. The decision of the board on the appeal is final.
History
- Authority: AS 44.88.080; AS 44.88.085
- Eff. 8/1/88, Register 107; am 9/25/92, Register 124; am 11/1/99, Register 153
Article 8 Small Business Economic Development Loan Program
3 AAC 99.800 Application process
To apply for a small business economic development loan, an applicant shall file with the department
(1) a completed application for a small business economic development loan, on a form provided by the department;
(2) a letter of intent stating the amount of the loan and intended use of the money, on a form provided by the department;
(3) an individual financial statement from each individual applicant, including each member of a partnership or other association, or, if the applicant is a corporation, each individual owning 20 percent or more of any outstanding shares, on a form provided by the department;
(4) a business financial statement, on a form provided by the department;
(5) an actual statement of profit and loss, on a form provided by the department;
(6) a project statement of profit and loss, on a form provided by the department;
(7) a personal resume, on a form provided by the department;
(8) a business resume, on a form provided by the department;
(9) credit authorizations for at least three of the applicant's creditors, on forms provided by the department;
(10) authorizations to verify financial information, on forms provided by the department;
(11) an earnest money agreement, explaining all terms and conditions of the transaction, with original signatures by all parties;
(12) signed copies of the applicant's federal income tax returns for the preceding three years, including returns for each member of a partnership or other association; and
(13) any other information requested by the department to document eligibility.
History
- Authority: AS 44.88.080; AS 44.88.085; AS 44.88.420
- Eff. 1/12/89, Register 109
3 AAC 99.810 Costs
(a) All expenses incurred by the department in closing a loan, including processing the application, must be paid by the applicant. These expenses include the cost of credit reports, title reports and insurance, recording fees, appraisals, surveys, travel, and other direct costs.
(b) A nonrefundable $250 application fee is due from the applicant at the time that an application is filed with the department. This fee will be credited toward the origination fee if the loan is made.
(c) An origination fee not to exceed 15 basis points applied to the loan balance is due from the borrower at the time that the loan is made.
(d) A late fee not to exceed five percent of the payment amount may be charged to a borrower for each loan payment that is more than 15 days past due.
(e) An extension fee not to exceed $50 may be charged to a borrower to process a loan extension.
History
- Authority: AS 44.88.420
- Eff. 1/12/89, Register 109; am 3/30/89, Register 110; am 7/19/91, Register 119; am 6/28/2018, Register 227
3 AAC 99.820 Confidentiality of loan information
Repealed 11/30/90.
Article 9 Rural Development Initiative Fund
3 AAC 99.825 Scope of article
3 AAC 99.825 - 3 AAC 99.899 applies to loans made under the rural development initiative fund.
History
- Authority: AS 44.88.600; AS 44.88.610; AS 44.88.620
- Eff. 2/8/2001, Register 158
3 AAC 99.830 Application process
(a) To apply for a rural development initiative fund loan, an applicant shall file with the department
(1) a completed loan application for a rural development initiative fund loan, on a form provided by the department, which includes:
(A) a letter of intent stating the amount requested and intended use of the proposed loan money;
(B) a schedule of acceptable collateral;
(C) an individual financial statement;
(D) a statement of projected income and expenses for the following year's operating plan;
(E) a signed credit authorization; and
(F) a consent to release information;
(2) copies of the applicants' federal income tax returns for the preceding three years, and for additional years if requested by the department; and
(3) repealed 6/28/2018;
(4) any other information that might be helpful to demonstrate the eligibility of the applicant for a loan, as requested by the department.
(b) The department may process loan requests without the information described in (a) of this section if the department determines that the information is not necessary for making the lending decision.
History
- Authority: AS 44.88.600; AS 44.88.610; AS 44.88.620
- Eff. 2/8/2001, Register 158; am 6/28/2018, Register 227
3 AAC 99.835 Examination
(a) The materials described in 3 AAC 99.830 will be processed and evaluated by a loan officer. The loan officer will evaluate the applicant's eligibility, financial and credit history, operating plan, ability to repay, and proposed collateral.
(b) On the basis of the evaluation described in (a) of this section, the loan officer will request additional information required under 3 AAC 99.830, notify applicant that applicant is ineligible for a loan, or recommend a proposed action on the loan request to the appropriate loan committee. The recommendation of a loan officer is not binding on a loan committee.
History
- Authority: AS 44.88.600; AS 44.88.610; AS 44.88.620
- Eff. 2/8/2001, Register 158
3 AAC 99.840 Loan committee
(a) A loan committee consists of one or more persons appointed by the director to act on a loan request.
(b) A loan committee shall consider the recommendations of the loan officer assigned to process the application and any other relevant information. A loan committee shall also consider the applicant's eligibility for a loan, financial and credit record, ability to repay, and operating plan, and the adequacy of collateral offered to secure the loan.
(c) After considering a loan request as described in section (b), a loan committee shall approve or deny the loan request, approve the loan request subject to modification, or table the loan request subject to obtaining additional information.
(d) A loan committee may impose reasonable conditions on the approval of a loan, including:
(1) additional collateral to secure the loan;
(2) additional guarantors; and
(3) subordination of prior lienholders' rights to the interest of the rural development initiative fund.
(e) A loan committee shall establish the term of a loan and repayment schedule within the limitations set by 3 AAC 99.870.
(f) If a loan request is denied, significantly modified, or tabled by a loan committee, the loan committee shall provide the applicant with a statement explaining reasons for the action.
(g) A material misstatement or omission of fact made by an applicant constitutes grounds for denial of a loan request.
History
- Authority: AS 44.88.600; AS 44.88.610; AS 44.88.620
- Eff. 2/8/2001, Register 158
3 AAC 99.845 Financial and credit record
(a) The department may consider the following factors in evaluating an applicant's financial and credit record:
(1) existing and prior debts;
(2) credit reports obtained from creditors and private credit reporting services;
(3) prior loan history with the department;
(4) timeliness in making payments on loans and other debts;
(5) prior bankruptcies;
(6) existence of tax liens;
(7) unpaid judgments and prior foreclosures; and
(8) financial and credit reputation.
(b) The department will weigh evidence of more recent unacceptable credit more heavily against the applicant.
History
- Authority: AS 44.88.600; AS 44.88.610; AS 44.88.620
- Eff. 2/8/2001, Register 158
3 AAC 99.850 Ability to repay
The department shall consider the following factors in evaluating an applicant's ability to repay:
(1) income history, including present income;
(2) prospects for future income;
(3) assets and their liquidity;
(4) liabilities;
(5) reasonableness of projected profit and loss statement; and
(6) other relevant experience.
History
- Authority: AS 44.88.600; AS 44.88.610; AS 44.88.620
- Eff. 2/8/2001, Register 158
3 AAC 99.855 Collateral
(a) A loan must be secured by collateral acceptable to the department, such as a mortgage or other security instrument in real property, equipment, buildings or other tangible assets.
(b) The department shall not approve a loan that exceeds the value of the collateral used to secure the loan.
History
- Authority: AS 44.88.600; AS 44.88.610; AS 44.88.620
- Eff. 2/8/2001, Register 158
3 AAC 99.860 Lending practices
(a) The proceeds of the loan may be used by the borrower for working capital, equipment, construction costs, or other commercial purposes relating to the borrower's business.
(b) A loan may not be made to pay costs which were incurred by the borrower more than six months before the loan application was filed with the department, except that the department may waive this restriction if:
(1) the applicant shows that the application of this restriction would result in undue hardship for the applicant; and
(2) the applicant is a good financial risk.
(c) A loan will not be approved for refinancing long-term debt. Interim or construction financing is not considered long-term debt if the term is less than the longer of 12 months or the length of actual construction and the earliest promissory note or other document evidencing the creation of the debt was executed less than six months before receipt of the application by the department, except that the department may waive these restrictions if:
(1) the applicant shows that the application of these restrictions would result in undue hardship for the applicant; and
(2) the applicant is a good financial risk.
(d) The department will make a loan only if it results in the creation of new jobs or retention of existing jobs in the eligible community.
History
- Authority: AS 44.88.600; AS 44.88.610; AS 44.88.620
- Eff. 2/8/2001, Register 158
3 AAC 99.865 Interest rate
The department shall set the interest rate on a quarterly basis for loans under this article. The interest rate set for a quarter remains in effect until the department changes the rate. The interest rate set by the department is based on the prime rate listed in the Wall Street Journal during the previous quarter minus one percentage point. The interest rate will be established at the nearest one-half point. The interest rate on an individual loan will be set at the time the loan is approved by the loan committee.
History
- Authority: AS 44.88.600; AS 44.88.610; AS 44.88.620
- Eff. 2/8/2001, Register 158; am 6/28/2018, Register 227
3 AAC 99.870 Loan terms
A loan under this article shall not exceed a term of 25 years except for modifications under 3 AAC 99.890. The term of a loan will be based on the useful life of the collateral offered, the useful life of the asset being purchased or to be constructed, the size of the loan, and the needs of the applicant.
History
- Authority: AS 44.88.600; AS 44.88.610; AS 44.88.620
- Eff. 2/8/2001, Register 158
3 AAC 99.875 Disbursement of loan money
Loan money will be disbursed when
(1) a security interest in the collateral is perfected for the benefit of the rural development initiative fund;
(2) requirements of the loan committee have been met;
(3) the applicant is in compliance with all other provisions of the loan documents, AS 44.88.600 - AS 44.88.620, and 3 AAC 99.825 - 3 AAC 99.899; and
(4) the applicant has paid all required costs and fees.
History
- Authority: AS 44.88.600; AS 44.88.610; AS 44.88.620
- Eff. 2/8/2001, Register 158
3 AAC 99.880 Costs and fees
(a) All expenses incurred by the department in processing an application must be paid by the applicant before loan money may be disbursed. These expenses include the cost of title reports and title insurance, recording fees, appraisals, travel, and other direct costs.
(b) A nonrefundable $150 application fee is due to the department at the time an application for a loan under this article is submitted to the department.
(c) An origination fee of one percent of the total loan amount is due from the borrower before loan money may be disbursed.
(d) A loan assumption fee of one percent of the outstanding loan balance is due upon approval by the loan committee and must be paid to the department before the loan assumption is effective.
(e) A late fee not to exceed five percent of the payment amount may be charged to a borrower for each loan payment that is more than 15 days past due.
(f) A nonrefundable $150 modification fee may be charged to a borrower to process a loan modification of an outstanding loan under this article.
History
- Authority: AS 44.88.600; AS 44.88.610; AS 44.88.620
- Eff. 2/8/2001, Register 158; am 6/28/2018, Register 227
3 AAC 99.885 Assumptions
(a) A request for permission to assume the obligations and benefits of a loan made under AS 44.88.610 and this article will be processed in the same manner as a loan application.
(b) A loan committee may permit an assumption if the applicant is a good financial risk and the security of the rural development initiative fund is preserved or improved.
(c) Wraparound financing that includes a loan made under AS 44.88.610 and this article is prohibited and constitutes a default on the loan.
History
- Authority: AS 44.88.600; AS 44.88.610; AS 44.88.620
- Eff. 2/8/2001, Register 158
3 AAC 99.890 Modifications
(a) A request for a modification to a loan made under AS 44.88.610 and this article will be processed in the same manner as a loan application.
(b) A loan committee may permit a loan modification only if the security of the loan under the rural development initiative fund is preserved or improved.
History
- Authority: AS 44.88.600; AS 44.88.610; AS 44.88.620
- Eff. 2/8/2001, Register 158
3 AAC 99.895 Reconsideration of loan request, assumption or modification
(a) If a loan request, assumption, or modification is denied, tabled, or significantly modified by the department, an applicant may file a written request for reconsideration within 30 days after receipt of notice of the department's decision.
(b) The department will, in its sole discretion, reconsider a request upon a showing by the applicant that
(1) there has been a substantial change in circumstances;
(2) additional relevant information is provided to the department; or
(3) administrative errors were made by the department.
History
- Authority: AS 44.88.600; AS 44.88.610; AS 44.88.620
- Eff. 2/8/2001, Register 158
3 AAC 99.899 Definitions
In this article,
(1) "department" means the Department of Commerce, Community, and Economic Development;
(2) "director" means the director of the Alaska Division of Economic Development;
(3) "wraparound financing" means a contract that includes the balance due on an existing debt and an additional amount to cover the difference between the selling price and the existing debt.
History
- Authority: AS 44.88.085; AS 44.88.610 AS 44.88.600; AS 44.88.620
- Eff. 2/8/2001, Register 158; am 4/25/2013, Register 207
Article 10 General Provisions
3 AAC 99.900 Inspection of records
If requested in writing by the authority for reasons pertaining to the authority's financing of a project, an applicant for or a recipient of a real property or tangible personal property loan shall make its books and records available for inspection by the authority or other persons designated by the authority.
History
- Authority: AS 44.88.080; AS 44.88.085
- In effect before 1988; am 1/11/88, Register 106
3 AAC 99.905 Public access to loan records
Loan records in the possession of the authority are open to inspection by the public in accordance with the Public Access to Records Booklet adopted under 2 AAC 96.100.
History
- Authority: AS 44.88.420
- Eff. 11/30/90, Register 118; am 2/8/2001, Register 158
3 AAC 99.906 Curtailment of originator or financial institution eligibility
(a) The authority will discontinue purchasing or guaranteeing loans from an originator or a financial institution if the 90-day delinquency rate on AS 44.88 loans from that originator or financial institution exceeds five percent by dollar value.
(b) Repealed 5/4/2010.
(c) In this section, "AS 44.88 loans" means all loan participations and loan guarantees approved and pending closing, owned or issued by the authority under the tax-exempt loan participation program under 3 AAC 99.200 - 3 AAC 99.290, the taxable loan participation program under 3 AAC 99.300 - 3 AAC 99.390, or the business and export assistance program under 3 AAC 99.700 - 3 AAC 99.785.
History
- Authority: AS 44.88.085; AS 44.88.165
- Eff. 11/30/90, Register 118; am 10/16/2006, Register 180; am 5/4/2010, Register 195
3 AAC 99.907 Recovery zone facility bonds
(a) The procedures applicable to the authority regarding recovery zone facility bonds are contained in the booklet entitled "Manual of the Alaska Industrial Development and Export Authority Regarding Recovery Zone Facility Bonds," dated August 5, 2010, prepared by the authority, and adopted by reference in this section.
(b) Before the authority reallocates recovery zone facility bond volume cap under sec. 6, ch. 68 SLA 2010, the authority will charge and collect a fee equal to 0.25 percent of the amount of the volume cap reallocated. If the authority issues bonds using the reallocated recovery zone facility bond volume cap, the authority will reduce its fee for issuing the bonds by the amount of the fee charged under this subsection. The authority will refund the $500 fee it collects under 3 AAC 99.110(b) for an application received under 3 AAC 99.110 if (i) the application is submitted in conjunction with a request for RZF bond volume cap pursuant to Section 100 of the manual described in (a) of this section; (ii) the application includes an Exhibit E as described in section 100 of that manual; and (iii) the authority decides that it will not allocate any RZF bond volume cap for the project. The executive director of the authority may reduce or waive a fee charged under this subsection if the executive director determines that circumstances justify the reduction or waiver.
History
- Authority: AS 44.88.085Sec. 6, ch. 68, SLA 2010
- Eff. 9/22/2010, Register 196
3 AAC 99.910 Supervision of proceeds of bond issues
If there are bonds remaining to be redeemed under a bond issue, an applicant whose financing of a project is approved or who is the recipient of a real property or tangible personal property loan shall, if requested by the authority
(1) permit and pay the cost of an audit or examination of its books and records by an independent firm of certified public accounts to determine if the provisions of the bond issue have been complied with; and
(2) submit a sworn statement that describes the purposes for which money derived from bond proceeds have been spent by the applicant.
History
- Authority: AS 44.88.080; AS 44.88.085
- In effect before 1988; am 1/11/88, Register 106
3 AAC 99.920 Public notice of meetings
Except as otherwise provided by statute, not more than two weeks and not less than five days before a meeting of the board, the authority will give public notice of the time, place, and subject of a meeting.
History
- Authority: AS 44.62.310; AS 44.88.080; AS 44.88.085
- In effect before 1988; am 1/11/88, Register 106; am 4/25/2013, Register 207
3 AAC 99.925 Waiver or modification of regulations in declared disaster emergencies
(a) If the governor has declared a statewide disaster emergency under AS 26.23.020, the authority may waive or modify any requirement established in a regulation under this chapter, or under 3 AAC 101 or 3 AAC 102, for any of the authority's loan, guarantee, or finance program. The authority's power to waive or modify under this section applies with respect to application requirements, application processing, interest rates, costs and fees, loan or financing terms and conditions, collateral requirements, underwriting standards, and other requirements established in regulation.
(b) The authority may approve a waiver or modification under (a) of this section for a specific loan, guarantee, or financing agreement, or the authority may approve waivers or modifications for loan, guarantee, or finance programs or other designated categories of loans, guarantees, or financing agreements.
(c) Once the governor has determined a declared statewide disaster emergency has ended, the authority shall comply with the requirements of the regulations of this chapter or 3 AAC 101 or 3 AAC 102 for any new or modified loans, guarantees, or financing agreements. The end of a declared statewide disaster emergency shall not affect waivers or modifications the authority previously approved for a loan, guarantee, or financing agreement.
History
- Authority: AS 44.88.080; AS 44.88.650; AS 44.88.700
- Effective 3/27/2020, Register 234
3 AAC 99.930 Definitions
In this chapter
(1) "authority" means the Alaska Industrial Development and Export Authority;
(2) "basis points" means the common unit of measure for interest rates and other percentages in finance; one hundred basis points equals one percent;
(3) "board" means the board of the Alaska Industrial Development and Export Authority;
(4) "code" means the Internal Revenue Code of 1986, as amended;
(5) "department" means the Department of Commerce, Community, and Economic Development;
(6) "effective term" means the number of years the loan is outstanding when the originator amortizes its portion of the loan in accordance with 3 AAC 99.240(f) or 3 AAC 99.340(f);
(7) "executive director" means the executive director of the Alaska Industrial Development and Export Authority;
(8) "financial institution" means, for purposes of 3 AAC 99.700 - 3 AAC 99.785, a federally or state chartered institution authorized to perform banking functions within the state of Alaska;
(9) "guarantee authorization" means the document which authorizes the issuance of a loan guarantee by the authority to a financial institution on behalf of a borrower;
(10) "improvements in energy efficiency" means any technology, process, equipment, facility, building, structure, or improvement that is intended to and is reasonably likely to reduce energy consumption or the cost of energy, based on current engineering and technological standards;
(11) "liquidation" means the exercise of all remedies commercially reasonable, in the opinion of the authority, to collect all amounts available to pay the debt;
(12) "liquidation expenses" means, for purposes of 3 AAC 99.700 - 3 AAC 99.785, normal costs of the foreclosure action, including legal fees, title fees, and advertising costs, the costs and expenses of maintaining the collateral, and costs of sale;
(13) "loan(s)" means, for purposes of 3 AAC 99.700 - 3 AAC 99.785, a new loan or a loan to refinance existing debt;
(14) "loan guarantee agreement" means the document that sets out terms and conditions governing the guarantee of a loan;
(15) "loan portfolio of the authority" means all loans, loan participations, and loan guarantees approved and pending closing, owned or issued by the authority under the tax-exempt loan participation program (3 AAC 99.200 - 3 AAC 99.290), the taxable loan participation program (3 AAC 99.300 - 3 AAC 99.390), or the business and export assistance program (3 AAC 99.700 - 3 AAC 99.785), and all other loans appropriated to or purchased by the authority;
(16) "mortgage" means a mortgage deed, deed of trust, or other security instrument;
(17) "originator" means the Commercial Fishing and Agricultural Bank, and a commercial bank, savings and loan association, mutual savings bank, credit union, or other financial institution that
(A) is either insured by the Federal Deposit Insurance Corporation or the National Credit Union Association, or regulated by the Office of Thrift Supervision, The Office of the Comptroller of the Currency, The Federal Reserve, or state banking regulators under AS 6 or substantially similar banking regulations or statutes of another state;
(B) is approved by the authority;
(C) has entered into an agreement with the authority to act as a seller and servicer of loans under the loan participation program;
(18) "outstanding bonds" means, for purposes of 3 AAC 99.700 - 3 AAC 99.785, bonds that have not been paid in full or defeased;
(19) "project," for purposes of 3 AAC 99.700 - 3 AAC 99.785, has the meaning provided in AS 44.88.900(13) and, with respect to a loan made to provide working capital to a business; means that business;
(20) "public offering" means a sale or proposed sale of bonds to a purchaser who intends to re-sell the bonds to members of the general public;
(21) "qualified energy development" has the meaning provided in AS 44.88.900;
(22) "real property loan" means a loan described in 3 AAC 99.230(a);
(23) "region" means one of the regions set out in 3 AAC 99.710(d);
(24) "related persons" means persons who are considered to be related for purposes of sections 144 - 150 of the code;
(25) "retained" means the holding of a note evidencing indebtedness, together with the right to receive payments under the note;
(26) "state resident" means an individual who has resided in the state for a minimum of 30 days and who intends to make the state a permanent place of abode; the determination of intent will include consideration of the individual's mailing address, where the individual owns property, where the individual's vehicles are registered, and location of the individual's immediate family;
(27) "tangible personal property" means, for the purposes of 3 AAC 99.700 - 3 AAC 99.785, equipment, chattels, mortgages, contracts, inventory, and accounts receivable;
(28) "total available guarantee dollars" means the maximum dollar amount of guarantees the authority will issue, which is the amount shown in 3 AAC 99.710(d).
History
- Authority: AS 44.88.080; AS 44.88.085; AS 44.88.900
- In effect before 1988; am 1/11/88, Register 106; am 8/1/88, Register 107; am 1/12/89, Register 109; am 11/30/90, Register 118; am 9/25/92, Register 124; am 12/2/94, Register 134; am 2/11/99, Register 150; am 11/1/99, Register 153; am 2/8/2001, Register 158; am 10/12/2004, Register 173; am 4/25/2013, Register 207; am 6/28/2018, Register 227
Chapter 100 Procurement
Article 1 Roles and Responsibilities
3 AAC 100.010 Purpose of the chapter
This chapter applies to contracts and procurements made by the authority.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 11/10/2011, Register 200; am 9/25/2013, Register 207
3 AAC 100.012 Temporary procedures
Repealed.
History
- Eff. 11/10/2011, Register 200; repealed 9/25/2013, Register 207
3 AAC 100.030 Roles and responsibilities
(a) The board is vested with and may exercise all of the rights, powers, and duties that relate to the procurement of construction, supplies, services, and professional services for the authority, and the control over construction, supplies, services, and professional services for the authority.
(b) The board may delegate to the executive director or other qualified employees of the authority any right, power, or duty described in (a) of this section; however, the board retains the right, power, and duty
(1) to consider appeals of protests under 3 AAC 100.570; and
(2) to adopt, amend, or repeal regulations under AS 36.30.015(f) and AS 44.62 (Administrative Procedure Act).
(c) Subject to a delegation of the authority from the board, the executive director shall
(1) appoint a chief procurement officer for the authority;
(2) take actions necessary to provide a recommendation to the board on a protest appeal under 3 AAC 100.570;
(3) take actions necessary to resolve any appeal of a contract claim under 3 AAC 100.590;
(4) subdelegate procurement authority to qualified employees of the authority to carry out the purposes of this chapter.
(d) Subject to a delegation of the authority from the executive director, the chief procurement officer of the authority shall
(1) procure or supervise the procurement of all supplies, services, construction, and professional services needed by the authority;
(2) prescribe the time, manner, and form of making requisitions for supplies and services;
(3) sell, trade, transfer, or otherwise dispose of surplus, obsolete, or unused supplies;
(4) prescribe standard forms for solicitation documents and contracts; and
(5) provide for other matters that may be necessary to carry out this chapter.
(e) An employee of the authority may exercise a delegated power only in accordance with the delegation and this chapter. The delegation must be in writing and may be revoked at any time, with or without cause, by the board, or in the case of a delegation from the executive director, by the executive director.
History
- Authority: AS 36.30.015; AS 44.88.050; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.040 Violations of regulations
(a) An employee of the authority who contracts for or purchases supplies, services, professional services, or construction in a manner the employee knows to be contrary to the requirements of this chapter is subject to disciplinary action, including suspension or termination of employment, in accordance with applicable personnel rules.
(b) An employee of the authority who intentionally makes a false statement regarding the determination to conduct a non-competitive or limited competition procurement is subject to disciplinary action, including suspension or termination of employment, in accordance with applicable personnel rules.
(c) If the authority suffers damages as a result of the unauthorized procurement actions of an employee, the authority will document the facts and file a report with the attorney general to determine if civil or criminal action should be considered.
(d) If for any reason an employee of the authority suspects collusion or other anticompetitive practices among bidders or offerors, the employee shall transmit a notice of the relevant facts to the attorney general.
(e) The authority will request that the attorney general on behalf of the state enforce this chapter. In addition to the actions described in this section, the attorney general may consider AS 36.30.930 in determining the applicability of civil or criminal penalties.
History
- Authority: AS 36.30.015; AS 44.88.050; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.050 Applicability of regulations
(a) This chapter applies only to contracts solicited or entered into after September 25, 2013 unless the parties agree to apply this chapter to a contract solicited or entered into before that date.
(b) This chapter applies to the expenditure of the authority's funds under a contract, except that this chapter does not apply to
(1) transactions of the types listed as exempt under AS 36.30.850(b);
(2) loans, loan guarantees, bonds, bond guarantees, or other indebtedness of the authority;
(3) contracts that delegate, in whole or in part, the authority's investment powers or fiduciary duties with respect to investments;
(4) contracts to
(A) finance or acquire a development project under AS 44.88.172, or contracts with an agent or other person to operate or manage a development project under AS 44.88.172;
(B) assist in financing or developing a qualified energy development by any means authorized under AS 44.88.680(a)(1), (2), (4), or (5); or
(C) assist in financing or developing an Arctic infrastructure development by any means authorized under AS 44.88.830(a)(1), (2), (4), or (5);
(5) expenditures by or for the benefit of a partner, developer, limited liability company, or other entity participating with the authority in the financing or development of a project, qualified energy development, or Arctic infrastructure development, whether through a public-private partnership agreement or otherwise, unless expressly adopted in the agreement between the authority and the partner, developer, limited liability company, or other entity;
(6) contracts between the authority and the state, its political subdivisions, and other governments or political subdivisions;
(7) contracts for legal services relating to existing or probable lawsuits in which the authority is or may become a party;
(8) transactions relating to the operation and protection of assets or disposals of property, equipment, or supplies that are acquired through foreclosure, deeds in lieu of foreclosure, or other proceedings against collateral for loans or guarantees of the authority;
(9) transactions relating to the operation and protection of assets or disposals of property, equipment, or supplies acquired after default under, or a termination of, a contract regarding a development project under AS 44.88.172, a qualified energy development under AS 44.88.680, or an Arctic infrastructure development under AS 44.88.830; or
(10) transactions involving or for the benefit of any subsidiary entity of the authority that is part of a development project under AS 44.88.172, a qualified energy development under AS 44.88.680, or an Arctic infrastructure development under AS 44.88.830.
(c) Nothing in this chapter prevents the authority from complying with the terms and conditions of a grant, gift, bequest, cooperative agreement, or federal assistance agreement.
(d) If a procurement involves the expenditure of federal money or requires federal assistance and there is a conflict between a provision of this chapter and a federal statute, regulation, policy, or requirement, the procurement officer shall comply with the federal statute, regulation, policy, or requirement.
History
- Authority: AS 36.30.015; AS 44.88.050; AS 44.88.080
- Eff. 9/25/2013, Register 207; am 2/27/2016, Register 217
Article 2 Source Selection General Requirements
3 AAC 100.060 Nondiscrimination in source selection
Source selection and contract awards may not be based on discrimination because of race, religion, color, national origin, sex, age, marital status, pregnancy, parenthood, disability, or political affiliation.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.070 Exclusion of prospective contractor from competition
(a) A procurement officer may issue a competitive solicitation that prohibits an individual or contractor from submitting a bid or proposal if
(1) the procurement officer makes a determination that the contractor or individual assisted in drafting the invitation to bid or request for proposal and gained substantial information regarding the invitation to bid or request for proposal that is not available to other bidders or offerors;
(2) the contractor or individual is listed on any state or federal list of debarred contractors;
(3) the contractor or individual has headquarters in a country listed in Tier 3 of the most recent Trafficking in Persons Report published by the United States Secretary of State under 22 U.S.C. 7107(b)(1)(C);
(4) the contractor or individual would only act as a broker in supplying the goods or services and not add value to the transaction; or
(5) award to a specific contractor or individual could create a conflict of interest that would compromise the objectivity or purposes of the contract.
(b) If an excluded contractor or individual submits a bid or proposal, the procurement officer shall reject the bid or proposal as nonresponsive.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.080 Lists of contractors
For the purpose of providing notice for competitive bids and proposals, the chief procurement officer may establish and maintain contact information for contractors who have expressed an interest in doing business with the authority.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.090 Specifications
(a) The purpose of a specification is to serve as a basis for obtaining, in a cost-effective manner, a supply, service, or construction item suitable for the authority's needs.
(b) The chief procurement officer shall monitor the content and use of specifications for supplies, services, professional services, and construction required by the authority.
(c) The chief procurement officer may obtain expert advice and assistance in the development of specifications and establish operational procedures governing the testing and trial use of equipment, materials, and other supplies by the authority, and the application of resulting information and data to specifications or procurements.
(d) Specifications must promote overall economy for the purposes intended, encourage competition in satisfying the authority's needs, and to the extent practicable, emphasize functional or performance criteria necessary to meet the needs of the authority and may not be unduly restrictive. The requirements of this subsection regarding the purposes and nonrestrictiveness of specifications apply to all specifications, including those prepared by architects, engineers, designers, and other professionals.
(e) Except for small procurements under 3 AAC 100.460, a specification that limits the procurement of items to a single manufacturer's name or catalog number may be used only if the procurement officer determines in writing that only the identified brand name item or items will satisfy the authority's needs.
(f) The procurement officer may use brand name or equal specifications for the purpose of identifying the performance and functional requirements of a commodity.
(g) The authority will procure standard commercial products if practicable. Under the direction of the chief procurement officer, the authority may develop and maintain a list of standard commercial products.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.100 Contract terms and conditions
(a) The chief procurement officer may determine the contractual provisions, terms, and conditions of solicitations and contracts, if the provisions, terms, and conditions are not contrary to statutory or regulatory requirements governing the procurement.
(b) The chief procurement officer shall develop and maintain standard contract terms subject to review and approval as to form by the attorney general. Modification of these standard terms is subject to review and approval as to form by the attorney general.
(c) Contractual terms and conditions may not have the effect of unnecessarily limiting competition or exclusively requiring a proprietary supply, service, or construction item resulting in procurement from a single source unless no other requirement will suffice.
(d) The standard contract terms will be included or referenced in all invitations to bid under 3 AAC 100.220 and requests for proposals under 3 AAC 100.350.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.110 Construction project delivery methods
(a) One or more of the following project delivery methods may be used for procurements related to design, construction, routine repair, maintenance, management, or operations for projects or facilities of the authority:
(1) design-bid-build;
(2) construction management;
(3) construction management with the general contractor at risk;
(4) design-build;
(5) design-build-operate-maintain;
(6) design-build-finance-operate;
(7) any variation of the methods described in (1) - (6) of this subsection.
(b) Participation in a report or study that is subsequently used in the preparation of design requirements for a construction project does not automatically disqualify a firm from participating as a member of a proposing team offering proposals under any of the project delivery methods described in (a) of this section, unless the procurement officer determines that participation by the firm in the report or study provided that firm with a substantial competitive advantage.
(c) Subject to the review and approval of the chief procurement officer, a construction procurement may be solicited by an invitation to bid under 3 AAC 100.220, a request for proposals under 3 AAC 100.350, multi-step bids or proposals under 3 AAC 100.160, or another procurement method under 3 AAC 100.450 - 3 AAC 100.500.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.120 Multiple awards
(a) The authority may issue a solicitation with the intent to make multiple awards if award to two or more bidders or offerors of similar products or services is necessary for adequate delivery, service, or product compatibility. A multiple award shall be made in accordance with 3 AAC 100.210 - 3 AAC 100.330 (competitive sealed bidding), 3 AAC 100.340 - 3 AAC 100.440 (competitive sealed proposals), 3 AAC 100.460 (small procurements), or 3 AAC 100.480 (emergency procurements), as applicable.
(b) If the intent of the solicitation is to establish multiple indefinite-delivery or indefinite-quantity term contracts, the contract period, including optional renewals and the process for selection and award of work orders or purchase orders, must be included in the original solicitation and subsequent contract award.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.130 Bid, payment, and performance bonds
(a) Bid bonds or bid security in the amount of at least five percent of the bid price
(1) must be submitted with all invitations to bid for construction projects estimated to cost over $100,000; and
(2) if needed for the protection of the authority as determined by the procurement officer, may be required in invitations to bid for contracts for supplies, services, or professional services.
(b) Payment and performance bonds, or other acceptable security approved by the chief procurement officer,
(1) shall be required for all construction contracts over $100,000; and
(2) if needed for the protection of the authority as determined by the procurement officer, may be required for other contracts.
(c) Any bid, payment, or performance bonding requirements must
(1) be set out in the solicitation; and
(2) identify the acceptability of alternative forms of security that may be substituted for the required bond, subject to approval of the chief procurement officer.
(d) If the invitation to bid requires security, the procurement officer shall reject a bid that does not comply with the bid security requirement unless the officer determines that the bid fails to comply in a nonsubstantial manner with the security requirements.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.140 Preferences
Unless otherwise prohibited by law or by requirements of the entity funding the transaction, the authority will incorporate the preference required under AS 36.30.015(f) in a competitive sealed bid or competitive sealed proposal in which price is an evaluation factor.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.150 Public notice of competitive sealed bids and competitive sealed proposals
(a) The procurement officer shall provide public notice of a competitive sealed bid or a competitive sealed proposal at least 21 days before the date for the opening of bids or proposals.
(b) If the procurement officer determines in writing that a shorter notice period is advantageous or required for a particular project and adequate competition is anticipated, the 21-day period may be shortened.
(c) Notice shall be posted on the Alaska Online Public Notice System. When practicable, notice may also include
(1) publication in a newspaper calculated to reach prospective bidders;
(2) posting in public places within the area where the work is to be performed or the material furnished;
(3) communicating in other appropriate media, including posting in electronic media;
(4) notifying bidders or offerors who have expressed an interest in previous solicitations of the authority;
(5) electronically notifying prospective contractors on the appropriate list maintained by the authority under 3 AAC 100.080.
(d) Nothing in this section limits use of additional methods of public notice in order to reach prospective contractors located in the state.
(e) The procurement officer shall provide notice of an invitation to bid or request for proposals to a prospective contractor upon request, regardless of the location of the prospective contractor.
(f) The procurement officer may require payment of duplication costs or a cash deposit for supplying the invitation to bid.
(g) Failure to comply with the notice requirements of this section does not invalidate a solicitation or the award of a contract.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.160 Multi-step solicitations
When it is considered impractical to initially prepare a definitive purchase description to support an award based on price or other definitive criteria, the procurement officer may issue an invitation to bid, request for information, or request for proposals seeking the submission of technical information or data to be followed by an invitation to bid or request for proposals limited to
(1) the bidders or offerors whose offers are determined to be technically qualified; or
(2) a short list of bidders or offerors who are determined to be best qualified under the criteria set out in the first step of the solicitation.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.170 Amendments or extensions to a solicitation
(a) Before the opening of bids or proposals, a solicitation may be amended, or time for opening may be extended, upon the procurement officer's determination that the extension or amendment is in the authority's best interest. Notice shall be provided so that potential bidders or offerors have access to the amendment.
(b) If, after the deadline for receipt of proposals under 3 AAC 100.360, there is a need for any substantial clarification or material change in the request for proposals, the request may be amended to incorporate the clarification or change. The procurement officer shall provide notice of the date and time established for receipt of new or amended proposals.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.180 Cancellation of the solicitation or rejection of all bids or proposals
Before the deadline for receipt of bids or proposals, after the opening of bids or proposals, or after notice of intent to award but before award, the chief procurement officer may cancel the solicitation or reject all bids or proposals. Reasons for cancellation or rejection include one or more of the following:
(1) the supplies, services, or construction being procured are no longer required;
(2) ambiguous or otherwise inadequate specifications were part of the solicitation;
(3) the solicitation did not provide for consideration of all factors of significance to the authority;
(4) prices exceed available money, and to adjust quantities or reduce services to accommodate available money would not be appropriate;
(5) all otherwise acceptable bids or proposals received are at unacceptable prices;
(6) there is reason to believe that the bids or proposals may not have been independently arrived at in open competition, may have been collusive, or may have been submitted in bad faith;
(7) only one proposal or bid was received;
(8) proceeding with the solicitation or award is not in the best interests of the authority.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.190 Disposition of canceled or rejected bids or proposals
(a) If at any time during the solicitation process a request for proposals or invitation to bid is canceled, the procurement officer shall return the bids or proposals if the time for filing a protest has expired and a protest has not been filed.
(b) The procurement officer shall keep a list of returned bids or proposals in the procurement file.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.200 Protest of cancellation of a solicitation
Not more than 10 days after a notice of cancellation is issued by the procurement officer, an interested party may protest the cancellation of an invitation to bid or request for proposals by filing with the procurement officer a written protest that includes the information required by 3 AAC 100.570.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
Article 3 Competitive Sealed Bidding
3 AAC 100.210 General policy
The authority will use competitive sealed bidding when the requirements of the authority are definite and can be sufficiently described by industry standards or practices so that price can be the primary basis for award, if the bid is determined to be responsive to the authority's requirements and the bidder is determined to be responsible.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.220 Invitation to bid
(a) When competitive sealed bidding is used, the procurement officer shall issue an invitation to bid. It must include a time, place, and date by which the bid must be received, a purchase description, a description of all contractual terms and conditions applicable to the procurement including the bid evaluation criteria, and the basis for award.
(b) A bidder must have a valid Alaska business license before contract award.
(c) A bidder for a construction contract must submit evidence of the bidder's registration under AS 08.18 at the time designated in the invitation to bid.
(d) If the chief procurement officer makes a written finding that the release of the estimated cost of goods or services would adversely affect the authority's ability to obtain the best competitive bid, the estimated cost of the goods or services is confidential during the solicitation process and may not be released to the public before bid opening.
(e) A bidder, in the submission of a bid, must certify under penalty of perjury that the price submitted was independently arrived at without collusion.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.230 Pre-opening correction or withdrawal of bids
(a) A bid may be corrected or withdrawn by written request received in the office designated in the invitation for bids before the time and date set for opening.
(b) A request under (a) of this section must provide authorization for the person making the correction or withdrawal to do so.
(c) If a bid is withdrawn, the bid security, if any, shall be returned to the bidder along with the copies of the unopened bid documents not later than 15 days after bid opening. A copy of the correspondence requesting the withdrawal shall be included in the procurement file.
(d) All documents relating to the correction of a bid shall be included in the procurement file.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.240 Submission and receipt of bids
(a) A bid must be submitted with the invitation to bid number clearly identified. The rest of the bid must be in a form that cannot be viewed by the procurement officer until after the closing date of the invitation to bid. Upon receipt, the bid and any bid corrections shall be stored in a secure place.
(b) The procurement officer may issue and receive competitive sealed bids through an electronic bidding system, if the system is able to receive electronic bid documents and corrections to bid documents, document the date and time of receipt of bid documents, secure the electronic bid submissions from being reviewed until after the date and time of bid opening, and provide an accessible public record that documents the solicitation as required under 3 AAC 100.710.
(c) Bids shall be unconditionally accepted without alteration or correction, except as authorized in 3 AAC 100.230 and 3 AAC 100.260.
(d) A bid, bid correction, or withdrawal of a bid received at the place designated for receipt of bids after the time and date set for receipt of bids is late.
(e) A late bid, correction, or withdrawal may not be accepted unless the delay was due to an error of the authority.
(f) A late bid or correction may not be opened or considered. The procurement officer shall document the date and time the late bid or correction was received and return the unopened late bid or correction to the bidder after the protest period has passed.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207; am 2/27/2016, Register 217
3 AAC 100.250 Bid openings
(a) The procurement officer shall open all bids and corrections received before the date and time designated in the invitation to bid.
(b) All bid openings are open to the public at the place, date, and time designated in the invitation to bid.
(c) The name of each bidder, the bid price, and other information determined appropriate by the procurement officer shall be tabulated at the bid opening. The tabulation is open to public inspection as soon as practicable after the bid opening.
(d) The bids are not open for public inspection until after the notice of intent to award a contract is given.
(e) To the extent the bidder designates and the procurement officer concurs, trade secrets and other proprietary data contained in a bid document are confidential.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.260 Correction and withdrawal of bids after bid opening
(a) After bid opening, changes in bid prices or other provisions of bids prejudicial to the interest of the authority or fair competition are not permitted except as provided under (d) of this section.
(b) If, before award, a procurement officer knows of an error in a bid, the officer shall notify the bidder of the error.
(c) Inadvertent errors discovered after opening but before award, other than minor informalities, may not be corrected. If a bidder submits proof that clearly and convincingly demonstrates that an inadvertent error other than a minor informality was made, the bidder may withdraw the bid.
(d) The procurement officer may correct a bid that contains a minor informality. A correction of a minor informality may include correcting the bid submission to the intended correct bid price if the correct price is evident from the bid document. The procurement officer shall initial any correction made to the bid documents.
(e) A decision to permit the correction or withdrawal of a bid, or to cancel an award or contract based on bid mistake, shall be supported by a written determination made by the procurement officer.
(f) If a bidder is permitted to withdraw a bid before award, an action may not be maintained against the bidder or the bid security.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.270 Bid evaluation
(a) The procurement officer shall evaluate bids based on the requirements set out in the invitation to bid, which may include criteria to determine acceptability such as inspection, testing, quality, delivery, and suitability for a particular purpose. An evaluation of product acceptability may be conducted to determine whether a bidder's offering is acceptable as set out in the invitation to bid. A bid that does not meet the acceptability requirements shall be rejected as nonresponsive.
(b) The procurement officer shall evaluate bids to determine which bid offers the lowest price to the authority in accordance with the evaluation criteria set out in the invitation to bid. The criteria that will affect the bid price and be considered in evaluation for award must be objectively measurable, such as discounts, transportation costs, and total or life cycle costs. Evaluation factors need not be precise predictors of actual future costs, but to the extent possible the evaluation factors must
(1) be reasonable estimates based upon information the authority has available concerning future use; and
(2) treat all bids equitably.
(c) Criteria may not be used in bid evaluation if they are not set out in the invitation to bid.
(d) Nothing in this section permits contract award to a bidder submitting a higher quality item than that designated in the invitation for bids if the bidder is not also the lowest bidder as determined under (b) of this section.
(e) An alternate or conditioned bid submitted by a bidder that requires a change to a material term of the solicitation is nonresponsive unless a response to a specific condition or alternative is requested and authorized in the invitation to bid.
(f) Negotiations are not permitted under this section except that after opening bids a procurement officer may request bidders extend the time during which the authority may accept a bid.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.280 Determination of responsibility
(a) Before contract award the procurement officer shall consider whether the apparent low bidder is responsible. Factors that may be considered in determining whether the apparent low bidder is responsible include whether the bidder
(1) has a satisfactory record of performance;
(2) is qualified legally to contract with the state; and
(3) has supplied all necessary information in connection with the inquiry concerning responsibility.
(b) The procurement officer may require the apparent low bidder to demonstrate the availability of necessary financing, equipment, facilities, expertise, and personnel, by submitting
(1) evidence that the contractor possesses the necessary items;
(2) acceptable plans to subcontract for the necessary items;
(3) a documented commitment from, or explicit arrangement with, a satisfactory source to provide the necessary items; or
(4) other information required by the procurement officer.
(c) The authority's determination of responsibility does not relieve the contractor from the requirements for performance under the contract.
(d) If a prospective contractor supplies information in response to a request for information made by a procurement officer under (b) of this section, the financial information and any agreements with suppliers or subcontractors supplied in response to the request are confidential and may not be disclosed unless the prospective contractor gives prior written consent to their disclosure.
(e) If the apparent low bidder is determined not to be responsible, the authority may reject the bid and award the contract to the next lowest responsive and responsible bidder.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.290 Rejection of individual bids
The procurement officer may reject an individual bid for one or more of the following reasons:
(1) the bid is nonresponsive;
(2) the bidder that submitted the bid is not responsible as determined under standards set out in 3 AAC 100.280;
(3) the bidder is excluded from bidding under 3 AAC 100.070;
(4) the supply, service, or construction item fails to meet the specifications or other acceptability criteria set out in the solicitation;
(5) only one bid was received and the chief procurement officer determines that award is not in the best interest of the authority.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.300 Contract award for competitive sealed bids
(a) After appropriate application of the bidder preferences required under AS 36.30.015(f) as amended, the procurement officer shall award a contract based on the solicited bids with reasonable promptness by written notice to the lowest responsible and responsive bidder whose bid conforms in all material respects to the requirements and criteria set out in the invitation to bid.
(b) Tie bids are low responsive bids from responsible bidders which are identical in price after application of the preference required under AS 36.30.015(f). If low tie bids exist, award shall be made through a random drawing or flip of the coin. Award may not be made by dividing the procurement among bidders offering identical low price bids.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.310 Subcontractors on construction contracts
(a) Within five working days after the identification of the apparent low bidder for a construction contract solicited through a competitive sealed bidding, the apparent low bidder shall submit a list of the subcontractors the bidder proposes to use in the performance of the construction contract.
(b) The list must include the name and location of the place of business for each subcontractor, evidence of each subcontractor's valid Alaska business license, and evidence of each subcontractor's registration as a contractor under AS 08.18.
(c) A construction contractor or the apparent low bidder for a construction contract may replace a listed subcontractor if the subcontractor
(1) fails to comply with AS 08.18;
(2) files for bankruptcy or becomes insolvent;
(3) fails to execute a contract with the construction contractor or bidder involving performance of the work for which the subcontractor was listed and the construction contractor or bidder acted in good faith;
(4) fails to obtain bonding;
(5) fails to obtain insurance acceptable to the authority;
(6) fails to perform the contract with the construction contractor or bidder involving work for which the subcontractor was listed;
(7) must be replaced in order for the contractor to satisfy required state or federal affirmative action requirements; or
(8) refuses to agree or abide with the labor agreement of the construction contractor or bidder.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.320 Documentation of award
Following award, a record showing the basis for determining the successful bidder shall be made a part of the procurement file.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.330 Notice of intent to award
(a) Notice of intent to award does not constitute a formal award of a contract. The notice of intent to award must include
(1) a statement of a bidder's right under 3 AAC 100.570 to protest the award, including the time within which the protest must be received; and
(2) the name of the successful bidder.
(b) Unless only one responsive bid is received, the notice of intent to award shall be issued to each bidder at least five days before formal award of the contract. If only one responsive bid is received, the contract award may proceed as soon as practical after the notice of intent to award is issued.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
Article 4 Competitive Sealed Proposals
3 AAC 100.340 Conditions for use
(a) The procurement officer may procure supplies or services by competitive sealed proposals if the procurement officer determines that the use of competitive sealed proposals is more practical or advantageous to the authority than competitive sealed bidding.
(b) The following types of supplies and services for which the use of competitive sealed bidding is either not practicable or not advantageous to the authority may be procured by competitive sealed proposals without a written determination by the procurement officer:
(1) professional services contracts;
(2) architectural, engineering, and land surveying contracts;
(3) lease space;
(4) supplies and services for clean-up of oil and hazardous substances;
(5) design-build construction contracts;
(6) design-build-operate contracts.
(c) Award under competitive sealed proposals will be made to the responsive and responsible offeror who provides the highest ranked proposal based on the criteria and evaluation processes identified in the request for competitive sealed proposals if the authority and the offeror are able to negotiate a contract for the benefit of the authority consistent with the solicitation and the offeror's proposal.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.350 Request for proposals
A request for competitive sealed proposals must contain
(1) the date, time, and place for delivering proposals;
(2) a specific description of the supplies, construction, services, or professional services to be provided under the contract;
(3) the standard contract terms under which the supplies, construction, services, or professional services are to be provided, or a reference to those terms;
(4) any other specific terms under which the supplies, construction, services, or professional services are to be provided;
(5) the requirement that the offeror document having the required professional and contractor's licenses necessary to provide the supplies, services, or professional services requested;
(6) the information necessary for an offeror to submit a proposal or references to any information that cannot reasonably be included with the request;
(7) the requirement that an offeror certify under penalty of perjury that the price submitted was independently arrived at without collusion, if offerors are required to provide price information with their submissions; and
(8) a description of the criteria that the procurement officer shall consider and the process that the procurement officer shall use when evaluating the proposals received; criteria may include
(A) the offeror's experience in performing work similar to that sought in the request for proposals; evaluation of that experience may include
(i) reviewing the offeror's conformance to specifications and standards of good workmanship, forecasting and containment of costs or prices, history of reasonable and cooperative behavior and overall concern for the interests of the customer, safety, risk management, and adherence to contract schedules; and
(ii) the review of evaluations by private persons and officials of other government entities that have retained the services of the offeror, with respect to control of costs, quality of work, ability to meet deadlines, and other factors related to the offeror's experience;
(B) the offeror's qualifications and competence of persons who would be assigned to perform the services, as reflected by technical training and education;
(C) the offeror's ability to perform the services, as reflected by workload and the availability of adequate personnel, equipment, and facilities to perform the services expeditiously;
(D) the offeror's methods or proposed plan for delivering the goods or services;
(E) the percentage of work that will be performed in the state and efforts proposed to support the local economy;
(F) the location of the office of the offeror where the work will be performed;
(G) the offeror's employment practices with regard to women and minorities; and
(H) the price for goods or services to be provided; evaluation of the price may include a comparison of total proposed costs, analysis of rates, life cycle costs, proposed fees, indirect costs, payment schedules or terms, or other factors that may have an impact on the total program cost of the goods or services to be provided to the authority; in soliciting architectural, engineering, and land surveying services, the procurement officer may only include price as an evaluation factor when, in the judgment of the procurement officer, the services required are repetitious in nature, and the scope, nature, and amount of services required are thoroughly defined by measurable and objective standards to reasonably enable firms or persons making proposals to compete with a clear understanding and interpretation of the services required; in order to include price as a factor in soliciting architectural, engineering, and land surveying services, a majority of the persons involved in evaluation of the proposals must be registered in the state to perform architectural, engineering, or land surveying services.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.360 Submission, receipt, and treatment of competitive sealed proposals
(a) A proposal must be submitted with the request for proposal number clearly identified. The rest of the proposal must be in a form that cannot be viewed by the procurement officer until after the closing date of the request for proposals. Upon receipt, the proposal and any proposal corrections shall be stored in a secure place.
(b) The procurement officer may issue and receive competitive sealed proposals through an electronic solicitation system, if the system is able to receive electronic proposal documents and corrections to proposal documents, document the date and time of receipt of proposal documents, secure the electronic submissions from being reviewed until after the date and time for receipt of proposals, and provide an accessible public record that documents the solicitation as required under 3 AAC 100.710.
(c) After the date set for receipt of proposals, a register of proposals shall be prepared. The register must include the name of each offeror and a description of the supply, service, or construction item offered. The register of proposals and all the contents of all proposals are confidential until the procurement officer issues a notice of intent to award.
(d) The procurement officer shall receive, open, and evaluate proposals so as to avoid disclosure of contents to competing offerors before notice of intent to award a contract is issued.
(e) To the extent that the offeror designates and the procurement officer concurs, trade secrets and other proprietary data contained in the proposal documents are confidential.
(f) A proposal or proposal correction received at the place designated for receipt of proposals after the time and date set for receipt of proposals is late.
(g) A late proposal or correction may not be opened or considered unless the delay was due to an error of the authority. The procurement officer shall document the date and time the late proposal or correction was received and return the unopened late proposal or correction to the offeror after the protest period has passed.
(h) If a solicitation is canceled after proposals are received but before a notice of intent to award a contract has been issued, and if a protest of the solicitation or of the cancellation of the solicitation has not been filed by an interested party, the procurement officer shall return all proposals to the offerors that submitted proposals once the time specified for filing a protest has expired. The procurement officer shall keep a list of returned proposals in the file for the solicitation.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207; am 2/27/2016, Register 217
3 AAC 100.370 Evaluation of proposals
(a) The authority will evaluate proposals based on the evaluation criteria and processes identified in the request for proposals. The authority will not use other factors, criteria, or processes.
(b) A procurement evaluation committee consisting of at least three authority employees, shall evaluate proposals. Other authority employees, public officials, experts, or representatives of participating organizations may be added as appropriate if there is no conflict of interest and the procurement evaluation committee is made up of at least three employees of the authority.
(c) If a procurement evaluation committee evaluates the proposals, each member shall exercise independent judgment, and the vote of one member may not be weighted more than the vote of any other member.
(d) The procurement evaluation committee may hold meetings to discuss the proposals received. Evaluators may independently adjust their own scores or rankings as a result of these discussions.
(e) Numerical rating systems may be used, but are not required. If a numerical rating system is used, evaluators are not required to provide additional documentation for scoring, if the relative weight of the criteria and system is defined in the solicitation.
(f) If a numerical rating system is not used, each evaluator shall provide a brief narrative consistent with the evaluation criteria documenting the basis for the evaluator's ranking in writing.
(g) The procurement officer shall document the evaluation process and provide a summary of the final ranking of proposals for the procurement file.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207; am 2/27/2016, Register 217
3 AAC 100.380 Rejection of individual proposals
Reasons for rejecting an individual proposal include one or more of the following:
(1) the proposal is nonresponsive to the minimum requirements identified in the solicitation;
(2) the offeror submitting the proposal is not responsible as determined under standards set out in 3 AAC 100.280;
(3) the offeror submitting the proposal is excluded from submitting a proposal under 3 AAC 100.070;
(4) after evaluation and discussion only one proposal is available for award, and the chief procurement officer determines that proceeding with the award is not in the best interest of the authority.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.390 Clarification of offers
(a) In order to determine if a proposal is reasonably susceptible for award, communications by the procurement officer or the procurement evaluation committee are permitted with an individual offeror to clarify the contents of an offeror's proposal.
(b) Clarification is limited to clarification of ambiguities or conflicts in the proposal and may not be a negotiation or allow for material changes to the proposal being evaluated.
(c) The procurement officer may limit communications to only those offerors who submitted proposals requiring clarification in order to complete the evaluation of those proposals.
(d) The evaluation by the procurement officer or the procurement evaluation committee may be adjusted as a result of a clarification under this section.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.400 Proposal discussions with offerors and best and final offers
(a) At the discretion of the procurement officer, an offeror whose proposal is reasonably susceptible for award as determined in the initial evaluation conducted under 3 AAC 100.370 may be offered the opportunity to confidentially discuss the proposal with the procurement officer or procurement evaluation committee.
(b) The opportunity for confidential discussions, if held, must be extended to all offerors submitting proposals determined reasonably susceptible for award.
(c) Meetings with offerors under this section are not subject to AS 44.62.310 - 44.62.319 (Open Meetings Act).
(d) Auction techniques that reveal one offeror's price to another, and disclosure of any information derived from competing proposals, are prohibited.
(e) The procurement officer may limit discussions to specific sections of the proposals received or specific sections of the request for proposals.
(f) The conditions, terms, or price of the proposal may be altered or otherwise changed during the course of the discussions, if the changes are within the scope of the request for proposals. Any modifications to a proposal as a result of discussions shall be reduced to writing by the offeror within the time frame designated by the procurement officer.
(g) Following discussions, the procurement officer may set a date and time for the submission of best and final proposals.
(h) Best and final proposals may be submitted more than once if the chief procurement officer makes a written determination that it is in the authority's best interest to conduct additional discussions or change the authority's requirements and request submission of another round of best and final proposals.
(i) If an offeror does not submit a best and final proposal or a notice of withdrawal, the offeror's previous proposal is considered the offeror's best and final proposal for the purpose of evaluation and award.
(j) The evaluation of a proposal may be adjusted as a result of discussions under this section.
(k) After best and final proposals are received, final evaluations will be conducted as described in 3 AAC 100.370.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.410 Contract negotiations
(a) After evaluation of proposals under 3 AAC 100.370, including an adjustment of an evaluation of a proposal as authorized under 3 AAC 100.390 and 3 AAC 100.400, the procurement officer may negotiate with the offeror of the highest ranked proposal for the purpose of obtaining contract terms consistent with the solicitation and most favorable to the authority.
(b) The authority may request or the offeror may propose changes to the offeror's proposal during contract negotiations. The changes must be reasonable and may not have the effect of substantially changing the scope of work or price if the change would alter the ranking of the highest ranked proposal. All changes will be documented in writing and incorporated into the contract documents.
(c) If the offeror with the highest ranked proposal fails to negotiate in good faith, fails to negotiate within the time period set by the procurement officer, or is unable to adjust the price as may be required by the authority without materially affecting the scope of work, the procurement officer may terminate negotiations and begin contract negotiations with the offeror of the next highest ranked proposal in the manner prescribed in this section.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.420 Contract award
The procurement officer shall award a contract under competitive sealed proposals to the responsible and responsive offeror whose proposal is determined in writing to be the most advantageous to the authority, taking into consideration the evaluation factors set out in the request for proposals and any contract negotiations conducted under 3 AAC 100.410.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.430 Documentation of contractor selection
When a contractor has been selected by competitive sealed proposal, the procurement officer shall enter into the procurement file a written record of the basis on which the selection was found to be most advantageous to the authority.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.440 Notice of intent to award
Notice of intent to award shall be issued in accordance with 3 AAC 100.330.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
Article 5 Other Procurement Methods
3 AAC 100.450 Determinations to use other procurement methods
The procurement officer responsible for making a determination to conduct a non-competitive procurement, limited competition procurement, or an innovative procurement shall examine the material facts of the procurement and independently determine whether the procurement is eligible for the procurement method contemplated.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.460 Small procurements
(a) Procurement requirements may not be artificially divided or fragmented so as to constitute a purchase under this section or to circumvent the source selection procedures required under 3 AAC 100.210 - 3 AAC 100.330 or 3 AAC 100.340 - 3 AAC 100.440.
(b) The authority will use reasonable and adequate procedures, and make records that facilitate auditing of the procurement, when procuring supplies, services, professional services, or construction estimated to cost not more than $10,000.
(c) The authority will use the following procedures in the procurement of supplies, services, professional services, or construction estimated to cost more than $10,000, but not more than $50,000:
(1) for the solicitation,
(A) at least three firms or persons will be contacted for a quotation or informal proposal; and
(B) the solicitation may be made verbally or in writing; in the solicitation, the authority will include the specifications, the award criteria, and the date and time responses are due;
(2) for the award, the authority will make the award
(A) in accordance with the specifications and award criteria in the solicitation; and
(B) to the responsive and responsible firm or person that submitted the lowest quotation or the informal proposal that is the most advantageous to the authority;
(3) as part of the file on the procurement, the procurement officer shall include the
(A) name of the person who made the solicitation and the date of the solicitation;
(B) information provided by the authority under (1)(B) of this subsection;
(C) names of the firms or persons contacted, a summary of any verbal responses, and copies of all quotations or informal proposals received; and
(D) justification for the award.
(d) The authority will use the following procedures for the procurement of supplies, services, or professional services estimated to cost more than $50,000, but not more than $100,000, or for procurement of construction estimated to cost more than $50,000, but not more than $200,000:
(1) for the solicitation,
(A) at least three firms or persons will be contacted for a quotation or an informal proposal;
(B) the solicitation will be made in writing; in the solicitation, the authority will include the specifications, the award criteria, the requirement that the response be made in writing, and the date and time responses are due;
(2) for the award, the authority will
(A) make the award
(i) in accordance with the specifications and award criteria in the solicitation; and
(ii) to the responsive and responsible firm or person that submitted the lowest quotation or the informal proposal that is the most advantageous to the authority; and
(B) provide written notice of the award, including the name of the successful offeror, to each firm or person providing a quotation or informal proposal, and will describe protest rights under 3 AAC 100.580 and the time limitations within which a protest must be received;
(3) as part of the file on the procurement, the procurement officer shall include
(A) a copy of the solicitation made under (1)(B) of this subsection;
(B) the names of the firms or persons contacted and copies of all written quotations or informal proposals received; and
(C) documentation of and the justification for the award.
(e) A procurement made under this section shall be solicited from Alaskan vendors, whenever practicable, and is subject to the preference required under AS 36.30.015(f).
(f) Nothing in this section prevents postings in electronic media to satisfy the competitive solicitation and notice of award requirements. Quotes and informal proposals may be submitted in electronic media if permitted by the procurement officer.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207; am 2/27/2016, Register 217
3 AAC 100.470 Limited competition procurements
(a) A contract may be awarded under this section when the chief procurement officer determines in writing that a situation exists that makes competitive sealed bidding or competitive sealed proposals impractical or contrary to the interests of the authority.
(b) Situations that may justify conducting a limited competition procurement include
(1) procurements that cannot be publicly advertised without compromising the business interests of the authority or its business partners;
(2) procurements that may have been previously solicited by competitive sealed proposals or competitive sealed bids but the authority was unable to award because no responsible and responsive bids or proposals were received and the authority still has an immediate need for the goods or services.
(c) To determine if two or more sources are interested in a procurement, the authority may provide notice under 3 AAC 100.150 requesting letters of interest in a limited competition procurement.
(d) Solicitation under this section may be limited to two or more potential contractors that the chief procurement officer determines may be able to provide a response to the solicitation.
(e) Under this section the procurement officer shall solicit bids or proposals and conduct negotiations, as appropriate, as to price, delivery, and terms, equally with each potential contractor.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.480 Emergency procurements
(a) An emergency procurement need not be made through competitive sealed bidding or competitive sealed proposals but shall be made with competition that is practicable under the circumstances, and must be limited to the supplies, services, professional services, or construction necessary to meet the emergency.
(b) A procurement may be made under emergency conditions if
(1) a threat to public health, welfare, or safety exists, including fire, flood, epidemic, riot, environmental accident, or a similarly compelling reason;
(2) an equipment failure occurs, and the need for timely repair is essential; or
(3) immediate action is needed to protect public or private property or other interests of the authority.
(c) Not later than 24 hours after discovering the emergency situation, the employee of the authority knowledgeable about the emergency and seeking a procurement shall provide notification of the emergency conditions to the chief procurement officer or the chief procurement officer's designee, and to the executive director or the executive director's designee. The employee shall provide
(1) the facts demonstrating the basis for the emergency;
(2) information about the scope of work necessary to meet the emergency need;
(3) the basis for contractor selection; and
(4) a description of any steps the employee or the authority may have taken to mitigate the immediate threat.
(d) The chief procurement officer shall make a written determination regarding the emergency and shall direct the procurement staff to make the procurements necessary by any reasonable means within authorized funding limits.
(e) The procurement file must include
(1) a copy of the determination made under (d) of this section;
(2) a copy of the contract that identifies the supplies, services, or construction procured under the contract; and
(3) any correspondence with the contractor.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.490 Non-competitive procurements
(a) A procurement officer may contract for supplies, services, professional services, or construction without the use of competitive source selection
(1) for any contract issued by another state or federal government agency where the authority is authorized to place orders under the terms and conditions of that contract;
(2) for a contract where the total cost is not more than $10,000 and the price is fair and reasonable;
(3) for a contract that was previously competitively bid, but where only one nonresponsive bid was received and the chief procurement officer determines that negotiation with that bidder is in the best interest of the authority because
(A) an immediate need exists for the goods or services; or
(B) re-solicitation is unlikely to increase the number of bids;
(4) for a contract where time is of the essence and the chief procurement officer makes a determination that
(A) the time required to solicit competitive bids or proposals for the equipment or services would adversely impact the authority's program or mission;
(B) the price for goods or services is reasonable compared to the impacts of a delay;
(C) the proposed contractor is in a unique position to be able to meet the authority's needs; and
(D) the duration of the contract is limited; or
(5) for a contract where the chief procurement officer determines that award of a contract by competitive sealed bidding, competitive sealed proposals, or small procurement procedures is not practicable, and that award to a single source is in the authority's best interests as no other reasonable source of the supplies or services is available that could meet the authority's requirements and schedule; the authority may advertise its intent to make a single source award to determine if a single source award is appropriate.
(b) For procurements made under (a)(3), (4), and (5) of this section, the chief procurement officer's determination must be in writing and include a written explanation with evidence necessary for the independent examination and determination of the material facts of the procurement. The determination by the chief procurement officer that a specific course of action is or is not "in the authority's best interest" means a determination that is reasonable under the circumstances and is not arbitrary, capricious, or prompted by corruption. A request to use a non-competitive procurement method that is based on a determination that it is "in the authority's best interest" must cite the specific and significant interests to support use of the non-competitive procurement method.
(c) A procurement officer shall conduct negotiations, as appropriate, as to the price, delivery, and terms of a non-competitive procurement identified in (a)(3), (4), and (5) of this section, and the contractor shall provide cost and pricing data in accordance with 3 AAC 100.560.
(d) The determination required for procurements under (a)(3), (4), and (5) of this section may only be made by the chief procurement officer or the executive director in the absence of the chief procurement officer.
(e) The procurement file must include a copy of the determinations for procurements made under (a)(3), (4), and (5) of this section.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207; am 2/27/2016, Register 217
3 AAC 100.500 Innovative procurements
(a) A contract may be awarded for supplies, services, professional services, or construction using an innovative procurement process, with or without competitive sealed bidding or competitive sealed proposals, when the chief procurement officer determines in writing that it is advantageous to the authority to use an innovative competitive procurement process in the procurement of new or unique requirements of the authority, new technologies, or to achieve best value.
(b) The chief procurement officer shall submit a procurement plan to the attorney general for review and approval as to form before issuing the notice required by (c) of this section. The plan must, at a minimum, address the method of solicitation, scope, method of award, protest procedures, and proposed contract provisions.
(c) A procurement under this section is subject to the public notice requirements of 3 AAC 100.150.
(d) A record of an innovative procurement must be available for public inspection upon completion or cancellation of the procurement, and must contain
(1) a copy of the contract;
(2) the written determination of the chief procurement officer to use the innovative procurement procedure;
(3) the procurement plan as approved as to form by the attorney general;
(4) the record of notice as required under 3 AAC 100.150;
(5) the record of respondents to the solicitation; and
(6) the contract award.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
Article 6 Contract Formation and Modification
3 AAC 100.510 Type of contracts
Any type of contract that will promote the best interests of the authority may be used, except that the use of a cost-plus-a-percentage-of-cost contract is prohibited.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.520 Contract contents
(a) Each contract awarded as a result of competitive sealed bids or competitive sealed proposals must contain
(1) a statement of the amount of the contract;
(2) the date for the supplies to be delivered or the expected period of performance of the construction, services, or professional services;
(3) a description of the supplies, construction, services, or professional services to be provided; and
(4) certification by the procurement officer or other official of the authority that sufficient money is available to be encumbered to cover the obligation under the contract or will be available before the authority issues a notice to proceed or purchase order against the contract.
(b) The procurement officer may also incorporate clauses for adjustments in prices, period of performance, and scope in addition to other terms or requirements included in the solicitation or negotiated between the procurement officer and the contractor.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.530 Contract term and cancellation
(a) Unless otherwise provided by law, a contract for supplies, services, or professional services may be entered into for any period of time considered to be in the best interests of the authority, if the term of the contract and conditions of renewal or extension, if any, are included in the solicitation and funds are available for the first fiscal period at the time of contracting.
(b) Payment and performance obligations for succeeding fiscal periods shall be subject to the availability and designation of funds for purposes of the contract.
(c) Before using a multi-term contract, the procurement officer shall determine in writing that
(1) estimated requirements cover the period of the contract and are reasonably firm and continuing; and
(2) the contract will serve the best interests of the authority by encouraging effective competition and efficient contract administration.
(d) When funds are not appropriated or otherwise made available to support continuation of performance in a subsequent fiscal period, the contract shall be canceled.
(e) Upon cancellation, the contractor may only be reimbursed for the reasonable value of any nonrecurring costs incurred but not amortized in the price of the supplies, services, or professional services delivered under the contract that are not otherwise recoverable.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.540 Contract amendments
(a) The procurement officer may amend a contract or purchase order if the contract includes clauses or terms that allow for and anticipate change orders, additional work, changes in scope, price adjustments, follow-up phases of work, or renewals consistent with the original scope and estimates of term and price documented with the source selection method used in the award.
(b) The procurement officer may amend a contract or purchase order when there is an unanticipated change in work beyond the estimated or actual contract price, term, or scope, if
(1) the solicitation was conducted following the small procurement procedures under 3 AAC 100.460, the amendment or change order, or cumulative contract amendments or change orders, will not cause the total contract amount, as amended, to exceed by 50 percent or more the original contract price, and the new total price of the contract, including all change orders and amendments, does not exceed the dollar limit for small procurements under 3 AAC 100.460; or
(2) the original contract is greater than $100,000, and the amount of the unanticipated amendment or change order, or cumulative unanticipated contract amendments or change orders, will be less than 20 percent of the original contract amount, including any anticipated amendments or contract adjustments.
(c) Before issuing an amendment that exceeds the dollar limits in (b)(1) or (2) of this section, the chief procurement officer shall provide a written determination required under 3 AAC 100.490(a)(4) or (5).
(d) The procurement officer shall obtain cost and pricing data in accordance with 3 AAC 100.560 from the contractor to confirm that the price adjustment is fair and reasonable. The authority's controller, or the controller's designee, must certify that there are sufficient funds to pay for any increase in price before issuing an amendment.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.550 Standard contract clauses
(a) The chief procurement officer, in consultation with the attorney general, may establish standard contract clauses that provide for appropriate remedies and cover the following subjects:
(1) liquidated damages;
(2) order of precedence of contract documents;
(3) specified excuses for delay or nonperformance;
(4) termination of the contract for default;
(5) termination of the contract in whole or in part for the convenience of the authority;
(6) adjustments in time including renewals or extensions;
(7) dispute resolution;
(8) adjustments in price;
(9) changes in work;
(10) additional work;
(11) amendments.
(b) The standard clauses to be used in a contract will be identified in a separate appendix to the contract and referenced in the solicitation.
(c) A procurement officer may vary the standard clauses for inclusion in a particular contract if
(1) the variations and the circumstances justifying them are documented; and
(2) the procurement officer receives written approval of the attorney general as to form.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.560 Cost principles and contractor cost and pricing data
(a) Before an award of a non-competitive contract or a change order or contract modification, the contractor or prospective contractor shall submit cost and pricing data. The contractor or prospective contractor shall certify that, to the best of the contractor's or prospective contractor's knowledge and belief, the data submitted is accurate, complete, and current as of a mutually determined specified date and will continue to be accurate and complete during the performance of the contract.
(b) When a contractor becomes aware of a situation that may form the basis of a claim for compensation that exceeds the amount designated as the base amount of the contract and before performing additional work or supplying additional materials, the contractor shall submit cost and pricing data on the additional work or materials. The contractor shall certify that, to the best of the contractor's knowledge and belief, the data submitted is accurate, complete, and current and is the actual cost to the contractor of performing the additional work or supplying the additional materials.
(c) A contract, change order, or contract modification under which a certification is required under (a) or (b) of this section must contain a provision that the price to the authority, including the contractor's profit or fee, will be adjusted to exclude any significant sums by which the authority finds that the price is increased because the cost or pricing data furnished by the contractor or prospective contractor is inaccurate, incomplete, or not current as of the date agreed upon by the parties.
(d) The requirements of (a) of this section do not apply when
(1) the contract price is based on adequate price competition obtained through a competitive solicitation;
(2) the contract price is set by law or regulation; or
(3) the chief procurement officer determines in writing that the requirements of (a) of this section may be waived and the reasons for waiver are stated.
(e) The procurement officer may use the federal cost principles as guidance in contract negotiations.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
Article 7 Legal and Contractual Remedies
3 AAC 100.570 Applicability of procurement protest and appeal procedures
(a) Except for protests of small procurements made under 3 AAC 100.580, the provisions of AS 36.30.560 - 36.30.615 apply to the protest or appeal of a protest on a solicitation, a proposed contract award, or the award of a contract for supplies, services, professional services, or construction. In applying the provisions of AS 36.30.560 - 36.30.615 to the authority,
(1) the rights, powers, and duties relating to appeals of protests concerning the procurement of supplies, services, professional services, or construction duties under AS 36.30 assigned to any commissioner is vested in the board with respect to appeals of protests, and the board may delegate the rights, powers, and duties to the executive director;
(2) the executive director is responsible for taking all necessary actions following the procedures in AS 36.30.610 and 36.30.615 to develop a recommendation regarding a protest appeal;
(3) the executive director may request, as provided under AS 44.64.030(b), that the office of administrative hearings (AS 44.64.010) conduct a hearing on an appeal in accordance with AS 36.30.670, make findings of fact and conclusions of law, and provide a recommended decision for the executive director to furnish to the board;
(4) the executive director shall make a recommendation to the board for a final decision on protest appeals not subject to 3 AAC 100.580; the board retains the final decision-making authority on a protest appeal and may affirm, modify, or reject the recommended decision, in whole or in part, may remand to the executive director or any hearing officer or administrative law judge with instructions, or may take other appropriate action.
(b) Protest of procurements with a total award value of $100,000 or less must be made under 3 AAC 100.580.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.580 Protest of small procurement
(a) An interested party shall attempt to informally resolve any protest with the procurement officer regarding a procurement with a total award value of $100,000 or less. However, if the procurement is for construction, the total award value for purposes of this subsection is $200,000 or less. If the attempt is unsuccessful, the interested party may protest the solicitation or the award of a small procurement contract solicited or awarded under 3 AAC 100.460. The protest must be filed with the executive director. The protester must file a copy of the protest with the procurement officer.
(b) If protesting a solicitation issued under 3 AAC 100.460, a protest must be filed before the date and time that quotations or informal proposals are due to the authority.
(c) If protesting the award of a small procurement contract of not more than $50,000, the protest must be filed not later than 10 days after the date of the solicitation or award, whichever is later.
(d) If protesting the award of a small procurement contract greater than $50,000, a protest must be filed not later than 10 days after the date that notice of award is made.
(e) To be accepted by the authority, a protest filed under (a), (b), (c), or (d) of this section must contain
(1) the name, address, and telephone number of the protester;
(2) the signature of the protester or the protester's representative;
(3) identification of the solicitation or contract at issue;
(4) a detailed statement of the legal and factual grounds of the protest, including copies of relevant documents; and
(5) the form of relief requested.
(f) The procurement officer shall immediately give notice of the protest to the contractor or, if no award has been made, to all firms or persons that were solicited for the small procurement.
(g) The executive director or the executive director's designee shall
(1) with the concurrence of the protester, assign the protest to the chief procurement officer or other responsible state official for a final administrative resolution under alternate dispute resolution;
(2) issue a decision denying the protest and stating the reasons for denial;
(3) issue a decision that sustains the protest, in whole or in part, and instruct the procurement officer to implement an appropriate remedy; or
(4) conduct a hearing on the protest consistent with the procedures set out in 3 AAC 100.570(a)(3).
(h) The decision of the executive director or the executive director's designee under this section constitutes the final action of the authority on the protest.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207; am 2/27/2016, Register 217
3 AAC 100.590 Contract claims
(a) The provisions of AS 36.30.620 - 36.30.631 apply to any contract claim concerning a contract awarded by the authority under this chapter for supplies, services, professional services, or construction.
(b) Hearings on contract claims will be conducted in accordance with AS 36.30.670 - 36.30.685, and any arbitration of a construction contract will be conducted in accordance with 2 AAC 12.950 - 2 AAC 12.989.
(c) The rights, powers, and duties relating to appeals of claims and arbitration of construction contracts concerning the procurement of supplies, services, professional services, or construction that are assigned under AS 36.30 to any commissioner are vested with the executive director with respect to appeals of claims or arbitration concerning the authority's contracts.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.600 Misrepresentations, fraud, and attempted fraud
(a) A person who makes or uses a misrepresentation in support of a contract claim under this chapter, or who practices or attempts to practice a fraud, at any stage of proceedings relating to a procurement or contract claim under this chapter
(1) forfeits all claims relating to that procurement or contract; and
(2) is obligated to reimburse the authority all sums paid on the claim and for all costs attributable to review of the claim.
(b) The procurement officer or executive director shall make specific findings of misrepresentation, attempted fraud, or fraud before declaring a forfeiture under (a)(1) of this section.
(c) Upon a finding that the recipient of an authority contract made a misrepresentation or fraudulent claim at any stage of proceedings relating to a procurement or contract controversy, the procurement officer may, after consulting with the attorney general, declare the contract void.
(d) In determining if additional action against a person under this section is warranted the attorney general may consider the limitations and penalties under AS 36.30.687.
(e) In this section, "misrepresentation" means a false or misleading statement of material fact, or conduct intended to deceive or mislead concerning material fact, whether it succeeds in deceiving or misleading.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.610 Debarment
(a) The provisions of AS 36.30.635 - 36.30.665 and 2 AAC 12.630 - 2 AAC 12.670 apply to any debarment action undertaken by the authority against a contractor to prohibit a contractor from participating in any solicitation or award under this chapter.
(b) Hearings on a debarment action will be conducted in accordance with AS 36.30.650 and 2 AAC 12.650 - 2 AAC 12.670.
(c) The rights, powers and duties relating to debarment actions assigned to the commissioner of administration under AS 36.30 are vested with the executive director with respect to any debarment actions undertaken by the authority.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.620 Exclusive remedy
Notwithstanding AS 44.77 or other law to the contrary, the protest, appeal, and claim procedures of 3 AAC 100.570 - 3 AAC 100.590 provide the exclusive procedures for asserting a claim against the authority arising in relation to a procurement under this chapter.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
Article 8 Supply Management
3 AAC 100.630 Supply inventory records
(a) The chief procurement officer shall establish and maintain inventory records for non-consumable supplies owned and managed by the authority. The records must include
(1) non-consumable supplies with a unit acquisition cost of more than $5,000;
(2) supplies determined by the chief procurement officer to be sensitive, regardless of cost; and
(3) lease purchase or installment purchase equipment or long-term rental equipment.
(b) Theft of supplies valued at $500 or more shall be immediately reported to the appropriate law enforcement agency. All lost, stolen, or destroyed supplies shall be reported to the executive director.
(c) If there is a conflict between 3 AAC 100.630 - 3 AAC 100.640 and the requirements of a bond resolution or a funding agreement, the requirements of the bond resolution or the funding agreement prevail.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.640 Surplus and disposal of supplies
(a) If delegated the authority to do so, the chief procurement officer may act on behalf of the authority in all matters pertaining to the disposition of surplus supplies.
(b) The chief procurement officer may offer surplus supplies through spot bids, competitive sealed bids, public auction, established markets, lease, trade, or posted prices. If circumstances render the methods required under this subsection impractical, the chief procurement officer may employ other disposition methods, including negotiations with a single buyer or barter.
(c) If the chief procurement officer offers surplus supplies by competitive sealed bid, notice of sale of the surplus supplies must be publicly available at least 10 days before the date set for opening bids.
(d) An employee, contractor, or partner of the authority may not directly or indirectly purchase, or agree with another person to purchase, surplus supplies that are offered through a bid process if the employee, contractor, or partner is, or has been, directly or indirectly involved in the disposal, maintenance, or preparation for sale of the surplus supplies.
(e) Before conducting a public disposal process, the chief procurement officer may approve the sale of surplus supplies to a contractor of the authority subject to a determination that
(1) the value received for the surplus supplies through a negotiated sale would exceed the cost to otherwise dispose of the property; or
(2) the sale to the contractor is in the best interest of the authority.
(f) The chief procurement officer may offer surplus supplies by negotiated sale, transfer, lease, or donation to local governments, public procurement units, or tax-exempt nonprofit organizations if the chief procurement officer determines it to be in the best interest of the authority.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
Article 9 Additional Principles and Administrative Provisions
3 AAC 100.650 Supplementary general principles of law applicable
Unless displaced by the particular provisions of this chapter, the principles of law and equity, including AS 45.01 - AS 45.08, AS 45.12, AS 45.14, and AS 45.29 (Uniform Commercial Code), the law merchant, and law relative to capacity to contract, agency, fraud, misrepresentation, duress, coercion, mistake, or bankruptcy supplement the provisions of this chapter.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.660 Requirement of good faith
All parties involved in the negotiation, performance, or administration of contracts of the authority shall act in good faith.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.670 Trade secrets and confidential technical data
To protect the confidentiality of trade secret and confidential technical data, the chief procurement officer may establish procedures that are consistent with AS 44.88.215 and the confidentiality provisions of the authority's Procedures for Inspection of Records, revised as of July 2012 and adopted by reference.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.680 Public access to procurement records
Except as otherwise provided in AS 44.88.215(c), procurement records are public records in accordance with AS 40.25.110.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.690 Retention of procurement records
Procurement records shall be retained and disposed of in accordance with records retention guidelines and schedules approved by the state archivist.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.700 Procurement records for competitive sealed bids and proposals
The executive director shall keep a contract file open for public inspection for each contract awarded under competitive sealed bids and competitive sealed proposals. The file may be maintained in a reproducible electronic format and must contain
(1) a copy of the solicitation document;
(2) a register of bids or proposals received;
(3) a copy of each responsive bid or proposal received;
(4) the basis of award; and
(5) a copy of the contract that includes a description of the supplies, services, professional services, or construction procured under each contract.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
3 AAC 100.710 Procurement records for other procurements
The executive director shall keep a contract file open for public inspection for each limited competition procurement, innovative procurement, or non-competitive procurement under 3 AAC 100.490(a)(3), (4), and (5). The file may be maintained in a reproducible electronic format and must contain
(1) the determination, as required, regarding the source selection method used;
(2) for innovative procurements, the procurement plan approved by the attorney general;
(3) if the procurement is solicited,
(A) a copy of the solicitation document used;
(B) a copy of the notice posted or list of potential offerors contacted;
(C) a register of offers or proposals received;
(D) a copy of each responsive offer or proposal received; and
(E) the basis of award;
(4) if the procurement is not solicited,
(A) cost and pricing data; and
(B) a copy of the quote, offer, or proposal received if different from the final contract; and
(5) a copy of the contract that includes a description of the supplies, services, professional services, or construction procured under each contract.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 9/25/2013, Register 207
Article 10 General Provisions
3 AAC 100.900 Definitions
In this chapter, unless the context requires otherwise,
(1) "authority" means the Alaska Industrial Development and Export Authority;
(2) "Alaska business license" means a license required under AS 43.70 (Alaska Business License Act);
(3) "Alaska Online Public Notice System" means the system developed under AS 44.62.175;
(4) "alternate dispute resolution"
(A) means a process that is voluntarily used to resolve issues in controversy;
(B) includes negotiation, mediation, and arbitration;
(5) "change order" means a written order signed by the procurement officer, directing the contractor to make changes that the changes clause of the contract authorizes the procurement officer to order without the consent of the contractor;
(6) "chief procurement officer" means the person appointed by the executive director under 3 AAC 100.030(c)(1) as the chief procurement officer of the authority;
(7) "competitive sealed bidding" means the procedure under 3 AAC 100.210 - 3 AAC 100.330;
(8) "competitive sealed proposals" means the procedure under 3 AAC 100.340 - 3 AAC 100.440;
(9) "construction"
(A) means the process of building, altering, repairing, maintaining, improving, or demolishing a highway, structure, building, or other improvement of any kind to real property;
(B) includes services and professional services relating to planning and design required for the construction;
(C) does not include the routine operation of an improvement to real property;
(10) "contract" means all types of agreements, regardless of what they may be called, for the procurement or disposal of supplies, services, professional services, or construction;
(11) "contract modification" means a written alteration in specifications, delivery point, rate of delivery, period of performance, price, quantity, or other provisions of a contract accomplished by mutual action of the parties to the contract;
(12) "cost and pricing data" means information concerning the actual or estimated cost of labor, material, overhead, and other cost elements that have been actually incurred or that are expected to be incurred by the contractor in performing the contract;
(13) "design-build construction contract" means a construction contract between the authority and a design-builder to furnish architecture, engineering, and related design services, and to furnish construction services, including labor and materials;
(14) "executive director" means the executive director of the authority;
(15) "grant" means money or property, whether real or personal, designated by law, including an appropriation act, as a grant;
(16) "interested party" means an actual or prospective bidder or offeror whose economic interest might be affected substantially and directly by the issuance of a contract solicitation, the award of a contract, or the failure to award a contract;
(17) "minor informality"
(A) means a matter of form rather than substance that
(i) is evident from the bid document, or is an insignificant matter that has a negligible effect on price, quantity, quality, delivery, or contractual conditions; and
(ii) can be waived or corrected without prejudice to other bidders;
(B) includes typographical errors, errors in extending unit prices, transposition errors, and arithmetical errors that are evident from the bid document;
(18) "nonresponsive" means a bid or proposal that does not conform in all material respects to the solicitation;
(19) "person" means a business, individual, union, committee, club, other organization, or group of individuals;
(20) "procurement"
(A) means buying, purchasing, renting, leasing, or otherwise acquiring supplies, equipment, services, or construction for the authority;
(B) includes functions that pertain to the obtaining of supplies, equipment, services, or construction, including description of requirements, selection and solicitation of sources, preparation and award of contract, and all phases of contract administration;
(21) "procurement officer"
(A) means a person authorized to enter into and administer contracts for the authority and make written determinations with respect to them;
(B) includes an authorized representative of a procurement officer acting within the limits of the delegated authority;
(22) "professional services" means professional, technical, or consultant's services that are predominantly intellectual in character, result in the production of a report or the completion of a task, and include analysis, evaluation, prediction, planning, or recommendation;
(23) "protester" means an actual or prospective bidder, offeror, or contractor who is aggrieved in connection with the solicitation of the award of a contract and who files a protest;
(24) "reasonable and adequate procedures"
(A) means procedures that ensure fairness to potential offerors and competition commensurate with the circumstances of the procurement, considering price, mission requirements, and available competition;
(B) includes contacting only one potential offeror in appropriate circumstances;
(25) "responsive bidder" means a firm or person who has submitted a bid that conforms in all material respects to the solicitation;
(26) "services"
(A) means the furnishing of labor, time, or effort by a contractor, not involving the delivery of a specific end product other than reports that are merely incidental to the required performance;
(B) does not include employment agreements or collective bargaining agreements;
(27) "solicitation" means an invitation to bid, a request for proposals, a request for quotations, or any other method of soliciting bids, proposals, or quotes to perform a contract with the authority;
(28) "specification" means a description of the physical or functional characteristics, or of the nature of a supply, service, professional service, or construction project; it may include requirements for licensing, inspecting, testing, and delivery;
(29) "supplies"
(A) means all property of the authority, including equipment, materials, and insurance;
(B) includes privately owned real property leased for the authority's use, such as office space;
(C) does not include the acquisition or disposition of other interests in land.
History
- Authority: AS 36.30.015; AS 44.88.080
- Eff. 11/10/2011, Register 200; am 9/25/2013, Register 207
Chapter 101 Sustainable Energy Transmission and Supply Development Program
3 AAC 101.010 Scope of chapter
This chapter applies to applications for financing under, and the authority's administration of, the sustainable energy transmission and supply development ("SETS") program and fund established by AS 44.88.650 and 44.88.660.
History
- Authority: AS 44.88.085; AS 44.88.660; AS 44.88.680 AS 44.88.650; AS 44.88.670; AS 44.88.690
- Eff. 4/25/2013, Register 207
3 AAC 101.020 Eligible projects
The authority may make a loan or issue a bond, or guarantee a loan or bond, under the SETS program to finance
(1) the construction of a new qualified energy development;
(2) the acquisition of an existing qualified energy development where the acquisition is part of a plan to improve, rehabilitate, or expand the qualified energy development;
(3) improvement of an existing qualified energy development in which the cost of the improvement is at least equal to or exceeds 30 percent of the current appraised or market value of the qualified energy development;
(4) rehabilitation of an existing qualified energy development in which the cost of rehabilitation of existing facilities or equipment attached to or part of the qualified energy development is at least equal to or exceeds 30 percent of the current appraised or market value of the qualified energy development;
(5) a 30 percent or more expansion of the size, output, generation capabilities, transmission throughput, conservation, storage or distribution capabilities for a qualified energy development that involves providing heat or electricity;
(6) a 30 percent or more expansion of the size, output, storage or distribution capabilities of a qualified energy development that involves the distribution or storage of refined petroleum products or the liquefaction, regasification distribution, storage, or use of natural gas, excluding a natural gas pipeline for transmitting natural gas from the North Slope or Cook Inlet.
History
- Authority: AS 44.88.085; AS 44.88.680 AS 44.88.670; AS 44.88.900
- Eff. 4/25/2013, Register 207
3 AAC 101.030 Financing limitations
The authority will not provide financing for a qualified energy development in excess of the capital costs limitation of AS 44.88.690(a)(1), or the dollar amount limitation of AS 44.88.690(a)(2), unless the legislature has approved exceeding the limitation. The authority will not finance or acquire a qualified energy development that is subject to the restrictions of AS 44.88.690(a)(3), unless the legislature has approved the authority doing so. The authority will not provide financing for a qualified energy development for a term longer than is authorized under AS 44.88.690(b).
History
- Authority: AS 44.88.085; AS 44.88.680; AS 44.88.690
- Eff. 4/25/2013, Register 207; am 9/24/2015, Register 217
3 AAC 101.040 Eligible applicants
An applicant may be an individual, municipal government, or tribe, or a business or other entity that is organized in any manner. To the extent required under state law, an applicant seeking financing under the SETS program and fund must be authorized to do business in the state and hold a valid state business license.
History
- Authority: AS 44.88.085; AS 44.88.680; AS 44.88.900
- Eff. 4/25/2013, Register 207
3 AAC 101.050 Application process
The application process for seeking financing under the SETS program and fund is a two-step procedure using first the submission of a preliminary application form. If the authority determines, based on the preliminary application, that the qualified energy development may be suitable for financing under the SETS program and fund, the authority may request the applicant submit a full application.
History
- Authority: AS 44.88.085; AS 44.88.680
- Eff. 4/25/2013, Register 207
3 AAC 101.060 Preliminary application
(a) An applicant seeking financing under the SETS program and fund may apply by completing a preliminary application. The preliminary application must be on a form supplied by the authority describing the nature of the qualified energy development, its location, its size, and its ownership. There is no fee for the submission of a preliminary application. The authority will review the preliminary application and advise the applicant whether to proceed with a full application.
(b) If the authority has not requested that an applicant submit a full application within 90 days after the applicant submitted the preliminary application, the preliminary application will be deemed to be denied. An applicant whose preliminary application is expressly denied by the authority, or whose preliminary application is deemed to be denied under this subsection may nevertheless elect to submit a full application to the authority so long as the applicant does so no later than 20 working days after the date of the denial. Submission of a full application shall be an applicant's sole remedy for the authority denying a preliminary application or failing to act on a preliminary application. If an applicant does not submit a full application within the required time period after the preliminary application is denied or deemed to be denied, the matter will be forever closed and the applicant will be entitled to no further consideration of it.
History
- Authority: AS 44.88.085; AS 44.88.680
- Eff. 4/25/2013, Register 207
3 AAC 101.070 Full application
A full application for financing under the SETS program and fund must be submitted to the authority on the form the authority has approved. The authority may require the applicant to include with the completed full application form any or all of the following:
(1) a letter of transmittal;
(2) current balance sheet and profit and loss statement for the applicant, not more than 90 days old; a fiscal-year balance sheet and profit and loss statement for the prior three years of operation of the applicant; current balance sheet and federal income tax return for the prior two years for any proposed guarantors and co-borrowers;
(3) copies of the applicant's federal income tax returns for the prior three years;
(4) a statement of all outstanding indebtedness of the applicant;
(5) proof of ownership of land on which the qualified energy development is to be sited, or a copy of the lease or other real property documents for the land related to the qualified energy development;
(6) a detailed description of the qualified energy development, including detailed legal description of all real property and detailed specifications for all tangible personal property that will be part of the qualified energy development;
(7) a detailed estimate of the cost of construction, improvement, rehabilitation, or expansion of the qualified energy development;
(8) an estimate of number of construction and permanent jobs to be created or retained by the qualified energy development;
(9) a copy of any pre-existing appraisals estimating the value of the real property where the qualified energy development is located;
(10) a financial feasibility analysis in a form and with a level of detail satisfactory to the authority;
(11) an environmental risk assessment satisfactory to the authority, followed by an environmental audit at the level specified by the authority, if required by the authority;
(12) a detailed development schedule, to include site selection, geotechnical investigation, route selection (for transmission lines), schedule for and status of processes under 42 U.S.C. 4321 - 4347 (National Environmental Policy Act of 1969) ("NEPA"), status of project permits, including wetlands, wildlife impacts, and archeological data; the full application must include a discussion of whether NEPA requires an environmental impact statement or environmental assessment, and schedule for any level of NEPA activities and issuance of a record of decision;
(13) for any qualified energy development meant to produce power for sale into an existing public utility transmission or distribution grid, an agreement or the terms for an off-take agreement in the form of a power supply or power purchase agreement that the applicant reasonably expects to obtain must be provided for review;
(14) for any qualified development intending to produce power generation or transmission that is to be connected to a public utility network that is regulated by the Regulatory Commission of Alaska, the applicant shall provide documents and a discussion regarding the anticipated regulatory approval approach, any applicable regulatory filings, and whether any existing utilities have indicated support;
(15) if transmission facilities are required to bring produced power to consumers, a transmission plan and any supporting documents must be provided, including a description of the way the qualified energy development will be interconnected with existing power transmission infrastructure;
(16) a public benefit statement enumerating the community and statewide benefits that the proposed qualified energy development will create, which may include
(A) construction and permanent job creation;
(B) improvement of environment;
(C) reduction in flow of money out of communities;
(D) economic development; and
(E) attraction of job creating industries to communities or regions;
(17) any other information the authority requests.
History
- Authority: AS 44.88.085; AS 44.88.680
- Eff. 4/25/2013, Register 207
3 AAC 101.080 Terms of financing
(a) The principal amount of a loan or guarantee may not exceed 75 percent of the appraised value of the collateral for the loan or guarantee.
(b) Any financing the authority provides must be secured by a mortgage that is a first lien on the real property in fee simple or on a leasehold estate or an easement where the qualified energy development is located. The authority may review and approve other security provisions and arrangements as well as encumbrances against the real property that do not affect the authority's security.
(c) Any financing the authority provides must be secured by a first position security interest in the applicant's rights under, and the proceeds of, any contract for the sale of power, electricity, or heat from the qualified energy development.
(d) Any financing for a qualified energy development must require complete amortization provisions and require periodic payments by the borrower. The term for a financing may not exceed the following calculated from the date the financing is made:
(1) a financing to a qualified energy development project may not exceed the limitations established in AS 44.88.690(b); and
(2) in no case may the term of a financing under the SETS program and fund exceed the remaining estimated economic life of the collateral for the loan.
(e) Before closing a transaction where construction of the improvements in part or whole has taken place, the authority will require a statement in writing from
(1) the author of the appraisal the authority has obtained regarding the qualified energy development, or another appraiser acceptable to the authority, that construction was substantially completed according to the plans and specifications contemplated in the appraisal and that the completed value is at least equal to an amount which would meet the requirements of (a) of this section;
(2) an authorized official that the buildings and structures may be occupied and that the occupancy, buildings, and structures conform to all requirements of federal, state and municipal law and regulations; or if there is no authorized official for the location in which the structure will be located, or if requested by the authority, a registered architect or professional engineer that the property serving as security for the loan is structurally sound and that the buildings or structures conform to applicable building standards.
(f) The terms and conditions of any land lease or easement that secures financing for a qualified energy development are subject to the approval of the authority. The term of the lease or easement must exceed the effective term of the financing by at least 10 years. However, the authority may approve a land lease or easement for a shorter term if there is an irrevocable option to renew the lease or easement that is acceptable in the sole discretion of the authority.
(g) Unless waived by the authority, the applicant shall obtain insurance coverage for the improvements on the real property from responsible companies in such amounts and against such risks as is satisfactory to the authority. The applicant shall obtain and pay for an American Land Title Association (ALTA) title insurance loan or encumbrance policy if real property or a real property encumbrance, such as an easement or right of way, is involved. The authority may require endorsements to the title insurance policy, including ALTA energy project endorsements where applicable.
(h) The authority may, in its discretion, provide financing for a qualified energy development where the security for the financing will be subordinate to a lien or security interest in favor of senior financing on the qualified energy development if
(1) one of the following is satisfied:
(A) the qualified energy development is currently financed by the authority under one or more of its programs;
(B) the financing will be secured by real property that has sufficient value to provide security for the subordinate financing;
(C) the subordinate financing is for expansion and improvements of an existing qualified energy development at the time of the application; and
(2) the applicant demonstrates to the satisfaction of the authority that the additional debt can be repaid from the revenue earned by the collateral offered as security for the subordinate financing.
(i) If required by the authority, the applicant must obtain a guarantee for repayment of the financing the authority provides from the following persons:
(1) a partner or member of the applicant;
(2) a joint venturer with the applicant;
(3) any stockholder of the capital stock of the applicant;
(4) the parent entity if the applicant is a subsidiary; or
(5) any such other credit support from any such other party as the authority may accept.
(j) In any financing agreement, the authority may require the applicant to provide covenants regarding the applicant's organization, operations, or finances. Any financing the authority provides that is in the form of a guarantee may be limited in duration or dollar amount, and may be subject to other conditions and restrictions, as the authority in its discretion determines to be appropriate.
History
- Authority: AS 44.88.085; AS 44.88.670; AS 44.88.680
- Eff. 4/25/2013, Register 207
3 AAC 101.090 Loan committee
(a) Once the authority determines that the requested financing is proper under the SETS program and fund and that a complete application has been submitted for review, the authority will notify the applicant in writing that the application is deemed complete.
(b) After payment of the application fee, a completed application will be reviewed by a loan committee for the purpose of making a recommendation to the board about the requested financing. The loan committee for the SETS program and fund will consist of one or more of the authority's employees the executive director may designate. With the executive director's approval, the loan committee may engage and consult professional advisors in considering an application.
(c) The loan committee may request modifications to the completed application or changes in the terms of the requested financing.
(d) The loan committee's approval of the completed application will constitute a recommendation to the board for it to approve the requested financing. The loan committee's rejection of a completed application will constitute a recommendation to the board that the requested financing be rejected.
History
- Authority: AS 44.88.085; AS 44.88.670; AS 44.88.680
- Eff. 4/25/2013, Register 207
3 AAC 101.100 Board review
(a) An application the loan committee approves will be put on the agenda for consideration at the next available board meeting. An application the loan committee rejects will not be put on the agenda for the board's consideration unless the applicant requests board consideration. To request board consideration, an applicant must file an appeal in accordance with 3 AAC 101.150.
(b) The board may accept or reject the application regardless of the loan committee's recommendation. The decision of the board to accept or reject an application will constitute the final decision of the authority on the application.
(c) If the board approves an application, the authority will issue to the applicant a commitment letter to finance the qualified energy development. The applicant must accept the commitment letter in writing within 20 working days after its issuance.
History
- Authority: AS 44.88.085; AS 44.88.670; AS 44.88.680
- Eff. 4/25/2013, Register 207
3 AAC 101.110 Application evaluation standards
The authority may approve or reject a full application for financing under the SETS program and fund by evaluating the following:
(1) whether the application requirements of this chapter have been met;
(2) the applicant's credit standing;
(3) the economic and financial viability of the proposed qualified energy development;
(4) the impact of the proposed qualified energy development on the portfolio of the SETS program and fund, considering the concentration by industry area, technology, and geographic region and the concentration of financing provided to a single borrower and related obligors with respect to all of the authority's financing programs;
(5) whether and the extent to which the financing is consistent with the fulfillment of the purposes of the SETS program and fund established in AS 44.88.650; and
(6) any other commercially reasonable underwriting criteria the authority, in its discretion, determines to be pertinent to the application, given the terms of the financing or the nature of the applicant or the proposed qualified energy development.
History
- Authority: AS 44.88.085; AS 44.88.670 AS 44.88.650; AS 44.88.680
- Eff. 4/25/2013, Register 207
3 AAC 101.120 Interest rates and other loan terms
(a) The initial rate of interest on a loan the authority makes under the SETS program and fund will be set at the time the authority issues a loan commitment letter. The initial rate of interest will not be less than a rate equal to the sum of the "true interest cost rate" and the "authority cost amount." The authority may adjust the initial rate of interest above the minimum rate provided for in the preceding sentence based on the authority's evaluation of the risk of the transaction. In evaluating the risk of the transaction, the authority may consider the nature of the applicant and the qualified energy development; the size, length and other terms of the loan; the collateral for the loan; and any other factors the authority reasonably determines bear on its risk in the transaction.
(b) The authority may require prepayment fees on loans made under the SETS program and fund in amounts and for a period of time the authority determines appropriate, except that the authority will not charge a prepayment fee later than five years from the date of the closing on the loan.
(c) In this section,
(1) "true interest cost rate" means
(A) if the authority issues bonds to fund a loan, the rate on the bonds of the authority; or
(B) if the authority uses assets of the SETS fund to fund a loan, the rate identified on the daily Federal Home Loan Bank of Seattle's Fixed-Rate Advances Index which most closely matches the term of the loan, and whether the type of loan has a fixed or variable ]interest rate, as determined by the authority, with the following adjustments:
(i) for a fixed rate loan, the rate during any fiscal year may not be lower than the five-year return on the investment funds of the authority, expressed as an annual interest rate, as determined in the authority's review of its investments at the end of the third quarter of the prior fiscal year and for a variable rate loan, the rate during any fiscal year will not be lower than 475 basis points;
(ii) for a variable rate loan, 200 basis points will be added to the rate;
(2) "authority cost amount" means an amount, determined by the authority and expressed as an annual rate of interest, that is necessary to pay for the allocable expenses of operation, costs of issuance not recoverable by the authority under 3 AAC 101.140(d), and loan servicing for which interest rates are determined under this section.
History
- Authority: AS 44.88.085; AS 44.88.680 AS 44.88.670; AS 44.88.690
- Eff. 4/25/2013, Register 207
3 AAC 101.130 Guarantee fees
(a) For any financing under the SETS program and fund that is in the form of a guarantee, the applicant must pay the authority a guarantee fee in the amount the authority in its discretion determines to be appropriate. The authority will inform the applicant of the guarantee fee in the commitment letter issued for a guaranty.
(b) The authority may set the guarantee fee as a one-time fixed amount, a one-time percentage of the amount guaranteed, a recurring annual fixed amount, a recurring annual percentage of the amount guaranteed, or a combination of these kinds of amounts. In setting a guarantee fee, the authority will consider the following:
(1) the amount and duration of the guarantee and any other conditions of the guarantee;
(2) the nature and credit standing of the applicant;
(3) the nature and economic and financial viability of the qualified energy development;
(4) the security provided to the authority for the issuance of the guaranty;
(5) the risk to the authority in providing the guaranty;
(6) the financial benefit the applicant or the qualified energy development receives from the authority's guaranty; and
(7) any other commercially reasonable factors the authority determines to have a bearing on setting the guarantee fee.
History
- Authority: AS 44.88.085; AS 44.88.670; AS 44.88.680
- Eff. 4/25/2013, Register 207
3 AAC 101.140 Other fees and charges
(a) Upon the issuance of written notification by the authority to the applicant that the application is complete, a nonrefundable application fee in the amount described in (b) of this section is due. No application will be given further consideration without payment of this fee. The application fee shall be non-refundable but may be credited against the commitment fee if the requested financing is approved.
(b) The application fee shall be
(1) $5,500 for a loan or guarantee of less than $10,000,000;
(2) $11,000 for a loan or guarantee from $10,000,000 to $20,000,000;
(3) $22,000 for a loan or a guarantee in excess of $20,000,000.
(c) A commitment fee is due upon the applicant accepting a commitment letter the authority has provided. The commitment fee is one percent of the principal amount of the financing the authority is providing. The commitment fee is non-refundable. Upon the applicant's acceptance of the authority's commitment letter in writing, the authority will credit the non-refundable application fee against the commitment fee.
(d) At the closing of any type of financing, the applicant must pay for all transaction costs of the closing and must reimburse the authority for its costs of underwriting and closing the financing. These costs may include the following:
(1) third-party legal costs, including bond counsel;
(2) costs for credit reports, title reports, title insurance and endorsements, appraisals and the authority's travel expenses incurred as part of the underwriting and closing process;
(3) financial advisor costs and professional and consultant fees;
(4) trustee fees, custodial fees, and other financial and administrative expenses;
(5) escrow agent fees, recording fees, and other expenses as may be incurred in the closing process.
(e) The applicant may elect to pay the costs required by (d) of this section from the proceeds of the financing. The applicant may elect to be reimbursed for the commitment fee from the proceeds of the financing. The applicant may elect to pay any guarantee fees due at the time of closing from the proceeds of the financing.
(f) After the commitment letter is issued and prior to the closing, the authority will provide the applicant with an estimate of the closing costs. The estimate will not be binding on the authority. Actual costs shall be charged to the applicant.
History
- Authority: AS 44.88.085; AS 44.88.670; AS 44.88.680
- Eff. 4/25/2013, Register 207; am 6/28/2018, Register 227
3 AAC 101.150 Appeal of rejection
An applicant for any financing that submitted a final application which is not approved by the authority may appeal to the board by filing a written notice of appeal with the executive director not later than 20 working days after being notified in writing of the rejection. The board may allow the applicant to make a presentation on its appeal or the board may limit its consideration of the appeal to the documents submitted to the authority by the applicant before the date of the rejection of the application. The decision of the board to reject an appeal will constitute the authority's final decision on the application.
History
- Authority: AS 44.88.085; AS 44.88.670; AS 44.88.680
- Eff. 4/25/2013, Register 207
3 AAC 101.160 Closing and disbursement of funds
(a) Upon written certification by both the authority and the applicant that all provisions of the commitment letter have been complied with, the financing will be scheduled for closing and, if a loan transaction, disbursement of proceeds. If the financing is a guarantee, then the authority, at the time of closing, will deliver its guarantee to the applicant, or where appropriate, to the applicant's third-party lender or bond trustee or to the closing agent handling the financing transaction between the applicant and its third-party lender.
(b) When the financing involves a qualified energy development that will generate power for sale into an existing public utility transmission or distribution grid, the applicant shall, prior to closing, or the issuance of a guarantee, provide the authority with an executed off-take agreement, either in the form of a power supply or power purchase agreement, the terms of which are, in all material respects, in accordance with the expected terms provided with the application, or with only those deviations from the expected terms that are acceptable to the authority.
History
- Authority: AS 44.88.085; AS 44.88.670; AS 44.88.680
- Eff. 4/25/2013, Register 207
3 AAC 101.170 Post-closing matters
The authority may require in the financing agreement or other closing documents signed by the applicant that the applicant periodically provide financial, operational, or other information to the authority over the term of the financing. The authority, or its designated agent, may periodically review the qualified energy development and may require the applicant to
(1) permit an on-site visit and inspection of the qualified energy development by the authority or its agent;
(2) provide updated financial, operational or other information on the applicant or the qualified energy development.
History
- Authority: AS 44.88.085; AS 44.88.670; AS 44.88.680
- Eff. 4/25/2013, Register 207
3 AAC 101.180 Lease-purchase and other financing agreements
(a) The authority may finance a qualified energy development through the SETS fund by entering into a lease-purchase, sale-leaseback, build-operate-transfer, operate-transfer, or similar financing arrangement with an applicant. However, the authority will not make any financing arrangement for which legislative approval under AS 36.30.085 is required unless the financing arrangement has been approved by the legislature. The authority will not make any financing arrangement that exceeds the capital costs limitation of AS 44.88.690(a)(1) without legislative approval.
(b) An applicant seeking to enter into a lease-purchase, sale-leaseback, build-operate-transfer, operate-transfer, or similar financing arrangement shall submit a preliminary application under 3 AAC 101.060 and a full application under 3 AAC 101.070. The preliminary application and the final application should include a statement setting out the financing arrangement being sought with the authority. The authority will consider the application as provided for in 3 AAC 101.090, 3 AAC 101.100, 3 AAC 101.110, and 3 AAC 101.150. The applicant shall pay the authority a nonrefundable application fee of
(1) $5,500 for any financing arrangement up to $10,000,000;
(2) $11,000 for any financing arrangement from $10,000,000 to $20,000,000;
(3) $22,000 for any financing arrangement over $20,000,000. The application fee is nonrefundable but the applicant may apply it against the commitment fee if the authority approves the financing.
(c) The terms of any lease-purchase, sale-leaseback, build-operate-transfer, operate-transfer, or similar financing arrangement shall be determined by the authority in its discretion, considering the financing arrangement, the nature and credit standing of the applicant, the nature and economic and financial viability of the qualified energy development, the security provided to the authority, the risk to the authority, and any other commercially reasonable factors the authority may determine to be applicable. The authority will set out the terms of its financing in the commitment letter provided to the applicant. A non-refundable commitment fee is due upon the applicant accepting a commitment letter the authority has provided. The commitment fee is one percent of the principal amount of the financing the authority is providing.
(d) At the closing of any financing the authority provides under this section the provisions of 3 AAC 101.140(d) and (e) will apply.
History
- Authority: AS 36.30.095; AS 44.88.670; AS 44.88.690 AS 44.88.085; AS 44.88.680
- Eff. 4/25/2013, Register 207; am 6/28/2018, Register 227
3 AAC 101.190 Payment of municipal bonds
(a) A municipality that, pursuant to AS 44.88.680(a)(8), seeks to have the authority pay off the principal of and interest on bonds the municipality has issued for a public utility must submit a preliminary application under 3 AAC 101.060 and a full application under 3 AAC 101.070. The authority will consider the preliminary application and full application as provided for in 3 AAC 101.090, 3 AAC 101.100, 3 AAC 101.110, and 3 AAC 101.150. The municipality shall pay the authority an application fee of $5,000 for any financing up to $10,000,000, an application fee of $10,000 for any financing between $10,000,000 and $20,000,000, and an application fee of $20,000 for any financing over $20,000,000. The application fee is non-refundable but the municipality may apply it against the commitment fee if the authority approves the financing.
(b) The authority will pay off the bonds of a municipality under AS 44.88.680(a)(8) by calling the bonds, if they are callable, or by defeasance. The authority will not acquire or negotiate to acquire a municipality's bonds on the secondary market.
(c) Unless legislative approval is obtained, the authority will not payoff the bonds of a municipality under AS 44.88.680(a)(8) if doing so will exceed the capital costs limitation of AS 44.88.690(a)(1).
(d) If the authority approves financing for a municipality under AS 44.88.680(a)(8), the authority will pay no more than the face amount of the outstanding bonds, plus currently accrued interest, to pay off the bonds. If defeasance of the bonds is required, and if the amount needed to defease the bonds is in excess of the face amount of the outstanding bonds, the municipality must pay the difference. A non-refundable commitment fee of one percent of the principal amount of the outstanding bonds will be due at the time the municipality accepts the authority's commitment letter to pay off the bonds. At the closing of any financing the authority provides under this section the provisions of 3 AAC 101.140(d) and (e) will apply.
(e) In paying off or defeasing a municipality's bonds, the authority will succeed to all the rights of the bond holders or the trustee for the bond holders. Notwithstanding the payment or defeasance of the bonds, the authority, in the event of a default by the municipality, may take any enforcement action against the municipality, the public utility or any security that is or would have been permitted under the bonds, the trust indenture for the bonds, any mortgage or security agreement relating to the bonds, or the municipality's bond resolution for the bonds.
(f) If requested in writing by the municipality to do so, the authority will establish an account within the SETS fund for the municipality that is equal to the principal amount of the payments the municipality has made to the authority for the bonds the authority pays off or defeases. The authority will maintain the account for the period of time the municipality designates, up to a maximum period of 25 years. The municipality may request financing from the authority for a qualified energy development up to the positive balance of the municipality's account in the SETS fund. A municipality's request for financing out of its account in the SETS fund is subject to the application process, review and approval process, financing terms, and fees provided for in this chapter. As provided in 3 AAC 101.110, the authority may approve or reject a municipality's application for financing out of the municipality's account in the SETS fund.
(g) On July 1 of each year, the municipality will owe the authority an annual maintenance fee of 50 basis points of the unapplied principal amount in the municipality's account in the SETS fund. For this purpose, "unapplied principal amount" means the positive amount in the municipality's account that has not been committed to financing a qualified energy development of the municipality. The authority may deduct the annual maintenance fee from the balance of the municipality's account in the SETS fund.
(h) A municipality may not use its account in the SETS fund for any purpose other than financing a qualified energy development under the SETS program as approved by the authority. A municipality's account in the SETS fund may not be assigned, pledged, or encumbered and any attempted assignment, pledge, or encumbrance will be void, not merely voidable. At the expiration of the applicable time period for the duration of the account, the account will lapse and no further credit will be available to the municipality under the account. No payment to the municipality will be made or will be due at the expiration of the account.
History
- Authority: AS 44.88.085; AS 44.88.670 AS 44.88.660; AS 44.88.680
- Eff. 4/25/2013, Register 207
3 AAC 101.900 Definitions
In this chapter
(1) "appraised value" means any valuation methodology acceptable to the authority, including comparable sale valuation, replacement cost valuation and produced by any third party evaluators deemed appropriate by the authority;
(2) "authority" means the Alaska Industrial Development and Export Authority;
(3) "board" means the board of the Alaska Industrial Development and Export Authority;
(4) "capital costs" means the one-time costs associated with the acquisition or construction of a qualified energy development, including the price of purchased assets such as land, equipment, or other materials incorporated into the facility, the cost of site preparation, permits, construction of the facility and designing and planning the construction, and the cost of financing, including legal, financial, underwriting, insurance, and other transactional expenses as may necessarily be incurred; capital costs may also include interest payments financed during the construction and start-up period of the qualified energy development;
(5) "executive director" means the executive director of the Alaska Industrial Development and Export Authority;
(6) "financing" means either a loan or a guarantee of a loan or bond or a financing arrangement as described in AS 44.88.680(a)(4);
(7) "guarantee" means an agreement pledging assets of the SETS fund to pay the regularly scheduled principal and interest due on a loan or bond made for a qualified energy development, subject to conditions set out in the guarantee;
(8) "loan" means an extension of credit by the authority or a third-party lender to an applicant or for a qualified energy development;
(9) "mortgage" means a mortgage, deed of trust, or other security instrument encumbering real property or an interest in real property;
(10) "qualified energy development" has the meaning given in AS 44.88.900;
(11) "SETS program and fund" means the sustainable energy transmission and supply development program and fund established by AS 44.88.650 and 44.88.660;
(12) "working day" does not include a Saturday, Sunday, or a state holiday.
History
- Authority: AS 44.88.085; AS 44.88.660; AS 44.88.690 AS 44.88.650; AS 44.88.680; AS 44.88.900
- Eff. 4/25/2013, Register 207
Chapter 102 New Markets Tax Credit Assistance Guarantee and Loan Program
3 AAC 102.010 Scope of chapter
This chapter applies to guarantees and loans made by the authority under the new markets tax credit assistance guarantee and loan program authorized by AS 44.88.700 - 44.88.799.
History
- Authority: AS 44.88.085; AS 44.88.720; AS 44.88.760 AS 44.88.700; AS 44.88.730; AS 44.88.770 AS 44.88.710; AS 44.88.740; AS 44.88.799 AS 44.88.715; AS 44.88.750
- Eff. 3/29/2013, Register 207
3 AAC 102.020 Eligibility
(a) The authority may guarantee a loan being made by a third party or make a direct loan in connection with an NMTC financing of a project, business, or nonprofit activity located in the state.
(b) The borrower must have the ability, as determined by the authority, to successfully repay the loan.
(c) NMTC leverage loan products may be issued only if the loans to be issued or guaranteed are necessary to facilitate an NMTC financing and if that NMTC financing is intended to increase economic activity in or provide needed services to low-income communities as determined by the federal NMTC program.
(d) The authority will monitor the size of its NMTC financing to ensure that no more than $40,000,000 in total loans and guarantees are outstanding at any one time.
History
- Authority: AS 44.88.085; AS 44.88.715; AS 44.88.770 AS 44.88.700; AS 44.88.760
- Eff. 3/29/2013, Register 207
3 AAC 102.030 Application process
(a) Applicants for NMTC leverage loan products must first apply to the authority for a loan guarantee that is intended to induce a private lender to make a leveraged loan into the NMTC transaction, In the event that the applicant cannot obtain a loan on commercially reasonable terms even with the existence of the guarantee, the applicant may request that the authority make the loan.
(b) To apply for NMTC leverage loan products, an applicant shall file with the authority a completed application on a form provided by the authority and shall include or attach the following information:
(1) a letter of transmittal stating the amount of the guarantee or loan being requested and intended use of the loan proceeds;
(2) a financial statement from each applicant, including each member of a partnership or other association that constitutes the applicant, or, if the applicant is a corporation, each shareholder owning 20 percent or more of any outstanding shares;
(3) a business financial statement;
(4) a project development schedule, if applicable;
(5) evidence of insurance, unless waived by the authority; the applicant shall obtain insurance coverage for the improvements on the real property from responsible companies in such amounts and against such risks as is satisfactory to the authority, and an American Land Title Association title insurance loan policy is required if real property is involved;
(6) a statement of projected income and expenses for the following year's operating plan;
(7) the applicant's profit and loss statement;
(8) a projected profit and loss statement;
(9) applicant background information;
(10) credit authorizations for at least three of the applicant's creditors;
(11) authorizations to verify financial information and other consents to release information;
(12) signed copies of the applicant's federal income tax returns for the preceding three years, including returns for each member of a partnership or other association, and for additional years if requested by the authority;
(13) a description and evaluation of any collateral to be used to secure the guarantee:
(A) if the NMTC financing is to be used to finance real property, a written appraisal report acceptable to the authority estimating the fair market value of the real property; the appraisal shall be a self-contained appraisal report prepared in accordance with the most current edition of the Uniform Standards of Professional Appraisal Practice established by the Appraisal Standards Board of The Appraisal Foundation;
(B) if the NMTC financing is to be used to finance tangible personal property, an appraisal in a format acceptable to the authority prepared by an appraiser who is acceptable to the authority;
(14) any documents needed for the authority to make a finding that the borrower has adequate projected cash flow to service the debt;
(15) an environmental risk assessment satisfactory to the authority, followed by an environmental audit if required by the authority; and
(16) any other information the authority considers necessary to evaluate the borrower and the project.
(c) The application for a guarantee of a loan to refinance existing debt must contain the items described or listed in (b) of this section and must also contain the following:
(1) a debt schedule that
(A) correlates to the project's or activity's latest balance sheet; and
(B) reflects the debt to be refinanced, including name of the creditor, original loan amount and loan balance, date of loan, and maturity date, together with statements as to whether the loan is paid monthly, annually, or otherwise, as to payment status and payment history of the loan, and as to the collateral securing the loan;
(2) an evaluation completed by the financial institution explaining how the guarantee of a loan to refinance existing debt will satisfy the following:
(A) is necessary to extend substantial debt payments over a longer period of time, thereby improving the applicant's net cash flow and working capital position consistent with the useful life of the assets being refinanced;
(B) assists with short-term debt or cash expenditures when lenders will not extend reasonable longer terms to the applicant; and
(C) creates additional economic opportunity or improves the viability of the project, business, or nonprofit activity rather than just reducing the liability of the lender; or
(D) is necessary to place a permanent loan subsequent to an interim loan for financing the project; and
(3) a statement by the financial institution whether the loan being refinanced has been criticized or classified by any regulatory agency or internal audit as a high-risk or under-collateralized loan.
(d) The authority may process NMTC financing requests without the information described in this section if the authority determines that such information is not necessary for making the loan guarantee decision.
History
- Authority: AS 44.88.085; AS 44.88.720; AS 44.88.770
- Eff. 3/29/2013, Register 207
3 AAC 102.040 Examination
(a) The application and accompanying materials will be processed and evaluated by a loan officer. The loan officer will evaluate the applicant's eligibility, financial and credit history, operating plan, ability to repay, and proposed collateral.
(b) On the basis of the information provided, the loan officer will either request additional information required under 3 AAC 102.030, notify the applicant that the applicant is ineligible for a guarantee or loan, or recommend a proposed action on the guarantee or loan request to the appropriate loan committee. The recommendation of a loan officer is not binding on a loan committee.
History
- Authority: AS 44.88.085; AS 44.88.730 AS 44.88.720; AS 44.88.770
- Eff. 3/29/2013, Register 207
3 AAC 102.050 Loan committee
(a) A loan committee consists of one or more persons the authority's executive director appoints to act on a request for an NMTC leverage loan product.
(b) A loan committee shall consider the recommendations of the loan officer assigned to process the application and any other relevant information. A loan committee shall also consider the applicant's eligibility for NMTC financing, financial and credit record, ability to repay, operating plan, and the adequacy of collateral offered to secure the loan or guarantee.
(c) After considering a guarantee or loan request as described in (b) of this section, a loan committee shall approve or deny the request, approve the request subject to modification, or table the request subject to obtaining additional information.
(d) A loan committee may impose reasonable conditions on the approval of an NMTC leverage loan product, including requiring additional guarantors.
(e) If a guarantee or loan request is denied, significantly modified, or tabled by a loan committee, the loan committee shall provide the applicant with a statement explaining reasons for the action.
(f) An applicant's material misstatement or omission of fact constitutes grounds for denial of a guarantee or loan request.
History
- Authority: AS 44.88.085; AS 44.88.770
- Eff. 3/29/2013, Register 207
3 AAC 102.060 Application review
(a) The authority will determine, in its sole discretion, whether to approve an application for NMTC leverage loan product by evaluating the following, among other considerations:
(1) existing and prior debts;
(2) credit reports obtained from creditors and private credit reporting services;
(3) prior loan history with the authority;
(4) timeliness in making payments on loans and other debts;
(5) prior bankruptcies;
(6) existence of tax liens;
(7) unpaid judgments and prior foreclosures; and
(8) financial and credit reputation.
(b) The authority will weigh any evidence of recent unacceptable credit activity more heavily against the applicant.
(c) The authority shall also consider the following factors in evaluating a borrower's ability to repay:
(1) income history, including present income;
(2) prospects for future income;
(3) assets and their liquidity;
(4) liabilities;
(5) reasonableness of projected profit and loss statement; and
(6) other relevant information.
History
- Authority: AS 44.88.085; AS 44.88.770
- Eff. 3/29/2013, Register 207
3 AAC 102.070 Costs
(a) A non-refundable $1,250 application fee is due from the applicant at the time that an application is filed with the authority. This fee will be credited toward the guarantee fee if a guarantee is issued or toward the origination fee if a loan is made.
(b) All expenses the authority incurs in providing a guarantee or loan, including processing the application, must be paid by the applicant. These expenses include the cost of credit reports, travel, and other direct costs.
(c) For loan assumptions, a loan assumption fee of one percent of the outstanding loan balance is due upon approval by the loan committee and must be paid to the authority before the loan assumption is effective.
History
- Authority: AS 44.88.085; AS 44.88.770
- Eff. 3/29/2013, Register 207; am 6/28/2018, Register 227
3 AAC 102.080 Conditions of guarantees
(a) In addition to the requirements of 3 AAC 102.020, the following conditions must be met in order for the authority to issue a guarantee:
(1) the loan must meet the requirements of AS 44.88.730(a)(1);
(2) the borrower must demonstrate the ability to repay the loan as required in AS 44.88.730(a)(3);
(3) the term of the loan may not exceed 10 years;
(4) the portion of the loan not guaranteed by the authority must be held by the originating financial institution or another institution approved by the authority; and
(5) loan guarantee must provide a benefit to the project, business, or nonprofit activity.
(b) The authority may provide a guarantee of up to 100 percent of a loan that qualifies under AS 44.88.700 - 44.88.799 and this chapter. The authority, in its discretion, shall determine the final percentage of the guarantee by evaluating the following:
(1) whether the application requirements of this chapter have been met;
(2) the applicant's credit rating;
(3) the economic and financial viability of the proposed project;
(4) the impact of the proposed guarantee on the $40,000,000 limit of AS 44.88.760;
(5) any other commercially reasonable underwriting criteria the authority determines to be pertinent to the application, the nature of the applicant or of the proposed project.
(c) The ratio of the guarantee to the outstanding principal of the loan may not increase over the term of the loan.
(d) The authority may guarantee the payment of interest on the guaranteed portion of a loan in the manner established by the authority in the loan guarantee authorization and loan guarantee agreement.
(e) The authority may not provide a guarantee of more than $20,000,000.
(f) The authority may not guarantee loans to refinance existing debt unless the refinancing
(1) is necessary to extend substantial debt payments over a longer period of time, thereby improving the project's or activity's net cash flow and working capital position consistent with the useful life of the assets being refinanced;
(2) assists with short-term debt or cash expenditures when lenders will not extend reasonable longer terms to the applicant; and
(3) creates additional economic opportunity or improves the viability of the project, business, or nonprofit activity other than just reducing the liability of the lender; or
(4) is necessary to place a permanent loan subsequent to an interim loan for financing of the project.
(g) A one-time guarantee fee of 150 basis points of the principal amount guaranteed is due when the authority issues its guarantee to the financial institution.
(h) Payment of guarantees will come exclusively from reserves set aside by the authority for this purpose. The holders of a loan guarantee issued by the authority can look only to the reserves set aside by the authority for this purpose for payment of the guarantee and not to the general assets of the authority. The guarantee authorization shall expressly limit the liability of the authority as provided in this subsection. The authority will set aside reserves that are, in the judgment of the authority, adequate to cover outstanding guarantees. Upon request of an applicant or a financial institution holding a loan guarantee of the authority or proposing to make a loan that may be guaranteed by the authority, the authority will provide information as to the amount of the reserves set aside for this purpose.
History
- Authority: AS 44.88.085; AS 44.88.730; AS 44.88.770
- Eff. 3/29/2013, Register 207; am 6/28/2018, Register 227
3 AAC 102.090 Review by authority
(a) The authority will not guarantee a loan under this chapter that is made before issuance of a guarantee authorization under this section. The authority will not guarantee a loan under this chapter without making the determination required under AS 44.88.700(c).
(b) If the authority approves an application for a guarantee, the authority will issue a guarantee authorization to the applicant stating that a guarantee will be provided for a specified portion of the loan under terms and conditions specified by the authority in the guarantee authorization. The terms and conditions, under which the guarantee will be valid and binding, will be set out in the guarantee authorization and in the loan guarantee agreement made with the financial institution providing the loan. No guarantee will be effective until the loan guarantee agreement is executed by the financial institution and returned to the authority and until the terms of the guarantee authorization are met. Any violation by the financial institution of the terms and conditions set out in the loan guarantee agreement or in the guarantee authorization that causes or contributes to a subsequent loss will, at the option of the authority, cause the guarantee to become null and void and absolutely unenforceable against the authority as of the date of the violation.
(c) If the authority denies an application, the authority will notify the applicant of the denial.
History
- Authority: AS 44.88.085; AS 44.88.700; AS 44.88.770
- Eff. 3/29/2013, Register 207
3 AAC 102.100 Loans
(a) The authority may make a loan under this chapter only if the authority determines that the applicant was unable to use the authority's guarantee to obtain a loan from a financial institution under commercially reasonable terms. Before making the determination to extend a loan, the authority shall require the applicant to submit documentation evidencing that at least two financial institutions have reviewed an application for a loan for which the authority issued a guarantee, and either rejected the application or approved the application subject to terms the authority determines are commercially unreasonable. The authority may require the applicant to submit applications for a loan to one or more additional financial institutions.
(b) The authority's loan officer will request whatever additional information the authority requires to evaluate the loan request. On the basis of all of the information provided, the loan officer will then make a recommendation to the appropriate loan committee as to whether the authority should convert the guarantee into a loan and what, if any, additional conditions should be applied, including whether the loan amount should be less than the guarantee amount. The recommendation of a loan officer is not binding on a loan committee.
History
- Authority: AS 44.88.085; AS 44.88.750 AS 44.88.700; AS 44.88.770
- Eff. 3/29/2013, Register 207
3 AAC 102.110 Lending practices
(a) The proceeds of the loan may be used by the applicant for purposes related to the project, business, or nonprofit activity. These purposes include working capital, equipment, construction, and other development costs. The loan can be used only for the purposes stated in the application.
(b) The authority may make a loan under this chapter for only a portion of a project. The authority, in its discretion, shall determine the final value of the loan by evaluating the following:
(1) whether the application requirements of this chapter have been met;
(2) the applicant's credit rating;
(3) the economic and financial viability of the proposed project;
(4) the impact of the proposed loan on the $40,000,000 limit of AS 44.88.760;
(5) any other commercially reasonable underwriting criteria the authority, in its discretion, determines to be pertinent to the application, the nature of the applicant or of the proposed project.
(c) An origination fee not to exceed 150 basis points applied to the loan balance is due from the borrower at the time that a loan is made.
History
- Authority: AS 44.88.085; AS 44.88.750; AS 44.88.770
- Eff. 3/29/2013, Register 207; am 6/28/2018, Register 227
3 AAC 102.120 Interest rates
(a) The initial rate of interest on the authority's loan made under this chapter is set at the time the authority issues a loan commitment at a rate equal to the sum of the "true interest cost rate" and the "authority cost amount." If the authority issues bonds in respect of a loan, the authority will set the interim rate of interest, pending sale of the bonds, at the time that the authority issues a loan commitment. The authority will set the final rate of interest after issuance of the bonds. If the authority does not issue bonds in respect of a loan, the authority will set the rate of interest at the time that the authority issues a loan commitment.
(b) In this section,
(1) "true interest cost rate" means
(A) if the authority issues bonds to fund an NMTC leverage loan, the rate on the bonds of the authority; or
(B) if the authority uses authority assets to fund an NMTC leverage loan, 65 percent of the rate identified on the daily Federal Home Loan Bank of Seattle's Fixed-Rate Advances Index which most closely matches the term of the loan, and whether the type of loan has a fixed or variable interest rate, as determined by the authority, with the following adjustments:
(i) for a fixed rate loan, the rate during any fiscal year may not be lower than the five-year return on the investment funds of the authority, expressed as an annual interest rate, as determined in the authority's review of its investments at the end of the third quarter of the prior fiscal year and, for a variable rate loan, the rate during any fiscal year will not be lower than 375 basis points;
(ii) for a variable rate loan, 100 basis points will be added to the rate;
(2) "authority cost amount" means an amount, determined by the authority and expressed as an annual rate of interest, that is necessary to pay for the allocable expenses of operation, costs of issuance not subject to reimbursement by a borrower, and loan servicing with respect to loans for which interest rates are determined under this section; however, if tax exempt bonds are issued the annual rate of interest may not exceed the maximum amount above the yield on the tax-exempt bonds that would be permitted under 26 U.S.C. 148 (section 148 of the Internal Revenue Code of 1986), as amended, without causing the bonds to lose their tax-exempt status.
History
- Authority: AS 44.88.085; AS 44.88.770
- Eff. 3/29/2013, Register 207; am 6/28/2018, Register 227
3 AAC 102.130 Loan terms
(a) A loan committee shall establish the term of a loan and repayment schedule within the limitations set by this chapter.
(b) A loan under this chapter shall be for a term of not less than eight years and may not exceed a term of 10 years unless extended by a loan modification approved under 3 AAC 102.160. The term of a loan will be based on the useful life of the asset being purchased or to be constructed with the NMTC financing, the size of the loan, and the needs of the applicant.
(c) The authority may request that a sinking fund be funded with amortizing payments on a regular basis.
History
- Authority: AS 44.88.085; AS 44.88.750; AS 44.88.770
- Eff. 3/29/2013, Register 207
3 AAC 102.140 Transaction closing and disbursement of funds
Upon certification by the authority and the applicant that all provisions of the commitment have been complied with, the financing will be scheduled for closing. If the NMTC leverage loan product is a loan transaction, the loan proceeds will be disbursed as contemplated in the authority's loan commitment, which will ordinarily mean the loan funds will be disbursed at the time of and as part of the closing of the overall NMTC transaction. If the NMTC leverage loan product is a guarantee, the authority will enter into a guarantee agreement with the financial institution providing the guaranteed loan, which guarantee agreement will enumerate the parties' obligations and responsibilities. The guarantee agreement will be executed simultaneously with the other closing requirements.
History
- Authority: AS 44.88.085; AS 44.88.770
- Eff. 3/29/2013, Register 207
3 AAC 102.150 Assumption
(a) A request for permission to assume the obligations and benefits of a loan made under this chapter will be processed in the same manner as a loan application.
(b) A loan committee may permit an assumption only if the borrower is a good financial risk and the security of the loan fund is preserved or improved.
History
- Authority: AS 44.88.085; AS 44.88.770
- Eff. 3/29/2013, Register 207
3 AAC 102.160 Modifications
(a) A request for a modification to a loan made under this chapter will be processed in the same manner as a loan application.
(b) A loan committee may permit a loan modification only if the security of the loan under the loan fund is preserved or improved.
History
- Authority: AS 44.88.085; AS 44.88.770
- Eff. 3/29/2013, Register 207
3 AAC 102.170 Reconsideration and appeal of financing decision
(a) If a guarantee or loan request made under this article is denied, tabled, or significantly modified by the authority, an applicant may file a written request for reconsideration within 15 working days after receipt of notice of the authority's decision.
(b) The authority will, in its sole discretion, reconsider a request upon a showing by the applicant that
(1) there has been a substantial change in circumstances;
(2) additional relevant information is provided to the authority; or
(3) administrative errors were made by the authority.
(c) The decision of the authority with regard to reconsiderations is final unless the applicant appeals to the board. To appeal to the board, the applicant must file a written notice of appeal with the executive director not later than 20 working days after being notified in writing of the rejection of the request for reconsideration. The board may allow the applicant to make a presentation on its appeal or the board may limit its consideration of the appeal to the documents submitted to the authority with the application and the request for reconsideration. The decision of the board to reject an appeal will constitute the authority's final decision on the application.
History
- Authority: AS 44.88.085; AS 44.88.770
- Eff. 3/29/2013, Register 207
3 AAC 102.180 Post-closing matters
In the agreements regarding the NMTC financing that are signed on or before closing, the applicant must agree to provide timely information to the authority over the term of the financing regarding the finances of the project, business, or nonprofit activity, and other matters the authority requires. In addition, the authority or its designee will review the project, business, or nonprofit activity periodically
History
- Authority: AS 44.88.085; AS 44.88.770
- Eff. 3/29/2013, Register 207
3 AAC 102.900 Definitions
In this chapter,
(1) "authority" means the Alaska Industrial Development and Export Authority;
(2) "basis points" means the common unit of measure for interest rates and other percentages in finance; one hundred basis points equals one percent;
(3) "board" means the board of the authority;
(4) "executive director" means the executive director of the authority;
(5) "guarantee" means an agreement pledging assets of the authority to pay the regularly scheduled principal and interest due on a loan made for a qualified project, subject to conditions set out in the guarantee;
(6) "leveraged loan" means a loan made into an investment entity, the proceeds of which, together with other funds, including tax credit equity, are invested as a qualified equity investment in a qualified community development entity that will use the funds to finance a project, business, or nonprofit activity for which the entity allocates new markets tax credits;
(7) "leverage loan product" means either a guarantee or a loan;
(8) "loan" means an extension of credit by the authority or a third-party lender to a borrower for an approved and eligible project, business, or nonprofit activity;
(9) "new markets tax credit" or "NMTC" means tax credits that arise out of 26 U.S.C. 45D (Internal Revenue Code) and related regulations;
(10) "NMTC financing" means a loan or guarantee provided under this chapter in connection with the federal new markets tax credit program administered by the Community Development Financial Institutions Fund that arises out of 26 U.S.C. 45D (Internal Revenue Code) and related regulations;
(11) "working day" does not include a Saturday, Sunday, or a state holiday.
History
- Authority: AS 44.88.085; AS 44.88.770; AS 44.88.799
- Eff. 3/29/2013, Register 207; am 6/28/2018, Register 227
Chapter 103 Arctic Infrastructure Development Program
3 AAC 103.010 Scope of chapter
This chapter applies to applications for financing under, and the authority's administration of, the Arctic infrastructure development program and fund established by AS 44.88.800 - 44.88.840.
History
- Authority: AS 44.88.085; AS 44.88.810; AS 44.88.830 AS 44.88.800; AS 44.88.820; AS 44.88.840
- Eff. 12/3/2015, Register 218
3 AAC 103.020 Eligible projects
The authority may make a loan or issue a bond, or guarantee a loan or bond, under this chapter to finance an Arctic infrastructure development.
History
- Authority: AS 44.88.085; AS 44.88.820 AS 44.88.800; AS 44.88.830
- Eff. 12/3/2015, Register 218
3 AAC 103.030 Financing limitations
The authority may not provide a loan for an Arctic infrastructure development in excess of the capital cost limitation of AS 44.88.840(a)(1), or the dollar amount limitation of AS 44.88.840(a)(2), unless the legislature has approved exceeding the limitation. The authority will not provide financing for an Arctic infrastructure development for a term longer than is authorized under AS 44.88.840(b).
History
- Authority: AS 44.88.085; AS 44.88.830; AS 44.88.840
- Eff. 12/3/2015, Register 218
3 AAC 103.040 Eligible applicants
An applicant may be an individual, municipal government, tribe, or business or other entity that is organized in any manner. To the extent required under state law, an applicant seeking financing under the Arctic infrastructure development program and fund must be authorized to do business in the state and hold a valid state business license.
History
- Authority: AS 44.88.085; AS 44.88.820 AS 44.88.800; AS 44.88.830
- Eff. 12/3/2015, Register 218
3 AAC 103.050 Application process
The application process for seeking financing under the Arctic infrastructure development program and fund is a two-step procedure using first the submission of a preliminary application form. If the authority determines, based on the preliminary application, that the Arctic infrastructure development is eligible for financing under the Arctic infrastructure development program and fund, the authority may request the applicant submit a full application.
History
- Authority: AS 44.88.085; AS 44.88.820 AS 44.88.800; AS 44.88.830
- Eff. 12/3/2015, Register 218
3 AAC 103.060 Preliminary application
(a) An applicant seeking financing under the Arctic infrastructure development program and fund may apply by completing a preliminary application. The preliminary application must be on a form supplied by the authority describing the nature of the Arctic infrastructure development, its location, size, and ownership. There is no fee for the submission of a preliminary application. The authority will review the preliminary application and advise the applicant whether to proceed with a full application.
(b) If the authority has not requested that an applicant submit a full application within 90 days after the applicant submitted the preliminary application, the preliminary application will be deemed to be denied. An applicant whose preliminary application is expressly denied by the authority, or whose preliminary application is deemed to be denied under this subsection, may nevertheless elect to submit a full application to the authority so long as the applicant does so no later than 20 working days after the date of the denial. Submission of a full application shall be an applicant's sole remedy for the authority denying a preliminary application or failing to act on a preliminary application. If an applicant does not submit a full application within the required time period after the preliminary application is denied or deemed to be denied, the matter will be forever closed and the applicant will be entitled to no further consideration of it.
History
- Authority: AS 44.88.085; AS 44.88.820 AS 44.88.800; AS 44.88.830
- Eff. 12/3/2015, Register 218
3 AAC 103.070 Full application
A full application for financing under the Arctic infrastructure development program must be submitted to the authority on the form the authority has approved. The authority may require the applicant to include with the completed full application form any or all of the following:
(1) a letter of transmittal;
(2) current balance sheet and profit and loss statement for the applicant, not more than 90 days old; a fiscal-year balance sheet and profit and loss statement for the prior three years of operation of the applicant; current balance sheet and federal income tax return for the prior two years for any proposed guarantors and co-borrowers;
(3) copies of the applicant's federal income tax returns for the prior three years;
(4) a statement of all outstanding indebtedness of the applicant;
(5) proof of ownership of land on which the Arctic infrastructure development is to be sited, or a copy of the lease or other real property documents for the land related to the Arctic infrastructure development;
(6) a detailed description of the Arctic infrastructure development, including detailed legal description of all real property and detailed specifications for all tangible personal property that will be part of the Arctic infrastructure development;
(7) a detailed estimate of the cost of construction, improvement, rehabilitation, or expansion of the Arctic infrastructure development;
(8) an estimate of number of construction and permanent jobs to be created or retained by the Arctic infrastructure development;
(9) a copy of any pre-existing appraisals estimating the value of the real property where the Arctic infrastructure development is located;
(10) a financial feasibility analysis in a form and with a level of detail satisfactory to the authority;
(11) agreements or the terms for agreements in support of the financial feasibility analysis that the applicant reasonably expects to obtain; the agreements or terms must be provided for review;
(12) an environmental risk assessment satisfactory to the authority, followed by an environmental audit at the level specified by the authority, if required by the authority;
(13) a detailed development schedule, to include site selection, geotechnical investigation, schedule for and status of processes under 42 U.S.C. 4321 - 4347 (National Environmental Policy Act of 1969) (NEPA), status of project permits, including wetlands, wildlife impacts, and archeological data; the full application must include a discussion of whether NEPA requires an environmental impact statement or environmental assessment, and schedule for any level of NEPA activities and issuance of a record of decision;
(14) a public benefit statement enumerating the community and statewide benefits that the proposed Arctic infrastructure development will create, which may include
(A) improvement of environment;
(B) reduction in flow of money out of communities;
(C) economic development; and
(D) attraction of job creating industries to communities or regions;
(15) any other information the authority requests.
History
- Authority: AS 44.88.085; AS 44.88.820 AS 44.88.800; AS 44.88.830
- Eff. 12/3/2015, Register 218
3 AAC 103.080 Terms of financing
(a) The principal amount of a loan may not exceed one-third of the appraised value of the collateral for the loan or guarantee, and a loan guarantee may not exceed $20,000,000.
(b) Any financing the authority provides must be secured by a mortgage that is a first lien on the real property in fee simple or on a leasehold estate or an easement where the infrastructure development is located. The authority may review and approve other security provisions and arrangements as well as encumbrances against the real property that do not affect the authority's security.
(c) Any financing the authority provides must be secured by a first position security interest in the applicant's rights under, and the proceeds of, any contract for sales, leases, or rentals from the infrastructure development.
(d) Any financing for infrastructure development as an Arctic infrastructure development project must require amortization provisions and require periodic payments by the borrower. The term for a financing may not exceed the following calculated from the date the financing is made:
(1) a financing to an Arctic infrastructure development project may not exceed the limitations established in AS 44.88.840(b); and
(2) the term of a financing under the Arctic infrastructure development program and fund may not exceed the remaining estimated economic life of the collateral for the loan.
(e) Before closing a transaction where construction of the improvements in part or whole has taken place, the authority will require a statement in writing from
(1) the author of the appraisal the authority has obtained regarding the Arctic infrastructure development, or another appraiser acceptable to the authority, that construction was substantially completed according to the plans and specifications contemplated in the appraisal and that the completed value is at least equal to an amount which would meet the requirements of (a) of this section;
(2) an authorized municipal, borough, or state official that the buildings and structures are fit for occupancy and that the occupancy, buildings, and structures conform to all requirements of federal, state, borough, and municipal law and regulations; or if there is no authorized official for the location in which the structure will be located, or if requested by the authority, a registered architect or professional engineer that the property serving as security for the loan is structurally sound and that the buildings or structures conform to applicable building standards.
(f) The terms and conditions of any land lease or easement that secures financing for an infrastructure development are subject to the approval of the authority. The term of the lease or easement must exceed the effective term of the financing by at least 10 years. However, the authority may approve a land lease or easement for a shorter term if there is an irrevocable option to renew the lease or easement that is acceptable in the sole discretion of the authority.
(g) Unless waived by the authority, the applicant shall obtain insurance coverage for the improvements on the real property from responsible companies in such amounts and against such risks as is satisfactory to the authority. The applicant shall obtain and pay for an American Land Title Association (ALTA) title insurance loan or encumbrance policy if real property or a real property encumbrance, such as an easement or right of way, is involved. The authority may require endorsements to the title insurance policy where applicable.
(h) The authority may provide financing for infrastructure development under the Arctic infrastructure development program, in cases in which the security for the financing will be subordinate to a lien or security interest in favor of senior financing on the Arctic infrastructure development if
(1) one of the following is satisfied:
(A) the infrastructure development is currently financed by the authority under one or more of its programs;
(B) the financing will be secured by real property that has sufficient value to provide security for the subordinate financing;
(C) the subordinate financing is for expansion and improvements of an existing infrastructure development at the time of the application; and
(2) the applicant demonstrates to the satisfaction of the authority that the additional debt can be repaid from the revenue earned by the collateral offered as security for the subordinate financing.
(i) If required by the authority, the applicant must obtain a guarantee for repayment of the financing the authority provides from the following persons:
(1) a partner or member of the applicant;
(2) a joint venture with the applicant;
(3) any stockholder of the capital stock of the applicant;
(4) the parent entity if the applicant is a subsidiary; or
(5) any such other credit support from any such other party as the authority may accept.
(j) In any financing agreement, the authority may require the applicant to provide covenants regarding the applicant's organization, operations, or finances. Any financing the authority provides that is in the form of a guarantee may be limited in duration or dollar amount, and may be subject to other conditions and restrictions, as the authority in its discretion determines to be appropriate.
History
- Authority: AS 44.88.085; AS 44.88.820; AS 44.88.840 AS 44.88.800; AS 44.88.830
- Eff. 12/3/2015, Register 218
3 AAC 103.090 Loan committee
(a) Once the authority determines that a complete application for an eligible project has been submitted for review, the authority will notify the applicant in writing that the application is deemed complete.
(b) After payment of the application fee, a completed application will be reviewed by a loan committee for the purpose of making a recommendation to the board regarding the requested financing. The loan committee for the Arctic infrastructure development program and fund will consist of one or more of the authority's employees the executive director may designate. With the executive director's approval, the loan committee may engage and consult professional advisors in considering an application.
(c) The loan committee may request modifications to the completed application or changes in the terms of the requested financing.
(d) The loan committee's approval of the completed application will constitute a recommendation to the board for its approval of the requested financing. The loan committee's rejection of a completed application will constitute a recommendation to the board that the requested financing be rejected.
History
- Authority: AS 44.88.085; AS 44.88.820 AS 44.88.800; AS 44.88.830
- Eff. 12/3/2015, Register 218
3 AAC 103.100 Board review
(a) An application the loan committee approves will be placed on the agenda for consideration at the next available board meeting. An application the loan committee rejects will not be put on the agenda for the board's consideration unless the applicant requests board consideration. To request board consideration, an applicant must file an appeal in accordance with 3 AAC 103.150.
(b) The board may accept or reject the application regardless of the loan committee's recommendation. The decision of the board to accept or reject an application will constitute the final decision of the authority on the application.
(c) If the board approves an application, the authority will issue to the applicant a commitment letter to finance the Arctic infrastructure development. The applicant must accept the commitment letter in writing within 20 working days after its issuance.
History
- Authority: AS 44.88.085; AS 44.88.820 AS 44.88.800; AS 44.88.830
- Eff. 12/3/2015, Register 218
3 AAC 103.110 Application evaluation standards
(a) The authority may approve or reject a full application for financing under the Arctic infrastructure development program and fund by evaluating the following:
(1) whether the application requirements of this chapter have been met;
(2) the applicant's credit standing;
(3) the economic and financial viability of the proposed Arctic infrastructure development;
(4) the impact of the proposed infrastructure development on the portfolio of the Arctic infrastructure development program and fund, considering the concentration by industry area, technology, and geographic region and the concentration of financing provided to a single borrower and related obligors with respect to all of the authority's financing programs;
(5) whether and the extent to which the financing is consistent with the fulfillment of the purposes of the Arctic infrastructure development program and fund established in AS 44.88.800; and
(6) any other commercially reasonable underwriting criteria the authority, in its discretion, determines to be pertinent to the application, given the terms of the financing or the nature of the applicant or the proposed infrastructure development.
(b) In evaluating the factors of (a) of this section, the authority may treat more favorably than otherwise would be the case an Arctic infrastructure development that will provide employment in an area of chronic or high unemployment.
History
- Authority: AS 44.88.085; AS 44.88.820 AS 44.88.800; AS 44.88.830
- Eff. 12/3/2015, Register 218
3 AAC 103.120 Interest rates and other loan terms
(a) The initial interest rate on the Arctic infrastructure development program financing will be set at the time the authority issues an Arctic infrastructure development program financing commitment letter. The initial interest rate will be no less than 250 basis points above the interest rate paid on the securities of the United States Treasury that have a maturity date comparable to the term of the authority's financing. In the event that no United States Treasury security is directly comparable in maturity to the authority's development project financing, the authority may use the United States Treasury security the authority in its discretion determines to be as directly comparable as possible. The authority will establish the initial interest rate for the financing based on the authority's evaluation of the relative risk of the transaction. In evaluating the risk of the transaction, the authority may consider the nature of the project applicant and its creditworthiness; the nature of the development project and its financial strengths or weaknesses; the size, length, and other terms of the financing; the collateral for the financing; and any other factors the authority reasonably determines to bear on the risk in the transaction.
(b) The authority may charge a fixed interest rate for the entire term of the financing or the authority may require that the rate of interest on the financing be adjusted from time to time at intervals the authority decides are appropriate. The authority will select a fixed or adjustable interest rate for the financing, establish the intervals for adjusting the interest rate, and determine the method by which the interest rate is adjusted based on the authority's evaluation of the risk of the transaction and based on the practices of private commercial lenders with respect to comparable financing. In the commitment letter for the Arctic infrastructure development program financing the authority provides to the project applicant, the authority will state whether the rate of interest is fixed or adjustable, the intervals for adjusting the interest rate, and the method by which the interest rate is to be adjusted.
(c) The authority may require a prepayment fee for an Arctic infrastructure development program financing. The prepayment fee will be in the amount the authority determines is appropriate and will be stated in the commitment letter for the Arctic infrastructure development program financing. The authority will not charge a prepayment fee on any prepayment that occurs later than five years after the date of the finance closing or as specified in the covenants of bonds issued for the Arctic infrastructure development program financing.
(d) In setting the terms and conditions of financing under this section, the authority may treat more favorably than otherwise would be the case an Arctic infrastructure development that will provide employment in an area of chronic or high unemployment.
History
- Authority: AS 44.88.085; AS 44.88.820 AS 44.88.800; AS 44.88.830
- Eff. 12/3/2015, Register 218
3 AAC 103.130 Guarantee fees
(a) For any financing under the Arctic infrastructure development program and fund that is in the form of a guarantee, the applicant must pay the authority a guarantee fee in the amount the authority in its discretion determines to be appropriate. The authority will inform the applicant of the guarantee fee in the commitment letter issued for a guaranty.
(b) The authority may set the guarantee fee as a one-time fixed amount, a one-time percentage of the amount guaranteed, a recurring annual fixed amount, a recurring annual percentage of the amount guaranteed, or a combination of these kinds of amounts. In setting a guarantee fee, the authority will consider the following:
(1) the amount and duration of the guarantee and any other conditions of the guarantee;
(2) the nature and credit standing of the applicant;
(3) the nature and economic and financial viability of the infrastructure development;
(4) the security provided to the authority for the issuance of the guaranty;
(5) the risk to the authority in providing the guaranty;
(6) the financial benefit the applicant or the Arctic infrastructure development receives from the authority's guaranty; and
(7) any other commercially reasonable factors the authority determines to have a bearing on setting the guarantee fee.
(c) In setting the fee for a guarantee under this section, the authority may treat more favorably than otherwise would be the case an Arctic infrastructure development that will provide employment in an area of chronic or high unemployment.
History
- Authority: AS 44.88.085; AS 44.88.820 AS 44.88.800; AS 44.88.830
- Eff. 12/3/2015, Register 218
3 AAC 103.140 Other fees and charges
(a) Upon the issuance of written notification by the authority to the applicant that the application is complete, an application fee in the amount described in (b) of this section is due. No application will be given further consideration without payment of this fee. The application fee is non-refundable but may be credited against the commitment fee if the requested financing is approved.
(b) The application fee is
(1) $5,500 for a loan or guarantee of less than $10,000,000;
(2) $11,000 for a loan or guarantee from $10,000,000 to $20,000,000;
(3) $22,000 for a loan or a guarantee in excess of $20,000,000.
(c) A commitment fee is due upon the applicant accepting a commitment letter the authority has provided. The commitment fee is one percent of the principal amount of the financing the authority is providing. The commitment fee is non-refundable. Upon the applicant's acceptance of the authority's commitment letter in writing, the authority will credit the non-refundable application fee against the commitment fee.
(d) At the closing of any type of financing, the applicant must pay for all transaction costs of the closing and must reimburse the authority for its costs of underwriting and closing the financing. These costs may include the following:
(1) third-party legal costs, including bond counsel;
(2) costs for credit reports, title reports, title insurance and endorsements, appraisals, and the authority's travel expenses incurred as part of the underwriting and closing process;
(3) financial advisor costs and professional and consultant fees;
(4) trustee fees, custodial fees, and other financial and administrative expenses;
(5) escrow agent fees, recording fees, and other expenses as may be incurred in the closing process.
(e) The applicant may elect to pay the costs required by (d) of this section from the proceeds of the financing. The applicant may elect to be reimbursed for the commitment fee from the proceeds of the financing. The applicant may elect to pay any guarantee fees due at the time of closing from the proceeds of the financing.
(f) After the commitment letter is issued and before the closing, the authority will provide the applicant with an estimate of the closing costs. The estimate will not be binding on the authority. Actual costs shall be charged to the applicant.
History
- Authority: AS 44.88.085; AS 44.88.820 AS 44.88.800; AS 44.88.830
- Eff. 12/3/2015, Register 218; am 6/28/2018, Register 227
3 AAC 103.150 Appeal of rejection
An applicant for any financing that submitted a final application which is not approved by the authority may appeal to the board by filing a written notice of appeal with the executive director not later than 20 working days after being notified in writing of the rejection. The board may allow the applicant to make a presentation on its appeal or the board may limit its consideration of the appeal to the documents submitted to the authority by the applicant before the date of the rejection of the application. The decision of the board to reject an appeal will constitute the authority's final decision on the application.
History
- Authority: AS 44.88.085; AS 44.88.820 AS 44.88.800; AS 44.88.830
- Eff. 12/3/2015, Register 218
3 AAC 103.160 Closing and disbursement of funds
Upon written certification by both the authority and the applicant that all provisions of the commitment letter have been satisfied, the financing will be scheduled for closing and, if a loan transaction, for disbursement of proceeds. If the financing is a guarantee, then the authority, at the time of closing, will deliver its guarantee to the applicant, or where appropriate, to the applicant's third-party lender or bond trustee or to the closing agent handling the financing transaction between the applicant and its third-party lender.
History
- Authority: AS 44.88.085; AS 44.88.820 AS 44.88.800; AS 44.88.840
- Eff. 12/3/2015, Register 218
3 AAC 103.170 Post-closing matters
The authority may require in the financing agreement or other closing documents signed by the applicant that the applicant periodically provide financial, operational, or other information to the authority over the term of the financing. The authority, or its designated agent, may periodically review the Arctic infrastructure development and may require the applicant to
(1) permit an on-site visit and inspection of the Arctic infrastructure development by the authority or its agent;
(2) provide updated financial, operational, or other information on the applicant or the Arctic infrastructure development.
History
- Authority: AS 44.88.085; AS 44.88.820 AS 44.88.800; AS 44.88.830
- Eff. 12/3/2015, Register 218
3 AAC 103.900 Definitions
In this chapter, unless the context requires otherwise,
(1) "appraised value" means any valuation methodology acceptable to the authority,
(2) "Arctic" has the meaning given in AS 44.88.900;
(3) "Arctic infrastructure development" has the meaning given in AS 44.88.900;
(4) "Arctic infrastructure development program and fund" means the Arctic infrastructure development program and fund established by AS 44.88.800 - 44.88.840;
(5) "authority" means the Alaska Industrial Development and Export Authority;
(6) "board" means the board of the Alaska Industrial Development and Export Authority;
(7) "capital costs" means the one-time costs associated with the acquisition or construction of an Arctic infrastructure development, including the price of purchased assets such as land, equipment, or other materials incorporated into the facility, the cost of site preparation, permits, construction of the facility and designing and planning the construction, and the cost of financing, including legal, financial, underwriting, insurance, and other transactional expenses as may necessarily be incurred; capital costs may also include interest payments financed during the construction and start-up period of the Arctic infrastructure development;
(8) "executive director" means the executive director of the Alaska Industrial Development and Export Authority;
(9) "financing" means either a loan or a guarantee of a loan or bond or a financing arrangement subject to the limitations on financing in AS 44.88.840;
(10) "guarantee" means an agreement pledging assets of the Arctic infrastructure development program fund to pay the regularly scheduled principal and interest due on a loan or bond made for an Arctic infrastructure development, subject to conditions set out in the guarantee;
(11) "loan" means an extension of credit by the authority or a third-party lender to an applicant or for an Arctic infrastructure development;
(12) "mortgage" means a mortgage, deed of trust, or other security instrument encumbering real property or an interest in real property;
(13) "working day" does not include a Saturday, Sunday, or state holiday.
History
- Authority: AS 44.88.085; AS 44.88.820; AS 44.88.900 AS 44.88.800; AS 44.88.830 AS 44.88.810; AS 44.88.840
- Eff. 12/3/2015, Register 218
Part 14 Alaska Energy Authority
Chapter 105 Administrative and Other Provisions
Article 1 Administrative Provisions
3 AAC 105.010 Scope of regulations
This chapter applies to applicable programs and activities of the Alaska Energy Authority.
History
- Authority: AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 105.020 Administration of assistance from other sources
The authority may apply for, accept, and administer financial and other assistance from public agencies and private sources for the construction, financing, operation, and maintenance of power projects and for bulk fuel, waste energy, energy conservation, energy efficiency, and alternative energy facilities, equipment, or programs that are consistent with applicable provisions of AS 42.45, AS 44.83, this chapter, and 3 AAC 106 - 3 AAC 108. The authority may accept conditions placed on federal and other state assistance that do not conflict with applicable provisions of AS 42.45, AS 44.83, this chapter, and 3 AAC 106 - 3 AAC 108.
History
- Authority: AS 44.83.080
- Eff. 3/25/2005, Register 173
Article 2 Operation of Projects
3 AAC 105.300 Operation of power projects
(a) The provisions of this section and 3 AAC 105.310 apply only to those projects that were acquired or constructed under AS 44.83.080(18), or that were acquired or constructed by the authority before August 11, 1993 and authorized as part of the energy program for this state under former AS 44.83.380. The authority will operate the projects using
(1) a qualified contractor; or
(2) under a contract or lease with the authority, a qualified utility.
(b) An electric utility or a qualified contractor may apply to operate a power project under (a) of this section by submitting a written proposal. The proposal must contain the following information:
(1) to be considered a qualified utility within the meaning given in AS 44.83.425, proof that the utility or utilities established as an electric operating entity are holders of a certificate of public convenience and necessity issued by the Regulatory Commission of Alaska to serve all or part of the area that is, or is intended to be, served by the power project;
(2) the legal name of the utility or electric operating entity and the legal authority under which it was created and other information that will demonstrate that the applicant is eligible to do business in this state;
(3) a record of the official action taken by the applicant's governing body authorizing the proposal;
(4) the name, title, and address of the applicant's official correspondent or representative for purposes of the proposal;
(5) the names and titles of the applicant's principal officers, including the chief executive officer and the general manager;
(6) the names and addresses of the engineers, legal counsel, financial advisers, or consultants that the applicant may have;
(7) a general description of the operations of the electric utility or electric operating entity, including a recent history of the costs of operating, maintaining, and replacing equipment on those operations; and
(8) an estimate of the annual costs to operate, maintain, and replace equipment on the power project.
(c) If the power project serves only one electric utility, the authority may accept a proposal from that electric utility for the operation and maintenance of the power project. If the authority, after reviewing the proposal from the electric utility, finds that the electric utility is a qualified utility, the authority will enter into a contract or lease with that qualified utility for the operation and maintenance of the power project.
(d) If the power project serves more than one electric utility, the authority may operate the power project using a qualified contractor or enter into a contract or lease with a qualified utility to operate the power project. The authority may accept proposals from each proposed contractor, electric utility, or electric operating entity and will select that qualified contractor, electric utility, or electric operating entity that is a qualified utility and that the authority determines is the most capable of operating the project based upon the following criteria:
(1) the financial history and stability of the qualified contractor, electric utility, or electric operating entity;
(2) the ability of the qualified contractor, electric utility, or electric operating entity to attract qualified power project managers and operators;
(3) the location of the project in relation to the service area of the electric utility or electric operating entity;
(4) the likelihood of assisting in the lowering of rates to all classes of consumers over the longest period of time;
(5) the ability of the qualified contractor, electric utility, or electric operating entity to satisfy the legislative goals of the energy program for the state.
(e) Before entering into a lease or contract with an qualified contractor, electric utility, or electric operating entity to operate and maintain a power project, the authority may
(1) request additional information from the applicant considered appropriate;
(2) conduct its own investigation;
(3) receive any written comments from interested persons and organizations; and
(4) consider any information received at one or more public meetings.
(f) The authority's decision to enter into a contract with a qualified contractor or a contract or lease with a qualified utility will be in writing.
(g) In accordance with sec. 37, ch. 18, SLA 1993, the authority will, to the maximum extent feasible, enter into contracts with public utilities under this section.
(h) in this section, "qualified contractor" means a contractor with demonstrated management capability, technical ability, and experience with projects of similar type, size, license status, complexity, and technology, to effectively operate and maintain the power project.
History
- Authority: Sec. 37, ch. 18,AS 44.83.080 SLA 1993AS 44.83.396
- Eff. 2/16/96, Register 137; am 11/5/2017, Register 224
3 AAC 105.310 Wholesale power rate
The wholesale power rate for a project described in 3 AAC 105.300 will be set annually in accordance with the applicable power sales agreement.
History
- Authority: AS 44.83.080; AS 44.83.398
- Eff. 2/16/96, Register 137
Article 3 Disposition of Assets
3 AAC 105.400 Disposition of property
(a) The provisions of 3 AAC 105.400 - 3 AAC 105.480 apply to the disposition of property by the authority.
(b) The executive director shall appoint a property officer of the authority who shall, subject to executive director authorization, be responsible for the disposition of the property of the authority.
(c) The authority will, in its discretion, dispose of property owned or acquired by the authority under terms approved by the executive director or the property officer. A disposal under this section may be by sale, lease, exchange, or other disposition.
(d) The executive director or the property officer may contract with other state agencies, project operators, real estate brokers, real estate agents, and other consultants to dispose of property under this section.
(e) In disposing of property under this section, the authority will take into consideration market conditions and will attempt to dispose of the property for its fair market value except as provided in 3 AAC 105.420. The determination of fair market value of property for purposes of 3 AAC 105.400 - 3 AAC 105.480 is solely at the discretion of the authority regardless of the result of an appraisal, if any, of the property.
(f) The authority will dispose of property under this section only in compliance with applicable laws and only if the disposition is not prohibited under the terms of bond trustee agreements or other contracts to which the authority is a party or is otherwise bound. If the authority considers it necessary or desirable, the authority will consult with the trustee for any outstanding bonds of the authority before disposing of property under this section.
(g) The authority will dispose of property under 3 AAC 105.400 - 3 AAC 105.480 by spot bids, competitive sealed bids, public auction, or other disposition methods selected by the authority. If the disposition of property is by competitive sealed bids, each bid must be accompanied by a deposit, in the form of a money order or a certified or cashier's check, in an amount equal to ten percent of the amount bid. In the discretion of the authority, the bid deposit amount may be increased or decreased for a disposal of property. The authority will apply the winning bidder's deposit toward the purchase price of the property. After awarding the bid and completing the sale or entering into a purchase contract with the winning bidder, the authority will return the other bidders' deposits.
(h) An employee of the authority may not directly or indirectly purchase property of the authority if the employee was directly or indirectly involved in the acquisition, maintenance, preparation for sale, or disposal of the property.
(i) The authority will, in its discretion, determine to dispose of property of the authority by giving the property to the state. A disposal under this subsection is not subject to the other requirements of this section.
History
- Authority: AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 105.410 Real property; fair market value
Except for real property disposed of under 3 AAC 105.420, the authority will obtain an appraisal from a licensed appraiser to assist in the determination of the fair market value for disposal of real property.
History
- Authority: AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 105.420 Real property; less than fair market value
Unless otherwise required by law or contract, the disposition of property under this section to the state, an agency of the state, a municipality, a utility, or a non-profit corporation that is exempt from federal income tax under 26 U.S.C. 501(c)(3), in the discretion of the executive director may be for less than fair market value. An appraisal is not required for the disposal of property under this section.
History
- Authority: AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 105.430 Personal property disposition
The property officer appointed under 3 AAC 105.400(b) will act on behalf of the authority in all matters pertaining to the disposition of personal property. An employee of the authority may not transfer or otherwise dispose of personal property of the authority without the express written authorization of the property officer appointed under 3 AAC 105.400(b).
History
- Authority: AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 105.440 Notice
(a) The authority will give notice of its intention to dispose of property under 3 AAC 105.400, in the case of a
(1) real property disposition, at least 30 days before the disposition; or
(2) personal property disposition, at least seven days before the disposition.
(b) Unless otherwise required by law or contract, the authority will publish the notice required by (a) of this section by at least one of the following methods:
(1) publication in a newspaper of general circulation in the state;
(2) publication in a newspaper of local circulation in the area pertinent to the disposition;
(3) other appropriate media publication.
(c) A notice required by (a) of this section will contain sufficient information in commonly understood terms to inform the public of the nature of the action and the opportunity of the public to comment on the action. If the notice includes an invitation to bid with respect to real property, the notice will include the following:
(1) a description of the real property;
(2) the time, place, and terms of the proposed disposition;
(3) a statement that the authority reserves the right to reject any and all bids;
(4) a description of the deposit requirement of 3 AAC 105.400(g);
(5) a statement that the winning bidder will not receive title to the property until the authority receives full payment or until the authority and the winning bidder enter into a purchase contract satisfactory to the authority.
History
- Authority: AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 105.450 Survey and appraisal
If the authority disposes of real property, the authority will, in its discretion, require the person or entity acquiring the property to pay for costs of surveying and appraising the property as part of the disposition.
History
- Authority: AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 105.460 Rejection of application or bids
The authority will, in its discretion, reject an application, or all bids, in whole or in part in connection with a property disposition under 3 AAC 105.400 if it is in the best interests of the state.
History
- Authority: AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 105.470 Appeal
An applicant or bidder aggrieved by the authority's rejection of an application or bid, or the selection of a successful bidder, may appeal to the executive director within five working days after the authority's determination. The appeal must be filed in duplicate and state the grounds for the appeal. The executive director shall review the file and the aggrieved person's appeal and issue a written decision within 90 days after receipt of the appeal. The decision of the executive director is a final administrative order.
History
- Authority: AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 105.480 Completion of bid requirements
After the time for appeal under 3 AAC 105.470 has run, or after the executive director has issued a decision under that section, the authority will notify the successful applicant or bidder that the authority intends to proceed with the transfer of the property to that applicant or bidder. Within 30 days after receiving notice of the authority's intent, the applicant or bidder must pay to the authority any amount due and submit any documents required to comply with the provisions of 3 AAC 105.400 - 3 AAC 105.480. If the applicant or bidder fails to comply within the time allowed under this section, the applicant or bidder forfeits any amount previously paid to, or upon the order of, the authority and all rights acquired in the property.
History
- Authority: AS 44.83.080
- Eff. 2/16/96, Register 137
Article 4 General Provisions
3 AAC 105.900 Definitions
In this chapter, unless the context requires otherwise,
(1) "authority" means the Alaska Energy Authority;
(2) "executive director" means the executive director of the Alaska Energy Authority.
History
- Authority: AS 44.83.080
- Eff. 2/16/96, Register 137
Chapter 106 Loan Programs
Article 1 Loan from Power Project Fund
3 AAC 106.100 Power project fund loan application
(a) An applicant for a loan from the power project fund must submit an application to the authority. The application must contain at the time of submission the following information:
(1) the legal name of the applicant and the legal authority under which it was created and other information that will demonstrate that the applicant is an eligible borrower under AS 42.45.010;
(2) a certified copy of the resolution or other official action taken by the applicant's governing body authorizing the application for a loan;
(3) the name, title, and address of the applicant's official correspondent or representative for purposes of the application;
(4) the names and titles of the applicant's principal officers, including the chief executive officer or general manager;
(5) the names and addresses of the engineer, legal counsel, financial advisor or consultant, and any management, engineering, design, economic, or other advisors or consultants that the applicant has for the project;
(6) the terms requested for the loan, including the total dollar amount of the loan, the maximum time allowed for repayment, and whether the applicant requests a reduced interest rate under (c) of this section;
(7) a general description of the use to which the loan money will be applied, including
(A) the geographic location of the project;
(B) a comprehensive statement clearly demonstrating public need for the project and the project's eligibility under AS 42.45.010;
(C) the proposed allocation of loan money to each purpose or to each phase of a project; and
(D) a narrative section providing a detailed description of the project, including each purpose of the project, a timeline and description of project phases, and the estimated annual operating costs and revenues of the project once project operations begin;
(8) information from which the authority can determine
(A) in the case of a loan to construct, equip, modify, or expand a project, whether the project is technically and economically viable, and is financially feasible under the criteria for financial feasibility in 3 AAC 106.125(a); and
(B) whether the applicant has the financial ability including, if necessary, the authority to charge and collect rates, fees, or rentals or in the case of a municipality, to levy taxes to generate sufficient revenue to repay the loan;
(9) the status of any proceedings undertaken by the applicant to obtain permits, certificates or other authorizations from any federal, state, or local agency necessary to begin, complete, and operate the project;
(10) financial statements for the previous two complete fiscal or calendar years of the applicant and any other party or parties acting as guarantor of the loan, unless otherwise required by the authority; these financial statements must include balance sheets and profit-and-loss statements and when possible, must be certified by an independent certified public accountant;
(11) for an investor-owned electric utility, a business history of any person or entity owning or controlling 10 percent or more of the applicant's stock or business;
(12) for a leveraged lease financing arrangement, information sufficient for the authority to determine that the provisions of AS 42.45.010(b)(2) have been met; and
(13) if the applicant is a Native village council, a resolution waiving sovereign immunity on a form provided by the authority.
(b) An applicant shall, in addition to the application, timely provide other information requested by the authority.
(c) Repealed 4/8/2015.
(d) An applicant requesting an interest rate less than the rate set out in AS 42.45.010(f)(2)(A) must provide information sufficient for the authority to determine that the reduced rate is necessary to allow the project to meet the criteria for financial feasibility under 3 AAC 106.125(b).
History
- Authority: AS 42.45.010; AS 44.83.080
- Eff. 2/16/96, Register 137; am 4/8/2015, Register 214
3 AAC 106.110 Review by authority
(a) Upon receipt of a completed application and other information requested or required, the authority will review the application.
(b) The authority after reviewing an application, other than an application for a loan for reconnaissance studies, feasibility studies, license and permit applications, or engineering and design, will make a determination that includes the following:
(1) written comments analyzing whether
(A) the money will be used to pay the costs of activities that are eligible under AS 42.45.010 and the applicant is an eligible borrower under AS 42.45.010;
(B) the project will meet the needs of the area to be served by the project and will benefit the area;
(C) for a loan to construct, equip, modify, or expand a project, the project is
(i) technically and economically viable; and
(ii) financially feasible under the criteria in 3 AAC 106.125(a), or will become financially feasible with the assistance of a power project loan;
(D) for a construction project, any alternatives to the project exist that
(i) would result in development of power at a different site, by a different method, or by an entity other than the applicant
(ii) could reasonably be expected to provide, within a time schedule comparable to the project, comparable volumes of power at a lower cost to the consumer; and
(iii) meet the criteria set out in (B) and (C) of this paragraph;
(E) the applicant has applied for, or has been awarded, necessary permits or certificates;
(F) for a loan to construct, equip, modify, or expand a project, if enough money is not available in the power project fund to make a loan for the project, or if a loan cannot be made at a rate of interest low enough to allow the project to be financially feasible under the criteria in 3 AAC 106.125(b), the loan should be approved if assistance is made to the applicant from some other source identified by the authority;
(G) if there is power project fund money that the authority can loan for more than one project, the needs of, and benefits to, the area to be served by the project are greater than the needs of, and benefits offered to, other areas of the state by a project for which sponsors may also seek loan money from the authority, if this determination can be made based on information existing at the time of the authority's review;
(H) the applicant has, or will have, sufficient revenue from all sources to repay the loan; and
(2) a list of subjects to be analyzed in any studies to be made by the applicant.
(c) The authority will consider each application for a loan for reconnaissance studies, feasibility studies, license and permit applications, engineering and design that has been transmitted to it for action and will determine whether the applicant is an eligible borrower under AS 42.45.010, whether the loan will be used to pay the costs of activities that are eligible under AS 42.45.010, and whether the applicant can reasonably be expected to have sufficient revenue from all sources to timely repay the loan.
(d) A loan committee comprised of authority staff designated by the executive director of the authority shall make the final decision of the authority on applications for loans up to and including $2,000,000. For loans in excess of $2,000,000, the board of directors of the authority, upon recommendation by the loan committee, will make the final decision of the authority on applications for loans, except for loans that require legislative approval under AS 42.45.010(j). The final decision of the authority to approve or deny an application for a loan will be in the form of a written determination that contains the findings required by this section, and any other comments the authority considers appropriate. The authority will transmit a copy of the written determination to the applicant not later than 30 days after making its final decision.
(e) If the authority approves an application, the written determination will also include
(1) any conditions that the applicant must satisfy before the authority will make the loan to the applicant; and
(2) proposed loan terms.
(f) If the authority approves an application, and after approval of the loan by the legislature to the extent required under AS 42.45.010(j), the authority will enter into a loan agreement with the applicant under conditions complying with 3 AAC 106.120, but only after receiving a certified copy of the resolution or other official action taken by the applicant's governing body agreeing to the terms of the loan.
(g) It is the responsibility of the applicant and not of the authority to obtain the approval by the legislature if approval of the applicant's loan is required under AS 42.45.010(j).
(h) If the authority denies an application, the written determination will also include a statement explaining the reasons for the denial.
History
- Authority: AS 42.45.010; AS 44.83.080
- Eff. 2/16/96, Register 137; am 3/25/2005, Register 173; am 4/8/2015, Register 214
3 AAC 106.120 Terms of loans
(a) The terms of a loan made by the authority from the power project fund will be determined by the authority and will comply with the following conditions:
(1) the loan must bear interest at the rate determined under AS 42.45.010(f)(2)(A), unless the authority determines, based on information the applicant provides under 3 AAC 106.100(d), that a lower interest rate will allow a project to meet the criteria for financial feasibilitv under 3 AAC 106.125(b);
(2) the loan must mature on the date and pay interest on the dates and in the amounts determined by the authority, but the final maturity date may not extend beyond 50 years or the expected and specified productive life of the project being financed, whichever is less; the authority will use the following standards to determine the length of the loan, taking into consideration the expected productive life of a project unless the authority determines that a different expected productive life is indicated:
(A) the term of loans will be up to 20 years for reconnaissance studies and for feasibility studies, preconstruction engineering and project design, or constructing, equipping, modifying, improving, and expanding of
(i) diesel generation facilities;
(ii) wind, geothermal, and waste heat recovery facilities;
(iii) wood gasification;
(iv) wood-fired steam-generation facilities;
(v) bulk fuel storage facilities;
(vi) energy efficiency and conservation projects;
(vii) solar thermal, solar photovoltaic hydrokinetic, energy storage, and transmission facilities; and
(viii) alternative energy facilities;
(B) the term of loans will be up to 50 years for feasibility studies, preconstruction engineering and project design, or constructing, equipping, modifying, improving, and expanding of
(i) coal-fired steam-generation facilities; and
(ii) hydroelectric generation facilities; and
(3) the loan must be supported by appropriate documentation that may include a loan agreement, bonds, notes, or other documentation, evidencing to the authority's satisfaction that the loan is secured by one or more of the following:
(A) a pledge of the revenues of the borrower or the project that may be subordinate to operating and maintenance expenses and certain other expenses of the borrower or the project as specified by the authority;
(B) a lien, mortgage, security interest, collateral agreements, or other encumbrance on the project or other assets, rights, or interests of the borrower; or
(C) a pledge of the taxing power of the borrower.
(b) The requirements of (a)(3) of this section do not apply to a loan to an applicant regulated by the Regulatory Commission of Alaska under AS 42.05 if the applicant has a history of repaying long-term loans and demonstrates to the authority that it has the capacity to repay the loan obtained from the authority.
History
- Authority: AS 42.45.010; AS 44.83.080
- Eff. 2/16/96, Register 137; am 10/16/2009, Register 192; am 4/8/2015, Register 214
3 AAC 106.125 Criteria to establish financial feasibility
(a) When making a written determination under 3 AAC 106.110 regarding the financial feasibility of a project, the authority will consider
(1) the revenue-generating capability of the project, including the local need for power from the project within any interconnected transmission grid;
(2) whether the applicant has, or will have, sufficient revenue from all sources to
(A) repay the loan;
(B) complete the project; and
(C) operate and maintain the project;
(3) whether the collateral provided is sufficient to secure repayment of the loan, including whether the loan is secured by a means other than by a pledge or revenues of the project;
(4) whether the applicant has obtained regulatory approval for any proposed power sales agreement;
(5) the relationship between the estimated user fees or charges upon completion of the project and the estimated user fees or charges if consumers of services provided by the project would have continued to receive services from existing sources; and;
(6) the relationship between the estimated user fees or charges upon completion of the project and the present or estimated user fees or charges for similar services in the state;
(b) When making a determination under 3 AAC 106.120(a)(1) regarding whether to reduce the interest rate for a loan below the interest rate set out in AS 42.45.010(f)(2)(A), the authority will consider
(1) the criteria identified in (a) of this section;
(2) for electric power projects, whether and the amount by which the local cost of energy exceeds the weighted average retail residential rate in Anchorage, Fairbanks, and Juneau under AS 42.45.110(c)(2);
(3) the financial impact on nonindustrial ratepayers expected to use energy or heat produced by the project;
(4) whether the project will provide immediate benefits to support the stability and sustainability of local energy or heat systems, including replacement of failing generation systems; and
(5) whether the project will help meet new load demands or diversify the local energy system's energy resource portfolio.
History
- Authority: AS 42.45.010; AS 44.83.080
- Eff. 4/8/2015, Register 214
3 AAC 106.130 Inspection of records and facilities
(a) An applicant for a loan and a borrower who has an outstanding loan with the authority shall make its books and records, facilities, and its real and personal property of any kind, available for inspection at any reasonable time by the authority, or its agents, after receipt by the applicant or borrower of the authority's written request to inspect.
(b) The authority or its agents will, in the discretion of the authority, inspect, after giving reasonable notice, the construction of any project that is financed, in whole or in part, with a loan under this chapter. The inspection does not relieve the borrower from its obligation to comply with applicable codes and ordinances.
(c) A borrower that has obtained a loan from the authority shall permit the authority or its agents to inspect its books, records, facilities, and real and personal property for as long as any portion of the loan, including interest, remains outstanding.
(d) The authority will, in its discretion, by written request require a borrower who has obtained a loan from the authority to submit
(1) at reasonable times to audits or examinations of its books and records by an independent firm of certified public accountants selected by the authority to determine whether the provisions of the loan agreement have been complied with and to pay the cost of those audits or examinations;
(2) a sworn statement by a responsible officer of the borrower describing the purposes to which the proceeds of the loan have been applied.
History
- Authority: AS 42.45.010; AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 106.140 Loans from other appropriations
The provisions of 3 AAC 106.100 - 3 AAC 106.130 relating to loans from the power project fund apply also to all other loans made by the authority affected by ch. 58, SLA 1999 and made from money appropriated for that purpose by the legislature, except loans from the rural electrification revolving loan fund, which are subject to the provisions of 3 AAC 106.200 - 3 AAC 106.260 and loans from the bulk fuel revolving loan fund, which are subject to the provisions of 3 AAC 106.300 - 3 AAC 106.365.
History
- Authority: AS 42.45.010; AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 106.150 Loan fees and reimbursement of costs
(a) An applicant for a loan from the power project fund must pay an application fee of
(1) $200 for applications requesting loan amounts up to and including $100,000;
(2) $1,000 for applications requesting loan amounts of more than $100,000 and not more than $500,000;
(3) $2,000 for applications requesting loan amounts of more than $500,000 and not more than $1,000,000; or
(4) $5,000 for applications requesting loan amounts of more than $1,000,000.
(b) The application fees in (a) of this section are nonrefundable and due at the time an application is filed with the authority.
(c) The authority may require the applicant to enter into an agreement obligating the applicant to reimburse the authority for the authority's costs to conduct a feasibility analysis of the loan application or proposed project.
(d) If the authority approves an application, the borrower shall pay a closing fee of one percent of the total loan amount at the time of closing. The application fee will be credited toward the closing fee. The authority may add the closing fee to the balance of the loan at loan closing. If the authority entered into an agreement with the applicant for reimbursement of the authority's costs for conducting a feasibility analysis under (c) of this section, the authority may add the cost of the authority's feasibility analysis to the balance of the loan at closing.
History
- Authority: AS 42.45.010; AS 44.83.080
- Eff. 4/8/2015, Register 214
3 AAC 106.159 Definition
In 3 AAC 106.100 - 3 AAC 106.159, "financially feasible" means that the authority has determined that enough money is available from all sources to complete the project, and that enough money is estimated to be available in the future to repay any debt incurred in connection with the project, taking into consideration the criteria in 3 AAC 106.125.
History
- Authority: AS 42.45.010; AS 44.83.080
- Eff. 4/8/2015, Register 214
Article 2 Loans from Rural Electrification Revolving Loan Fund
3 AAC 106.200 Use of loan proceeds
(a) A borrower who receives a loan from the rural electrification revolving loan fund may use the loan only to pay for capital improvements that extend the borrower's transmission and distribution system to customers not previously receiving service from a public utility. A borrower may not use the loan to provide electric power generation or fuel storage facilities, or for reconstruction or upgrade of existing transmission and distribution lines.
(b) A borrower who receives a loan from the rural electrification revolving loan fund shall use money available to the borrower, other than the proceeds of the loan, to acquire and install one transformer, one span of line, one pole, and one service drop for each customer to who immediate service is provided. The borrower may use proceeds of the loan to pay for additional costs of providing service to a customer receiving immediate service that are not paid by the customer.
History
- Authority: AS 42.45.020; AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 106.210 Rural electrification revolving loan fund application
(a) An applicant for a loan from the rural electrification revolving loan fund shall submit an application, which contains at the time of filing, the following information:
(1) the legal name of the applicant and the legal authority under which it was created and other information that will demonstrate that the applicant is an eligible borrower under AS 42.45.020, including evidence that it holds a certificate of public convenience and necessity issued by the Regulatory Commission of Alaska allowing it to provide electric service to the area where the proceeds of the loan will be used;
(2) a certified copy of the resolution or other official action taken by the applicant's governing body authorizing the application for a loan;
(3) the name, title, and address of the applicant's official correspondent or representative for purposes of the application;
(4) the names and titles of the applicant's principal officers, including the chief executive officer or general manager;
(5) the names and addresses of the engineer, legal counsel, financial advisor or consultant, and any management, engineering, design, economic, or other advisors or consultants that the applicant has for the project;
(6) the total amount of the loan requested;
(7) a description of the use to which the loan money will be applied, including
(A) geographic location of the project;
(B) a narrative describing the physical components and the electrical characteristic of the project;
(C) a comprehensive statement clearly demonstrating public need for the project and the project's eligibility under AS 42.45.020;
(D) the proposed allocation of loan money to each purpose or to each phase of a project and the expected date of completion of each;
(E) information necessary so the loan advisory committee can consider the matters required by AS 42.45.030 and by 19 AAC 96.230, including a
(i) description of each structure to be served and whether it is temporary or permanent for each customer identified in (12) of this subsection and all other customers the applicant expects will be served by the extension of electric service within the 10-year period following completion of the project;
(ii) description of the present and expected future use of land in the area to be served by the extension of electric service, including residential population and commercial facility density and zoning, if any;
(iii) description of the terrain that will be crossed by the extension of electric service and information about the ownership status of each parcel to be crossed, including information about any easements and rights-of-way granted or expected to be granted;
(iv) description of all other utility service available or expected to be available in the area to be served by the extension of electric service; and
(v) projection of the number of new customers that the applicant expects to be served by the extension of electric service for each of the 10 years following completion of the project and an estimate of the cost to provide a service connection to each of those customers;
(8) information from which the authority can determine that the project is technically and financially feasible;
(9) the status of any proceedings necessary for the applicant to obtain permits, certificates, or other authorizations from any federal, state, or local agency necessary to begin, complete, and operate the project;
(10) financial statements of the applicant and any other party or parties acting as guarantor of the loan, unless otherwise required by the authority; these financial statements must include, when possible, balance sheets and profit-and-loss statements and must be certified by an independent certified public accountant;
(11) for an investor-owned electric utility, a business history of any person or entity owning or controlling 10 percent or more of the applicant's stock or business;
(12) the name and location of each customer who has applied for service and for whom immediate service is expected to be provided and whether those customers are receiving electric service from a public utility at the time of the loan application;
(13) information from which the authority can determine whether the applicant has the financial ability to provide from other money available to it an amount equal to that required for acquisition and installation of one transformer, one span of line, one pole, and one service drop as required for each customer to whom immediate service will be provided; and
(14) a loan repayment analysis that demonstrates expected payments of principal and interest over the first 10 years following completion of the project sufficient to retire the full amount of the obligation, including
(A) the connection costs calculated as the average costs anticipated at the time of the application for acquisition and installation of one transformer, one span of line, one pole, and one service drop;
(B) the expected number of additional customers to be connected to the service extension financed by the loan
(i) during the first 30 days following completion of the project;
(ii) after the first 30 days but before the end of the first calendar year following completion of the project; and
(iii) during each of the nine calendar years following the first calendar year;
(C) assumptions made in forecasting the number of additional customers under (B) of this paragraph, and other information that demonstrates the reasonableness of the forecast;
(D) the estimated actual cost, at the time of the application, to provide a service connection to each new customer identified under (B)(ii) and (B)(iii) of this paragraph, plus a statement of any assumptions or information that demonstrates the reasonableness of the cost estimates;
(E) the expected principal repayment during each of the first 10 years; the repayment is calculated as the sum of the differences between the cost for each connection for that year identified under (D) of this paragraph and the average cost calculated under (A) of this paragraph for each such connection described in (D) of this paragraph that costs less than the average cost calculated under (A) of this paragraph;
(F) the expected interest payment during each of the first 10 years, which is calculated as two percent of the unpaid principal balance;
(G) the surcharge required from each new customer identified under (B) of this paragraph, during each of the first 10 years, to generate the expected interest payment described in (F) of this paragraph; the surcharge is calculated annually by dividing the expected interest payment by the total number of customers connected with the loan proceeds;
(H) a comparison of the annual principal payments calculated under (E) of this paragraph with the applicant's total projected annual revenue for each of the first 10 years;
(15) if the applicant is a Native village council, a resolution waiving sovereign immunity on a form provided by the authority.
(b) An applicant shall in addition to the application, timely provide other information requested by the authority.
(c) An application must be submitted to the authority.
History
- Authority: AS 42.45.020; AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 106.220 Review by authority
(a) Upon receipt of a completed application and other information requested or required, the authority will review the application.
(b) The authority, after reviewing the application, will make a determination that includes the following:
(1) written comments analyzing whether
(A) the money will be used to pay the costs of activities that are eligible under AS 42.45.020 and the applicant is an eligible borrower under AS 42.45.020;
(B) the project will meet the needs of the area to be served by the project and will benefit the area;
(C) the project is technically feasible;
(D) alternatives to the project exist that would result in extension of electric service by a different method, or by an entity other than the applicant, which could reasonably be expected to provide, within a time schedule comparable to the project, electric service at a lower cost to the consumer;
(E) the applicant has applied for, or has been awarded, necessary permits or certificates;
(F) the project is financially feasible;
(G) the applicant has the ability to provide from money other than the proceeds of the loan an amount equal to that required for acquisition and installation of one transformer, one span of line, one pole, and one service drop as required for each customer for whom immediate service is expected to be provided;
(H) the needs of, and benefits to, the area to be served by the project are greater than the needs of, and benefits offered to, other areas of the state by a project for which sponsors may also seek loan money from the authority if there is not sufficient money in the rural electrification revolving loan fund for both projects, if this determination can be made based on information existing at the time of the authority's review, considering factors such as the number of customers to be served by the project, the cost to serve each customer, and the availability of alternative sources of capital to the respective utilities; and
(I) the applicant has, or will have, sufficient revenue from all sources to repay the loan;
(2) a statement setting out proposed loan terms and conditions; and
(3) other comments that the authority considers appropriate.
(c) If the authority approves the loan application, the authority will prepare a written decision and deliver a copy of its decision to the applicant. The decision will
(1) indicate whether there are conditions that the applicant must satisfy before the authority will make the loan to the applicant; and
(2) include proposed loan terms.
(d) Repealed 3/25/2005.
(e) If the authority approves an application, the authority will prepare a loan agreement and other appropriate documentation to reflect the terms of the loan sufficient, as determined by the authority to assure repayment of the loan in accordance with its terms, and to provide for other matters the authority considers appropriate in connection with the loan. The authority will not disburse the proceeds of the loan to the borrower until the borrower has entered into the loan agreement with the authority.
History
- Authority: AS 42.45.020; AS 42.45.030; AS 44.83.080
- Eff. 2/16/96, Register 137; am 3/25/2005, Register 173
3 AAC 106.230 Review by loan advisory committee
(a) Within 15 days after a completed application has been received, the department will appoint a loan advisory committee composed of three individuals, each of whom resides within the certificated area served by the applicant, but none of whom is a person identified in 3 AAC 106.210(a)(12).
(b) Members of the committee may be selected by the department from lists of nominees provided by the applicant and by community groups and interested persons, but when possible, the committee may not include more than one individual who directly represents any of the following:
(1) the State of Alaska;
(2) a borough or city;
(3) a village council;
(4) an Indian Relocation Act (IRA) council;
(5) consumers;
(6) utilities;
(7) business or labor organizations;
(8) finance and real estate professions;
(9) a regional corporation;
(10) a village corporation;
(11) a nonprofit organization; or
(12) the federal government.
(c) The committee shall choose a chairperson from among its members and within 30 days after appointment by the department shall, following reasonable notice to the public, hold at least one public meeting in the area served by the applicant.
(d) The committee's recommendation concerning the loan shall be transmitted by the chairman to the department within 45 days after receiving the department's written determination provided for in 3 AAC 106.220. In making its recommendation, the committee shall consider the factors set out in AS 42.45.030.
History
- Authority: AS 42.45.020; AS 42.45.030; AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 106.240 Terms of loans
(a) The authority will establish the terms of a loan made from the rural electrification revolving loan fund when the authority approves the loan application under 3 AAC 106.220.
(b) A loan must bear an interest rate equal to two percent a year on the unpaid balance. Interest paid to the authority must be recovered by the electric utility receiving the loan through a surcharge to the regular electric rates paid by the customers served by the electric service extended with the loan proceeds. Interest payments to the authority are due on the first day of the calendar year following the extension of electric service and on the first day of each calendar year thereafter until paid in full.
(c) A loan from the rural electrification revolving loan fund will be made only to finance a project if full repayment of the loan is likely to be made within 10 years. Payment of the unpaid balance of the principal of the loan is deferred until the first day of the calendar year following the extension of electric service. At that time, and annually after that, the annual principal repayment amount due will be calculated as follows:
(1) the average cost to the electric utility to acquire and install one transformer, one span of line, one pole, and one service drop during the initial 30-day period following the extension of electric service must be calculated by the electric utility and verified by the authority; after the first year following the extension of electric service, and in January of each year until the loan is fully repaid, a recognized construction-cost index for the area will be used to adjust the amount specified for the first year under this paragraph;
(2) the actual cost to the electric utility to provide each service connection to customers first served in the preceding calendar year must be reported by the electric utility to the authority each January, and the cost must be verified by the authority; the first report must exclude the cost of service connections for customers connected during the initial 30-day period following extension of electric service;
(3) for each customer for whom the cost of connection reported under (2) of this subsection is equal to or greater than the amount calculated under (1) of this subsection, no principal payment is due;
(4) for each customer for whom the cost of connection reported under (2) of this subsection is less than the amount calculated under (1) of this subsection, the difference is due as a principal repayment.
(d) Notwithstanding (c) of this section, the authority and the borrower may agree to a fixed repayment term.
(e) A loan must be supported by appropriate documentation that may include a loan agreement, bonds, notes, or other documentation, in a form satisfactory to the authority.
History
- Authority: AS 42.45.020; AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 106.250 Inspection of records and facilities
The provisions of 3 AAC 106.130 concerning inspection of records and facilities of applicants for loans from the power project fund apply also to applicants for loans from the rural electrification revolving loan fund.
History
- Authority: AS 42.45.020; AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 106.260 Loan amounts
(a) A loan will not exceed $250,000 per loan application for a specific project if the rural electrification revolving loan fund balance is less than $3,000,000 at the time of application.
(b) A loan will not exceed $500,000 per loan application for a specified project if the rural electrification revolving loan fund balance is $3,000,000 or more at the time of application.
History
- Authority: AS 42.45.020; AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 106.269 Definition
In 3 AAC 106.200 - 3 AAC 106.269, "financially feasible" means that the authority has determined that enough money is available from all sources to complete the project, and that enough money is estimated to be available in the future to repay any debt incurred in connection with the project, taking into consideration the relationship between the estimated user fees or charges upon completion of the project and the estimated user fees or charges if consumers of services provided by the project would have continued to receive services from existing sources, the relationship between the estimated user fees or charges upon completion of the project and the present or estimated user fees or charges for similar services in the state, and whether the loan is secured by a means other than by a pledge or revenues of the project.
History
- Authority: AS 42.45.020; AS 44.83.080
- Eff. 4/8/2015, Register 214
Article 3 Loans from Bulk Fuel Revolving Loan Fund
3 AAC 106.300 Application process
Deleted.
History
- Eff. 2/16/96, Register 137; am 3/25/2005, Register 173; am 10/16/2009, Register 192; deleted as of Register 205, April 2013
3 AAC 106.305 Examination
Deleted.
History
- Eff. 2/16/96, Register 137; deleted as of Register 205, April 2013
3 AAC 106.310 Eligibility
Deleted.
History
- Eff. 2/16/96, Register 137; am 3/25/2005, Register 173; am 10/16/2009, Register 192; deleted as of Register 205, April 2013
3 AAC 106.315 Financial and credit record
Deleted.
History
- Eff. 2/16/96, Register 137; deleted as of Register 205, April 2013
3 AAC 106.320 Ability to repay
Deleted.
History
- Eff. 2/16/96, Register 137; deleted as of Register 205, April 2013
3 AAC 106.325 Lending practices
Deleted.
History
- Eff. 2/16/96, Register 137; deleted as of Register 205, April 2013
3 AAC 106.330 Disbursement of loan money
Deleted.
History
- Eff. 2/16/96, Register 137; deleted as of Register 205, April 2013
3 AAC 106.335 Supervision of loans
Deleted.
History
- Authority: AS 42.45.250; AS 44.83.080
- Eff. 2/16/96, Register 137; deleted as of Register 205, April 2013
3 AAC 106.340 Costs
Deleted.
History
- Eff. 2/16/96, Register 137; deleted as of Register 205, April 2013
3 AAC 106.345 Assumptions
Deleted.
History
- Eff. 2/16/96, Register 137; deleted as of Register 205, April 2013
3 AAC 106.350 Modifications
Deleted.
History
- Eff. 2/16/96, Register 137; deleted as of Register 205, April 2013
3 AAC 106.355 Reconsideration of a loan request
Deleted.
History
- Eff. 2/16/96, Register 137; deleted as of Register 205, April 2013
3 AAC 106.360 Confidentiality of loan information
Deleted.
History
- Eff. 2/16/96, Register 137; deleted as of Register 205, April 2013
3 AAC 106.365 Definitions
Deleted.
History
- Eff. 2/16/96, Register 137; deleted as of Register 205, April 2013
Article 4 General Provisions
3 AAC 106.900 Definitions
(a) In this chapter, unless the context requires otherwise,
(1) deleted;
(2) Repealed 4/8/2015;
(3) deleted;
(4) "regional corporation" means an Alaska Native regional corporation established under the laws of this state in accordance with the provisions of 43 U.S.C. 1601 - 1629(e) (Alaska Native Claims Settlement Act).
(b) In AS 42.45, unless the context requires otherwise, "nonprofit marketing cooperative" means a cooperative organized under AS 10.15 (Alaska Cooperative Corporation Act), which is operated on a nonprofit basis for the mutual benefit of its members and which has bylaws containing provisions relating to the disposition of revenues and receipts as may be necessary and appropriate to establish and maintain its nonprofit and cooperative character, or a cooperative organized under AS 10.25 (Electric and Telephone Cooperative Act) that exercises the powers granted to an electric cooperative by AS 10.25.020.
(c) In AS 42.45 and this chapter, unless the context requires otherwise,
(1) "economically viable" means
(A) a project for which the long term benefits exceed the long term costs; or
(B) the project is financially feasible in the absence of a government grant for the project;
(2) "extension of electric service" means the point when at least three new customers begin receiving electric service through an extension made in connection with a loan from the rural electrification revolving loan fund;
(3) "immediate service" means electric service provided within 30 days after completion of the extension of electric service made in connection with a loan from the rural electrification revolving loan fund;
(4) "village corporation" means an Alaska Native Village Corporation organized under the laws of the State of Alaska as a business for profit or nonprofit corporation to hold, invest, manage, and distribute land, property, money, and other rights and assets for and on behalf of a native village in accordance with the terms of the Alaska Native Claims Settlement Act (PL 920-203);
(5) "village council" means the duly elected governing body of an unincorporated community which has between 25 and 600 people residing within a two-mile radius;
(6) "authority" means the Alaska Energy Authority created in AS 44.83.020.
(d) In AS 42.45.010, "independent power producer" means a corporation, person, agency, authority, or other legal entity or instrumentality, that is not a utility and that owns or operates a facility for the generation or production of electric or thermal energy for use by the residents, local government, or businesses of one or more municipalities or unincorporated communities recognized by the Department of Commerce, Community, and Economic Development for community revenue sharing under AS 29.60.850 - 29.60.879 and 3 AAC 180.
(e) In AS 42.45.010 and this chapter,
(1) "alternative energy"
(A) means energy or fuel that is used for production of electricity, heat, or mechanical power, and that is derived from renewable or local sources other than liquid petroleum;
(B) includes,
(i) wind, solar, geothermal, hydroelectric, and biomass power sources; and
(ii) local sources of coal and natural gas;
(2) "alternative energy facility" means a facility that generates or produces alternative energy;
(3) "electric utility" has the meaning given the term "public utility" in AS 42.05.990(6)(A).
History
- Authority: AS 42.45.010; AS 44.83.080
- Eff. 2/16/96, Register 137; am 10/16/2009, Register 192; am 4/8/2015, Register 214
Chapter 107 Grant Programs
Article 1 Power Cost Equalization Program
3 AAC 107.200 Technical requirements; metering
(a) An eligible electric utility shall install and maintain
(1) operational equipment designed to meter power consumption of its utility customers, including community facilities and power stations;
(2) a fuel meter on the day tank to record the amount of fuel used to generate electric power on a daily basis;
(3) an appropriate master meter or totalizing meter and demand register to measure the electric power generated at the main bus-bar; and
(4) a station service meter to measure the power consumed by the utility for lights and heat for the power plant.
(b) No metering is required for street lights.
(c) An electric utility that has technical or financial problems in implementing the metering requirements in (a) of this section may petition the authority for technical assistance.
(d) The authority will, in its discretion, exempt an electric utility from the requirements of (a) of this section if the authority determines that compliance is not practicable. The exemption will remain in effect until the authority determines that the conditions for which it was granted no longer exist.
(e) An electric utility owning or operating any new generating plant built or upgraded after October 28, 1989 is not eligible for the exemption in (d) of this section.
(f) Failure to comply with (a) of this section or to secure an exemption under (d) of this section, means that non-metered electric utility customers, including community facilities, are not eligible to receive power cost equalization credits.
History
- Authority: AS 42.45.100; AS 42.45.130 AS 42.45.110; AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 107.210 Overpayments
(a) The authority is entitled to reimbursement if an eligible electric utility, or its electric utility customers, have received power cost equalization payments to which they were not entitled.
(b) Grounds for reimbursement include
(1) an interim or permanent power cost equalization reduction ordered by the commission;
(2) a reduction of power cost equalization resulting from an adjustment to fuel or other eligible costs ordered by the commission;
(3) payment disbursed in error or based on an erroneous or undocumented monthly report.
(c) An adjustment in the power cost equalization amount per kilowatt hour in (b)(1) and (b)(2) of this section is retroactive to the effective date of its determination by the commission.
(d) The authority will recover any overpayment under this section by reducing the future power cost equalization payments to be disbursed or by demanding repayment from the participating utility, whichever method the authority determines is appropriate.
History
- Authority: AS 42.45.100; AS 42.45.160; AS 44.83.080 AS 42.45.110; AS 42.45.170
- Eff. 2/16/96, Register 137
3 AAC 107.220 Power cost equalization pro-rata reduction
When power cost equalization payments paid to each electric utility are reduced on a pro rata basis as required by AS 42.45.110(i), eligible electric utilities will implement the pro rata reduction effective with the comparable monthly report. An electric utility shall consult with the authority regarding implementation of the reduction.
History
- Authority: AS 42.45.100; AS 42.45.160; AS 44.83.080 AS 42.45.110; AS 42.45.170
- Eff. 2/16/96, Register 137
3 AAC 107.225 Allocation of supplemental appropriations after pro rata reduction
If a supplemental appropriation is received for the power cost equalization program after the authority has made a pro rata reduction under AS 42.45.110(i), the authority will
(1) increase the power cost equalization payments to be made to eligible utilities for the rest of the fiscal year on a pro rata basis up to the maximum allowable under AS 42.45.110; and
(2) if any money remains after payments are made under (1) of this section, make additional power cost equalization payments to eligible utilities that received reduced payments under AS 42.45.110(i) to restore funding to the maximum allowable under AS 42.45.110 for each month, starting from the most recent month and going back to the beginning of the state fiscal year.
History
- Authority: AS 42.45.100; AS 42.45.160; AS 44.83.080 AS 42.45.110; AS 42.45.170
- Eff. 7/30/2006, Register 179
3 AAC 107.230 Exclusions from power cost equalization
(a) A customer whose facility has more than one meter will only receive power cost equalization credit for the master meter.
(b) Power consumption measured by a station service meter required in 3 AAC 107.200 is not eligible for power cost equalization credit.
History
- Authority: AS 42.45.100; AS 42.45.160; AS 44.83.080 AS 42.45.110; AS 42.45.170
- Eff. 2/16/96, Register 137
3 AAC 107.240 Reporting and recordkeeping requirements
(a) An eligible electric utility shall submit a power cost equalization report to the authority within 10 working days after the end of its billing period. The report must set out the power consumption of the previous month and must be in the format required by the authority. Within each fiscal year an eligible electric utility shall submit 12 separate monthly reports.
(b) Power cost equalization payments will not be made for power consumed through June 30 of a year if the relevant monthly report is received after August 31 of that year.
(c) An eligible electric utility shall report separately, in the format required by the authority, the power eligible for power cost equalization that is consumed by each of its customers.
(d) An eligible electric utility shall keep accurate periodic written records for the fuel day meters, generating meters, and station service meters required by 3 AAC 107.200.
(e) An eligible electric utility shall organize and maintain, in accordance with standard accounting practices, the accounts of its electric fund as a separate accounting entity in a self-balancing set of accounts that includes the assets, liabilities, balance, revenue, and expenses of the electric fund.
(f) An eligible electric utility shall make its records available to the authority and the commission within 60 days after receipt of a request to do so.
(g) Failure to comply with (f) of this section may result in
(1) suspension by the authority of the power cost equalization disbursements to the eligible electric utility, until satisfactory records are provided;
(2) loss of the suspended power cost equalization disbursements, if satisfactory records are not submitted by January 31 of the following fiscal year.
History
- Authority: AS 42.45.100; AS 42.45.130; AS 42.45.170 AS 42.45.110; AS 42.45.160; AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 107.250 Power cost equalization and the commission
(a) The authority and the commission have statutory responsibilities in furtherance of the power cost equalization program.
(b) 3 AAC 107.200 - 3 AAC 107.270 should be read together with 3 AAC 52.600 - 3 AAC 52.690.
History
- Authority: AS 42.45.100; AS 42.45.130; AS 42.45.170 AS 42.45.110; AS 42.45.150; AS 44.83.080 AS 42.45.120; AS 42.45.160
- Eff. 2/16/96, Register 137
3 AAC 107.260 Standards for customer eligibility
To receive a power cost equalization payment, a customer of an eligible electric utility
(1) must be billed by the utility in accordance with the relevant tariff, rate structure, separate demand charge, or minimum charge;
(2) shall make timely payments to the utility, for the electric power purchased, at least annually or on an appropriate schedule throughout the year, and in an amount equal to the required annual payment, if this practice is justified by the community's seasonal economy, the local utility rule, and the economic feasibility of the practice by the local utility; and
(3) shall pay to the utility at least the applicable base amount determined by the commission under AS 42.45.110 and 3 AAC 52.160, plus the difference between the utility rate and the amount of power cost equalization, for each kilowatt-hour consumed.
History
- Authority: AS 42.45.100; AS 42.45.130; AS 42.45.170 AS 42.45.110; AS 42.45.150; AS 44.83.080 AS 42.45.120; AS 42.45.160
- Eff. 2/16/96, Register 137
3 AAC 107.267 State or federal funding of community facilities
(a) A community facility is not eligible for power cost equalization if the costs of operating the community facility, or eligible portion of the community facility, are paid for by the state, federal government, or private commercial interests.
(b) As used in (a) of this section, the receipt of state or federal government funds by a community facility is not state or federal government payment for the costs of operating the community facility if the local community will receive the benefits of the power cost equalization payment, rather than the state or federal government. The local community receives the benefits of the power cost equalization payment if
(1) the state or federal government does not direct the community facility to spend the state or federal government funds on operating costs of the community facility, and
(2) the power cost equalization payment will not reduce the amount of state or federal government funding provided to the community facility.
(c) For all or a portion of a community facility that receives state or federal government funds to be eligible for power cost equalization payment under the criteria established in (b) of this section, the community facility must certify on a form acceptable to the authority that the receipt of state or federal government funding satisfies each condition of (b) of this section.
History
- Authority: AS 42.45.110; AS 42.45.150; AS 44.83.080
- Eff. 7/25/2014, Register 211
3 AAC 107.270 Definitions
(a) In 3 AAC 107.200 - 3 AAC 107.270 and in AS 42.45.110 - 42.45.170, unless the context requires otherwise,
(1) "commission" means the Regulatory Commission of Alaska;
(2) "customers" means
(A) an eligible electric utility's residential customer of energy for a single-family or multi-family dwelling, or residential housing unit;
(B) an eligible electric utility's commercial customer of energy for a business, school, or building other than the customers identified in (A), (C), and (D) of this paragraph;
(C) a community facility as defined in AS 42.45.150;
(D) state or federal customers;
(3) deleted;
(4) "state or federal customer" means a state or federal office or facility other than public schools;
(5) "authority" means the Alaska Energy Authority created in AS 44.83.020;
(6) "residential customer" means a customer whose residence is the
(A) location receiving electrical service, regardless of whether the customer engages in commercial activity at the customer's residence; and
(B) place of residence in this state as determined under AS 15.05.020 for the purpose of voting.
(b) As used in AS 42.45.150(1), "community building" means a community facility that
(1) is not operated for profit;
(2) is operated for the benefit of the general public;
(3) complies with 3 AAC 107.260(1);
(4) makes timely payments to the utility for the electric power consumed; and
(5) complies with 3 AAC 107.260(3).
History
- Authority: AS 42.45.100; AS 42.45.130; AS 42.45.170 AS 42.45.110; AS 42.45.150; AS 44.83.080 AS 42.45.120; AS 42.45.160
- Eff. 2/16/96, Register 137; am 3/25/2005, Register 173; am 7/25/2014, Register 211
Article 2 Utility Improvements Grant Program
3 AAC 107.300 Grants for utility improvements; purpose of fund
(a) The provisions of 3 AAC 107.300 - 3 AAC 107.430 implement and interpret AS 42.45.180 relating to the responsibilities and powers of the authority with respect to grants for utility improvements from the power cost equalization and rural electric capitalization fund. The authority may use money available in the fund to make grants for utility improvements as provided in 3 AAC 107.300 - 3 AAC 107.430. It is a purpose of the fund to provide grants to improve existing utility systems and thereby to reduce the costs to the fund for power cost equalization under AS 42.45.100 - 42.45.170.
(b) A grant under 3 AAC 107.300 - 3 AAC 107.430 is subject to the availability of money in the fund for that purpose. As soon as practical in each fiscal year, the authority shall determine the amount of money in the fund. During each fiscal year, the authority shall make available for grants for utility improvements from the fund an amount equal to three percent of the amount of money in the fund as of July 1 of that fiscal year.
History
- Authority: AS 42.45.100; AS 42.45.180; AS 44.83.080
- Eff. 6/29/94, Register 131; am 11/25/94, Register 132
3 AAC 107.310 Notice of availability of money in fund
If the authority determines under 3 AAC 107.300 that money is available from the fund for grants for utility improvements, the authority shall publish notice of the amount of money available for the grants. The authority shall include in the notice information regarding application procedures, a summary of significant terms and conditions that shall apply to the grants, and a statement of the time by which the authority must receive applications. The authority shall publish the notice by the method that it considers appropriate. Upon receipt of written request from a person, the authority shall mail to the person a sample grant agreement and the evaluation criteria that will be used to select recipients of the grants.
History
- Authority: AS 42.45.100; AS 42.45.180; AS 44.83.080
- Eff. 6/29/94, Register, 131; am 11/25/94, Register 132
3 AAC 107.320 Utility improvements grant limits
The authority may not award a grant to a recipient under 3 AAC 107.300 - 3 AAC 107.430 in a fiscal year in an amount that exceeds 20 percent of the amount in the fund available in that fiscal year for grants under 3 AAC 107.300 - 3 AAC 107.430. An applicant may apply for, and the authority may award to an applicant, more than one grant under 3 AAC 107.300 - 3 AAC 107.430 during a fiscal year; however, the applicant must submit a separate application for each grant requested.
History
- Authority: AS 42.45.100; AS 42.45.180; AS 44.83.080
- Eff. 6/29/94, Register 131; am 11/25/94, Register 132
3 AAC 107.330 Grant application
(a) A person who wishes to receive a grant under 3 AAC 107.300 - 3 AAC 107.430 must submit an application to the authority. The application must be dated and must
(1) state the legal name of the applicant and the legal authority under which the applicant was created;
(2) include sufficient information about the applicant to demonstrate to the satisfaction of the authority that the applicant is eligible to receive a grant from the fund;
(3) include a certified copy of the resolution or other official action by the governing body of the applicant authorizing the application for a grant;
(4) state the name, title, and address of the official correspondent or representative of the applicant for purposes of the application;
(5) state the names and titles of the principal officers, including the chief executive officer or general manager, of the applicant;
(6) state the name and address of the engineer, legal counsel, financial advisor or consultant, and other advisors or consultants that the applicant has for the project for which the grant is requested, including management, engineering, design, and economic advisors and consultants;
(7) state the amount of the grant requested;
(8) provide a general description of the use to which the grant proceeds will be applied, including
(A) the location of the project for which the grant is requested;
(B) a comprehensive statement clearly demonstrating public need for the project and the project's eligibility for financing with money from the fund;
(C) the proposed allocation of grant proceeds to each purpose or phase of the project and a schedule for the beginning and completion of each phase of the project;
(9) include a statement identifying all other money sources and amounts, and anticipated commitment dates for each source, and demonstrate to the satisfaction of the authority that the applicant's project cannot be completed without the requested grant;
(10) provide information that demonstrates to the satisfaction of the authority that the project is technically feasible and that demonstrates, as described in (c) of this section, that the project is economically feasible;
(11) provide information that demonstrates to the satisfaction of the authority that the applicant has obtained or will obtain all permits, certificates, or other authorizations from any federal, state, or local agency necessary to begin, complete, and operate the project within the schedule provided for the project;
(12) unless otherwise required by the authority, provide financial statements of the applicant that demonstrate that the applicant is financially capable of owning or operating the project for which the grant is requested and of using the grant proceeds in accordance with the terms of the grant; the financial statements must include balance sheets and profit-and-loss statements and must be certified by an independent certified public accountant;
(13) in the case of an investor-owned electric utility, provide a business history of any person owning or controlling 10 percent or more of the applicant's stock or business and, if necessary, other information demonstrating to the satisfaction of the authority that the applicant is capable of successfully owning and operating the project;
(14) include information sufficient in the determination of the authority to establish the total cost of the project;
(15) include a description of the project; and
(16) include information sufficient in the determination of the authority to demonstrate that at least 25 percent of the total cost of the project will be paid with money derived from a source other than the fund; contributions in a form other than money do not satisfy the requirements of this paragraph.
(b) In addition to the information described in (a) of this section, the authority may require information that the authority considers necessary or desirable in order to determine whether a grant request meets the requirements of AS 42.45.100 and 42.45.180 and 3 AAC 107.300 - 3 AAC 107.430. To be considered for a grant, an applicant must provide any required additional information within the time established by the authority.
(c) To demonstrate economic feasibility for purposes of (a)(10) of this section, an applicant shall project the operating and capital costs of the applicant's utility both with and without the proposed project for which the grant is requested. The authority shall review that information to determine whether there are savings to the applicant that would result from the proposed project and to determine the amount of the savings relative to the size of the requested grant for purposes of ranking the application under 3 AAC 107.340(c).
(d) The executive director of the authority may waive some or all of the requirements of (a) of this section if the executive director of the authority determines that (1) the requirement to be waived is not necessary to enable the authority to determine the eligibility of the grant application under AS 42.45.100 and 42.45.180; (2) the waiver is necessary to avoid hardship in the community served or to be served by the project for which the grant is requested; or (3) the authority has other sources of information that it can use in reviewing the application in place of the requirement to be waived or the authority will be able to adequately analyze the eligibility of the applicant in the absence of that information.
History
- Authority: AS 42.45.100; AS 42.45.180; AS 44.83.080
- Eff. 6/29/94, Register 131; am 11/25/94, Register 132
3 AAC 107.340 Evaluation committee; ranking of applications; award of grants
(a) For the purpose of reviewing applications received under 3 AAC 107.300 - 3 AAC 107.430, the executive director of the authority shall appoint an evaluation committee. The committee must include authority personnel who are competent to review the projects for which grants are requested. The authority shall transfer to the evaluation committee the applications the authority receives before the filing deadline set in the notice described in 3 AAC 107.310.
(b) Upon receipt from the authority of complete applications and any additional information required under 3 AAC 107.330, the evaluation committee shall review the applications. The committee shall rank the applications that it has determined satisfy the requirements of AS 42.45.180 and 3 AAC 107.330 and further the purposes for which the fund was created as described in 3 AAC 107.300(a), except that the committee may decline to rank such an application if, in the judgment of the committee, the project for which the grant is requested would create an unreasonably high risk to public health or welfare. The committee shall determine the approved grant amount for each ranked application. If the committee determines that an application does not satisfy the requirements of AS 42.45.180 or 3 AAC 107.330 solely because of the amount of the grant requested, the committee may change the amount of the grant requested so that the application will satisfy the requirements of AS 42.45.180 and 3 AAC 107.330 and then shall rank the application accordingly.
(c) The evaluation committee shall rank applications based upon the committee's determination of (1) each project's likelihood of reducing the costs of generating and transmitting power relative to the size of the grant requested; (2) the public need for the project; and (3) the economic feasibility of the project as demonstrated under 3 AAC 107.330(a)(10) and (c). In ranking applications, the committee also shall consider the applicant's financial and credit record for the purpose of determining whether the applicant has the ability to use the requested grant in a manner that effectively accomplishes the purposes of the grant. The committee shall complete its ranking of the applications within 90 days after the filing deadline for those applications as set under 3 AAC 107.310(a). The committee shall make its rankings in writing, shall include a summary of the reasons for the rankings, and shall deliver a copy of the decision to the authority.
(d) The authority shall award grants under 3 AAC 107.300 - 3 AAC 107.430 to successful applicants in the order that the applications were ranked by the evaluation committee and in the amounts approved by the committee until either grants have been awarded for all ranked applications or there is no more money available in the fund for the grants, whichever occurs first. The authority shall provide written notice to each applicant of its ranking under this section.
History
- Authority: AS 42.45.100; AS 42.45.180; AS 44.83.080
- Eff. 6/29/94, Register 131; am 11/25/94, Register 132
3 AAC 107.350 Grant agreement
(a) If the authority awards a grant to an applicant under 3 AAC 107.340(d), the applicant must enter into a grant agreement with the authority within 60 days after receiving notice from the authority that the applicant has been awarded the grant. If the applicant fails to enter into the grant agreement within the 60 days, the applicant forfeits the right to receive the grant. If the authority determines that failure to timely enter into a grant agreement is caused by actions of the authority, the director may extend the time to enter into the grant agreement.
(b) The authority shall prepare the grant agreement required by (a) of this section and other appropriate documentation to reflect the terms of the grant and to provide for other matters the authority considers appropriate in connection with the grant. The authority may not disburse proceeds of the grant to a successful applicant until the applicant has entered into the grant agreement with the authority and has executed any other documents required under this section. Unless waived by the authority, the grant agreement will include the following:
(1) a statement of the intended use of the grant proceeds, specifying how the proceeds will be used in connection with the purposes of the fund;
(2) a budget description in detail appropriate to the scope of the project;
(3) a timetable listing the steps considered necessary for the timely completion of the project and listing the schedule for the disbursement of grant proceeds;
(4) a provision for the administration of the grant proceeds according to generally accepted financial accounting procedures, for regular periodic reporting to the authority of grant-financed activities, and for the disposition of grant proceeds in accordance with intended use;
(5) provisions for the termination or suspension of grant disbursements and for termination of the grant agreement, including a statement of the provisions in 3 AAC 107.400;
(6) a provision acknowledging that all grant proceeds, until they are spent for the purposes of the grant and in accordance with the grant agreement, remain the property of the state and, if not expended for the purposes of the grant and in accordance with the grant agreement, will be returned to the authority within 30 days after the final date on which the grant proceeds were scheduled to be spent under the terms of the grant agreement;
(7) a statement acknowledging that the applicant and its employees, agents, and advisors, and not the authority, are responsible for obtaining necessary licenses and permits, if any, for ensuring that all aspects of the project comply with all applicable statutes, regulations, ordinances, and codes, and for all costs of the project in excess of the amount of the approved grant;
(8) a promise to defend and hold harmless, and to require all contractors and subcontractors to hold harmless, the authority from any action arising from a determination not to award a subsequent grant under 3 AAC 107.300 - 3 AAC 107.430;
(9) a requirement that the grant recipient submit to the authority plans and specifications for the recipient's project within 90 days after entering into the grant agreement;
(10) a requirement that the grant recipient obtain all necessary permits for the project within eight months after entering into the grant agreement;
(11) a requirement that the grant recipient complete all field construction work for the project within 18 months after entering into the grant agreement; and
(12) a provision stating that the applicant agrees to the inspection, audit, and examination provisions in 3 AAC 107.380.
History
- Authority: AS 42.45.100; AS 42.45.180; AS 44.83.080
- Eff. 6/29/94, Register 131; am 11/25/94, Register 132
3 AAC 107.360 Conditions for receiving a utility improvements grant
A recipient of a grant under 3 AAC 107.300 - 3 AAC 107.430 may not use the proceeds of the grant to pay for costs of a project that were incurred before the applicant entered into a grant agreement under 3 AAC 107.350(a) unless the executive director of the authority approves payment of the costs.
History
- Authority: AS 42.45.100; AS 42.45.180; AS 44.83.080
- Eff. 6/29/94, Register 131; am 11/25/94, Register 132
3 AAC 107.370 Insufficient money
If the amount of money in the fund is not sufficient to initially award grants for all the ranked applications as provided in 3 AAC 107.340(d), the authority shall notify the successful applicants for whom there is insufficient money in the fund to award grants. The notice must include a statement that the applicant's application was ranked but that there was insufficient money in the fund to award the grant. The notice also must inform the successful applicant that (1) if additional money becomes available in the fund in the same fiscal year, the authority, to the extent of that additional available money, will award grants to the remaining successful applicants in the order in which their applications were ranked; and (2) if the applicant does not receive a grant in the fiscal year for which the applicant applied, the applicant must resubmit its application within the time required for the following fiscal year to be considered for a grant in that period. If additional money becomes available in the fund, the authority shall award additional grants as described in the notice. The authority may award a grant to an applicant in an amount less than the amount requested by the applicant if there is insufficient money in the fund to award the full amount requested and if the purposes of the grant can be carried out with less than the full amount requested.
History
- Authority: AS 42.45.100; AS 42.45.180; AS 44.83.080
- Eff. 6/29/94, Register 131; am 11/25/94, Register 132
3 AAC 107.380 Inspection of records and facilities; audits and examinations
(a) Each applicant for a grant under 3 AAC 107.300 - 3 AAC 107.430 and each grant recipient under 3 AAC 107.300 - 3 AAC 107.430 shall agree to make its books and records, facilities, and real and personal property of any kind, available for inspection at any reasonable time by the authority or its agents upon receipt by the applicant or grant recipient of a written request to inspect at any time while the applicant's application is pending with the authority and at any time up to one year after the most recent disbursement of grant proceeds to the recipient.
(b) The authority or its agents may inspect, upon reasonable notice, the construction of any project that is being financed, in whole or in part, with a grant under 3 AAC 107.300 - 3 AAC 107.430.
(c) A grant recipient shall,
(1) at reasonable times during the applicable time period described in (a) of this section, and upon written request from the authority, submit to an audit or examination of the recipient's book and records by an independent firm of certified public accountants selected by the authority, in order to determine whether the provisions of the grant agreement have been complied with and, except as limited by 2 AAC 45.010, shall pay the cost of the audits or examinations;
(2) upon written request from the authority, submit a sworn statement by a responsible officer of the recipient as to the purposes to which the grant proceeds have been applied.
(d) An inspection, audit, or examination under this section is only for purposes of compliance with the requirements of AS 42.45.100 and 42.45.180 and 3 AAC 107.300 - 3 AAC 107.430.
History
- Authority: AS 42.45.100; AS 42.45.180; AS 44.83.080
- Eff. 6/29/94, Register 131; am 11/25/94, Register 132
3 AAC 107.400 Termination of grant agreement; ineligibility
If the authority terminates a grant agreement for cause in accordance with the terms of the grant agreement under 3 AAC 107.300 - 3 AAC 107.430, the authority may
(1) require the grant recipient to repay to the authority the portion of the grant proceeds that relates to the termination; and
(2) determine that the grant recipient is ineligible for further grants under this chapter.
History
- Authority: AS 42.45.100; AS 42.45.180; AS 44.83.080
- Eff. 6/29/94, Register 131; am 11/25/94, Register 132
3 AAC 107.410 Title to project
In connection with a grant under 3 AAC 107.300 - 3 AAC 107.430 and for the purpose of ensuring that the grant proceeds are used for a public purpose, the authority may require that a deed restriction on the title to the land benefited by the grant be recorded requiring approval from the authority for sale or transfer of the title to the land and requiring that the property be used for the purposes of the grant. The deed restriction may include provisions restricting the sale or transfer of title to the land to an entity that is eligible for the grant.
History
- Authority: AS 42.45.100; AS 42.45.180; AS 44.83.080
- Eff. 6/29/94, Register 131; am 11/25/94, Register 132
3 AAC 107.420 Modifications
The authority may consider and treat a request for a modification to a grant as a grant application if, in the determination of the evaluation committee appointed under 3 AAC 107.340, the modification is material.
History
- Authority: AS 42.45.100; AS 42.45.180; AS 44.83.080
- Eff. 6/29/94, Register 131; am 11/25/94, Register 132
3 AAC 107.430 Grant Programs
3 AAC 107.430. Definition for 3 AAC 107.300 - 3 AAC 107.430. In 3 AAC 107.300 - 3 AAC 107.430, "fund" has the meaning given in AS 42.45.190.
History
- Authority: AS 42.45.100; AS 42.45.180; AS 44.83.080
- Eff. 6/29/94, Register 131; am 11/25/94, Register 132
Article 3 Electrical Service Extension Fund Grants
3 AAC 107.500 Grant Programs
3 AAC 107.500. Eligible applicants. (a) Only an electric utility that meet the requirements of AS 42.45.200 and this chapter is eligible to apply for a grant from the electrical service extension fund. (b) A grant application must be submitted by the utility that will serve the customers for whom the line extension is proposed, or by the utility for which the improvement is proposed. The authority will not accept a grant application submitted by a subcontractor or a third party on behalf of an eligible applicant.
History
- Authority: AS 44.45.200; AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 107.505 Grant Programs
3 AAC 107.505. Notice of funding availability. (a) At the beginning of each fiscal year that money is available from the electrical service extension fund, the authority will invite electric utilities to apply for a grant from the fund. The authority will determine the appropriate form of notice, including publishing public notice in a newspaper and direct notification of electric utilities by mail. The notice will state how an electric utility can obtain information on grant application procedures, the terms and conditions of a grant, and the application deadline. (b) Upon request, the authority will provide an electric utility with a sample grant agreement and the evaluation criteria that will be used to select a grant recipient.
History
- Authority: AS 44.45.200; AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 107.510 Grant Programs
3 AAC 107.510. Grant limits. (a) The maximum dollar amount of a grant is 25 percent of the total amount of money appropriated to the fund in any given fiscal year, or $100,000, whichever is greater. (b) A grant may not exceed 60 percent of the total eligible project costs. (c) An electric utility may submit multiple applications. Each application must be for a project clearly and distinctly separate from the other and not a phase, continuation, or extension of another project for which an application is made under AS 42.45.200.
History
- Authority: AS 44.45.200; AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 107.515 Grant Programs
3 AAC 107.515. Matching funds. (a) A grantee shall contribute at least (1) 40 percent of the total eligible project costs; and (2) 100 percent of the ineligible project costs, including planning, feasibility studies, and design. (b) A grantee's 40 percent minimum share of total eligible project costs required in (a) of this section may not include state money from other legislative appropriations, including the authority's appropriation or the appropriation of another authority.
History
- Authority: AS 44.45.200; AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 107.520 Grant Programs
3 AAC 107.520. Electrical service extension fund application. (a) An applicant for a grant from the fund shall submit an application to the authority on a form provided by the authority. The applicant shall provide the following information: (1) the date of application; (2) the legal name of the applicant and the legal authority under which it is created; (3) a statement that the applicant is a certificated electrical utility, or a statement why it is exempt from certification under AS 42.05.711; (4) a certified copy of the resolution or other official action taken by the applicant's governing body authorizing the applicant to apply for the grant; (5) the name, title, and address of the applicant's authorized representative for the purposes of the grant application; (6) the names and titles of the applicant's principal officers, including the chief executive officer or general manager; (7) the names and addresses of the engineer, legal counsel, financial advisor or consultant, and any management, engineering, design, economic, or other advisors or consultants that the applicant has for the project; (8) the total eligible project costs; (9) the total ineligible project costs, including the cost of design, planning, and feasibility; (10) a description of the use to which the grant money will be applied, including (A) the geographic location of the line extension or improvement to be made to existing utilities; (B) the physical components and the electrical characteristics of the project; (C) the proposed allocation of grant money for each purpose or to each phase of a project, such as permitting, site preparation, construction, and the expected date of start-up and completion of each phase; (D) whether the grant will be used to extend service to private residences or small businesses, or will be used to make improvements to existing utilities; (E) a description of the project sufficient to determine its technical feasibility; and (F) identification of sources and amounts of money the applicant proposes to use to pay for its share of the project's costs; (11) for line extension projects, the number of existing primary residences and the number of existing small businesses that have signed commitments to purchase power from the applicant if the project is constructed; (12) for improvements to existing utilities, a description of the project's benefits to the utility and customers in its service area; (13) a project budget showing how grant money and the money the applicant contributes will be spent for the project; (14) copies of power sales agreements, hook up agreements, or other documentation verifying customer commitments to purchase electrical service under the applicant's current tariff if the project is constructed; (15) evidence that all permits and rights-of-way needed for the construction of the project can be secured in time to allow construction to proceed on the schedule provided under (10)(C) of this subsection; and (16) evidence that the utility is capable of contributing the matching funds required in 3 AAC 107.515 from loans, grants, proceeds from hookup fees, or other sources of funding. (b) The applicant shall provide any additional information requested by the authority so the authority can evaluate the application under 3 AAC 107.530.
History
- Authority: AS 44.45.200; AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 107.525 Grant Programs
3 AAC 107.525. Grounds for rejecting incomplete applications. The authority will notify an applicant in writing of the authority's intent to reject an application if information requested under 3 AAC 107.520(b) is not provided in a timely manner. A rejected application will not be evaluated under 3 AAC 107.530.
History
- Authority: AS 44.45.200; AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 107.530 Grant Programs
3 AAC 107.530. Evaluation of grant applications. (a) The authority will appoint a committee consisting of employees of the authority to evaluate the grant applications, including any additional information requested by the authority under 3 AAC 107.520. (b) The committee must include at least one electrical engineer. (c) The committee shall first evaluate all the grant applications for line extensions to qualifying residences or small businesses. (d) To evaluate grant applications for line extensions, the committee shall determine whether each (1) project is technically feasible and falls within accepted national utility standards for design and construction; (2) applicant can obtain permits and rights-of-way within the time provided in the project schedule; (3) proposed project start up and completion dates are realistic and the applicant can comply with 3 AAC 107.535(e) - (g); (4) applicant can secure all necessary permits and other approvals within the time required in 3 AAC 107.535(f) and (g); (5) project is financially feasible, and whether the applicant demonstrates that it has the money available to meet the matching fund requirements of 3 AAC 107.515; (6) application and all of its supporting documentation provide sufficient information to determine eligibility for award of a grant; (7) applicant has met the requirements of eligibility for a grant under AS 42.45.200. (e) The committee shall recommend that an application be denied if it does not satisfy the requirements of (d) of this section. (f) The committee shall rank eligible applications on the basis of the lowest eligible project costs per new customer by dividing the total number of small businesses and primary residences for which there are signed commitments to purchase power at the time of application into the total eligible project costs. (g) If money would still be available in the fund after all eligible line extension grants are determined, the committee shall rank eligible applications for improvements to existing utilities according to the following priorities: (1) the proposed improvement will remedy a condition that affects the life, health, or safety of residents in the utility's service area; (2) the proposed improvement will eliminate one or more existing state or federal code violations; or (3) the proposed improvement will increase the efficiency of the applicant utility's operating system. (h) The committee shall provide the authority with a written report stating the reasons for recommending each grant. The report will be available to the public after the grants have been awarded. (i) Subject to the availability of appropriations and providing that the applicant meets the requirements of 3 AAC 107.500 - 3 AAC 107.550, the authority will award the grants based upon the committee's recommendations and will notify all applicants of the authority's decision.
History
- Authority: AS 44.45.200; AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 107.535 Grant Programs
3 AAC 107.535. Conditions for receiving a grant. (a) A successful applicant shall sign a grant agreement with the authority in order to receive the grant. (b) A successful applicant that fails to execute a grant agreement with the authority within 60 days of receiving a notice of award from the authority forfeits the right to that grant award. (c) The authority will, in its discretion, terminate the grant agreement if the grantee fails to meet the terms and conditions of the agreement. (d) The authority will not disburse grant money for any work completed before the execution of the grant agreement. (e) Within 90 days after the grant agreement is executed, unless otherwise determined by the authority, the grantee shall submit plans and specifications to the authority for review. (f) Within eight months after the grant agreement is executed, permit work must be completed. (g) Within 18 months after the grant agreement is executed, field construction work must be completed. (h) The grantee shall pay all project costs above those costs on which the grant is based.
History
- Authority: AS 44.45.200; AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 107.540 Grant Programs
3 AAC 107.540. Insufficient funds. If the total amount of grant money requested from all eligible applicants is greater than the money available in the fund, the authority will place the eligible applicants who were not awarded a grant on a waiting list ranked according to the standards set out in 3 AAC 107.530(f) and (g). As money becomes available during the fiscal year in which the waiting list is established, the authority will award grants in the order that the applications are ranked on the waiting list. The waiting list will be dissolved on June 30 of each year. Any remaining applications may be resubmitted for consideration under the following year's program.
History
- Authority: AS 44.45.200; AS 44.83.050
- Eff. 2/16/96, Register 137
3 AAC 107.545 Grant Programs
3 AAC 107.545. Inspection of records and facilities. (a) Upon receipt of a written request to inspect, the applicant shall make its books, records, facilities, and real and personal property available for inspection at a reasonable time by the authority to the extent necessary to evaluate the applicant's eligibility for a grant under AS 42.45.200. (b) The authority will, in its discretion and after reasonable notice, inspect the construction of any project that is being financed with a grant under AS 42.45.200 in order to determine whether the grant is being spent in accordance with the requirements of AS 42.45.200. The inspection does not relieve the borrower of its obligation to comply with applicable codes and ordinances. (c) The authority will, in its discretion and after reasonable notice, inspect the applicant's books, records, facilities, and real and personal property up to three years after the completion of construction of a project financed with a grant under AS 42.45.200 in order to determine whether the grant was spent in accordance with the requirements of AS 42.45.200. (d) The authority will, in its discretion, require the applicant to submit a sworn statement by an authorized representative describing the purposes to which the proceeds of the grant have been applied.
History
- Authority: AS 44.45.200; AS 44.83.080
- Eff. 2/16/96, Register 137
3 AAC 107.550 Grant Programs
3 AAC 107.550. Definitions. (a) In 3 AAC 107.500 - 3 AAC 107.545, unless the context requires otherwise, (1) "eligible applicant" means a certificated electric utility or electric utility exempt from certification under AS 42.05.711 who has submitted an application for a grant under AS 42.45.200; (2) "primary residence" means a residence that is occupied by the utility's customer for at least seven months each year; (3) "small business" means an existing commercial enterprise operated for profit and engaged in lawful business activity with not more than $10,000,000 in annual gross sales; "small business" does not include a business that is a division or subsidiary of a larger parent company that does not meet the definition in this paragraph as a small business; (4) "total eligible project costs" means the cost of site preparation and construction, including the costs of obtaining project related permits associated with constructing a line extension project or improving an existing utility. (b) In AS 42.45.200 and 3 AAC 107.500 - 3 AAC 107.545, unless the context requires otherwise, (1) "fund" means the electrical service extension fund under AS 42.45.200; (2) "line extension" means any additional lines and equipment capable of serving one or more customers and necessary to extend the electric distribution system of a utility to a new customer.
History
- Authority: AS 44.45.200; AS 44.83.080
- Eff. 2/16/96, Register 137
Article 4 Renewable Energy Grant Program
3 AAC 107.600 Grant Programs
3 AAC 107.600. Purpose. The purpose of 3 AAC 107.600 - 3 AAC 107.695 is to establish procedures and criteria for grant applications, the evaluation of applications, recommendations to the legislature for the award of grants, and the administration of grants from the renewable energy grant fund under AS 42.45.045.
History
- Authority: AS 42.45.045; AS 44.83.080
- Eff. 10/16/2009, Register 192
3 AAC 107.605 Grant Programs
3 AAC 107.605. Public purpose requirements of renewable energy grants. The authority may take actions it determines are appropriate to protect the public purpose of renewable energy grants and the public interest in and benefit from the use of grant funds, including (1) limiting recommendations for grants to preliminary development phases, until the authority determines that subsequent phases are feasible, will result in sufficient benefit to the public, and are otherwise appropriate for grants; (2) seeking repayment of some or all of a grant if the grantee fails to comply with the terms and conditions of the grant or, without the prior approval of the authority, sells, conveys, or encumbers a project constructed with renewable energy grant money; (3) requiring review and approval by the Regulatory Commission of Alaska or, if the Regulatory Commission of Alaska does not have or exercise jurisdiction, review and approval by the authority, of rates charged for the use of assets funded in whole or in part with a renewable energy grant and for energy generated by those assets; (4) determining whether an applicant that is not a governmental entity and not a utility regulated by the Regulatory Commission of Alaska will own and operate the project in a manner that will provide sufficient public benefit to support a recommendation under AS 42.45.045 and 3 AAC 107.600 - 3 AAC 107.695 for a grant; in making a determination under this paragraph, the authority will consider the applicant's previous experience, its ownership and financial resources, proposed financial oversight, and other factors relevant to the analysis of public benefit.
History
- Authority: AS 42.45.045; AS 44.83.080
- Eff. 10/16/2009, Register 192
3 AAC 107.610 Grant Programs
3 AAC 107.610. Eligible applicants. (a) To apply for a renewable energy grant, a person must (1) be an eligible applicant within the meaning given in AS 42.45.045( l); and (2) demonstrate, to the satisfaction of the authority and subject to (b) of this section, that the applicant will (A) own the renewable energy project; (B) own, lease, or otherwise control the site upon which the project is located; and (C) upon completion of the project, operate and maintain it for its economic life for the benefit of the public. (b) The authority may authorize conveyance of an ownership interest or of operations or maintenance responsibilities if the authority determines that the conveyance protects the public interest in and benefit from the grant.
History
- Authority: AS 42.45.045; AS 44.83.080
- Eff. 10/16/2009, Register 192
3 AAC 107.615 Grant Programs
3 AAC 107.615. Eligible projects. (a) A project that meets the requirements of AS 42.45.045(f) - (h) is eligible for a renewable energy grant. (b) For purposes of AS 42.45.045(f)(2)(B), a project is a direct use of renewable energy resources if it uses renewable energy resources to generate energy or to make a fuel used to generate energy.
History
- Authority: AS 42.45.045; AS 44.83.080
- Eff. 10/16/2009, Register 192
3 AAC 107.620 Grant Programs
3 AAC 107.620. Public notice of application period; solicitation of grant applications. (a) The authority will provide public notice of the application period by publishing notice on the authority's website and on the Alaska Online Public Notice System established under AS 44.62.175. (b) The authority will publish on its website a request for grant applications that includes the date, time, place, and method for delivering applications, and a description of the application requirements.
History
- Authority: AS 42.45.045; AS 44.83.080
- Eff. 10/16/2009, Register 192
3 AAC 107.625 Grant Programs
3 AAC 107.625. Grant applications. (a) An applicant must submit an application to the authority within the time specified in the request for applications with the documentation and in the format required in the request for grant applications. The application must include (1) information showing to the satisfaction of the authority that the applicant is an eligible applicant within the meaning given in AS 42.45.045( l) and under 3 AAC 107.610; (2) information showing to the satisfaction of the authority that the project is eligible under AS 42.45.045(f) - (h) and 3 AAC 107.615; (3) information showing to the satisfaction of the authority that the project is technically and economically feasible; (4) a description of the public benefit from the project; (5) a description of the project scope of work, schedule, milestones, and budget; the description must include an estimate of total project costs, the amount of grant money requested, and identification of other money or resources that are committed to the purposes of the grant; (6) a description of the applicant's financial resources and financial capability of developing the project, including matching resources and other financing necessary for project development; and (7) additional information as required in the request for grant applications or under 3 AAC 107.670. (b) As it considers necessary to obtain complete or additional information, the authority will require applicants, including applicants who have previously received grants for preliminary development phases or partial grants, to submit new applications for each solicitation to which the applicants are responding.
History
- Authority: AS 42.45.045; AS 44.83.080
- Eff. 10/16/2009, Register 192
3 AAC 107.630 Grant Programs
3 AAC 107.630. Disclosure of applications and other materials submitted to the authority; confidentiality. (a) A grant application and other materials submitted to the authority under AS 42.45.045 and 3 AAC 107.600 - 3 AAC 107.695 are subject to disclosure under AS 40.25.100 - 40.25.295 (Alaska Public Records Act) and 2 AAC 96, unless the authority determines that the material is protected from disclosure under AS 40.25.120. (b) A person submitting a grant application or other material under AS 42.45.045 and 3 AAC 107.600 - 3 AAC 107.695 may request that the authority keep certain information confidential. The request must (1) clearly designate the specific information to be kept confidential; and (2) specifically describe the basis for asserting that the information is protected from disclosure under AS 40.25.120; if the person believes the information is protected as a trade secret or business proprietary information, the description must include analysis of whether the person's commercial privacy interest in protecting the information from disclosure outweighs the public interest in obtaining the information. (c) If the authority receives a public records request and determines the information requested is protected from disclosure under AS 40.25.120, the authority will not release the information except to authority personnel and contractors for purposes of evaluating the person's application. If the authority determines the information may not be protected from disclosure under AS 40.25.120, the authority will notify the person submitting the information, who is responsible at the person's own expense for seeking judicial relief or taking other action necessary to protect the material from disclosure under AS 40.25.100 - 40.25.295.
History
- Authority: Art. 1, sec 22,AS 40.25.110; AS 42.45.045 Ak ConstAS 40.25.120; AS 44.83.080
- Eff. 10/16/2009, Register 192
3 AAC 107.635 Grant Programs
3 AAC 107.635. Acceptance of applications for consideration; eligibility review. The authority will accept for consideration, for a recommendation for a grant, each application received on or before the deadline established in the request for applications. The authority will determine if the application is complete, is submitted by an eligible applicant within the meaning given in AS 42.45.045( l) and under 3 AAC 107.610, and is for a project that is eligible under AS 42.45.045(f) - (h) and 3 AAC 107.615. The authority will reject applications that fail to meet those requirements, and will notify each applicant whose application is rejected of the authority's decision.
History
- Authority: AS 42.45.045; AS 44.83.080
- Eff. 10/16/2009, Register 192
3 AAC 107.645 Grant Programs
3 AAC 107.645. Feasibility and public benefit review of grant applications. (a) For each application not rejected under 3 AAC 107.635, the authority will perform a benefit and feasibility review, in which the authority will review (1) project management, development, and operations, including whether (A) the proposed schedule is clear, realistic, and described in adequate detail; (B) the costs and savings estimates for project development, operation, maintenance, fuel, and other project items are realistic; (C) the project team's method of communicating, monitoring, and reporting development progress is described in adequate detail; and (D) logistical, business, and financial arrangements for operating and selling energy from the completed project are reasonable and described in adequate detail; (2) qualifications and experience, including whether (A) the applicant, partners, and contractors have sufficient knowledge and experience to successfully complete and operate the project; (B) the project team has staffing, time, and other resources to successfully complete and operate the project; (C) the project team is able to understand and address technical, economic, and environmental barriers to successful project completion and operation; and (D) the project uses local labor and trains a local labor workforce; (3) technical feasibility, including whether (A) the renewable energy resource is available on a sustainable basis, and project permits and other authorizations can reasonably be obtained; (B) a site is available and suitable for the proposed energy system; (C) project technical and environmental risks are reasonable; (D) the proposed energy system can reliably produce and deliver energy as planned; and (E) if a demonstration project is being proposed, (i) application in other areas of the state, or another specific benefit of the proposed project, is likely; (ii) the need for the project is shown; and (iii) the risks of the proposed system are reasonable and warrant demonstration; and (4) economic feasibility and benefits, including whether (A) the project is shown to be economically feasible; (B) the project has an adequate financing plan for completion of the grant-funded phase, and has considered options for financing subsequent phases of the project; or (C) other public benefits are demonstrated. (b) The authority will reject applications that it determines under (a) of this section not to be technically and economically feasible, or not to provide sufficient public benefit, and will notify each applicant whose application is rejected of the reasons for rejection.
History
- Authority: AS 42.45.045; AS 44.83.080
- Eff. 10/16/2009, Register 192
3 AAC 107.650 Grant Programs
3 AAC 107.650. Requests for reconsideration. (a) An applicant whose application is rejected in the eligibility review or the feasibility and public benefit review may request that the executive director of the authority reconsider the decision of the authority's staff to reject the application. The request for reconsideration must be in writing, including by electronic mail, must state the basis for reconsideration, and must be received by the authority no more than 10 days after the applicant has been provided written notice of the rejection, including notice by electronic mail. (b) The executive director may concur with the decision of staff and reject the application, request additional information from the applicant before making a decision, or require further consideration of the application under 3 AAC 107.645 or 3 AAC 107.655 if the executive director determines that the authority erred in its rejection of the application.
History
- Authority: AS 42.45.045; AS 44.83.080
- Eff. 10/16/2009, Register 192
3 AAC 107.655 Grant Programs
3 AAC 107.655. Evaluation of grant applications. (a) For each application not rejected under 3 AAC 107.645, the authority will perform an evaluation for the purpose of ranking applications and making recommendations to the legislature for grants. The evaluation criteria include (1) the extent to which the proposed project serves an area of the state in which the average cost of energy to each resident of the area exceeds the average cost to each resident of other areas of the state; the authority will give the most weight to the criterion in this paragraph; (2) the extent to which the applicant will provide matching resources for the project; the authority will give significant weight to the criterion in this paragraph; (3) the extent to which a grant to the project, considered with other recommended grants, achieves a statewide balance of grant money; the authority will give significant weight to the criterion in this paragraph; (4) the likely economic and technical feasibility of the project; as part of its evaluation under this section, the authority will consider the results of the review performed under 3 AAC 107.645; (5) the public benefits of the project, including economic benefits; as part of its evaluation under this section, the authority will consider the results of the review performed under 3 AAC 107.645; (6) the ability of the applicant to finance, operate, and maintain the project for the life of the project; (7) local support for the project; (8) the readiness of the applicant to proceed with the phases of the project proposed for a grant; (9) the applicant's previous compliance with the requirements of AS 42.45.045, 3 AAC 107.600 - 3 AAC 107.695, requests for applications, and grant agreements; and (10) other project-specific criteria as identified in the request for applications. (b) As a result of the evaluation under (a) of this section, the authority may recommend a grant in the amount requested by the applicant, decline to recommend a grant for a project, or recommend a grant in an amount or for project phases different from what the applicant requested. In recommending a grant for phases different from what the applicant requested, the authority may limit its recommendation to a grant for one or more preliminary project phases before recommending a grant for project construction.
History
- Authority: AS 42.45.045; AS 44.83.080
- Eff. 10/16/2009, Register 192
3 AAC 107.660 Grant Programs
3 AAC 107.660. Ranking of applications. (a) To establish a statewide balance of recommended projects, the authority will provide to the advisory committee established in AS 42.45.045(i) a statewide and regional ranking of all applications recommended for grants. (b) In consultation with the advisory committee established in AS 42.45.045(i), the authority will (1) make a final prioritized list of all recommended projects, giving significant weight to providing a statewide balance of grant money, and taking into consideration the amount of money that may be available, number and types of projects within each region, regional rank, and statewide rank; (2) include in the final prioritized list any changes to the recommendations made following the evaluation under 3 AAC 107.655; and (3) include in the final prioritized list a list of applications that were rejected under 3 AAC 107.635 - 3 AAC 107.645. (c) The authority will publish the final prioritized list on its website, and will provide it to the legislature in accordance with AS 42.45.045(d)(3). Award of a grant is subject to legislative appropriation.
History
- Authority: AS 42.45.045; AS 44.83.080
- Eff. 10/16/2009, Register 192
3 AAC 107.670 Grant Programs
3 AAC 107.670. Additional information from applicant or grantee. (a) As it considers necessary to perform a complete review of an application or project, and at any stage in the review, evaluation, recommendation, or award process under 3 AAC 107.600 - 3 AAC 107.695, the authority will request that an applicant or grantee provide additional information. Requests for information may include a request for information sufficient for the authority to confirm that an (1) application meets the requirements of the request for applications; or (2) applicant or grantee is willing and able to adjust the project scope and budget as required by the authority in making a recommendation or as required by the legislature in approving a grant. (b) If an applicant or grantee fails to provide timely or adequate information in response to a request from the authority, the authority may reject the application, modify the authority's recommendations to the legislature, or cancel a notice of intent to award a grant.
History
- Authority: AS 42.45.045; AS 44.83.080
- Eff. 10/16/2009, Register 192
3 AAC 107.675 Grant Programs
3 AAC 107.675. Grant agreement. (a) As a condition for a grant under AS 42.45.045 and 3 AAC 107.600 - 3 AAC 107.695, the applicant must sign a grant agreement that the authority prepares and that contains the terms and conditions of the grant, including (1) a description of the project to be financed with the grant; (2) a project schedule; the authority may make one or more disbursements of grant money conditional upon (A) completion and approval by the authority of pre-construction phases of the project; (B) the grantee demonstrating that it has site control for the project; (C) the grantee demonstrating that it has one or more permits or authorizations required for construction of the project; (D) the grantee's successful completion of other activities or objectives set under the project schedule; (3) requirements for project management; (4) a description of allowable costs; (5) requirements for the documentation of expenditures and procurements; (6) procedures for making grant payments to the grantee; (7) requirements for the grantee's accounting and reporting; (8) requirements for the grantee's maintenance and retention of project records; (9) hiring preferences applicable under AS 36.10.150 - 36.10.180 and 8 AAC 30.064 - 8 AAC 30.088 to the grantee and its agents, contractors, and subcontractors; (10) procedures for verifying the provision of the grantee's matching resources to the project; and (11) other terms and conditions that the authority determines are appropriate to ensure the public purpose of and maximize the public benefit from the grant. (b) If an applicant fails to execute the grant agreement within 30 days after receiving it from the authority, the authority may cancel a notice of intent to award the grant and may offer the grant money to another eligible applicant, subject to appropriation and approval by the legislature.
History
- Authority: AS 42.45.045; AS 44.83.080
- Eff. 10/16/2009, Register 192
3 AAC 107.680 Grant Programs
3 AAC 107.680. Grant closeout; return of unexpended grant money. Upon completion of the grant-financed or termination of the grant, the authority will close out the grant and the grantee shall return to the authority any grant money and interest on grant money not spent on project work under the terms and conditions of the grant agreement. The grant agreement may provide that specified obligations of the grantee survive grant closeout.
History
- Authority: AS 42.45.045; AS 44.83.080
- Eff. 10/16/2009, Register 192
3 AAC 107.685 Grant Programs
3 AAC 107.685. Project operations and maintenance reporting. For a project constructed with a renewable energy grant, the grantee shall provide to the authority reports on project operations and maintenance for the periods and with the information that the authority specifies in the grant agreement. The authority may require information on project operations and maintenance activities and cost, other costs of the project, energy output, estimated fuel displacement resulting from the energy output, discussion of operational issues, and other information useful to the authority for its evaluation of the project and the grant. If the grantee fails to provide information as required under this section and in the grant agreement, the authority may determine the grantee ineligible for recommendations for future renewable energy grants or ineligible for other future grants from the authority.
History
- Authority: AS 42.45.045; AS 44.83.080
- Eff. 10/16/2009, Register 192
3 AAC 107.690 Grant Programs
3 AAC 107.690. Dispute resolution. A person who has a claim concerning a grant awarded under AS 42.45.045 and 3 AAC 107.600 - 3 AAC 107.695 may submit that claim in accordance with 3 AAC 108.915 - 3 AAC 108.920.
History
- Authority: AS 42.45.045; AS 44.83.080
- Eff. 10/16/2009, Register 192
3 AAC 107.695 Grant Programs
3 AAC 107.695. Definitions for AS 42.45.045 and 3 AAC 107.600 - 3 AAC 107.695. (a) In AS 42.45.045, (1) "independent power producer" means a corporation, person, agency, authority, or other legal entity or instrumentality, that is not an electric utility and that owns or operates a facility for the generation or production of energy entirely for use by the residents of one or more municipalities or unincorporated communities recognized by the Department of Commerce, Community, and Economic Development for community revenue sharing under AS 29.60.850 - 29.60.879 and 3 AAC 180; (2) "wasteheat recovery" means systems for the recovery of unused heat from systems or processes in operation when the applicant applies for a renewable energy grant. (b) In AS 42.45.045 and 3 AAC 107.600 - 3 AAC 107.695, (1) "matching funds" or "matching resources" (A) means those resources that the grantee dedicates for the completion of the project; (B) includes (i) cash; (ii) loan proceeds; and (iii) grantee-provided equipment, labor, or other materials or services needed for the completion of the project; (2) "preliminary development phase" includes (A) feasibility studies; (B) reconnaissance studies; (C) energy resource monitoring; (D) design phases; and (E) obtaining required permits and authorizations; (3) "renewable energy resources" has the meaning given in AS 42.45.045( l). (c) In 3 AAC 107.600 - 3 AAC 107.695, unless the context requires otherwise, "grant" or "renewable energy grant" means a grant recommended or awarded under AS 42.45.045 and 3 AAC 107.600 - 3 AAC 107.695.
History
- Authority: AS 42.45.045; AS 44.83.080
- Eff. 10/16/2009, Register 192
Article 5 Emerging Energy Technology Grant Program
3 AAC 107.700 Grant Programs
3 AAC 107.700. Purpose. 3 AAC 107.700 to 3 AAC 107.799 establishes standards and procedures regarding the emerging energy technology fund program and grants under AS 42.45.375. These standards and procedures include criteria for grant applications, the evaluation of applications, the award of grants, the administration of grants, and other matters related to the emerging energy technology fund.
History
- Authority: AS 42.45.375; AS 44.83.080
- Eff. 1/26/2012, Register 201
3 AAC 107.705 Grant Programs
3 AAC 107.705. Public purpose. To advance the public purpose of promoting the expansion of energy sources available for residents of the state or to enhance the use of energy in the state, the authority may (1) in consultation with the emerging energy technology advisory committee, establish that certain types of potential projects will receive priority consideration under a solicitation for applications, subject to AS 42.45.375; the public notice for the solicitation must identify and describe any priority consideration for the review of abstracts and full proposals submitted under 3 AAC 107.700 - 3 AAC 107.799; (2) solicit, award, or fund grants in phases; recommendations for awarding and funding grants for preliminary development phases may be limited or delayed until the authority determines that subsequent phases of a project are feasible, will result in sufficient benefit to the public, or are otherwise appropriate for the grant; and (3) require a grantee to repay the grant if the grantee sells, conveys, or encumbers a project constructed with grant funds without the prior written approval of the authority.
History
- Authority: AS 42.45.375; AS 44.83.080
- Eff. 1/26/2012, Register 201
3 AAC 107.710 Grant Programs
3 AAC 107.710. Eligible grantees. (a) To be eligible for an emerging energy technology grant, an applicant must (1) be an eligible applicant under AS 42.45.375; and (2) demonstrate that the applicant will (A) own, operate, and maintain the emerging energy technology project, unless the grantee obtains the authority's consent under (b) of this section; (B) own, lease, or otherwise have adequate legal access to the site upon which the project is located; and (C) provide adequate demonstration of the technology. (b) The authority may consent to a grantee not owning an emerging energy technology project, or not retaining operation or maintenance responsibilities, if the authority determines that conditions imposed or the alternative ownership, operation, or maintenance protects the public interest in and benefit from the grant.
History
- Authority: AS 42.45.375; AS 44.83.080
- Eff. 1/26/2012, Register 201
3 AAC 107.715 Grant Programs
3 AAC 107.715. Eligible projects. A project is eligible for a grant from the emerging energy technology grant fund if the project meets (1) the requirements of AS 42.45.375(c); and (2) the definition of energy technology under AS 42.45.375(j)(2) and promotes the expansion of energy sources available for residents of the state or enhances the efficient use of energy in the state.
History
- Authority: AS 42.45.375; AS 44.83.080
- Eff. 1/26/2012, Register 201
3 AAC 107.720 Grant Programs
3 AAC 107.720. Advisory committee. The emerging energy technology fund advisory committee shall (1) advise the authority regarding solicitations for applications, including whether and how certain types of projects should receive priority consideration under a solicitation; and (2) review, advise on ranks, and make recommendations to the authority regarding the quality of abstracts and full proposals.
History
- Authority: AS 42.45.375; AS 44.83.080
- Eff. 1/26/2012, Register 201
3 AAC 107.725 Grant Programs
3 AAC 107.725. Public notice of application period; solicitation of grant applications. (a) The authority will publish public notice of the application period on the authority's website, and on the Alaska Online Public Notice System. The authority also may publish notice on or through other media outlets. (b) The notice published on the authority's website must request grant applications, and include the date, time, place, and method for delivering applications, and a description of the application requirements.
History
- Authority: AS 42.45.375; AS 44.83.080
- Eff. 1/26/2012, Register 201
3 AAC 107.730 Grant Programs
3 AAC 107.730. Grant applications. The authority under 3 AAC 107.700 - 3 AAC 107.799 will process grant applications in two steps. In step one, the authority under 3 AAC 107.735 - 3 AAC 107.745 will solicit and review abstracts, and select proposal abstracts for further evaluation. In step two, the authority under 3 AAC 107.750 - 3 AAC 107.760 will solicit a full proposal from applicants that submitted abstracts that have been selected for further evaluation. In step two, the authority will also review and evaluate full proposals to determine who will be awarded emerging energy technology grants.
History
- Authority: AS 42.45.375; AS 44.83.080
- Eff. 1/26/2012, Register 201
3 AAC 107.735 Grant Programs
3 AAC 107.735. Abstracts. (a) The request for grant applications will establish the deadline for submitting abstracts to the authority, the necessary documentation to be included with the abstract, and the format and size for the abstract and documentation. Upon request by the applicant, the executive director may accept an abstract filed after the established deadline only upon finding that extraordinary circumstances caused the delayed delivery and the delay did not give the applicant a substantive advantage. The acceptance or denial must be in writing, and may be given by electronic mail. (b) An abstract must include (1) documentation to establish that the applicant is an eligible applicant under AS 42.45.375(j)(1) and 3 AAC 107.715; (2) a summary of the proposed project, including a description of how the proposed project will (A) test emerging technologies; (B) test methods of conserving energy; (C) improve an existing energy technology; or (D) use an existing technology that has not previously been demonstrated in the state; (3) a description of how the proposed project addresses the priority considerations established by AS 42.45.375(d) and by the request for grant applications; (4) a description of how the proposed project will advance the commercialization of the energy technology not later than the next five years, and the market for purchasing energy generated by the proposed project; (5) statement of the project team's qualifications; (6) a budget for the proposed project; (7) a description of how the proposed project will collect technical and economic data for analysis; and (8) any additional information required in the request for grant applications or under 3 AAC 107.775. (c) The authority may require applicants who have previously received grants from the emerging energy technology fund for preliminary development phases or partial grants, to submit new abstracts for each solicitation for applications.
History
- Authority: AS 42.45.375; AS 44.83.080
- Eff. 1/26/2012, Register 201
3 AAC 107.740 Grant Programs
3 AAC 107.740. Eligibility review. The authority will review each timely received abstract, and determine whether the abstract is complete, is submitted by an eligible applicant, relates to an eligible project, and complies with AS 42.45.375 and 3 AAC 107.700 - 3 AAC 107.799. The authority will reject abstracts that fail to meet those requirements. The authority will provide written notice to the applicant of the rejection. The notice may be given by electronic mail.
History
- Authority: AS 42.45.375; AS 44.83.080
- Eff. 1/26/2012, Register 201
3 AAC 107.745 Grant Programs
3 AAC 107.745. Review of abstracts. (a) The authority, in consultation with the emerging energy technology fund advisory committee, will evaluate and rank abstracts not rejected under 3 AAC 107.740 based on how well the proposed project addresses the statutory priorities under AS 42.45.375, and the following criteria: (1) feasibility of the proposed technology; (2) innovation and quality of the technical explanations submitted; (3) how well the proposed project will demonstrate emerging energy technologies, test methods of conserving energy, improve an existing energy technology, or deploy an existing technology that has not previously been demonstrated in the state; (4) how well the proposed project addresses the priority considerations established for projects under the request for grant applications; (5) whether the proposed schedule is realistic; (6) whether the energy technology can be beneficial when deployed in the state; (7) how suitable the proposed project site is; (8) the extent to which existing research and development demonstrates the energy technology and the systems and components included are likely to successfully work in the proposed location and environment in the state; (9) the extent to which the proposed project will advance the commercialization of the energy technology not later than the next five years; (10) capabilities of the project team; (11) potential commercial market for the proposed technology or energy from the proposed technology; and (12) an evaluation of the finance plan and budget for the proposed project. (b) The authority may reject a proposal based upon the review under this section and AS 42.45.375. The authority will provide written notice to the applicant of the rejection. The notice may be given by electronic mail.
History
- Authority: AS 42.45.375; AS 44.83.080
- Eff. 1/26/2012, Register 201
3 AAC 107.750 Grant Programs
3 AAC 107.750. Full proposal. The authority will select applicants to submit full proposals based on ranking of abstracts and available funding. A full proposal must be submitted not later than the time specified, and include documentation in the format required in the request for full proposals. The full proposal must include (1) a description of the proposed technology, any improvements, or both of current technology; (2) a description of the commercial availability of the proposed technology; (3) a discussion of any intellectual property issues, including (A) ownership; (B) licenses; and (C) agreement for use; (4) a description of the technical components of the proposed project, including (A) key technology elements to be implemented; (B) potential hurdles and how they will be addressed; (C) phasing of the project; (D) deliverables; (E) the data acquisition and management plan; and (F) schedule; (5) the project team and any partnerships with postsecondary institutions in this state, residents of this state, associations, organizations, or manufacturers; (6) the project site, evidence that the applicant has appropriate legal access to the proposed site, and description of why the technology is appropriate for the area that the project will be located; (7) how the proposed project will be integrated in the existing energy system; (8) the potential market and commercialization plan for the proposed project or energy to be generated or transmitted by the project; (9) a complete project budget, including funding requested, the amount and source of matching funding to be provided, and proposed development, operation, and maintenance costs; (10) potential public benefits from the technology and potential for widespread deployment; (11) any regulatory issues specific to the project, the site, the proposed technology, or other matters which could impact the project or public benefits from the project; and (12) any additional information the authority decides it needs to complete its review of the application.
History
- Authority: AS 42.45.375; AS 44.83.080
- Eff. 1/26/2012, Register 201
3 AAC 107.755 Grant Programs
3 AAC 107.755. Review of full proposals. (a) The authority, in consultation with the emerging energy technology fund advisory committee, will evaluate and rank full proposals using criteria and processes established in 3 AAC 107.760, and AS 42.45.375 and award grants according to ranking of the projects and the criteria established in the solicitation. (b) The authority may ask applicants to make presentations to the authority, authority staff, and emerging energy technology fund advisory committee. During a presentation, the authority, the authority staff and emerging energy technology fund advisory committee members may ask questions concerning the application. (c) As a result of the evaluation under (a) of this section, the advisory committee may recommend the authority award or not award a grant, either in the amount requested by the applicant or a different amount. (d) The authority will determine whether to award or not award a grant. The authority may award a grant for less than the amount requested by the applicant.
History
- Authority: AS 42.45.375; AS 44.83.080
- Eff. 1/26/2012, Register 201
3 AAC 107.760 Grant Programs
3 AAC 107.760. Review criteria for full proposals. (a) The criteria for reviewing full proposals must include how well the full proposal addresses the statutory priorities at AS 42.45.375, and (1) the feasibility of the proposed technology; (2) the innovation and quality of the technical explanations submitted; (3) how well the proposed project will test emerging energy technologies, test methods of conserving energy, improve an existing energy technology, or deploy an existing technology that has not previously been demonstrated in the state; (4) how well the proposed project addresses the priority considerations established for projects under the request for grant applications; (5) how the proposed project will demonstrate the energy technology; (6) whether the proposed schedule is realistic; (7) whether the energy technology can be beneficial when deployed in the state; (8) how suitable the proposed project site is; (9) the extent to which existing research and development demonstrates the energy technology and the systems and components included are likely to successfully work in the proposed location and environment in the state; (10) the extent to which the proposed project will advance the commercialization of the energy technology not later than the next five years; (11) the capabilities of the project team; (12) the potential commercial market for the proposed technology or energy from the technology; (13) an evaluation of the finance plan and budget for the proposed project; and (14) whether all regulatory and legal issues have been adequately addressed. (b) The authority may reject a full proposal based upon the review under this section and AS 42.45.375. The authority will provide written notice to the applicant of the rejection. The notice may be given by electronic mail.
History
- Authority: AS 42.45.375; AS 44.83.080
- Eff. 1/26/2012, Register 201
3 AAC 107.765 Grant Programs
3 AAC 107.765. Reconsideration; abstracts or full proposals. (a) An applicant who believes an error was made when its abstract or full proposal was rejected or ranked may request reconsideration to the executive director of the authority. The request for reconsideration must be in writing, must state the error made during the review, and must be received by the authority no more than 10 days after the notice of rejection or ranking. (b) The executive director on reconsideration may accept or overturn the decision made during the review of the abstract or full proposal, or request additional information from the applicant before making a decision. If the executive director overturns the decision, the authority shall further consider the abstract under 3 AAC 107.740 and 3 AAC 107.745 or the full proposal under 3 AAC 107.750 - 3 AAC 107.760. The decision of the executive director on reconsideration is the final agency decision. If the executive director fails to issue a decision not later than 30 days, the request for reconsideration is denied.
History
- Authority: AS 42.45.375; AS 44.83.080
- Eff. 1/26/2012, Register 201
3 AAC 107.770 Grant Programs
3 AAC 107.770. Confidentiality of abstracts, full proposals and other materials submitted to the authority. (a) An abstract, full proposal, and other materials submitted to the authority under AS 42.45.375 and 3 AAC 107.700 - 3 AAC 107.799 are records subject to AS 40.25.100 - 40.25.295 (Alaska Public Records Act) and 2 AAC 96, and may be disclosed to the public unless the records are confidential or otherwise protected from disclosure under AS 40.25.120 or other applicable law. (b) A person submitting an abstract, full proposal, or other material under AS 42.45.375 and 3 AAC 107.700 - 3 AAC 107.799 may request that certain information be kept confidential. The request must (1) clearly designate the specific information to be kept confidential; and (2) specifically describe the basis for asserting that the information is protected from disclosure under AS 40.25.120; if the person believes the information is protected as a trade secret or business proprietary information, the description must include analysis of whether the person's commercial privacy interest in protecting the information from disclosure outweighs the public interest in obtaining the information. (c) If the authority determines the records submitted do not appear to be confidential or otherwise protected from disclosure under AS 40.25.100 - 40.25.295 (Alaska Public Records Act), the authority will notify the applicant so that the applicant may request to withdraw all or parts of the abstract or full proposal. (d) If the authority agrees that records received from a grantee appear to be confidential or otherwise protected from disclosure under AS 40.25.100 - 40.25.295 (Alaska Public Records Act), the authority will agree in the grant agreement to notify the applicant if the authority receives a public records request so that the applicant may seek judicial relief or take other action necessary to protect the records from disclosure.
History
- Authority: AS 42.45.375; AS 44.83.080
- Eff. 1/26/2012, Register 201
3 AAC 107.775 Grant Programs
3 AAC 107.775. Additional information from applicant. (a) The authority may require the applicant or grantee to provide additional information which the authority considers necessary or desirable to complete review of an abstract, a full proposal, or during project operation and maintenance reporting required under 3 AAC 107.790. The authority may require the additional information and at any stage in the review, evaluation, or award process. Required additional information may include information sufficient for the authority to confirm that (1) an application meets the requirements for abstracts and full proposals; or (2) an applicant or grantee is willing and able to adjust the project scope and budget as required by the authority in awarding a grant. (b) If an applicant or grantee fails to provide timely or adequate information required by the authority, the authority may reject the abstract or full proposal, modify the grant award, or cancel an award of a grant.
History
- Authority: AS 42.45.375; AS 44.83.080
- Eff. 1/26/2012, Register 201
3 AAC 107.780 Grant Programs
3 AAC 107.780. Grant agreement. (a) Before the authority may disburse any grant funds, the applicant must sign a grant agreement acceptable to the authority. The grant agreement must contain the terms and conditions of the grant, including (1) a description of the project; (2) a project schedule; (3) a grant fund disbursal schedule that addresses disbursement upon the grantee achieving milestones including (A) completion and approval by the authority of pre-construction phases of the project; (B) the grantee demonstrating that it has site control for the project; (C) the grantee demonstrating that it has required permits or authorizations for construction of the project; (D) the grantee demonstrating that it has obtained the required intellectual property rights or licensing for the project; and (E) the grantee's successful completion of activities or objectives set under the project schedule; (4) requirements for project management; (5) a description of allowable costs; (6) requirements for the documentation of expenditures and procurements; (7) procedures for making grant payments to the grantee; (8) requirements for the grantee's accounting and reporting; (9) requirements for the grantee's maintenance and retention of project records; (10) hiring preferences applicable under AS 36.10.150 - 36.10.180 and 8 AAC 30.064 - 30.088 to the grantee and its agents, contractors, and subcontractors; (11) procedures for verifying the provision of the grantee's matching contributions to the project; (12) requirements for providing information on project operations and maintenance activities and costs, other costs of the project, energy output, estimated fuel displacement resulting from the energy output, operational issues, and other project elements and outputs useful to the authority for its evaluation of the project and the grant; (13) the grantee's agreement to allow access to the project site and project data by a third party chosen by the authority to verify the reporting submitted by the grantee; and (14) other terms and conditions that the authority determines are appropriate to ensure the public purpose of and maximize the public benefit from the grant. (b) If an applicant fails to execute the grant agreement not later than 30 days after receiving the agreement from the authority, the authority may cancel a grant award and may offer the grant funds to another eligible applicant.
History
- Authority: AS 42.45.375; AS 44.83.080
- Eff. 1/26/2012, Register 201
3 AAC 107.785 Grant Programs
3 AAC 107.785. Grant closeout; return of unexpended grant money. Upon completion of the grant project, or termination of the grant, the authority will close out the grant and the grantee shall return to the authority any grant funds not spent on project work under the terms and conditions of the grant agreement and any earnings on grant money. The grant agreement may provide that specified obligations of the grantee survive grant closeout.
History
- Authority: AS 42.45.375; AS 44.83.080
- Eff. 1/26/2012, Register 201
3 AAC 107.790 Grant Programs
3 AAC 107.790. Reporting on project technology, operations and maintenance. The grantee must provide the authority with technical and economic data, project and budget reports, and other technology validation information appropriate to the project which the authority specifies in the grant agreement. The grantee must use data collection designs and processes to capture performance information and validate the demonstrated technology as determined by the authority. The authority may use third party agents to receive and analyze data from the grantee. If the grantee fails to cooperate in providing information and data required under this section and in the grant agreement, the authority may cancel the project, require reimbursement of grant funds, determine the grantee ineligible for future emerging energy technology fund grants or other grants from the authority, or take a combination of these actions.
History
- Authority: AS 42.45.375; AS 44.83.080
- Eff. 1/26/2012, Register 201
3 AAC 107.795 Grant Programs
3 AAC 107.795. Dispute resolution. A person who has a claim concerning a grant awarded under AS 42.45.375 and 3 AAC 107.700 - 3 AAC 107.799 may submit that claim in accordance with 3 AAC 108.915 - 108.920.
History
- Authority: AS 42.45.375; AS 44.83.080
- Eff. 1/26/2012, Register 201
3 AAC 107.799 Grant Programs
3 AAC 107.799. Definitions. (a) In 3 AAC 107.700 - 3 AAC 107.799, unless the context requires otherwise, (1) "advisory committee" means the emerging energy technology advisory committee; (2) "emerging energy technology" has the same meaning given "energy technology" in AS 42.45.375(j)(2); (3) "emerging energy technology advisory committee" means the advisory committee established under AS 42.45.375(f); (4) "emerging energy technology grant" means a grant awarded under AS 42.45.375 and 3 AAC 107.700 - 3 AAC 107.799; (5) "grant" means an emerging energy technology grant; (6) "grant funds" means amounts awarded as grants from the emerging energy technology fund under AS 42.45.375; (7) "preliminary development phase" includes (A) feasibility studies; (B) reconnaissance studies; (C) energy resource monitoring; (D) design phases; and (E) obtaining required permits and authorizations. (b) In AS 42.45.375, "matching funds" or "matching resources" means those resources that the grantee dedicates for the completion of the project; "matching funds" or "matching resources" includes (1) cash; (2) loan proceeds; and (3) grantee-provided equipment, labor, materials, or services needed for completion of the project.
History
- Authority: AS 42.45.375; AS 44.83.080
- Eff. 1/26/2012, Register 201
Article 6 General Provisions
3 AAC 107.990 Grant Programs
3 AAC 107.990. Definitions. In 3 AAC 107, unless the context requires otherwise, (1) deleted; (2) deleted; (3) "fiscal year" means the state fiscal year; (4) repealed 11/25/94; (5) deleted; (6) "authority" means the Alaska Energy Authority created under AS 44.83.020.
History
- Authority: AS 44.83.080
- Eff. 6/29/94, Register 131; am 11/25/94, Register 132; am 2/16/96, Register 137
Chapter 108 Financial and Technical Assistance for Energy Systems, Facilities, and Equipment
Article 1 Bulk Fuel Storage Facility and Power System Upgrades
3 AAC 108.100 Bulk fuel storage facility and power system upgrade assistance provided by the authority
Subject to the availability of appropriations, the authority may provide financial assistance and technical assistance, including construction management and training, to recipients eligible for bulk fuel storage facility and power system upgrade assistance.
History
- Authority: AS 44.83.080
- Eff. 3/25/2005, Register 173
3 AAC 108.110 Eligibility for and authority prioritization of assistance
(a) Utilities, municipalities, school districts, unincorporated villages, community associations, Native corporations, councils organized under 25 U.S.C. 476, traditional councils, and other persons providing power or fuel to the public in one or more communities are eligible for assistance under 3 AAC 108.100 - 3 AAC 108.130.
(b) To prioritize its assistance for bulk fuel storage facility upgrades, the authority will evaluate and rank deficiencies and needs for upgraded community bulk fuel storage facilities in each community in the state that
(1) has a population of at least 20 but less than 2,000;
(2) is not predominantly a military or industrial site;
(3) has significant bulk fuel storage needs; and
(4) is either located off an interconnected road system or, if located on an interconnected road system, is more than 20 miles from Anchorage, Fairbanks, Juneau, Kenai, Ketchikan, Kodiak, Nikiski, Sitka, Soldotna, Valdez, or another major fuel distribution center.
(c) To prioritize its assistance for power system upgrades, the authority will evaluate and rank deficiencies and needs for upgraded community power systems in each community in the state that
(1) has a population of at least 20 but less than 2,000;
(2) is not predominantly a military or industrial site;
(3) has a central community power system; and
(4) is not connected to the Railbelt (Homer-Seward-Anchorage-Fairbanks), Four Dam Pool (Glenallen-Valdez, Wrangell-Petersburg, Ketchikan, Kodiak), or Juneau power distribution systems.
(d) The authority may reevaluate and modify its evaluations and rankings based on changed assumptions or new information. The authority will publish and periodically update its rankings on its Internet web site.
(e) In providing assistance under 3 AAC 108.100 - 3 AAC 108.130, the authority will give priority to those communities found in the authority's evaluations and rankings under (b) and (c) of this section to have the greatest needs for assistance. The authority may revise its prioritization based on
(1) requirements of federal or state agencies or other entities providing money;
(2) the authority's determination of a recipient's readiness to proceed with the project;
(3) the recipient's ability to meet conditions for assistance under 3 AAC 108.120; or
(4) cost-effectiveness factors.
History
- Authority: AS 44.83.080
- Eff. 3/25/2005, Register 173
3 AAC 108.120 Conditions to receiving assistance
As a condition to providing assistance under 3 AAC 108.100 - 3 AAC 108.130, the authority will require the recipient to
(1) execute a grant agreement prepared by the authority that describes the terms and conditions of the assistance;
(2) execute a waiver of any sovereign immunity;
(3) provide a business plan or other documentation demonstrating to the satisfaction of the authority the recipient's ability to operate and maintain the facility for the public benefit for the facility's useful life and to replace the facility at the end of the facility's useful life;
(4) provide a cash match, property, services or another form of contribution to the project;
(5) establish that the recipient has title to or a leasehold interest in the site on which the facility is located; and
(6) comply with other terms and conditions that the authority determines are needed to maximize the public benefit from the assistance provided.
History
- Authority: AS 44.83.080
- Eff. 3/25/2005, Register 173
3 AAC 108.130 Phased approach to assistance
The authority may employ a phased approach to providing assistance under 3 AAC 108.100 - 3 AAC 108.130, including providing assistance for a conceptual design or other planning documents to determine whether to provide additional assistance.
History
- Authority: AS 44.83.080
- Eff. 3/25/2005, Register 173
Article 2 Circuit Rider Maintenance and Electrical Emergencies Programs
3 AAC 108.200 Purpose of circuit rider maintenance and electrical emergencies programs
(a) The purpose of the circuit rider maintenance program under 3 AAC 108.200 - 3 AAC 108.220 is to assist eligible utilities to improve the efficiency, safety, and reliability of power systems and reduce the risk and severity of emergency conditions or emergency disruptions in the operation of community power systems, by providing training, consultation, on-site assistance with maintenance and minor repairs, and other technical assistance.
(b) The purpose of electrical emergency assistance under 3 AAC 108.230 is to assist eligible utilities in responding to emergencies that affect their ability to reliably generate and transmit power, by providing financial or technical assistance in response to emergency conditions or emergency disruptions in the operation of community power systems.
History
- Authority: AS 42.45.900; AS 44.83.080
- Eff. 3/25/2005, Register 173
3 AAC 108.210 Eligibility and selection for circuit rider assistance
(a) At the beginning of each fiscal year, to prioritize its circuit rider assistance for that year, the authority will evaluate and rank deficiencies and needs for circuit rider assistance that year
(1) for a utility that serves a community in this state that
(A) has a population of at least 20 but less than 2,000;
(B) is not predominately a military or industrial site;
(C) has a central community power system;
(D) is not connected to a power distribution system identified in 3 AAC 108.110(c)(4); and
(E) is located off an interconnected road system; and
(2) so that the ranking corresponds to the ranking under 3 AAC 108.110(c) for power system upgrade assistance to the community served by the utility, with modifications to that ranking as the authority considers necessary to address
(A) The authority's assessment under 3 AAC 108.220 (b) of the utility's major needs and the authority's ability to provide assistance for those needs;
(B) the risk of catastrophic system failure;
(C) the utility's management practices and operations;
(D) the utility's maintenance practices;
(E) the utility's ability to obtain and pay for assistance from other sources; and
(F) how recently the utility received circuit rider assistance from the authority.
(b) The authority will respond to requests for circuit rider assistance from eligible utilities taking into account the prioritization under (a) of this section, the availability of appropriations, and the authority's ability to efficiently administer circuit rider assistance, including its ability to provide assistance in multiple communities during one circuit rider trip.
History
- Authority: AS 42.45.900; AS 44.83.080
- Eff. 3/25/2005, Register 173
3 AAC 108.220 Circuit rider assistance provided by the authority
Circuit rider assistance may include one or more visits to the community whose utility is selected to receive assistance or it may be limited to assistance provided telephonically or by electronic mail. The circuit rider assistance to be provided will be determined based on the authority's assessment, in consultation with the utility, of the utility's major needs and the authority's ability to provide assistance for those needs. Assistance that the authority may provide includes
(1) review of and recommendations to improve the system condition and system operations and maintenance;
(2) training utility personnel; and
(3) performing, or assisting utility personnel in their performance of, minor maintenance and repairs.
History
- Authority: AS 42.45.900; AS 44.83.080
- Eff. 3/25/2005, Register 173
3 AAC 108.230 Electrical emergency assistance provided by the authority
(a) If a utility eligible under 3 AAC 108.210 suffers an electrical emergency, the authority will, subject to the availability of appropriations, assist the utility in responding to the emergency and recovering the ability to generate and transmit power to the utility's customers in a manner that does not constitute a significant threat to life or property. Assistance may include financial assistance or technical assistance, including emergency repairs.
(b) In this section, "electrical emergency" means a condition in a utility's system that presents an imminent danger to life or likelihood of significant disruption of electrical service.
History
- Authority: AS 42.45.900; AS 44.83.080
- Eff. 3/25/2005, Register 173
3 AAC 108.240 Conditions to receiving assistance
As a condition to providing assistance under 3 AAC 108.200 - 3 AAC 108.240, the authority will require the recipient to:
(1) execute an agreement prepared by the authority that describes the terms and conditions of the assistance;
(2) execute a waiver of any sovereign immunity; and
(3) comply with other terms and conditions that the authority determines are needed to maximize the public benefit from the assistance provided.
History
- Authority: AS 42.45.900; AS 44.83.080
- Eff. 3/25/2005, Register 173
Article 3 Alternative Energy and Energy Efficiency Programs
3 AAC 108.300 Alternative energy and energy efficiency assistance provided by the authority
(a) Subject to the availability of appropriations, the authority may provide financial and technical assistance to utilities, municipalities, schools districts, unincorporated villages, community associations, Native corporations, councils organized under 25 U.S.C. 476, traditional councils, and businesses for evaluation and development of sources of energy in the state for local consumption and for evaluation, development, and installation of measures to improve the efficient utilization of energy that is consumed locally.
(b) In providing assistance under 3 AAC 108.300 - 3 AAC 108.320, the authority will give priority to those projects that show the greatest potential for reducing communities' dependence on diesel fuel for power generation.
History
- Authority: AS 44.83.080
- Eff. 3/25/2005, Register 173
3 AAC 108.310 Alternative energy and energy efficiency assistance plan
The authority will prepare, publish on its Internet web site, and periodically update a biennial plan for providing alternative energy and energy efficiency assistance under 3 AAC 108.300 - 3 AAC 108.320. In the plan the authority will include a description of available money and money the authority plans to request for alternative energy and energy efficiency assistance, the types of assistance the authority provides and plans to provide, and the criteria for allocating money that the authority uses and plans to use.
History
- Authority: AS 44.83.080
- Eff. 3/25/2005, Register 173
3 AAC 108.320 Conditions for receiving assistance
As a condition to providing assistance under 3 AAC 108.300 - 3 AAC 108.320, the authority will require the recipient to
(1) execute a grant agreement prepared by the authority that describes the terms and conditions of the assistance;
(2) execute a waiver of any sovereign immunity;
(3) provide a cash match, property, services or another form of contribution to the project; and
(4) comply with other terms and conditions that the authority determines are needed to maximize the public benefit from the assistance provided.
History
- Authority: AS 44.83.080
- Eff. 3/25/2005, Register 173
Article 4 Village Energy Efficiency Program
3 AAC 108.400 Purpose
Subject to the availability of appropriations, the authority may provide financial assistance under 3 AAC 108.400 - 3 AAC 108.499 (village energy efficiency program) to eligible applicants representing eligible communities to conduct energy audits, implement cost-saving energy efficiency improvements in public buildings and facilities, and implement conservation programs.
History
- Authority: AS 44.83.080
- Eff. 6/30/2013, Register 206
3 AAC 108.410 Eligible communities and applicants
(a) A community with a population not greater than 8,000 residents is eligible for a village energy efficiency program grant.
(b) An applicant committed to representing the interests of the entire community in developing an effective work plan and implementing energy efficiency and conservation measures to maximize cost savings from the community's use of electricity and heating energy is eligible to apply for and receive a village energy efficiency program grant. Eligible applicants may include municipalities, school districts, unincorporated villages, Native corporations, tribal consortiums recognized as nonprofit entities under 26 U.C.S. 501(c)(3), regional housing authorities, councils organized under 25 U.S.C. 476, and traditional councils.
History
- Authority: AS 44.83.080
- Eff. 6/30/2013, Register 206
3 AAC 108.420 Eligible projects
Village energy efficiency program grant money may be used for the following types of energy efficiency and conservation projects:
(1) energy efficiency audits of public buildings and facilities; not more than 30 percent of the grant money may be used for energy efficiency audits;
(2) energy efficiency improvements to public buildings and facilities, including those affecting the
(A) thermal envelope; improvements affecting the thermal envelope include installing insulation or weather sealing, and replacing windows and doors;
(B) heating, domestic hot water, air conditioning, or ventilation systems;
(C) lighting systems and controls, both indoor and outdoor; and
(D) other electrical load of the building or facility, including motors, pumps, water heaters, heat trace timers, occupancy sensors, other control equipment, exit signs, refrigeration, appliances, and other electric loads;
(3) Implementation of energy conservation measures using no more than $10,000 of the total grant award, and limited to the following activities:
(A) establishing workplace policies or programs for employees regarding the conservation of energy;
(B) designing and adopting public building and public facility energy conservation programs;
(C) conducting public education to increase community participation in conservation activities and implementation of efficiency measures.
History
- Authority: AS 44.83.080
- Eff. 6/30/2013, Register 206
3 AAC 108.430 Public notice of application period; solicitation of grant applications
(a) The authority will publish public notice of the application period on the authority's website, and on the Alaska Online Public Notice System (AS 44.62.175). The authority may also publish notice on or through other media outlets.
(b) In the public notice, the authority will request grant applications and include a description of the application requirements, including the date, time, place, and method for submitting applications to the authority.
History
- Authority: AS 44.83.080
- Eff. 6/30/2013, Register 206
3 AAC 108.440 Grant applications
(a) A grant application must include
(1) the applicant's name and type of entity:
(2) the name of the community the applicant represents;
(3) a statement from the applicant of community support for the applicant to represent the community related to the village energy efficiency program grant;
(4) a description of proposed community matching resources, and a demonstration of the ability of the applicant and community to supply those contributions; and
(5) a statement of the applicant's commitment to diligently work with other members of the community and the authority to ensure all project components are completed;
(A) to maximize cost savings from the community's use of electricity and heating energy; and
(B) in a timely, efficient and cost effective manner, including providing regularly required reports to the authority.
(b) A grant application may include a statement of the applicant's intended purposes for the grant, to the extent known, including identification of
(1) the public buildings and facilities that may become a subject of a grant project;
(2) energy conservation programs that may become a subject of a grant project; and
(3) other energy, energy efficiency, or energy conservation programs, or other community activities that the applicant believes would promote cost efficiencies if done in conjunction with a village energy efficiency program grant.
(c) If requested by the authority, an eligible applicant must provide additional information to enable the authority to evaluate the application. Required additional information may include community information regarding energy cost and demand, prior financial assistance for energy efficiency or conservation efforts, and other pertinent information.
History
- Authority: AS 44.83.080
- Eff. 6/30/2013, Register 206
3 AAC 108.450 Evaluation of grant applications
(a) The authority will evaluate and rank grant applications, with priority given to applications representing eligible communities based upon each of the following criteria:
(1) the cost of electricity and heating energy in the community;
(2) the demand for energy in the community due to climate;
(3) whether or how recently financial assistance from state or federal agencies has been provided to implement end-use energy efficiency measures in public buildings and facilities in the eligible community;
(4) the amount of community matching resources offered to support the grant project;
(5) whether cost efficiencies may be achieved by awarding and implementing a village energy efficiency program grant in conjunction with another energy, energy efficiency, or energy conservation program, or in conjunction with the timing of other community activities, such as replacement schedules for large pieces of community equipment;
(6) the equitable geographic- and population-based distribution of village energy efficiency program grants, evaluated based upon the distribution of grants over the prior five years;
(7) the administrative capability of the applicant, including past performance on any previous grant awards.
(b) If more than one eligible applicant representing an eligible community submits an application to receive a village energy efficiency program grant, the authority will award not more than one grant with respect to the community. To evaluate the multiple applications with respect to the community, the authority may meet with the eligible applicants and with other members of the community. Nothing in this subsection precludes competing eligible applicants and the community from agreeing to cooperatively develop and implement a grant project.
(c) The authority, before approving an application between competing eligible applicants, will consider factors relevant to achieving the purposes of the grant, including the
(1) ability of each applicant to represent the interests of the whole community to develop an effective work plan and implement energy efficiency and conservation measures to maximize cost savings from the community's use of electricity and heating energy;
(2) views of members of the community respecting the competing applications;
(3) ability of each eligible applicant to manage its debt and other finances; and
(4) administrative capability of each eligible applicant, including past performance on any previous grant awards.
History
- Authority: AS 44.83.080
- Eff. 6/30/2013, Register 206
3 AAC 108.460 Grant agreement
(a) Before the authority will disburse any grant money, the applicant must sign a grant agreement containing the terms and conditions of the grant. A grant agreement must contain the terms and conditions of the grant, including
(1) the identity of the community the applicant represents;
(2) a statement whether the project will include an energy audit;
(3) a project work-plan, approved by the authority, that includes
(A) a description of the project, including the energy efficiency improvements to be made to specified public buildings and facilities, and any energy conservation measures to be implemented;
(B) activities to coordinate project planning with members of the community;
(C) a project schedule;
(D) a project completion deadline; the deadline must be approximately three years from the date of the first disbursement of grant money;
(E) a complete project budget from all funding sources, including community matching resources;
(F) identification of allowable project costs;
(G) a statement whether the authority will procure a third-party service provider to perform the project work and meet reporting requirements, or whether the grantee will administer the project; and
(H) reporting requirements for technical and economic data, project and budget reports, and actual energy use data;
(4) identification of community matching resources and procedures for verifying those contributions;
(5) requirements for the documentation of expenditures and procurements;
(6) requirements for the grantee's maintenance and retention of project records;
(7) a waiver of sovereign immunity from suit for claims related to the grant award, on a form approved by the Department of Law; and
(8) other terms and conditions that the authority determines are appropriate to ensure the public purpose of, and maximize the public benefit from, the grant.
(b) The authority will require an energy audit be conducted before approving a project work plan under (a)(3) of this section unless
(1) within the prior three years, an American Society of Heating, Refrigerating and Air-Conditioning Engineers Level II or higher energy audit has been conducted on the public buildings and facilities in the eligible community;
(2) the applicant is proposing to implement a street light retrofit or another specific energy measure that would not require an audit to determine estimated savings;
(3) the authority determines that other special circumstances related to the proposed grant project exist so that conducting an energy audit is not necessary to promote the purposes of the village energy efficiency program.
(c) When the grant project includes an energy audit, the project work plan under (a)(3) of this section may be initially limited to activities, schedules, and budget regarding the energy audit. The process for conducting the energy audit will be used to develop the project work plan. The authority will not disburse additional grant money until the grant agreement is amended to incorporate a work plan, approved by the authority, for implementing the remainder of the grant project.
(d) The authority may meet with the applicant and with other members of the community before signing the grant agreement to help ensure that terms and conditions of the grant meet the interests of the community.
History
- Authority: AS 44.83.080
- Eff. 6/30/2013, Register 206
3 AAC 108.470 Project implementation
(a) The village energy efficiency program projects will generally be administered by the authority. Except as provided in (b) of this section, after approving the grant application, the authority will contract with third-party service providers to implement the grant project.
(b) The authority may allow the grantee, upon request, to implement the grant project if the authority determines the grantee has previously successfully managed and reported on projects of comparable size and complexity, and demonstrates current capacity to successfully manage and report on the grant project.
(c) The grantee or the third-party service provider that is implementing the grant project shall be responsible for
(1) coordinating project planning with the grantee and members of the community, including assisting with the determination of the most cost-effective energy efficiency and conservation measures to implement;
(2) if included in the grant project, conducting an energy audit for the community;
(3) implementing energy efficiency upgrades, including contracting and installation;
(4) project administration; and
(5) reporting to the authority; reporting may include technical and economic data, project and budget reports and actual energy use data.
(d) Nothing in 3 AAC 108.400 - 3 AAC 108.499 prohibits a grantee or third-party service provider implementing a grant project in a community from offering to provide similar services to persons within the community for buildings and facilities that are not included in the grant project or do not qualify for the program, such as buildings used by private organizations or businesses. The grantee or third-party service provider may not use grant money for their time or materials related to these non-grant efforts, but may offer to provide cost efficiencies that arise from implementing a grant project.
History
- Authority: AS 44.83.080
- Eff. 6/30/2013, Register 206
3 AAC 108.480 Grant closeout
Upon completion of the grant project, or termination of the grant, the authority will close out the grant and the grantee shall return to the authority any grant money not spent on project work under the terms and conditions of the grant agreement.
History
- Authority: AS 44.83.080
- Eff. 6/30/2013, Register 206
3 AAC 108.490 Reconsideration
(a) An applicant whose grant application is denied may request reconsideration to the executive director of the authority. The request for reconsideration must be in writing, must state the basis for reconsideration, and must be received by the authority not more than 10 days after denial.
(b) The executive director on reconsideration may accept or overturn the decision to deny the grant application, or request additional information from the applicant before making a decision. The decision of the executive director on reconsideration is the final agency decision. If the executive director fails to issue a decision within 30 days, the request for reconsideration is considered denied, unless the executive director extends the time for reconsideration
History
- Authority: AS 44.83.080
- Eff. 6/30/2013, Register 206
3 AAC 108.499 Definitions
In 3 AAC 108.400 - 3 AAC 108.499, unless the context requires otherwise,
(1) "American Society of Heating, Refrigerating and Air-Conditioning Engineers Level II or higher energy audit" means an energy audit that complies with guidance provided by the American Society of Heating, Refrigerating and Air-Conditioning Engineers in the publication Procedures for Commercial Building Energy Audits, Second Edition (2011), adopted by reference, for a Level II or higher energy audit;
(2) "community" means a municipality or unincorporated village in which 25 or more individuals reside as a social unit;
(3) "end-use energy efficiency measure"
(A) means an improvement made to a building or facility that incorporates a technology or building practice that improves the energy efficiency of that building or facility;
(B) includes lighting retrofits, increased insulation, weather stripping, and automated controls;
(C) does not include behavior change programs or other conservation measures;
(4) "grant" or "village energy efficiency program grant" means a grant awarded under 3 AAC 108.400 - 3 AAC 108.499;
(5) "grant money" means amounts awarded as grants under the village energy efficiency program;
(6) "matching funds" or "matching resources"
(A) means those resources that the grantee dedicates for the completion of the project;
(B) includes
(i) cash;
(ii) loan proceeds; and
(iii) grantee-provided and documented equipment, labor, or other materials or services needed for the completion of the project;
(7) "public building and facility" means a building or other infrastructure that consumes electricity or heating energy, is open to the general public, and is used by the community; in this paragraph, "other infrastructure" includes water systems and street or community outdoor lighting.
History
- Authority: AS 44.83.080
- Eff. 6/30/2013, Register 206
Article 5 Commercial Building Energy Audit Program
3 AAC 108.500 Purpose
Subject to the availability of appropriations, the authority may provide financial assistance under 3 AAC 108.500 - 3 AAC 108.590 (commercial building energy audit program) to reimburse the owners of commercial buildings in the state for the cost of energy audits of their commercial buildings.
History
- Authority: AS 44.83.080
- Eff. 9/25/2013, Register 207
3 AAC 108.510 Eligible applicants
Any non-public owner of a commercial building located in the state may apply for and receive a grant for reimbursement of up to the full cost of a commercial energy audit under 3 AAC 108.500 - 3 AAC 108.590. An eligible applicant may operate the applicant's commercial building on either a for-profit or non-profit basis.
History
- Authority: AS 44.83.080
- Eff. 9/25/2013, Register 207
3 AAC 108.520 Eligible energy audit
A commercial building energy audit program grant may be awarded to an eligible applicant for up to the total cost of a commercial building energy audit that
(1) meets or exceeds the standards of an American Society of Heating, Refrigerating and Air-Conditioning Engineers Level II or higher energy audit; and
(2) is administered by an Association of Energy Engineers certified energy auditor or certified energy manager, or authority-approved equivalent.
History
- Authority: AS 44.83.080
- Eff. 9/25/2013, Register 207
3 AAC 108.525 Grant amount
(a) The amount of an approved grant will be determined under the schedule in this subsection based on the square feet of building size and whether the building has heating only or has heating, ventilation, and air conditioning, with adjustments the authority makes under (b) of this section:
Square feetBuilding
with heating
onlyBuildings with heating,
ventilation, and air
conditioningNot more than 2,500$1,800$2,100Not more than 5,000$1,950$2,325Not more than 10,000$2,300$2,750Not more than 15,000$2,650$3,175Not more than 20,000$3,000$3,600Not more than 30,000$3,700$4,450Not more than 40,000$4,400$5,300Not more than 50,000$5,100$6,150More than 50,000$5,800$7,000
(b) The authority may adjust as follows the grant amount determined under the schedule in (a) of this section:
(1) the actual amount of any grant may not exceed the actual cost of the energy audit;
(2) the amount of a grant may be increased to include reimbursement of up to the actual cost of travel required to complete the energy audit if an Association of Energy Engineers certified energy auditor or certified energy manager, or authority-approved equivalent, is not available within 100 miles by road or the Alaska marine highway system of the applicant's commercial building;
(3) the amount of a grant may be decreased based upon the level of program funding available.
History
- Authority: AS 44.83.080
- Eff. 9/25/2013, Register 207
3 AAC 108.530 Public notice of application period; solicitation of applications
(a) The authority will publish public notice of the application period on the authority's website, and on the Alaska Online Public Notice System (AS 44.62.175). The authority may also publish notice on or through other media.
(b) In the public notice, the authority will request applications and include a description of the application requirements, including the date, time, place, and method for submitting applications to the authority.
History
- Authority: AS 44.83.080
- Eff. 9/25/2013, Register 207
3 AAC 108.540 Grant application
The authority will require the applicant to provide the following documents and information regarding the commercial building:
(1) proof of private ownership and site control;
(2) utility bills for the prior 12 months' energy use, or self-reported statements certified by the applicant if utility bills are not available;
(3) building location and size;
(4) building type as described in 3 AAC 108.550(c);
(5) a statement of commitment to implementing some or all efficiency and conservation measures that are recommended by the energy audit and that are determined economic by the applicant.
History
- Authority: AS 44.83.080
- Eff. 9/25/2013, Register 207
3 AAC 108.550 Grant evaluation
(a) The authority will evaluate and rank grant applications, with priority for funding based upon each of the following criteria:
(1) whether the applicant and commercial building meet the eligibility requirements;
(2) the annual energy use intensity of the commercial building, as described in (c) of this section;
(3) geographical distribution of grants;
(4) whether cost savings and efficiencies may be obtained if the energy audit is conducted in conjunction with another state program because the commercial building is located in a community where one or more Association of Energy Engineers certified energy auditors or certified energy managers or authority-approved equivalents will travel under 3 AAC 108.400 - 3 AAC 108.499 (village energy efficiency program) or another state program.
(b) To the extent applicants are evenly ranked under (a) of this section, grants will be awarded on a first-come, first-served basis.
(c) The authority will determine a commercial building's annual energy use intensity by evaluating the amount of energy used by a building on a per square foot basis. The authority will give priority to an applicant whose commercial building uses more energy per square foot compared to commercial buildings of other applicants within the same category of building type. The authority will classify a commercial building into one of the following five categories of building type, with each individual building type defined as set out in the building type definitions section of the Commercial Building Energy Consumption Survey:
(1) food sales, food service, and inpatient healthcare;
(2) lodging, public assembly, outpatient healthcare, and office;
(3) mercantile, service, and education;
(4) religious worship, and warehouse and storage;
(5) other.
History
- Authority: AS 44.83.080
- Eff. 9/25/2013, Register 207
3 AAC 108.560 Grant award and notice to proceed
The authority will send a notice to proceed after an applicant has been selected for a grant.
History
- Authority: AS 44.83.080
- Eff. 9/25/2013, Register 207
3 AAC 108.570 Project implementation
The grant recipient is responsible for each of the following project activities after receiving a notice to proceed:
(1) hiring an energy auditor and notifying the authority of the name and estimated date of the energy audit;
(2) being present for the energy audit;
(3) providing utility bill data and building use information;
(4) ensuring completion of the energy audit in a reasonable amount of time;
(5) paying the energy auditor after acceptance of the auditor's invoice;
(6) ensuring that the auditor submits by electronic mail the audit report and energy use data directly to the authority program manager;
(7) rating the service of the energy auditor, and submitting the rating to the authority;
(8) submitting a request for grant reimbursement with a copy of the invoice paid and any other documentation the authority determines necessary.
History
- Authority: AS 44.83.080
- Eff. 9/25/2013, Register 207
3 AAC 108.580 Reconsideration
(a) An applicant whose application is denied may request reconsideration to the executive director of the authority. The request for reconsideration must be in writing, must state the basis for reconsideration, and must be received by the authority not more than 10 days after denial.
(b) The executive director on reconsideration may accept or overturn the decision to deny the application, or request additional information from the applicant before making a decision. The decision of the executive director on reconsideration is the final agency decision. If the executive director fails to issue a decision within 30 days, the request for reconsideration is considered denied, unless the executive director extends the time for reconsideration.
History
- Authority: AS 44.83.080
- Eff. 9/25/2013, Register 207
3 AAC 108.590 Definitions
In 3 AAC 108.500 - 3 AAC 108.590, unless the context requires otherwise,
(1) "American Society of Heating, Refrigerating and Air-Conditioning Engineers Level II or higher energy audit" means an energy audit that complies with guidance provided by the American Society of Heating, Refrigerating and Air-Conditioning Engineers in the publication Procedures for Commercial Building Energy Audits, Second Edition (2011), adopted by reference, for a Level II or higher energy audit;
(2) "Association of Energy Engineers certified energy auditor or certified energy manager" means an individual with the Certified Energy Auditor (CEA) or Certified Energy Manager (CEM) certification offered through the Association of Energy Engineers;
(3) "building type definitions section of the Commercial Building Energy Consumption Survey" means the section designated "Building Type Definitions" in the United States Department of Energy, Energy Information Administration's Commercial Building Energy Consumption Survey, revised as of 2003; the building type definitions section of the Commercial Building Energy Consumption Survey is adopted by reference;
(4) "commercial building" means a building that is
(A) located in the state;
(B) privately owned, including a building owned by a non-profit organization; and
(C) used for commercial purposes, including office buildings, restaurants, grocery stores, warehouses, retail, medical offices, hospitals, hotels, lodges, places of worship, and buildings used for industrial, manufacturing, or other similar commercial uses;
(5) "grant" or "commercial building energy audit grant" means a grant awarded under 3 AAC 108.500 - 3 AAC 108.590.
History
- Authority: AS 44.83.080
- Eff. 9/25/2013, Register 207
Article 6 General Provisions
3 AAC 108.900 Notice of availability of assistance and status of programs
The authority will publish and periodically update on its Internet web site information on
(1) solicitations for proposals, procedures for developing proposals and requesting assistance under this chapter, and criteria that the authority uses to select recipients of assistance;
(2) available money for assistance under this chapter and allocation of available money to projects;
(3) the status of rural power system upgrades, bulk fuel storage facility upgrades, alternative energy projects, and energy efficiency projects under this chapter; and
(4) changes to programs for providing assistance under this chapter considered or proposed by the authority.
History
- Authority: AS 42.45.900; AS 44.83.080
- Eff. 3/25/2005, Register 173
3 AAC 108.910 Protests
(a) In accordance with this section, and except as otherwise provided by statute or required as a condition of assistance received by the authority under 3 AAC 105.020, an interested party may protest the authority's award of a contract, the authority's proposed award of a contract, or a solicitation by the authority for supplies, services, professional services, or construction.
(b) The protest must be submitted to the authority's procurement officer in writing, and must include
(1) the name, address, and telephone number of the protester;
(2) the signature of the protester or the protester's representative;
(3) identification of the solicitation at issue;
(4) a detailed statement of the legal and factual grounds for the protest, including copies of relevant documents; and
(5) a statement of the remedy requested; in a protest of a procurement action, the protester is limited to remedies that would apply in a protest under AS 36.30.
(c) A protest based on alleged improprieties in a bid or solicitation must be received by the authority at least 10 days before the due date of the bid or proposal. A protest based on alleged improprieties in an award of a contract or a proposed award of a contract must be filed within 10 days after the procurement officer issues a notice of intent to award the contract. For good cause shown, the authority may change a deadline set in this subsection or accept a late filed protest.
(d) Upon receiving a protest, the authority will provide notice of the protest to other interested persons.
(e) The authority's procurement officer shall issue a written decision on a procurement protest within 15 days after receipt of all relevant information from the protester and the authority, unless the executive director extends the time for decision for good cause shown.
History
- Authority: AS 42.45.045; AS 44.83.080
- Eff. 5/12/2005, Register 174; am 10/16/2009, Register 192
3 AAC 108.915 Contract and grant claims
(a) In accordance with this section, and except as otherwise provided by statute or required as a condition of assistance received by the authority under 3 AAC 105.020, a person who has a claim against the authority under a contract or grant agreement with the authority may submit that claim to the authority.
(b) The claim must be submitted to the procurement officer in writing, and must include
(1) the name, address, and telephone number of the claimant;
(2) the signature of the claimant or the claimant's representative;
(3) identification of the contract or grant at issue;
(4) a detailed statement of the legal and factual grounds for the claim, including copies of relevant documents; and
(5) a statement of the remedy requested.
(c) A claim under a contract or grant must be received by the authority within 30 days after the claimant becomes aware of the basis of the claim or should have known of the basis of the claim, except that the information required in (b)(4) and (5) of this section and any other relevant information must be received by the authority within 60 days after the claimant submits the claim. For good cause shown, the authority may change a deadline set in this subsection or accept a late filed protest.
(d) Upon receiving a claim, the authority will provide notice of the claim to other interested persons.
(e) The authority's procurement officer shall issue a written decision on a claim within 90 days after receipt of all relevant information from the claimant and the authority, unless the executive director extends the time for decision for good cause shown.
History
- Authority: AS 42.45.045; AS 44.83.080
- Eff. 10/16/2009, Register 192
3 AAC 108.920 Appeals
(a) A protester who is dissatisfied with a decision of the procurement officer under 3 AAC 108.910, a claimant who is dissatisfied with a decision of the procurement officer under 3 AAC 108.915, or a protester dissatisfied with other action of the authority, may appeal the decision to the board of directors of the authority or, if the board of directors has authorized the executive director to make the final decision of the authority, to the executive director. A protester or claimant must submit an appeal within 10 days after receiving the decision to be appealed.
(b) Upon receiving an appeal under (a) of this section, the executive director shall review the protest or claim, relevant information from agency staff, including any decision of the procurement officer and other relevant information, and shall
(1) prepare a final decision or a recommended decision for consideration by the board of directors of the authority;
(2) conduct a hearing and prepare a final decision or recommended decision for consideration by the board of directors of the authority;
(3) designate a hearing officer to conduct a hearing and prepare a recommended decision for consideration by the executive director or the board of directors of the authority; or
(4) refer the matter to a mediator or arbitrator for resolution, subject to approval of the resolution by the executive director or the board of directors of the authority.
(c) The board of directors of the authority will adopt a recommended decision prepared under (b) of this section, adopt the recommended decision with modifications, reject the recommended decision, or return the recommended decision to the executive director or hearing officer for additional findings.
(d) In conducting a hearing under this section, the hearing officer or executive director may
(1) hold prehearing conferences to settle, simplify, or identify the issues in a proceeding, or to consider other matters that may aid in the expeditious disposition of the proceeding;
(2) require parties to state their positions concerning the various issues in the proceeding;
(3) require parties to produce for examination those relevant witnesses and documents under their control;
(4) rule on motions and other procedural matters;
(5) regulate the course of the hearing and conduct of the participants;
(6) establish time limits for submission of motions or memoranda;
(7) impose appropriate sanctions against a person who fails to obey an order relating to the hearing procedures, including
(A) prohibiting the person from asserting or opposing designated claims or defenses or introducing designated matters into evidence;
(B) excluding all testimony of an unresponsive or evasive witness; and
(C) excluding a person from further participation in the hearing;
(8) take official notice of a material fact not appearing in evidence, if the fact among the traditional matters subject to judicial notice; and
(9) administer oaths or affirmations.
(e) The board of directors of the authority may delegate to the executive director authority to make the final decision regarding protests of procurement actions, claims under contracts or grants, and protests of other actions of the authority, and contract claims, as the board determines is appropriate.
(f) A decision by the board of directors of the authority, or by the executive director on matters delegated to the executive director, is a final decision for purposes of judicial review.
History
- Authority: AS 42.45.045; AS 44.83.080
- Eff. 10/16/2009, Register 192
3 AAC 108.990 Definitions
In this chapter, unless the context requires otherwise,
(1) "alternative energy"
(a) means energy or fuel that is used for production of electricity, heat, or mechanical power, and that is derived from renewable or local sources other than liquid petroleum; and
(b) includes
(i) wind, solar, geothermal, hydroelectric, and biomass power sources; and
(ii) local sources of coal and natural gas;
(2) "bulk fuel storage facility" means tanks and appurtenant facilities and equipment, including pipelines and headers, for the storage and distribution of fuel for local consumption or power generation;
(3) "construction" means planning for, designing, preparing the site for, building, altering, testing, or improving the facility or equipment being upgraded;
(4) "energy efficiency" means improvement of energy generation from, transmission by, or utilization at existing facilities in the state; "energy efficiency" includes facility insulation, energy-efficient lighting, improved efficiency in diesel generation of power, and co-generation of electricity, heat or mechanical power;
(5) "native corporation" means a regional or village corporation established under 43 U.S.C. 1601 - 1629h (Alaska Native Claims Settlement Act);
(6) "power project" or "power system" has the meaning given "power project" in AS 44.83.990;
(7) "upgrade" means construction, renovation, repair, replacement, or other improvements to a facility or equipment; "upgrade" includes taking out of service facilities or equipment replaced or rendered obsolete by the improvements to the facility or equipment.
History
- Authority: AS 42.45.900; AS 44.83.080
- Eff. 3/25/2005, Register 173
Chapter 109 Procurement for Alaska Energy Authority Managed Grants
Article 1 Roles and Responsibilities
3 AAC 109.010 Applicability
(a) This chapter applies to procurement for construction, supplies, services, and professional services for a project conducted by the authority in managing a grant on behalf of a grantee. This chapter applies only to procurements exempt from AS 36.30 (State Procurement Code) under AS 36.30.850(b)(1).
(b) This chapter applies only to procurements initiated on or after July 10, 2015.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.020 General standards for procurements on behalf of a grantee
This chapter sets out procedures for the authority to conduct procurements on behalf of grantees in a manner that
(1) provides for the needs of the grantee;
(2) is efficient, cost-effective, and consistent; and
(3) is justifiable to potential bidders, offerors, and contractors.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.030 Roles and responsibilities
(a) The executive director is vested with and may exercise all of the rights, powers, and duties that relate to the management of construction, supplies, services, and professional services procured under this chapter by the authority on behalf of a grantee.
(b) The executive director may delegate to other qualified employees of the authority any right, power, or duty described in (a) of this section, except that the executive director shall retain the right, power, and duty to consider appeals of protests under 3 AAC 109.570.
(c) The executive director in exercising any right, power, or duty described in (a) of this section shall
(1) appoint a chief procurement officer for the authority for procurements under this chapter; and.
(2) take actions necessary to resolve any protest appeal under 3 AAC 109.570 or any appeal of a contract claim under 3 AAC 109.590.
(d) Subject to a delegation of the authority from the executive director under this chapter, the chief procurement officer of the authority shall
(1) procure or supervise the procurement of all supplies, services, construction, and professional services;
(2) prescribe the time, manner, and form of making requisitions for supplies and services;
(3) prescribe standard forms for solicitation documents and contracts;
(4) take actions necessary to provide a recommendation to the executive director on a protest appeal under 3 AAC 109.570; and
(5) provide for other matters that may be necessary to carry out this chapter.
(e) An employee of the authority may exercise a delegated power only in accordance with the delegation and this chapter. The delegation must be in writing and may be revoked at any time, with or without cause, by the executive director.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.040 Applicability of other terms and conditions
Nothing in this chapter prevents the authority from complying with the terms and conditions of a grant, gift, bequest, cooperative agreement, or federal assistance agreement.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
Article 2 Source Selection General Requirements
3 AAC 109.060 Nondiscrimination in source selection
Source selection and contract awards may not be based on discrimination because of race, religion, color, national origin, sex, age, marital status, pregnancy, parenthood, disability, or political affiliation.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.070 Exclusion of prospective contractor from competition
(a) A procurement officer may issue a competitive solicitation that prohibits an individual or contractor from submitting a bid or proposal if
(1) the procurement officer makes a determination that the contractor or individual assisted in drafting the invitation to bid or request for proposal and gained substantial information regarding the invitation to bid or request for proposal that is not available to other bidders or offerors;
(2) the contractor or individual is listed on any state or federal list of debarred contractors;
(3) the contractor or individual has headquarters in a country listed in Tier 3 of the most recent Trafficking in Persons Report published by the United States Secretary of State under 22 U.S.C. 7107(b)(1)(C);
(4) the contractor or individual would only act as a broker in supplying the goods or services and not add value to the transaction; or;
(5) award to a specific contractor or individual could create a conflict of interest that would compromise the objectivity or purposes of the contract.
(b) If an excluded contractor or individual submits a bid or proposal, the procurement officer shall reject the bid or proposal as nonresponsive.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.080 Lists of contractors
For the purpose of providing notice for competitive bids and proposals, the chief procurement officer may establish and maintain contact information for contractors who have expressed an interest in doing business with the authority.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.090 Specifications
(a) The purpose of a specification is to serve as a basis for obtaining, in an efficient, cost-effective, and consistent manner, a supply, service, or construction item suitable for the needs of the grantee.
(b) The chief procurement officer shall monitor the content and use of specifications for supplies, services, professional services, and construction required under this chapter.
(c) The chief procurement officer may obtain expert advice and assistance in the development of specifications and establish operational procedures governing the testing and trial use of equipment, materials, and other supplies by the authority, and the application of resulting information and data to specifications or procurements.
(d) Specifications must promote overall economy for the purposes intended, encourage competition in satisfying the needs of the grantee, and to the extent practicable, emphasize functional or performance criteria necessary to meet the needs of the grantee and may not be unduly restrictive. The requirements of this subsection regarding the purposes and nonrestrictiveness of specifications apply to all specifications, including those prepared by architects, engineers, designers, and other professionals.
(e) Except for small procurements under 3 AAC 109.460, a specification that limits the procurement of items to a single manufacturer's name or catalog number may be used only if the procurement officer determines in writing that only the identified brand name item or items will satisfy the needs of the grantee.
(f) The procurement officer may use brand name or equal specifications for the purpose of identifying the performance and functional requirements of a commodity.
(g) The procurement officer shall procure standard commercial products if practicable. Under the direction of the chief procurement officer, the authority may develop and maintain a list of standard commercial products.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.100 Contract terms and conditions
(a) The chief procurement officer may determine the contractual provisions, terms, and conditions of solicitations and contracts, if the provisions, terms, and conditions are not contrary to statutory or regulatory requirements or the federal funding source governing the procurement.
(b) The chief procurement officer shall develop and maintain standard contract terms subject to review and approval as to form by the attorney general. Modification of these standard terms is subject to review and approval as to form by the attorney general.
(c) Contractual terms and conditions may not have the effect of unnecessarily limiting competition or exclusively requiring a proprietary supply, service, or construction item resulting in procurement from a single source unless no other requirement will suffice.
(d) The standard contract terms will be included or referenced in all invitations to bid under 3 AAC 109.220 and requests for proposals under 3 AAC 109.350.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.110 Construction project delivery methods
(a) One or more of the following project delivery methods may be used for procurements related to design; construction, routine repair, maintenance, management, or operations for projects or facilities of the grantee:
(1) design-bid-build;
(2) construction management;
(3) construction management with the general contractor at risk;
(4) design-build;
(5) design-build-operate-maintain;
(6) design-build-finance-operate;
(7) any variation of the methods described in (1) - (6) of this subsection.
(b) Participation in a report or study that is subsequently used in the preparation of design requirements for a construction project does not automatically disqualify a firm from participating as a member of a proposing team offering proposals under any of the project delivery methods described in (a) of this section, unless the procurement officer determines that participation by the firm in the report or study provided that firm with a substantial competitive advantage.
(c) Subject to the review and approval of the chief procurement officer, a construction procurement may be solicited by an invitation to bid under 3 AAC 109.220, a request for proposals under 3 AAC 109.350, multi-step bids or proposals under 3 AAC 109.160, or another procurement method under 3 AAC 109.450 - 3 AAC 109.500.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.120 Multiple awards
(a) The procurement officer may issue a solicitation with the intent to make multiple awards if award to two or more bidders or offerors of similar products or services is necessary for adequate delivery, service, or product compatibility. A multiple award shall be made in accordance with 3 AAC 109.210 - 3 AAC 109.330 (competitive sealed bidding), 3 AAC 109.340 - 3 AAC 109.440 (competitive sealed proposals), or 3 AAC 109.460 (small procurements), as applicable.
(b) If the intent of the solicitation is to establish multiple indefinite-delivery or indefinite-quantity term contracts, the contract period, including optional renewals and the process for selection and award of work orders or purchase orders, must be included in the original solicitation and subsequent contract award.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.130 Bid, payment, and performance bonds
(a) Bid bonds or bid security in the amount of at least five percent of the bid price.
(1) must be submitted with all invitations to bid for construction projects estimated to cost over $100,000; and
(2) if needed for the protection of the grantee or authority as determined by the procurement officer, may be required in invitations to bid for contracts for supplies, services, or professional services.
(b) Payment and performance bonds, or other acceptable security approved by the chief procurement officer,
(1) shall be required for all construction contracts over $100,000; and
(2) if needed for the protection of the grantee or authority as determined by the procurement officer, may be required for other contracts.
(c) Any bid, payment, or performance bonding requirements must
(1) be set out in the solicitation; and
(2) identify the acceptability of alternative forms of security that may be substituted for the required bond, subject to approval of the chief procurement officer.
(d) If the invitation to bid requires security, the procurement officer shall reject a bid that does not comply with the bid security requirement unless the officer determines that the bid fails to comply in a nonsubstantial manner with the security requirements.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.150 Public notice of competitive sealed bids and competitive sealed proposals
(a) The procurement officer shall provide public notice of a competitive sealed bid or a competitive sealed proposal at least 21 days before the date for the opening of bids or proposals.
(b) If the procurement officer determines in writing that a shorter notice period is advantageous or required for a particular project and adequate competition is anticipated, the 21-day period may be shortened.
(c) Notice shall be posted on the Alaska Online Public Notice System and the authority's website. When practicable, notice may also include
(1) publication in a newspaper calculated to reach prospective bidders;
(2) posting in public places within the area where the work is to be performed or the material furnished;
(3) communicating in other appropriate media, including posting in electronic media;
(4) notifying bidders or offerors who have expressed an interest in previous solicitations of the authority;
(5) electronically notifying prospective contractors on the appropriate list maintained by the authority under 3 AAC 109.080.
(d) Nothing in this section limits use of additional methods of public notice in order to reach prospective contractors.
(e) The procurement officer shall provide notice of an invitation to bid or request for proposals to a prospective contractor upon request.
(f) The procurement officer may require payment of duplication costs or a cash deposit for supplying the invitation to bid.
(g) Failure to comply with the notice requirements of this section does not invalidate a solicitation or the award of a contract.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.160 Multi-step solicitations
When it is considered impractical to initially prepare a definitive purchase description to support an award based on price or other definitive criteria, the procurement officer may issue an invitation to bid, request for information, or request for proposals seeking the submission of technical information or data to be followed by an invitation to bid or request for proposals limited to
(1) the bidders or offerors whose offers are determined to be technically qualified; or
(2) a short list of bidders or offerors who are determined to be best qualified under the criteria set out in the first step of the solicitation.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.170 Amendments or extensions to a solicitation
(a) Before the opening of bids or proposals, a solicitation may be amended, or time for opening may be extended, upon the procurement officer's determination that the extension or amendment satisfies 3 AAC 109.020. Notice shall be provided so that potential bidders or offerors have access to the amendment.
(b) If, after the deadline for receipt of proposals under 3 AAC 109.360, there is a need for any substantial clarification or material change in the request for proposals, the request may be amended to incorporate the clarification or change. The procurement officer shall provide notice of the amended request and the date and time established for receipt of new or amended proposals.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.180 Cancellation of the solicitation or rejection of all bids or proposals
Before the deadline for receipt of bids or proposals, after the opening of bids or proposals, or after notice of intent to award but before award, the chief procurement officer may cancel the solicitation or reject all bids or proposals. Reasons for cancellation or rejection include one or more of the following:
(1) the supplies, services, or construction being procured are no longer required;
(2) ambiguous or otherwise inadequate specifications were part of the solicitation;
(3) the solicitation did not provide for consideration of all factors of significance to satisfy 3 AAC 109.020;
(4) prices exceed available money, and to adjust quantities or reduce services to accommodate available money would not be appropriate;
(5) all otherwise acceptable bids or proposals received are at unacceptable prices;
(6) there is reason to believe that the bids or proposals may not have been independently arrived at in open competition, may have been collusive, or may have been submitted in bad faith;
(7) only one proposal or bid was received;
(8) proceeding with the solicitation or award does not satisfy 3 AAC 109.020.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.190 Disposition of canceled or rejected bids or proposals
(a) If at any time during the solicitation process a request for proposals or invitation to bid is canceled, the procurement officer shall return the bids or proposals if the time for filing a protest has expired and a protest has not been filed.
(b) The procurement officer shall keep a list of returned bids or proposals in the procurement file.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.200 Protest of cancellation of a solicitation
Not more than 10 days after a notice of cancellation is issued by the procurement officer, an interested party may protest the cancellation of an invitation to bid or request for proposals by filing with the procurement officer a written protest that includes the information required under 3 AAC 109.570.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
Article 3 Competitive Sealed Bidding
3 AAC 109.210 General policy
The authority will use competitive sealed bidding when the requirements of the grantee are definite and can be sufficiently described by industry standards or practices so that price can be the primary basis for award, if the bid is determind to be responsive to the authority's requirements and the bidder is determined to be responsible.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.220 Invitation to bid
(a) When competitive sealed bidding is used, the procurement officer shall issue an invitation to bid. It must include a time, place, and date by which the bid must be received, a purchase description, a description of all contractual terms and conditions applicable to the procurement including the bid evaluation criteria, and the basis for award.
(b) A bidder must have a valid Alaska business license before contract award.
(c) A bidder for a construction contract must submit evidence of the bidder's registration under AS 08.18 at the time designated in the invitation to bid.
(d) If the chief procurement officer makes a written finding that the release of the estimated cost of goods or services would adversely affect the ability of the authority to obtain the best competitive bid, the estimated cost of the goods or services is confidential during the solicitation process and may not be released to the public before bid opening.
(e) A bidder, in the submission of a bid, must certify under penalty of perjury that the price submitted was independently arrived at without collusion.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.230 Pre-opening correction or withdrawal of bids
(a) A bid may be corrected or withdrawn by written request received in the office designated in the invitation for bids before the time and date set for opening.
(b) A request under (a) of this section must provide authorization for the person making the correction or withdrawal to do so.
(c) If a bid is withdrawn, the bid security, if any, shall be returned to the bidder along with the copies of the unopened bid documents not later than 15 days after bid opening. A copy of the correspondence requesting the withdrawal shall be included in the procurement file.
(d) All documents relating to the correction of a bid shall be included in the procurement file.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.240 Submission and receipt of bids
(a) A bid submitted on paper must be submitted in a sealed envelope with the invitation to bid number identified on the outside of the envelope. Upon receipt, the bid and any bid corrections shall be stored in a secure place until the time and date set for bid opening.
(b) The procurement officer may issue and receive competitive sealed bids through an electronic bidding system, if the system is able to receive electronic bid documents and corrections to bid documents, document the date and time of receipt of bid documents, secure the electronic bid submissions from being reviewed until after the date and time of bid opening, and provide an accessible public record that documents the solicitation.
(c) Bids shall be unconditionally accepted without alteration or correction, except as authorized in 3 AAC 109.230 and 3 AAC 109.260.
(d) A bid, bid correction, or withdrawal of a bid received at the place designated for receipt of bids after the time and date set for receipt of bids is late.
(e) A late bid, correction, or withdrawal may not be accepted unless the delay was due to an error of the authority.
(f) A late bid or correction may not be opened or considered. The procurement officer shall document the date and time the late bid or correction was received and return the unopened late bid or correction to the bidder after the protest period has passed.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.250 Bid openings
(a) The procurement officer shall open all bids and corrections received before the date and time designated in the invitation to bid.
(b) All bid openings are open to the public at the place, date, and time designated in the invitation to bid.
(c) The name of each bidder, the bid price, and other information determined appropriate by the procurement officer shall be tabulated at the bid opening. The tabulation is open to public inspection as soon as practicable after the bid opening.
(d) The procurement officer shall open bids for public inspection when the notice of intent to award a contract is given.
(e) To the extent the bidder designates and the procurement officer concurs, trade secrets and other proprietary data contained in a bid document will not be opened for public inspection under (d) of this section.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.260 Correction and withdrawal of bids after bid opening
(a) After bid opening, changes in bid prices or other provisions of bids prejudicial to the interest of the grantee or fair competition are not permitted except as provided under (d) of this section.
(b) If, before award, a procurement officer knows of an error in a bid, the procurement officer shall notify the bidder of the error.
(c) Inadvertent errors discovered after opening but before award, other than minor informalities, may not be corrected. If a bidder submits proof that clearly and convincingly demonstrates that an inadvertent error other than a minor informality was made, the bidder may withdraw the bid.
(d) The procurement officer may correct a bid that contains a minor informality. A correction of a minor informality may include correcting the bid submission to the intended correct bid price if the correct price is evident from the bid document. The procurement officer shall initial any correction made to the bid documents.
(e) A decision to permit the correction or withdrawal of a bid, or to cancel an award or contract based on bid mistake, shall be supported by a written determination made by the procurement offticer.
(f) If a bidder is permitted to withdraw a bid before award, an action may not be maintained against the bidder or the bid security.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.270 Bid evaluation
(a) The procurement officer shall evaluate bids based on the requirements set out in the invitation to bid, which may include criteria to determine acceptability such as inspection, testing, quality, delivery, and suitability for a particular purpose. An evaluation of product acceptability may be conducted to determine whether a bidder's offering is acceptable as set out in the invitation to bid. A bid that does not meet the acceptability requirements shall be rejected as nonresponsive.
(b) The procurement officer shall evaluate bids to determine which bid offers the lowest price to the authority in accordance with the evaluation criteria set out in the invitation to bid. The criteria that will affect the bid price and be considered in evaluation for award must be objectively measurable, such as discounts, transportation costs, and total or life cycle costs. Evaluation factors need not be precise predictors of actual future costs, but to the extent possible the evaluation factors must
(1) be reasonable estimates based upon information the procurement officer has available concerning future use; and
(2) treat all bids equitably.
(c) Criteria may not be used in bid evaluation if they are not set out in the invitation to bid.
(d) Nothing in this section permits contract award to a bidder submitting a higher quality item than that designated in the invitation for bids if the bidder is not also the lowest bidder as determined under (b) of this section.
(e) An alternate or conditioned bid submitted by a bidder that requires a change to a material term of the solicitation is nonresponsive unless a response to a specific condition or alternative is requested and authorized in the invitation to bid.
(f) Negotiations are not permitted under this section except that after opening bids a procurement officer may request bidders extend the time during which the authority may accept a bid.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.280 Determination of responsibility
(a) Before contract award the procurement officer shall consider whether the apparent low bidder is responsible. Factors that may be considered in determining whether the apparent low bidder is responsible include whether the bidder
(1) has a satisfactory record of performance;
(2) is qualified legally to contract with the authority under this chapter; and
(3) has supplied all necessary information in connection with the inquiry concerning responsibility.
(b) The procurement officer may require the apparent low bidder to demonstrate the availability of necessary financing, equipment, facilities, expertise, and personnel, by submitting.
(1) evidence that the contractor possesses the necessary items;
(2) acceptable plans to subcontract for the necessary items;
(3) a documented commitment from, or explicit arrangement with, a satisfactory source to provide the necessary items; or
(4) other information required by the procurement officer.
(c) The procurement officer's determination of responsibility does not relieve the contractor from the requirements for performance under the contract.
(d) If a prospective contractor supplies information in response to a request for infonnation made by a procurement officer under (b) of this section, the procurement officer may not open for public inspection under 3 AAC 109.250(d) financial information and any agreements with suppliers or subcontractors supplied in response to the request unless the prospective contractor gives prior written consent to their disclosure.
(e) If the apparent low bidder is determined not to be responsible, the procurement officer may reject the bid and award the contract to the next lowest responsive and responsible bidder.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.290 Rejection of individual bids
The procurement officer may reject an individual bid for one or more of the following reasons:
(1) the bid is nonresponsive;
(2) the bidder that submitted the bid is not responsible as determined under standards set out in 3 AAC 109.280;
(3) the bidder is excluded from bidding under 3 AAC 109.070;
(4) the supply, service, or construction item fails to meet the specifications or other acceptability criteria set out in the solicitation;
(5) only one bid was received and the chief procurement officer determines that award does satisfy 3 AAC 109.020.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.300 Contract award for competitive sealed bids
(a) The procurement officer shall award a contract based on the solicited bids with reasonable promptness by written notice to the lowest responsible and responsive bidder whose bid conforms in all material respects to the requirements and criteria set out in the invitation to bid.
(b) Tie bids are low responsive bids from responsible bidders which are identical in price. If low tie bids exist, award shall be made through a random drawing or flip of the coin. Award may not be made by dividing the procurement among bidders offering identical low price bids.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.310 Subcontractors on construction contracts
(a) Within five working days after the identification of the apparent low bidder for a construction contract solicited through a competitive sealed bidding, the apparent low bidder shall submit a list of the subcontractors the bidder proposes to use in the performance of the construction contract.
(b) The list must include the name and location of the place of business for each subcontractor, evidence of each subcontractor's valid Alaska business license, and evidence of each subcontractor's registration as a contractor under AS 08.18.
(c) A construction contractor or the apparent low bidder for a construction contract may replace a listed subcontractor if the subcontractor
(1) fails to comply with AS 08.18;
(2) files for bankruptcy or becomes insolvent;
(3) fails to execute a contract with the construction contractor or bidder involving performance of the work for which the subcontractor was listed and the construction contractor or bidder acted in good faith;
(4) fails to obtain bonding;
(5) fails to obtain insurance acceptable to the authority;
(6) fails to perform the contract with the construction contractor or bidder involving work for which the subcontractor was listed;
(7) must be replaced in order for the contractor to satisfy required state or federal affirmative action requirements; or
(8) refuses to agree or abide with the labor agreement of the construction contractor or bidder.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.320 Documentation of award
Following award, a record showing the basis for determining the successful bidder shall be made a part of the procurement file.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.330 Notice of intent to award
(a) Notice of intent to award does not constitute a formal award of a contract. The notice of intent to award must include
(1) a statement of a bidder's right under 3 AAC 109.570 to protest the award, including the time within which the protest must be received; and
(2) the name of the successful bidder.
(b) Unless only one responsive bid is received, the notice of intent to award shall be issued to each bidder at least five days before formal award of the contract. If only one responsive bid is received, the contract award may proceed as soon as practical after the notice of intent to award is issued.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
Article 4 Competitive Sealed Proposals
3 AAC 109.340 Conditions for use
(a) The procurement officer may procure supplies or services by competitive sealed proposals if the procurement officer determines that the use of competitive sealed proposals is more practical or advantageous for satisfying 3 AAC 109.020 than competitive sealed bidding.
(b) The following types of supplies and services for which the use of competitive sealed bidding is either not practicable or not advantageous for satisfying 3 AAC 109.020 may be procured by competitive sealed proposals without a written determination by the procurement officer:
(1) professional services contracts;
(2) architectural, engineering, and land surveying contracts;
(3) design-build construction contracts;
(4) design-build-operate contracts.
(c) Award under competitive sealed proposals will be made to the responsive and responsible offeror who provides the highest ranked proposal based on the criteria and evaluation processes identified in the request for competitive sealed proposals if the procurement officer and the offeror are able to negotiate a contract for the benefit of the grantee consistent with the solicitation and the offeror's proposal.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.350 Request for proposals
A request for competitive sealed proposals must contain
(1) the date, time, and place for delivering proposals;
(2) a specific description of the supplies, construction, services, or professional services to be provided under the contract;
(3) the standard contract terms under which the supplies, construction, services, or professional services are to be provided, or a reference to those terms;
(4) any other specific terms under which the supplies, construction, services, or professional services are to be provided;
(5) the requirement that the offeror document having the required professional and contractor's licenses necessary to provide the supplies, services, or professional services requested;
(6) the information necessary for an offeror to submit a proposal or references to any information that cannot reasonably be included with the request;
(7) the requirement that an offeror certify under penalty of perjury that the price submitted was independently arrived at without collusion, if the proposal requires offerors to provide price information with their submissions; and
(8) a description of the criteria that the procurement officer shall consider and the process that the procurement officer shall use when evaluating the proposals received; criteria may include
(A) the offeror's experience in performing work similar to that sought in the request for proposals; evaluation of that experience may include
(i) reviewing the offeror's conformance to specifications and standards of good workmanship, forecasting and containment of costs or prices, history of reasonable and cooperative behavior and overall concern for the interests of the customer, safety, risk management, and adherence to contract schedules; and
(ii) the review of evaluations by private persons and officials of other government entities that have retained the services of the offeror, with respect to control of costs, quality of work, ability to meet deadlines, and other factors related to the offeror's experience;
(B) the offeror's qualifications and competence of persons who would be assigned to perform the services, as reflected by technical training and education;
(C) the offeror's ability to perform the services, as reflected by workload and the availability of adequate personnel, equipment, and facilities to perfom the services expeditiously;
(D) the offeror's methods or proposed plan for delivering the goods or services;
(E) efforts proposed to support the local economy;
(F) the location of the office of the offeror where the work will be performed;
(G) the offeror's employment practices with regard to women and minorities; and
(H) the price for goods or services to be provided; evaluation of the price may include a comparison of total proposed costs, analysis of rates, life cycle costs, proposed fees, indirect costs, payment schedules or terms, or other factors that may have an impact on the total program cost of the goods or services; in soliciting architectural, engineering, and land surveying services, the procurement officer may only include price as an evaluation factor when, in the judgment of the procurement officer, the services required are repetitious in nature, and the scope, nature, and amount of services required are thoroughly defined by measurable and objective standards to reasonably enable firms or persons making proposals to compete with a clear understanding and interpretation of the services required; in order to include price as a factor in soliciting architectural, engineering, and land surveying services, a majority of the persons involved in evaluation of the proposals must be registered in the state to perform architectural, engineering, or land surveying services.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.360 Submission, receipt, and treatment of competitive sealed proposals
(a) Proposals may be accepted electronically. Proposals submitted on paper must be submitted in a sealed envelope with the competitive proposal number identified on the outside of the envelope. Upon receipt, the proposal and any proposal corrections shall be stored in a secure place.
(b) The procurement officer may issue and receive competitive sealed proposals through an electronic solicitation system, if the system is able to receive electronic proposal documents and corrections to proposal documents, document the date and time of receipt of proposal documents, secure the electronic submissions from being reviewed until after the date and time for receipt of proposals, and provide an accessible public record that documents the solicitation.
(c) After the date set for receipt of proposals, a register of proposals shall be prepared. The register must include the name of each offerer and a description of the supply, service, or construction item offered. The procurement officer shall open the register of proposals and all the contents of all proposals for public inspection when the procurement officer issues a notice of intent to award.
(d) The procurement officer shall receive, open, and evaluate proposals so as to avoid disclosure of contents to competing offerers before notice of intent to award a contract is issued.
(e) To the extent the offeror designates and the procurement officer concurs, trade secrets and other proprietary data contained in the proposal will not be opened for public inspection under (c) of this section.
(f) A proposal or proposal correction received at the place designated for receipt of proposals after the time and date set for receipt of proposals is late.
(g) A late proposal or correction may not be opened or considered unless the delay was due to an error of the authority. The procurement officer shall document the date and time the late proposal or correction was received and return the unopened late proposal or correction to the offerer after the protest period has passed .
(h) If a solicitation is canceled after proposals are received but before a notice of intent to award a contract has been issued, and if a rotest of the solicitation or of the cancellation of the solicitation has not been filed by an interested party, the procurement officer shall return all proposals to the offerors that submitted proposals once the time specified for filing a protest has expired. The procurement officer shall keep a list of returned proposals in the file for the solicitation.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.370 Evaluation of proposals
(a) The procurement officer shall evaluate proposals based on the evaluation criteria and processes identified in the request for proposals. The procurement officer may not use other factors, criteria, or processes.
(b) The procurement officer, or a procurement evaluation commiittee consisting of at least the procurement officer and two other authority employees, shall evaluate proposals. Other authority employees, public officials, experts, or representatives of participating organizations may be substituted as appropriate if there is no conflict of interest and the procurement evaluation committee is made up of at least the procurement officer and two employees of the authority or substitutes.
(c) If a procurement evaluation committee evaluates the proposals, each member shall exercise independent judgment, and the vote of one member may not be weighted more than the vote of any other member.
(d) The procurement evaluation committee may hold meetings to discuss the proposals received. Evaluators may independently adjust their own scores or rankings as a result of these discussions.
(e) Numerical rating systems may be used, but are not required. If a numerical rating system is used, evaluators are not required to provide additional documentation for scoring, if the relative weight of the criteria and system is defined in the solicitation.
(f) If a numerical rating system is not used, each evaluator shall provide a brief narrative consistent with the evaluation criteria documenting the basis for the evaluator's ranking in writing..
(g) The procurement officer shall document the evaluation process and provide a summary of the final ranking of proposals for the procurement file.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.380 Rejection of individual proposals
Reasons for rejecting an individual proposal include one or more of the following:
(1) the proposal is nonresponsive to the minimum requirements identified in the solicitation;
(2) the offeror submitting the proposal is not responsible as determined under standards set out in 3 AAC 109.280;
(3) the offeror submitting the proposal is excluded from submitting a proposal under 3 AAC 109.070;
(4) after evaluation and discussion, only one proposal is available for award, and the chief procurement officer determines that proceeding with the award does not satisfy 3 AAC 109.020.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.390 Clarification of offers
(a) In order to determine if a proposal is reasonably susceptible for award, communications by the procurement officer or the procurement evaluation committee are permitted with an individual offeror to clarify the contents of an offeror's proposal.
(b) Clarification is limited to clarification of ambiguities or conflicts in the proposal and may not be a negotiation or allow for material changes to the proposal being evaluated.
(c) The procurement officer may limit communications to only those offerers who submitted proposals requiring clarification in order to complete the evaluation of those proposals.
(d) The evaluation by the procurement officer or the procurement evaluation committee may be adjusted as a result of a clarification under this section.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.400 Proposal discussions with offerors and best and final offers
(a) At the discretion of the procurement officer, an offerer whose proposal is reasonably susceptible for award as determined in the initial evaluation may be offered the opportunity to confidentially discuss the proposal with the procurement officer or procurement evaluation committee.
(b) The opportunity for confidential discussions, if held, must be extended to all offerors submitting proposals determined reasonably susceptible for award.
(c) Meetings with offerors under this section are not subject to AS 44.62.310 - 44.62.319 (Open Meetings Act).
(d) Auction techniques that reveal one offeror's price to another, and disclosure of any information derived from competing proposals, are prohibited.
(e) The procurement officer may limit discussions to specific sections of the proposals received or specific sections of the request for proposals.
(f) The conditions, terms, or price of the proposal may be altered or otherwise changed during the course of the discussions, if the changes are within the scope of the request for proposals. Any modifications to a proposal as a result of discussions shall be reduced to writing by the offerer within the time frame designated by the procurement officer.
(g) Following discussions, the procurement officer may set a date and time for the submission of best and final proposals.
(h) Best and final proposals may be submitted more than once if the chief procurement officer makes a written determination that it is in the best interests of the purposes of this chapter to conduct additional discussions or change the requirements and request submission of another round of best and final proposals.
(i) If an offerer does not submit a best and final proposal or a notice of withdrawal, the offerer's previous proposal is considered the offerer's best and final proposal for the purpose of evaluation and award.
(j) The evaluation of a proposal may be adjusted as a result of discussions under this section.
(k) After best and final proposals are received, final evaluations will be conducted as described in 3 AAC 109.370 (evaluation of proposals).
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.410 Contract negotiations
(a) After evaluation of proposals including an adjustment of an evaluation of a proposal, the procurement officer may negotiate with the offerer of the highest ranked proposal for the purpose of obtaining contract terms consistent with the solicitation and most favorable to the grantee.
(b) The procurement officer may request or the offerer may propose changes to the offerer's proposal during contract negotiations. The changes must be reasonable and may not have the effect of substantially changing the scope of work or price if the change would alter the ranking of the highest ranked proposal. All changes will be documented in writing and incorporated into the contract documents.
(c) If the offeror with the highest ranked proposal fails to negotiate in good faith, fails to negotiate within the time period set by the procurement officer, or is unable to adjust the price as may be required by the procurement officer without materially affecting the scope of work, the procurement officer may terminate negotiations and begin contract negotiations with the offeror of the next highest ranked proposal in the manner prescribed in this section.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.420 Contract award
The procurement officer shall award a contract under competitive sealed proposals to the responsible and responsive offeror whose proposal is determined in writing to be the most advantageous to the grantee, taking into consideration the evaluation factors set out in the request for proposals and any contract negotiations.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.430 Documentation of contractor selection
When a contractor has been selected by competitive sealed proposal, the procurement officer shall enter into the procurement file a written record of the basis on which the selection was found to be most advantageous to the purposes of this chapter.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.440 Notice of intent to award
Notice of intent to award shall be issued in accordance with 3 AAC 109.330.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
Article 5 Other Procurement Methods
3 AAC 109.450 Determinations to use other procurement methods
The procurement officer responsible for making a determination to conduct a non-competitive procurement, limited competition procurement, or an innovative procurement shall examine the material facts of the procurement and independently determine whether the procurement is eligible for the procurement method contemplated.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.460 Small procurements
(a) Procurement requirements may not be artificially divided or fragmented so as to constitute a purchase under this section or to circumvent the source selection procedures required under 3 AAC 109.210 - 3 AAC 109.330 or 3 AAC 109.340 - 3 AAC 109.440.
(b) The procurement officer shall use reasonable and adequate procedures, and make records that facilitate auditing of the procurement, when procuring supplies, services, professional services, or construction estimated to cost not more than $5,000.
(c) The procurement officer shall use the following procedures in the procurement of supplies, services, professional services, or construction estimated to cost more than $5,000, but not more than $25,000:
(1) for the solicitation,
(A) at least three firms or persons shall be contacted for a quotation or informal proposal; and
(B) the solicitation may be made verbally or in writing; in the solicitation, the procurement officer shall include the specifications, the award criteria, and the date and time responses are due;
(2) for the award, the procurement officer shall make the award
(A) in accordance with the specifications and award criteria in the solicitation; and
(B) to the responsive and responsible firm or person that submitted the lowest quotation or the informal proposal that is the most advantageous to the grantee;
(3) as part of the file on the procurement, the procurement officer shall include the
(A) name of the person who made the solicitation and the date of the solicitation;
(B) information provided by the procurement officer under (1)(B) of this subsection;
(C) names of the firms or persons contacted, a summary of any verbal responses, and copies of all quotations or informal proposals received; and
(D) justification for the award.
(d) The procurement officer shall use the following procedures for the procurement of supplies, services, professional services, or construction estimated to cost more than $25,000, but not more than $100,000:
(1) for the solicitation,
(A) at least three firms or persons shall be contacted for a quotation or an informal proposal;
(B) the solicitation shall be made in writing; in the solicitation, the procurement officer shall include the specifications, the award criteria, the requirement that the response be made in writing, and the date and time responses are due;
(2) for the award, the procurement officer shall
(A) make the award
(i) in accordance with the specifications and award criteria in the solicitation; and
(ii) to the responsive and responsible firm or person that submitted the lowest quotation or the informal proposal that is the most advantageous to the grantee; and
(B) provide written notice of the award, including the name of the successful offeror, to each firm or person providing a quotation or informal proposal, and will describe protest rights under 3 AAC 109.580 and the time limitations within which a protest must be received;
(3) as part of the file on the procurement, the procurement officer shall include
(A) a copy of the solicitation made under (1)(B) of this subsection;
(B) the names of the firms or persons contacted and copies of all written quotations or informal proposals received; and
(C) documentation of and the justification for the award.
(e) Nothing in this section prevents postings in electronic media to satisfy the competitive solicitation and notice of award requirements. Quotes and informal proposals may be submitted in electronic media if permitted by the procurement officer.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.470 Limited competition procurements
(a) A contract may be awarded under this section when the chief procurement officer determines in writing that a situation exists that makes competitive sealed bidding or competitive sealed proposals impractical or contrary to the interests of the grantee.
(b) Situations that may justify conducting a limited competition procurement include
(1) procurements that cannot be publicly advertised without compromising the interests of the grantee or authority;
(2) procurements that may have been previously solicited by competitive sealed proposals or competitive sealed bids but the procurement officer was unable to award because no responsible and responsive bids or proposals were received and the grantee still has an immediate need for the goods or services.
(c) To determine if two or more sources are interested in a procurement, the procurement officer may provide notice under 3 AAC 109.150 requesting letters of interest in a limited competition procurement.
(d) Solicitation under this section may be limited to two or more potential contractors that the chief procurement officer determines may be able to provide a response to the solicitation.
(e) Under this section the procurement officer shall solicit bids or proposals and conduct negotiations, as appropriate, as to price, delivery, and terms, equally with each potential contractor.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.490 Non-competitive procurements
(a) A procurement officer may contract for supplies, services, professional services, or construction without the use of competitive source selection
(1) for any contract issued by another state or federal government agency where the authority is authorized to place orders under the terms and conditions of that contract;
(2) for a contract where the total cost is not more than $5,000 and the price is fair and reasonable;
(3) for a contract that was previously competitively bid, but where only one nonresponsive bid was received and the chief procurement officer determines that negotiation with that bidder is in the grantee's best interest because.
(A) an immediate need exists for the goods or services; or
(B) re-solicitation is unlikely to increase the number of bids;
(4) for a contract where time is of the essence and the chief procurement officer makes a determination that the non-competitive procurement is in the grantee's best interest because
(A) the time required to solicit competitive bids or proposals for the equipment or services would adversely impact the grantee's project;
(B) the price for goods or services is reasonable compared to the impacts of a delay;
(C) the proposed contractor is in a unique position to be able to meet the grantee's needs; and
(D) the duration of the contract is limited; or
(5) for a contract where the chief procurement officer determines that award of a contract by competitive sealed bidding, competitive sealed proposals, or small procurement procedures is not practicable, and that award to a single source is in the grantee's best interests as no other reasonable source of the supplies or services is available that could meet the requirements and schedule; the procurement officer may advertise its intent to make a single source award to determine if a single source award is appropriate.
(b) For procurements made under (a)(3), (4) and (5) of this section, the chief procurement officer's determination must be in writing and include a written explanation with evidence necessary for the independent examination and determination of the material facts of the procurement. The determination by the chief procurement officer that a specific course of action is or is not "in the grantee's best interest" means a determination that is reasonable under the circumstances and is not arbitrary, capricious, or prompted by corruption. A request to use a non-competitive procurement method that is based on a determination that it is "in the grantee's best interest" must cite the specific and significant interests to support use of the non-competitive procurement method.
(c) A procurement officer shall conduct negotiations, as appropriate, as to the price, delivery, and terms of a non-competitive procurement identified in (a)(3), (4), and (5) of this section, and the contractor shall provide cost and pricing data in accordance with 3 AAC 109.560.
(d) The determination required for procurements under (a)(3), (4), and (5) of this section may only be made by the chief procurement officer or the executive director in the absence of the chief procurement officer.
(e) The procurement file must include a copy of the determinations for procurements made under (a)(3), (4), and (5) of this section.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.500 Innovative procurements
(a) A contract may be awarded for supplies, services, professional services, or construction using an innovative procurement process, with or without competitive sealed bidding or competitive sealed proposals, when the chief procurement officer determines in writing that it satisfies 3 AAC 109.020 to use an innovative competitive procurement process in the procurement of new or unique requirements of the grantee or authority, new technologies, or to achieve best value.
(b) The chief procurement officer shall submit a procurement plan to the attorney general for review and approval as to form before issuing the notice required by (c) of this section. The plan must, at a minimum, address the method of solicitation, scope, method of award, protest procedures, and proposed contract provisions.
(c) A procurement under this section is subject to public notice requirements of 3 AAC 109.150.
(d) A record of an innovative procurement must be available for public inspection upon completion or cancellation of the procurement, and must contain
(1) a copy of the contract;
(2) the written determination of the chief procurement officer to use the innovative procurement procedure;
(3) the procurement plan as approved as to form by the attorney general;
(4) the record of notice as required under 3 AAC 109.150;
(5) the record of respondents to the solicitation; and
(6) the contract award.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
Article 6 Contract Formation and Modification
3 AAC 109.510 Type of contracts
Any type of contract that will promote the best interests of the grantee may be used, except that the use of a cost-plus-a-percentage-of-cost contract is prohibited
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.520 Contract contents
(a) Each contract awarded as a result of competitive sealed bids or competitive sealed proposals must contain
(1) a statement of the amount of the contract;
(2) the date for the supplies to be delivered or the expected period of performance of the construction, services, or professional services;
(3) a description of the supplies, construction, services, or professional services to be provided; and
(4) certification by the procurement officer or other official of the authority that sufficient money is available to be encumbered to cover the obligation under the contract or will be available before the procurement officer issues a notice to proceed or purchase order against the contract.
(b) The procurement officer may also incorporate clauses for adjustments in prices, period of performance, and scope in addition to other terms or requirements included in the solicitation or negotiated between the procurement officer and the contractor.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.530 Contract term and cancellation
(a) Unless otherwise provided by law, a contract for supplies, services, or professional services may be entered into for any period of time considered to be in the best interests of the grantee or authority, if the term of the contract and conditions of renewal or extension, if any, are included in the solicitation and funds are available for the first grant period at the time of contracting.
(b) Payment and performance obligations for succeeding grant periods shall be subject to the availability and designation of funds for purposes of the contract.
(c) Before using a multi-term contract, the procurement officer shall determine in writing that
(1) estimated requirements cover the period of the contract and are reasonably firm and continuing; and
(2) the contract will serve the best interests of the grantee or authority by encouraging effective competition and efficient contract admininistration.
(d) When funds are not appropriated or otherwise made available to support continuation of performance in a subsequent fiscal period, the contract shall be canceled.
(e) Upon cancellation, the contractor may only be reimbursed for the reasonable value of any nonrecurring costs incurred but not amortized in the price of the supplies, services, or professional services delivered under the contract that are not otherwise recoverable.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.540 Contract amendments
(a) The procurement officer may amend a contract or purchase order if the contract includes clauses or terms that allow for and anticipate change orders, additional work, changes in scope, price adjustments, follow-up phases of work, or renewals consistent with the original scope and estimates of term and price documented with the source selection method used in the award.
(b) The procurement officer may amend a contract or purchase order when there is an unanticipated change in work beyond the estimated or actual contract price, term, or scope, if
(1) the solicitation was conducted following the small procurement procedures under 3 AAC 109.460, the amendment or change order, or cumulative contract amendments or change orders, will not cause the total contract amount, as amended, to exceed by 50 percent or more the original contract price, and the new total price of the contract, including all change orders and amendments, does not exceed the dollar limit for small procurements under 3 AAC 109.460; or
(2) the original contract is greater than $100,000, and the amount of the unanticipated amendment or change order, or cumulative unanticipated contract amendments or change orders, will be less than 20 percent of the original contract amount, including any anticipated amendments or contract adjustments.
(c) Before issuing an amendment that exceeds the dollar limits in (b)(1) or (2) of this section, the chief procurement officer shall provide a written determination required under 3 AAC 109.490(a)(4) or (5).
(d) The procurement officer shall obtain cost and pricing data in accordance with 3 AAC 109.560 from the contractor to confirm the price adjustment is fair and reasonable. The authority's controller, or the controller's designee, must certify that there are sufficient funds to pay for any increase in price before issuing an amendment.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.550 Standard contract clauses
(a) The chief procurement officer, in consultation with the attorney general, may establish standard contract clauses that provide for appropriate remedies and cover the following subjects:
(1) liquidated damages;
(2) order of precedence of contract documents;
(3) specified excuses for delay or nonperformance;
(4) termination of the contract for default;
(5) termination of the contract in whole or in part for the convenience of the grantee or authority;
(6) adjustments in time including renewals or extensions;
(7) dispute resolution;
(8) adjustments in price;
(9) changes in work;
(10) additional work;
(11) amendments.
(b) The standard clauses to be used in a contract will be identified in a separate appendix to the contract and referenced in the solicitation.
(c) A procurement officer may vary the standard clauses for inclusion in a particular contract if
(1) the variations and the circumstances justifying them are documented; and
(2) the procurement officer receives written approval of the attorney general as to form.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.560 Cost principles and contractor cost and pricing data
(a) Before an award of a non-competitive contract or a change order or contract modification, the contractor or prospective contractor shall submit cost and pricing data. The contractor or prospective contractor shall certify that, to the best of the contractor's or prospective contractor's knowledge and belief, the data submitted is accurate, complete, and current as of a mutually determined specified date and will continue to be accurate and complete during the performance of the contract.
(b) When a contractor becomes aware of a situation that may form the basis of a claim for compensation that exceeds the amount designated as the base amount of the contract and before performing additional work or supplying additional materials, the contractor shall submit cost and pricing data on the additional work or materials. The contractor shall certify that, to the best of the contractor's knowledge and belief, the data submitted is accurate, complete, and current and is the actual cost to the contractor of performing the additional work or supplying the additional materials.
(c) A contract, change order, or contract modification under which a certification is required under (a) or (b) of this section must contain a provision that the contract price, including the contractor's profit or fee, will be adjusted to exclude any significant sums by which the procurement officer finds that the price is increased because the cost or pricing data furnished by the contractor or prospective contractor is inaccurate, incomplete, or not current as of the date agreed upon by the parties;
(d) The requirements of (a) of this section do not apply when
(1) the contract price is based on adequate price competition obtained through a competitive solicitation;
(2) the contract price is set by law or regulation; or
(3) the chief procurement officer determines in writing that the requirements of (a) of this section may be waived and the reasons for waiver are stated.
(e) The procurement officer may use the federal cost principles a guidance in contract negotiations.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
Article 7 Legal and Contractual Remedies
3 AAC 109.570 Applicability of procurement protest and appeal procedures
(a) Except for protests of small procurements made under 3 AAC 109.580, the provisions of AS 36.30.560 - 36.30.615 apply to the protest or appeal of a protest on a solicitation, a proposed contract award, or the award of a contract for supplies, services, professional services, or construction. In applying the provisions of AS 36.30.560 - 36.30.615 under this chapter,
(1) the rights, powers, and duties relating to appeals of protests concerning the procurement of supplies, services, professional services, or construction duties under AS 36.30 assigned to any commissioner is vested in the executive director with respect to appeals of protests, and the executive director may delegate the rights powers, and duties to the chief procurement officer;
(2) the chief procurement officer is responsible for taking all necessary actions following the procedures in AS 36.30.610 and 36.30.615 to develop a recommendation regarding a protest appeal;
(3) the chief procurement officer may request, as provided under AS 44.64.030(b), that the office of administrative hearings (AS 44.64.010) conduct a hearing on an appeal in accordance with AS 36.30.670, make findings of fact and conclusions of law, and provide a recommended decision for the chief procurement officer to furnish to the executive director;
(4) the chief procurement officer shall make a recommendation to the executive director for a final decision on protest appeals not subject to 3 AAC 109.580; the executive director retains the final decision-making authority on a protest appeal and may affirm, modify, or reject the recommended decision, in whole or in part, may remand to the chief procurement officer or any hearing officer or administrative law judge with instructions, or may take other appropriate action.
(b) Protest of procurements with a total award value of $100,000 or less must be made under 3 AAC 109.580.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.580 Protest of small procurement
(a) An interested party shall attempt to informally resolve any protest with the procurement officer regarding a procurement with a total award value of $100,000 or less. If the attempt is unsuccessful, the interested party may protest the solicitation or the award of a small procurement contract solicited or awarded under 3 AAC 109.460. The protest must be filed with the executive director. The protester must file a copy of the protest with the procurement officer.
(b) If protesting a solicitation issued under 3 AAC 109.460, a protest must be filed before the date and time that quotations or informal proposals are due to the authority.
(c) If protesting the award of a small procurement contract of not more than $25,000, the protest must be filed not later than 10 days after the date of the solicitation or award, whichever is later.
(d) If protesting the award of a small procurement contract greater than $25,000, a protest must be filed not later than 10 days after the date that notice of award is made.
(e) To be accepted by the authority, a protest filed under (a), (b), (c), or (d) of this section must contain
(1) the name, address, and telephone number of the protester;
(2) the signature of the protester or the protester's representative;
(3) identification of the solicitation or contract at issue;
(4) a detailed statement of the legal and factual grounds of the protest, including copies of relevant documents; and
(5) the form of relief requested.
(f) The procurement officer shall immediately give notice of the protest to the contractor or, if no award has been made, to all firms or persons that were solicited for the small procurement.
(g) The executive director or the executive director's designee may
(1) with the concurrence of the protester, assign the protest to the chief procurement officer or other responsible state official for a final administrative resolution under alternate dispute resolution;
(2) conduct a hearing on the protest consistent with the procedures set out in 3 AAC 109.570(a)(3); or
(3) issue a final decision under (h) of this section.
(h) The executive director or the executive director's designee shall
(1) issue a final decision denying the protest and stating the reasons for denial;
(2) issue a final decision that sustains the protest, in whole or in part, and instruct the procurement officer to implement an appropriate remedy; or
(3) remand to the chief procurement officer or any hearing officer or administrative law judge with instructions.
(i) The final decision of the executive director or the executive director's designee under (h) of this section constitutes the final action of the authority on the protest.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.590 Contract claims
(a) The provisions of AS 36.30.620 - 36.30.631 apply to any contract claim concerning a contract awarded by the procurement officer under this chapter.
(b) Hearings on contract claims will be conducted in accordance with AS 36.30.670 - 36.30.685, and any arbitration of a construction contract will be conducted in accordance with 2 AAC 12.950 - 2 AAC 12.989.
(c) The rights, powers, and duties relating to appeals of claims and arbitration of construction contracts concerning the procurement of supplies, services, professional services, or construction that are assigned under AS. 36.30 to any commissioner are vested under this chapter with the executive director.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.600 Misrepresentations, fraud, and attempted fraud
(a) A person who makes or uses a misrepresentation in support of a contract claim under this chapter, or who practices or attempts to practice a fraud, at any stage of proceedings relating to a procurement or contract claim under this chapter
(1) forfeits all claims relating to that procurement or contract; and
(2) is obligated to reimburse all sums paid on the claim and for all costs attributable to review of the claim.
(b) The procurement officer or executive director shall make specific findings of misrepresentation, attempted fraud, or fraud before declaring a forfeiture under (a)(1) of this section.
(c) Upon a finding that the recipient of a contract issued under this chapter made a misrepresentation or fraudulent claim at any stage of proceedings relating to a procurement or contract controversy, the procurement officer may, after consulting with the attorney general, declare the contract void.
(d) In this section, "misrepresentation" means a false or misleading statement of material fact, or conduct intended to deceive or mislead concerning material fact, whether it succeeds in deceiving or misleading.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.610 Debarment
(a) The provisions of AS 36.30.635 - 36.30.665 and 2 AAC 12.630 - 2 AAC 12.670 apply to any debarment action undertaken by the authority against a contractor to prohibit a contractor from participating in any solicitation or award under this chepter.
(b) Hearings on a debarment action will be conducted in accordance with AS 36.30.650 and 2 AAC 12.650 - 2 AAC 12.670.
(c) The rights, powers and duties relating to debarment actions assigned to the commissioner of administration under AS 36.30 are vested with the executive director with respect to any debarment actions undertaken by the authority under this chapter.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
Article 8 Additional Principles and Administrative Provisions
3 AAC 109.650 Supplementary general principles of law applicable
Unless displaced by the particular provisions of this chapter, the principles of law and equity, including AS 45.01 - AS 45.08, AS 45.12, AS 45.14, and AS 45.29 (Uniform Commercial Code), the law merchant, and law relative to capacity to contract, agency, fraud, misrepresentation, duress, coercion, mistake, or bankruptcy supplement the provisions of this chapter.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.660 Requirement of good faith
All parties involved in the negotiation, performance, or administration of contracts of the authority under this chapter shall act in good faith.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.680 Public access to procurement records
(a) Procurement records under this chapter are public records in accordance with AS 40.25.110.
(b) If a bidder or proposer submits a procurement record and request that it be kept confidential, the chief procurement officer shall determine whether the procurement record appears to be confidential and notify the bidder or proposer of the determination. If the authority receives a public records request for a procurement record determined to appear to be confidential, the authority will notify the bidder or proposer of the public records request to enable the bidder or proposer to protect the confidentiality of the procurement record.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.690 Retention of procurement records
Procurement records shall be retained and disposed of in accordance with records retention guidelines and schedules approved by the state archivist.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.700 Procurement records for competitive sealed bids and proposals
The executive director shall keep a contract file open for public inspection for each contract awarded under competitive sealed bids and competitive sealed proposals. The file may be maintained in a reproducible electronic format and must contain
(1) a copy of the solicitation document;
(2) a register of bids or proposals received;
(3) a copy of each responsive bid or proposal received;
(4) the basis of award; and
(5) a copy of the contract that includes a description of the supplies, services, professional services, or construction procured under each contract.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
3 AAC 109.710 Procurement records for other procurements
The executive director shall keep a contract file open for public inspection for each limited competition procurement, innovation procurement, or non-competitive procurement under 3 AAC 109.490(a)(3), (4), and (5). The file may be maintained in a reproducible electronic format and must contain
(1) the determination, as required, regarding the source selection method used;
(2) for innovative procurements, the procurement plan approved by the attorney general;
(3) if the procurement is solicited,
(A) a copy of the solicitation document used;
(B) a copy of the notice posted or list of potential offerors contacted;
(C) a register of offers or proposals received;
(D) a copy of each responsive offer or proposal received; and
(E) the basis of award;
(4) if the procurement is not solicited,
(A) cost and pricing data; and
(B) a copy of the quote, offer, or proposal received if different from the final contract; and
(5) a copy of the contract that includes a description of the supplies, services, professional services, or construction procured under each contract.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
Article 9 General Provisions
3 AAC 109.900 Definitions
In this chapter unless the context requires otherwise,
(1) "authority" means the Alaska Energy Authority;
(2) "Alaska business license" means a license required under AS 43.70 (Alaska Business Act);
(3) "Alaska Online Public Notice System" means the system developed under AS 44.62.175;
(4) "alternate dispute resolution" means negotiation or mediation voluntarily used to resolve issues in controversy;
(5) "change order" means a written order signed by the procurement officer directing the contractor to make changes that the changes clause of the contract authorizes the procurement officer to order without the consent of the contractor;
(6) "chief procurement officer" means the person appointed by the executive director under 3 AAC 109.030(c)(1) as the chief procurement officer of the authority;
(7) "competitive sealed bidding" means the procedure under 3 AAC 109.210 - 3 AAC 109.330;
(8) "competitive sealed proposals" means the procedure under 3 AAC 109.340 - 3 AAC 109.440;
(9) "construction" means
(A) the process of building, altering, repairing, maintaining, improving, or demolishing a highway, structure, building, or other improvement of any kind to real property;
(B) includes services and professional services relating to planning and design required for the construction;
(C) does not include the routine operation of an improvement to real property;
(10) "contract" means all types of agreements, regardless of what they may be called, for the procurement or disposal of supplies, services, professional services, or construction;
(11) "contract modification" means a written alteration in specifications, delivery point, rate of delivery, period of performance, price, quantity, or other provisions of a contract accomplished by mutual action of the parties to the contract;
(12) "cost and pricing data" means information concerning the actual or estimated cost of labor, material, overhead, and other cost elements that have been actually incurred or that are expected to be incurred by the contractor in performing the contract;
(13) "design-build construction contract" means a construction contract between the authority and a design-builder to furnish architecture, engineering, and related design services, and to furnish construction services, including labor and materials;
(14) "executive director" means the executive director of the authority;
(15) "grantee" means any entity that receives a grant of money or property under which the authority manages the grant on behalf of the entity,
(16) "grant" means property furnished by the state, whether real or personal, designated by law, including an appropriation act, as a grant;
(17) "interested party" means an actual or prospective bidder or offeror whose economic interest might be affected substantially and directly by the issuance of a contract solicitation, the award of a contract, or the failure to award a contract;
(18) "minor informality"
(A) means a matter of form rather than substance that
(i) is evident from the bid document, or is an insignificant matter that has a negligible effect on price, quantity, quality, delivery, or contractual conditions; and
(ii) can be waived or corrected without prejudice to other bidders;
(B) includes typographical errors, errors in extending unit prices, transposition errors, and arithmetical errors that are evident from the bid document;
(19) "nonresponsive" means a bid or proposal that does not conform in all material respects to the solicitation;
(20) "person" means a business, individual, union, committee, club, other organization, or group of individuals;
(21) "procurement"
(A) means buying, purchasing, renting, leasing, or otherwise acquiring supplies, equipment, services, or construction for the authority;
(B) includes functions that pertain to the obtaining of supplies, equipment, services, or construction, including description of requirements, selection and solicitation of sources, preparation and award of contract, and all phases of contract administration;
(22) "procurement officer"
(A) means a person authorized to enter into and administer contracts for the authority and make written determinations with respect to them;
(B) includes an authorized representative of a procurement officer acting within the limits of the delegated authority;
(23) "professional services" means professional, technical, or consultant's services that are predominantly intellectual in character, result in the production of a report or the completion of a task, and include analysis, evaluation, prediction, planning, or recommendation;
(24) "protester" means an actual or prospective bidder, offeror, or contractor who is aggrieved in connection with the solicitation or the award of a contract and who files a protest;
(25) "reasonable and adequate procedures"
(A) means procedures that ensure fairness to potential offerors and competition commensurate with the circumstances of the procurement, considering price, mission requirements, and available competition;
(B) includes contacting only one potential offeror in appropriate circumstances;
(26) "responsive bidder" means a firm or person who has submitted a bid that conforms in all material respects to the solicitation;
(27) "services"
(A) means the furnishing of labor, time, or effort by a contractor, not involving the delivery of a specific end product other than reports that are merely incidental to the required performance;
(B) does not include employment agreements or collective bargaining agreements;
(28) "solicitation" means an invitation to bid, a request for proposals, a request for quotations, or any other method of soliciting bids, proposals, or quotes to perform a contract with the authority;
(29) "specification" means a description of the physical or functional characteristics, or of the nature of a supply, service, professional service, or construction project; it may include requirements for licensing, inspecting, testing, and delivery;
(30) "supplies"
(A) means all property of the authority, including equipment, materials, and insurance;
(B) includes privately owned real property leased for the authority's use, such as office space;
(C) does not include the acquisition or disposition of other interests in land.
History
- Authority: AS 44.83.080
- Eff. 7/10/2015, Register 215
Part 15 Local Boundary Commission
Chapter 110 Municipal Boundary Changes
Article 1 Standards for Incorporation of Cities
3 AAC 110.005 Community
Territory proposed for incorporation as a city must encompass a community.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.05.011 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 7,Ak Const.
- Eff. 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.010 Need
(a) In accordance with AS 29.05.011(a)(5), a community must demonstrate a reasonable need for city government. In this regard, the commission may consider relevant factors, including
(1) existing or reasonably anticipated social or economic conditions;
(2) existing or reasonably anticipated health, safety, and general welfare conditions;
(3) existing or reasonably anticipated economic development; and
(4) adequacy of existing services.
(b) In accordance with AS 29.05.021(a), and to promote a minimum number of local government units in accordance with art. X, sec. 1, Constitution of the State of Alaska, a community in the unorganized borough may not incorporate as a city if essential municipal services can be provided more efficiently or more effectively by annexation to an existing city.
(c) In accordance with AS 29.05.021(b), and to promote a minimum number of local government units in accordance with art. X, sec. 1, Constitution of the State of Alaska, a community within an organized borough may not incorporate as a city if essential municipal services can be provided more efficiently or more effectively
(1) by annexation to an existing city;
(2) by an existing organized borough on an areawide or nonareawide basis; or
(3) through an existing borough service area.
History
- Authority: Art. X, sec. 1,Art. X, sec. 7,AS 29.05.011 Ak Const.Ak Const.AS 29.05.021 Art. X, sec. 5,Art. X, sec. 12,AS 44.33.812 Ak Const.Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.020 Resources
In accordance with AS 29.05.011(a)(3), the economy of a proposed city must include the human and financial resources necessary to provide essential municipal services on an efficient, cost-effective level. In this regard, the commission
(1) will consider
(A) the reasonably anticipated functions of the proposed city;
(B) the reasonably anticipated expenses of the proposed city;
(C) the ability of the proposed city to generate and collect revenue at the local level;
(D) the reasonably anticipated income of the proposed city;
(E) the feasibility and plausibility of the anticipated operating and capital budgets of the proposed city through the period extending one full fiscal year beyond the reasonably anticipated date
(i) for receipt of the final organization grant under AS 29.05.180;
(ii) for completion of the transition set out in AS 29.05.130 - 29.05.140 and 3 AAC 110.900; and
(iii) on which the proposed city will make its first full local contribution required under AS 14.17.410(b)(2) if the proposal seeks to incorporate a home rule or first class city in the unorganized borough;
(F) the economic base within the proposed city;
(G) valuations of taxable property within the proposed city;
(H) existing and reasonably anticipated industrial, commercial, and resource development within the proposed city; and
(I) personal income of residents of the proposed city; and
(2) may consider other relevant factors, including
(A) land use within the proposed city;
(B) the need for and availability of employable skilled and unskilled persons to serve the proposed city government; and
(C) the reasonably predictable level of commitment and interest of the residents in sustaining a city government.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.05.011 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 7,Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.030 Population
(a) In accordance with AS 29.05.011(a)(4), the population of a proposed city must be sufficiently large and stable to support the proposed city government. In this regard, the commission may consider relevant factors, including
(1) census enumerations;
(2) durations of residency;
(3) historical population patterns;
(4) seasonal population changes;
(5) age distributions;
(6) contemporary and historical public school enrollment data; and
(7) nonconfidential data from the Department of Revenue regarding applications under AS 43.23 for permanent fund dividends.
(b) To become a first class or home rule city, the territory proposed for incorporation must have a population of at least 400 permanent residents.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.05.011 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 7,Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.040 Boundaries
(a) In accordance with AS 29.05.011(a)(2), the boundaries of a proposed city must include all land and water necessary to provide the development of essential municipal services on an efficient, cost-effective level. In this regard, the commission may consider relevant factors, including
(1) land use, subdivision platting, and ownership patterns;
(2) population density;
(3) existing and reasonably anticipated transportation patterns and facilities;
(4) natural geographical features and environmental factors;
(5) extraterritorial powers of cities;
(6) salability of land for residential, commercial, or industrial purposes; and
(7) suitability of the territory for reasonably anticipated community purposes.
(b) To promote the limitation of community, the boundaries of the proposed city
(1) must be on a scale suitable for city government and may include only that territory comprising a present local community, plus reasonably predictable growth, development, and public safety needs during the 10 years following the anticipated date of incorporation; and
(2) may not include entire geographical regions or large unpopulated areas, except if those boundaries are justified by the application of the standards in 3 AAC 110.005 - 3 AAC 110.042 and are otherwise suitable for city government.
(c) Absent a specific and persuasive showing to the contrary, the commission will presume that territory proposed for incorporation that is noncontiguous or that contains enclaves does not include all land and water necessary to allow for the development of essential municipal services on an efficient, cost-effective level.
(d) If a petition for incorporation of a proposed city describes boundaries overlapping the boundaries of an existing organized borough or city, the petition for incorporation must also address and comply with all standards and procedures to alter the boundaries of the existing organized borough or city to remove the overlapping territory. The commission will consider that petition for incorporation as also being a petition to alter the boundaries of the existing borough or city.
History
- Authority: Art. X, sec. 1,Art. X, sec. 7,AS 29.05.011 Ak Const.Ak Const.AS 44.33.812 Art. X, sec. 3,Art. X, sec. 12, Ak Const.Ak Const.
- Eff. 7/3/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.042 Best interests of state
In determining whether incorporation of a city is in the best interests of the state under AS 29.05.100(a), the commission may consider relevant factors, including whether incorporation
(1) promotes maximum local self-government, as determined under 3 AAC 110.981;
(2) promotes a minimum number of local government units, as determined under 3 AAC 110.982 and in accordance with art. X, sec. 1, Constitution of the State of Alaska;
(3) will relieve the state government of the responsibility of providing local services; and
(4) is reasonably likely to expose the state government to unusual and substantial risks as the prospective successor to the city in the event of the city's dissolution.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.05.100 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 7,Ak Const.
- Eff. 5/19/2002, Register 162; am 1/9/2008, Register 185
Article 2 Standards for Incorporation of Boroughs
3 AAC 110.045 Relationship of interests
(a) On a regional scale suitable for borough government, the social, cultural, and economic characteristics and activities of the people in a proposed borough must be interrelated and integrated in accordance with AS 29.05.031(a)(1) and art. X, sec. 3, Constitution of the State of Alaska. In this regard, the commission may consider relevant factors, including the
(1) compatibility of urban and rural areas within the proposed borough;
(2) compatibility of economic lifestyles and industrial or commercial activities;
(3) existence throughout the proposed borough of customary and simple transportation and communication patterns;
(4) extent and accommodation of spoken language differences throughout the proposed borough; and
(5) existence throughout the proposed borough of organized volunteer services such as fire departments or other emergency services.
(b) Repealed 1/9/2008.
(c) The communications media and the land, water, and air transportation facilities throughout the proposed borough must allow for the level of communications and exchange necessary to develop an integrated borough government in accordance with AS 29.05.031(a)(4) and art. X, sec. 3, Constitution of the State of Alaska. In this regard, the commission may consider relevant factors, including
(1) transportation schedules and costs;
(2) geographical and climatic impediments;
(3) telephonic and teleconferencing facilities; and
(4) electronic media for use by the public.
(d) In determining whether communications and exchange patterns are sufficient, the commission may consider whether
(1) all communities within a proposed borough are connected to the proposed borough seat by a public roadway, regular scheduled airline flights on at least a weekly basis, regular ferry service on at least a weekly basis, a charter flight service based in the proposed borough, other customary means of travel including boats and snow machines, or sufficient electronic media communications; and
(2) communications and exchange patterns will adequately facilitate interrelationships and integration of the people in the proposed borough.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.05.031 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 3,Ak Const.
- Eff. 10/12/91, Register 120; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.050 Population
(a) The population of a proposed borough must be sufficiently large and stable to support the proposed borough government in accordance with AS 29.05.031(a)(1) and art. X, sec. 3, Constitution of the State of Alaska. In this regard, the commission may consider relevant factors, including
(1) census enumerations;
(2) durations of residency;
(3) historical population patterns;
(4) seasonal population changes;
(5) age distributions;
(6) contemporary and historical public school enrollment data; and
(7) nonconfidential data from the Department of Revenue regarding applications under AS 43.23 for permanent fund dividends.
(b) In determining whether the population of a proposed borough is sufficiently large and stable to support the proposed borough government, the commission will presume that a minimum of 1,000 permanent residents is required unless specific and persuasive facts are presented showing that a lesser number is adequate.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.05.031 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 3,Ak Const.
- Eff. 10/12/91, Register 120; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.055 Resources
In accordance with AS 29.05.031(a)(3), the economy of a proposed borough must include the human and financial resources necessary to provide the development of essential municipal services on an efficient, cost-effective level, In this regard, the commission
(1) will consider
(A) the reasonably anticipated functions of the proposed borough;
(B) the reasonably anticipated expenses of the proposed borough;
(C) the ability of the proposed borough to generate and collect revenue at the local level;
(D) the reasonably anticipated income of the proposed borough;
(E) the feasibility and plausibility of the anticipated operating and capital budgets of the proposed borough through the period extending one full fiscal year beyond the reasonably anticipated date
(i) for receipt of the final organization grant under AS 29.05.190;
(ii) for completion of the transition set out in AS 29.05.130 - 29.05.140 and 3 AAC 110.900; and
(iii) on which the proposed borough will make its first full local contribution required under AS 14.17.410(b)(2);
(F) the economic base of the area within the proposed borough;
(G) valuations of taxable property within the proposed borough;
(H) land use within the proposed borough;
(I) existing and reasonably anticipated industrial, commercial, and resource development for the proposed borough; and
(J) personal income of residents within the proposed borough; and
(2) may consider other relevant factors, including
(A) the need for and availability of employable skilled and unskilled persons to serve the proposed borough government; and
(B) a reasonably predictable level of commitment and interest of the population in sustaining a borough government.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.05.031 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 3,Ak Const.
- Eff. 10/12/91, Register 120; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.060 Boundaries
(a) In accordance with AS 29.05.031(a)(2) and art. X, sec. 3, Constitution of the State of Alaska, the boundaries of a proposed borough must conform generally to natural geography, must be on a regional scale suitable for borough government, and must include all land and water necessary to provide the full development of essential municipal services on an efficient, cost-effective level. In this regard, the commission may consider relevant factors, including
(1) land use and ownership patterns;
(2) ethnicity and cultures;
(3) repealed 1/9/2008;
(4) existing and reasonably anticipated transportation patterns and facilities;
(5) natural geographical features and environmental factors;
(6) repealed 1/9/2008; and
(7) existing and reasonably anticipated industrial, commercial, and resource development within the proposed borough.
(b) When reviewing the boundaries proposed in a petition for borough incorporation, the commission may consider
(1) model borough boundaries for the area within the proposed borough;
(2) regional boundaries, including
(A) boundaries of one or more regional educational attendance areas existing in that proposed borough area;
(B) federal census area boundaries;
(C) boundaries established for regional Native corporations under 43 U.S.C. 1601 - 1629h (Alaska Native Claims Settlement Act); and
(D) boundaries of national forests;
(3) whether the proposed borough will embrace an area and population with common interests to the maximum degree possible;
(4) whether the proposed borough promotes maximum local self-government, as determined under 3 AAC 110.981;
(5) whether the proposed borough promotes a minimum number of local government units, as determined under 3 AAC 110.982 and in accordance with art. X, sec. 1, Constitution of the State of Alaska; and
(6) whether the proposed borough boundaries are the optimum boundaries for that region in accordance with art. X, sec. 3, Constitution of the State of Alaska.
(c) Repealed 1/9/2008.
(d) Absent a specific and persuasive showing to the contrary, the commission will presume that an area proposed for incorporation that is noncontiguous or that contains enclaves does not include all land and water necessary to allow for the full development of essential municipal services on an efficient, cost-effective level.
(e) If a petition for incorporation of a proposed borough describes boundaries overlapping the boundaries of an existing organized borough, the petition for incorporation must also address and comply with all standards and procedures for detachment of the overlapping boundaries from the existing organized borough. The commission will consider that petition for incorporation as also being a detachment petition.
(f) The boundaries of a borough may not include only a portion of the territory of an existing city government.
(g) Requirements relating to limitation of community, as set out in 3 AAC 110.040(b), do not apply to boroughs.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.05.031 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 3,Ak Const.
- Eff. 10/12/91, Register 120; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.065 Best interests of state
In determining whether incorporation of a borough is in the best interests of the state under AS 29.05.100(a), the commission may consider relevant factors, including whether incorporation
(1) promotes maximum local self-government, as determined under 3 AAC 110.981;
(2) promotes a minimum number of local government units, as determined under 3 AAC 110.982 and in accordance with art. X, sec. 1, Constitution of the State of Alaska;
(3) will relieve the state government of the responsibility of providing local services; and
(4) is reasonably likely to expose the state government to unusual and substantial risks as the prospective successor to the borough in the event of the borough's dissolution.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.05.100 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 3,Ak Const.
- Eff. 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.067 Applicability
The provisions of 3 AAC 110.045 - 3 AAC 110.065 apply to a petition for borough incorporation using either
(1) the legislative review method provided in art. X, sec. 12, Constitution of the State of Alaska; or
(2) the local option methods provided in AS 29.05.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.05.100 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 3,Ak Const.
- Eff. 1/9/2008, Register 185
Article 3 Standards for Annexation to Cities
3 AAC 110.090 Need
(a) The territory must exhibit a reasonable need for city government. In this regard, the commission may consider relevant factors, including
(1) existing or reasonably anticipated social or economic conditions, including the extent to which residential and commercial growth of the community has occurred or is reasonably expected to occur beyond the existing boundaries of the city during the 10 years following the effective date of annexation;
(2) existing or reasonably anticipated health, safety, and general welfare conditions;
(3) existing or reasonably anticipated economic development;
(4) adequacy of existing services;
(5) extraterritorial powers available to the city to which the territory is proposed to be annexed and extraterritorial powers of nearby municipalities; and
(6) whether residents or property owners within the territory receive, or may be reasonably expected to receive, directly or indirectly, the benefit of services and facilities provided by the annexing city.
(b) Territory may not be annexed to a city if essential municipal services can be provided more efficiently and more effectively by another existing city or by an organized borough, on an areawide basis or nonareawide basis, or through a borough service area that, in the determination of the commission, was established in accordance with art. X, sec. 5, Constitution of the State of Alaska.
History
- Authority: Art. X, sec. 1,Art. X, sec. 5,Art. X, sec. 12, Ak Const.Ak Const.Ak Const. Art. X, sec. 3,Art. X, sec. 7,AS 29.06.040 Ak Const.Ak Const.AS 44.33.812
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.100 Character
The territory must be compatible in character with the annexing city. In this regard, the commission may consider relevant factors, including the
(1) land use, subdivision platting, and ownership patterns;
(2) salability of land for residential, commercial, or industrial purposes;
(3) population density;
(4) cause of recent population changes;
(5) suitability of the territory for reasonably anticipated community purposes;
(6) existing and reasonably anticipated transportation patterns and facilities; and
(7) natural geographical features and environmental factors.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 7,Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.110 Resources
The economy within the proposed expanded boundaries of the city must include the human and financial resources necessary to provide essential municipal services on an efficient, cost-effective level. In this regard, the commission may consider relevant factors, including the
(1) reasonably anticipated functions of the city in the territory being annexed;
(2) reasonably anticipated new expenses of the city that would result from annexation;
(3) actual income and the reasonably anticipated ability to generate and collect local revenue and income from the territory;
(4) feasibility and plausibility of those aspects of the city's anticipated operating and capital budgets that would be affected by the annexation through the period extending one full fiscal year beyond the reasonably anticipated date for completion of the transition set out in 3 AAC 110.900;
(5) economic base of the territory within the city after annexation;
(6) valuations of taxable property in the territory proposed for annexation;
(7) land use in the territory proposed for annexation;
(8) existing and reasonably anticipated industrial, commercial, and resource development in the territory proposed for annexation;
(9) personal income of residents in the territory and in the city; and
(10) need for and availability of employable skilled and unskilled persons to serve the city government as a result of annexation.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 7,Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.120 Population
The population within the proposed expanded boundaries of the city must be sufficiently large and stable to support the extension of city government. In this regard, the commission may consider relevant factors, including
(1) census enumerations;
(2) duration of residency;
(3) historical population patterns;
(4) seasonal population changes;
(5) age distributions;
(6) contemporary and historical public school enrollment data; and
(7) nonconfidential data from the Department of Revenue regarding applications under AS 43.23 for permanent fund dividends.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 7,Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.130 Boundaries
(a) The proposed expanded boundaries of the city must include all land and water necessary to provide the development of essential municipal services on an efficient, cost-effective level. In this regard, the commission may consider relevant factors, including
(1) land use and ownership patterns;
(2) population density;
(3) existing and reasonably anticipated transportation patterns and facilities;
(4) natural geographical features and environmental factors; and
(5) extraterritorial powers of cities.
(b) Absent a specific and persuasive showing to the contrary, the commission will presume that territory that is not contiguous to the annexing city, or that would create enclaves in the annexing city, does not include all land and water necessary to allow for the development of essential municipal services on an efficient, cost-effective level.
(c) To promote the limitation of community, the proposed expanded boundaries of the city
(1) must be on a scale suitable for city government and may include only that territory comprising an existing local community, plus reasonably predictable growth, development, and public safety needs during the 10 years following the effective date of annexation; and
(2) may not include entire geographical regions or large unpopulated areas, except if those boundaries are justified by the application of the standards in 3 AAC 110.090 - 3 AAC 110.135 and are otherwise suitable for city government.
(d) If a petition for annexation to a city describes boundaries overlapping the boundaries of an existing organized borough, the petition for annexation must also address and comply with the standards and procedures for either annexation of the enlarged city to the existing organized borough or detachment of the enlarged city from the existing organized borough. If a petition for annexation to a city describes boundaries overlapping the boundaries of another existing city, the petition for annexation must also address and comply with the standards and procedures for detachment of territory from a city, merger of cities, or consolidation of cities.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 7,Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.135 Best interests of state
In determining whether annexation to a city is in the best interests of the state under AS 29.06.040(a), the commission may consider relevant factors, including whether annexation
(1) promotes maximum local self-government, as determined under 3 AAC 110.981;
(2) promotes a minimum number of local government units, as determined under 3 AAC 110.982 and in accordance with art. X, sec. 1, Constitution of the State of Alaska; and
(3) will relieve the state government of the responsibility of providing local services.
History
- Authority: Art. X, sec. 1,Art. X, sec. 7,AS 29.06.040 Ak Const.Ak Const.AS 44.33.812 Art. X, sec. 5,Art. X, sec. 12, Ak Const.Ak Const.
- Eff. 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.140 Legislative review
Territory that meets the annexation standards specified in 3 AAC 110.090 - 3 AAC 110.135 may be annexed to a city by the legislative review process if the commission also determines that any one of the following circumstances exists:
(1) the territory is wholly or substantially surrounded by the annexing city;
(2) the health, safety, or general welfare of city residents is or will be endangered by conditions existing or potentially developing in the territory, and annexation will enable the city to regulate or control the detrimental effects of those conditions;
(3) the extension of city services or facilities into the territory is necessary to enable the city to provide adequate services to city residents, and it is impossible or impractical for the city to extend the facilities or services unless the territory is within the boundaries of the city;
(4) residents or property owners within the territory receive, or may be reasonably expected to receive, directly or indirectly, the benefit of city government without commensurate tax contributions, whether these city benefits are rendered or received inside or outside the territory, and no practical or equitable alternative method is available to offset the cost of providing these benefits;
(5) annexation of the territory will enable the city to plan and control reasonably anticipated growth or development in the territory that otherwise may adversely impact the city;
(6) repealed 5/19/2002;
(7) annexation of the territory will promote
(A) maximum local self-government, as determined under 3 AAC 110.981; and
(B) a minimum number of local government units, as determined under 3 AAC 110.982 and in accordance with art. X, sec. 1, Constitution of the State of Alaska;
(8) annexation of the territory will enhance the extent to which the existing city meets the standards for incorporation of cities, as set out in the Constitution of the State of Alaska, AS 29.05, and 3 AAC 110.005 - 3 AAC 110.042, and is in the best interests of the state;
(9) the commission determines that specific policies set out in the Constitution of the State of Alaska, AS 29.04, AS 29.05, or AS 29.06 are best served through annexation of the territory by the legislative review process, and that annexation is in the best interests of the state.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 7,Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.150 Local action
Territory contiguous to the annexing city, that meets the annexation standards specified in 3 AAC 110.090 - 3 AAC 110.135 and has been approved for local action annexation by the commission, may be annexed to a city by any one of the following actions:
(1) city ordinance if the territory is wholly owned by the annexing city;
(2) city ordinance and a petition signed by all the voters and property owners of the territory;
(3) approval by a majority of votes on the question cast by voters residing in
(A) the territory; and
(B) the annexing city;
(4) repealed 1/9/2008;
(5) repealed 1/9/2008.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 7,Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
Article 4 Standards for Annexation to Boroughs
3 AAC 110.160 Relationship of interests
(a) On a regional scale suitable for borough government, the social, cultural, and economic characteristics and activities of the people in the area proposed for annexation must be interrelated and integrated with the characteristics and activities of the people in the existing borough. In this regard, the commission may consider relevant factors, including the
(1) compatibility of urban and rural areas within the proposed expanded boundaries of the borough;
(2) compatibility of economic lifestyles and industrial or commercial activities within the proposed expanded boundaries of the borough;
(3) existence of customary and simple transportation and communication patterns throughout the proposed expanded boundaries of the borough; and
(4) extent and accommodation of spoken language differences throughout the proposed expanded boundaries of the borough.
(b) The communications media and the land, water, and air transportation facilities throughout the proposed expanded boundaries of the borough must allow for the level of communications and exchange necessary to develop an integrated borough government. In this regard, the commission may consider relevant factors, including
(1) transportation schedules and costs;
(2) geographical and climatic impediments;
(3) telephonic and teleconferencing facilities; and
(4) electronic media for use by the public.
(c) In determining whether communications and exchange patterns are sufficient, the commission may consider whether
(1) all communities within the proposed borough after annexation are connected to the borough seat by a public roadway, regular scheduled airline flights on at least a weekly basis, regular ferry service on at least a weekly basis, a charter flight service based in the proposed borough after annexation, other customary means of travel including boats and snow machines, or sufficient electronic media communications; and
(2) the communications and exchange patterns would adequately facilitate interrelationships and integration of the people in an expanded borough.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X. sec. 12,AS 44.33.812 Art. X, sec. 3,Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.170 Population
The population of the proposed borough after annexation must be sufficiently large and stable to support the resulting borough. In this regard, the commission may consider relevant factors, including
(1) census enumerations;
(2) durations of residency;
(3) historical population patterns;
(4) seasonal population changes;
(5) age distributions;
(6) contemporary and historical public school enrollment data; and
(7) nonconfidential data from the Department of Revenue regarding applications under AS 43.23 for permanent fund dividends.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 3,Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.180 Resources
The economy within the proposed expanded boundaries of the borough must include the human and financial resources necessary to provide the development of essential municipal services. In this regard, the commission may consider relevant factors, including the
(1) reasonably anticipated functions of the borough in the area proposed for annexation;
(2) reasonably anticipated new expenses of the borough that would result from annexation;
(3) actual income and the reasonably anticipated ability of the borough to generate and collect local revenue and income from the new area;
(4) feasibility and plausibility of those aspects of the borough's anticipated operating and capital budgets that would be affected by annexation through the period extending one full fiscal year beyond the reasonably anticipated date for completion of the transition set out in 3 AAC 110.900;
(5) economic base of the area within the borough after annexation;
(6) valuations of taxable property in the area proposed for annexation;
(7) land use in the area proposed for annexation;
(8) existing and reasonably anticipated industrial, commercial, and resource development in the area proposed for annexation;
(9) personal income of residents in the area to be annexed and in the borough; and
(10) the need for and availability of employable skilled and unskilled persons to serve the borough government as a result of annexation.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 3,Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.190 Boundaries
(a) The proposed expanded boundaries of the borough must conform generally to natural geography and must include all land and water necessary to provide the development of essential municipal services. In this regard, the commission may consider relevant factors, including
(1) land use and ownership patterns;
(2) ethnicity and cultures;
(3) repealed 1/9/2008;
(4) existing and reasonably anticipated transportation patterns and facilities;
(5) natural geographical features and environmental factors; and
(6) extraterritorial powers of boroughs.
(b) Absent a specific and persuasive showing to the contrary, the commission will presume that an area that is not contiguous to the annexing borough, or that would create enclaves in the annexing borough, does not include all land and water necessary to allow for the development of essential municipal services.
(c) When considering the annexation of area to a borough, the commission may review
(1) the model borough boundaries for the area for which annexation is proposed;
(2) regional boundaries, including
(A) boundaries of one or more regional educational attendance areas existing in the area proposed for annexation;
(B) federal census area boundaries;
(C) boundaries for regional Native corporations under 43 U.S.C. 1601 - 1629h (Alaska Native Claims Settlement Act); and
(D) boundaries of national forests;
(3) whether the borough will, following the proposed annexation, embrace a maximum area and population with common interests;
(4) whether the annexation promotes maximum local self-government, as determined under 3 AAC 110.981;
(5) whether the annexation promotes a minimum number of local government units, as determined under 3 AAC 110.982 and in accordance with art. X, sec. 1, Constitution of the State of Alaska; and
(6) whether the proposed borough boundaries are the optimum boundaries for that region in accordance with art. X, sec. 3, Constitution of the State of Alaska.
(d) Repealed 1/9/2008;
(e) If a petition for annexation to a borough describes boundaries overlapping the boundaries of an existing organized borough, the petition for annexation must also address and comply with the standards and procedures for detachment of the overlapping region from the existing organized borough.
(f) A petition for annexation to a borough may not include only a portion of the territory of an existing city government.
(g) Requirements relating to limitation of community, as set out in 3 AAC 110.130(c), do not apply to boroughs.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 3,Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.195 Best interests of state
In determining whether annexation to a borough is in the best interests of the state under AS 29.06.040(a), the commission may consider relevant factors, including whether annexation
(1) promotes maximum local self-government, as determined under 3 AAC 110.981;
(2) promotes a minimum number of local government units, as determined under 3 AAC 110.982 and in accordance with art. X, sec. 1, Constitution of the State of Alaska; and
(3) will relieve the state government of the responsibility of providing local services.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 3,Ak Const.
- Eff. 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.200 Legislative review
Area that meets the annexation standards specified in 3 AAC 110.160 - 3 AAC 110.195 may be annexed to a borough by the legislative review process if the commission also determines that any one of the following circumstances exists:
(1) the area manifests a reasonable need for borough government that can be met most efficiently and effectively by the annexing borough;
(2) the area is wholly or substantially surrounded by the annexing borough;
(3) the health, safety, or general welfare of borough residents is or will be endangered by conditions existing or potentially developing in the area, and annexation will enable the borough to regulate or control the detrimental effect of those conditions;
(4) the extension of borough services or facilities into the area is necessary to enable the borough to provide adequate services to borough residents, and it is impossible or impractical for the borough to extend the facilities or services unless the area is within the boundaries of the borough;
(5) residents or property owners within the area receive, or may be reasonably expected to receive, directly or indirectly, the benefit of borough government without commensurate tax contributions, whether these benefits are rendered or received inside or outside the area, and no practical or equitable alternative method is available to offset the cost of providing these benefits;
(6) annexation of the area will enable the borough to plan and control reasonably anticipated growth or development in the area that otherwise may adversely impact the borough;
(7) repealed 5/19/2002;
(8) annexation of the area will promote
(A) maximum local self-government, as determined under 3 AAC 110.981; and
(B) a minimum number of local government units, as determined under 3 AAC 110.982 and in accordance with art. X, sec. 1, Constitution of the State of Alaska;
(9) annexation of the area will enhance the extent to which the annexing borough meets the standards for incorporation of boroughs, as set out in the Constitution of the State of Alaska, AS 29.05, and 3 AAC 110.045 - 3 AAC 110.065, and is in the best interests of the state;
(10) the commission determines that specific policies set out in the Constitution of the State of Alaska, AS 29.04, AS 29.05, or AS 29.06 are best served through annexation of the area by the legislative review process, and that annexation is in the best interests of the state.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 3,Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.210 Local action
Area that meets the annexation standards specified in 3 AAC 110.160 - 3 AAC 110.195 and has been approved for local action annexation by the commission may be annexed to a borough by any one of the following actions:
(1) borough ordinance if the area is wholly owned by the annexing borough;
(2) borough ordinance and a petition signed by all the voters and property owners of the area;
(3) approval by a majority of votes on the question cast by voters residing in
(A) the area; and
(B) the annexing borough;
(4) repealed 1/9/2008;
(5) repealed 1/9/2008.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 3,Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
Article 5 Standards for Merger of Municipalities
3 AAC 110.220 Standards
(a) Two or more municipalities may merge if, in accordance with AS 29.06.130, the commission determines that the proposed merger
(1) meets the standards in 3 AAC 110.220 - 3 AAC 110.235 and
(A) for a proposal to form a merged city, meets the standards for incorporation of cities, as set out in the Constitution of the State of Alaska, AS 29.05, 3 AAC 110.005 - 3 AAC 110.042, and 3 AAC 110.900 - 3 AAC 110.970; or
(B) for a proposal to form a merged borough, meets the standards for incorporation of boroughs, as set out in the Constitution of the State of Alaska, AS 29.05, 3 AAC 110.045 - 3 AAC 110.067, and 3 AAC 110.900 - 3 AAC 110.970; and
(2) is in the best interests of the state.
(b) Separate proceedings are not required for dissolution of a municipality that is being merged with another municipality. Dissolution occurs automatically at the time of merger.
(c) If a petition for merger proposes boundaries that include lands or submerged lands not currently within the boundaries of the merging municipalities, the petition for merger must also address and comply with the standards and procedures for annexation of those lands or submerged lands to the new municipality.
(d) Absent a specific and persuasive showing to the contrary, the commission will presume that a petition for merger promotes
(1) maximum local self-government, as determined under 3 AAC 110.981; and
(2) a minimum number of local government units, as determined under 3 AAC 110.982 and in accordance with art. X, sec. 1, Constitution of the State of Alaska.
History
- Authority: Art. X, sec. 1,Art. X, sec. 7,AS 29.06.040 Ak Const.Ak Const.AS 44.33.812 Art. X, sec. 3,Art. X, sec. 12, Ak Const.Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.225 Best interests of the state
In determining whether merger is in the best interests of the state under AS 29.06.130, the commission may consider relevant factors, including
(1) the ability of the proposed merged municipality to efficiently and effectively provide reasonably necessary facilities and services after merger;
(2) the effect of the proposed merger on the long-term stability of the finances of the proposed merged municipality, other municipalities, and the state;
(3) whether the proposed merger will promote
(A) maximum local self-government, as determined under 3 AAC 110.981; and
(B) a minimum number of local government units, as determined under 3 AAC 110.982 and in accordance with art. X, sec. 1, Constitution of the State of Alaska; and
(4) whether requirements for local government services will be enhanced following merger.
History
- Authority: Art. X, sec. 1,Art. X, sec. 7,AS 29.06.090 Ak Const.Ak Const.AS 44.33.812 Art. X, sec. 3,Art. X, sec. 12, Ak Const.Ak Const.
- Eff. 1/9/2008, Register 185
3 AAC 110.230 Local option
Municipalities that meet the merger standards required under 3 AAC 110.220 - 3 AAC 110.225, and are approved by the commission for local option merger, may merge if the petition for merger is submitted by the number of voters required under AS 29.06.100(a), and if a majority of the voters in the remaining municipality vote in favor of the merger in a subsequent election. The election must be held in accordance with AS 29.06.140.
History
- Authority: Art. X, sec. 1,Art. X, sec. 7,AS 29.06.090 Ak Const.Ak Const.AS 44.33.812 Art. X, sec. 3,Art. X, sec. 12, Ak Const.Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.235 Legislative review
(a) Municipalities that meet the merger standards required under 3 AAC 110.220 - 3 AAC 110.225 and are approved by the commission for legislative review merger, may merge 45 days after presentation to the legislature of the commission's final decision on a legislative review petition if the legislature has not disapproved the decision.
(b) Under AS 29.06.140, the director of elections shall conduct the election of officials of the municipality merged through the legislative review process. The date of the election is the effective date of the merger.
History
- Authority: Art. X, sec. 1,Art. X, sec. 7,AS 29.06.090 Ak Const.Ak Const.AS 44.33.812 Art. X, sec. 3,Art. X, sec. 12, Ak Const.Ak Const.
- Eff. 1/9/2008, Register 185
Article 6 Standards for Consolidation of Municipalities
3 AAC 110.240 Standards
(a) Two or more municipalities may consolidate to form a new municipality if, in accordance with AS 29.06.130, the commission determines that the proposed consolidation
(1) meets the standards in 3 AAC 110.240 - 3 AAC 110.245 and
(A) for a proposal to form a consolidated city, meets the standards for incorporation of cities, as set out in the Constitution of the State of Alaska, AS 29.05, 3 AAC 110.005 - 3 AAC 110.042, and 3 AAC 110.900 - 3 AAC 110.970; or
(B) for a proposal to form a consolidated borough, meets the standards for incorporation of boroughs, as set out in the Constitution of the State of Alaska, AS 29.05, 3 AAC 110.045 - 3 AAC 110.067, and 3 AAC 110.900 - 3 AAC 110.970; and
(2) is in the best interests of the state.
(b) Separate proceedings are not required for dissolution of the consolidating municipalities. Dissolution occurs automatically at the time of consolidation.
(c) If a petition for consolidation proposes boundaries that include lands or submerged lands not currently within the boundaries of the consolidating municipalities, the petition for consolidation must also address and comply with the standards and procedures for annexation of those lands or submerged lands to the new municipality.
(d) Absent a specific and persuasive showing to the contrary, the commission will presume that a petition for consolidation promotes
(1) maximum local self-government, as determined under 3 AAC 110.981; and
(2) a minimum number of local government units, as determined under 3 AAC 110.982 and in accordance with art. X, sec. 1, Constitution of the State of Alaska.
History
- Authority: Art. X, sec. 1,Art. X, sec. 7,AS 29.06.090 Ak Const.Ak Const.AS 44.33.812 Art. X, sec. 3,Art. X, sec. 12, Ak Const.Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.245 Best interests of state
In determining whether consolidation is in the best interests of the state under AS 29.06.130, the commission may consider relevant factors, including
(1) the ability of the proposed consolidated municipality to efficiently and effectively provide reasonably necessary facilities and services after consolidation;
(2) the effect of the proposed consolidation on the long-term stability of the finances of the proposed consolidated municipality, other municipalities, and the state;
(3) whether the proposed consolidation will promote
(A) maximum local self-government, as determined under 3 AAC 110.981; and
(B) a minimum number of local government units, as determined under 3 AAC 110.982 and in accordance with art. X, sec. 1, Constitution of the State of Alaska; and
(4) whether requirements for local government services will be enhanced following consolidation.
History
- Authority: Art. X, sec. 1,Art. X, sec. 7,AS 29.06.090 Ak Const.Ak Const.AS 44.33.812 Art. X, sec. 3,Art. X, sec. 12, Ak Const.Ak Const.
- Eff. 1/9/2008, Register 185
3 AAC 110.250 Local option
Municipalities that meet the consolidation standards required under 3 AAC 110.240 - 3 AAC 110.245, and are approved by the commission for local option consolidation, may consolidate if the petition for consolidation was submitted by the number of voters required under AS 29.06.100(a), and if a majority of the voters in the proposed new municipality vote in favor of the consolidation in a subsequent election. The election must be held in accordance with AS 29.06.140.
History
- Authority: Art. X, sec. 1,Art. X, sec. 7,AS 29.06.090 Ak Const.Ak Const.AS 44.33.812 Art. X, sec. 3,Art. X, sec. 12, Ak Const.Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.255 Legislative review
(a) Municipalities that meet the consolidation standards required under 3 AAC 110.240 - 3 AAC 110.245, and are approved by the commission for legislative review consolidation, may consolidate 45 days after presentation to the legislature of the commission's final decision on a legislative review petition if the legislature has not disapproved the decision.
(b) Under AS 29.06.140, the director of elections shall conduct the election of officials of the municipality consolidated through the legislative review process. The date of the election is the effective date of the consolidation.
History
- Authority: Art. X, sec. 1,Art. X, sec. 7,AS 29.06.090 Ak Const.Ak Const.AS 44.33.812 Art. X, sec. 3,Art. X, sec. 12, Ak Const.Ak Const.
- Eff. 1/9/2008, Register 185
Article 7 Standards for Detachment from Cities
3 AAC 110.257 Standards for detachment from cities
In accordance with AS 29.06.040(a), the commission may approve a proposal for detachment from a city only if the commission determines that the proposal
(1) meets applicable standards under the Constitution of the State of Alaska;
(2) meets standards in 3 AAC 110.257 - 3 AAC 110.260 and 3 AAC 110.900 - 3 AAC 110.970; and
(3) is in the best interests of the state.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 7,Ak Const.
- Eff. 1/9/2008, Register 185
3 AAC 110.260 Best interests of state
(a) In determining whether detachment from a city is in the best interests of the state under AS 29.06.040, the commission may consider relevant factors, including
(1) the health, safety, and general welfare of the proposed remnant city and the territory after detachment;
(2) the ability of the proposed remnant city to efficiently and effectively provide reasonably necessary facilities and services after detachment;
(3) the reasonably anticipated potential for, and impact of, future population growth or economic development that will require local government regulation in the territory after detachment;
(4) the historical pattern of providing to the territory municipal services that have been, or should be, supported by tax levies in the territory;
(5) the historical pattern of cooperation and shared commitment between the people of the proposed remnant city and the people of the territory;
(6) the extent to which detachment might enhance or diminish the ability of the proposed remnant city to meet the standards for incorporation of cities, as set out in the Constitution of the State of Alaska, AS 29.05, 3 AAC 110.005 - 3 AAC 110.042, and 3 AAC 110.900 - 3 AAC 110.970;
(7) the extent to which a transition plan of a previous annexation has been implemented and is effective;
(8) the effect of the proposed detachment on the long-term stability of the finances of the proposed remnant city, other municipalities, and the state;
(9) whether the proposed detachment will promote
(A) maximum local self-government, as determined under 3 AAC 110.981; and
(B) a minimum number of local government units, as determined under 3 AAC 110.982 and in accordance with art. X, sec. 1, Constitution of the State of Alaska;
(10) whether the territory's requirements for local government services will be adequately met following detachment;
(11) contemporary and historical public school enrollment data; and
(12) nonconfidential data from the Department of Revenue regarding applications under AS 43.23 for permanent fund dividends.
(b) If, to fulfill the requirements of (a)(10) of this section, the petitioner has proposed, or the commission requires, incorporation of the territory into a new municipality, the commission may condition the approval of the detachment upon voter approval of the incorporation.
(c) Absent a specific and persuasive showing to the contrary, the commission will presume that territory proposed for detachment that would create noncontiguous parts of the city or enclaves within the city does not meet the standards for detachment.
(d) Absent a specific and persuasive showing to the contrary, the commission will presume that territory proposed for detachment from a city in an unorganized borough is a diminution of maximum local self-government and does not meet the standards for detachment.
(e) In order to promote a minimum number of local government units in accordance with art. X, sec. 1, Constitution of the State of Alaska, a petition for detachment that also seeks to incorporate a new city must propose that the new city will encompass a substantially larger population and territory than the population and territory proposed for detachment.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 7,Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.263 Legislative review
Territory that meets the detachment standards specified in 3 AAC 110.257 - 3 AAC 110.260 may detach from a city by the legislative review process if the commission also determines that any one of the following circumstances exists:
(1) the health, safety, or general welfare of city residents is or will be endangered by conditions existing or potentially developing in the territory, and detachment will enable the city to regulate or control the detrimental effects of those conditions;
(2) it is impossible or impractical for the city to extend facilities or services to the territory;
(3) residents or property owners within the territory have not received, and do not reasonably expect to receive, directly or indirectly, the benefit of city government without significant additional tax contributions;
(4) the commission determines that specific policies set out in the Constitution of the State of Alaska, AS 29.04, AS 29.05, or AS 29.06 are best served through detachment of the territory by the legislative review process, and that detachment is in the best interests of the state.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 7,Ak Const.
- Eff. 1/9/2008, Register 185
3 AAC 110.265 Local action
Territory that meets the detachment standards specified in 3 AAC 110.257 - 3 AAC 110.260 and has been approved for local action detachment by the commission may be detached from a city upon approval by a majority of voters residing in the territory voting on the question at an election.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 7,Ak Const.
- Eff. 1/9/2008, Register 185
Article 8 Standards for Detachment from Boroughs
3 AAC 110.267 Standards for detachment from boroughs
In accordance with AS 29.06.040(a), the commission may approve a proposal for detachment from a borough only if the commission determines that the proposal
(1) meets applicable standards under the Constitution of the State of Alaska;
(2) meets standards in 3 AAC 110.267 - 3 AAC 110.270 and 3 AAC 110.900 - 3 AAC 110.970; and
(3) is in the best interests of the state.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 3,Ak Const.
- Eff. 1/9/2008, Register 185
3 AAC 110.270 Best interests of state
(a) In determining whether detachment from a borough is in the best interests of the state under AS 29.06.040, the commission may consider relevant factors, including
(1) the health, safety, and general welfare of the proposed remnant borough and the area after detachment;
(2) the ability of the proposed remnant borough to efficiently and effectively provide reasonably necessary facilities and services after detachment;
(3) the reasonably anticipated potential for, and impact of, future population growth or economic development that will require local government regulation in the area after detachment;
(4) the historical pattern of providing to the area municipal services that have been, or should be, supported by tax levies in the area;
(5) the historical pattern of cooperation and shared commitment between the people of the proposed remnant borough and the people of the area;
(6) the extent to which detachment might enhance or diminish the ability of the proposed remnant borough to meet the standards for incorporation of boroughs, as set out in the Constitution of the State of Alaska, AS 29.05, 3 AAC 110.045 - 3 AAC 110.065, and 3 AAC 110.900 - 3 AAC 110.970;
(7) the extent to which a transition plan of a previous annexation has been implemented and is effective;
(8) the effect of the proposed detachment on the long-term stability of the finances of the proposed remnant borough, other municipalities, and the state;
(9) whether the proposed detachment will promote
(A) maximum local self-government, as determined under 3 AAC 110.981; and
(B) a minimum number of local government units, as determined under 3 AAC 110.982 and in accordance with art. X, sec. 1, Constitution of the State of Alaska;
(10) whether the area's requirements for local government services will be adequately met following detachment;
(11) contemporary and historical public school enrollment data; and
(12) nonconfidential data from the Department of Revenue regarding applications under AS 43.23 for permanent fund dividends.
(b) If, to fulfill the requirements of (a)(10) of this section, the petitioner has proposed, or the commission requires, incorporation of the area into a new municipality, the commission will condition the approval of the detachment upon voter approval of the incorporation.
(c) Absent a specific and persuasive showing to the contrary, the commission will presume that area proposed for detachment that would create noncontiguous parts of the borough or enclaves within the borough does not meet the standards for detachment.
(d) Absent a specific and persuasive showing to the contrary, the commission will presume that area proposed for detachment from an organized borough to an unorganized borough is a diminution of maximum local self-government and does not meet the standards for detachment.
(e) In order to promote a minimum number of local government units in accordance with art. X, sec. 1, Constitution of the State of Alaska, a petition for detachment that also seeks to incorporate a new borough must propose that the new borough will encompass a substantially larger population and area than the population and area proposed for detachment.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 3,Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.272 Effect of detachment on education
In addition to the information required by a petition form under 3 AAC 110.420, a petition that proposes to detach an area from an organized borough and include that area in the unorganized borough must explain in the brief required under 3 AAC 110.420(b)(19) the plan for education by a regional educational attendance area in the detached area, including a proposal to work with the department and the Department of Education and Early Development to implement the plan.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 3,Ak Const.
- Eff. 1/9/2008, Register 185
3 AAC 110.273 Legislative review
An area that meets the detachment standards specified in 3 AAC 110.267 - 3 AAC 110.270 may detach from a borough by the legislative review process if the commission also determines that any one of the following circumstances exists:
(1) the health, safety, or general welfare of borough residents is or will be endangered by conditions existing or potentially developing in the area, and detachment will enable the area to regulate or control the detrimental effects of those conditions;
(2) it is impossible or impractical for the borough to extend facilities or services to the area;
(3) residents or property owners within the area have not received, and do not reasonably expect to receive, directly or indirectly, the benefit of borough government without significant additional tax contributions;
(4) the commission determines that specific policies set out in the Constitution of the State of Alaska or AS 29.04, AS 29.05, or AS 29.06 are best served through detachment of the area by the legislative review process and that detachment is in the best interests of the state.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 3,Ak Const.
- Eff. 1/9/2008, Register 185
3 AAC 110.275 Local action
An area that meets the detachment standards specified in 3 AAC 110.267 - 3 AAC 110.270 and has been approved for local action detachment by the commission, may be detached from a borough upon approval by a majority of voters residing in the area voting on the question at an election.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 3,Ak Const.
- Eff. 1/9/2008, Register 185
Article 9 Standards for Dissolution of Cities
3 AAC 110.280 Commission standards
(a) After filing a petition under AS 29.06.450(a)(1), a city may dissolve if the commission determines that
(1) dissolution of the city is in the best interests of the state;
(2) the city is free of debt or has satisfied each creditor with a method of repayment; and
(3) the city
(A) no longer meets the standards for incorporation of cities, as set out in AS 29.05 and 3 AAC 110.005 - 3 AAC 110.042;
(B) has ceased to exercise any of its mandatory powers; or
(C) is included within an organized borough that assumes, on an areawide, nonareawide, or service-area basis, all the rights, powers, duties, assets, and liabilities of the city.
(b) Repealed 1/9/2008.
(c) Except as otherwise provided in this subsection, in determining whether a city is free of debt or has satisfied each creditor with a method of repayment, the commission will require an audit identifying all assets and liabilities of the city. For the proposed dissolution of a home rule or first class city, and for the proposed dissolution of a second class city that has undergone an audit in each of the three years immediately preceding the petition for dissolution, the audit must be performed by an independent certified public accountant. For the proposed dissolution of a second class city that has not undergone an audit in each of the three years immediately preceding the petition for dissolution, the department shall submit a written report identifying all assets and liabilities of that city.
History
- Authority: Art. X, sec. 1,Art. X, sec. 12,AS 29.06.450 Ak Const.Ak Const.AS 44.33.020 Art. X, sec. 7,Art. X, sec. 14,AS 44.33.812 Ak Const.Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.290 Local option standards
(a) A city may dissolve using the local option method identified in AS 29.06.450(a)(2) if the voters of the city file a petition for dissolution under AS 29.06.460 and the commission determines that the city qualifies for dissolution under AS 29.06.470(a) or AS 29.06.470(b). The commission will deny or accept a petition in accordance with AS 29.06.
(b) Except as otherwise provided in this subsection in determining whether a city is free of debt or has satisfied each creditor with a method of repayment under AS 29.06.470, the commission will require an audit identifying all assets and liabilities of the city. For the proposed dissolution of a home rule or first class city, and for the proposed dissolution of a second class city that has undergone an audit in each of the three years immediately preceding the petition for dissolution, the audit must be performed by an independent certified public accountant. For the proposed dissolution of a second class city that has not undergone an audit in each of the three years immediately preceding the petition for dissolution, the department shall submit a written report identifying all assets and liabilities of that city proposed for dissolution.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.470 Ak Const.Art. X, sec. 14,AS 29.06.500 Art. X, sec. 7,Ak Const.AS 44.33.020 Ak Const.AS 29.06.450; AS 44.33.812 Art. X, sec. 12,AS 29.06.460
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.295 Legislative review
The commission may determine whether its decision favoring dissolution of a city will be submitted for legislative review in accordance with art. X, sec. 12, Constitution of the State of Alaska.
History
- Authority: Art. X, sec. 1,Art. X, sec. 12,AS 29.06.470 Ak Const.Ak Const.AS 29.06.500 Art. X, sec. 7,AS 29.06.450; AS 44.33.812 Ak Const.AS 29.06.460
- Eff. 1/9/2008, Register 185
3 AAC 110.300 Best interests of state
(a) In determining whether dissolution of a city is in the best interests of the state under AS 29.06.500(a) or 3 AAC 110.280, the commission may consider relevant factors, including
(1) the extent to which the city is providing services, receiving revenue, and incurring debt;
(2) whether a government or organization other than the state is willing and able to provide all services and facilities necessary to meet the needs of the community;
(3) whether dissolution of the city is likely to endanger the health, safety, or general welfare of residents in or near the city proposed for dissolution;
(4) the effect that the proposed dissolution will have on the harmony of relations among residents of the city proposed for dissolution, and between the residents of the city and others residing near the city;
(5) the social and economic impacts of the proposed dissolution on other municipalities or communities in the state;
(6) the effect of the proposed dissolution on the long-term stability of the finances of other municipalities and the state; and
(7) circumstances identified by the commission reflecting the legal standards and principles that guide commission action in furthering the development of maximum local self-government with a minimum number of local government units.
(b) Absent a specific and persuasive showing to the contrary, the commission will presume that a petition for dissolution of a city within an organized borough promotes a minimum number of local government units in accordance with art. X, sec. 1, Constitution of the State of Alaska.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.450 Ak Const.Art. X, sec. 12,AS 29.06.500 Art. X, sec. 7,Ak Const.AS 44.33.812
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
Article 10 Standards for Dissolution of Boroughs
3 AAC 110.310 Commission standards
(a) After filing a petition under AS 29.06.450(a)(1), a borough may dissolve if the commission determines that
(1) dissolution of the borough is in the best interests of the state;
(2) the borough is free of debt or has satisfied each creditor with a method of repayment; and
(3) the borough
(A) no longer meets the standards for incorporation of boroughs, as set out in the Constitution of the State of Alaska, AS 29.05, and 3 AAC 110.045 - 3 AAC 110.065, and dissolution is in the best interests of the state;
(B) has ceased to exercise any of its mandatory powers; or
(C) is a unified municipality and is subject to a petition for deunification under 3 AAC 110.331 - 3 AAC 110.333.
(b) Repealed 1/9/2008.
(c) Except as otherwise provided in this subsection, in determining whether a borough is free of debt or has satisfied each creditor with a method of repayment, the commission will require an audit to be performed by an independent certified accountant identifying all assets and liabilities of the borough.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.450 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 3,Ak Const.
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.320 Local option standards
(a) A borough may dissolve using the local option method identified in AS 29.06.450(a)(2) if the voters of the borough file a petition for dissolution under AS 29.06.460 and the commission determines that the borough qualifies for dissolution under AS 29.06.470(a) or AS 29.06.470(b). The commission will deny or accept a petition in accordance with AS 29.06.
(b) In determining whether a borough is free of debt or has satisfied each creditor with a method of repayment under AS 29.06.470, the commission will require an audit performed by an independent certified public accountant identifying all assets and liabilities of the borough.
History
- Authority: Art. X, sec. 1,Art. X, sec. 12,AS 29.06.470 Ak Const.Ak Const.AS 29.06.500 Art. X, sec. 3,AS 29.06.450; AS 44.33.812 Ak Const.AS 29.06.460
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.325 Legislative review
The commission may determine whether its decision favoring dissolution of a borough will be submitted for legislative review in accordance with art. X, sec. 12, Constitution of the State of Alaska.
History
- Authority: Art. X, sec. 1,Art. X, sec. 12,AS 29.06.470 Ak Const.Ak Const.AS 29.06.500 Art. X, sec. 3,AS 29.06.450; AS 44.33.812 Ak Const.AS 29.06.460
- Eff. 1/9/2008, Register 185
3 AAC 110.330 Best interests of state
In determining whether dissolution of a borough is in the best interests of the state under AS 29.06.500(a) or 3 AAC 110.310, the commission may consider relevant factors, including
(1) the extent to which the borough is providing services, receiving revenue, and incurring debt;
(2) whether a government or organization other than the state is willing and able to provide all services and facilities necessary to meet the needs of the area;
(3) whether dissolution of the borough is likely to endanger the health, safety, or general welfare of residents in or near the borough proposed for dissolution;
(4) the effect that the proposed dissolution will have on the harmony of relations among residents of the borough proposed for dissolution, and between the residents of the borough and others residing near the borough;
(5) the social and economic impacts of the proposed dissolution on other municipalities or communities in the state;
(6) the effect of the proposed dissolution on the long-term stability of the finances of other municipalities and the state; and
(7) circumstances identified by the commission reflecting the legal standards and principles that guide commission action in furthering the development of maximum local self-government with a minimum number of local government units.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.450 Ak Const.Art. X, sec. 12,AS 29.06.500 Art. X, sec. 3,Ak Const.AS 44.33.812
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
Article 11 Standards for Deunification
3 AAC 110.331 Standards for deunification of a unified municipality
(a) After filing a petition as required under 3 AAC 110.310 and 3 AAC 110.420, a unified municipality may deunify and incorporate as a non-unified home rule borough if the commission determines that
(1) the municipality to deunify meets the standards for incorporation of a borough, as set out in the Constitution of the State of Alaska, AS 29.05, 3 AAC 110.045 - 3 AAC 110.065, and 3 AAC 110.900 - 3 AAC 110.970;
(2) deunification of the unified municipality is in the best interest of that municipality and its citizens;
(3) deunification of the unified municipality is in the best interests of the state;
(4) the non-unified home rule borough has all the rights, powers, duties, assets, and liabilities of the former unified municipality, and all charter provisions, ordinances, resolutions, regulations, procedures, and orders of the former unified municipality remain in effect except to the extent that any of them would otherwise prohibit the incorporation of a city government within the boundaries of the former unified municipality or is inconsistent with other provisions of the law and require an amendment to any of those laws as provided in (b) of this section.
(b) A petition for deunification of a unified municipality must comply with the requirements for amending the charter or other laws of the unified municipality if a provision of the charter or other laws are affected by the dissolution and incorporation. If that compliance requires an election by the qualified voters of the municipality, that election becomes a condition of approval whether the petition is by legislative review or local option.
(c) The commission may accept or deny a petition for deunification and may amend or attach conditions to it.
History
- Authority: Art. X, sec. 1,Art. X, sec. 12,AS 29.06.500 Ak Const.Ak Const.AS 44.33.812 Art. X, sec. 3,AS 29.05.031 Ak Const.AS 29.06.450
- Eff. 1/9/2008, Register 185
3 AAC 110.332 Local option
A unified municipality may deunify using the local option method if
(1) a deunification petition is filed with the department on the form prescribed by the department;
(2) the petition is signed by the number of voters equal to at least 25 percent of the number of votes cast in the last regular election of the unified municipality; and
(3) the commission determines that the municipality qualifies for deunification and accepts the petition in accordance with AS 29.06.450(a)(1), AS 29.05.031 - 29.05.100, and 3 AAC 110.310 - 3 AAC 110.333.
History
- Authority: Art. X, sec. 1,Art. X, sec. 12,AS 29.06.500 Ak Const.Ak Const.AS 44.33.812 Art. X, sec. 3,AS 29.05.031 Ak Const.AS 29.06.450
- Eff. 1/9/2008, Register 185
3 AAC 110.333 Best interests of the state
In determining whether deunification of a unified municipality is in the best interests of the state under AS 29.06.500(a) or 3 AAC 110.310, the commission may consider relevant factors, including
(1) whether deunification promotes maximum local self-government;
(2) whether deunification promotes a minimum number of local government units, as determined under 3 AAC 110.982 and in accordance with art. X, sec. 1, Constitution of the State of Alaska;
(3) whether deunification is likely to endanger the health, safety, or general welfare of residents in or near the municipality proposed for deunification;
(4) the effect of deunification on the harmony of relations among residents of the municipality proposed for deunification;
(5) the social and economic impacts of deunification on other municipalities or communities in the state;
(6) the effect of deunification on the long-term stability of the finances of the successor non-unified home rule borough, other municipalities, and the state; and
(7) circumstances identified by the commission reflecting the legal standards and principles that guide commission action in furthering the development of maximum local self-government with a minimum number of local governmental units.
History
- Authority: Art. X, sec. 1,Art. X, sec. 12,AS 29.06.500 Ak Const.Ak Const.AS 44.33.812 Art. X, sec. 3,AS 29.05.031 Ak Const.AS 29.06.450
- Eff. 1/9/2008, Register 185
Article 12 Standards for Reclassification of Cities
3 AAC 110.340 Application of incorporation standards
In determining whether a city satisfies the incorporation standards for the class of city to which it is proposed to be reclassified under AS 29.04.040(a), the commission will consider the applicable standards under the Constitution of the State of Alaska, AS 29.05.011, AS 29.05.021, 3 AAC 110.005 - 3 AAC 110.042, and 3 AAC 110.900 - 3 AAC 110.970.
History
- Authority: Art. X, sec. 7,Art. X, sec. 12,AS 29.04.040 Ak Const.Ak Const.AS 44.33.812
- Eff. 11/27/96, Register 140; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.350 Best interests standard for a proposed second class city in the unorganized borough
(a) In determining whether reclassification of a home rule city or first class city to a second class city in the unorganized borough is in the best interests of the state under AS 29.04.040(a), the commission may consider relevant factors, including the
(1) reasonably anticipated fiscal impact to the state from the elimination of local contributions to the city school district under AS 14.17.410, changes in the district cost factors under AS 14.17.460, changes in funding under 20 U.S.C. 7703, and other effects;
(2) reasonably anticipated impacts on education from combining the city school district and the regional educational attendance area in which the city is located;
(3) ability of the city to provide essential city services, meet its financial and contractual obligations, and otherwise function under the more limited authority of a second class city to levy a property tax;
(4) reasonably anticipated need for mandatory planning, platting, and land use regulation within the boundaries of the city;
(5) reasonably anticipated need for the city to exercise the power of eminent domain; and
(6) likelihood that reclassification may promote formation of an organized borough in the region.
(b) In considering the factors in (a)(1) and (2) of this section, the commission may consult with the commissioner of education and early development, the superintendent and school board of the city school district, and the superintendent, school board, and advisory school boards established under AS 14.08.115 of the regional educational attendance area in which the city is located.
(c) The commission may make a determination that reclassification is in the state's best interest, subject to legislative review in the manner provided by art. X, sec. 12, Constitution of the State of Alaska. In those circumstances, legislative review of a reclassification proposal does not eliminate the requirement for voter approval of a reclassification proposal under AS 29.04.040.
(d) Absent a specific and persuasive showing to the contrary, the commission will presume that reclassification of a city under this section is not in the best interests of the state if reclassification will result in the transfer of the city's debt for educational facilities to the state.
(e) Absent a specific and persuasive showing to the contrary, the commission will presume that reclassification of a city under this section promotes a minimum number of local government units, as determined under 3 AAC 110.982 and in accordance with art. X, sec. 1, Constitution of the State of Alaska.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.04.040 Ak Const.Art. X, sec. 12,AS 44.33.812 Art. X, sec. 7,Ak Const.
- Eff. 11/27/96, Register 140; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.360 Best interests standard for a proposed first class city in the unorganized borough
(a) In determining whether reclassification of a second class city to a first class city in the unorganized borough is in the best interests of the state under AS 29.04.040(a), the commission may consider relevant factors, including
(1) the reasonably anticipated fiscal impact to the state from the imposition of local contributions to the city school district under AS 14.17.410, changes in the district cost factors under AS 14.17.460, changes in funding under 20 U.S.C. 7703, and other effects;
(2) the reasonably anticipated impacts on education resulting from the creation of a new city school district;
(3) repealed 1/9/2008;
(4) the need for the city to have greater authority to levy a property tax in order to provide essential municipal services;
(5) the need for mandatory planning, platting, and land use regulation within the boundaries of the city;
(6) the need for the city to exercise the power of eminent domain; and
(7) the likelihood that reclassification will diminish incentives or opportunities to form an organized borough.
(b) In considering the factors in (a)(1) and (2) of this section, the commission may consult with the commissioner of education and early development and the superintendent, school board, and advisory school boards established under AS 14.08.115 of the regional educational attendance area in which the city is located.
(c) The commission may make a determination that reclassification is in the state's best interest, subject to legislative review in the manner provided by art. X, sec. 12, Constitution of the State of Alaska. In those circumstances, legislative review of a reclassification proposal does not eliminate the requirement for voter approval of a reclassification proposal under AS 29.04.040.
History
- Authority: Art. X, sec. 7,Art. X, sec. 12,AS 29.04.040 Ak Const.Ak Const.AS 44.33.812
- Eff. 11/27/96, Register 140; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.370 Best interests standard for cities within an organized borough
(a) In determining whether reclassification of a city within an organized borough is in the best interests of the state under AS 29.04.040(a), the commission may consider relevant factors, including the
(1) fiscal impact to the state;
(2) need for the city to have authority to levy a property tax, and at what rate, to provide essential municipal services; and
(3) need for the city to exercise the power of eminent domain.
(b) The commission may make a determination that reclassification is in the state's best interest, subject to legislative review in the manner provided by art. X, sec. 12, Constitution of the State of Alaska. In those circumstances, legislative review of a reclassification proposal does not eliminate the requirement for voter approval of a reclassification proposal under AS 29.04.040.
History
- Authority: Art. X, sec. 7,Art. X, sec. 12,AS 29.04.040 Ak Const.Ak Const.AS 44.33.812
- Eff. 11/27/96, Register 140; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.371 Reclassification of first class cities with a population less than 400
The provisions of 3 AAC 110.340 - 3 AAC 110.370 do not apply to a reclassification request submitted under AS 29.04.045.
History
- Authority: Art. X, sec. 7,AS 29.04.045 Ak Const.AS 44.33.812
- Eff. 1/5/2024, Register 249
Article 13 Procedures for Petitioning and for Other Commission Matters
3 AAC 110.400 Applicability
Except as provided in 3 AAC 110.590 and 3 AAC 110.710, 3 AAC 110.410 - 3 AAC 110.700 apply to petitions for city reclassification under AS 29.04, for incorporation under AS 29.05 or art. X, sec 12, Constitution of the State of Alaska, and for alterations to municipalities under AS 29.06 or art. X, sec 12, Constitution of the State of Alaska. However, only those sections of 3 AAC 110.410 - 3 AAC 110.700 with which compliance is required under 3 AAC 110.590 apply to an annexation petition filed under a local action method provided for in AS 29.06.040(c)(3) or (4).
History
- Authority: Art. X, sec. 1,Art. X, sec. 12,AS 29.06.100 Ak Const.Ak Const.AS 29.06.450 Art. X, sec. 3,AS 29.04.040; AS 29.06.460 Ak Const.AS 29.05.060; AS 44.33.812 Art. X, sec. 7,AS 29.06.040 Ak Const.AS 29.06.090
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185; am 1/5/2024, Register 249
3 AAC 110.410 Petitioners
(a) A petition for a proposed action by the commission under this chapter may be initiated by
(1) the legislature;
(2) the commissioner;
(3) a person designated by the commission, subject to (d) of this section;
(4) a political subdivision of the state;
(5) a regional educational attendance area;
(6) repealed 1/9/2008;
(7) at least 10 percent of the persons registered to vote in a political subdivision of the state or in a regional educational attendance area, if the petition seeks the alteration of a municipality under AS 29.06, other than by local option under AS 29.06.090(b)(2) or AS 29.06.450(a)(2);
(8) at least 10 percent of the persons registered to vote in
(A) the area proposed for borough annexation by election under 3 AAC 110.210(3) or by legislative review under AS 29.06.040(b) or AS 44.33.812(b)(2); or
(B) the territory proposed for city annexation by election under 3 AAC 110.150(3) or by legislative review under AS 29.06.040(b) or AS 44.33.812(b)(2);
(9) at least 25 percent of the persons registered to vote in
(A) the area proposed for borough detachment by election under AS 29.06.040(c)(2) or by legislative review under AS 29.06.040(b) or AS 44.33.812(b)(2); or
(B) the territory proposed for city detachment by election under AS 29.06.040(c)(2) or by legislative review under AS 29.06.040(b) or AS 44.33.812(b)(2); or
(10) the number of qualified voters required under
(A) AS 29.04.040, if the petition seeks reclassification of a city;
(B) AS 29.05.060, if the petition seeks a municipal incorporation under AS 29.05.060;
(C) AS 29.06.100(a), if the petition seeks a municipal merger or consolidation under AS 29.06.090(b)(2); or
(D) AS 29.06.460(a), if the petition seeks a municipal dissolution under AS 29.06.450(a)(2).
(b) If, to achieve compliance with AS 29.06.100(a), a petition for merger or consolidation must be signed by a percentage of voters from one or more cities within a borough, and also by a percentage of voters in that borough, all voters who sign the petition as borough voters must reside outside any city or cities joining that petition. The number of borough voters required to sign the petition must be based on the number of registered voters or the number of votes cast in the area of the borough outside any city or cities joining the petition.
(c) The provisions of (a)(10) of this section may not be construed to apply to petition procedures established by the commission under AS 44.33.812(a)(2), AS 29.06.040(c) for annexation and detachment, AS 29.06.090(b)(1) for merger and consolidation, or AS 29.06.450(a)(1) for dissolution.
(d) A person designated by the commission may initiate a petition if the commission
(1) determines that the action proposed will likely promote the standards established under the Constitution of the State of Alaska, AS 29.04, AS 29.05, AS 29.06, or this chapter, and is in the best interests of the state; and
(2) directs the designated person to prepare a petition by a motion approved by a majority of the appointed membership of the commission.
(e) The person initiating a petition under (a) of this section is the petitioner. A petition must include a designation of
(1) one person as representative of the petitioner; and
(2) a second person as an alternate representative, who may act if the primary representative is absent, resigns, or fails to perform the representative's duties.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.100 Ak Const.Art. X, sec. 14,AS 29.06.450 Art. X, sec. 3,Ak Const.AS 29.06.460 Ak Const.AS 29.04.040; AS 44.33.020 Art. X, sec. 7,AS 29.05.060; AS 44.33.812 Ak Const.AS 29.06.040 Art. X, sec. 12,AS 29.06.090
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.415 Additional requirements of a voter-initiated petition
(a) In determining whether a voter-initiated petition under 3 AAC 110.410(a)(7) - (10) or 3 AAC 110.410(b) contains at least the minimum number of required signatures, the department may not consider a signature
(1) unless the voter who signed the form printed the voter's name, physical address of place of residence, and a numerical identifier, and dated the signature;
(2) that is dated more than one year before the date that the petition was submitted to the department.
(b) If a voter-initiated petition is unacceptable under (a)(2) of this section, the department is not required to perform a technical review of the petition under 3 AAC 110.440. The department shall return the petition to the petitioner with a letter explaining the reason for the return.
(c) A person who has signed a petition form may withdraw that person's name only by giving written notice to the petitioner's representative before the date the petition is submitted to the department.
(d) Information that is confidential under AS 15.07.195 is not open to public inspection unless otherwise required by law.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.100 Ak Const.Art. X, sec. 14,AS 29.06.450 Art. X, sec. 3,Ak Const.AS 29.06.460 Ak Const.AS 29.04.040; AS 44.33.020 Art. X, sec. 7,AS 29.05.060; AS 44.33.812 Ak Const.AS 29.06.040 Art. X, sec. 12,AS 29.06.090
- Eff. 1/9/2008, Register 185
3 AAC 110.420 Petition
(a) A proposal for one or more actions by the commission under this chapter is initiated by submitting a petition and supporting materials to the department.
(b) A petition must be submitted on forms provided by the department. On the forms provided, the department shall require that the petition include the following information and supporting materials:
(1) the name of the petitioner;
(2) for the petitioner's representative and alternative representative designated under 3 AAC 110.410(e),
(A) the physical address of each individual's place of residence;
(B) each individual's mailing address; and
(C) each individual's telephone number, facsimile number, and electronic mail address, if any;
(3) the name and class of the
(A) existing municipal government for which a change is proposed; and
(B) proposed municipal government;
(4) a general description of the nature of the proposed commission action;
(5) a general description of the
(A) area proposed for borough boundary change; or
(B) territory proposed for city boundary change;
(6) a statement of reasons for the petition;
(7) legal metes and bounds descriptions, maps, and plats for a proposed municipality, or for any existing municipality for which a change is proposed;
(8) the size of the
(A) area proposed for borough boundary change; or
(B) territory proposed for city boundary change;
(9) data estimating the population of the
(A) area proposed for borough boundary change; or
(B) territory proposed for city boundary change;
(10) information relating to public notice and service of the petition;
(11) the following tax data for a borough boundary change:
(A) the assessed or estimated value of taxable property in the area proposed for change, if the proposed municipal government, or any existing municipal government for which a change is proposed, levies or proposes to levy property taxes;
(B) projected taxable sales in the area proposed for change, if the proposed municipal government, or any existing municipal government for which the change is proposed, levies or proposes to levy sales taxes;
(C) each municipal government tax levy currently in effect in the area proposed for change;
(12) the following tax data for a city boundary change:
(A) the assessed or estimated value of taxable property in the territory proposed for change, if the proposed municipal government, or any existing municipal government for which a change is proposed, levies or proposes to levy property taxes;
(B) projected taxable sales in the territory proposed for change, if the proposed municipal government, or any existing municipal government for which the change is proposed, levies or proposes to levy sales taxes;
(C) each municipal government tax levy currently in effect in the territory proposed for change;
(13) for a proposed municipality, or for any existing municipality for which a change is proposed, projections of revenue, operating expenditures, and capital expenditures through the period extending one full fiscal year beyond the reasonably anticipated date
(A) for receipt of any final organization grant under AS 29.05.180 or 29.05.190;
(B) for completion of any transition set out in AS 29.05.130 - 29.05.140 or 3 AAC 110.900; and
(C) on which a proposed new borough or city will make its first full local contribution required under AS 14.17.410(b)(2), if the proposal seeks to incorporate a municipality that would be subject to AS 14.17.410(b)(2);
(14) information about any existing long-term municipal debt;
(15) information about the powers and functions of
(A) the proposed municipality;
(B) any existing municipality for which a change is proposed, before and after the proposed change; and
(C) alternative service providers, including regional educational attendance areas and other service areas within the area proposed for borough boundary change or territory proposed for city boundary change;
(16) the transition plan required under 3 AAC 110.900;
(17) information about the composition and apportionment of the governing body of
(A) the proposed municipality; and
(B) any existing municipality for which a change is proposed, before and after the proposed change;
(18) information regarding any effects of the proposed change upon civil and political rights for purposes of 42 U.S.C. 1971 - 1974 (Voting Rights Act of 1965);
(19) a supporting brief that provides a detailed explanation of how the proposal serves the best interests of the state and satisfies each constitutional, statutory, and regulatory standard that is relevant to the proposed commission action;
(20) documentation demonstrating that the petitioner is authorized to file the petition under 3 AAC 110.410;
(21) for a petition to incorporate or consolidate a home rule city or borough, the proposed municipal charter;
(22) an affidavit from the petitioner's representative that, to the best of the representative's knowledge, information, and belief, formed after reasonable inquiry, the information in the petition is true and accurate;
(23) other information or supporting material that the department believes the petitioner must provide for an adequate review of the proposal.
(c) The petitioner shall provide the department with a copy of the petition and supporting materials in an electronic format, unless the department waives this requirement because the petitioner lacks a readily accessible means or the capability to provide items in an electronic format.
(d) For a voter-initiated petition, the petition form must include sufficient space for the printed name, a numerical identifier, the signature, the date of signature, and the address of each person signing the petition.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.100 Ak Const.Art. X, sec. 14,AS 29.06.450 Art. X, sec. 3,Ak Const.AS 29.06.460 Ak Const.AS 29.04.040; AS 44.33.020 Art. X, sec. 7,AS 29.05.060; AS 44.33.812 Ak Const.AS 29.06.040 Art. X, sec. 12,AS 29.06.090
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.421 Name of municipal government
The name of the municipal government specified in accordance with 3 AAC 110.420(b)(3)(B) must contain the word "city,""borough," or "municipality," as applicable to the type of municipal government proposed. The name may not contain a word or phrase that indicates or implies that the municipal government is organized for a purpose other than that authorized by its incorporation or alteration.
History
- Authority: AS 44.33.812
- Eff. 1/9/2008, Register 185
3 AAC 110.425 Legislative review annexation petitions
(a) Except as provided in (i) of this section, before a petition for annexation by the legislative review process may be submitted to the department under 3 AAC 110.420, the prospective petitioner shall prepare a complete draft of the prospective annexation petition and a summary of the prospective petition. The prospective petitioner shall also conduct a public hearing on the annexation proposal in accordance with (d) - (e) of this section.
(b) The prospective annexation petition required under (a) of this section must be prepared using forms provided by the department under 3 AAC 110.420. The summary required under (a) of this section must include a map of the area proposed for borough annexation or territory proposed for city annexation, a synopsis of the views of the prospective petitioner regarding the application of applicable standards to the proposed annexation, a summary of the reasonably anticipated effects of annexation, and an abstract of the transition plan required under 3 AAC 110.900.
(c) The prospective annexation petition and the summary must be made available to the public on or before the first publication or posting of the notice of the hearing required under (e) of this section. The prospective petitioner shall make one copy of the prospective petition available for public review at a convenient location within or near the boundaries proposed for annexation for every 500 individuals reasonably estimated to reside within those boundaries. However, the prospective petitioner need not provide more than five copies of the prospective petition for public review regardless of the population within the boundaries proposed for annexation. The prospective petitioner shall make the summary of the annexation proposal available for distribution to the public without charge at a convenient location within or near the boundaries proposed for annexation.
(d) The public hearing required under (a) of this section must address appropriate annexation standards and their application to the annexation proposal, legislative review annexation procedures, the reasonably anticipated effects of the proposed annexation, and the proposed transition plan required under 3 AAC 110.900. The hearing must be held at a convenient location selected by the prospective petitioner within or near the boundaries proposed for annexation. The hearing must allow a period for comment on the proposal from members of the public. If the prospective petitioner is a municipality, the governing body shall conduct the hearing.
(e) In the manner provided for a hearing of the commission under 3 AAC 110.550, a prospective petitioner shall give public notice and a public service announcement of the public hearing required under (a) of this section.
(f) The department shall specify the text of the public notice required under (e) of this section, to ensure that the notice contains the following information:
(1) the title of the notice of the hearing;
(2) the name of the prospective petitioner;
(3) a brief description of the nature of the prospective legislative review annexation proposal, including the size and general location of the boundaries under consideration;
(4) information about where and when the prospective petition is available for public review;
(5) information about where the public may receive, without charge, a summary of the prospective petition;
(6) a statement concerning who will conduct the hearing;
(7) a statement of the scope of the hearing;
(8) notification that public comments will be accepted during the hearing, and a statement of any time limits to be placed on individuals who offer comments;
(9) the date, time, and place of the hearing;
(10) a statement of compliance with 42 U.S.C. 12101 - 12213 (Americans with Disabilities Act);
(11) the name and telephone number of a representative of the prospective petitioner to contact for additional information.
(g) The department shall specify the text of the public service announcement required under (e) of this section, to ensure that the announcement contains the following information:
(1) the title of the public service announcement;
(2) the period during which the public service announcement is requested to be broadcast;
(3) the name of the prospective petitioner;
(4) a description of the prospective legislative review annexation proposal;
(5) a statement of the size and general location of the boundaries being considered for annexation;
(6) information about where and when the prospective petition is available for public review;
(7) information about where the public may receive, without charge, a summary of the prospective petition;
(8) a statement concerning who will conduct the hearing;
(9) the date, time, and place of the hearing;
(10) the name and telephone number of a representative of the prospective petitioner to contact for additional information.
(h) When filing a petition with the department under this section, the prospective petitioner shall submit evidence of compliance with the requirements of (e) of this section, a written summary or transcript of the hearing, a copy of any written materials received during the hearing, and an audio recording of the hearing.
(i) This section does not apply to a petition for annexation that is submitted at the request of the legislature.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 44.33.020 Art. X, sec. 3,Ak Const.AS 44.33.812 Ak Const.Art. X, sec. 14, Art. X, sec. 7,Ak Const.
- Eff. 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.430 Consolidation of petitions
If two or more petitions pending action by the commission affect all or some portion of the same boundaries, the chair of the commission may consolidate the informational session, briefing schedule, department reports, commission hearing, decisional meeting, or other procedure under this chapter for one or more of those petitions. The commission may consider relevant information from concurrent or conflicting petitions during the process of rendering its decision on any one petition.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.470 Ak Const.AS 29.04.040; AS 44.33.812 Art. X, sec. 3,AS 29.05.060; AS 44.33.814 Ak Const.AS 29.06.040; AS 44.33.818 Art. X, sec. 7,AS 29.06.090; AS 44.33.822 Ak Const.AS 29.06.100; AS 44.33.826 Art. X, sec. 12,AS 29.06.450
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.435 Role of department staff
(a) A department employee assigned under AS 44.33.020(a)(4) as a member of the commission staff serves as an advisor. The advisory staff may not act in an advocacy capacity as a petitioner under 3 AAC 110.410.
(b) During a proceeding, the advisory staff to the commission may provide technical assistance, information, and forms to petitioners, respondents, and interested persons who have procedural questions regarding local government or boundary issues. If the commissioner, a department subdivision, or a department employee not assigned under AS 44.33.020(a)(4) to the commission's advisory staff serves in an official capacity as a petitioner in a case before the commission,
(1) communications with the commission's advisory staff regarding the case are subject to the limitations of this subsection and 3 AAC 110.500; and
(2) communications with members of the commission are subject to the ex parte limitations of 3 AAC 110.500.
(c) Nothing in this section limits the role and ability of the commission's advisory staff to ensure that the commission is fully and accurately informed by providing to the commission new or additional information that supplements, questions, or refutes information provided by, or a position taken by, a petitioner, respondent, or other person.
History
- Authority: Art. X, sec. 12,Art. X, sec. 14,AS 44.33.020 Ak Const.Ak Const.AS 44.33.812
- Eff. 1/9/2008, Register 185
3 AAC 110.440 Technical review of petition
(a) The department shall review the petition and supporting materials to determine whether they include a budget sufficient for commission review, a transition plan sufficient for commission review, and other required information. When applicable, the department shall also determine whether the petition contains the legally required number of valid signatures. The department shall complete the technical review of the petition within 45 days after receiving it, except that the chair of the commission, for good cause, may grant the department additional time to complete its technical review.
(b) The petitioner is primarily responsible for supplying all supplemental information and documents reasonably necessary for the technical review process, including information identifying who is registered to vote, who resides within the boundaries proposed for change, and the number of persons who voted within those boundaries during the last election.
(c) If it determines that the petition or supporting materials are deficient in form or content, the department shall consult with the chair of the commission. With the concurrence of the chair of the commission, the department shall return the defective petition or supporting materials to the petitioner for correction or completion. With the concurrence of the chair of the commission, the department shall determine whether the deficiencies in the petition are significant enough to require new authorization for the filing of the corrected or completed petition. The department shall complete the technical review of any corrections or materials needed to complete the petition within 30 days after receiving them, except that the chair of the commission, for good cause, may grant the department additional time to complete its technical review. If the department determines that the petition and brief are in substantial compliance with applicable provisions of AS 29.04, AS 29.05, AS 29.06, and this chapter, the department shall notify the petitioner that the petition and brief have been accepted for filing.
(d) The petitioner may appeal to the commission a determination by the department under (c) of this section that a petition is deficient in form and content or that new authorization will be required for the filing of a corrected or completed petition.
History
- Authority: Art. X, sec. 1,Art. X, sec. 12,AS 29.06.040 Ak Const.Ak Const.AS 29.06.110 Art. X, sec. 3,Art. X, sec. 14,AS 29.06.480 Ak Const.Ak Const.AS 44.33.020 Art. X, sec. 7,AS 29.04.040; AS 44.33.812 Ak Const.AS 29.05.070
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.450 Notice of petition
(a) No later than 45 days after receipt of the department's written notice of acceptance of the petition for filing, the petitioner shall
(1) publish public notice of the filing of the petition in a display ad format of no less than six inches long by two columns wide at least once each week for three consecutive weeks in one or more newspapers of general circulation designated by the department; if the department determines that a newspaper of general circulation, with publication at least once a week, does not circulate within the boundaries proposed for change, the department shall require the petitioner to provide notice through other means designed to reach the public;
(2) post public notice of the filing of the petition in
(A) at least three prominent locations readily accessible to the public and within or near the boundaries proposed for change; and
(B) other locations designated by the department;
(3) ensure that notices posted under (2) of this subsection remain posted through the deadline set under 3 AAC 110.640 by the chair of the commission for the filing of responsive briefs;
(4) hand-deliver or mail, postage prepaid, public notice of the filing of the petition, correctly addressed to the municipalities having jurisdictional boundaries within 20 miles of the boundaries proposed for change, and to other persons designated by the department; and
(5) submit a request for a public service announcement of the filing of the petition to at least one radio or television station serving within the boundaries of the proposed change and request that it be announced for the following 14 days.
(b) The department shall specify the text of the public notices required in (a)(1) - (a)(4) of this section, to ensure that the notices contain the following information:
(1) the title of the notice of the filing of the petition;
(2) the name of the petitioner and the petitioner's representative designated under 3 AAC 110.410(e);
(3) a description of the proposed action;
(4) a statement of the size and general location of the boundaries proposed for change;
(5) a map of the area or territory proposed for change or information where that map is available for public review;
(6) a reference to the constitutional, statutory, and regulatory standards applicable to the proposal;
(7) a reference to the statutes and regulations applicable to procedures for consideration of the petition;
(8) designation of where and when the petition is available for public review;
(9) a statement that responsive briefs and comments regarding the petition may be filed with the commission;
(10) a reference to the regulations applicable to the filing of responsive briefs;
(11) the deadline for receipt of responsive briefs and comments;
(12) the mailing address, facsimile number, and electronic mail address for the submission of responsive briefs and comments to the department;
(13) a telephone number for inquiries to the commission staff.
(c) The department shall specify the text of the public service announcement required in (a)(5) of this section to ensure that the announcement contains
(1) the title of the public service announcement;
(2) the period during which the public service announcement is requested to be broadcast;
(3) the name of the petitioner;
(4) a description of the proposed action;
(5) a statement of the size and general location of the
(A) area proposed for borough boundary change; or
(B) territory proposed for city boundary change;
(6) a statement of where and when the petition is available for public review;
(7) a statement that responsive briefs and comments regarding the petition may be filed with the commission;
(8) a statement of the deadline for responsive briefs and comments;
(9) a statement of where the complete notice of the filing may be reviewed; and
(10) a telephone number for inquiries to the petitioner.
(d) For a municipal incorporation, the department shall ensure that, in addition to the information required in (b) of this section, the notice also contains the following information:
(1) for a petition using the local option method, a statement regarding voter eligibility in the incorporation election;
(2) for a petition using the legislative review method, a statement regarding the election of initial officials for the municipality.
History
- Authority: Art. X, sec. 3,Art. X, sec. 14,AS 29.06.130 Ak Const.Ak Const.AS 29.06.500 Art. X, sec. 7,AS 29.04.040; AS 44.33.020 Ak Const.AS 29.05.100; AS 44.33.812 Art. X, sec. 12,AS 29.05.120 Ak. Const.AS 29.06.040
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.460 Service of petition
(a) No later than 25 days after receipt of the department's notice of acceptance of the petition for filing, the petitioner shall hand-deliver or mail, postage prepaid, one complete set of petition documents to every municipality within 20 miles of the boundaries proposed for change, and to other interested persons designated by the department. Copies of the petition documents, including maps and other exhibits, must conform to the originals in color, size, and other distinguishing characteristics.
(b) From the first date of publication of notice of the filing of the petition under 3 AAC 110.450(a)(1), through the last date on which the petition may be subject to action by the commission, including the last date of proceedings of the commission ordered by a court of competent jurisdiction, the petitioner shall make a full set of petition documents, including public notices, responsive briefs, the reply brief, and department reports, available for review by the public at a central and convenient location such as a municipal office or public library. The petition documents must be available for review during normal working hours, and the petitioner shall accommodate specific requests for public review of the petition documents at reasonable times in the evening and on weekend days. All published and posted notices of filing of a petition must identify the specific location of the petition documents, and the hours when the documents can be reviewed.
History
- Authority: Art. X, sec. 3,Art. X, sec. 12,AS 29.06.040 Ak Const.Ak Const.AS 29.06.130 Art. X, sec. 7,AS 29.04.040; AS 29.06.500 Ak Const.AS 29.05.100; AS 44.33.812
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.470 Proof of notice and service
No later than 50 days after receipt of the department's written notice of acceptance of the petition for filing, the petitioner shall deliver to the department five additional complete sets of petition documents and an affidavit that the notice, posting, service, deposit, and publishing requirements of 3 AAC 110.450 - 3 AAC 110.460 have been satisfied. Copies of the petition documents, including maps and other exhibits, must conform to the originals in color, size, and other distinguishing characteristics.
History
- Authority: Art. X, sec. 3,Art. X, sec. 12,AS 29.06.040 Ak Const.Ak Const.AS 29.06.130 Art. X, sec. 7,AS 29.04.040; AS 29.06.500 Ak Const.AS 29.05.100; AS 44.33.812
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162
3 AAC 110.475 Summary determination
(a) If the staff for the commission or a person who may serve as a petitioner under 3 AAC 110.410(a) believes that a petition accepted for filing under 3 AAC 110.440 was prepared using defective procedures, that the petition lacks certain information needed to determine and fully evaluate the merits of the petition, or that a reasonable probability exists that the petition fails to meet the standards applicable to the petition, that person may request a summary determination of the petition in accordance with this section. If the person requesting a summary determination is the commissioner, a department subdivision, or a department employee not assigned under AS 44.33.020(a)(4) to the commission's advisory staff, and that person is making the request in an official capacity, the limitations of 3 AAC 110.435(b) apply.
(b) Not later than 21 days after the initial publication of notice of the petition under 3 AAC 110.450(a)(1), the person seeking a summary determination must file an original and five copies of a request that the petition be rejected or be returned to the petitioner for substantial correction or modification.
(c) A request for summary determination must include
(1) the name of the person requesting a summary determination and that person's representative;
(2) the physical address of place of residence and mailing address of the representative designated under (1) of this subsection and the telephone number, facsimile number, and electronic mail address, if any, for that representative;
(3) if a person other than the staff of the commission seeks a summary determination, documentation demonstrating that the person may serve as a petitioner under 3 AAC 110.410(a);
(4) a description of the proposed summary determination action;
(5) a statement of reasons for the request for summary determination;
(6) a supporting brief that provides a detailed explanation of how
(A) the petition accepted for filing was prepared using defective procedures, or lacks certain information needed to determine and fully evaluate the merits of the petition; or
(B) a reasonable probability exists that the petition fails to meet constitutional, statutory, and regulatory standards that apply to the petition;
(7) legal metes and bounds descriptions, maps, and plats needed to assess the proposed determination; and
(8) an affidavit by the representative designated under (1) of this subsection that
(A) to the best of the representative's knowledge, information, and belief, formed after reasonable inquiry, the information in the request for summary determination is true and accurate:
(B) the request for summary determination is not submitted to harass or to cause unnecessary delay or needless expense in the cost of processing the petition; and
(C) three copies of the request for summary determination have been served on the petitioner by mail, postage prepaid, or hand delivery, or one copy has been delivered by facsimile or electronic mail, unless prohibited under (d) of this section.
(d) Copies of the request for summary determination, including maps and other exhibits, provided to the department and the petitioner under this section must conform to the original in color, size, and other distinguishing characteristics. If the request, including attachments, contains colored materials or materials larger than 11 inches by 17 inches, the person requesting a summary determination may not serve the request and copies by facsimile or electronic mail. The person shall provide the department with a copy of the request for summary determination in an electronic format, unless the department waives this requirement because the person lacks a readily accessible means or the capability to provide items in an electronic format.
(e) Within 24 hours after receipt of a request for summary determination, the petitioner shall place a copy of the request with the petition documents available for review under 3 AAC 110.460(b).
(f) Within two days after the receipt of a request for summary determination, the department shall determine whether the request is complete, filed in a timely manner, groundless, or filed for purposes of delay. The department shall immediately notify the person who filed the request, the petitioner, and the commission of the department's determination. If the department determines that the request for summary determination was incomplete or untimely, the person who filed the request may appeal the department's determination to the commission. If the department determines that a request for summary determination was complete and timely, the provisions of (g) - (p) of this section apply. If the department determines that the request was filed for the purpose of delay or is groundless, the provisions of (q) of this section apply.
(g) If the department determines that a request for summary determination is complete and timely, the deadline for filing responsive briefs and comments under 3 AAC 110.480 is suspended pending a decision by the commission regarding the request for summary determination.
(h) If it determines that the request is complete and timely, the department shall issue public notice of the request in accordance with 3 AAC 110.450(a)(1), except that publication of the notice is required only one time. The department shall issue public notice of the commission hearing under (k) of this section in accordance with 3 AAC 110.550, except that the first date of publishing must occur at least 20 days before the date of the hearing. The person who filed the request shall bear the cost of publication of the public notices.
(i) Within 10 days after receipt of notice under (f) of this section that the request is complete and timely, the petitioner shall file with the department an original and five copies of a brief responding to the request for summary determination. At the same time the petitioner files its responsive brief with the department, the petitioner shall serve a copy of that responsive brief by mail, postage prepaid, or by electronic mail, facsimile transmission, or hand delivery on the person who filed the request, and shall file an affidavit of service to that effect. The petitioner shall provide the department with a copy of the responsive brief in an electronic format, unless the department waives that requirement because the petitioner lacks a readily accessible means or the capability to provide items in an electronic format.
(j) Within 10 days after receipt of the petitioner's responsive brief under (i) of this section, the department shall provide the commission with a written report of the department's analysis, findings, and recommendation regarding the request for summary determination. The report must include a summary of the request, petitioner's responsive brief, and public comments, if any. A copy of the report must be provided to the person who filed the request and the petitioner at the same time the report is provided to the commission. The chair may, for good cause, grant additional time, not to exceed five days, for the department to file the report required under this subsection.
(k) After service of the report under (j) of this section, the commission will hold a public hearing on the request for summary determination.
(l) As part of the hearing conducted under (k) of this section, the commission will include
(1) a summary of the analysis and recommendation by the department;
(2) an opening statement by the person who filed the request, not to exceed 10 minutes;
(3) an opening statement by the petitioner, not to exceed 10 minutes;
(4) oral argument by the person who filed the request, on the merits of the request;
(5) oral argument by the petitioner on its opposition to the request;
(6) a period of public comment by interested persons, not to exceed three minutes for each person;
(7) a closing statement by the person who filed the request, not to exceed 10 minutes;
(8) a closing statement by the petitioner, not to exceed 10 minutes; and
(9) a reply by the person who filed the request, not to exceed five minutes.
(m) Within three days after the public hearing under (k) of this section, the commission will hold a decisional meeting in accordance with 3 AAC 110.570(a), (b), and (d) - (f) and either grant the request for summary determination or deny the request.
(n) If a request for summary determination seeking rejection of a petition is granted, the petitioner may not submit a substantially similar petition for at least three years after the date of commission's decision on the request. If a request for summary determination seeking substantial correction or modification of a petition is granted, the petitioner may modify the petition and resubmit it as a new petition, with no restriction as to the time of filing.
(o) If the request for summary determination is denied, the chair of the commission shall determine a new schedule for the filing of responsive briefs and comments on the petition in accordance with 3 AAC 110.640.
(p) The person who filed the request or the petitioner may seek reconsideration of a commission decision on a request for summary determination under this section.
(q) The commission will deny, without hearing, a request for summary determination under this section if the commission concludes that the request is filed for purposes of delay or is groundless.
History
- Authority: Art. X, sec. 1,AS 29.04.040; AS 44.33.814 Ak Const.AS 29.05.090; AS 44.33.816 Art. X, sec. 12,AS 29.06.120; AS 44.33.818 Ak Const.AS 29.06.490; AS 44.33.820 Art. X, sec. 14,AS 44.33.020 Ak Const.AS 44.33.812
- Eff. 1/9/2008, Register 185
3 AAC 110.480 Responsive briefs and written comments
(a) If an interested person seeks to participate as a respondent to a petition, that person must have the capacity to sue and be sued and must file with the department an original and five complete copies of a responsive brief containing facts and analyses favorable or adverse to the petition. If the respondent is a group, the group shall designate one person to represent the group. A responsive brief must provide the physical address of the place of residence and mailing address of the respondent or the respondent's representative, and must provide the telephone number, facsimile number, and electronic mail address, if any, for the respondent or respondent's representative. Copies of the responsive briefs, including maps and other exhibits, must conform to the original in color, size, and other distinguishing characteristics. The respondent shall provide the department with a copy of the responsive brief in an electronic format, unless the department waives this requirement because the respondent lacks a readily accessible means or the capability to provide items in an electronic format.
(b) The responsive brief, and any companion exhibits, must be filed with an affidavit by the respondent that, to the best of the respondent's knowledge, information, and belief, formed after reasonable inquiry, the responsive brief and exhibits are founded in fact and are not submitted to harass or to cause unnecessary delay or needless expense in the cost of processing the petition.
(c) A responsive brief must be received by the department in a timely manner in accordance with 3 AAC 110.640. A responsive brief must be accompanied by an affidavit stating that two copies of the brief have been served on the petitioner by regular mail, postage prepaid, or by electronic mail, facsimile transmission, or hand delivery.
(d) An interested person may file with the department written comments supporting or opposing the petition. The department shall request that the commentor either serve a copy of the comments on the petitioner and file a statement on or with the comments that service was made on the petitioner or notify the department of an inability to serve comments on the petitioner. If the department receives comments without a statement that they were served on the petitioner, the department shall provide promptly a copy of the written comments to the petitioner by hand-delivery, electronic mail, facsimile, or postage-prepaid mail. If the written comments, including attachments, exceed 20 pages or if they include colored materials or materials larger than 11 inches by 17 inches, the commentor shall provide an additional five complete sets of the written comments to the department. Copies of the written comments, including attachments, must conform to the original in color, size, and other distinguishing characteristics. Written comments must be received by the department in a timely manner in accordance with 3 AAC 110.640.
History
- Authority: Art. X, sec. 3,Art. X, sec. 14,AS 29.06.110 Ak Const.Ak Const.AS 29.06.130 Art. X, sec. 7,AS 29.04.040; AS 29.06.480 Ak Const.AS 29.05.080; AS 29.06.500 Art. X, sec. 12,AS 29.05.100; AS 44.33.020 Ak Const.AS 29.06.040; AS 44.33.812
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.490 Reply brief
The petitioner may file an original and five copies of a single reply brief in response to all responsive briefs and written comments filed timely under 3 AAC 110.480. The petitioner shall provide the department with a copy of the reply brief in an electronic format, unless the department waives this requirement because the petitioner lacks a readily accessible means or the capability to provide items in an electronic format. The reply brief must be received by the department in a timely manner in compliance with 3 AAC 110.640. The reply brief must be accompanied by an affidavit stating that the brief has been served on all respondents by regular mail, postage prepaid, or by electronic mail, facsimile transmission, or hand delivery.
History
- Authority: Art. X, sec. 3,Art. X, sec. 14,AS 29.06.110 Ak Const.Ak Const.AS 29.06.130 Art. X, sec. 7,AS 29.04.040; AS 29.06.480 Ak Const.AS 29.05.080; AS 29.06.500 Art. X, sec. 12,AS 29.05.100; AS 44.33.020 Ak Const.AS 29.06.040; AS 44.33.812
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.500 Limitations on advocacy
(a) Unless otherwise ordered by the commission for good cause shown, the commission will not, and the department may not, accept a document, letter, or brief for filing and consideration except in accordance with the procedures, timeframes, hearings, and meetings specified in 3 AAC 110.410 - 3 AAC 110.700.
(b) A member of the commission is prohibited from ex parte contact and communication with any person except the staff of the commission, concerning a matter pending before the commission that has been filed as a petition, from the date the petition was first submitted to the department through the last date on which the petition may be subject to action by the commission, including the last date of proceedings of the commission ordered by a court of competent jurisdiction.
History
- Authority: Art. X, sec. 12,AS 29.05.080; AS 29.06.480 Ak Const.AS 29.05.100; AS 29.06.500 Art. X, sec. 14,AS 29.06.040; AS 44.33.020 Ak Const.AS 29.06.110; AS 44.33.812 AS 29.04.040; AS 29.06.130
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.510 Informational sessions
(a) If the department determines that persons within or near the proposed boundary change have not had adequate opportunity to be informed about the scope, benefits, or detriments of the proposed change, the department shall require the petitioner to conduct informational sessions, and to submit a recording, transcript, or summary of those sessions to the department.
(b) The department may not proceed with the processing of the petition until the petitioner has certified, by affidavit, that the informational session requirements of this section have been met.
History
- Authority: Art. X, sec. 12,AS 29.05.080; AS 29.06.480 Ak Const.AS 29.05.100; AS 29.06.500 Art. X, sec. 14,AS 29.06.040; AS 44.33.020 Ak Const.AS 29.06.110; AS 44.33.812 AS 29.04.040; AS 29.06.130
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.520 Departmental public meetings
(a) During its investigation and analysis of a petition for incorporation, the department shall convene at least one public meeting within the boundaries proposed for incorporation. During its investigation and analysis of a petition for a change other than incorporation, the department may convene at least one public meeting within or near the boundaries proposed for change.
(b) Notice of the date, time, and place of the public meeting under (a) of this section must be mailed, postage prepaid, to the petitioner and to each respondent at least 15 days before the public meeting. The department shall publish the notice at least once each week, for two consecutive weeks, immediately preceding the date of the meeting, in a newspaper of general circulation selected by the department to reach the people and entities within or near the boundaries of the proposed change. If the department determines that a newspaper of general circulation, with publication at least once a week, does not circulate within or near the boundaries of the proposed change, the department shall provide notice through other means designed to reach the public. The petitioner shall post notice of the meeting in at least three prominent locations readily accessible to the public within or near the boundaries proposed for change, and at the same location where the petition documents are available for review, for at least 14 days immediately preceding the date of the meeting. On or before the date of the public meeting, the petitioner shall submit to the department an affidavit certifying that the posting requirements of this subsection have been met.
(c) Staff assigned to the commission shall preside at the public meeting. If the public meeting is held within the time period established under 3 AAC 110.640 for receiving written comments, the presiding staff person shall accept written materials submitted at the public meeting. However, except in extraordinary circumstances, the petitioner and the respondents may not submit further written materials at the meeting. The public meeting must be recorded and must be summarized in the department's preliminary or final report prepared under 3 AAC 110.530.
(d) The department may postpone the time or relocate the place of the public meeting by conspicuously posting notice of the postponement or relocation at the original time and location of the public meeting. If the meeting is relocated, the new location must be within the same vicinity, and be rescheduled no more than 72 hours after the originally scheduled time.
(e) The department staff presiding at the public meeting may request that respondents with similar positions coordinate their participation and use a single spokesperson to present their common views or positions. The department staff presiding at the public meeting may request the same coordination by commentors with similar positions.
History
- Authority: Art. X, sec. 12,AS 29.04.040; AS 29.06.110 Ak Const.AS 29.05.080; AS 29.06.480 Art. X, sec. 14,AS 29.06.040; AS 44.33.020 Ak Const.AS 29.06.090; AS 44.33.812
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.530 Departmental reports
(a) The department shall investigate and analyze a petition filed with the department under this chapter. The department shall prepare a written preliminary and a written final report regarding the petition. Each report must contain the department's findings and recommendations regarding the petition.
(b) The department shall mail or hand-deliver its preliminary report to the commission, petitioner, and respondents. Within 24 hours after receipt of the preliminary report, the petitioner shall place a copy of the report with the petition documents available for review. The petitioner shall file an affidavit with the department stating the preliminary report has been made available for public review.
(c) The petitioner, respondents, and other interested persons may submit to the department written comments pertaining directly to the preliminary report. The written comments must be received by the department in a timely manner in accordance with 3 AAC 110.640.
(d) In its final report, the department shall consider timely submitted written comments addressing the preliminary report. The department shall mail its final report to the commission, petitioner, and respondents.
(e) If a preliminary or final report of the department contains a recommendation to amend or condition approval of a municipal incorporation petition subject to AS 29.05.060 - 29.05.110,
(1) the department shall issue a public notice regarding the recommended amendment or condition;
(2) the public notice required under (1) of this subsection
(A) must be issued contemporaneously with that report;
(B) must be published in conformance with the requirements of 3 AAC 110.450(a)(1), except that the notice need be published only one time;
(C) if the recommendation is part of a preliminary report, must state that comments on the recommendation must be filed on or before the same date as comments on the preliminary report under 3 AAC 110.640(b)(3); that date must be set out in the notice;
(D) if the recommendation is only part of a final report, must specify a date on or before which written comments on the recommendation may be filed; that date must allow at least 14 days for written comment; and
(E) must contain a statement that oral comments on a recommendation for amendment or conditional approval may also be provided at the public hearing under 3 AAC 110.560; and
(3) public comment received in response to a public notice required under (1) of this subsection must be included in the department's final report or summarized at the public hearing, whichever occurs first.
(f) A report required from the department under this section does not constitute acting in an advocacy capacity as a petitioner under 3 AAC 110.410.
History
- Authority: Art. X, sec. 12,AS 29.04.040; AS 29.06.490 Ak Const.AS 29.05.080; AS 44.33.020 Art. X, sec. 14,AS 29.06.040; AS 44.33.812 Ak Const.AS 29.06.110
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.540 Amendment of petition
(a) A petitioner may amend the petition at any time before the first mailing, publishing, or posting of notice of the commission's hearing on the petition under 3 AAC 110.550. The original and five copies of the amendment must be filed with the department. The petitioner shall provide the department with a copy of the amended petition and supporting materials in an electronic format, unless the department waives this requirement because the petitioner lacks a readily accessible means or the capability to provide items in an electronic format.
(b) A petitioner may not amend the petition after the first mailing, publishing, or posting of notice of the commission's hearing on the petition except upon a clear showing to the commission that the public interest of the state and of the persons within or near the boundaries of the proposed change is best served by allowing the proposed amendment.
(c) If voters initiated the petition, the amended petition must contain the dated signatures of the same number of voters required by AS 29.04, AS 29.05, AS 29.06, or this chapter for the original petition and must include the dated signatures of at least a majority of the same voters who signed the original petition.
(d) The petitioner shall serve the amended petition on each person designated by the department, and by 3 AAC 110.410 - 3 AAC 110.700 to receive the original petition, and on the respondents to the original petition. The petitioner shall place a copy of the amended petition with the original petition documents, post the public notice of the amended petition, and submit an affidavit of service and notice in the same manner required for the original petition.
(e) The chair of the commission shall determine whether the amendment is significant enough to warrant an informational session, opportunity for further responsive briefing, an additional public meeting by the department, or a repeat of any other step or process specified in 3 AAC 110.410 - 3 AAC 110.700. Additional informational sessions, meetings, briefings, or other steps or processes will be conducted in accordance with the procedures specified in 3 AAC 110.410 - 3 AAC 110.700 for the processing of the original petition, except that the chair of the commission may shorten the timing.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.100 Ak Const.Art. X, sec. 14,AS 29.06.450 Art. X, sec. 3,Ak Const.AS 29.06.460 Ak Const.AS 29.04.040; AS 44.33.020 Art. X, sec. 7,AS 29.05.060; AS 44.33.812 Ak Const.AS 29.06.040; AS 44.33.814 Art. X, sec. 12,AS 29.06.090
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.545 Withdrawal of petition
(a) A petitioner may withdraw the petition at any time before the first mailing, publishing, or posting of notice of the commission's hearing on the petition under 3 AAC 110.550. The original and five copies of the withdrawal must be filed with the department.
(b) A petitioner may not withdraw the petition after the first mailing, publishing, or posting of notice of the commission's hearing on the petition except upon a clear showing to the commission that the public interest of the state and the persons within or near the boundaries of the proposed change is best served by allowing the proposed withdrawal.
(c) If voters initiated the petition, a statement withdrawing a petition must contain the dated signatures of at least 30 percent of the voters residing within the boundaries of the proposed change and must include at least a majority of the same voters who signed the original petition.
(d) If the petition was submitted by a municipality under AS 29.06.040(c)(4) at the request of all property owners and voters within the boundaries of the proposed change, the petition may be withdrawn only with the approval of the petitioning municipality.
(e) If the petitioning municipality declines to withdraw the petition,
(1) the consent of a property owner or voter to the filing of the petition is binding on any subsequent purchaser of the property if the property is purchased before the boundary change is approved; and
(2) the municipality and the state are not responsible for ensuring that the subsequent purchaser receives notice of the proposed boundary change before purchase, by recording or otherwise.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.100 Ak Const.Art. X, sec. 14,AS 29.06.450 Art. X, sec. 3,Ak Const.AS 29.06.460 Ak Const.AS 29.04.040; AS 44.33.812 Art. X, sec. 7,AS 29.05.060; AS 44.33.814 Ak Const.AS 29.06.040 Art. X, sec. 12,AS 29.06.090
- Eff. 1/9/2008, Register 185
3 AAC 110.550 Commission public hearing
(a) The commission will convene one or more public hearings at convenient locations within or near the boundaries of the proposed change as required under AS 29.04, AS 29.05, AS 29.06, AS 44.33.810 - 44.33.828, and this chapter. If the proposed change is for legislative-review borough incorporation under AS 29.05.115, the commission will convene two or more public hearings within the boundaries of the proposed change.
(b) Notice of the date, time, place, and subject of the hearing must be
(1) mailed, postage prepaid, by the department to the petitioner and to each respondent;
(2) published by the department at least three times, with the first date of publishing occurring at least 30 days before the date of the hearing, in a display ad format no less than three inches long by two columns wide, in one or more newspapers of general circulation selected by the department to reach the people within the boundaries of the proposed change; if the department determines that a newspaper of general circulation, with publication at least once a week, does not circulate within the boundaries of the proposed change, the department shall provide notice through other means designed to reach the public; and
(3) posted by the petitioner in at least three prominent locations readily accessible to the public within the boundaries of the proposed change in which the hearing is to be held, and where the petition documents are available for review, for at least 21 days preceding the date of the hearing.
(c) The department shall submit a request for a public service announcement of the hearing notice required under this section to at least one radio or television station serving within the boundaries of the proposed change and request that it be announced during the 21 days preceding the date of the hearing.
(d) The commission may postpone the time or relocate the place of the hearing by conspicuously posting notice of the postponement or relocation at the original time and location of the public hearing. If the hearing is relocated, the new location will be within the same vicinity and will be rescheduled no more than 72 hours after the originally scheduled time.
(e) At least 14 days before the hearing, the petitioner and each respondent shall submit to the department a list of witnesses that the respective party intends to call to provide sworn testimony. The list must include the name and qualifications of each witness, the subjects about which each witness will testify, and the estimated time anticipated for the testimony of each witness. On the same date that the petitioner submits its witness list to the department, the petitioner shall provide a copy of its witness list to each respondent by hand-delivery, facsimile, electronic mail, or postage-prepaid mail. On the same date that a respondent submits its witness list to the department, the respondent shall provide a copy of its witness list to the petitioner and to all other respondents by hand-delivery, facsimile, electronic mail, or postage-prepaid mail.
(f) In conjunction with a public hearing under this section, the commission may tour the area or territory. The purpose of a tour is to enable the commission to gain first-hand perceptions regarding the characteristics of the area or territory. If a tour is conducted,
(1) the tour will be recorded; and
(2) conversations relating to the pending petition will be limited to factual questions by commission members to the department staff and concise factual answers by the department staff.
History
- Authority: Art. X, sec. 12,AS 29.05.090; AS 44.33.812 Ak Const.AS 29.06.040; AS 44.33.814 Art. X, sec. 14,AS 29.06.120; AS 44.33.818 Ak Const.AS 29.06.490; AS 44.33.826 AS 29.04.040; AS 44.33.020
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.560 Commission hearing procedures
(a) The chair of the commission shall preside at the hearing, and shall regulate the time and the content of statements, testimony, and comments to exclude irrelevant or repetitious statements, testimony, and comments. The department shall record the hearing and preserve the recording. Two members of the commission constitute a quorum for purposes of a hearing under this section.
(b) As part of the hearing, the commission may include
(1) a report with recommendations from the department;
(2) an opening statement by the petitioner, not to exceed 10 minutes;
(3) an opening statement by each respondent, not to exceed 10 minutes;
(4) sworn testimony of witnesses
(A) with expertise in matters relevant to the proposed change; and
(B) called by the petitioner;
(5) sworn testimony of witnesses
(A) with expertise in matters relevant to the proposed change; and
(B) called by each respondent;
(6) sworn responsive testimony of witnesses
(A) with expertise in matters relevant to the proposed change; and
(B) called by the petitioner;
(7) a period of public comment by interested persons, not to exceed three minutes for each person;
(8) a closing statement by the petitioner, not to exceed 10 minutes;
(9) a closing statement by each respondent, not to exceed 10 minutes;
(10) a reply by the petitioner, not to exceed five minutes; and
(11) points of information or clarification by the department.
(c) If more than one respondent participates, the chair of the commission, at least 14 days before the hearing, may establish for each respondent time limits on the opening and closing statements that are lower than those time limits set out in (b) of this section.
(d) A member of the commission may question a person appearing for public comment or as a sworn witness. The commission may call additional witnesses.
(e) A brief, document, or other evidence may not be introduced at the time of the public hearing unless the commission determines that good cause exists for that evidence not being presented in a timely manner for written response by the petitioner or respondents or for consideration in the reports of the department under 3 AAC 110.530.
(f) The commission may amend the order of proceedings and change allotted times for presentations to promote efficiency if the amendment does not detract from the commission's ability to make an informed decision.
(g) If the petition at hearing is for municipal incorporation subject to AS 29.05.060 - 29.05.110 and the department has recommended an amendment to or conditional approval of the petition, during the hearing the commission will invite specific comments on that recommendation.
History
- Authority: Art. X, sec. 12,AS 29.05.090; AS 44.33.812 Ak Const.AS 29.06.040; AS 44.33.814 Art. X, sec. 14,AS 29.06.120; AS 44.33.816 Ak Const.AS 29.06.490; AS 44.33.820 AS 29.04.040; AS 44.33.020; AS 44.33.826
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.570 Decisional meeting
(a) Within 90 days after the last commission hearing on a proposed change, the commission will convene a decisional meeting to examine the written briefs, exhibits, comments, and testimony and to reach a decision regarding the proposed change. During the decisional meeting,
(1) the commission will not receive new evidence, testimony, or briefing;
(2) the chair of the commission or a commission member may ask the department or a person for a point of information or clarification; and
(3) the department may raise a point of information or clarification.
(b) Repealed 1/9/2008.
(c) If the commission determines that a proposed change must be altered or a condition must be satisfied to meet the standards contained in the Constitution of the State of Alaska, AS 29.04, AS 29.05, AS 29.06, or this chapter, and be in the best interests of the state, the commission may alter or attach a condition to the proposed change and accept the petition as altered or conditioned. A motion to alter, impose conditions upon, or approve a proposed change requires at least three affirmative votes by commission members to constitute approval. If the proposed change is a
(1) municipal annexation, detachment, deunification, dissolution, merger, or consolidation, a city reclassification, or a legislative-review borough incorporation under AS 29.05.115, and if the commission determines that the proposed change must be altered or a condition must be satisfied before the proposed change can take effect, the commission will include that condition or alteration in its decision; or
(2) municipal incorporation subject to AS 29.05.060 - 29.05.110, and if the commission determines that an amendment to the petition or the placement of a condition on incorporation may be warranted, the department shall provide public notice and an opportunity for public comment on the alteration or condition before the commission amends the petition or imposes a condition upon incorporation; if the department recommended the proposed change or condition and the public had an opportunity to comment on the proposed change or condition at a commission hearing, an additional notice or comment period is not required.
(d) If the commission determines that a proposed change fails to meet the standards contained in the Constitution of the State of Alaska, AS 29.04, AS 29.05, AS 29.06, or this chapter, or is not in the best interests of the state, the commission will reject the proposed change. If a motion to grant a proposed change receives fewer than three affirmative votes by commission members, the proposed change is rejected.
(e) The commission will keep written minutes of a decisional meeting. Each vote taken by the commission will be entered in the minutes. The approved minutes are a public record.
(f) Within 30 days after the date of its decision, the commission will issue a written decision explaining all major considerations leading to the decision. A copy of the statement will be mailed to the petitioner, respondents, and other interested persons requesting a copy. The department shall execute and file an affidavit of mailing as a part of the public record of the proceedings.
(g) Unless reconsideration is requested timely under 3 AAC 110.580 or the commission, on its own motion, orders reconsideration under 3 AAC 110.580, a decision by the commission is final on the day that the written statement of decision is mailed, postage prepaid, to the petitioners and the respondents.
History
- Authority: Art. X, sec. 12,AS 29.06.040; AS 44.33.816 Ak Const.AS 29.06.130; AS 44.33.818 Art. X, sec. 14,AS 29.06.500; AS 44.33.820 Ak Const.AS 44.33.020; AS 44.33.822 AS 29.04.040; AS 44.33.812; AS 44.33.826 AS 29.05.100; AS 44.33.814
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.580 Reconsideration
(a) Within 18 days after a written statement of decision is mailed under 3 AAC 110.570(f), a person may file an original and five copies of a request for reconsideration of all or part of that decision, describing in detail the facts and analyses that support the request for reconsideration.
(b) Within 30 days after a written statement of decision is mailed under 3 AAC 110.570(f), the commission may, on its own motion, order reconsideration of all or part of that decision.
(c) A person filing a request for reconsideration shall provide the department with a copy of the request for reconsideration and supporting materials in an electronic format, unless the department waives this requirement because the person requesting reconsideration lacks a readily accessible means or the capability to provide items in an electronic format. A request for reconsideration must be filed with an affidavit of service of the request for reconsideration on the petitioner and each respondent by regular mail, postage prepaid, or by hand-delivery. A request for reconsideration must also be filed with an affidavit that, to the best of the affiant's knowledge, information, and belief, formed after reasonable inquiry, the request for reconsideration is founded in fact and is not submitted to harass or to cause unnecessary delay or needless expense in the cost of processing the petition.
(d) If the person filing the request for reconsideration is a group, the request must identify a representative of the group. Each request for reconsideration must provide the physical residence address and mailing address of the person filing the request for reconsideration and the telephone number, facsimile number, and electronic mail address, if any, for the person or representative of the group.
(e) The commission will grant a request for reconsideration or, on its own motion, order reconsideration of a decision only if the commission determines that
(1) a substantial procedural error occurred in the original proceeding;
(2) the original vote was based on fraud or misrepresentation;
(3) the commission failed to address a material issue of fact or a controlling principle of law; or
(4) new evidence not available at the time of the hearing relating to a matter of significant public policy has become known.
(f) If the commission does not act on a request for reconsideration within 30 days after the decision was mailed under 3 AAC 110.570(f), the request is automatically denied. If it orders reconsideration or grants a request for reconsideration within 30 days after the decision was mailed under 3 AAC 110.570(f), the commission will allow a petitioner or respondent 10 days after the date reconsideration is ordered or the request for reconsideration is granted to file an original and five copies of a responsive brief describing in detail the facts and analyses that support or oppose the decision being reconsidered. The petitioner or respondent shall provide the department with a copy of the responsive brief in an electronic format, unless the department waives this requirement because the petitioner or respondent lacks a readily accessible means or the capability to provide items in an electronic format.
(g) Within 90 days after the department receives timely filed responsive briefs, the commission, by means of the decisional meeting procedure set out in 3 AAC 110.570(a) - (f), will issue a decision on reconsideration. A decision on reconsideration by the commission is final on the day that the written statement of decision is mailed, postage prepaid, to the petitioner and the respondents.
History
- Authority: Art. X, sec. 12,AS 29.05.100; AS 44.33.812 Ak Const.AS 29.06.040; AS 44.33.814 Art. X, sec. 14,AS 29.06.130; AS 44.33.820 Ak Const.AS 29.06.500; AS 44.33.822 AS 29.04.040; AS 44.33.020; AS 44.33.826
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.590 Modified procedures for certain local action annexations
(a) Except as otherwise provided in this section, if a petition is filed with the department under a local action method provided for in AS 29.06.040(c)(3) or (4) for annexation of adjacent municipally owned property or adjacent property by unanimous consent of voters and property owners, only the following procedures specified in 3 AAC 110.400 - 3 AAC 110.700 are required:
(1) filing a petition under 3 AAC 110.420;
(2) technical review of the petition under 3 AAC 110.440;
(3) notice and service of the petition under 3 AAC 110.450 - 3 AAC 110.470, unless the petitioning municipality, at least 30 days before passage of its authorizing ordinance under AS 29.06.040(c)(3) or (4) by the council or assembly, publishes notice of the annexation proposal in a newspaper of general circulation in the area or territory proposed for annexation and provides the notice to each owner of property abutting the boundaries proposed for annexation; the pre-ordinance notice
(A) must be published at least once in the format prescribed by 3 AAC 110.450(a)(1);
(B) must be served on each municipality within 20 miles of the boundaries of the area or territory proposed for change;
(C) must be posted in accordance with 3 AAC 110.450(a)(2) except that the posting must occur on or before the date that the notice is published under (A) of this paragraph;
(D) must remain posted in accordance with 3 AAC 110.450(a)(3) except that the posting deadline is determined under (4)(B) of this subsection; and
(E) may be broadcast as a public service announcement under 3 AAC 110.450(a)(5);
(4) responsive briefs and comments under 3 AAC 110.480, except that the time allowed under 3 AAC 110.640 for the filing of responsive briefs and comments is limited to 14 days from
(A) the date of first publication of the notice of filing of the petition; or
(B) passage of the ordinance required by AS 29.06.040(c)(3) or (4) by the council or assembly, if the petitioning municipality published notice at least 30 days before passage of the ordinance;
(5) a reply brief under 3 AAC 110.490, except that the time allowed under 3 AAC 110.640 for the filing of a reply brief is limited to seven days from the date that the petitioner received the responsive brief;
(6) a departmental report under 3 AAC 110.530, except that the department shall issue only one report concerning the local action annexation proposal at least 10 days before the public hearing under 3 AAC 110.550; interested persons may submit written comments to the department on its report no later than three days before the public hearing;
(7) the commission's public hearing under 3 AAC 110.550, except that the commission may conduct the hearing by teleconference;
(8) the decisional meeting under 3 AAC 110.570, except that the commission will convene a decisional meeting to examine the written briefs, exhibits, comments, and testimony and to reach a decision regarding the proposed change within 10 days after the last commission hearing on the petition;
(9) reconsideration under 3 AAC 110.580, except that a request for reconsideration must be filed within 10 days after a written statement of decision is mailed under 3 AAC 110.570(f);
(10) the amendment and withdrawal provisions of 3 AAC 110.540 and 3 AAC 110.545.
(b) The commission may expand local action procedures for annexations under (a) of this section, so that those procedures include other requirements of 3 AAC 110.400 - 3 AAC 110.700, such as informational sessions, and public meetings and hearings, if the commission determines that the best interests of the state will be enhanced.
(c) The commission may further relax or suspend local action procedures for annexation under (a) of this section as provided under 3 AAC 110.660.
(d) Repealed 5/19/2002.
(e) If the commission determines that the balanced best interests of the locality and the state are enhanced by statewide participation, the commission may convert a local action petition for an annexation described in (a) of this section to a legislative review petition.
(f) If the petitioning municipality publishes a pre-ordinance notice as provided under (a)(3) of this section, the municipality shall file with the department a copy of
(1) the publisher's affidavit of publication of the notice;
(2) written comments submitted to the municipality regarding the annexation proposal; and
(3) the minutes of all council or assembly meetings at which the proposal was addressed by the petitioning municipality.
History
- Authority: Art. X, sec. 1,Art. X, sec. 12,AS 29.06.450 Ak Const.Ak Const.AS 44.33.020 Art. X, sec. 3,Art. X, sec. 14,AS 44.33.812 Ak Const.Ak Const.AS 44.33.814 Art. X, sec. 7,AS 29.06.040; AS 44.33.818 Ak Const.AS 29.06.090; AS 44.33.826
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.600 Local action/local option elections
(a) In accordance with AS 29.04, AS 29.05, and AS 29.06, the commission will notify the director of elections of the commission's acceptance of a local action or local option petition proposing city reclassification under AS 29.04, municipal incorporation under art. X, sec. 12 of the Constitution of the State of Alaska or AS 29.05, and municipal dissolution, deunification, merger, or consolidation under AS 29.06.
(b) If AS 29.06.040 requires a municipal election for a proposed annexation or detachment, the commission will notify the clerk of the municipality proposed for change of the commission's acceptance of a local action petition. The election must be administered by the municipality proposed for change at the municipality's own cost and in the manner prescribed by its municipal election ordinances, except that the commission may specify the wording of the ballot measure and broaden the election notice requirements.
(c) If a petition for detachment under AS 29.06.040 and incorporation under AS 29.05 requires a municipal election, the commission will notify the director of elections of the commission's acceptance of a local option petition and that the election must be a combined one for detachment and incorporation.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.05.120 Ak Const.Art. X, sec. 12,AS 29.06.040 Art. X, sec. 3,Ak Const.AS 29.06.140 Ak Const.AS 29.04.040; AS 29.06.510 Art. X, sec. 7,AS 29.05.110; AS 44.33.812
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.610 Legislative review
(a) The commission may determine during the course of proceedings that a legislative review petition must be amended and considered as a local action or local option petition if the commission determines that the balanced best interests of the locality and the state are enhanced by local participation.
(b) If a decision of the commission requires legislative review, the commission will present a recommendation for the decision to the legislature during the first 10 days of a regular session in accordance with art. X, sec. 12, Constitution of the State of Alaska.
History
- Authority: Art. X, sec. 12,AS 29.06.090; AS 44.33.826 Ak Const.AS 44.33.812; AS 44.33.828 AS 29.06.040; AS 44.33.822
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.620 Judicial review
A final decision of the commission made under the Constitution of the State of Alaska, AS 29.04, AS 29.05, AS 29.06, or this chapter may be appealed to the superior court in accordance with the Administrative Procedure Act (AS 44.62).
History
- Authority: Art. X, sec. 12,AS 29.05.100; AS 29.06.500 Ak Const.AS 29.06.040; AS 44.33.812 AS 29.04.040; AS 29.06.130
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.630 Effective date and certification
(a) Except as provided in (b) or (c) of this section, a final decision of the commission is effective when
(1) notification of compliance with 42 U.S.C. 1973c (Voting Rights Act of 1965) is received from the United States Department of Justice;
(2) certification of the legally required voter approval of the commission's final decision is received from the director of elections or the appropriate municipal official; and
(3) 45 days have passed since presentation of the commission's final decision on a legislative review petition was made to the legislature and the legislature has not disapproved the decision.
(b) The effective date of a merger or consolidation is the date set by the director of elections for the election of officials of the remaining or new municipality, if the provisions of (a) of this section have also been satisfied.
(c) The commission may defer the effective date of a city reclassification under AS 29.04, municipal incorporation under the Constitution of the State of Alaska or AS 29.05, or municipal annexation, detachment, deunification, merger, consolidation, or dissolution under AS 29.06 for a period of no more than two years.
(d) When the requirements in (a) of this section have been met, the department shall issue a certificate describing the effective change. The department shall hand-deliver or mail, postage prepaid, a copy of the certificate to the municipality that has been changed and shall file a copy of the certificate in each recording district of all territory within the municipality that has been changed.
(e) If a minor error is found in the certificate issued under (d) of this section, the person discovering the error shall notify the department and the commission. If the commission determines that the error resulted from an oversight during the petition proceeding or the issuance of the certificate, the commission will direct the department to issue a corrected certificate. The commission will not consider a request for a corrected certificate to include area or territory not proposed in the boundary change proceeding for which the certificate was issued.
History
- Authority: Art. X, sec. 12,AS 29.04.040; AS 29.06.510 Ak Const.AS 29.05.120; AS 44.33.020 Art. X, sec. 14,AS 29.06.040; AS 44.33.812 Ak Const.AS 29.06.140; AS 44.33.828
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.640 Scheduling
(a) The chair of the commission shall set or amend the schedule for action on a petition.
(b) In a schedule under (a) of this section, and except as provided by 3 AAC 110.590 for certain local action annexations, the chair of the commission shall allow at least
(1) 49 days after the date of initial publication or posting of notice of the filing of a petition, whichever occurs first, for receipt by the department of a responsive brief or written comments concerning the petition;
(2) 14 days after the date of service of a responsive brief on the petitioner for the receipt by the department of a reply brief from the petitioner. Contemporaneously with notice to the petitioner of the date for filing its reply brief, the department shall provide notice to respondents and commentors of that date;
(3) 28 days after the date of mailing of a departmental preliminary report for receipt of written summary comments to the department; and
(4) 21 days between the date of mailing of a final report and the commission hearing on the petition.
(c) As provided under 3 AAC 110.430, the commission may postpone proceedings on a petition that has been accepted for filing to allow concurrent consideration and action on another petition that pertains to some or all the same boundaries and that has either been accepted for filing or is anticipated to be filed. The commission may postpone the proceedings for an anticipated competing petition only if the anticipated competing petition is received by the department no later than 90 days after the date of the first publication of notice of the earlier petition under 3 AAC 110.450.
(d) The chair of the commission will adjust the schedule in (b)(1) - (4) of this section to accommodate the procedures under 3 AAC 110.475 if a request for summary determination is filed on the petition.
History
- Authority: Art. X, sec. 1,Art. X, sec. 14,AS 29.06.110 Ak Const.Ak Const.AS 29.06.120 Art. X, sec. 3,AS 29.04.040; AS 29.06.480 Ak Const.AS 29.05.070; AS 29.06.490 Art. X, sec. 7,AS 29.05.080; AS 44.33.020 Ak Const.AS 29.05.090; AS 44.33.812 Art. X, sec. 12,AS 29.06.040; AS 44.33.814 Ak Const.AS 29.06.090; AS 44.33.826
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.650 Resubmittals and reversals
Except upon a special showing to the commission of significantly changed conditions, a petition will not be accepted for filing that
(1) is substantially similar to a petition denied by the commission during the immediately preceding three years; for purposes of this paragraph, the three-year period will be measured from the date that the denial is final at the agency level, including reconsideration, or through the end of the appeal process, whichever is later;
(2) is substantially similar to a petition rejected by the legislature or rejected by the voters during the immediately preceding two years; or
(3) requests a substantial reversal of a decision of the commission that first became effective during the immediately preceding two years.
History
- Authority: Art. X, sec. 3,Ak Const.AS 29.06.130 Ak Const.AS 29.04.040; AS 29.06.450 Art. X, sec. 7,AS 29.05.100; AS 29.06.500 Ak Const.AS 29.06.040; AS 44.33.812 Art. X, sec. 12,AS 29.06.090
- Eff. 7/31/92, Register 123; am 1/9/2008, Register 185
3 AAC 110.660 Purpose of procedural regulations; relaxation or suspension of procedural regulations
The purpose of the procedural requirements set out in 3 AAC 110.400 - 3 AAC 110.700 is to facilitate the business of the commission, and will be construed to secure the reasonable, speedy, and inexpensive determination of every action and proceeding. Unless a requirement is strictly provided for in the Constitution of the State of Alaska, AS 29, or AS 44.33.810 - 44.33.849, the commission, by a vote of at least three members, may relax or suspend a procedural regulation if the commission determines that a strict adherence to the regulation would work injustice, would result in a substantially uninformed decision, or would not serve relevant constitutional principles and the broad public interest.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 29.06.090 Art. X, sec. 3,Ak Const.AS 29.06.450 Ak Const.AS 29.04.040; AS 44.33.812 Art. X, sec. 7,AS 29.05.100
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.680 Meetings
(a) When providing public notice of a commission meeting, the department shall include the date, time, and place of the meeting, the general topics to be discussed or considered, and the originating site of any teleconferencing facilities that will be used. If at least three days remain before the date of the meeting, and unless AS 44.33.818 or an applicable provision of this chapter sets out a more stringent publication requirement, the department shall publish notice of that meeting in a newspaper of general circulation in the vicinity where the meeting will be held or teleconferenced. If time is insufficient to arrange for publication of a complete notice as described in this subsection, the department shall publish an abbreviated notice that includes the date, time, and place of the meeting, the originating site of any teleconferencing facilities that will be used, and a statement that additional information regarding the meeting is available at the commission's offices and on the commission's website. Before the date and time of the meeting, the department shall
(1) post the complete notice of the meeting on the commission's website;
(2) transmit the complete notice to subscribers to the commission's electronic notice list;
(3) notify by telephone, electronic mail, or facsimile transmission those persons whom the chair of the commission determines to warrant notice by those means;
(4) mail or otherwise provide the complete notice to each person who requests it; and
(5) mail or otherwise distribute notice as directed by the commission chair.
(b) The department shall prepare an agenda of each public meeting as directed by the chair, make the agenda available for public inspection and copying at the commission's offices, post it on the commission's website, serve it by electronic mail on subscribers to the commission's electronic notice service, and mail or otherwise provide it to each person who requests a copy. The department shall also make copies of the agenda available at the public meeting.
(c) To the extent time permits, a public meeting agenda must be available at least 48 hours before the scheduled time of the meeting. If time does not allow that advanced publication, the agenda must be posted and distributed as soon as it is available but no later than the date of the meeting.
(d) If the commission allows public testimony regarding a matter on the agenda or pending before the commission, that testimony is limited to three minutes for each person except that the chair may allow an extended period for good cause shown.
History
- Authority: Art. X, sec. 12,Ak Const.AS 44.33.814 Ak Const.AS 44.33.020 Art. X, sec. 14,AS 44.33.812
- Eff. 1/9/2008, Register 185
3 AAC 110.690 Teleconference policy and procedures
(a) If the commission conducts a hearing by teleconference on a proposed boundary change, at least two members shall attend the hearing in person within or near the boundaries affected by the proposed change under consideration at the hearing. The department shall reflect in the minutes of a meeting or hearing whether a commission member attended in person or by teleconference.
(b) If the commission conducts a hearing or meeting by teleconference, and teleconference access is arranged by the department, the petitioner, respondent, witness, or other person convenienced by teleconference attendance shall bear the cost of that person's teleconferencing, except as provided by law, or unless otherwise ordered by the commission.
(c) If the commission conducts a meeting with a public teleconference site, agency materials that will be considered at a public meeting will be made available at the teleconference site or on the commission's website.
History
- Authority: Art. X, sec. 12,AS 44.33.020; AS 44.33.816 Ak Const.AS 44.33.810; AS 44.33.826 Art. X, sec. 14,AS 44.33.812 Ak Const.AS 44.33.814
- Eff. 1/9/2008, Register 185
3 AAC 110.700 Filing with the commission
(a) The filing of documents with the commission as allowed or required by this chapter or by order of the commission is made by filing them with the commission staff at the commission's offices. Unless otherwise required by this chapter or ordered by the commission, documents may be filed by hand delivery, United States mail, electronic mail, or facsimile transmission. The commission requests that a document filed by electronic mail be in searchable portable document format (.pdf).
(b) A document filed with the commission is complete upon receipt of the entire document by the commission. Filing that occurs in whole or in part after 4:30 p.m. is considered to have occurred at the opening of business on the next day that is not a Saturday, Sunday, or state holiday.
(c) For a document to be considered timely filed under requirements of this chapter or an order of the commission, the document must be filed with the commission on or before the deadline set under (b) and (e) of this section. For good cause shown, the commission chair will consider a request to accept a late-filed document.
(d) The original of a document served by electronic mail or facsimile transmission must be submitted to the commission within 10 days after the submission of the filing by either electronic method.
(e) The time in which to perform an act required or permitted under this chapter is computed by excluding the first day and including the last, unless the last day is a Saturday, Sunday, or state holiday. If the last day is a Saturday, Sunday, or state holiday, that day is excluded and the act shall be performed on or before the end of the next state business day.
History
- Authority: AS 44.33.812
- Eff. 1/9/2008, Register 185
3 AAC 110.710 Procedure for reclassification of first class cities with less than 400 residents
(a) A city council requesting reclassification under AS 29.04.045 shall file a written request with the commission including the following:
(1) the name of the first class city seeking reclassification;
(2) the city council's mailing address;
(3) a certified copy of the resolution, meeting minutes or other official record of the city council action requesting reclassification;
(4) whether the city will exercise powers under AS 29.35.260(c) after reclassification;
(5) a true and correct copy of the most recent decennial U.S. census records showing that the city has a population less than 400; and
(6) an affidavit of the person filing the written request that, to the best of the person's knowledge, information, and belief, formed after reasonable inquiry, the information in the request is true and accurate.
(b) Within 20 days after receiving a request under (a), the commission will convene a decisional meeting in compliance with 3 AAC 110.680 to examine the written request and to determine whether the city is eligible for reclassification as a second class city under AS 29.04.045. The commission will only determine that a city is ineligible if
(1) the written request does not meet the requirements of (a) of this section; or
(2) the city council previously rejected reclassification under AS 29.04.045(c) within the twelve months preceding receipt of the request.
(c) Within 30 days after receipt of the written request, the commission will issue a notice to the requesting city council of its determination. If the commission determines that the city is ineligible for reclassification, the notice will state the reason for ineligibility. The notice will be mailed to the city council. The department shall execute and file an affidavit of mailing as part of the public record of the proceedings. The notice constitutes a final decision of the commission.
(d) The city council of a first class city determined ineligible based on failure to meet the requirements of (a) of this section may submit a new written request at any time. The city council of a first class city determined to be ineligible under AS 29.04.045(c) may resubmit a petition after twelve months have elapsed since the city council's rejection of reclassification.
(e) Except as otherwise provided in this section, the provisions of 3 AAC 110.400 - 3 AAC 110.700 do not apply to a written request under AS 29.04.045.
History
- Authority: Art. X, sec. 7,AS 29.04.045 Ak Const.AS 44.33.812
- Eff. 1/5/2024, Register 249
Article 14 General Provisions
3 AAC 110.900 Transition
(a) A petition for incorporation, annexation, merger, or consolidation must include a practical plan that demonstrates the capacity of the municipal government to extend essential municipal services into the boundaries proposed for change in the shortest practicable time after the effective date of the proposed change. A petition for municipal detachment or dissolution under AS 29.06, or a city reclassification under AS 29.04, must include a practical plan demonstrating the transition or termination of municipal services in the shortest practicable time after detachment, dissolution, or city reclassification.
(b) Each petition must include a practical plan for the assumption of all relevant and appropriate powers, duties, rights, and functions presently exercised by an existing borough, city, unorganized borough service area, or other appropriate entity located within the boundaries proposed for change. The plan must be prepared in consultation with the officials of each existing borough, city, and unorganized borough service area and must be designed to effect an orderly, efficient, and economical transfer within the shortest practicable time, not to exceed two years after the effective date of the proposed change.
(c) Each petition must include a practical plan for the transfer and integration of all relevant and appropriate assets and liabilities of an existing borough, city, unorganized borough service area, and other entity located within the boundaries proposed for change. The plan must be prepared in consultation with the officials of each existing borough, city, and unorganized borough service area wholly or partially included within the boundaries proposed for change and must be designed to effect an orderly, efficient, and economical transfer within the shortest practicable time, not to exceed two years after the date of the proposed change. The plan must specifically address procedures that ensure that the transfer and integration occur without loss of value in assets, loss of credit reputation, or a reduced bond rating for liabilities.
(d) Before approving a proposed change, the commission may require that all boroughs, cities, unorganized borough service areas, or other entities wholly or partially included within the boundaries of the proposed change execute an agreement prescribed or approved by the commission for the assumption of powers, duties, rights, and functions, and for the transfer and integration of assets and liabilities.
(e) The transition plan must state the names and titles of all officials of each existing borough, city, and unorganized borough service area that were consulted by the petitioner. The dates on which that consultation occurred and the subject addressed during that consultation must also be listed.
(f) If a prospective petitioner has been unable to consult with officials of an existing borough, city, or unorganized borough service area because those officials have chosen not to consult or were unavailable during reasonable times to consult with a prospective petitioner, the prospective petitioner may request that the commission waive the requirement for consultation with those officials. The request for a waiver must document all attempts by the prospective petitioner to consult with officials of each existing borough, city, and unorganized borough service area. If the commission determines that the prospective petitioner acted in good faith and that further efforts to consult with the officials would not be productive in a reasonable period of time, the commission may waive the requirement for consultation.
History
- Authority: Art. X, sec. 1,Art. X, sec. 12,AS 29.06.040 Ak Const.Ak Const.AS 29.06.090 Art. X, sec. 3,AS 29.04.040; AS 29.06.130 Ak Const.AS 29.05.100; AS 29.06.150 Art. X, sec. 7,AS 29.05.130; AS 29.06.160 Ak Const.AS 29.05.140; AS 44.33.812
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.910 Statement of nondiscrimination
A petition will not be approved by the commission if the effect of the proposed change denies any person the enjoyment of any civil or political right, including voting rights, because of race, color, creed, sex, or national origin.
History
- Authority: Art. X, sec. 12,Ak Const.AS 44.33.812
- Eff. 7/31/92, Register 123
3 AAC 110.920 Determination of community
(a) In determining whether a settlement comprises a community, the commission may consider relevant factors, including whether the
(1) settlement is inhabited by at least 25 permanent residents;
(2) the permanent residents live in a geographical proximity that allows frequent personal contacts and interaction; and
(3) the permanent residents at a location are a discrete and identifiable social unit, as indicated by such factors as resident public school enrollment, number of sources of employment, voter registration, precinct boundaries, permanency of dwelling units, and the number of commercial or industrial establishments, community services, and service centers.
(b) Absent a specific and persuasive showing to the contrary, the commission will presume that a population does not constitute a community if
(1) public access to or the right to reside at the location of the population is restricted; or
(2) repealed 1/9/2008;
(3) the location of the population is provided by an employer and is occupied as a condition of employment primarily by persons who do not consider the place to be their permanent residence.
(c) A city that absorbs one or more municipalities through merger comprises a single community. A city that is formed through the consolidation of one or more municipalities comprises a single community.
History
- Authority: Art. X, sec. 1,Ak Const.Art. X, sec. 12, Ak Const.Art. X, sec. 7,Ak Const. Art. X, sec. 3,Ak Const.AS 44.33.812
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.970 Determination of essential municipal services
(a) If a provision of this chapter calls for the identification of essential municipal services for a borough, the commission will determine those services to consist of those mandatory and discretionary powers and facilities that
(1) are reasonably necessary to the area; and
(2) promote maximum local self-government.
(b) The commission may determine essential municipal services for a borough to include
(1) assessing the value of taxable property if the proposed or existing borough proposes to levy or levies a property tax;
(2) levying and collecting taxes if the proposed or existing borough proposes to levy or levies taxes;
(3) establishing, maintaining, and operating a system of public schools on an areawide basis as provided in AS 14.14.065;
(4) planning, platting, and land use regulation; and
(5) other services that the commission considers reasonably necessary to meet the borough governmental needs of the residents of the area.
(c) If a provision of this chapter calls for the identification of essential municipal services for a city, the commission will determine those services to consist of those mandatory and discretionary powers and facilities that
(1) are reasonably necessary to the community;
(2) promote maximum, local self-government; and
(3) cannot be provided more efficiently and more effectively by the creation or modification of some other political subdivision of the state.
(d) The commission may determine essential municipal services for a city to include
(1) levying taxes;
(2) for a city in the unorganized borough, assessing the value of taxable property;
(3) levying and collecting taxes;
(4) for a first class or home rule city in the unorganized borough, establishing, maintaining, and operating a system of public schools within the city as provided in AS 14.14.065;
(5) public safety protection;
(6) planning, platting, and land use regulation; and
(7) other services that the commission considers reasonably necessary to meet the local governmental needs of the residents of the community.
History
- Authority: Art. X, sec. 1,Art. X, sec. 12,AS 29.06.040 Ak Const.Ak Const.AS 29.06.090 Art. X, sec. 3,AS 29.04.040; AS 29.06.130 Ak Const.AS 29.05.011; AS 29.06.450 Art. X, sec. 7,AS 29.05.031; AS 29.06.500 Ak Const.AS 29.05.100; AS 44.33.812
- Eff. 5/19/2002, Register 162; am 1/9/2008, Register 185
3 AAC 110.980 (Repealed)
Repealed.
History
- Eff. 5/19/2002, Register 162; repealed 1/9/2008, Register 185
3 AAC 110.981 Determination of maximum local self-government
In determining whether a proposed boundary change promotes maximum local self-government under art. X, sec. 1, Constitution of the State of Alaska, the commission will consider
(1) for borough incorporation, whether the proposal would extend local government on a regional scale to a significant area and population of the unorganized borough;
(2) for borough annexation, whether the proposal would extend local government to portions of the unorganized borough;
(3) for merger or consolidation of municipalities, whether the proposal would expand or diminish the level of local government currently provided by the municipalities being merged or consolidated;
(4) for borough detachment, whether the
(A) proposal would
(i) diminish the provision of local government to the area and population being detached; or
(ii) detrimentally affect the capacity of the remnant borough to serve the local government needs of its residents; and
(B) local government needs of the detached area can be adequately met by an existing local government;
(5) for borough dissolution, whether the proposal substantiates that the provision of local government is no longer necessary or supportable for the area;
(6) for deunification, whether the proposal substantiates that the provision of local government is not diminished by deunification or that deunification could lead to better local government by incorporation of other local governments better suited to needs of the area and population;
(7) for city incorporation or annexation in the unorganized borough, whether the proposal would extend local government to territory and population of the unorganized borough where no local government currently exists;
(8) for city incorporation or annexation in an organized borough, whether the proposal would extend local government to territory or population of the organized borough where local government needs cannot be met by the borough on an areawide or nonareawide basis, by annexation to an existing city, or through an existing borough service area;
(9) for city detachment in an organized borough, whether the
(A) proposal would
(i) diminish the provision of local government to the territory and population being detached; or
(ii) detrimentally affect the capacity of the remnant city to serve the local government needs of its residents; and
(B) local government needs of the territory and population to be detached can be adequately met by the borough;
(10) for city detachment in the unorganized borough, whether the
(A) proposal would
(i) diminish the provision of local government to the territory and population being detached; or
(ii) detrimentally affect the capacity of the remnant city to provide local government services; and
(B) local government needs of the detached territory and population can be adequately met by another existing local government;
(11) for city dissolution in an organized borough, whether the proposal substantiates that the
(A) provision of local government is no longer necessary or supportable for the territory; or
(B) local government needs of the territory could be better provided by the borough;
(12) for city dissolution in the unorganized borough, whether the proposal substantiates that the
(A) provision of local government is no longer necessary or supportable for the territory; or
(B) local government needs of the territory could be better provided by a governmental organization other than the city;
(13) for city reclassification, whether the proposal would expand or diminish the provision of local government to the territory being reclassified;
(14) whether the petition proposes incorporation of a home rule municipality.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 29.06.090 Art. X, sec. 3,Ak Const.AS 29.06.130 Ak Const.AS 29.04.040; AS 29.06.450 Art. X, sec. 5,AS 29.05.011; AS 29.06.500 Ak Const.AS 29.05.031; AS 44.33.812 Art. X, sec. 7,AS 29.05.100
- Eff. 1/9/2008, Register 185
3 AAC 110.982 Minimum number of local government units
Among the factors to be considered in determining whether a proposed boundary change promotes a minimum number of local government units in accordance with art. X, sec. 1, Constitution of the State of Alaska, the commission will consider
(1) for borough incorporation, whether a new borough will be created from the unorganized borough and whether the proposed boundaries maximize an area and population with common interests;
(2) for borough annexation, whether the jurisdictional boundaries of an existing borough are being enlarged rather than promoting the incorporation of a new borough and whether the proposed boundaries maximize an area and population with common interests;
(3) for borough merger or consolidation, whether the merged or consolidated borough minimizes the number of local government units and whether the boundaries of the merged or consolidated borough maximize an area and population with common interests;
(4) for borough detachment, whether the detached area by itself is likely to be incorporated as an organized borough;
(5) for deunification of a unified municipality, whether
(A) incorporation of one or more new cities is likely to occur as a result of the proposed action, and, if so, the reasons why a new incorporation is or will be needed; or
(B) the action is proposed as an alternative to detachment of area and incorporation of one or more new boroughs;
(6) for city incorporation, whether incorporation of a new city is the only means by which residents of the territory can receive essential municipal services;
(7) for city annexation, whether the jurisdictional boundaries of an existing city are being enlarged rather than promoting the incorporation of a new city or creation of a new borough service area;
(8) for city merger or consolidation, whether the merged or consolidated city minimizes the number of local government units;
(9) for city detachment, whether the detached area, by itself, is likely to be incorporated as a new city.
History
- Authority: Art. X, sec. 1,Ak Const.AS 29.06.040 Ak Const.Art. X, sec. 12,AS 29.06.090 Art. X, sec. 3,Ak Const.AS 29.06.130 Ak Const.AS 29.04.040; AS 29.06.450 Art. X, sec. 5,AS 29.05.011; AS 29.06.500 Ak Const.AS 29.05.031; AS 44.33.812 Art. X, sec. 7,AS 29.05.100
- Eff. 1/9/2008, Register 185
3 AAC 110.990 Definitions
Unless the context indicates otherwise, in this chapter
(1) "borough" means a general law borough, a home rule borough, or a unified municipality;
(2) repealed 1/9/2008;
(3) "commission" means the Local Boundary Commission;
(4) "commissioner" means the commissioner of commerce, community, and economic development;
(5) a "community" means a social unit comprised of 25 or more permanent residents as determined under 3 AAC 110.920;
(6) "contiguous" means, with respect to area, territory, or property, adjacent, adjoining, and touching; contiguous area, territory, or property includes area, territory, or property separated by public rights-of-way;
(7) "department" means the Department of Commerce, Community, and Economic Development;
(8) "mandatory power" means an authorized act, duty, or obligation required by law to be performed or fulfilled by a municipality in the course of its fiduciary obligations to citizens and taxpayers; "mandatory power" includes one or more of the following:
(A) assessing the value of taxable property, and levying and collecting taxes;
(B) providing education, public safety, public health, and sanitation services;
(C) planning, platting and land use regulation;
(D) conducting elections; and
(E) other acts, duties, or obligations required by law to meet the local governmental needs within the boundaries proposed for change;
(9) "model borough boundaries" means those boundaries set out in the commission's publications
(A) Model Borough Boundaries, revised as of June 1997 and adopted by reference; and
(B) Unorganized Areas of Alaska That Meet Borough Incorporation Standards: A Report by the Alaska Local Boundary Commission to the Alaska Legislature Pursuant to Chapter 53, Session Laws of Alaska 2002, dated February 2003 and adopted by reference;
(10) "permanent resident" means a person who has maintained a principal domicile within the boundaries proposed for change under this chapter for at least 30 days immediately preceding the date of acceptance of a petition by the department and who shows no intent to remove that principal domicile at any time during the pendency of a petition before the commission;
(11) "political subdivision" means a borough or city organized and operated under state law;
(12) "property owner" means a legal person holding a vested fee simple interest in the surface estate of any real property including submerged lands;
(13) "regional educational attendance area" means an educational service area established in the unorganized borough under AS 14.08.031 by the department; "regional educational attendance area" includes the territory within the boundaries of a
(A) home rule city in that area;
(B) first class city in that area; or
(C) federal transfer regional educational attendance area formed under ch. 66, SLA 1985 in that area;
(14) "witnesses with expertise in matters relevant to the proposed change" means individuals who are
(A) specialists in relevant subjects, including municipal finance, municipal law, public safety, public works, public utilities, and municipal planning; or
(B) long-standing members of the community or region that are directly familiar with social, cultural, economic, geographic, and other characteristics of the community or region;
(15) "area" means the geographical lands and submerged lands forming the boundaries described in a petition regarding a borough government or forming the boundaries of an incorporated borough;
(16) "boundary change" means the type of action the commission takes to create, alter, or abolish a municipal government; "boundary change" includes
(A) annexation, consolidation, detachment, dissolution, incorporation, and merger of boroughs or cities; and
(B) reclassification of cities if jurisdictional boundaries for public school districts are affected;
(17) "city" has the meaning given in AS 29.71.800;
(18) "consolidation" has the meaning given in AS 29.71.800;
(19) "debt" means an obligation or alleged obligation of a municipality to pay money; "debt" includes funded debt and floating debt;
(20) "deunification" and "deunify" mean to change a unified municipality into a non-unified home rule borough;
(21) "floating debt" means a municipal obligation that is payable on demand;
(22) "funded debt" means a municipal obligation
(A) evidenced by bonds payable at a time beyond the current fiscal year of their issue, with periodic payment of interest; and
(B) for which provision is made for payment by future taxation;
(23) "merger" has the meaning given in AS 29.71.800;
(24) "numerical identifier" has the meaning given in AS 15.80.010;
(25) "non-unified home rule borough" means a home rule borough in which a city government does or could exist;
(26) "person" has the meaning given in AS 01.10.060;
(27) "public right-of-way" means a public easement or public property that is or may be used for a street, an alley, or another public purpose;
(28) "region"
(A) means a relatively large area of geographical lands and submerged lands that may include multiple communities, all or most of which share similar attributes with respect to population, natural geography, social, cultural, and economic activities, communications, transportation, and other factors;
(B) includes a regional educational attendance area, a state house election district, an organized borough, and a model borough described in a publication adopted by reference in (9) of this section;
(29) "regional" means having the characteristics of a region;
(30) "remnant city" means the portion of a city that will remain if a petition to detach territory from that city is approved under AS 29.06.040;
(31) "remnant borough" means the portion of a borough that will remain if a petition to detach area from that borough is approved under AS 29.06.040;
(32) "territory" means the geographical lands and submerged lands forming the boundaries in a petition regarding a city government or forming the boundaries of an incorporated city;
(33) "unified municipality" has the meaning given in AS 29.71.800;
(34) "unorganized borough" has the meaning given in AS 29.03.010.
History
- Authority: Art. X, sec. 1,Art. X, sec. 7,AS 29.05.011 Ak Const.Ak Const.AS 29.05.031 Art. X, sec. 3,Art. X, sec. 12,AS 29.71.800 Ak Const.Ak Const.AS 44.33.812
- Eff. 7/31/92, Register 123; am 5/19/2002, Register 162; am 1/9/2008, Register 185
Part 16 Division of Community and Regional Affairs
Chapter 130 State Aid to Municipalities and Other Recipients
3 AAC 130.011 Application for state aid
Repealed.
History
- Eff. 8/20/81, Register 79; am 10/18/87, Register 104; am 8/19/88, Register 107; am 12/1/2002, Register 164; repealed 3/14/2012, Register 201
3 AAC 130.021 Financial reports
Repealed.
History
- Eff. 8/20/81, Register 79; am 10/18/87, Register 104; am 8/19/88, Register 107; repealed 3/14/2012, Register 201
3 AAC 130.042 Population determination
Repealed.
History
- Eff. 10/18/87, Register 104; am 8/19/88, Register 107; am 12/1/2002, Register 164; repealed 3/14/2012, Register 201
3 AAC 130.043 Request for adjustment of population determination
Repealed.
History
- Eff. 10/18/87, Register 104; am 12/1/2002, Register 164; repealed 3/14/2012, Register 201
3 AAC 130.044 Appeal of population determination to the commissioner
Repealed.
History
- Eff. 10/18/87, Register 104; am 12/1/2002, Register 164; repealed 3/14/2012, Register 201
3 AAC 130.052 Standards for payments of state aid to municipalities for roads
Repealed.
History
- Eff. 10/18/87, Register 104; am 8/19/88, Register 107; repealed 3/14/2012, Register 201
3 AAC 130.053 Standards for payments of state aid to municipalities and other eligible recipients for health facilities and hospitals
Repealed.
History
- Eff. 10/18/87, Register 104; am 8/19/88, Register 107; repealed 3/14/2012, Register 201
3 AAC 130.054 Standards for payments of state aid to volunteer fire departments not in an organized municipality
Repealed.
History
- Eff. 10/18/87, Register 104; am 8/19/88, Register 107; repealed 3/14/2012, Register 201
3 AAC 130.055 Standards for payments of state aid to unincorporated communities
Repealed.
History
- Eff. 10/18/87, Register 104; am 8/19/88, Register 107; repealed 3/14/2012, Register 201
3 AAC 130.061 Standards for payment of state aid under former AS 29.90
Repealed.
History
- Eff. 8/20/81, Register 79; am 10/18/87, Register 104; repealed 12/1/2002, Register 164
3 AAC 130.071 Standards for minimum payments under AS 29.60.290
Repealed.
History
- Eff. 8/20/81, Register 79; am 10/18/87, Register 104; repealed 3/14/2012, Register 201
3 AAC 130.072 Violation of payment standard
Repealed.
History
- Eff. 10/18/87, Register 104; am 12/1/2002, Register 164; repealed 3/14/2012, Register 201
3 AAC 130.092 Full and true assessed property value determination
Repealed.
History
- Eff. 10/18/87, Register 104; am 12/1/2002, Register 164; repealed 3/14/2012, Register 201
3 AAC 130.093 Determination of social unit
Repealed.
History
- Eff. 10/18/87, Register 104; repealed 3/14/2012, Register 201
3 AAC 130.094 Determination of most qualified entity
Repealed.
History
- Eff. 10/18/87, Register 104; repealed 3/14/2012, Register 201
3 AAC 130.097 Determination of millage rate equivalent and data elements
Repealed.
History
- Eff. 10/18/87, Register 104; am 8/19/88, Register 107; am 12/1/2002, Register 164; repealed 3/14/2012, Register 201
3 AAC 130.102 Appeal of determination to the commissioner
Repealed.
History
- Eff. 10/18/87, Register 104; am 8/19/88, Register 107; repealed 3/14/2012, Register 201
3 AAC 130.112 Notice of entitlement
Repealed.
History
- Eff. 10/18/87, Register 104; am 12/1/2002, Register 164; repealed 3/14/2012, Register 201
3 AAC 130.113 Request for recalculation of entitlements
Repealed.
History
- Eff. 10/18/87, Register 104; repealed 3/14/2012, Register 201
3 AAC 130.121 Overpayment and adjustment
Repealed.
History
- Eff. 8/20/81, Register 79; am 5/23/85, Register 94; am 10/17/85, Register 96; repealed 3/14/2012, Register 201
3 AAC 130.122 Underpayment and adjustment
Repealed.
History
- Eff. 10/18/87, Register 104; am 8/19/88, Register 107; repealed 3/14/2012, Register 201
3 AAC 130.131 Incorporation or dissolution of an applicant
Repealed.
History
- Eff. 8/20/81, Register 79; am 10/18/87, Register 104; am 8/19/88, Register 107; repealed 3/14/2012, Register 201
3 AAC 130.135 Waiver for good cause
Repealed.
History
- Eff. 10/18/87, Register 104; repealed 3/14/2012, Register 201
3 AAC 130.150 Definitions
Repealed.
History
- Eff. 8/20/81, Register 79; am 10/18/87, Register 104; am 8/19/88, Register 107; am 12/1/2002, Register 164; repealed 3/14/2012, Register 201
Chapter 131 Population Determination for Municipal Oil and Gas Production Property Tax Limitations
3 AAC 131.010 Certification of population
Except as provided in 3 AAC 131.020, the population of a municipality for the purposes of the limitation on its oil and gas production property tax revenue will be the population certified by the commissioner under 3 AAC 180.030.
History
- Authority: AS 29.45.080; AS 44.33.020
- Eff. 3/16/89, Register 109; am 12/1/2002, Register 164; am 3/14/2012, Register 201
3 AAC 131.020 Alternate population determination procedure for municipalities with remote work sites
(a) The department will send an alternate municipal population determination to a qualified municipality by January 15. The municipality may appeal the determination to the commissioner. The appeal must be in writing and must be mailed to the commissioner within 30 days after receipt of the notice of determination. The appeal must include the grounds for the appeal and any relevant evidence. The commissioner will review the appeal and notify the municipality of the decision on the appeal within 10 days after receipt of the appeal.
(b) The population of a qualified municipality under this section is the sum of the population, as determined under 3 AAC 180.030, of the municipality in locations other than remote work sites and the annual average number of employment positions at the remote work sites that, if occupied by one person, would qualify that person as a "permanent resident" under the definition at 3 AAC 180.900. The annual average number of employment positions shall be determined by using the most current available, relevant Department of Labor and Workforce Development statistics.
History
- Authority: AS 29.45.080; AS 44.33.020
- Eff. 3/16/89, Register 109; am 12/1/2002, Register 164; am 3/14/2012, Register 201
3 AAC 131.030 Definitions
In this chapter,
(1) "commissioner" means the commissioner of the Department of Commerce, Community, and Economic Development;
(2) "qualified municipality" means a municipality that has within its boundaries one or more remote work sites and for which the definition of "permanent resident" in 3 AAC 180.900 does not accurately reflect the year-around presence of employees at the work site in the municipality, because several persons, none of whom individually qualifies as a "permanent resident," combine to fill one employment position in the work site more than a majority of the year;
(3) "remote work site" means a work camp established or supported by an employer for its employees in an isolated location separate from other populated areas of the municipality in which there is a reasonably stable number of persons who work and reside at the work camp throughout the year.
History
- Authority: AS 29.45.080; AS 44.33.020
- Eff. 3/16/89, Register 109; am 3/14/2012, Register 201
Chapter 132 National Forest Receipts Program
Article 1 General Provisions
3 AAC 132.010 Purpose
3 AAC 132.010 - 3 AAC 132.160 implement, interpret, and make specific AS 41.15.180 to provide for payments under the national forest receipts program to eligible municipalities and regional educational attendance areas.
History
- Authority: AS 41.15.180; AS 44.33.020
- Eff. 10/23/94, Register 132
3 AAC 132.020 Objective
The objective of the national forest receipts program is to allocate a share of national forest income under 16 U.S.C. 500 and AS 41.15.180 to eligible
(1) municipalities to be expended for public schools, public roads, and Title II and Title III projects; and
(2) regional educational attendance areas to be expended for public schools and Title II and Title III projects.
History
- Authority: AS 41.15.180; AS 44.33.020
- Eff. 10/23/94, Register 132; am 1/6/2005, Register 173
3 AAC 132.030 Delegation of authority
The commissioner will, in the commissioner's discretion, delegate the authority to administer the national forest receipts program under AS 41.15.180 to the municipal and regional assistance division in the department.
History
- Authority: AS 41.15.180; AS 44.17.010; AS 44.33.020
- Eff. 10/23/94, Register 132
Article 2 Program Eligibility
3 AAC 132.040 Eligibility requirements
To be eligible to receive a payment under the national forest receipts program, a municipality or regional educational attendance area must
(1) apply to the department under the procedures set out in 3 AAC 132.050 - 3 AAC 132.160;
(2) be classified before July 1 of the application year, as a
(A) municipality under AS 29.04.010 - 29.04.030;
(B) municipality organized as an Indian reserve having formed a community development corporation under AS 29.60.365; or
(C) regional educational attendance area under AS 14.08.031; and
(3) be located within
(A) the national forest; or
(B) 20 miles of the national forest.
History
- Authority: AS 41.15.180; AS 44.33.020
- Eff. 10/23/94, Register 132; am 1/6/2005, Register 173
Article 3 Procedures
3 AAC 132.050 Application procedures
(a) An application for payment under the national forest receipts program must be made on a form provided by the department.
(b) On or before July 1 of each application year, the department will distribute application forms to municipalities and regional educational attendance areas that the department determines may be eligible for participation in the national forest receipts program. The department will make application forms available to the public upon request.
(c) To be eligible for the national forest receipts program, an applicant must meet the eligibility requirements in 3 AAC 132.040 and must submit to the department an annual application form including, as appropriate, a certified road mileage statement as described in 3 AAC 132.080, a declaration allocating the applicant's share of project money between Title II and Title III projects, a waiver of sovereign immunity as described in 3 AAC 132.090, and an annual accounting report as described in 3 AAC 132.120. The submissions required in this subsection must be postmarked no later than August 15 of the application year.
(d) The commissioner will, in the commissioner's discretion, waive the filing deadline if the commissioner determines that the municipality or regional educational attendance area made a good faith effort to comply with the provisions of this section and if the commissioner determines that a waiver will not unreasonably disrupt the administration of the program.
History
- Authority: AS 41.15.180; AS 44.33.020
- Eff. 10/23/94, Register 132; am 1/6/2005, Register 173
3 AAC 132.055 Allocation of national forest receipts program money between the Tongass and Chugach National Forests
The department will use the following formula to allocate the state's annual full payment of national forest receipts received from the federal government between the Tongass and Chugach National Forests for distribution to eligible applicants located within each national forest:
(1) 98.43 percent will be allocated for the Tongass National Forest;
(2) 1.57 percent will be allocated for the Chugach National Forest.
History
- Authority: AS 41.15.180; AS 44.33.020
- Eff. 1/6/2005, Register 173
3 AAC 132.060 Calculation of national forest within boroughs
The amount of a payment made under the national forest receipts program to each borough will be calculated based upon the area of the national forest located within its boundaries as of September 30 of the state fiscal year immediately preceding the application year.
History
- Authority: AS 41.15.180; AS 44.33.020
- Eff. 10/23/94, Register 132; am 1/6/2005, Register 173
3 AAC 132.070 Calculation of average daily membership
The amount of a payment made under the national forest receipts program to a regional educational attendance area or a municipal school district in the unorganized borough for public schools will be calculated based upon the average daily membership of school districts as determined under AS 14.17.600 and AS 41.15.180(m), for the state fiscal year immediately preceding the application year.
History
- Authority: AS 41.15.180; AS 44.33.020
- Eff. 10/23/94, Register 132; am 1/6/2005, Register 173
3 AAC 132.080 Calculation of locally maintained roads
(a) The amount of a payment made under the national forest receipts program to a municipality in the unorganized borough for public roads will be calculated based upon the number of road miles located within the municipality over which the municipality exercises road powers plus the number of state road miles maintained by the municipality under a road maintenance agreement with the state in effect as of September 30 of the state fiscal year immediately preceding the application year.
(b) A municipality shall submit with its annual application to the department a road mileage statement certified by the mayor of the number of miles of eligible locally maintained roads. The road mileage statement must be on a form provided by the department. The department may require the municipality to submit a scale map displaying the roads claimed.
History
- Authority: AS 41.15.180; AS 44.33.020
- Eff. 10/23/94, Register 132; am 1/6/2005, Register 173
3 AAC 132.085 Calculation of Title II and Title III projects
(a) The amount of Title II and Title III project money allocated for the unorganized borough under the national forest receipts program is 15 percent of the payment to the unorganized borough calculated under 3 AAC 132.060.
(b) National forest receipts program money allocated to the state under AS 41.15.180(j) is exempt from the requirements of this section.
(c) The portion of national forest receipts program money that is allocated to each municipality or regional educational attendance area in the unorganized borough, and that must be used under (a) of this section for Title II and Title III projects, will be based upon the municipality's or regional educational attendance area's pro rata share of the total amount allocated under AS 41.15.180(c) and (d) during the application year to the municipality or regional educational attendance area.
(d) If the total amount of national forest receipts program money allocated to a municipality or regional educational attendance area in the unorganized borough for schools under AS 41.15.180(c), roads under AS 41.15.180(d), and Title II and Title III projects under this section is less than $100,000, that amount is exempt from the requirement that the municipality or regional educational attendance area spend a portion of its national forest receipts program payment on Title II or Title III projects. If the amount is exempt under this subsection, the municipality or regional educational attendance area shall spend an amount for schools and roads that is equal to the amount that would have been allocated for Title II or Title III projects, and shall allocate that amount between schools and roads so that the amounts spent on schools and roads are proportional to the amounts allocated for schools under AS 41.15.180(c) and roads under AS 41.15.180(d).
(e) Notwithstanding (c) of this section, if the total amount of national forest receipts program money allocated to a municipality or regional educational attendance area in the unorganized borough for schools under AS 41.15.180(c), roads under AS 41.15.180(d), and Title II and Title III projects under this section is $100,000 or more, the department will
(1) require the municipality or regional educational attendance area to spend a pro rata share of the total amount of national forest receipts program money that the department determines under (b) and (d) of this section to be exempt; and
(2) proportionately reduce, by the pro rata share of the total amount of national forest receipts program money that the department determines under (b) and (d) of this section to be exempt, the portions of national forest receipts program money allocated to the municipality or regional educational attendance area for schools under AS 41.15.180(c) and roads under AS 41.15.180(d), so that the 15-percent requirement in (a) of this section is met.
History
- Authority: AS 41.15.180; AS 44.33.020
- Eff. 1/6/2005, Register 173
3 AAC 132.090 Waiver of sovereign immunity
A municipality that is organized under federal law as an Indian reserve that existed before the enactment of 43 U.S.C. 1618(a) and is continued in existence under that subsection, that has formed a community development corporation under AS 29.60.365, and that applies for a payment from the national forest receipts program shall submit with its annual application to the department a written waiver of sovereign immunity from legal action by the state to recover all or a portion of the payments distributed. The written waiver of sovereign immunity must be on a form provided by the department.
History
- Authority: AS 41.15.180; AS 44.33.020
- Eff. 10/23/94, Register 132; am 1/6/2005, Register 173
3 AAC 132.100 Expenditure of national forest receipts for public schools
A payment made under the national forest receipts program for public schools must be used only for the operation, maintenance, repair or construction of public schools and may be used as the local government contribution to public schools under AS 14.17.410.
History
- Authority: AS 41.15.180; AS 44.33.020
- Eff. 10/23/94, Register 132; am 1/6/2005, Register 173
3 AAC 132.110 Expenditure of national forest receipts for public roads
A payment made under the national forest receipts program for public roads must be used only for the operation, maintenance, repair, or construction of public roads over which the municipality exercises road powers. The purchase of materials and equipment used to operate, maintain, repair, or construct public roads is permitted under this section.
History
- Authority: AS 41.15.180; AS 44.33.020
- Eff. 10/23/94, Register 132
3 AAC 132.115 Expenditure of national forest receipts for Title III projects; public comment period
(a) National forest receipts program money for Title III projects may be used by a municipality or regional educational attendance area for one or more of the following purposes:
(1) reimbursement for search-and-rescue, fire-fighting, and other emergency services performed on federal lands and paid for by the municipality or regional educational attendance area;
(2) reimbursement for all or part of the costs incurred by the municipality or regional educational attendance area to pay the salaries and benefits of its employees who supervise adults or juveniles performing mandatory community service on federal lands;
(3) acquisition of easements on a willing-seller basis to provide for
(A) non-motorized access to public lands for hunting, fishing, and other recreational purposes; or
(B) conservation easements;
(4) establishing or conducting forest-related after-school programs;
(5) education of homeowners in fire-sensitive ecosystems about the consequences of wildfires and techniques in home siting, home construction, and home landscaping that can increase the protection of people and property from wildfires;
(6) planning efforts to reduce or mitigate the impact of development on adjacent federal lands and to increase the protection of people and property from wildfires.
(b) Before spending national forest receipts program money on a Title III project for a purpose set out in (a) of this section, the municipality or regional educational attendance area must give public notice of the proposed Title III project and provide for a minimum 45-day public comment period.
(c) For purposes of (b) of this section public notice must consist of
(1) publication of a description of the proposed Title III project, at least one time, in a newspaper of general circulation in the municipality or regional educational attendance area; or
(2) posting of a description of the proposed Title III project in at least three public and prominent locations within the boundaries of the municipality or regional educational attendance area.
(d) After public notice under (b) and (c) of this section and the end of the 45-day public comment period, the municipality or regional educational attendance area may change the proposed Title III project based on comments received, or may carry out the project as described in the public notice.
History
- Authority: AS 41.15.180; AS 44.33.020
- Eff. 1/6/2005, Register 173
3 AAC 132.120 Accounting and reporting requirements
A municipality or regional educational attendance area that receives a payment from the national forest receipts program shall establish a separate accounting of the receipt and expenditure of the payment. A municipality or regional educational attendance area shall submit with its annual application to the department an accounting report that documents the expenditure of the income received from the national forest receipts program in the previous application year. The report must be on a form provided by the department and must be certified by the mayor of the municipality or by the superintendent of the regional educational attendance area.
History
- Authority: AS 41.15.180; AS 44.33.020
- Eff. 10/23/94, Register 132
3 AAC 132.130 Reduction of payments
The department will reduce a municipality's or regional educational attendance area's payment under the national forest receipts program if the department determines that a municipality or regional educational attendance area failed to properly expend a payment received from the national forest receipts program. The amount of the reduction will equal the amount determined by the department to have been improperly expended. At the discretion of the department, the reduction will occur over more than one application year. The department will notify the municipality or regional educational attendance area of the determination in writing by certified mail.
History
- Authority: AS 41.15.180; AS 44.33.020
- Eff. 10/23/94, Register 132
3 AAC 132.140 Appeal procedures
(a) A municipality or regional educational attendance area may appeal a determination made by the department under 3 AAC 132.130 to the commissioner. An appeal must be made in writing to the commissioner within 15 days after receipt of the department's determination.
(b) Not later than 15 days after receipt of the appeal, the commissioner or the commissioner's designee will decide the appeal and will notify the municipality or regional educational attendance area of the decision in writing by certified mail. The written decision is the agency's final administrative decision for purposes of appeal to superior court.
History
- Authority: AS 41.15.180; AS 44.33.020
- Eff. 10/23/94, Register 132
3 AAC 132.150 Underpayment and adjustment
(a) A municipality or regional educational attendance area may submit a request for adjustment if the municipality or the regional educational attendance area believes that an underpayment was made. A request for adjustment under this section must be made in writing to the commissioner and must be postmarked on or before August 1 of the application year following the application year in which the underpayment was made. The request must include evidence to demonstrate a good faith effort by the municipality or regional educational attendance area to comply with the provisions of this chapter and must include documentation in support of the adjustment.
(b) Not later than 15 days after receipt of the request for adjustment, the commissioner or the commissioner's designee will make a determination and will notify the municipality or regional educational attendance area of the decision in writing by certified mail. The written decision is the agency's final administrative decision for purposes of appeal to the superior court.
(c) Upon a determination by the commissioner or the commissioner's designee that the municipality or regional educational attendance area made a good faith effort to comply with the provisions of this chapter and that an underpayment was made, the department will adjust the payment during the application year in which the request for adjustment was made. The adjustment will be the difference between the amount that the municipality or regional educational attendance area received and the amount it was entitled to receive.
(d) If the commissioner or the commissioner's designee determines that the municipality or regional educational attendance area did not make a good faith effort to comply with the provisions of this chapter or that an underpayment was not made, the request for adjustment will be denied.
History
- Authority: AS 41.15.180; AS 44.33.020
- Eff. 10/23/94, Register 132; am 1/6/2005, Register 173
3 AAC 132.160 Overpayment and adjustment
(a) If the department determines that a payment that a municipality or regional educational attendance area received under the national forest receipts program exceeded the amount that the municipality or regional educational attendance area was entitled to receive during an application year, the department either will
(1) request that the excess payment be returned to the state; or
(2) reduce the municipality's or regional educational attendance area's payment during the following application year.
(b) If the commissioner or the commissioner's designee determines that it is in the best interests of the state and the municipality or regional educational attendance area, the commissioner or the commissioner's designee will reduce the municipality's or regional educational attendance area's payment under (a)(2) of this section over a period of not more than three application years.
(c) The commissioner or the commissioner's designee will waive the return of the overpayment if the commissioner or the commissioner's designee determines that
(1) the municipality or regional educational attendance area reasonably and in good faith relied upon the department's determination of the amount of the payment; and
(2) the reason for the overpayment was all or in substantial part departmental error.
History
- Authority: AS 41.15.180; AS 44.33.020
- Eff. 10/23/94, Register 132
Article 4 Definitions
3 AAC 132.900 Definitions
In this chapter
(1) "application year" means the state fiscal year during which a municipality or regional educational attendance area submits an application form for a payment under this chapter;
(2) "automotive equipment" means a self-propelled vehicle with a minimum of three wheels used to transport one or more persons, materials, or commodities;
(3) "commissioner" means the commissioner of the Department of Commerce, Community, and Economic Development;
(4) "department" means the Department of Commerce, Community, and Economic Development;
(5) "public roads" means public right-of-ways dedicated and maintained for use by automotive equipment;
(6) "public schools" means a school that is a member of a district of the state public school system as defined by AS 14.12.010;
(7) "federal lands" means lands within the National Forest System as defined in 16 U.S.C. 1609(a) (sec. 11(a) of the Forest and Rangeland Renewable Resources Planning Act);
(8) "Title II project" means a project authorized under 16 U.S.C. 500 and secs. 201 - 208, P.L. 106-393 (Secure Rural Schools and Community Self-Determination Act of 2000);
(9) "Title III project" means a project authorized under 16 U.S.C. 500 and secs. 301 - 303, P.L. 106-393 (Secure Rural Schools and Community Self-Determination Act of 2000).
History
- Authority: AS 41.15.180; AS 44.33.020
- Eff. 10/23/94, Register 132; am 1/6/2005, Register 173
Chapter 134 Shared Fisheries Business Tax Program
Article 1 General Provisions
3 AAC 134.010 Purpose
3 AAC 134.010 - 3 AAC 134.160 implement, interpret, and make specific AS 29.60.450, that provides for a shared fisheries business tax allocation to eligible municipalities.
History
- Authority: AS 29.60.450; AS 44.33.020
- Eff. 10/28/93, Register 128
3 AAC 134.020 Objective
The objective of the shared fisheries business tax program is to allocate a share of state fisheries business tax receipts collected outside municipal boundaries to municipalities that demonstrate they suffered significant effects from fisheries business activity during the program base year.
History
- Authority: AS 29.60.450; AS 44.33.020
- Eff. 10/28/93, Register 128
3 AAC 134.030 Delegation of authority
The authority of the department to administer the shared fisheries business tax program under AS 29.60.450 is delegated by the commissioner to the division in the department responsible for administering community financial assistance programs.
History
- Authority: AS 29.60.450; AS 44.17.010; AS 44.33.020
- Eff. 10/28/93, Register 128; am 2/16/2013, Register 205
Article 2 Program Eligibility
3 AAC 134.040 Eligibility requirements
(a) To be eligible to receive an allocation under the shared fisheries business tax program, a municipality
(1) must apply to the department under the procedures set out in 3 AAC 134.090 - 3 AAC 134.120; and
(2) must have been classified as a municipality under AS 29.04.010 - 29.04.020 during all or part of the program base year.
(b) To be eligible for an allocation within a fisheries management area under 3 AAC 134.060, a municipality must demonstrate to the department that the municipality suffered significant effects from fisheries business activities that occurred in that fisheries management area during the program base year.
History
- Authority: AS 29.60.450; AS 44.33.020
- Eff. 10/28/93, Register 128; am 9/8/94, Register 131
Article 3 Procedures
3 AAC 134.050 Statewide apportionments
(a) Money available each fiscal year under AS 43.75.137 for the shared fisheries business tax program will be apportioned by the department to the fisheries management areas established in (e) of this section. As provided in AS 29.60.450, the apportionment will be based on the ratio of the weight of fish and shellfish processed by fisheries businesses in an area to the total weight of the fish and shellfish processed by fisheries businesses for all areas.
(b) For purposes of (a) of this section, the weight of fish and shellfish processed in each area will be determined based on the information from the Alaska fisheries business tax returns filed under AS 43.75.030 with the Department of Revenue as of July 1 of the application year.
(c) Money available each year under AS 43.77.060(d) for the shared fisheries business tax program will be apportioned by the department to the fisheries management areas established in (e) of this section. As provided in AS 29.60.450, the apportionment will be based on the ratio of an area's fishery resource landing tax production value to the total fishery resource landing tax production value for all areas.
(d) For purposes of (c) of this section, the fishery resource landing tax production value for each area will be determined based on the statewide average price paid for fisheries resources during the program base year as reported to the Department of Fish and Game under AS 16.05.690.
(e) For the purposes of apportioning and allocating the money available for the shared fisheries business tax program, 19 fisheries management areas for the program are established:
(1) Pribilof Islands Area, including the waters around St. Paul and St. George Islands, as described in 5 AAC 34.905(b);
(2) Aleutians Islands Area as described in 5 AAC 12.100;
(3) Alaska Peninsula Area as described in 5 AAC 09.100;
(4) Chignik Area as described in 5 AAC 15.100;
(5) Bristol Bay Area as described in 5 AAC 06.100;
(6) Lower Kuskokwim Area, consisting of Districts 1, 4, and 5 as set out in 5 AAC 07.200, and other municipalities outside of those districts, located within the Kuskokwim Area as described in 5 AAC 07.100;
(7) Upper Kuskokwim Area, consisting of Districts 2 and 3 as set out in 5 AAC 07.200, located within the Kuskokwim Area as described in 5 AAC 07.100;
(8) Lower Yukon Area, consisting of Districts 1 - 3 as set out in 5 AAC 05.200, located within the Yukon-Northern Area as described in 5 AAC 05.100;
(9) Middle Yukon Area, consisting of District 4 as set out in 5 AAC 05.200, located within the Yukon-Northern Area as described in 5 AAC 05.100;
(10) Upper Yukon Area, consisting of Districts 5 and 6 as set out in 5 AAC 05.200, located within the Yukon-Northern Area as described in 5 AAC 05.100;
(11) Norton Sound-Point Clarence Area as described in 5 AAC 04.100;
(12) Kotzebue-Northern Area as described in 5 AAC 03.100;
(13) Kodiak Area as described in 5 AAC 18.100;
(14) Cook Inlet Area as described in 5 AAC 21.100;
(15) Prince William Sound Area as described in 5 AAC 24.100;
(16) Yakutat Area as described in 5 AAC 30.100;
(17) Northern Southeastern Area, consisting of Districts 11, 12, and 14 - 16 as set out in 5 AAC 33.200, located within the Southeastern Alaska Area as described in 5 AAC 33.100;
(18) Central Southeastern Area, consisting of Districts 5 - 10 and 13, as set out in 5 AAC 33.200, located within the Southeastern Alaska Area as described in 5 AAC 33.100; and
(19) Southern Southeastern Area, consisting of Districts 1 - 4, and the Dixon Entrance District as set out in 5 AAC 33.200, located within the Southeastern Alaska Area as described in 5 AAC 33.100.
History
- Authority: AS 29.60.450; AS 44.33.020
- Eff. 10/28/93, Register 128; am 9/8/94, Register 131
3 AAC 134.060 Allocation within areas
(a) Except as provided in (f) of this section, if the total apportionment available for an entire area under 3 AAC 134.050(a) and (c) together is equal to or greater than the long-form threshold value, the department will distribute one-half of the apportionment for that area to eligible applicants in that area. This share of the area's apportionment will be allocated by the department proportionate to the significant effects of fisheries business activity demonstrated by each eligible applicant in that area divided by the total significant effects of fisheries business activity demonstrated by all eligible applicants in that area. The remaining share of one-half of the apportionment for that area will be allocated equally among all eligible applicants in that area.
(b) In calculating the allocations under (a) of this section
(1) the significant effects credited by the department to each eligible applicant will be measured in terms of expenditures during the program base year demonstrated by that applicant and determined by the department to be reasonable and necessary as a result of fisheries business activities; eligible expenditures include
(A) actual expenditures incurred by the applicant for the mitigation of effects of fisheries business activity; or
(B) estimated expenditures documented by the applicant as reasonable and necessary to mitigate effects of fisheries business activity but which the applicant was unable to make during the program base year.
(2) If an applicant occupies more than one of the areas established in 3 AAC 134.050(e), the applicant's participation in the allocations within those areas will be based on those significant effects on the applicant that are the result of fisheries business activities that occurred within each area.
(c) Except as provided in (f) of this section, if the total apportionment available for an entire area under 3 AAC 134.050(a) and (c) together is less than the long-form threshold value, one-half of the area's apportionment will be allocated equally among all eligible applicants in that area. The remaining share of one-half of the area's apportionment will be allocated to eligible applicants in the area proportionate to the populations of all eligible applicants in the area.
(d) For the purposes of determining the eligibility of an applicant under (c) of this section, the demonstration of significant effects on a municipality from fisheries business activity may be satisfied by submitting to the department a resolution of the municipality's governing body which states the municipality suffered significant effects during the program base year from fisheries business activity.
(e) If the department determines that there is only one eligible applicant within an area, the applicant may receive the entire apportionment under 3 AAC 134.050(a) and (c) together for that area.
(f) If the department determines that allocation to an applicant is $50 or less, the department will determine that the amount of the effects from fisheries business activities is negligible and the department will not distribute the allocation to the applicant.
History
- Authority: AS 29.60.450; AS 44.33.020
- Eff. 10/28/93, Register 128; am 9/8/94, Register 131; am 7/1/2001, Register 158
3 AAC 134.070 Alternative allocation method within areas
(a) If all eligible applicants within an area for which the total apportionment under 3 AAC 134.050(a) and (c) together is equal to or greater than the long-form threshold value agree in writing, the department will, in its discretion, allow those applicants to use an allocation method within that area other than the method provided for under 3 AAC 134.060(a). Alternative allocation methods under this section must measure the relative significant effect of fisheries business activity on the respective applicants in the area and must comply with AS 29.60.450.
(b) Repealed 2/16/2013.
History
- Authority: AS 29.60.450; AS 44.33.020
- Eff. 10/28/93, Register 128; am 9/8/94, Register 131; am 2/16/2013, Register 205
3 AAC 134.080 Municipal population determination
For the purposes of per capita and other population calculations under this chapter, the department will use the municipal population as certified during the fiscal year immediately preceding the application year under 3 AAC 180.050(d).
History
- Authority: AS 29.60.450; AS 44.33.020
- Eff. 10/23/93, Register 128; am 2/16/2013, Register 205
3 AAC 134.090 Application procedures
(a) An application for the program must be made on the forms provided by the department.
(b) Not later than November 15 of each application year, the department will distribute applications to persons who have requested an application and municipalities who the department believes eligible for participation in the program. The department will make application forms also available to the public, upon request.
(c) If an area's total apportionment under 3 AAC 134.050(a) and (c) together is equal to or greater than the long-form threshold value, an applicant in that area must complete a long-form application prescribed in 3 AAC 134.100. If an area's total apportionment under 3 AAC 134.050(a) and (c) together is less than the long-form threshold value, an applicant in that area must complete a short-form application prescribed in 3 AAC 134.120. If an applicant wishes to use an approved alternative method of allocation under 3 AAC 134.070, the applicant must complete an application prescribed in 3 AAC 134.110.
(d) A municipality that occupies more than one area must submit a separate application for each area in which that municipality applies to receive an allocation under this program.
(e) To be eligible for the program, an applicant must submit its applications to the department postmarked no later than February 15 of the fiscal year that the application is being submitted. The commissioner may extend the application deadline for good cause, and upon a finding by the commissioner that a waiver will not unreasonably disrupt the administration of the program.
History
- Authority: AS 29.60.450; AS 44.33.020
- Eff. 10/28/93, Register 128; am 9/8/94, Register 131; am 2/16/2013, Register 205
3 AAC 134.100 Long-form application
(a) A municipality located in an area and submitting a long-form application shall include in its application a determination of the significant effects suffered by the municipality during the program base year as a result of fisheries business activity that occurred in that area. The statement, along with the remainder of the application, must be adopted by the governing body through resolution as being true and correct to the best of its knowledge. The application must include this resolution.
(b) The significant effects claimed in a municipality's application must be documented in terms of municipal expenditures during the program base year determined to be reasonable and necessary to mitigate effects of fisheries business activities that occurred in the area in which the municipality is located.
(c) If a significant effect claimed reflects actual municipal expenditures, the application must include clear and complete documentation of those expenditures.
(d) If a significant effect claimed in the application reflects estimated expenditures that were determined by the municipality to be reasonable and necessary, but the municipality was unable to make during the program base year, the application must include a finding in a resolution by the municipal governing body that documents and clearly demonstrates the procedures and methods by which the need and the estimates were determined.
(e) If a significant effect claimed in the application represents only a part of the need for a municipal service, the application must include documentation that explains how the part claimed under the program was determined as a significant effect. Eligible municipal services include health care, public safety, education, transportation, solid waste disposal, utilities, or general government administration.
History
- Authority: AS 29.60.450; AS 44.33.020
- Eff. 10/28/93, Register 128; am 9/8/94, Register 131
3 AAC 134.110 Alternative method application
An applicant shall include with its alternative method application a resolution adopted by the governing body that clearly describes the alternative allocation method within that area approved by the department under 3 AAC 134.070.
History
- Authority: AS 29.60.450; AS 44.33.020
- Eff. 10/28/93, Register 128
3 AAC 134.120 Short-form application
An applicant shall include with a short-form application a resolution adopted by the governing body that states that the municipality suffered significant effects during the program base year as a result of fisheries business activity.
History
- Authority: AS 29.60.450; AS 44.33.020
- Eff. 10/28/93, Register 128
3 AAC 134.130 Evaluation of long-form application
The department will evaluate a long-form application and make a determination on the amount of the significant effects claimed by each applicant that has submitted a long-form application. The department will mail to each applicant a notice of this determination. A determination under this section may be appealed under 3 AAC 134.140.
History
- Authority: AS 29.60.450; AS 44.33.020
- Eff. 10/28/93, Register 128; am 2/16/2013, Register 205
3 AAC 134.140 Long-form application appeal procedure
An applicant may appeal a determination made under 3 AAC 134.130 to the commissioner. An appeal must be made in writing to the commissioner within 30 days after mailing of the notice of the determination to the applicant's address on record with the program. No later than 20 days after receipt of the appeal, the commissioner or the commissioner's designee will decide the appeal. Written notification of the decision will be mailed to the appealing applicant. This decision represents the final agency action on the appeal.
History
- Authority: AS 29.60.450; AS 44.33.020
- Eff. 10/28/93, Register 128
3 AAC 134.150 Allocation calculations
(a) In an area subject to the procedures of the long-form application, the department will calculate and distribute one-half of the apportionment for that area equally among all applicants after the department has received and verified the applications required of the applicants in those areas under 3 AAC 134.100 and determined the applicants to be eligible for the program. After the commissioner or the commissioner's designee decides the appeals within an area under 3 AAC 134.140, the department will calculate and distribute the remaining one-half of the apportionment for that area to each applicant within that area subject to the procedures of the long-form application.
(b) In an area subject to the procedures of the short-form application, the department will calculate and distribute the allocations for an applicant within that area after the department has received and verified the applications required of the applicants in those areas under 3 AAC 134.120 and determined the applicants to be eligible for the program.
(c) In an area subject to the procedures of the alternative method application, the department will calculate and distribute the allocations for an applicant within that area after the department has received and verified the applications required of the applicants in those areas under 3 AAC 134.110 and determined the applicants to be eligible for the program.
History
- Authority: AS 29.60.450; AS 44.33.020
- Eff. 10/28/93, Register 128; am 7/1/2001, Register 158
Article 4 Definitions
3 AAC 134.160 Definitions
In this chapter
(1) "alternative method application" means the application requirements and procedures that are to be followed by applicants located within an area for which an alternative method of allocation under 3 AAC 134.070 has been approved by the department;
(2) "application year" means the state fiscal year in which a municipality submits an application for funding under this chapter and is the state fiscal year immediately following the program base year;
(3) "area" means a fisheries management area established under 3 AAC 134.050;
(4) "commissioner" means the commissioner of the Department of Commerce, Community, and Economic Development;
(5) "department" means the Department of Commerce, Community, and Economic Development;
(6) repealed 2/16/2013;
(7) repealed 2/16/2013;
(8) "fisheries business activity" means the same as in AS 29.60.450(f)(4);
(9) "long-form application" means the application requirements and procedures that are to be followed by applicants located within an area for which the total apportionment under 3 AAC 134.050(a) and (c) together is equal to or greater than the long-form threshold value;
(10) "program" means the shared fisheries business tax program under AS 29.60.450;
(11) "program base year" means the calendar year that precedes the application year;
(12) "short-form application" means the application requirements and procedures that are to be followed by applicants located within an area for which the total apportionment under 3 AAC 134.050(a) and (c) together is less than the long-form threshold value;
(13) "significant effect" means municipal expenditures during the program base year demonstrated by the municipality to the department to be reasonable and necessary that are the result of fisheries business activities on the municipality's
(A) population;
(B) employment;
(C) finances;
(D) air and water quality;
(E) fish and wildlife habitats; and
(F) ability to provide essential public services, including health care, public safety, education, transportation, marine garbage collection and disposal, solid waste disposal, utilities, and government administration;
(14) "fisheries resource landing tax production value" has the meaning given in AS 29.60.450;
(15) "long-form threshold value" means the value determined by multiplying the number of municipalities in an area by $4,000.
History
- Authority: AS 29.60.450; AS 44.33.020
- Eff. 10/28/93, Register 128; am 9/8/94, Register 131; em am 6/25/2003 - 10/22/2003, Register 167; am 2/16/2013, Register 205
Chapter 135 Senior Citizen and Disabled Veteran Property Tax Exemption
3 AAC 135.010 Method of application
Applications for the senior citizen and disabled veteran property tax exemption shall be on forms provided by the department.
History
- Authority: AS 29.45.030(f)
- Eff. 1/28/73, Register 45; am 9/21/88, Register 107
3 AAC 135.020 Forms
Form 21-400 and Form 21-400b are hereby adopted by the department for use in the application for senior citizen and disabled veteran property tax exemptions, respectively.
History
- Authority: AS 29.45.030(f)
- Eff. 1/28/73, Register 45; am 1/27/74, Register 48; am 9/21/88, Register 107
3 AAC 135.030 Obtaining forms
Application forms are available only from the office of the clerk or assessor of the municipality.
History
- Authority: AS 29.45.030(f)
- Eff. 1/28/73, Register 45
3 AAC 135.040 Deadlines and calculations
(a) Exemption applications filed after January 15 of the assessment year, or after a date provided by ordinance as specified in AS 29.45.030(f), must be accompanied by an affidavit stating the reason for the late filing.
(b) To qualify for a hardship exemption beyond the first $150,000 of assessed value of real property under AS 29.45.030(e), the applicant must apply by completing Form 21-400c and submitting the form, including necessary attachments, to the municipal assessor before July 1, or before a date provided by ordinance as specified in AS 29.45.030(f), of the exemption year.
(c) An eligible applicant may qualify for a hardship exemption beyond the first $150,000 of assessed value of real property if the amount of the applicant's tax bill is greater than two percent of the applicant's gross household income. An exemption will be granted only for that portion of the applicant's taxes in excess of two percent of the gross household income. "Gross household income" means total annual compensation, earned and unearned, from all sources, of all members of the household.
(d) In cases of extreme hardship, an exemption up to 100 percent of the applicant's assessed value of real property may be granted by a two-thirds vote of the governing body.
(e) Hardship exists when the amount of taxes owed is in excess of two percent of an applicant's gross household income.
(f) The following are examples of hardship exemption calculation:
(1) Example A
Household Income:$30,000Assessed Value:200,000Mill Rate: 10.0Taxes Calculated:$200,000 x 10.0 mills =$2,000$150,000 Cap:$150,000 x 10.0 mills =$1,500 Tax Liability:$ 500Ability to Pay:$ 30,000 x 2% = 600 =No hardship
exemption
allowed
(2) Example B
Household Income:$10,000Assessed Value:200,000Mill Rate: 10.0Taxes Calculated:$200,000 x 10.0 mills =$2,000$150,000 Cap:$150,000 x 10.0 mills =$1,500 Tax Liability:$ 500Ability to Pay:$ 10,000 x 2% = $200Tax Liability:$500Ability to Pay:(200)Hardship Exemption:$300
History
- Authority: AS 29.45.030(f)
- Eff. 1/28/73, Register 45; am 3/31/76, Register 57; am 9/21/88, Register 107
3 AAC 135.085 Eligibility
(a) When an eligible person and his or her spouse occupy the same permanent place of abode, the reimbursement described in AS 29.45.030(g) applies, regardless of whether the property is held in the name of the husband, wife, or both.
(b) A resident widow or widower who is at least 60 years old is eligible for the hardship exemption under AS 29.45.030(e) if the deceased spouse of the widow or widower was at the time of his or her death
(1) a resident of the State of Alaska; and
(2) at least 65 years old or a disabled veteran.
(c) If property is occupied by a person other than the eligible applicant and his or her spouse, an exemption, to be eligible for reimbursement, applies only to the portion of the property permanently occupied by the eligible applicant and his or her spouse as a place of abode.
(d) The real property eligible for reimbursement under this chapter includes only a
(1) primary parcel: the entire parcel of real property owned and occupied by an applicant as a permanent place of abode; and
(2) subsidiary parcel: a parcel of real property adjacent to the primary parcel described under (1) of this subsection, subject to approval by the department.
History
- Authority: AS 29.45.030(f)
- Eff. 11/24/82, Register 84; am 9/21/88, Register 107
3 AAC 135.095 Other statutory encumbrances
Approval of the property for the property tax exemption does not exempt the property from other statutory encumbrances.
History
- Authority: AS 29.45.030(f)
- Eff. 11/24/82, Register 84
3 AAC 135.110 Appeal
(a) An applicant aggrieved by any determination of the local assessor, except a decision as to the purpose of a transfer, may appeal under AS 29.53.130 - AS 29.53.135 to his local board of equalization.
(b) The determination of the board of equalization is appealable under AS 44.62.560 - AS 44.62.570.
History
- Authority: AS 29.53.020(f)AS 44.47.160
- Eff. 1/28/73, Register 45
3 AAC 135.120 Definitions
In this chapter
(1) repealed 1/27/73;
(2) "exemption year" means the calendar year for which the exemption is sought;
(3) "real property" includes, but is not limited to mobile homes, whether classified as real or personal property for municipal tax purposes;
(4) "permanent place of abode" means a dwelling, or a dwelling unit in a multiple dwelling, including lots and outbuildings, or an appropriate portion thereof, which are necessary to convenient use of the dwelling unit;
(5) "resident" includes applicants who have a fixed habitation in the State of Alaska, and, when absent, intend to return to the State of Alaska;
(6) "ownership" means possession of an interest in real property, including but not limited to, a mobile home or condominium, which interest is recorded in the office of the district recorder, or, if unrecorded, is attested by a contract, bill of sale, deed of trust, or other proof in a form satisfactory to the local assessor;
(7) "department" means the Department of Commerce, Community, and Economic Development;
(8) "senior citizen" means one who is 65 or older before January 1 of the exemption year;
(9) "disabled veteran" has the same meaning as in AS 29.45.030(i)(1).
History
- Authority: AS 29.45.030(f)
- Eff. 1/28/73, Register 45; am 4/18/73, Register 45; am 1/27/74, Register 48; am 3/31/76, Register 57; am 11/24/82, Register 84; am 9/21/88, Register 107
Chapter 136 Senior Citizen Property Tax Equivalency Payment
3 AAC 136.010 Forms
(a) Form 21-405 and Form 21-406 are adopted by the department for use in application for the senior citizen and disabled veteran renter property tax equivalency payment, respectively. Form 21-405a and Form 21-406a "rent certificate" are adopted by the department as supplements to Form 21-405 and Form 21-406, respectively.
(b) Application forms will be supplied upon request by the office of the state assessor.
History
- Authority: AS 29.45.040
- Eff. 11/24/82, Register 84; am 9/21/88, Register 107
3 AAC 136.020 Rental payment verification
Satisfactory evidence of payment and of amount paid, as required by AS 29.45.040(c), includes
(1) Form 21-405a or Form 21-406a, properly completed by the landlord and attached to Form 21-405 or Form 21-406, respectively;
(2) cancelled checks payable to the landlord for rent paid;
(3) rent receipts; or
(4) a combination of the items in (1) - (3) of this section.
History
- Authority: AS 29.45.040
- Eff. 11/24/82, Register 84; am 9/21/88, Register 107
3 AAC 136.030 Eligibility
(a) To be eligible, property for which rent is paid must be subject to a local property tax. Payment in place of property tax is not considered local property tax for purposes of this chapter.
(b) To be eligible, a rental payment must be paid to the landlord and must exclude security deposits, rent paid for the year before the program year, and advance payments for the year after the program year. Rental charges for food, medical care and supplies, personal services, or other items not directly related to providing shelter and utilities are not eligible. Sales tax paid to the landlord for the rental may be included in the eligible rent paid.
(c) An applicant may not receive a property tax exemption under AS 29.53.020(e) - (i) and renter equivalency payment under AS 29.73.060 for the same program year unless a portion of a permanent place of abode is owned and a portion of the same permanent place of abode is rented.
(d) An applicant must be age 65 or older before January 1 of the program year to be eligible.
(e) Application for an equivalency payment must be mailed to the department by January 15 of the year following the program year.
History
- Authority: AS 29.45.040
- Eff. 11/24/82, Register 84
3 AAC 136.040 Verification of age
(a) Documentation of birth date is required the first year an applicant enters the program. Submission of one of the following documents clearly showing birth date of the applicant is adequate documentation:
(1) birth certificate;
(2) proof of eligibility for the Alaska Longevity Program, or any Alaska state program that requires similar adequate documentation of age;
(3) baptismal certificate showing date of birth and issued during the first few years of life;
(4) naturalization papers;
(5) a document issued by the Social Security Administration showing date of birth; or
(6) a Bureau of the Vital Statistics record of birth.
(b) The department will, in its discretion, accept as adequate documentation other documents attesting to the age of the applicant.
History
- Authority: AS 29.45.040
- Eff. 1/24/82, Register 84
3 AAC 136.045 Veteran verification of disability
(a) For each year of application, a disabled veteran must submit a letter of certification from the Veterans Administration attesting to the disabled veteran's current percentage of disability. The letter of certification must be attached to Form 21-406.
(b) A disabled veteran will not be required to provide a current letter of certification as specified in (a) of this section if the disabled veteran submits a letter from the Veterans Administration certifying that his or her disability is of a permanent nature and does not require reevaluation.
History
- Authority: AS 29.45.040
- Eff. 9/21/88, Register 107
3 AAC 136.050 Computation of payment
(a) No payment will be made for less than $1.
(b) The property-tax equivalent percentage for each home rule or general law municipality that levies a general property tax is based on the highest mill rate levied within that municipality during the program year.
(c) The mill rate levied against the abode most recently occupied is used to determine the equivalent percentage for that year.
History
- Authority: AS 29.45.040
- Eff. 11/24/82, Register 84
3 AAC 136.060 Definitions
In this chapter
(1) "department" means the Department of Commerce, Community, and Economic Development;
(2) "disabled veteran" has the same meaning as in AS 29.45.030(i)(1);
(3) "program year" means the calendar year immediately preceding the filing date.
History
- Authority: AS 29.25.040
- Eff. 11/24/82, Register 84; am 9/21/88, Register 107
Chapter 138 Farm and Agricultural Land
3 AAC 138.010 Forms
(a) The Department of Community and Regional Affairs Form 21.410 and Form 21-411 are adopted for use in application for the farm and agricultural land use assessment and tax deferment program.
(b) Application and authorization forms shall be made available by and shall be returned to the clerk or assessor of the municipality in which the land for which the farm use assessment and tax deferment are sought is located.
History
- Authority: AS 29.45.060(b)AS 44.33.020; AS 44.33.740
- Eff. 12/31/75, Register 56
3 AAC 138.020 Income verification
(a) In addition to the application prescribed in 3 AAC 138.010, an applicant must establish before May 15 of the assessment year that the gross income attributed to farm-use land is at least 10 percent of the applicant's yearly gross income, by either
(1) providing the clerk or assessor of the municipality proof of income eligibility as shown by income tax returns or other reasonably documented information which is determined by the local assessor to be sufficient proof of eligibility; or
(2) providing the department with copies of signed federal income tax returns submitted to the Internal Revenue Service for the previous year.
(b) Failure to provide documentation as required by this section forfeits the claim for reimbursement for that assessment year.
History
- Authority: AS 29.45.060(a)
- Eff. 11/24/82, Register 84
3 AAC 138.030 Appeal
An applicant for the farm use assessment and tax deferment who believes that the valuation or classification assigned to the land that is the subject of the application is erroneous may appeal to the board of equalization of the municipality in which the land is located in the manner provided by AS 29.53.130. The municipality shall report the disposition of all such appeals to the state assessor.
History
- Authority: AS 29.45.060(c)
- Eff. 12/31/75, Register 56
3 AAC 138.040 Maintenance of records; duplicate copies
The municipality in which the land is located shall maintain separate files and records of all applications for the farm use assessment and tax deferment, whether allowed by the municipality or not, including valuation of the property under the full and true value standard of AS 29.53.060. Duplicate copies of all records relating to the application entered in the file shall be forwarded to the state assessor. The municipality shall investigate to determine whether title to land for which the assessment and deferment have been granted has been conveyed or alienated in such a way that the assessment or deferment may be terminated and shall advise the state assessor as to the results of its investigation.
History
- Authority: AS 29.45.060(a)
- Eff. 12/31/75, Register 56
3 AAC 138.050 Confidentiality
Tax records and other documents providing evidence of the applicant's eligibility for the farm use assessment and tax deferment are confidential and shall be used only for the purpose of ascertaining whether the applicant is entitled to the benefits of the assessment and deferment.
History
- Authority: AS 29.45.060(c)
- Eff. 12/31/75, Register 56
3 AAC 138.060 Definitions
In this chapter
(1) "farm use assessment" means the value of the unit or parcel of property for which application for a farm use assessment and tax deferment is made, based upon its highest and best use as farm or agricultural land;
(2) "yearly gross income" means the income of the applicant for the year preceding the tax year for which the application is filed and means the adjusted gross income of the applicant as defined in Section 62 of the Internal Revenue Code (26 U.S.C. 62).
History
- Authority: AS 29.45.060(c)AS 43.20.011(d)
- Eff. 12/31/75, Register 56
Chapter 139 Errors in Municipal Assessment, Valuation, or Taxation Records
3 AAC 139.010 Inspection of records
(a) The state assessor will, in his or her discretion, inspect municipal records dealing with assessment, valuation or taxation.
(b) If a written complaint of an alleged major error in a municipality's assessment, valuation, or taxation procedures is submitted to the state assessor, the state assessor will, in his or her discretion, investigate the complaint. If an investigation is prompted by a complaint, the state assessor will give at least 30 days' notice to the municipal assessor, stating the nature of the complaint and the state assessor's intention to investigate the complaint. The municipal assessor may participate in the review process.
History
- Authority: AS 29.45.105; AS 44.33.010
- Eff. 12/6/85, Register 96
3 AAC 139.020 Notice of errors found
(a) Immediately following a review of municipal records dealing with assessment, valuation or taxation, the state assessor will discuss with the municipal assessor any errors found in the course of the review.
(b) The state assessor will inform a municipality of any major errors discovered in the municipality's assessment, valuation, or taxation records. The major error will be resolved in the manner described in (c) or (d) of this section, in the state assessor's discretion.
(c) The state assessor will, in his or her discretion, verbally inform a municipality of a major error and work with the municipality informally to correct the problem.
(d) The state assessor will, in his or her discretion, send an official notice of a major error by certified mail, return receipt requested, which will contain at least the following information:
(1) a brief description of the major error found; and
(2) a directive to the municipality to correct the major error before the beginning of the next fiscal year.
(e) The state assessor will provide a copy of all notices of major errors issued under (d) of this section to the commissioner and to the Alaska Association of Assessing Officers.
History
- Authority: AS 29.45.105; AS 44.33.010
- Eff. 12/6/85, Register 96
3 AAC 139.030 Appeal
(a) If a municipality elects to appeal, under AS 29.45.105, a determination made by the state assessor, it shall provide a copy of its appeal to the Alaska Association of Assessing Officers.
(b) In deciding the appeal, the commissioner will consult with the Alaska Association of Assessing Officers and the appellant, and will, at the commissioner's discretion, consult with others. Parties to the appeal may offer testimony and may submit briefs and other evidence in support of their respective positions.
(c) Within 60 days after receiving the appeal, the commissioner will send a decision by certified mail, return receipt requested, to the municipality. In addition, the commissioner will send a copy of the decision to the Alaska Association of Assessing Officers. If the commissioner determines that a major error has been made in the municipality's assessment, valuation, or taxation procedures, the commissioner will notify the municipality of the changes that must be made. The municipality shall then correct its procedures before the beginning of its next fiscal year.
History
- Authority: AS 29.45.105; AS 44.33.010
- Eff. 12/6/85, Register 96
3 AAC 139.900 Definitions
As used in this chapter,
(1) "commissioner" means the commissioner of the Department of Commerce, Community, and Economic Development;
(2) "major error" means a violation of federal, state, or municipal property tax law;
(3) "state assessor" means the state assessor in the Department of Commerce, Community, and Economic Development, or a designee from the office of the state assessor.
History
- Authority: AS 29.45.105; AS 44.33.010
- Eff. 12/6/85, Register 96
Chapter 141 Fisheries Revitalization: Southeast Alaska Salmon Marketing Matching Grants
3 AAC 141.010 Purpose and applicability
Repealed.
History
- Eff. 7/3/2007, Register 183; am 11/24/2007, Register 184; repealed 3/14/2012, Register 201
3 AAC 141.020 Eligible applicants
Repealed.
History
- Eff. 7/3/2007, Register 183; am 11/24/2007, Register 184; repealed 3/14/2012, Register 201
3 AAC 141.030 Project eligibility requirements
Repealed.
History
- Eff. 7/3/2007, Register 183; repealed 3/14/2012, Register 201
3 AAC 141.040 Selection of grant recipients
Repealed.
History
- Eff. 7/3/2007, Register 183; am 11/24/2007, Register 184; repealed 3/14/2012, Register 201
3 AAC 141.050 Type, amount, and duration of grants
Repealed.
History
- Eff. 7/3/2007, Register 183; am 11/24/2007, Register 184; repealed 3/14/2012, Register 201
3 AAC 141.060 Acceptance of grant offer
Repealed.
History
- Eff. 7/3/2007, Register 183; am 11/24/2007, Register 184; repealed 3/14/2012, Register 201
3 AAC 141.070 Disbursement of money
Repealed.
History
- Eff. 7/3/2007, Register 183; repealed 3/14/2012, Register 201
3 AAC 141.080 Use of money
Repealed.
History
- Eff. 7/3/2007, Register 183; repealed 3/14/2012, Register 201
3 AAC 141.090 Return of money
Repealed.
History
- Eff. 7/3/2007, Register 183; repealed 3/14/2012, Register 201
3 AAC 141.900 Definitions
Repealed.
History
- Eff. 7/3/2007, Register 183; am 11/24/2007, Register 184; repealed 3/14/2012, Register 201
Chapter 142 Fisheries Revitalization: Southeast Alaska Targeted Fisheries Assistance Matching Grants
3 AAC 142.010 Purpose and applicability
Repealed.
History
- Eff. 7/3/2007, Register 183; am 11/24/2007, Register 184; repealed 3/14/2012, Register 201
3 AAC 142.020 Eligible persons
Repealed.
History
- Eff. 7/3/2007, Register 183; am 11/24/2007, Register 184; repealed 3/14/2012, Register 201
3 AAC 142.030 Identification of distressed fisheries and targeted problems
Repealed.
History
- Eff. 7/3/2007, Register 183; am 11/24/2007, Register 184; repealed 3/14/2012, Register 201
3 AAC 142.040 Solicitation of grant applications
Repealed.
History
- Eff. 7/3/2007, Register 183; am 11/24/2007, Register 184; repealed 3/14/2012, Register 201
3 AAC 142.050 Selection of grant recipients
Repealed.
History
- Eff. 7/3/2007, Register 183; am 11/24/2007, Register 184; repealed 3/14/2012, Register 201
3 AAC 142.060 Size and duration of grants
Repealed.
History
- Eff. 7/3/2007, Register 183; am 11/24/2007, Register 184; repealed 3/14/2012, Register 201
3 AAC 142.070 Match requirement
Repealed.
History
- Eff. 7/3/2007, Register 183; am 11/24/2007, Register 184; repealed 3/14/2012, Register 201
3 AAC 142.080 Acceptance of grant offer
Repealed.
History
- Eff. 7/3/2007, Register 183; am 11/24/2007, Register 184; repealed 3/14/2012, Register 201
3 AAC 142.090 Disbursement of money
Repealed.
History
- Eff. 7/3/2007, Register 183; am 11/24/2007, Register 184; repealed 3/14/2012, Register 201
3 AAC 142.100 Use of money
Repealed.
History
- Eff. 7/3/2007, Register 183; repealed 3/14/2012, Register 201
3 AAC 142.110 Return of money
Repealed.
History
- Eff. 7/3/2007, Register 183; repealed 3/14/2012, Register 201
3 AAC 142.900 Definitions
Repealed.
History
- Eff. 7/3/2007, Register 183; am 11/24/2007, Register 184; repealed 3/14/2012, Register 201
Chapter 143 Oil Spill Community Assistance Grant Program
Article 1 Eligibility for Oil Spill Community Assistance Grant Program
3 AAC 143.010 Eligible applicants
Repealed.
History
- Eff. 7/27/89, Register 111; repealed 3/14/2012, Register 201
3 AAC 143.020 Project eligibility
Repealed.
History
- Eff. 7/27/89, Register 111; repealed 3/14/2012, Register 201
3 AAC 143.030 Project criteria
Repealed.
History
- Eff. 7/27/89, Register 111; repealed 3/14/2012, Register 201
Article 2 Application Procedure
3 AAC 143.040 Funding cycles
Repealed.
History
- Eff. 7/27/89, Register 111; repealed 3/14/2012, Register 201
3 AAC 143.050 Applications
Repealed.
History
- Eff. 7/27/89, Register 111; repealed 3/14/2012, Register 201
3 AAC 143.060 Review of applications
Repealed.
History
- Eff. 7/27/89, Register 111; repealed 3/14/2012, Register 201
Article 3 General Provisions
3 AAC 143.900 Definitions
Repealed.
History
- Eff. 7/27/89, Register 111; repealed 3/14/2012, Register 201
Chapter 144 Fisheries Revitalization: Southeast Alaska Sustainable Salmon Fisheries Economic Development Matching Grants
3 AAC 144.110 Purpose and applicability
Repealed.
History
- Eff. 5/10/2006, Register 178; repealed 3/14/2012, Register 201
3 AAC 144.120 Eligible persons
Repealed.
History
- Eff. 5/10/2006, Register 178; repealed 3/14/2012, Register 201
3 AAC 144.125 Determination regarding commercial fishery-related businesses
Repealed.
History
- Eff. 5/10/2006, Register 178; repealed 3/14/2012, Register 201
3 AAC 144.130 Project eligibility requirements
Repealed.
History
- Eff. 5/10/2006, Register 178; repealed 3/14/2012, Register 201
3 AAC 144.140 Selection of grant recipients
Repealed.
History
- Eff. 5/10/2006, Register 178; repealed 3/14/2012, Register 201
3 AAC 144.150 Size and duration of grants
Repealed.
History
- Eff. 5/10/2006, Register 178; repealed 3/14/2012, Register 201
3 AAC 144.160 Match requirement
Repealed.
History
- Eff. 5/10/2006, Register 178; repealed 3/14/2012, Register 201
3 AAC 144.170 Acceptance of grant offer
Repealed.
History
- Eff. 5/10/2006, Register 178; repealed 3/14/2012, Register 201
3 AAC 144.180 Disbursement of money
Repealed.
History
- Eff. 5/10/2006, Register 178; repealed 3/14/2012, Register 201
3 AAC 144.190 Use of money
Repealed.
History
- Eff. 5/10/2006, Register 178; repealed 3/14/2012, Register 201
3 AAC 144.200 Return of money
Repealed.
History
- Eff. 5/10/2006, Register 178; repealed 3/14/2012, Register 201
3 AAC 144.950 Definitions
Repealed.
History
- Eff. 5/10/2006, Register 178; repealed 3/14/2012, Register 201
Chapter 145 Fisheries Revitalization: Economic Development Matching Grants
3 AAC 145.110 Purpose and applicability
Repealed.
History
- Eff. 12/19/2003, Register 168; repealed 3/14/2012, Register 201
3 AAC 145.120 Eligible persons
Repealed.
History
- Eff. 12/19/2003, Register 168; repealed 3/14/2012, Register 201
3 AAC 145.130 Project eligibility requirements
Repealed.
History
- Eff. 12/19/2003, Register 168; am 3/13/2006, Register 177; repealed 3/14/2012, Register 201
3 AAC 145.140 Selection of grant recipients
Repealed.
History
- Eff. 12/19/2003, Register 168; am 3/13/2006, Register 177; repealed 3/14/2012, Register 201
3 AAC 145.150 Size and duration of grants
Repealed.
History
- Eff. 12/19/2003, Register 168; repealed 3/14/2012, Register 201
3 AAC 145.160 Match requirement
Repealed.
History
- Eff. 12/19/2003, Register 168; am 3/13/2006, Register 177; repealed 3/14/2012, Register 201
3 AAC 145.170 Acceptance of grant offer
Repealed.
History
- Eff. 12/19/2003, Register 168; repealed 3/14/2012, Register 201
3 AAC 145.180 Disbursement of money
Repealed.
History
- Eff. 12/19/2003, Register 168; repealed 3/14/2012, Register 201
3 AAC 145.190 Use of money
Repealed.
History
- Eff. 12/19/2003, Register 168; repealed 3/14/2012, Register 201
3 AAC 145.200 Return of money
Repealed.
History
- Eff. 12/19/2003, Register 168; repealed 3/14/2012, Register 201
3 AAC 145.950 Definitions
Repealed.
History
- Eff. 12/19/2003, Register 168; am 3/13/2006, Register 177; repealed 3/14/2012, Register 201
Chapter 146 Fisheries Revitalization: Targeted Fisheries Assistance
3 AAC 146.010 Purpose and applicability
Expired.
History
- In effect 11/9/2006 - 3/8/2007, by em. adop., Register 180
3 AAC 146.020 Eligible persons
Expired.
History
- In effect 11/9/2006 - 3/8/2007, by em. adop., Register 180
3 AAC 146.030 Identification of distressed fisheries and targeted problems
Expired.
History
- In effect 11/9/2006 - 3/8/2007, by em. adop., Register 180
3 AAC 146.040 Solicitation of applications
Expired.
History
- In effect 11/9/2006 - 3/8/2007, by em. adop., Register 180
3 AAC 146.050 Selection of proposals
Expired.
History
- In effect 11/9/2006 - 3/8/2007, by em. adop., Register 180
3 AAC 146.060 Size and duration of grants
Expired.
History
- In effect 11/9/2006 - 3/8/2007, by em. adop., Register 180
3 AAC 146.070 Match requirement
Expired.
History
- In effect 11/9/2006 - 3/8/2007, by em. adop., Register 180
3 AAC 146.080 Acceptance of grant offer
Expired.
History
- In effect 11/9/2006 - 3/8/2007, by em. adop., Register 180
3 AAC 146.090 Disbursement of money
Expired.
History
- In effect 11/9/2006 - 3/8/2007, by em. adop., Register 180
3 AAC 146.100 Use of money
Expired.
History
- In effect 11/9/2006 - 3/8/2007, by em. adop., Register 180
3 AAC 146.110 Return of money
Expired.
History
- In effect 11/9/2006 - 3/8/2007, by em. adop., Register 180
3 AAC 146.900 Definitions
Expired.
History
- In effect 11/9/2006 - 3/8/2007, by em. adop., Register 180
Chapter 147 Fisheries Revitalization: Alaska Salmon Marketing Grants
3 AAC 147.010 Purpose and applicability
Repealed.
History
- Eff. 12/13/2003, Register 168; repealed 3/14/2012, Register 201
3 AAC 147.020 Eligible applicants
Repealed.
History
- Eff. 12/13/2003, Register 168; repealed 3/14/2012, Register 201
3 AAC 147.030 Project eligibility requirements
Repealed.
History
- Eff. 12/13/2003, Register 168; repealed 3/14/2012, Register 201
3 AAC 147.040 Selection of grant recipients
Repealed.
History
- Eff. 12/13/2003, Register 168; repealed 3/14/2012, Register 201
3 AAC 147.050 Type, amount, and duration of grants
Repealed.
History
- Eff. 12/13/2003, Register 168; repealed 3/14/2012, Register 201
3 AAC 147.060 Acceptance of grant offer
Repealed.
History
- Eff. 12/13/2003, Register 168; repealed 3/14/2012, Register 201
3 AAC 147.070 Disbursement of money
Repealed.
History
- Eff. 12/13/2003, Register 168; repealed 3/14/2012, Register 201
3 AAC 147.080 Use of money
Repealed.
History
- Eff. 12/13/2003, Register 168; repealed 3/14/2012, Register 201
3 AAC 147.090 Return of money
Repealed.
History
- Eff. 12/13/2003, Register 168; repealed 3/14/2012, Register 201
3 AAC 147.900 Definitions
Repealed.
History
- Eff. 12/13/2003, Register 168; repealed 3/14/2012, Register 201
Chapter 148 Fisheries Revitalization: Targeted Fisheries Assistance
3 AAC 148.010 Purpose and applicability
Repealed.
History
- Eff. 4/8/2004, Register 170; am 8/11/2004, Register 171; repealed 3/14/2012, Register 201
3 AAC 148.020 Eligible persons
Repealed.
History
- Eff. 4/8/2004, Register 170; am 8/11/2004, Register 171; repealed 3/14/2012, Register 201
3 AAC 148.030 Identification of distressed fisheries and targeted problems
Repealed.
History
- Eff. 4/8/2004, Register 170; am 8/11/2004, Register 171; repealed 3/14/2012, Register 201
3 AAC 148.040 Solicitation of applications
Repealed.
History
- Eff. 4/8/2004, Register 170; am 8/11/2004, Register 171; repealed 3/14/2012, Register 201
3 AAC 148.050 Selection of proposals
Repealed.
History
- Eff. 4/8/2004, Register 170; am 8/11/2004, Register 171; repealed 3/14/2012, Register 201
3 AAC 148.060 Size and duration of grants
Repealed.
History
- Eff. 4/8/2004, Register 170; am 8/11/2004, Register 171; repealed 3/14/2012, Register 201
3 AAC 148.070 Match requirement
Repealed.
History
- Eff. 4/8/2004, Register 170; am 8/11/2004, Register 171; repealed 3/14/2012, Register 201
3 AAC 148.080 Acceptance of grant offer
Repealed.
History
- Eff. 4/8/2004, Register 170; am 8/11/2004, Register 171; repealed 3/14/2012, Register 201
3 AAC 148.090 Disbursement of money
Repealed.
History
- Eff. 4/8/2004, Register 170; am 8/11/2004, Register 171; repealed 3/14/2012, Register 201
3 AAC 148.100 Use of money
Repealed.
History
- Eff. 4/8/2004, Register 170; repealed 3/14/2012, Register 201
3 AAC 148.110 Return of money
Repealed.
History
- Eff. 4/8/2004, Register 170; repealed 3/14/2012, Register 201
3 AAC 148.900 Definitions
Repealed.
History
- Eff. 4/8/2004, Register 170; am 8/11/2004, Register 171; repealed 3/14/2012, Register 201
Chapter 149 Regional Seafood Development Association
3 AAC 149.010 Qualification criteria
(a) To qualify as a regional seafood development association, an organization must demonstrate that it meets the qualification criteria set out in AS 44.33.065(a)(1) - (4).
(b) To demonstrate that the organization is established for the purposes set out in AS 44.33.065(a)(1), the organization must submit, as part of its application submitted under 3 AAC 149.030(b), a business plan describing in detail
(1) the organization's overall mission and purpose;
(2) information about the qualifications of individuals serving in management position; that information must include
(A) the membership of the board of directors;
(B) a description of the experience of each individual serving in a management position; and
(C) an organization chart;
(3) economic development goals and strategies that show how the organization will meet the purposes set out in AS 44.33.065(a)(1);
(4) estimated seafood development taxes to be levied under AS 43.76.350 - 43.76.399 within each seafood development region to be represented by the organization; and
(5) estimated expenses, including administrative expenses.
(c) To demonstrate that it can provide representation on the board of directors as required by AS 44.33.065(a)(2), and as part of its application submitted under 3 AAC 149.030(b),
(1) the organization must list the number of seats on the board of directors;
(2) the organization must describe in detail
(A) the process by which members of the board of directors are to be elected; and
(B) how the election process for the board of directors will provide representation on the board of directors for each fishery
(i) subject to a seafood development tax levied under AS 43.76.350 - 43.76.399; and
(ii) in each seafood development region for which the organization seeks designation as a qualified regional seafood development association; and
(3) if the organization proposes to allocate seats on the board of directors according to the portion paid by each represented fishery of the total seafood development taxes estimated to be levied under AS 43.76.350 - 43.76.399, the organization must demonstrate that the allocation accurately corresponds to the portion paid by each represented fishery of the total seafood development taxes.
(d) To demonstrate that it has met the membership criteria in AS 44.33.065(a)(3), the organization must describe, in its application submitted under 3 AAC 149.030(b), how the organization will provide notice sufficient to reach persons identified in AS 44.33.065(a)(3) in each seafood development region for which the organization seeks designation as a qualified regional seafood development association.
(e) To demonstrate that it is organized as a nonprofit corporation as required in AS 44.33.065(a)(4), the organization must provide, as part of its application submitted under 3 AAC 149.030(b), a copy of its
(1) certificate of incorporation;
(2) articles of incorporation;
(3) bylaws;
(4) administrative policies and procedures that address board of directors structure, procurement activities, financial accountability, and election process;
(5) federal tax identification number; and
(6) determination by the United States Internal Revenue Service that the organization is exempt under 26 U.S.C. 501(c) from paying federal income tax; if the organization has not obtained tax-exempt status, but can demonstrate that the organization has met all other requirements under this section and has applied for tax-exempt status, the department will waive the requirement of this paragraph; however, an organization that receives a waiver is subject to the withholding requirement of 3 AAC 149.070(b).
History
- Authority: AS 44.33.065
- Eff. 2/24/2005, Register 173
3 AAC 149.020 Application development period
(a) At least 20 days before the application period begins under 3 AAC 149.030(a), the department will announce an application development period for each seafood development region established in AS 44.33.065(b). The department will
(1) publish the announcement in each seafood development region, in at least one newspaper of general circulation in that region; and
(2) send the announcement to each commercial fishing permit holder on record with the Commercial Fisheries Entry Commission for each fishery in that seafood development region.
(b) After the department announces the application development period, an organization may submit written notice of its intention to apply for designation as a qualified regional seafood development association and describe its
(1) proposed mission statement;
(2) proposed management structure;
(3) proposed economic development goals and strategies;
(4) plan to involve all eligible commercial fishing permit holders from fisheries in each seafood development region for which the association seeks designation as a qualified regional seafood development association;
(5) mechanisms to administer state financial assistance under AS 44.33.065(d) fairly; and
(6) attempts to gain support from commercial fishing permit holders from fisheries in each seafood development region for which the organization seeks designation as a qualified regional seafood development association.
(c) The department will conduct an in-person or telephonic meeting with each organization to discuss the organization's proposal.
(d) If the department receives more than one response from a seafood development region, the department will encourage and assist the responding organizations to work together to develop an application that addresses the interests of all the responding organizations.
(e) The department will prepare a summary report after each meeting that the department has under this section with an organization. The department will make the summary report available for public inspection.
History
- Authority: AS 44.33.065
- Eff. 2/24/2005, Register 173
3 AAC 149.030 Application period
(a) The application period for designation as a qualified regional seafood development association in each seafood development region established in AS 44.33.065(b) begins on February 24, 2005.
(b) To submit an application, the applicant must complete the department's application form, and on that form must
(1) designate a contact person;
(2) identify each seafood development region for which the applicant seeks designation;
(3) identify each fishery for which the applicant intends to hold elections under AS 43.76.350 - 43.76.399; and
(4) provide the information required in 3 AAC 149.010 to demonstrate that the qualification criteria set out in AS 44.33.065(a)(1) - (4) have been met.
History
- Authority: AS 44.33.065
- Eff. 2/24/2005, Register 173
3 AAC 149.040 Application review
(a) The department will review for recommendation to the commissioner the first complete application received after the application period has begun for each seafood development region. Incomplete applications will not be considered.
(b) The department will notify the applicant by certified mail of the department's review. Within seven days after receiving a completed application, the department will review it and make a recommendation under 3 AAC 149.050.
History
- Authority: AS 44.33.065
- Eff. 2/24/2005, Register 173
3 AAC 149.050 Recommendation to commissioner
(a) The department will issue and provide to the commissioner a written recommendation to accept or reject the applicant as a qualified regional seafood development association. The department will base its recommendation upon whether the applicant has met the qualification criteria in AS 44.33.065(a)(1) - (4) and 3 AAC 149.010. In the recommendation, the department will set out which of the qualification criteria the applicant has or has not met and upon what information the department relied in reaching the recommendation.
(b) The department will provide the applicant's designated contact person with a copy of the written recommendation by certified mail.
(c) If the applicant does not agree with the department's recommendation, the applicant may submit to the commissioner, within 10 days after receiving the recommendation, a written objection to the recommendation. The commissioner will not review a written objection postmarked after that deadline.
History
- Authority: AS 44.33.065
- Eff. 2/24/2005, Register 173
3 AAC 149.060 Commissioner's final determination
(a) Within 15 days after receiving the department's written recommendation, the commissioner will issue a final decision to accept or reject the applicant as a qualified regional seafood development association. The commissioner's determination whether the applicant has met the qualification criteria set out in AS 44.33.065(a)(1) - (4) and 3 AAC 149.010 will be based upon the
(1) department's written recommendation;
(2) applicant's timely written objection, if any, to the department's written recommendation; and
(3) information submitted by the applicant through the application process.
(b) The commissioner's decision is final for purposes of judicial review.
(c) Once the commissioner makes the determination, and if the determination rejects the applicant as a qualified regional seafood development association, the department will begin review of the next complete application for designation.
History
- Authority: AS 44.33.065
- Eff. 2/24/2005, Register 173
3 AAC 149.070 State financial assistance
(a) An annual financial report required under AS 44.33.065(e) for obtaining state financial assistance must be compiled by an independent certified public accountant and must be prepared in accordance with generally accepted accounting principles. The report must include
(1) a consolidated statement of financial position, a statement of activities, and a cash flow statement; those items must include notes to the financial statements;
(2) a report on the extent to which the qualified regional seafood development association achieved the economic development goals proposed under 3 AAC 149.010(b)(3); and
(3) each letter, if any, from the independent certified public accountant to management or the board of directors recommending improvements to the regional seafood development association's accounting or financial practices.
(b) If a qualified regional seafood development association has applied for, but has not yet received, a determination by the United States Internal Revenue Service that the association is exempt under 26 U.S.C. 501(c) from paying federal income tax, the department will withhold from any state financial assistance provided under AS 44.33.065(d) an amount equal to 40 percent of the total seafood development taxes collected under AS 43.76.350 - 43.76.399 within the seafood development regions represented by the association. The department will continue withholding under this subsection until the department receives a copy of the determination by the United States Internal Revenue Service that the association is exempt under 26 U.S.C. 501(c) from paying federal income tax.
History
- Authority: AS 44.33.065
- Eff. 2/24/2005, Register 173
3 AAC 149.080 Prohibitions on use of state financial assistance
State financial assistance under AS 44.33.065(d), and any passive investment income earned from that financial assistance, may not be used
(1) to the disadvantage of a seafood development region not represented by the qualified regional seafood development association;
(2) for price negotiations between fishers and seafood processors; or
(3) to pay expenses associated with lobbying a municipality or an agency of a municipality, or with lobbying the state or an agency of the state; for purposes of this paragraph,
(A) "lobby a municipality or an agency of a municipality" means to engage in an activity for the purpose of influencing municipal legislative or administrative action if the activity is substantially the same as activity that would have required registration under AS 24.45.121 if the activity was for the purpose of influencing state legislative or administrative action;
(B) "lobby the state or an agency of the state" means to engage in an activity for which registration is required under AS 24.45.121.
History
- Authority: AS 44.33.065
- Eff. 2/24/2005, Register 173
3 AAC 149.950 Definitions
In this chapter, unless the context requires otherwise,
(1) "commissioner" means the commissioner of commerce, community, and economic development;
(2) "department" means the Department of Commerce, Community, and Economic Development;
(3) "fishery" has the meaning given in AS 16.43.990;
(4) "seafood development region" means a region established under AS 44.33.065(b).
History
- Authority: AS 44.33.065
- Eff. 2/24/2005, Register 173
Chapter 150 National Petroleum Reserve — Alaska Impact Program
Article 1 Introductory Provisions
3 AAC 150.010 General objectives
The primary objective of the National Petroleum Reserve-Alaska (NPR-A) Impact Program is to provide municipalities with financial assistance to help mitigate significantly adverse impacts related to oil or gas leasing within the NPR-A, including exploration, production, and oil or gas transportation activities, conducted under the authority of 42 U.S.C. 6508. Financial assistance may be available for
(1) planning;
(2) construction, maintenance, and operation of essential public facilities; and
(3) other necessary public services.
History
- Authority: AS 44.33.020SLA 1984 am. by $ 2, Subsec. (c), $ 2, ch. 94,ch. 52, SLA 1986
- Eff. 7/30/86, Register 99
3 AAC 150.020 Administration of NPR-A impact program
Under sec. 2, ch. 53, SLA 1986, the legislature will appropriate each year the balance remaining in the National Petroleum Reserve-Alaska special revenue fund to the Department of Commerce, Community, and Economic Development. The department will, in accordance with this chapter, receive, review, and evaluate applications from eligible municipalities each year, and will fund qualified grant requests up to the amount of the appropriation. Money not allocated to eligible municipalities each year lapses in accordance with sec. 3, ch. 53, SLA 1986. If the total amount of money requested by eligible municipalities in a year exceeds the appropriation for that year, the department will allocate the available grant money in accordance with the criteria for priority set out in 3 AAC 150.060 - 3 AAC 150.080. Additional money might be made available through supplemental appropriations if the impact is greater than anticipated and the legislature considers the additional grants proposed by the department to be meritorious.
History
- Authority: AS 44.33.020SLA 1984 am. by $ 2, Subsec. (c), $ 2, ch. 94,ch. 53, SLA 1986
- Eff. 7/30/86, Register 99
Article 2 Eligibility for NPR-A Impact Assistance
3 AAC 150.030 Eligibility in general
Eligibility for NPR-A impact assistance has two main components: applicant eligibility and project eligibility.
History
- Authority: AS 44.33.020SLA 1984 am. by $ 2, Subsec. (c), $ 2, ch. 94,ch. 53, SLA 1986
- Eff. 7/30/86, Register 99
3 AAC 150.040 Applicant eligibility
To be eligible to receive assistance under the NPR-A Impact program, the applicant
(1) must be a municipality under state law; and
(2) must demonstrate present impact, regardless of date of initial occurrence, or foreseeable future impact, on the applicant or the applicant's residents from oil or gas exploration, production, or transportation activities in the NPR-A under 42 U.S.C. 6508.
History
- Authority: AS 44.33.020SLA 1984 am. by $ 2, Subsec. (c), $ 2, ch. 94,ch. 53, SLA 1986
- Eff. 7/30/86, Register 99
3 AAC 150.050 Project eligibility
(a) To be eligible for funding under the NPR-A impact program, a project must be related to present, continuing, or reasonably foreseeable impact on the applicant or the applicant's residents from oil or gas exploration, production, or transportation activities in the NPR-A under 42 U.S.C. 6508.
(b) To be eligible for funding, a project also must be for the purpose of
(1) planning;
(2) construction, maintenance, and operation of essential public facilities; or
(3) other necessary public services.
(c) In this section, "impact" means an effect reasonably attributable to NPR-A oil and gas activities under 42 U.S.C. 6508 on
(1) population;
(2) employment;
(3) finances;
(4) social and cultural values;
(5) air and water quality;
(6) fish and wildlife habitats;
(7) the ability to provide essential public services, including health care, public safety, education, transportation, utilities, and government administration; and
(8) other things of demonstrable importance to the applicant or the applicant's residents.
(d) Examples of needs that eligible projects may address include the following:
(1) resource protection to ensure the continued viability of fish, wildlife, and other natural resources on which the applicant's residents rely for subsistence needs;
(2) alleviation or mitigation of adverse social or cultural impacts;
(3) health needs, including hospitals, clinics, emergency medical facilities, alcohol and drug abuse facilities, mental health facilities, waste disposal systems, and water quality improvement systems;
(4) public safety needs, including police protection, search and rescue, and fire protection;
(5) utility needs, including electric generating plants and distribution systems, water supply systems, telephone systems, and other fuel distribution systems;
(6) housing needs;
(7) recreational needs.
History
- Authority: AS 44.33.020SLA 1984 am. by $ 2, Subsec. (c), $ 2, ch. 94,ch. 53, SLA 1986
- Eff. 7/30/86, Register 99
3 AAC 150.060 Project criteria
(a) If the total amount of money requested by eligible applicants for eligible projects in meritorious applications exceeds the amount appropriated for grants that year, the department will rank applications for the purpose of establishing priority for funding.
(b) In determining the merit of an application, the department will consider
(1) the degree to which the project proposed in the grant application alleviates the impact caused by development in the NPR-A under 42 U.S.C. 6508;
(2) the ability of the applicant to accommodate or absorb the impacts through existing facilities or programs; and
(3) other criteria the department identifies as critical to determination of the merit of the application.
(c) In ranking the applications, the department will consider
(1) the severity of the impact caused by the development in the NPR-A under 42 U.S.C. 6508 on the municipality; and
(2) the degree to which the impact on the municipality is directly caused by development in the NPR-A under 42 U.S.C. 6508.
History
- Authority: AS 44.33.020SLA 1984 am. by $ 2, Subsec. (c), $ 2, ch. 94,ch. 53, SLA 1986
- Eff. 7/30/86, Register 99
Article 3 Procedures for Allocation of NPR-A Impact Assistance
3 AAC 150.070 Submission of applications
(a) Application must be made on forms provided by the department. The forms will be such that they may be easily filled out by small communities without technical staff. The department will, upon request, provide assistance to applicants to the extent possible based upon the availability of financial and human resources.
(b) In a year when NPR-A impact assistance money is available under AS 37.05.530, a grant application for impact assistance under (a) of this section must be postmarked no later than November 15 of that year. If November 15 is a Saturday, Sunday, or state holiday, the deadline for postmark is the department's next regular business day.
History
- Authority: AS 37.05.530; AS 44.33.020
- Eff. 7/30/86, Register 99; am 10/16/2003, Register 168
3 AAC 150.080 Review of applications and award of grants
(a) The department will review applications for eligibility for NPR-A impact assistance and place applications in order of priority in accordance with 3 AAC 150.060.
(b) The department will review each application determined to be eligible for NPR-A impact assistance to determine whether the amount requested for a project is reasonably necessary for the project to alleviate impacts from oil and gas development in the NPR-A under 42 U.S.C. 6508, the department will deduct from the amount requested any amounts that are not reasonably necessary for that purpose.
(c) If, after making necessary adjustments to grant requests under (b) of this section, the department determines that the total amount for eligible projects requested by all eligible applicants that year is equal to or less than the amount appropriated for that year, the department will fund all meritorious requests. If the total amounts requested are greater than the amount appropriated, the department will fund requests in accordance with the priorities established in 3 AAC 150.060 until the appropriation is spent. The department will, in its discretion, recommend to the legislature that additional money be made available through supplemental appropriations.
History
- Authority: AS 44.33.020SLA 1984 am. by $ 2, Subsec. (c), $ 2, ch. 94,ch. 53, SLA 1986
- Eff. 7/30/86, Register 99
Article 4 Appeal Procedures
3 AAC 150.090 Reconsideration and judicial review
A municipality aggrieved by a decision made under this chapter may request reconsideration by the commissioner of commerce, community, and economic development, and must seek such reconsideration before seeking judicial review. A final decision of the department is subject to judicial review in accordance with Rule 602 of the Alaska Rules of Appellate Procedure.
History
- Authority: AS 44.33.020SLA 1984 am. by $ 2, Subsec. (c), $ 2, ch. 94,ch. 53, SLA 1986
- Eff. 7/30/86, Register 99
Chapter 151 Safe Communities Program
3 AAC 151.010 Eligibility requirements
Repealed.
History
- Eff. 7/1/2001, Register 158; repealed 3/14/2012, Register 201
Chapter 152 Payment in Lieu of Taxes for Cities in the Unorganized Borough Program
Article 1 General Provisions
3 AAC 152.010 Purpose
3 AAC 152.010 - 3 AAC 152.900 provide for annual distribution of payment in lieu of taxes income received by the state from the federal government under 31 U.S.C. 6901 - 6902, to eligible home rule and general law cities located within the unorganized borough.
History
- Authority: AS 44.33.020
- Eff. 10/4/97, Register 144
Article 2 Program Eligibility
3 AAC 152.100 Eligibility requirements
To be eligible to receive a distribution under the payment in lieu of taxes for cities in the unorganized borough program, a city must
(1) be located within the circumference of the boundaries of a federally designated area in the unorganized borough; and
(2) be incorporated as a city under AS 29.04.010 - 29.04.020 before July 1 of the state fiscal year in which the distribution is requested.
History
- Authority: AS 44.33.020
- Eff. 10/4/97, Register 144; am 7/12/2009, Register 191; am 3/30/2018, Register 225
Article 3 Program Procedures
3 AAC 152.200 Calculation of payment in lieu of taxes allocations
Subject to appropriations, each payment received by the state under 31 U.S.C. 6901 - 6902 for a federally designated area in the unorganized borough will be fully allocated by the department among the eligible home rule and general law cities located within the boundaries of that area on the basis of the population of each of those cities. For the purpose of this section, the population of a city is the population residing within the city and within the federally designated area, as certified by the commissioner during the state fiscal year immediately preceding the state fiscal year in which the distribution to the city is to be made.
History
- Authority: AS 44.33.020
- Eff. 10/4/97, Register 144
3 AAC 152.210 Distribution of payments
Subject to the receipt of appropriations, distribution to cities of payment in lieu of taxes income under this chapter will be made by the department to eligible cities on or after July 1 of the state fiscal year in which the department receives the federal payment for a federally designated area.
History
- Authority: AS 44.33.020
- Eff. 10/4/97, Register 144; am 7/12/2009, Register 191
3 AAC 152.220 Use of payments
A distribution received by a city under 3 AAC 152.010 - 3 AAC 152.900 may be used for any purpose authorized by law for which the city otherwise has the power to expend money.
History
- Authority: AS 44.33.020
- Eff. 10/4/97, Register 144
Article 4 Definitions
3 AAC 152.900 Definitions
In this chapter,
(1) "commissioner" means the commissioner of the department;
(2) "department" means the Department of Commerce, Community, and Economic Development;
(3) "federally designated area" means a census area designated by the federal government for use in making payments to the state under 31 U.S.C. 6901 - 6902.
History
- Authority: AS 44.33.020
- Eff. 10/4/97, Register 144
Chapter 154 Municipal Capital Project Matching Grant Program
3 AAC 154.010 Program administration
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; repealed 3/14/2012, Register 201
3 AAC 154.020 Interest accrual on grant account balance
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; repealed 3/14/2012, Register 201
3 AAC 154.030 Eligibility
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; repealed 3/14/2012, Register 201
3 AAC 154.040 Determination of eligibility
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; am 6/15/97, Register 142; repealed 3/14/2012, Register 201
3 AAC 154.050 Notification of eligibility
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; am 6/15/97, Register 142; repealed 3/14/2012, Register 201
3 AAC 154.052 Request for lists of proposed projects
Repealed.
History
- Eff. 6/15/97, Register 142; repealed 3/14/2012, Register 201
3 AAC 154.054 Submission of list of proposed projects
Repealed.
History
- Eff. 6/15/97, Register 142; repealed 3/14/2012, Register 201
3 AAC 154.056 Selection of proposed projects
Repealed.
History
- Eff. 6/15/97, Register 142; repealed 3/14/2012, Register 201
3 AAC 154.060 Request for lists of proposed projects
Expired.
History
- In effect 8/19/93 - 12/16/93, by em adop, Register 127
3 AAC 154.070 Local share required
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; repealed 3/14/2012, Register 201
3 AAC 154.075 Audits
Repealed.
History
- Eff. 6/15/97, Register 142; repealed 3/14/2012, Register 201
3 AAC 154.080 Notification of allocations, project appropriations, and local share percentage
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; am 6/15/97, Register 142; repealed 3/14/2012, Register 201
3 AAC 154.090 Grant agreements
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; am 6/15/97, Register 142; repealed 3/14/2012, Register 201
3 AAC 154.100 Site control
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; repealed 3/14/2012, Register 201
3 AAC 154.110 Restriction on use of assets acquired with state money for local share
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; repealed 3/14/2012, Register 201
3 AAC 154.120 Valuation and verification of local share
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; am 6/15/97, Register 142; repealed 3/14/2012, Register 201
3 AAC 154.130 Administrative costs
Expired.
History
- In effect 8/19/93 - 12/16/93, by em adop, Register 127
3 AAC 154.140 Inspections
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; repealed 3/14/2012, Register 201
3 AAC 154.150 Population data
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; repealed 3/14/2012, Register 201
3 AAC 154.160 Disputes and appeals
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; am 6/15/97, Register 142; repealed 3/14/2012, Register 201
3 AAC 154.170 Definitions
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; am 6/15/97, Register 142; repealed 3/14/2012, Register 201
Chapter 155 Unincorporated Community Capital Project Matching Grant Program
3 AAC 155.010 Program administration
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; repealed 3/14/2012, Register 201
3 AAC 155.020 Interest accrual on grant account balance
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; repealed 3/14/2012, Register 201
3 AAC 155.030 Determination of eligibility
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; am 6/15/97, Register 142; repealed 3/14/2012, Register 201
3 AAC 155.040 Notification of eligibility
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; am 6/15/97, Register 142; repealed 3/14/2012, Register 201
3 AAC 155.060 Local share required
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; am 6/15/97, Register 142; repealed 3/14/2012, Register 201
3 AAC 155.062 Request and submission of project list
Repealed.
History
- Eff. 6/15/97, Register 142; repealed 3/14/2012, Register 201
3 AAC 155.063 Selection of proposed projects
Repealed.
History
- Eff. 6/15/97, Register 142; repealed 3/14/2012, Register 201
3 AAC 155.065 Audit procedures
Repealed.
History
- Eff. 6/15/97, Register 142; repealed 3/14/2012, Register 201
3 AAC 155.070 Notification of allocations, project appropriations, and local share percentage
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; am 6/15/97, Register 142; repealed 3/14/2012, Register 201
3 AAC 155.080 Grant agreements
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; am 6/15/97, Register 142; repealed 3/14/2012, Register 201
3 AAC 155.090 Site control
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; am 6/15/97, Register 142; repealed 3/14/2012, Register 201
3 AAC 155.100 Restriction on use of assets acquired with state money for local share
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; repealed 3/14/2012, Register 201
3 AAC 155.110 Valuation and verification of local share
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; am 6/15/97, Register 142; repealed 3/14/2012, Register 201
3 AAC 155.130 Inspections
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; repealed 3/14/2012, Register 201
3 AAC 155.140 Population data
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; repealed 3/14/2012, Register 201
3 AAC 155.150 Disputes and appeals
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; am 6/15/97, Register 142; repealed 3/14/2012, Register 201
3 AAC 155.160 Definitions
Repealed.
History
- Eff. 8/19/93, Register 127; am 12/31/93, Register 128; repealed 3/14/2012, Register 201
Chapter 157 Sustainable Salmon Outreach, Education, and Infrastructure Mitigation Programs
Article 1 Alaska Sustainable Salmon Outreach and Education Grants
3 AAC 157.010 Purpose and applicability
(a) The purpose of Alaska sustainable salmon outreach and education grants is to educate constituencies on the value of and types of actions that should be taken for conservation, restoration, and sustainability of healthy Pacific salmon populations and their habitats.
(b) The provisions of 3 AAC 157.010 - 3 AAC 157.095 and 3 AAC 157.910 - 3 AAC 157.990 apply, subject to the availability of appropriations, to the award, allocation, and distribution of money allocated, from the Pacific Coastal Salmon Recovery Fund established under 16 U.S.C. 3645, directly to this state and received by the Department of Commerce, Community, and Economic Development for outreach and education.
History
- Authority: AS 44.33.020
- Eff. 9/16/2010, Register 195
3 AAC 157.020 Eligible entities
The following entities are eligible to submit a proposal under 3 AAC 157.010 - 3 AAC 157.095:
(1) a municipality;
(2) an Alaska Native tribe that is recognized by the United States Secretary of the Interior to exist as an Indian tribe under 25 U.S.C. 479a (Federally Recognized Indian Tribe List Act of 1994);
(3) a regional development organization;
(4) an incorporated nonprofit entity with articles of incorporation and a certificate of incorporation or authority in good standing under AS 10.20;
(5) a business;
(6) a postsecondary educational institution;
(7) a regional educational attendance area as described in AS 14.08.031;
(8) a school district;
(9) a state agency;
(10) a federal agency.
History
- Authority: AS 44.33.020
- Eff. 9/16/2010, Register 195
3 AAC 157.030 Eligible grant proposals
(a) To be eligible for a grant, proposed projects and activities must meet one or more of the following purposes:
(1) support effective public information and education about Pacific salmon and their habitats in this state;
(2) increase public commitment to the sustained use and protection of Pacific salmon through public involvement in habitat stewardship in this state;
(3) support public access to technical information regarding Pacific salmon and their habitats in this state.
(b) An eligible entity may apply for a minimum of $25,000 and a maximum of $300,000 in grant money.
(c) Grants may not be used to pay for scholarships or educational stipends.
History
- Authority: AS 44.33.020
- Eff. 9/16/2010, Register 195
3 AAC 157.040 Solicitation process
The department will
(1) publish a grant application guide;
(2) solicit applications for grants by public notice of the solicitation in a newspaper of general circulation, and by posting the notice on the Alaska Online Public Notice System established under AS 44.62.175; and
(3) provide applications on request.
History
- Authority: AS 44.33.020
- Eff. 9/16/2010, Register 195
3 AAC 157.050 Application requirements
An application submitted in response to the public notice under 3 AAC 157.040 must
(1) be complete, and must be submitted on forms provided by the department; the application must include
(A) a project narrative; and
(B) a detailed description of the project, the associated costs of the project, and the financing sources that will support the project; and
(2) provide specific details regarding any grantee match and whether a grantee match is required; if a match is required,
(A) the source of the match may not be federal in origin;
(B) the match must be directly related and integral to the completion of the project;
(C) the use of the match must occur after the signing of the grant agreement, but before the end date of the project; and
(D) the match may be in the form of
(i) in-kind labor;
(ii) in-kind equipment;
(iii) in-kind services;
(iv) donated supplies;
(v) money.
History
- Authority: AS 44.33.020
- Eff. 9/16/2010, Register 195
3 AAC 157.060 Preliminary proposal review
The department will conduct a preliminary review of an application to ensure it meets the requirements of 3 AAC 157.050. At any time during the preliminary proposal review, the department may request additional information if it considers the information necessary to complete the review of the application. If the department determines the application meets the requirements of 3 AAC 157.050, the proposal review committee shall accept, score, and rank the application.
History
- Authority: AS 44.33.020
- Eff. 9/16/2010, Register 195
3 AAC 157.070 Proposal review committee
The department will assemble a proposal review committee. The department will offer a seat on the proposal review committee to, at a minimum, representatives from the Department of Commerce, Community, and Economic Development and the Department of Fish and Game.
History
- Authority: AS 44.33.020
- Eff. 9/16/2010, Register 195
3 AAC 157.080 Proposal scoring process and criteria
(a) Each member of the proposal review committee shall score a proposal on a scale of 0 - 100 total points, and shall award
(1) no more than 40 points for a proposed project's strategic importance; the committee shall give a higher score to a proposal that
(A) meets a demonstrated need and will provide a lasting benefit;
(B) is supported or endorsed by organizations with expertise or authority in the area;
(C) is identified as a high priority in an adopted plan or study; and
(D) best fulfills at least one of the following criteria:
(i) develops and implements a public information and education program that fosters public awareness and stewardship of Pacific salmon populations and their habitats;
(ii) develops and implements an outreach program that includes public participation in on-the-ground habitat monitoring, restoration, or other stewardship actions that benefit Pacific salmon;
(iii) develops and supports a program or system that provides public access to technical information about Pacific salmon and their habitats;
(2) no more than 25 points for the proposed project's technical merit; the committee shall give a higher score to a proposal that
(A) clearly defines objectives, methods, anticipated results, and products appropriate to the project;
(B) has a high likelihood for success toward meeting project objectives within the specified timeframe and budget;
(C) includes a mechanism to evaluate project success in meeting goals and objectives; and
(D) demonstrates the ability to sustain or manage the project beyond the initial funding period to require the achieved project objectives;
(3) no more than 10 points for a proposed project's staff experience and qualifications; the committee shall give a higher score to a proposal where the applicant and any partners
(A) demonstrate they have the capacity, including technical and administrative expertise, to successfully complete the project;
(B) have a history of successfully implementing, administering, and completing comparable projects; and
(C) have a history of successful grant administration, or submit other evidence demonstrating they have the capability to manage the grant;
(4) no more than 25 points for a proposed project's budget; the committee shall give a higher score to a proposal that includes
(A) costs that are reasonable to meet project objectives;
(B) project cost estimates that are explained and justified;
(C) administrative costs that are reasonable; and
(D) additional financing sources, including all match amounts and sources of origin, if required.
(b) Once all its members have completed their individual scores for a proposal, the proposal review committee shall average those individual scores to calculate a final score for that proposal. After it completes scoring each proposal, the proposal review committee shall rank the proposals by score. The department will forward the results of the scored and ranked applications to the commissioner of fish and game, or the commissioner's designee, for comment.
(c) The department may modify the scoring calculations and ranking of the proposal review committee as a result of comments received from the commissioner of fish and game or the commissioner's designee. The department will make proposal selections based on the scoring calculations, project rankings, and the availability of appropriations.
History
- Authority: AS 44.33.020
- Eff. 9/16/2010, Register 195
3 AAC 157.090 Award notification
The department will send an applicant written notification when the applicant's proposal has been selected or denied. In a written notification that a proposal has been selected, the department will include
(1) the department's recommended amount of the grant; and
(2) the type and amount of match required, if the grant was submitted for a solicitation that requires a grantee match.
History
- Authority: AS 44.33.020
- Eff. 9/16/2010, Register 195
3 AAC 157.095 Definitions for sustainable salmon outreach and education grants
In 3 AAC 157.010 - 3 AAC 157.095, unless the context requires otherwise,
(1) "grant" means an Alaska sustainable salmon outreach and education grant, applied for and awarded under 3 AAC 157.010 - 3 AAC 157.095;
(2) "proposal review committee" means the group assembled under 3 AAC 157.070;
(3) "salmon" means Pacific salmon species native to this state, including chinook, sockeye, coho, chum, pink, and steelhead.
History
- Authority: AS 44.33.020
- Eff. 9/16/2010, Register 195
Article 2 Southeast Alaska Chinook Salmon Mitigation Infrastructure Grants
3 AAC 157.110 Purpose and applicability
(a) The purpose of Southeast Alaska chinook salmon mitigation infrastructure grants is to help mitigate economic impacts to Southeast Alaska fisheries interests from the reduction in the Southeast Alaska chinook salmon harvest under the revised Pacific Salmon Treaty.
(b) The provisions of 3 AAC 157.110 - 3 AAC 157.195 and 3 AAC 157.910 - 3 AAC 157.990 apply, subject to the availability of appropriations, to the award, allocation, and distribution of money received from the United States Department of Commerce, National Oceanic and Atmospheric Administration under 16 U.S.C. 3641, received by the Department of Fish and Game, and allocated to the Department of Commerce, Community, and Economic Development to help mitigate the economic impacts of harvest reductions under the revised Pacific Salmon Treaty.
History
- Authority: AS 44.33.020
- Eff. 11/28/2010, Register 196
3 AAC 157.120 Eligible entities
The following entities are eligible to submit a proposal under 3 AAC 157.110 - 3 AAC 157.195:
(1) a municipality;
(2) an Alaska Native tribe that is recognized by the United States Secretary of the Interior to exist as an Indian tribe under 25 U.S.C. 479a (Federally Recognized Indian Tribe List Act of 1994);
(3) a regional development organization;
(4) an incorporated nonprofit entity with articles of incorporation and a certificate of incorporation or authority in good standing under AS 10.20;
(5) a business.
History
- Authority: AS 44.33.020
- Eff. 11/28/2010, Register 196
3 AAC 157.130 Eligible grant proposals
(a) To be eligible for a grant, proposed projects must fall within one of the following categories:
(1) ice-making and storage infrastructure projects providing service to the coastal area of
(A) Baranof Island;
(B) Wrangell Island; or
(C) Prince of Wales Island;
(2) boat haulout equipment in the Southeast region north of Cape Spencer and east of Cape Suckling;
(3) infrastructure to support the commercial troll salmon fishery;
(4) infrastructure projects that will provide a lasting benefit to the sport chinook salmon fishery under one or more of the following criteria:
(A) fish cleaning float improvements;
(B) fish waste disposal;
(C) improved access to ice;
(b) An eligible entity may apply for a minimum of $15,000 in grant money.
(c) An eligible entity may apply for a maximum of
(1) $240,000 in grant money, for a project in the category set out in (a)(1)(A) of this section;
(2) $200,000 in grant money, for a project in the category set out in (a)(1)(B) of this section;
(3) $120,000 in grant money, for a project in the category set out in (a)(1)(C) of this section;
(4) $50,000 in grant money, for a project in a category set out in (a)(2) or (3) of this section;
(5) $250,000 in grant money, for a project in a category set out in (a)(4)(A) or (B) of this section;
(6) $75,000 in grant money, for a project in the category set out in (a)(4)(C) of this section.
History
- Authority: AS 44.33.020
- Eff. 11/28/2010, Register 196; am 3/8/2013, Register 205
3 AAC 157.140 Solicitation process
The department will
(1) publish a grant application guide;
(2) solicit applications for grants by public notice of the solicitation in a newspaper of general circulation, and by posting the notice on the Alaska Online Public Notice System established under AS 44.62.175; and
(3) provide applications on request.
History
- Authority: AS 44.33.020
- Eff. 11/28/2010, Register 196
3 AAC 157.150 Application requirements
An application submitted in response to the public notice under 3 AAC 157.140 must be complete, and must be submitted on forms provided by the department. The application must include a detailed description of the project, the associated costs of the project, and the financing sources that will support the project.
History
- Authority: AS 44.33.020
- Eff. 11/28/2010, Register 196
3 AAC 157.160 Preliminary proposal review
The department will conduct a preliminary review of an application to ensure it meets the requirements of 3 AAC 157.150. At any time during the preliminary proposal review, the department may request additional information if it considers the information necessary to complete the review of the application. If the department determines the application meets the requirements of 3 AAC 157.150, the proposal review committee shall accept, score, and rank the application.
History
- Authority: AS 44.33.020
- Eff. 11/28/2010, Register 196
3 AAC 157.170 Proposal review committee
The department will assemble a proposal review committee. The department will offer a seat on the proposal review committee to, at a minimum, representatives from the Department of Commerce, Community, and Economic Development and the Department of Fish and Game.
History
- Authority: AS 44.33.020
- Eff. 11/28/2010, Register 196
3 AAC 157.180 Proposal scoring process and criteria
(a) Each member of the proposal review committee shall score a proposal on a scale of 0 - 100 total points, and shall award
(1) no more than 30 points for a proposed project's strategic importance; the committee shall give a higher score to a proposal that meets a demonstrated need and will provide a lasting benefit;
(2) no more than 15 points for a proposed project's support or endorsement by
(A) organizations with expertise in the area; and
(B) persons affected by the harvest reduction;
(3) no more than 20 points for a proposed project's staff experience and qualifications; the committee shall give a higher score to a proposal where the applicant and any partners
(A) have a history of successfully implementing, administering, and completing comparable projects;
(B) demonstrate they have the capacity, including technical and administrative expertise, to successfully complete the project; and
(C) have a history of successful grant administration, or submit other evidence demonstrating they have the capability to manage the grant;
(4) no more than 15 points for a proposed project's technical merit; the committee shall give a higher score to a proposal that
(A) clearly defines objectives, methods, anticipated results, and products appropriate to the project;
(B) has a high likelihood for success toward meeting project objectives within the specified timeframe and budget;
(C) includes a mechanism to evaluate project success in meeting goals and objectives; and
(D) demonstrates the ability to sustain or manage the project beyond the initial funding period to require the achieved project objectives;
(5) no more than 10 points for a proposed project's budget; the committee shall give a higher score to proposals that include
(A) costs that are reasonable to meet project objectives;
(B) project cost estimates that are explained and justified; and
(C) administrative costs that are reasonable and do not exceed 10 percent of the total project costs;
(6) no more than five points for a proposed project that provides additional financing sources; in-kind or monetary matches are not required, but if provided, the match may be in the form of in-kind labor, in-kind equipment, in-kind services, donated supplies, or money;
(7) no more than five points for a proposed project's readiness; the committee shall give a higher score to a project that is ready to start and can be completed no later than one year after the date of contract.
(b) The department will not award a grant to a proposed project scoring less than 70 points.
(c) Once all its members have completed their individual scores for a proposal, the proposal review committee shall average those individual scores to calculate a final score for that proposal. After it completes scoring each proposal, the proposal review committee shall rank the proposals by score. The department will make proposal selections based on scoring calculations, project rankings, and the availability of appropriations.
History
- Authority: AS 44.33.020
- Eff. 11/28/2010, Register 196; am 3/8/2013, Register 205
3 AAC 157.190 Award notification
The department will send an applicant written notification when the applicant's project has been selected or denied. In a written notification that a project has been selected, the department will include the department's recommended amount of the grant.
History
- Authority: AS 44.33.020
- Eff. 11/28/2010, Register 196
3 AAC 157.195 Definitions for Southeast Alaska chinook salmon mitigation infrastructure grants
In 3 AAC 157.110 - 3 AAC 157.195, unless the context requires otherwise,
(1) "grant" means a Southeast Alaska chinook salmon mitigation infrastructure grant, applied for and awarded under 3 AAC 157.110 - 3 AAC 157.195;
(2) "proposal review committee" means the group assembled under 3 AAC 157.170.
History
- Authority: AS 44.33.020
- Eff. 11/28/2010, Register 196
Article 3 Chinook Salmon Mitigation Direct Distributions for 2009
3 AAC 157.210 Purpose and applicability
(a) The purpose of chinook salmon mitigation direct distributions is to help mitigate economic impacts to commercial salmon troll fishermen from the reduction in the Southeast Alaska chinook salmon harvest under the revised Pacific Salmon Treaty.
(b) The provisions of 3 AAC 157.210 - 3 AAC 157.295, 3 AAC 157.910, and 3 AAC 157.990 apply, subject to the availability of appropriations, to the allocation and distribution of money received from the United States Department of Commerce, National Oceanic and Atmospheric Administration under 16 U.S.C. 3641, received by the Department of Fish and Game, and allocated to the Department of Commerce, Community, and Economic Development for payments to individual commercial salmon troll fishery permit holders.
History
- Authority: AS 44.33.020
- Eff. 1/15/2011, Register 197
3 AAC 157.220 Eligible entities
The following individuals are eligible to submit an application under 3 AAC 157.210 - 3 AAC 157.295:
(1) a holder of an active salmon hand troll permit in 2009;
(2) a holder of an active salmon power troll permit in 2009;
(3) an individual who fished in 2009 under a legal transfer of an active 2009 salmon
(A) hand troll permit; or
(B) power troll permit;
(4) the personal representative or executor of the estate of a holder of an active 2009 salmon
(A) hand troll permit; or
(B) power troll permit;
(5) an individual who is eligible under (1) - (4) of this section and who has not received a direct distribution for the 2009 salmon season before March 8, 2013.
History
- Authority: AS 44.33.020
- Eff. 1/15/2011, Register 197; am 3/8/2013, Register 205
3 AAC 157.230 Application requirements
(a) The department will solicit applications for direct distributions under 3 AAC 157.210 - 3 AAC 157.295 by
(1) posting public notice on the Alaska Online Public Notice System established under AS 44.62.175;
(2) providing applications to persons whom the department believes are interested in applying for direct distributions; and
(3) providing applications on request.
(b) An application for a direct distribution under 3 AAC 157.210 - 3 AAC 157.295 must
(1) be complete, signed by the applicant, and submitted on a form provided by the department;
(2) include a verification of eligibility from the Commercial Fisheries Entry Commission, including
(A) the permit number for a permit described in 3 AAC 157.220;
(B) the permit holder's name; and
(C) for permit holders with recorded fish ticket landings of chinook salmon during the 2009 summer chinook salmon season, the total net pounds of chinook salmon recorded on fish tickets and the calculated round weight equivalent pounds of chinook salmon landed during that season;
(3) include the applicant's federal tax identification number;
(4) include, on a form provided by the department and signed by the applicant, a waiver of confidentiality of fish ticket data relevant to the application; and
(5) be received no later than 60 days after the date notice is posted under (a)(1) of this section.
History
- Authority: AS 44.33.020
- Eff. 1/15/2011, Register 197
3 AAC 157.240 Preliminary application review
The department will conduct a preliminary review of an application to ensure it meets the requirements of 3 AAC 157.230. At any time during the preliminary review, the department may request additional information if it considers the information necessary to complete the review of the application. If the department determines the application meets the requirements of 3 AAC 157.230, the department will accept the application.
History
- Authority: AS 44.33.020
- Eff. 1/15/2011, Register 197
3 AAC 157.250 Calculation of payments
(a) A payment will be made, as follows, to each applicant who held an active salmon hand troll permit or active salmon power troll permit when it was renewed for 2009:
(1) a payment of $75 will be made to each applicant who held an active salmon hand troll permit;
(2) a payment of $150 will be made to each applicant who held an active salmon power troll permit.
(b) A payment will be made, as follows, to each applicant who commercially harvested chinook salmon during the 2009 summer chinook salmon season:
(1) a payment of $225 will be made to each applicant who commercially harvested chinook salmon under a salmon hand troll permit;
(2) a payment of $675 will be made to each applicant who commercially harvested chinook salmon under a salmon power troll permit.
(c) A payment will be made, as follows, to each applicant based upon the round weight equivalent pounds of chinook salmon commercially harvested during the 2009 summer chinook salmon season multiplied by $.5024205 per pound.
History
- Authority: AS 44.33.020
- Eff. 1/15/2011, Register 197; am 3/8/2013, Register 205
3 AAC 157.260 Notification of distribution
The department will send an applicant written notification when the applicant's application has been accepted or denied. In a written notification that an application has been accepted, the department will include the total payment amount calculated under 3 AAC 157.250.
History
- Authority: AS 44.33.020
- Eff. 1/15/2011, Register 197
3 AAC 157.295 Definitions for chinook salmon mitigation direct distributions for 2009
In 3 AAC 157.210 - 3 AAC 157.295, unless the context requires otherwise,
(1) "2009 summer chinook salmon season" means a period, the first day of which was July 1, 2009, and the last day of which was September 30, 2009, and during which chinook salmon could be commercially harvested;
(2) "commercially harvested" means lawfully taken and sold in a manner consistent with AS 16, 5 AAC, and 20 AAC 05, including requirements regarding proper completion of reports required by processors, buyers, and fishermen;
(3) "permit" means a Commercial Fisheries Entry Commission entry permit that was renewed and held in accordance with AS 16.43.150;
(4) "round weight equivalent pounds" means an amount calculated with product recovery ratios determined by the Department of Fish and Game and
(A) applied to pounds of chinook salmon commercially harvested on hand or power troll gear, and recorded on Department of Fish and Game fish tickets;
(B) not applied to salmon roe or other ancillary fish products.
History
- Authority: AS 44.33.020
- Eff. 1/15/2011, Register 197; am 3/8/2013, Register 205
Article 4 Chinook Salmon Mitigation Direct Distributions for 2010, 2011, and 2012
3 AAC 157.310 Purpose and applicability
(a) The purpose of chinook salmon mitigation direct distributions is to help mitigate economic impacts to commercial salmon troll fishermen from the reduction in the Southeast Alaska chinook salmon harvest under the revised Pacific Salmon Treaty.
(b) The provisions of 3 AAC 157.310 - 3 AAC 157.395, 3 AAC 157.910, and 3 AAC 157.990 apply, subject to the availability of appropriations, to the allocation and distribution of money received from the United States Department of Commerce, National Oceanic and Atmospheric Administration under 16 U.S.C. 3641, received by the Department of Fish and Game, and allocated to the Department of Commerce, Community, and Economic Development for payments to individual commercial salmon troll fishery permit holders.
History
- Authority: AS 44.33.020
- Eff. 3/8/2013, Register 205
3 AAC 157.320 Eligible entities
The following individuals are eligible to submit an application under 3 AAC 157.310 - 3 AAC 157.395:
(1) a holder of an active salmon hand troll permit in the funding year;
(2) a holder of an active salmon power troll permit in the funding year;
(3) an individual who fished in the funding year under a legal transfer of an active salmon
(A) hand troll permit for the funding year; or
(B) power troll permit for the funding year;
(4) the personal representative or executor of the estate of a holder of an active salmon
(A) hand troll permit for the funding year; or
(B) power troll permit for the funding year.
History
- Authority: AS 44.33.020
- Eff. 3/8/2013, Register 205
3 AAC 157.330 Application requirements
(a) The department will solicit applications for direct distributions under 3 AAC 157.310 - 3 AAC 157.395 by
(1) posting public notice on the Alaska Online Public Notice System established under AS 44.62.175;
(2) providing applications to persons whom the department believes are interested in applying for direct distributions; and
(3) providing applications on request.
(b) An application for a direct distribution under 3 AAC 157.310 - 3 AAC 157.395 must
(1) be complete, signed by the applicant, and submitted on a form provided by the department;
(2) include a verification of eligibility from the Commercial Fisheries Entry Commission, including
(A) the permit number for a permit described in 3 AAC 157.320;
(B) the permit holder's name; and
(C) for permit holders with recorded fish ticket landings of chinook salmon during the summer chinook salmon season in the funding year, the total net pounds of chinook salmon recorded on fish tickets and the calculated round weight equivalent pounds of chinook salmon landed during that season;
(3) include the applicant's federal tax identification number;
(4) include, on a form provided by the department and signed by the applicant, a waiver of confidentiality of fish ticket data relevant to the application; and
(5) be received no later than 60 days after the date notice is posted under (a)(1) of this section.
History
- Authority: AS 44.33.020
- Eff. 3/8/2013, Register 205
3 AAC 157.340 Preliminary application review
The department will conduct a preliminary review of an application to ensure it meets the requirements of 3 AAC 157.330. At any time during the preliminary review, the department may request additional information if it considers the information necessary to complete the review of the application. If the department determines the application meets the requirements of 3 AAC 157.330, the department will accept the application.
History
- Authority: AS 44.33.020
- Eff. 3/8/2013, Register 205
3 AAC 157.350 Calculation of payments
(a) Seventy-five percent of the total amount of money available in a funding year will be allocated, as follows, as payments to each applicant who commercially harvested chinook salmon during the summer chinook salmon season in that funding year:
(1) a base payment will be made to each applicant who commercially harvested chinook salmon under a salmon hand troll permit;
(2) a base payment multiplied by three will be made to each applicant who commercially harvested chinook salmon under a salmon power troll permit;
(3) the base formula under (1) and (2) of this subsection is calculated by dividing the funding year allocation by the sum of
(A) the total number of eligible power troller applicants multiplied by three; and
(B) the total number of eligible hand troller applicants.
(b) Twenty-five percent of the total amount of money available in a funding year will be allocated as payments to each applicant based upon the round weight equivalent pounds of chinook salmon commercially harvested during the summer chinook salmon season in that funding year. The amount of payment to each applicant will be calculated by dividing the amount of money available under this subsection by the total round weight equivalent pounds commercially harvested by the eligible applicants for the summer chinook salmon season in that funding year, and multiplying the resulting figure by the round weight equivalent pounds caught by each eligible permit holder.
History
- Authority: AS 44.33.020
- Eff. 3/8/2013, Register 205
3 AAC 157.360 Notification of distribution
The department will send an applicant written notification when the applicant's application has been accepted or denied. In a written notification that an application has been accepted, the department will include the total payment amount calculated under 3 AAC 157.350.
History
- Authority: AS 44.33.020
- Eff. 3/8/2013, Register 205
3 AAC 157.395 Definitions for chinook salmon mitigation direct distributions for 2010, 2011, and 2012
In 3 AAC 157.310 - 3 AAC 157.395, unless the context requires otherwise,
(1) "commercially harvested" means lawfully taken and sold in a manner consistent with AS 16, 5 AAC, and 20 AAC 05, including requirements regarding proper completion of reports required by processors, buyers, and fishermen;
(2) "funding year" means any of the following three years for which funding was allocated:
(A) 2010;
(B) 2011;
(C) 2012;
(3) "permit" means a Commercial Fisheries Entry Commission entry permit that was renewed and held in accordance with AS 16.43.150;
(4) "round weight equivalent pounds" means an amount calculated with product recovery ratios determined by the Department of Fish and Game and
(A) applied to pounds of chinook salmon commercially harvested on hand or power troll gear, and recorded on Department of Fish and Game fish tickets;
(B) not applied to salmon roe or other ancillary fish products;
(5) "summer chinook salmon season" means a period, the first day of which was July 1 and the last day of which was September 30 of the same year, and during which chinook salmon could be commercially harvested.
History
- Authority: AS 44.33.020
- Eff. 3/8/2013, Register 205
Article 5 Southeast Alaska Salmon Hatchery Enhancement Grants
3 AAC 157.410 Purpose and applicability
(a) The purpose of Southeast Alaska salmon hatchery enhancement grants is to help mitigate economic impacts to Southeast Alaska fisheries interests from the reduction in the Southeast Alaska salmon harvest under the revised Pacific Salmon Treaty.
(b) The provisions of 3 AAC 157.410 - 3 AAC 157.495, 3 AAC 157.910 - 3 AAC 157.990 apply, subject to the availability of appropriations, to the award, allocation, and distribution of money received from the United States Department of Commerce, National Oceanic and Atmospheric Administration under 16 U.S.C. 3641, received by the Department of Fish and Game, and allocated to the Department of Commerce, Community, and Economic Development to help mitigate the economic impacts of harvest reductions under the revised Pacific Salmon Treaty.
History
- Authority: AS 44.33.020
- Eff. 3/8/2013, Register 205
3 AAC 157.420 Eligible entities
A hatchery that holds an active permit issued under AS 16.10.400 and 5 AAC 40 is eligible to submit a proposal under 3 AAC 157.410 - 3 AAC 157.495.
History
- Authority: AS 44.33.020
- Eff. 3/8/2013, Register 205
3 AAC 157.430 Eligible grant proposals
(a) To be eligible for a grant, a proposed project must fall within one of the following categories:
(1) support for coho or chinook salmon hatchery operations at existing facilities within the districts established under 5 AAC 33.200(a) - (h);
(2) the development or addition of remote release sites of hatchery fish in waters inside the winter boundary line established under 5 AAC 29.020(b).
(b) An eligible entity may apply for a minimum of $15,000 in grant money.
(c) An eligible entity may apply for a maximum of $200,000 in grant money.
(d) The total amount of money allocated for projects in the category set out in (a)(1) of this section is $200,000.
(e) The total amount of money allocated for projects in the category set out in (a)(2) of this section is $300,000.
History
- Authority: AS 44.33.020
- Eff. 3/8/2013, Register 205
3 AAC 157.440 Solicitation process
The department will
(1) publish a grant application guide;
(2) solicit applications for grants by public notice of the solicitation in a newspaper of general circulation, and by posting the notice on the Alaska Online Public Notice System established under AS 44.62.175; and
(3) provide applications on request.
History
- Authority: AS 44.33.020
- Eff. 3/8/2013, Register 205
3 AAC 157.450 Application requirements
An application submitted in response to the public notice under 3 AAC 157.440 must be complete, and must be submitted on forms provided by the department. The application must include a detailed description of the project, the associated costs of the project, and the financing sources that will support the project.
History
- Authority: AS 44.33.020
- Eff. 3/8/2013, Register 205
3 AAC 157.460 Preliminary proposal review
The department will conduct a preliminary review of an application to ensure it meets the requirements of 3 AAC 157.450. At any time during the preliminary proposal review, the department may request additional information if it considers the information necessary to complete the review of the application. If the department determines the application meets the requirements of 3 AAC 157.450, the proposal review committee shall accept, score, and rank the application.
History
- Authority: AS 44.33.020
- Eff. 3/8/2013, Register 205
3 AAC 157.470 Proposal review committee
The department will assemble a proposal review committee. The department will offer a seat on the proposal review committee to, at a minimum, representatives from the Department of Commerce, Community, and Economic Development and the Department of Fish and Game.
History
- Authority: AS 44.33.020
- Eff. 3/8/2013, Register 205
3 AAC 157.480 Proposal scoring process and criteria
(a) Each member of the proposal review committee shall score a proposal on a scale of 0 - 100 total points, and shall award
(1) no more than 30 points for a proposed project's strategic importance; the committee shall give a higher score to a proposal that meets a demonstrated need and will provide a lasting benefit;
(2) no more than 15 points for a proposed project's support or endorsement by
(A) organizations with expertise in the area; and
(B) persons affected by the harvest reduction;
(3) no more than 20 points for a proposed project's staff experience and qualifications; the committee shall give a higher score to a proposal where the applicant and any partners
(A) have a history of successfully implementing, administering, and completing comparable projects;
(B) demonstrate they have the capacity, including technical and administrative expertise, to successfully complete the project; and
(C) have a history of successful grant administration, or submit other evidence demonstrating they have the capability to manage the grant;
(4) no more than 15 points for a proposed project's technical merit; the committee shall give a higher score to a proposal that
(A) clearly defines objectives, methods, anticipated results, and products appropriate to the project;
(B) has a high likelihood for success toward meeting project objectives within the specified timeframe and budget;
(C) includes a mechanism to evaluate project success in meeting goals and objectives; and
(D) demonstrates the ability to sustain or manage the project beyond the initial funding period to require the achieved project objectives;
(5) no more than 10 points for a proposed project's budget; the committee shall give a higher score to proposals that include
(A) costs that are reasonable to meet project objectives;
(B) project cost estimates that are explained and justified; and
(C) administrative costs that are reasonable and do not exceed 10 percent of the total project costs;
(6) no more than five points for a proposed project that provides additional financing sources; in-kind or monetary matches are not required, but if provided, the match may be in the form of in-kind labor, in-kind equipment, in-kind services, donated supplies, or money;
(7) no more than five points for a proposed project's readiness; the committee shall give a higher score to a project that is ready to start and can be completed no later than one year after the date of contract.
(b) The department will not award a grant to a proposed project scoring less than 70 points.
(c) Once all its members have completed their individual scores for a proposal, the proposal review committee shall average those individual scores to calculate a final score for that proposal. After it completes scoring each proposal, the proposal review committee shall rank the proposals by score. The department will make proposal selections based on scoring calculations, project rankings, and the availability of appropriations.
History
- Authority: AS 44.33.020
- Eff. 3/8/2013, Register 205
3 AAC 157.490 Award notification
The department will send an applicant written notification when the applicant's project has been selected or denied. In a written notification that a project has been selected, the department will include the department's recommended amount of the grant.
History
- Authority: AS 44.33.020
- Eff. 3/8/2013, Register 205
3 AAC 157.495 Definitions for Southeast Alaska salmon hatchery enhancement grants
In 3 AAC 157.410 - 3 AAC 157.495, unless the context requires otherwise,
(1) "grant" means a Southeast Alaska salmon hatchery enhancement grant, applied for and awarded under 3 AAC 157.410 - 3 AAC 157.495;
(2) "proposal review committee" means the group assembled under 3 AAC 157.470.
History
- Authority: AS 44.33.020
- Eff. 3/8/2013, Register 205
Article 6 General Provisions
3 AAC 157.910 Reconsideration
(a) No later than 10 days after receipt of the department's written notification under 3 AAC 157.090, 3 AAC 157.190, 3 AAC 157.260, 3 AAC 157.360, or 3 AAC 157.490, the applicant may make a request for reconsideration of all or part of the decision to the commissioner. The request must be in writing and must identify each part of the decision to which the applicant objects.
(b) No later than 15 days after receiving a request for reconsideration, the commissioner will review the request, the application, and any relevant supplemental material, and may issue a written decision. If a written decision is not issued during the 15 days after a request for reconsideration is received, the request is automatically denied. The commissioner's decision on a request for reconsideration is final.
(c) If the applicant fails to request reconsideration during the time set out in (a) of this section, the department's decision is final.
History
- Authority: AS 44.33.020
- Eff. 9/16/2010, Register 195; am 11/28/2010, Register 196; am 1/15/2011, Register 197; am 3/8/2013, Register 205
3 AAC 157.920 Acceptance of grant offer; grant conditions
(a) Subject to the availability of appropriations, the department will negotiate a grant agreement with the recipient. A recipient of a final award determination does not have a vested right or other entitlement to a grant under this chapter until a mutually acceptable definitive written agreement is negotiated and is executed by the department.
(b) In a grant agreement, the department will incorporate any audit requirements of 2 AAC 45.010.
(c) In a grant agreement, the department may require a grantee to procure, maintain, and demonstrate liability, hazard, or workers' compensation insurance, may designate required policy limits, and may require that the state be an additional insured under a policy.
(d) During the term of a grant agreement, the grantee shall maintain and provide, at the department's request, all grant-related records, reports, invoices, documents, and other information required under the grant agreement.
(e) As a condition of the grant agreement, the grantee must agree to comply with federal law and requirements applicable to the grant or imposed on the grantee as conditions for the state to receive federal money.
(f) The department may withhold payment under the grant for the grantee's failure to comply with this chapter or the grant agreement.
History
- Authority: AS 44.33.020
- Eff. 9/16/2010, Register 195
3 AAC 157.930 Waiver of sovereign immunity
If the grantee is an entity that possesses sovereign immunity, the grantee must agree as a condition of receiving a grant that the grantee irrevocably waives its sovereign immunity with respect to enforcement of the grant agreement or claims related to the grant agreement. The waiver of sovereign immunity must be on a form approved by the Department of Law and provided by the Department of Commerce, Community and Economic Development.
History
- Authority: AS 44.33.020
- Eff. 9/16/2010, Register 195
3 AAC 157.990 Definitions
(a) In this chapter, unless the context requires otherwise,
(1) "business" has the meaning given in AS 43.70.110;
(2) "commissioner" means the commissioner of commerce, community, and economic development;
(3) "department" means the Department of Commerce, Community, and Economic Development;
(4) "municipality" has the meaning given in AS 29.71.800;
(5) "regional development organization" has the meaning given in AS 44.33.895(e).
(b) In 3 AAC 157.910 - 3 AAC 157.990, "grant" means a grant applied for or awarded under 3 AAC 157.010 - 3 AAC 157.095 or 3 AAC 157.110 - 3 AAC 157.195.
History
- Authority: AS 44.33.020
- Eff. 9/16/2010, Register 195; am 11/28/2010, Register 196
Chapter 160 Rural Development Assistance and Bulk Fuel Storage Facility Grant Programs
3 AAC 160.010 Purpose of regulations
Repealed.
History
- Eff. 8/14/82, Register 83; am 4/5/90, Register 114; repealed 3/14/2012, Register 201
3 AAC 160.020 Program authority
Repealed.
History
- Eff. 8/14/82, Register 83; am 4/5/90, Register 114; repealed 3/14/2012, Register 201
3 AAC 160.032 Purpose of program
Repealed.
History
- Eff. 4/5/90, Register 114; repealed 3/14/2012, Register 201
3 AAC 160.042 Eligible communities
Repealed.
History
- Eff. 4/5/90, Register 114; repealed 3/14/2012, Register 201
3 AAC 160.052 Eligible projects
Repealed.
History
- Eff. 4/5/90, Register 114; repealed 3/14/2012, Register 201
3 AAC 160.062 Program operation and use of funds
Repealed.
History
- Eff. 4/5/90, Register 114; repealed 3/14/2012, Register 201
3 AAC 160.072 Application and award processes
Repealed.
History
- Eff. 4/5/90, Register 114; repealed 3/14/2012, Register 201
3 AAC 160.082 Grant conditions
Repealed.
History
- Eff. 4/5/90, Register 114; repealed 3/14/2012, Register 201
3 AAC 160.130 Appeals
Repealed.
History
- Eff. 8/14/82, Register 83; am 4/5/90, Register 114; repealed 3/14/2012, Register 201
3 AAC 160.140 Technical assistance
Repealed.
History
- Eff. 8/14/82, Register 83; am 4/5/90, Register 114; repealed 3/14/2012, Register 201
3 AAC 160.900 Definitions
Repealed.
History
- Eff. 8/14/82, Register 83; am 4/5/90, Register 114; repealed 3/14/2012, Register 201
Chapter 161 Bulk Fuel Revolving Loan Fund
3 AAC 161.010 Application process
To apply for a loan for the purchase and transportation of bulk fuel under AS 42.45.250 - 42.45.299, an applicant must file with the division
(1) a completed application for a bulk fuel loan, on a form provided by the division;
(2) proof that the application is for a community within the meaning given in AS 42.45.299;
(3) a letter of intent, on a form provided by division, stating the amount requested and the intended use of the proposed loan money;
(4) a bulk fuel loan agreement and promissory note, on a form provided by the division;
(5) if the applicant is a Native village council, a resolution waiving sovereign immunity from suit for claims related to the loan, on a form provided by the division;
(6) a resolution by community or corporate applicants approving the purchase of bulk fuel, on a form provided by the division; and
(7) any other information requested by the division to demonstrate the applicant's eligibility for a loan.
History
- Authority: AS 42.45.250; AS 42.45.260; AS 42.45.270
- Eff. 9/2/2008, Register 188; am 1/28/2009, Register 189; am 3/8/2013, Register 205
3 AAC 161.020 Examination
(a) The division will process the material described in 3 AAC 161.010 and 3 AAC 161.040 and evaluate
(1) the eligibility of the community;
(2) the applicant's eligibility, financial and credit records, and ability to repay the loan; and
(3) any other information relevant to eligibility for or the issuance of a bulk fuel loan or bulk fuel bridge loan.
(b) If the application is incomplete, or if the division needs additional information in order to complete an evaluation described in (a) of this section, the division will request the information necessary from the applicant. The applicant must provide the requested information not later than 30 days after the date that the division received the application. If the applicant fails to provide the requested information timely, the division will inactivate the application.
(c) On the basis of the evaluation described in (a) of this section, the division will
(1) deny the application, if the applicant is ineligible; or
(2) approve the application as a bulk fuel loan or a bulk fuel bridge loan; in its approval, the division may include modifications to the applicant's original request.
(d) The division will fix, in accordance with AS 42.45.250 - 42.45.299, the terms of a loan, including the interest rate and a repayment schedule.
(e) If the division denies or significantly modifies a loan request, the division will provide the applicant with a written statement of the reasons for the action and the information on which the division relied for the denial or modification.
(f) An applicant's material misstatement or omission of fact constitutes grounds for denial of a loan request.
History
- Authority: AS 42.45.250; AS 42.45.260; AS 42.45.270
- Eff. 9/2/2008, Register 188; am 1/28/2009, Register 189; am 3/8/2013, Register 205
3 AAC 161.030 Eligibility
To be eligible for a loan,
(1) an applicant must intend to use the loan for purchase of fuel to generate power or supply the public with fuel for use, including the necessary costs of transporting the fuel;
(2) an applicant must agree to repay the loan in one year or less, according to a repayment plan determined by the division;
(3) the amount of the loan, added to the amounts of all other bulk fuel revolving loan principal balances to the same borrower
(A) may not exceed $750,000, unless the loan is from the bulk fuel loan account and the borrower
(i) is a cooperative corporation organized under AS 10.15 or an electric cooperative organized under AS 10.25; and
(ii) uses the loan to purchase bulk fuel on behalf of more than one community; and
(B) may not exceed the lesser of
(i) $750,000 multiplied by the number of eligible communities on whose behalf the bulk fuel is to be purchased; or
(ii) $1,800,000.
History
- Authority: AS 42.45.250; AS 42.45.260; AS 42.45.270
- Eff. 9/2/2008, Register 188; am 1/28/2009, Register 189; am 3/8/2013, Register 205
3 AAC 161.040 Financial and credit record
The division may consider the following in evaluating an applicant's financial and credit record:
(1) existing and prior debts;
(2) credit reports obtained from creditors and private credit reporting services;
(3) prior loan history with other known fuel lenders or the division;
(4) timeliness in making payments on loans and other debts;
(5) the existence of tax liens;
(6) unpaid judgments and prior foreclosures;
(7) the applicant's financial and credit reputation.
History
- Authority: AS 42.45.250; AS 42.45.260; AS 42.45.270
- Eff. 9/2/2008, Register 188; am 1/28/2009, Register 189; am 3/8/2013, Register 205
3 AAC 161.045 Interest
(a) In evaluating a potential interest rate reduction under AS 42.45.280(b), the division will reduce the interest rate by
(1) one percent for a borrower whom the division considers not to have been delinquent in repayment on at least one previous bulk fuel loan made by the division;
(2) two percent for a borrower whom the division considers not to have been delinquent in repayment on two or more bulk fuel loans made by the division.
(b) If an application for an interest rate reduction is denied, the division will provide the applicant with a written statement of the reasons for the denial.
History
- Authority: AS 42.45.250; AS 42.45.280
- Eff. 3/8/2013, Register 205
3 AAC 161.050 Lending practices
(a) The division will fix a loan period based on the needs of the borrower. However, the borrower shall repay a loan not later than one year after the date of the disbursement.
(b) Proceeds of a bulk fuel loan may not be used to
(1) purchase fuel other than bulk fuels; or
(2) make a profit, unless the profit is used to purchase additional community fuel supplies.
History
- Authority: AS 42.45.250; AS 42.45.260; AS 42.45.270
- Eff. 9/2/2008, Register 188; am 1/28/2009, Register 189; am 3/8/2013, Register 205; am 10/27/2018, Register 228
3 AAC 161.060 Disbursement of loan money
(a) Loan money will be disbursed after the borrower has complied with the provisions of the loan documents and the requirements of this chapter.
(b) Loan money will be disbursed upon receipt by the division of delivery bills and fuel invoices.
History
- Authority: AS 42.45.250; AS 42.45.260; AS 42.45.270
- Eff. 9/2/2008, Register 188; am 1/28/2009, Register 189; am 3/8/2013, Register 205
3 AAC 161.070 Modifications
A request for a modification to a loan made under AS 42.45.250 - 42.45.299 will be processed in the same manner as a loan application. The division may require the applicant to provide additional information in support of the request.
History
- Authority: AS 42.45.250; AS 42.45.260; AS 42.45.270
- Eff. 9/2/2008, Register 188; am 1/28/2009, Register 189; am 3/8/2013, Register 205
3 AAC 161.080 Reconsideration of a loan request
(a) If the division denies, inactivates, or significantly modifies a loan request, an applicant may file, not later than 30 days after receipt of notice of the division's decision, a written request for reconsideration of that decision.
(b) The division will consider a request for reconsideration if the applicant submits information to show that
(1) a substantial change has occurred in the circumstances leading to the division's decision;
(2) additional relevant information can be provided to the division that was not initially available; or
(3) the division made administrative errors.
History
- Authority: AS 42.45.250; AS 42.45.260; AS 42.45.270
- Eff. 9/2/2008, Register 188; am 1/28/2009, Register 189; am 3/8/2013, Register 205
3 AAC 161.090 Confidentiality of loan information
Repealed.
History
- Eff. 9/2/2008, Register 188; am 1/28/2009, Register 189; repealed 3/8/2013, Register 205
3 AAC 161.100 Definitions
Repealed.
History
- Eff. 9/2/2008, Register 188; repealed 1/28/2009, Register 189
3 AAC 161.110 Default
The division may consider a borrower to be in default on a loan made under AS 42.45.250 - 42.45.299 if the borrower
(1) violates a provision of AS 42.45.250 - 42.45.299, this chapter, or the loan documents; or
(2) fails to make a necessary payment during the 30-day period after the date that the payment is due; or
(3) fails to maintain any insurance that the division requires as a condition for the loan.
History
- Authority: AS 42.45.250; AS 42.45.260; AS 42.45.270
- Eff. 3/8/2013, Register 205
3 AAC 161.900 Definitions
In this chapter, unless the context requires otherwise,
(1) "bulk fuel" means bulk petroleum fuels or biomass fuel;
(2) "bulk fuel loan" means a loan made under AS 42.45.260 from the bulk fuel loan account;
(3) "bulk fuel bridge loan" means a loan made under AS 42.45.270 from the bulk fuel bridge loan account;
(4) "division" means the division in the Department of Commerce, Community, and Economic Development that is responsible for community and regional affairs;
(5) "Native village council" means
(A) a council organized under 25 U.S.C. 476 (sec. 16 of the Indian Reorganization Act);
(B) the council for the Annette Island Reserve established by 25 U.S.C. 495 for the Metlakatla Indian Community; or
(C) a traditional village council recognized by the United States as eligible for federal aid to Indians;
(6) "biomass fuel" means a product that is
(A) derived from wood, such as wood pellets, wood chips, or cordwood, or from other organic matter; and
(B) proven and feasible for use as fuel to generate heat or electricity.
History
- Authority: AS 42.45.250; AS 42.45.260; AS 42.45.270
- Eff. 1/28/2009, Register 189; am 3/8/2013, Register 205; am 10/27/2018, Register 228
Chapter 168 Community Development Block Grant Program
3 AAC 168.010 Purpose of regulations
This chapter implements the community development block grant (CDBG) program which is established by Title 1 of the Housing and Community Development Act of 1974, as amended, 42 U.S.C. 5301 - 5320.
History
- Authority: AS 44.33.020
- Eff. 6/7/84, Register 90
3 AAC 168.020 Program authority
The authority of the department to administer the CDBG program is delegated by the commissioner to the director of the division of community development.
History
- Authority: AS 44.33.020
- Eff. 6/7/84, Register 90
3 AAC 168.030 State plan
In accordance with 42 U.S.C. 5304(a), the state plan for the CDBG program, dated May 24, 1983, is adopted. The state plan is adopted as a part of this chapter for the purpose of administering grants to communities in the state, which are made under Title 1 of the Housing and Community Development Act of 1974, as amended, 42 U.S.C. 5301 - 5320.
History
- Authority: AS 44.33.020
- Eff. 6/7/84, Register 90
3 AAC 168.040 Eligible communities
Those communities that meet the criteria described in sec. VII of the state plan are eligible to apply for a grant under this chapter.
History
- Authority: AS 44.33.020
- Eff. 6/7/84, Register 90
3 AAC 168.050 Eligible activities
Those activities listed in sec. IX of the state plan are eligible activities.
History
- Authority: AS 44.33.020
- Eff. 6/7/84, Register 90
3 AAC 168.060 Grant limitations
Grants awarded under this chapter fall into the following two categories:
(1) single-purpose, single-year grants as described in sec. V(A) of the state plan;
(2) previous multi-year grants as described in sec. V(B) of the state plan.
History
- Authority: AS 44.33.020
- Eff. 6/7/84, Register 90
3 AAC 168.070 Form and content of applications
Applications submitted under this chapter must comply with the requirements specified in sec. VIII of the state plan.
History
- Authority: AS 44.33.020
- Eff. 6/7/84, Register 90
3 AAC 168.080 Application review and grant award
Grant applications under this chapter will be reviewed, and award decisions will be made according to the criteria specified in sec. X of the state plan. Award decisions will be made by the department based on the applicant's ability to meet the criteria specified in secs. II, III, and X of the state plan. The commissioner will announce grant awards.
History
- Authority: AS 44.33.020
- Eff. 6/7/84, Register 90
3 AAC 168.090 Notification of grant award
Grant applicants will be notified of final grant award action under this chapter in accordance with sec. XI(A) of the state plan.
History
- Authority: AS 44.33.020
- Eff. 6/7/84, Register 90
3 AAC 168.100 Appeals
The appeals process under this chapter is specified in sec. XI(B) of the state plan.
History
- Authority: AS 44.33.020
- Eff. 6/7/84, Register 90
3 AAC 168.110 Technical assistance
The division will make every reasonable effort to respond to an applicant's request for technical assistance in grant application and grant administration and management.
History
- Authority: AS 44.33.020
- Eff. 6/7/84, Register 90
3 AAC 168.120 Amendments
Amendments under this chapter fall into the following two categories:
(1) the division will, in its discretion, amend the state plan in accordance with the procedure outlined in sec. XI(C)(1) of the state plan;
(2) the grantee may amend a local program in accordance with the procedure outlined in sec. XI(C)(2) of the state plan.
History
- Authority: AS 44.33.020
- Eff. 6/7/84, Register 90
3 AAC 168.130 Recordkeeping
The grantee shall maintain the records specified in the grant contract issued under XI(D) of the state plan.
History
- Authority: AS 44.33.020
- Eff. 6/7/84, Register 90
3 AAC 168.140 Access to records
The division will, in its discretion, and other state and federal officials authorized by the division may examine, excerpt, or transcribe any pertinent documents, papers, records, and books of the grantee and of persons or organizations with which the grantees may contract, involving transactions related to the project and contract.
History
- Authority: AS 44.33.020
- Eff. 6/7/84, Register 90
3 AAC 168.150 Contracts and reporting forms
The issuance of contracts and reporting requirements under this chapter will be carried out in accordance with sec. XI(D) of the state plan.
History
- Authority: AS 44.33.020
- Eff. 6/7/84, Register 90
3 AAC 168.160 Termination of grant contract
(a) The grant contract may be terminated in whole or in part by either party for either convenience or cause.
(b) Either party must give a minimum of five days' notice to the other party before termination for convenience. The grant contract may be terminated for convenience
(1) by the department, with the consent of the grantee, when the two parties agree upon the termination conditions;
(2) by the grantee, with the consent of the department, upon written notification to the department setting out the reasons for the termination.
(c) If a grantee fails to comply with the terms of the grant contract, or fails to use the grant for only those purposes which have been designated in the grant contract, the department will, in its discretion,
(1) after notice in writing to the grantee, either suspend the grantee and withhold any further payment, or prohibit the grantee from incurring additional obligation of grant money, until the grantee takes corrective action or until the department decides to terminate the grant for cause;
(2) terminate the grant in whole or in part, at any time before the final grant payment is made; the department will promptly notify the grantee in writing of the decision to terminate for cause, the reason for termination, and the effective date of termination.
History
- Authority: AS 44.33.020
- Eff. 6/7/84, Register 90
3 AAC 168.170 Recovery of grant money
If a grantee defaults or violates a term of the grant contract, the department will request the attorney general to institute an action to recover all or part of the grant money paid to the grantee.
History
- Authority: AS 44.33.020
- Eff. 6/7/84, Register 90
3 AAC 168.180 Audits
A grantee shall arrange and pay for an audit of a grant, to be conducted according to art. 30 of the grant contract. A grantee may pay for the audit out of grant money. A grantee shall provide to the department copies of all audits and an explanation of any questioned costs.
History
- Authority: AS 44.33.020
- Eff. 6/7/84, Register 90
3 AAC 168.190 Compliance
A grantee shall comply with the U.S. Department of Housing and Urban Development regulations at 24 C.F.R. Part 570, subpart I, as published in the Federal Register dated April 8, 1982.
History
- Authority: AS 44.33.020
- Eff. 6/7/84, Register 90
3 AAC 168.900 Definitions
In this chapter
(1) "CDBG program" means the community development block grant program;
(2) "commissioner" means the commissioner of the Department of Commerce, Community, and Economic Development;
(3) "department" means the Department of Commerce, Community, and Economic Development;
(4) "director" means the director of the division of community development;
(5) "division" means any employee of the division of community development within the Department of Commerce, Community, and Economic Development who is authorized to administer the community development block grant program;
(6) "grant" means money for an activity eligible under this chapter;
(7) "grant contract" means the binding contract between the Department of Commerce, Community, and Economic Development and the grantee outlining the amount and use of a grant, the proposed project being funded, conditions, terms of payment, state and federal reporting requirements, compliance assurances with pertinent laws and regulations impacting the design, and administration and implementation of the project;
(8) "grantee" means an eligible applicant who has been awarded a grant;
(9) "state plan" means the final statement, required by 42 U.S.C. 5304(a), and adopted by reference in 19 AAC 68.030, containing the state's community development objectives, methods of distribution, and the administration and implementation of grants made under Title I of the Housing and Community Development Act of 1974, 42 U.S.C. 5301 - 5320, as amended.
History
- Authority: AS 44.33.020
- Eff. 6/7/84, Register 90
Chapter 170 Rural Development Initiative Fund
3 AAC 170.010 Scope of chapter
The provisions of 3 AAC 170.010 - 3 AAC 170.900 establish procedures for the use of money in the rural development initiative fund.
History
- Authority: AS 44.33.770
- Eff. 1/19/93, Register 125
3 AAC 170.020 Use of money in fund
The division will use money in the rural development initiative fund either to
(1) purchase participations in loans in accordance with 3 AAC 170.030 from eligible lenders; or
(2) transfer money to reserve accounts described in 3 AAC 170.040.
History
- Authority: AS 44.33.765; AS 44.33.770
- Eff. 1/19/93, Register 125
3 AAC 170.030 Purchase of participations
(a) The division will, in its discretion, use money in the rural development initiative fund to purchase a participation interest in an eligible loan from an eligible lender in accordance with the procedures established in this section. The division will purchase the participation interest at a price equal to principal amount of the participation interest.
(b) The division will purchase a participation interest in an eligible loan under (a) of this section only from an eligible lender and only following (1) receipt and approval by the division of an application submitted to the division by the eligible lender that has made or proposes to make the loan and (2) receipt by the division of the amounts described in (d) of this section. The eligible lender may submit the application in the form of a letter or in any other form that the eligible lender desires as long as the application (1) contains information sufficient for the division to reasonably determine that the loan satisfies or will satisfy the requirements of this chapter, (2) is accompanied by the documentation described in 3 AAC 170.030(c), (3) states whether the loan is expected to be guaranteed by the Alaska Industrial Development and Export Authority under 3 AAC 99.700 - 3 AAC 99.785, and (4) is accompanied by a nonrefundable application fee of $100.
(c) Unless waived by the division, an eligible lender must submit to the division each of the following documents with respect to an application described in 3 AAC 170.030(b) before the division will agree to purchase a participation interest in the loan to which the application relates:
(1) a loan summary, including the eligible lender's loan approval;
(2) a copy of the signed loan application accompanied by a written release from the borrower consenting to the delivery to the division of the information required by this chapter;
(3) a financial statement, including a profit and loss statement of the borrower's business, that is signed by the borrower and is current to within 90 days of the date on which the division receives the application;
(4) a description of the purpose for which the loan will be made;
(5) a current report of the credit history of the borrower and of any guarantors;
(6) copies of the borrower's federal income tax returns or financial statements prepared by a public accounting firm for the preceding three fiscal years of the borrower;
(7) a description and evaluation of the collateral to be used to secure the loan, including
(A) if the loan is to be secured by real property, a narrative appraisal report acceptable to the division estimating the fair market value of the real property in a format consistent with standards established by the American Institute of Real Estate Appraisers or Society of Real Estate Appraisers including a cost approach, a market approach, and an income approach, or
(B) if the loan is to be secured by tangible personal property, an appraisal in a format acceptable to the division prepared by an appraiser who is acceptable to the division;
(8) a finding that the borrower has adequate projected cash flow to pay all amounts to become due on the loan when and as those amounts become due;
(9) an environmental risk assessment satisfactory to the division followed by an environmental audit if required by the division;
(10) a description of other nonstate sources committed for use on the project or enterprise for which money from a loan will be used;
(11) any other information considered necessary by the division in order to evaluate the borrower and borrower's business.
(d) On or before the date of purchase of a participation interest in an eligible loan, the division must receive a nonrefundable commitment fee equal to one-half percent of the principal amount of the participation to be purchased.
History
- Authority: AS 44.33.765; AS 44.33.770
- Eff. 1/19/93, Register 125; am 6/13/93, Register 126
3 AAC 170.040 Reserve accounts
(a) If the division determines that it will purchase a participation interest in a loan which is expected to be guaranteed by the Alaska Industrial Development and Export Authority under 3 AAC 99.700 - 3 AAC 99.785, the division will establish a reserve account within the fund for that loan. Before the division purchases the participation interest in the loan, but after the loan is guaranteed as described in this subsection, the division will transfer from the fund into the reserve account created for that loan an amount equal to 180 days of interest on the guaranteed portion of the loan at the interest rate applicable to that portion of the loan or a lesser amount if necessary under (b) of this section. The division will transfer money to a reserve account as provided in this section only in conjunction with the purchase of a participation interest in the loan under 3 AAC 170.030, and the amount deposited in the reserve account for a loan will not exceed the amount paid by the division for the purchase of the participation interest.
(b) If there is insufficient money in the fund to purchase a participation in a loan described in (a) of this section and to transfer money to a reserve account for the loan as described in (a) of this section, the division will notify the eligible lender of that fact. At the request of the eligible lender, the division will, depending upon the availability of money in the fund, (1) purchase a smaller participation in the loan, (2) transfer money to the reserve account at a smaller amount, or (3) both.
(c) The division will use money held in a reserve account created under this section solely for the purpose of paying accrued and unpaid interest on the guaranteed portion of the loan in the event of a default with respect to the loan. The division will make the payment of interest when the Alaska Industrial Development and Export Authority has paid the guaranteed portion of the loan. To the extent that the division uses any amount in a reserve account as described in this subsection, the division will be entitled to seek recovery of that amount, together with interest on that amount from the date of payment by the division, from the borrower. The division must be a secured party under, or an assignee of the eligible lender's interest in, any security agreements or documents relating to the loan.
(d) From time to time, the division will review the amount held in each reserve account established under this section and, to the extent the amount in a reserve account exceeds 180 days of interest, or the lesser amount established for a loan under (b) of this section, with respect to the loan for which the reserve account was established, the division will transfer the excess from the reserve account in to the fund. If there is money remaining in a reserve account after the loan for which the reserve account is created is fully paid, the division will transfer the money out of the reserve account and back into the fund.
History
- Authority: AS 44.33.765; AS 44.33.770
- Eff. 1/19/93, Register 125; am 6/13/93, Register 126
3 AAC 170.050 Loan eligibility
(a) The division will purchase a participation in a loan with money from the fund only if (1) the borrower is an eligible borrower as described in (c) of this section and (2) the proceeds of the loan will be used by the borrower for working capital, equipment, construction costs, or other commercial purposes relating to the borrower's business. For the purposes of this subsection, the division does not consider the use of the loan proceeds to refinance another loan to be for any of the purposes described in this subsection. In addition to the other provisions of this subsection, the division will purchase a participation in a loan only if (1) the borrower's principal place of business is located within a rural community in the state or if the borrower verifies to the satisfaction of the division that the primary beneficiaries of the loan will be residents of a rural community in the state; (2) the loan is made to pay costs described in this subsection which were incurred by the borrower no earlier than six months before the loan application described in 3 AAC 170.030 was filed with the division. For the purposes of this subsection, a "rural community in the state" means a community with a population of 5,000 or less.
(b) In addition to the limitations stated in (a) of this section, the division will purchase a participation in a loan only if the division concludes, based upon the information available to it, that the loan will result in new job creation or the retention of existing jobs in the community described in (a) of this section.
(c) A borrower is eligible for a loan for purposes of (a) of this section if the division has received information that it determines is sufficient to make a determination as to the borrower's creditworthiness and, based upon that information, determines that the borrower will be able to repay the loan in accordance with its terms.
(d) The division will not purchase a participation in a loan with money from the fund if the borrower has an outstanding loan in which the division has purchased a participation with money from the fund.
(e) The division will not purchase a participation in a loan with money from the fund unless the loan bears interest at the rate described in 3 AAC 170.080, is secured by collateral as described in 3 AAC 170.100, contains terms and conditions as described in 3 AAC 170.110, and otherwise complies with the requirements of AS 44.33.765 - 44.33.780 and this chapter.
History
- Authority: AS 44.33.765; AS 44.33.770
- Eff. 1/19/93, Register 125; am 6/13/93, Register 126
3 AAC 170.060 Lender eligibility
(a) The division will treat any private institution or any federal, state, or municipal agency as an eligible lender if the:
(1) division is reasonably satisfied, based upon information provided to it from the institution or agency or other information available to the division, the institution or agency is capable of making the loan which is the subject of an application described in 3 AAC 170.030;
(2) division is reasonably satisfied, based upon the information provided to it from the institution or agency or other information available to the division, that the institution or agency is capable of servicing the loan and performing its duties under the servicing agreement described in the following clause; and
(3) institution or agency has entered into a servicing agreement with the division as described in 3 AAC 170.090.
(b) The division will, in its discretion, request information from an institution or agency for the purpose of making the determinations described in (a) of this section at any time, including any time after an initial determination that the institution or agency is an eligible lender. If, in the reasonable judgment of the division, the institution or agency fails to adequately or timely respond to a request for information or if the division reasonably determines that, based upon information it has received, it cannot justify or sustain the findings required by (a) of this section, the division will in its discretion, decline to treat or decline to continue to treat the institution or agency as an eligible lender and will deliver written notice to that effect to the institution or agency.
History
- Authority: AS 44.33.765; AS 44.33.770
- Eff. 1/19/93, Register 125
3 AAC 170.070 Size of participation interests
(a) For a loan that is a guaranteed loan, the division will only purchase a participation interest in the loan that is not the guaranteed portion. The division's participation interest in the loan will not exceed the lesser of
(1) 20 percent of the entire loan, including the guaranteed portion; or
(2) the amount described in (c) of this section.
(b) For a loan that is not a guaranteed loan, the division's participation interest in the loan will not exceed the lesser of
(1) 80 percent of the entire loan; or
(2) the amount described in (c) of this section.
(c) In addition to the provisions of (a) and (b) of this section, the division's participation interest in a loan may not exceed $100,000 if the loan is made to an individual or $200,000 if the loan is made to two or more individuals. If the loan is made to a corporation, joint venture, partnership, or other form of business consisting of more than one individual, the division's participation interest in a loan will not exceed $200,000. For a loan that is a guaranteed loan, the amounts described in this subsection will be reduced by any amount required to be deposited in a reserve account for the loan.
History
- Authority: AS 44.33.765; AS 44.33.770
- Eff. 1/19/93, Register 125
3 AAC 170.080 Interest rate
Until October 1, 1993, the interest rate applicable to the participation interest in a loan which the division purchases under 3 AAC 170.030 must be seven percent per annum. After October 1, 1993, the interest rate applicable to the participation interest in a loan which the division purchases under 3 AAC 170.030 must be a fixed rate of interest equal to one percent per annum above the prime rate of interest published in The Wall Street Journal on the Friday before the date the division signs a commitment letter to purchase a participation interest in the loan under 3 AAC 170.030(a), except that in no event may the interest rate be less than six percent per annum. The rate of interest applicable to the portion of the loan not purchased by the division under 19 AAC 70.030 is set by the eligible lender but may not exceed a market rate determined by the division at the time the division signs a commitment letter under 3 AAC 170.130(a). The eligible lender may determine whether to calculate interest on the basis of a 365-day year and the actual number of days elapsed or on the basis of a 360-day year consisting of twelve 30-day months or on any other basis conventionally used in the banking industry.
History
- Authority: AS 44.33.765; AS 44.33.770
- Eff. 1/19/93, Register 125
3 AAC 170.090 Servicing agreement
Before the division purchases a participation interest in a loan under 3 AAC 170.030, the division will enter into a servicing agreement with the eligible lender. The servicing agreement will include
(1) an agreement by the eligible lender that the eligible lender will provide all servicing for the loan;
(2) provisions establishing methods for the collection of delinquent payments of principal and interest and provisions relating to foreclosure and enforcement of other security rights and relating to audits that may be required by the division;
(3) provisions relating to periodic reports to be filed with the division by the eligible lender and relating to reports of inspections and other information relating to the financial condition of each borrower who is in default;
(4) agreements by the eligible lender to service the loan in accordance with accepted business practices, including prompt collection of amounts due under the loan;
(5) provisions relating to forms of deed of trust and other security documents that are acceptable to the division;
(6) provisions relating to servicing fees that may be charged by the eligible lender;
(7) provisions relating to the payment of late fees to the division;
(8) provisions permitting the division to terminate the servicing agreement with the eligible lender for failure to properly perform under the servicing agreement by the eligible lender;
(9) provisions prohibiting the eligible lender from selling or otherwise disposing of an interest in a loan without prior notice to and approval of the division; and
(10) provisions requiring the eligible lender to collect and deliver to the division an assumption fee equal to one-half percent of the outstanding balance of the loan at the time of any assumption or modification permitted under 3 AAC 170.120.
History
- Authority: AS 44.33.765; AS 44.33.770
- Eff. 1/19/93, Register 125
3 AAC 170.100 Collateral
A loan in which the division will purchase a participation interest under 3 AAC 170.030 must be secured by collateral determined to be adequate by the division. The division will determine whether the collateral offered is adequate based upon the credit history of the borrower, the size of the loan, and other factors considered relevant by the division. In the division's discretion, acceptable collateral may include a deed of trust on real estate, a security interest in personal property, a guarantee from a person other than the borrower, or other forms of collateral.
History
- Authority: AS 44.33.765; AS 44.33.770
- Eff. 1/19/93, Register 125
3 AAC 170.110 General terms of loans
A loan in which the division will purchase a participation interest under 3 AAC 170.030 must mature within the period of time, and contain amortization terms, reasonable in the determination of the division for the size and type of loan involved. The division will consider an amortization schedule that provides for equal monthly payments through the term of the loan to be reasonable. The loan must be fully repaid within the following periods:
(1) for a loan to be used for working capital, five years from the date that the loan is made;
(2) for a loan to be used to acquire property other than real property, the earlier of
(A) 15 years from the date the loan is made; or
(B) the date that represents 75 percent of the reasonably expected economic life of the property from the date the loan is made as determined by the division; and
(3) for a loan to be used to acquire, improve, or construct real property, the earlier of
(A) 20 years from the date the loan is made; or
(B) the date that represents 75 percent of the reasonably expected economic life of the real property or improvement from the date the loan is made as determined by the division.
History
- Authority: AS 44.33.765; AS 44.33.770
- Eff. 1/19/93, Register 125
3 AAC 170.120 Assumptions and modifications
(a) A loan in which the division has purchased a participation under 3 AAC 170.030 may be assumed if the person assuming the loan would be eligible for a loan under 3 AAC 170.050.
(b) The division will consent to a modification of the terms of a loan in which the division has purchased a participation interest under 3 AAC 170.030 if the borrower and the eligible lender submit to the division a written application for the modification and if the division determines based upon the information available to it that the modification is necessary to either prevent a default or to further the purposes of the fund or to protect the interests of the state.
History
- Authority: AS 44.33.765; AS 44.33.770
- Eff. 1/19/93, Register 125
3 AAC 170.130 Loan application review and appeal
(a) Upon receipt of an application under 3 AAC 170.030, the division will form a loan committee of one or more persons which may consist of employees of the division or persons selected for their expertise in commercial financing from outside the division. The loan committee will review the application and will make a recommendation to the division director whether the requirements of this chapter have been met with respect to the loan. If the division director determines that the requirements of this chapter have been met, the division will enter into a commitment to purchase the participation interest in the loan from available money in the fund.
(b) If the division director determines that the requirements of this chapter have not been met, the division will decline the application. Within 15 days after receipt of notice of the decision denying the loan, the lender may appeal the decision to the commissioner. The appeal must be in writing. Within 30 days of receipt of an appeal of a decision, the commissioner will review the application and any supplemental material and will notify the lender of the final determination affirming, reversing or modifying the decision and the reasons for the final determination. If the lender fails to file an appeal within 15 days after receipt of the division director's decision, the division director's decision constitutes the final determination of the department.
History
- Authority: AS 44.33.765; AS 44.33.770
- Eff. 1/19/93, Register 125; am 6/13/93, Register 126
3 AAC 170.140 Confidentiality of information
(a) The following information is not confidential and is available for public inspection upon request:
(1) a document that is already a public record;
(2) general information regarding loans, including the original loan amount, loan terms, personal guarantees, and disbursement and repayment schedules;
(3) insurance matters, including title insurance policies and correspondence with insurance companies and borrowers regarding losses, accident reports, and nonpayment of premiums; and
(4) foreclosure and default proceedings.
(b) The following information is confidential and is not subject to public disclosure:
(1) personal and financial information, including income tax returns, financial statements, business income statements, pro forma profit and loss statements, credit information obtained directly from banks and other creditors, and reports obtained from consumer reporting agencies;
(2) loan committee memoranda and minutes containing information relating to creditworthiness of an applicant; and
(3) payment history on a loan, unless the loan is in default.
(c) Information not described in (b) of this section may be subject to public disclosure. Requests for disclosure must be made, and will be determined, in accordance with 2 AAC 96. Upon receipt of a request for disclosure, the division will notify the loan applicant and other persons with a privacy interest in the request to permit them to present reasons why the requested information should not be disclosed.
History
- Authority: Alaska Const. Art. I,AS 40.25.110; AS 44.33.765 sec. 22AS 40.25.120; AS 44.33.770
- Eff. 1/19/93, Register 125
3 AAC 170.900 Definitions
In this chapter
(1) "division" means the division assigned to administer this chapter in the Department of Commerce, Community, and Economic Development;
(2) "eligible lender" means a lender that is eligible under 3 AAC 170.060;
(3) "eligible loan" means a loan that is eligible under 3 AAC 170.050;
(4) "fund" means the rural development initiative fund;
(5) "guaranteed loan" means a loan that is guaranteed by the Alaska Industrial Development and Export Authority as described in 3 AAC 170.040;
(6) "guaranteed portion" means the portion of a loan that is guaranteed by the Alaska Industrial Development and Export Authority as described in 3 AAC 170.040;
(7) "participation interest" means a percentage of the principal amount of a loan that includes the right to receive interest on that principal amount and other rights applicable to the ownership of a loan;
(8) "reserve account" means a reserve account established under 3 AAC 170.040;
(9) "commissioner" means the commissioner of the Department of Commerce, Community, and Economic Development;
(10) "community" means a community as defined in 3 AAC 110.920 and 3 AAC 110.990(4).
History
- Authority: AS 44.33.765; AS 44.33.770
- Eff. 1/19/93, Register 125; am 6/13/93, Register 126
Chapter 175 Temporary Fiscal Relief for Municipalities, Unincorporated Communities and Volunteer Fire Departments Serving an Area Not in an Organized Municipality
3 AAC 175.010 Applicability
Repealed.
History
- Eff. 6/16/2003, Register 167; repealed 3/14/2012, Register 201
3 AAC 175.020 Eligibility requirements
Repealed.
History
- Eff. 6/16/2003, Register 167; repealed 3/14/2012, Register 201
3 AAC 175.030 Calculation of temporary relief allocations
Repealed.
History
- Eff. 6/16/2003, Register 167; am 9/26/2003, Register 167; repealed 3/14/2012, Register 201
3 AAC 175.040 Department determination and distribution of money
Repealed.
History
- Eff. 6/16/2003, Register 167; repealed 3/14/2012, Register 201
3 AAC 175.050 Use of money
Repealed.
History
- Eff. 6/16/2003, Register 167; repealed 3/14/2012, Register 201
3 AAC 175.060 Reconsideration process
Repealed.
History
- Eff. 6/16/2003, Register 167; repealed 3/14/2012, Register 201
3 AAC 175.900 Definitions
Repealed.
History
- Eff. 6/16/2003, Register 167; repealed 3/14/2012, Register 201
Chapter 176 Community Energy Assistance
Article 1 Small Municipal Energy Assistance
3 AAC 176.010 Applicability
Repealed.
History
- Eff. 4/11/2005, Register 174; am 7/6/2006, Register 179; repealed 3/14/2012, Register 201
3 AAC 176.020 Eligibility requirements
Repealed.
History
- Eff. 4/11/2005, Register 174; repealed 3/14/2012, Register 201
3 AAC 176.030 Calculation of energy assistance grants
Repealed.
History
- Eff. 4/11/2005, Register 174; repealed 3/14/2012, Register 201
3 AAC 176.040 Department distribution of grant money
Repealed.
History
- Eff. 4/11/2005, Register 174; repealed 3/14/2012, Register 201
3 AAC 176.050 Use of grant money
Repealed.
History
- Eff. 4/11/2005, Register 174; am 7/6/2006, Register 179; repealed 3/14/2012, Register 201
3 AAC 176.060 Documentation required for payment of grant money
Repealed.
History
- Eff. 4/11/2005, Register 174; repealed 3/14/2012, Register 201
Article 2 Community Energy Assistance
3 AAC 176.110 Applicability
Repealed.
History
- Eff. 7/6/2006, Register 179; am 7/31/2007, Register 183; repealed 3/14/2012, Register 201
3 AAC 176.120 Eligibility requirements for municipalities
Repealed.
History
- Eff. 7/6/2006, Register 179; am 7/31/2007, Register 183; repealed 3/14/2012, Register 201
3 AAC 176.125 Eligibility requirements for unincorporated communities
Repealed.
History
- Eff. 7/31/2007, Register 183; repealed 3/14/2012, Register 201
3 AAC 176.130 Calculation of energy assistance grants
Repealed.
History
- Eff. 7/6/2006, Register 179; am 7/31/2007, Register 183; repealed 3/14/2012, Register 201
3 AAC 176.140 Department distribution of grant money
Repealed.
History
- Eff. 7/6/2006, Register 179; repealed 3/14/2012, Register 201
3 AAC 176.150 Use of grant money
Repealed.
History
- Eff. 7/6/2006, Register 179; am 7/31/2007, Register 183; repealed 3/14/2012, Register 201
3 AAC 176.160 Waiver of sovereign immunity
Repealed.
History
- Eff. 7/31/2007, Register 183; repealed 3/14/2012, Register 201
Article 3 General Provisions
3 AAC 176.900 Definitions
Repealed.
History
- Eff. 4/11/2005, Register 174; am 7/31/2007, Register 183; repealed 3/14/2012, Register 201
Chapter 180 Community Assistance Program
3 AAC 180.010 Application for community assistance payments
(a) To receive a community assistance payment under AS 29.60.850 - 29.60.879, a municipality, reserve, or community must certify and agree, on a form provided by the department,
(1) that the municipality, reserve, or community is in compliance with AS 29.60.850 - 29.60.879 and this chapter;
(2) to use a payment received under AS 29.60.855 and 29.60.860 only for a public purpose as required under AS 29.60.850(a);
(3) to make a service or facility provided with a payment received under AS 29.60.855 and 29.60.860 available to every person in the community regardless of race, religion, color, national origin, age, physical or mental disability, sex, marital status, changes in marital status, pregnancy, parenthood, or political affiliation; and
(4) to maintain, as required under this paragraph, all accounting records, receipts, invoices, and other documents related to the receipt and expenditure of a payment under AS 29.60.855 and 29.60.860, including all documents that record the activities that occurred through the use of the payment; if the payment is for a community, the village council or incorporated nonprofit entity that agrees to receive the payment for the community must agree to maintain documents as required under this paragraph; the documents must be maintained
(A) for at least three years after the date when the department distributes a payment under AS 29.60.855 and 29.60.860 each year to the municipality or reserve or to the village council or incorporated nonprofit entity for a community; and
(B) for longer than three years and until the matter is fully resolved, if the municipality or reserve, or the village council or incorporated nonprofit entity for a community, has an unresolved audit finding, questioned costs, litigation, or a grievance at the end of the three-year period.
(b) In addition to making the certification and agreement on the form provided under (a) of this section, a borough or unified municipality that will receive community assistance payments on behalf of communities in the borough or unified municipality must
(1) submit to the department a resolution adopted by the assembly that clearly identifies
(A) the communities that the borough or unified municipality has determined meet the eligibility criteria under AS 29.60.865, 29.60.879, and 3 AAC 180.110; and
(B) the village council or incorporated nonprofit entity located within each community listed under (A) of this paragraph that the borough or unified municipality has approved as the recipient of the community assistance payment; and
(2) certify that at least three of the services required under AS 29.60.865(c) are generally available to all residents of the community.
(c) In addition to making the certification and agreement on the form provided under (a) of this section and receiving any identification required under (b) of this section, a reserve or village council must submit to the department a waiver of sovereign immunity in accordance with AS 29.60.865(a) and 3 AAC 180.130.
(d) The department will not issue a community assistance payment to an entity until the department has received the entity's statement of expenditures of the prior year's community assistance payment, the community assistance program budget form for the current year's application, and all documents required under this section and 3 AAC 180.020.
(e) To administer more efficiently the community assistance payment program under AS 29.60.850 - 29.60.879 and this chapter, and to reduce the costs associated with its administration, the department will use electronic mail and electronic filing to the maximum degree possible. An applicant may submit the form and documents required under this section to the department by means of electronic mail received not later than 4:30 p.m. on June 1 or regular mail postmarked not later than June 1, for community assistance payments to be distributed the following state fiscal year.
History
- Authority: AS 29.60.850; AS 29.60.860; AS 44.33.020 AS 29.60.855; AS 29.60.865
- Eff. 5/15/2008, Register 186; am 10/8/2008, Register 188; em am 3/10/2011 - 7/7/2011, Register 198; am 12/22/2017, Register 224
3 AAC 180.020 Reports to the department by municipalities
In addition to meeting the requirements of 3 AAC 180.110 that apply to a municipality, and before the department makes a community assistance payment to a municipality, the municipality must submit
(1) maps and descriptions of all annexed or detached territory as required under AS 29.20.640(a)(1);
(2) if the municipality is a borough, unified municipality, or first class city, a copy of the annual audit reviewed by a certified public accountant licensed under AS 08.04, as required under AS 29.20.640(a)(2);
(3) if the municipality is a second class city and is required under state or federal law to submit an audit, a copy of that audit reviewed by a certified public accountant licensed under AS 08.04, as required under AS 29.20.640(a)(2); otherwise, a second class city must submit a statement of annual income and expenditures approved by the governing body, as required under AS 29.20.640(a)(2);
(4) tax assessment and tax levy figures for the most recently completed annual budget cycle as required under AS 29.20.640(a)(3);
(5) a copy of the current annual budget of the municipality as required under AS 29.20.640(a)(4);
(6) as required under AS 29.20.640(a)(5), a summary of the optional property tax exemptions authorized together with the estimate of the revenues lost to the municipality by operation of each of the exemptions; and
(7) a copy of the taxpayer notices required under AS 29.45.020 and 29.45.660.
History
- Authority: AS 29.20.640; AS 29.45.660; AS 29.60.865 AS 29.45.020; AS 29.60.850; AS 44.33.020
- Eff. 5/15/2008, Register 186; am 10/8/2008, Register 188; am 12/22/2017, Register 224
3 AAC 180.030 Population determination
(a) For purposes of community assistance per capita payments to municipalities, reserves, and communities under AS 29.60.860, the director shall annually determine the permanent resident population of the previous calendar year for each municipality, reserve, and community in the state. No later than January 15 of each calendar year, the director shall mail to each municipality, reserve, and community the determination of the municipality's previous calendar year population.
(b) The determination under (a) of this section must be based upon the following census or estimate that indicates the most recent population of the municipality, reserve, or community:
(1) a census of the United States Bureau of the Census;
(2) a head count census conducted in accordance with 3 AAC 180.040(c) by the municipality or reserve, or by the village council or incorporated nonprofit entity for a community;
(3) a housing unit method population estimate conducted in accordance with 3 AAC 180.040(d) by the municipality or reserve, or by the village council or incorporated nonprofit entity for a community;
(4) an estimate by the Department of Labor and Workforce Development.
(c) If there is a conflict between or among the population results, for the same calendar year, of a census or a population estimate listed in (b) of this section, the order of precedence for determination of population is the order in which the censuses and population estimates are listed in (b) of this section.
(d) When a city is within a borough, a head count census or housing unit method population estimate conducted by the borough may be used to determine the population of the city. For the purposes of (c) of this section, a head count census or housing unit population estimate conducted by the borough within which the city is located takes precedence over an estimate by the Department of Labor and Workforce Development.
(e) If a population determination under this section for a city within a borough conflicts with the population for that city indicated in a head count census or housing unit population estimate upon which a population determination for the borough is based, the conflict is automatically appealed to the commissioner. Both municipalities are parties to the appeal.
History
- Authority: AS 29.60.860; AS 44.33.020
- Eff. 5/15/2008, Register 186; am 10/8/2008, Register 188; em am 3/10/2011 - 7/7/2011, Register 198; am 12/22/2017, Register 224
3 AAC 180.040 Request for adjustment of population determination
(a) A municipality or reserve, or the village council or incorporated nonprofit entity for a community, may request an adjustment of the population determination under 3 AAC 180.030 for the municipality, reserve, or community by submitting a written request to the director, postmarked no later than April 1 of the calendar year. If a municipality or reserve, or the village council or incorporated nonprofit entity for a community, requests an adjustment under this section, the municipality, reserve, village council, or incorporated nonprofit entity shall substantiate the requested adjustment with
(1) a head count census conducted by the municipality, reserve, village council, or incorporated nonprofit entity in accordance with (c) of this section; or
(2) a housing unit method population estimate conducted by the municipality, reserve, village council, or incorporated nonprofit entity in accordance with (d) of this section.
(b) If a request under (a) of this section is postmarked after April 1 of the calendar year, the director shall deny the request as being untimely filed. An appeal to the commissioner regarding that denial, submitted in accordance with 3 AAC 180.050, will be accepted if the applicant shows good cause for missing the postmark deadline.
(c) For the purposes of (a)(1) of this section, a head count census must be conducted in a manner satisfactory to the division. The division shall validate the census in accordance with the standard census definitions and procedures specified by the division. The municipality, reserve, village council, or incorporated nonprofit entity shall bear the expense of the census. The governing body of the municipality or reserve, or the governing body of a village council or incorporated nonprofit entity for a community, must
(1) pass a resolution adopting the results of the census; and
(2) provide a copy of the resolution with the census results to the division.
(d) For the purposes of (a)(2) of this section, a housing unit population estimate must be conducted in a manner satisfactory to the division. The division shall validate the estimate in accordance with standard census definitions and procedures specified by the division. The municipality, reserve, village council, or incorporated nonprofit entity shall bear the expense of the estimate. The governing body of the municipality or reserve, or the governing body of a village council or incorporated nonprofit entity for a community, must
(1) pass a resolution adopting the results of the estimate; and
(2) provide a copy of the resolution with the estimate results to the division.
(e) A municipality, reserve, village council, or incorporated nonprofit entity shall, upon request of the director, furnish available information and provide assistance requested by the director necessary to make a determination to grant or deny a request for adjustment under (a) of this section. The director may prescribe forms containing procedures for reporting the information.
(f) The director shall, in writing, grant or deny a request for adjustment within 10 days after receipt of the request. The director's response shall include the reason for granting or denying the request for adjustment, and a determination of the population determination based upon the director's decision to grant or deny the request.
History
- Authority: AS 29.60.860; AS 44.33.020
- Eff. 5/15/2008, Register 186; am 10/8/2008, Register 188; em am 3/10/2011 - 7/7/2011, Register 198; am 12/22/2017, Register 224
3 AAC 180.050 Appeal of population determination to the commissioner
(a) A municipality, reserve, village council, or incorporated nonprofit entity may appeal to the commissioner a decision of the director made under 3 AAC 180.040. The appeal must be in writing and must be postmarked within 10 days after the municipality, reserve, village council, or incorporated nonprofit entity received the written decision of the director. The appeal must include relevant evidence in support of the claim.
(b) No later than 10 days after receipt of the appeal, the commissioner will render a decision on the appeal. Immediately following the commissioner's decision, written notification, containing a statement of the decision and the reasons for it, will be sent to the municipality, reserve, village council, or incorporated nonprofit entity.
(c) The commissioner's decision of an appeal is final.
(d) After deciding all appeals made under this section, the commissioner will certify a final population report on or before June 1 of that calendar year.
History
- Authority: AS 29.60.860; AS 44.33.020
- Eff. 5/15/2008, Register 186; em am 3/10/2011 - 7/7/2011, Register 198; am 12/22/2017, Register 224
3 AAC 180.060 Standards for payment to communities located in the unorganized borough
Repealed.
History
- Eff. 5/15/2008, Register 186; am 10/8/2008, Register 188; repealed 12/22/2017, Register 224
3 AAC 180.065 Standards for payment to reserves
Repealed.
History
- Eff. 10/8/2008, Register 188; repealed 12/22/2017, Register 224
3 AAC 180.070 Standards for payment on behalf of communities located within boroughs and unified municipalities
Repealed.
History
- Eff. 5/15/2008, Register 186; am 10/8/2008, Register 188; repealed 12/22/2017, Register 224
3 AAC 180.080 Determination of most qualified entity
If there is more than one qualified entity within a community in the unorganized borough that will agree to receive and spend the community assistance payment under AS 29.60.865, the department shall determine which entity is to receive the payment. In making this determination, the department shall consider factors relevant to achieving the public purpose of the payment, including
(1) the administrative capability of each village council or incorporated nonprofit entity, including past performance on any previous grant awards, bulk fuel loans under AS 42.45.250 - 42.45.299, or any other financial aid provided by the state or federal government;
(2) for each incorporated nonprofit entity, whether the entity has articles of incorporation and a certificate of incorporation in good standing under AS 10.20;
(3) the ability of each village council or incorporated nonprofit entity to manage its debt and other finances, including whether amounts due to the United States Internal Revenue Service are timely paid;
(4) the degree to which each village council or incorporated nonprofit entity is representative of the community; and
(5) the purpose for which each village council or incorporated nonprofit entity intends to spend the community assistance payment.
History
- Authority: AS 29.60.865; AS 44.33.020
- Eff. 5/15/2008, Register 186; am 10/8/2008, Register 188; am 12/22/2017, Register 224
3 AAC 180.090 Incorporation or dissolution of a municipality
(a) A municipality that incorporates on or before June 30 of a state fiscal year is eligible to receive a community assistance payment under AS 29.60.855 and 29.60.860 the following state fiscal year.
(b) A qualified entity under AS 29.60.865(a) located within a city in the unorganized borough may receive a community assistance payment under AS 29.60.855 and 29.60.860 if
(1) the city has not qualified for a community assistance payment under AS 29.60.855 and 29.60.860 for two consecutive state fiscal years; and
(2) a petition has been submitted under AS 29.06.460 to the Local Boundary Commission to initiate dissolution of the city.
(c) Payment may not be made under (b) of this section for more than two state fiscal years.
History
- Authority: AS 29.60.855; AS 29.60.860; AS 44.33.020
- Eff. 5/15/2008, Register 186; am 10/8/2008, Register 188; am 12/22/2017, Register 224
3 AAC 180.100 Waiver for good cause
The department may waive a deadline in this chapter if the department determines there was good cause for missing the deadline and that a waiver will not unreasonably disrupt the process of administering the program under this chapter.
History
- Authority: AS 29.60.855; AS 29.60.860; AS 44.33.020
- Eff. 5/15/2008, Register 186; am 10/8/2008, Register 188; am 12/22/2017, Register 224
3 AAC 180.110 Determination of social unit
(a) A community under AS 29.60.879 is a social unit if
(1) the persons residing in that area are a discrete and identifiable unit based on evidence of
(A) school enrollment;
(B) sources of employment;
(C) voter registration;
(D) permanency of dwelling units; or
(E) presence of a commercial establishment; and
(2) the geographic area in which the persons reside is proportionate in size to that number of persons; in determining whether this standard has been met, the department may consider the physical topography of the area, the use of the land, land ownership patterns, and other factors that could affect population density; an area with a population density of at least 14 persons per square mile is considered to have met this standard.
(b) Individuals residing in one or more of the following places are not a social unit under AS 29.60.879:
(1) a place where public access or the right to reside at the location is restricted;
(2) a place that is contiguous to a city and is dependent upon the city to the extent that it exists only because the city exists;
(3) a place provided by an employer that is populated primarily by persons who are required to reside there as a condition of their employment.
History
- Authority: AS 29.60.865; AS 29.60.879; AS 44.33.020
- Eff. 5/15/2008, Register 186; am 10/8/2008, Register 188; am 12/22/2017, Register 224
3 AAC 180.120 Preliminary and final payments
(a) Upon a finding by the department that it is in the state's best interest, the department may make preliminary community assistance payments to eligible municipalities, communities, and reserves. The amount of the preliminary payment equals the sum of the basic payment calculated under AS 29.60.855.
(b) Immediately after identifying and verifying all information necessary to calculate final community assistance payments, the department will calculate and distribute final payments to all eligible municipalities, communities, and reserves. The amount of the final payment for each eligible municipality, community, and reserve equals the difference between the amount of the total payments calculated under AS 29.60.855 and 29.60.860 and the amount distributed under (a) of this section.
History
- Authority: AS 29.60.855; AS 29.60.860; AS 44.33.020
- Eff. 5/15/2008, Register 186; am 10/8/2008, Register 188; am 12/22/2017, Register 224
3 AAC 180.130 Waiver of sovereign immunity
The department will not make a community assistance payment under AS 29.60.855 and 29.60.860 to a village council or reserve unless the department receives, on a form approved by the Department of Law, a waiver of sovereign immunity from suit adopted by the governing body for claims related to the payment.
History
- Authority: AS 29.60.855; AS 29.60.865 AS 29.60.860; AS 44.33.020
- Eff. 5/15/2008, Register 186; am 10/8/2008, Register 188; am 12/22/2017, Register 224
3 AAC 180.140 Overpayment, adjustment, and assignment
(a) If the amount that an entity receives under this chapter exceeds the amount that the entity is entitled to receive under AS 29.60.855 and 29.60.860, the department will either request the entity to return the excess to the state or will reduce the entity's payment for the next distribution by the difference between the amount received and the amount that the entity was entitled to receive.
(b) If the department determines that it is in the best interests of the state and the entity involved, the department may extend the adjustment period over three years.
(c) The commissioner may waive the return of the overpayment if
(1) the entity reasonably and in good faith relied upon the department's determination of the entity's payment; and
(2) the reason for the overpayment was all or in substantial part departmental error.
(d) If a loss of services essential to the public health and safety is imminent, an entity receiving community assistance payments may assign any portion of the current year program payment directly to a third party approved by the commissioner.
History
- Authority: AS 29.60.855; AS 29.60.860; AS 44.33.020
- Eff. 5/15/2008, Register 186; am 10/8/2008, Register 188; am 12/22/2017, Register 224
3 AAC 180.900 Definitions
In this chapter, unless the context requires otherwise,
(1) "commissioner" means the commissioner of commerce, community, and economic development;
(2) "community" has the meaning given in AS 29.60.879;
(3) "department" means the Department of Commerce, Community, and Economic Development;
(4) "director" means the director of the departmental division responsible for community and regional affairs;
(5) "division" means the departmental division responsible for community and regional affairs;
(6) "entity" means a municipality, reserve, community, village council, or incorporated nonprofit entity;
(7) "governing body" means
(A) the assembly or council for a municipality;
(B) the council for a reserve defined in AS 29.60.879;
(C) the council for a Native village council; or
(D) the board of directors for an incorporated nonprofit entity;
(8) "municipality" has the meaning given in AS 29.71.800;
(9) "permanent resident" means a person whose primary place of residence is within the corporate limits of a municipality or community;
(10) "primary place of residence" means the place where a person sleeps on a weekly basis; if a person has more than one residence, "primary place of residence" means the place where the person sleeps more often during the calendar year;
(11) "public purpose" means a purpose the objective of which is to promote the public health, safety, and general welfare of the residents of a municipality, community, or reserve in the state;
(12) "village council" means
(A) a council organized under 25 U.S.C. 476 (sec. 16 of the Indian Reorganization Act);
(B) a traditional village council recognized by the United States as eligible for federal aid to Indians; or
(C) a council recognized by the commissioner under 3 AAC 190.110 - 3 AAC 190.150.
History
- Authority: AS 29.60.850; AS 29.60.860; AS 29.60.879 AS 29.60.855; AS 29.60.865; AS 44.33.020
- Eff. 5/15/2008, Register 186; am 10/8/2008, Register 188; am 12/22/2017, Register 224
Chapter 188 Alaska Film Production Incentive Program
3 AAC 188.010 Applicability
This chapter applies to applications for
(1) a notice of qualification under AS 44.33.234 for a film production tax credit; and
(2) the award of, and the calculation of an amount for, a film production tax credit by the film office under AS 44.33.235, for purposes of issuance of a transferable tax credit certificate by the Department of Revenue under AS 43.98.030.
History
- Authority: AS 44.33.231; AS 44.33.234; AS 44.33.238 AS 44.33.232; AS 44.33.235
- Eff. 6/18/2009, Register 190
3 AAC 188.020 Eligibility
(a) To satisfy the minimum qualified expenditure requirement of AS 44.33.233(a)(1) for a film production tax credit, a producer must incur at least $100,000 in qualified expenditures during production of a single film, video, television program, or commercial. Multiple episodes of a television series that will air during one television season and multiple music videos marketed together as one product may be aggregated to qualify as a single television program or video.
(b) When calculating the 24-month qualification period of AS 44.33.233(a)(1), the period begins on the date on which the film office issues the notice of qualification to the producer or on the date agreed upon by the film office and the producer.
(c) The exclusion under AS 44.33.233(c)(1) of news, weather, or current events programming from eligibility
(1) applies to an ongoing television program created primarily to present news, weather, or current events; and
(2) does not apply if a film, video, or television program is a documentary.
History
- Authority: AS 44.33.233; AS 44.33.238
- Eff. 6/18/2009, Register 190
3 AAC 188.030 Qualification application process
(a) The following restrictions apply to film producers applying for qualification under AS 44.33.234:
(1) only one producer per production is eligible for qualification;
(2) only one project is permissible for each application except for
(A) a television series in which one season counts as one project if it is completed within a 24-month period; or
(B) multiple music videos that are marketed together as one product.
(b) The film office will review complete qualification applications in the order that they are received. The film office will determine the order by the date-and-time stamp placed on the complete application on the day it is received into the film office. The priority for reviewing an incomplete application will be determined by the date-and-time stamp placed on the envelope containing the documents or materials needed to make the application complete.
(c) If an application is complete and accompanied by all required materials, the film office will notify the producer by electronic mail that the film office has received the application. The film office will send the notice by United States mail if requested to do so by the producer.
(d) If the application is incomplete or is not accompanied by all required materials, the film office will notify the producer by electronic mail that the application requires additional information, materials, or documentation. The film office will send the notice by United States mail if requested to do so by the producer.
(e) If the film office receives a complete application package for a production that does not qualify under AS 44.33.234, the film office will notify the producer by electronic mail that the film production does not qualify for the tax credit with an explanation why it does not qualify. The film office will send the notice by United States mail if requested to do so by the producer.
(f) A producer who is notified by the film office that a project does not qualify for the tax credit may reapply. However, the film office will treat reapplication as a new application for purposes of (b) of this section.
(g) After the film office approves a qualification application, it will issue a notice of qualification to the producer that sets out the estimated amount of the film production tax credit and the period during which the producer may incur expenditures for which the producer may claim a credit.
(h) A producer who is denied a notice of qualification may request an administrative hearing by filing a notice of appeal within 30 days after the date of the denial notice. The notice of appeal must be in writing and will be considered filed on the date it is received by the film office. The notice of appeal must clearly state each objection to the denial, the justification for each objection, and the reasons why the applicant is entitled to a notice of qualification under AS 44.33.234 and this chapter. Appeals will be referred to the office of administrative hearings. A hearing will be conducted under AS 44.64.060(c) - (e) and 2 AAC 64.100 - 2 AAC 64.370.
(i) When the amount of the notices of qualification and tax credit certificates issued equals the $100,000,000 in-the-aggregate limit established in AS 43.98.030, the film office will cease to issue notices of qualification.
History
- Authority: AS 44.33.234; AS 44.33.238
- Eff. 6/18/2009, Register 190
3 AAC 188.040 Qualified expenditures
(a) For purposes of AS 44.33.236(a),
(1) an expenditure for real property, tangible personal property, or services is ordinary and reasonable if it is
(A) necessary and non-extravagant; and
(B) common and accepted in the producer's trade or business; and
(2) an expenditure is directly related to the production if it is for the direct costs of the actual production that would not have been incurred independent of the production.
(b) If tangible personal property is purchased, leased, or rented for direct use in the state in a film production for which a notice of qualification has been issued under AS 44.33.234(b), and if the producer does not return, dispose of, or sell the property as of the completion of its use in the film production,
(1) only a portion of the depreciation expense will be allowed for the property;
(2) the allowable depreciation expense is an amount equal to the portion of the depreciation expense attributable to direct use of the property in the state in the film production; and
(3) the allowable depreciation expense will be calculated using class life categories under the federal depreciation rules as identified in United States Internal Revenue Service, Revenue Procedure 87-56, 1987-42 I.R.B. 4, 1987-2 C.B. 674, as modified by Revenue Procedure 88-22, 1988-18 I.R.B. 38, 1988-1 C.B. 785 and adopted by reference; the cost of tangible personal property is divided by the applicable class life category to determine an annual expense; the resulting figure for annual expense is multiplied by the ratio of the number of days in the state that the tangible personal property was in qualified use in the production over 365; the resulting amount is the allowable depreciation expense.
(c) The purchase price of a screenplay is a qualified expenditure if
(1) payment for the screenplay is made during the 24-month period set out in AS 44.33.233(a)(1), as that period is determined under 3 AAC 188.020(b);
(2) the writer is an Alaska business; and
(3) the full rights of the screenplay have been transferred to the producer, and the writer cannot sell the same screenplay to another buyer.
(d) Only a qualified expenditure that is incurred during the 24-month period set out in AS 44.33.233(a)(1), as that period is determined under 3 AAC 188.020(b), will be considered in determining whether the producer has met the $100,000 minimum in AS 44.33.233(a)(1), and in determining the amount of a tax credit.
(e) In addition to costs excluded under AS 44.33.236(b), the following production costs will not be considered qualified expenditures:
(1) 50 percent of interstate travel and shipping costs;
(2) intellectual property rights, including usage rights, archival material costs, fees for stock footage, and costs for licensing.
(f) For purposes of the additional two percent credit under AS 44.33.235(c)(2), qualified expenditures will be considered to have been made in a rural area if they are for
(1) services provided in a rural area;
(2) the purchase or use of real property located in a rural area; or
(3) tangible personal property purchased, leased, or rented in a rural area from an Alaska business that maintains a year-round physical presence in that rural area.
(g) For purposes of the additional two percent credit under AS 44.33.235(c)(3), qualified expenditures will be considered to have been made in the state between October 1 and March 30 if they are for
(1) services provided during that period; or
(2) real property or tangible personal property purchased, leased, or rented from an Alaska business for use during that period.
History
- Authority: AS 44.33.235; AS 44.33.236; AS 44.33.238
- Eff. 6/18/2009, Register 190
3 AAC 188.050 Award of tax credits
(a) Within 60 days after the end of the 24-month period set out in AS 44.33.233(a)(1), as that period is determined under 3 AAC 188.020(b), the producer must submit an application to the film office, on a form or in a format provided by the film office, for the award of a film production tax credit under AS 44.33.235.
(b) Before the film office makes a determination under AS 44.33.235 with respect to the award of a film production tax credit, the producer must submit a rough assembly of the film to the film office for review. The film office will refuse to award the producer a tax credit if the rough assembly of the film does not bear a reasonable resemblance to what was proposed in the documents that the producer provided under AS 44.33.234, and if the film production is contrary to the best interests of the state under AS 44.33.233. In this subsection, "rough assembly of the film" means a sequencing of scenes that will eventually be refined into the final cut of the film.
(c) The verification of qualified expenditures required under AS 44.33.235(d) must be prepared by a certified public accountant who
(1) holds a current license issued under AS 08.04 by the Board of Public Accountancy;
(2) holds a current business license issued under AS 43.70; and
(3) is an independent third party, not related to the producer or involved in any way with the production.
(d) A producer may apply under AS 44.33.235 for a tax credit that exceeds the estimated film production tax credit provided in the notice of qualification issued for the production under AS 44.33.234. The film office will grant a larger tax credit if
(1) all the expenditures claimed by the producer
(A) are qualified expenditures under AS 44.33.236 and this chapter; and
(B) were incurred during the 24-month period set out in AS 44.33.233(a)(1), as that period is determined under 3 AAC 188.020(b); and
(2) at the time the determination is made, the sum of the following amounts does not exceed the $100,000,000 in-the-aggregate limit established in AS 43.98.030:
(A) the total amount of the tax credits estimated for all producers in outstanding notices of qualification issued under AS 44.33.234(b);
(B) the total amount of tax credits already provided under AS 43.98.030 to all producers;
(C) the amount of the increase that the producer requests under this subsection.
(e) With the items required by AS 44.33.235(d) and this section, a producer must also submit a sworn certification that the producer and the production have fully complied with all applicable state laws and regulations during the production and have complied with all state permit requirements, that neither the producer nor the production is the subject of an investigation or administrative proceeding concerning alleged violations by the producer or the production of the laws or regulations of this state, and that neither the producer nor the production is involved in a legal action filed in a federal court or a court in this state concerning alleged violations by the producer or the production of the laws or regulations of this state. If the producer or the production, after submission of the sworn certification, becomes the subject of an investigation or administrative proceeding described in this subsection, or becomes involved in a legal action described in this subsection, the producer shall immediately notify the film office. Failure to comply with this subsection may result in a tax credit not being awarded to the producer. If the producer or the production is or becomes the subject of an investigation or administrative proceeding described in this subsection, or is or becomes involved in a legal action described in this subsection, the film office will suspend determination of eligibility for a tax credit pending resolution of that investigation, administrative proceeding, or legal action.
(f) A producer who receives notice from the film office that it will not award all the tax credits for which the producer applied may request an administrative hearing by filing a notice of appeal within 30 days after the date of the denial notice. The notice of appeal must be in writing and will be considered filed on the date it is received by the film office. The notice of appeal must clearly state each objection to the denial, the justification for each objection, and the reasons why the producer is entitled to the amount of the tax credit for which the producer applied. Appeals will be referred to the office of administrative hearings. A hearing will be conducted under AS 44.64.060(c) - (e) and 2 AAC 64.100 - 2 AAC 64.370.
(g) Upon a final determination under AS 44.33.235 on the award and amount of a film production tax credit, the film office will notify the Department of Revenue and request the issuance under AS 43.98.030 of a transferable tax credit certificate in that amount.
(h) If a transferee purchases a film production tax credit certificate in an arm's length transaction, and the department seeks, after the transfer, to recover an amount of the credit under AS 44.33.237, the department will not hold the transferee liable for any portion of the credit that the department seeks to recover, and will seek recovery from the producer to whom the tax credit certificate was originally provided.
History
- Authority: AS 44.33.233; AS 44.33.235; AS 44.33.237 AS 44.33.234; AS 44.33.236; AS 44.33.238
- Eff. 6/18/2009, Register 190
3 AAC 188.060 Alaska film production internship training program
(a) The film office may maintain a list of certified Alaska film production internship training programs and provide the list to producers applying for a film production tax credit.
(b) Organizations eligible to be included on the list are entities that are based in the state and that facilitate learning and career opportunities for residents of the state. These entities may include
(1) a postsecondary educational institution that is accredited by the Northwest Commission on Colleges and Universities, and that offers a program of instruction, training, or study in film, television, or video production at a campus in the state; and
(2) an Alaska business that offers a formal internship training program in film, television, or video production and has worked in one of those fields in each of the five previous years.
History
- Authority: AS 44.33.231; AS 44.33.238
- Eff. 6/18/2009, Register 190
3 AAC 188.990 Definitions
(a) In AS 44.33.236,
(1) "Alaska musician" means a resident of the state who is a musician;
(2) "fees" means amounts charged by the United States, the state, or a municipality for use or access;
(3) "leasing of vehicles" means rentals and leases of vehicles registered in the state.
(b) In AS 44.33.236 and this chapter,
(1) "real property" means land and things permanently attached to the land; "real property" includes trees already attached to the land, buildings, and stationary mobile homes already attached to the land;
(2) "tangible property" or "tangible personal property" means personal property that can be seen or touched; "tangible property" or "tangible personal property" does not include real property.
(c) In AS 44.33.231 - 44.33.239 and this chapter,
(1) "Alaska resident" or "resident" means an individual who meets the residency requirements of AS 01.10.055;
(2) "services" means work performed as an occupation or business by an Alaska business;
(3) "television" means an electronic system of transmitting transient images of fixed or moving objects together with sound over a wire or through space, including over the Internet and via satellite, by apparatus that converts light and sound into electrical waves and reconverts them into visible light rays and audible sound.
(d) In this chapter,
(1) "Alaska business" has the meaning given in AS 44.33.239;
(2) "film office" has the meaning given in AS 44.33.239;
(3) "rural area" has the meaning given in AS 44.33.239.
History
- Authority: AS 44.33.231; AS 44.33.233; AS 44.33.238 AS 44.33.232; AS 44.33.236
- Eff. 6/18/2009, Register 190
Part 17 Community Planning
Chapter 190 Municipal Trust Land
Article 1 Tender, Acceptance, and Conveyance of Municipal Trust Land
3 AAC 190.010 Municipal trust land
All land conveyed to and accepted by the State of Alaska in trust for future cities under sec. 14(c)(3) of the Alaska Native Claims Settlement Act (ANCSA), AS 44.33.755, and this chapter is to be known for so long as it is held by the state in trust as "municipal trust land." Title to municipal trust land will be held in the name of the State of Alaska in trust for any municipal corporation established in and for the village with reference to which the land was conveyed to the state. Municipal trust land will be managed under this chapter and is not considered part of the state public domain. Laws applicable to the management and disposal of state public domain land or to land held by incorporated municipalities do not apply to municipal trust land.
History
- Authority: ANCSA, sec. 14(c)(3)AS 44.17.030; AS 44.33.755
- Eff. 9/21/79, Register 71
3 AAC 190.015 Procedure for tender, acceptance, and conveyance
Land and interests in land will be accepted by the commissioner as municipal trust land in accordance with the following procedure:
(1) A village corporation having an obligation under sec. 14(c)(3) of the Alaska Native Claims Settlement Act to convey land to the State of Alaska in trust for any municipality which might in the future be incorporated in and for the Native village corresponding to that corporation may make one or more written tenders to the commissioner of specifically identified land in satisfaction of that obligation. Where land status circumstances present technical reasons for postponement of a final tender which would fully satisfy the acreage obligation, a tender or tenders which will partially satisfy the obligation are encouraged by the commissioner, especially where certain land needed for public community facilities can be identified for conveyance.
(2) Upon receipt of a written tender, the commissioner will begin consultation and evaluation procedures to determine whether the land tendered should be accepted. If the tender only partially satisfies the sec. 14(c)(3) obligation, the commissioner will accept or reject the tender within 90 days after receipt. If the tender is for complete satisfaction of the sec. 14(c)(3) obligation, the commissioner will accept or reject the tender within 180 days after receipt. The commissioner will, in his or her discretion, extend either deadline with the written concurrence of the village corporation. Before making a determination to accept a tender, the commissioner will consult with the recognized village entity or the village residents, as provided in 3 AAC 190.110 - 3 AAC 190.290. In determining whether to accept the tender, the commissioner will take into account the views expressed by the recognized village entity or the village residents, as provided in 3 AAC 190.110 - 3 AAC 190.290. The commissioner will apply the standards in 3 AAC 190.020 in evaluating the tender. The commissioner will, in his or her discretion, reject a written tender without consultation with the recognized village entity or the village residents upon a determination that the tendered lands are not subject to the provisions of sec. 14(c)(3) of ANCSA.
(3) The commissioner will accept or reject a tender by a written decision. If the determination is not consistent with the views expressed by the recognized village entity or the village residents, under 3 AAC 190.110 - 3 AAC 190.290, then the commissioner's written decision will include a statement of the reasons why those views have not been accepted. The decision will be sent by certified mail, return receipt requested, to the local village corporation and recognized village entity, and published and posted publicly in the manner provided by 3 AAC 190.910, except that the posting period will be at least 30 days. The decision becomes final 30 days after the date of its receipt by the village corporation or the recognized village entity, the date of publication, or the date of posting, whichever date is latest, unless an appeal was timely filed under 3 AAC 190.940.
(4) If the village corporation and either the recognized village entity or the village residents as provided in 3 AAC 190.110 - 3 AAC 190.290, consent in writing, the commissioner will, in his or her discretion, waive the publication and posting requirements of (3) of this section and accept the tender. Such a waiver and immediate acceptance will occur only if a disaster or other emergency has occurred or exists and where an expedited transfer of title to the specific parcel of land is necessary to alleviate a threat to life, property, or the welfare of persons in the village. Under such circumstances, the decision to accept a tender of a specific parcel of land becomes final immediately, without a waiting period.
(5) A document that conveys, or agrees to convey, land, may be executed by the village corporation either before or after the decision to accept the tender becomes final. In either case, the commissioner will inspect the document and will accept delivery of the document upon a determination that it is consistent with the accepted tender and complies with 3 AAC 190.025 or 3 AAC 190.030, as appropriate. The commissioner will accept delivery of the document by written endorsement on the face of the document and will cause it to be recorded promptly under AS 34.15. Unaccepted documents will be returned to the village corporation.
History
- Authority: ANCSA, sec. 14(c)(3)AS 44.17.030; AS 44.33.755(a)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.020 Standards to be applied by commissioner in determining whether to accept tender
In determining whether to accept or reject a tender of land under this chapter, the commissioner will, after consulting with the recognized village entity or with the village residents, as provided in 3 AAC 190.110 - 3 AAC 190.290, and with the borough if the land is located in an organized borough, evaluate the land included in the tender to determine whether its acceptance would be in the best interests of any future city that might be incorporated in respect to the Native village. In making a decision, the commissioner will consider, as a minimum, the following standards and considerations:
(1) whether all tenders of the village corporation collectively include all improved land on which the Native village is located which is subject to reconveyance under sec. 14(c)(3) of ANCSA;
(2) whether all tenders of the village corporation collectively include all land conveyed or to be conveyed to the village corporation under ANCSA which is clearly essential to meet all present or foreseeable public community needs of any first or second class city which might be established in the Native village, including (without limitation) community expansion and appropriate rights-of-way for public use;
(3) whether, considering future land-use patterns which would be created by acceptance of the tendered land, the effect upon community growth and development of accepting that land would not significantly impair the economic viability of the village corporation or deprive it of a reasonable entrepreneurial opportunity;
(4) whether acceptance of the land tendered to the state in trust is consistent with the views of the village residents, as expressed by the recognized village entity or (if applicable) by the village residents in a village meeting resolution or a village referendum;
(5) whether with respect to land which is located within a borough or other municipality having municipal powers, the tenders include all land conveyed or to be conveyed to the village corporation under ANCSA which is clearly essential within the foreseeable future to the proper execution of municipal powers; and
(6) whether acceptance of the land by the state in trust would be consistent with the good faith execution of the commissioner's responsibility to any future municipality that might be incorporated in the Native village.
History
- Authority: ANCSA, sec. 14(c)(3)AS 44.33.755(a)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.025 Form of document of conveyance
Before or upon a determination by the commissioner to accept a tender of land by a village corporation under 3 AAC 190.020, the village corporation must execute and deliver to the commissioner a quitclaim deed to the State of Alaska. The deed must be in a form that, in the commissioner's judgment, will effectively pass title to the surface estate to the State of Alaska upon its acceptance of delivery by the commissioner. The deed must be accompanied by a certification that title is held by the village corporation, that there has been no previous conveyance of the land, and that there are no liens, encumbrances, charges, or claims (other than those arising under ANCSA) affecting the surface rights to the land being conveyed which were created by or are the result of any action taken by the village corporation. The commissioner will signify acceptance by placing a written endorsement upon the face of the deed. Except in the case of less-than-fee interests (described in 19 AAC 90.040), the deed must convey all present and after-acquired title held by the corporation in the surface estate.
History
- Authority: AS 44.33.755(a)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.030 Form of agreement to convey land
If a tender has been accepted, and the village corporation demonstrates to the satisfaction of the commissioner that it is presently unable to execute a deed that complies with 3 AAC 190.025, the commissioner will, in his or her discretion, in place of immediate delivery of such a deed, accept a written agreement to convey land. Acceptance of the agreement to convey will be signified by written endorsement and execution of the agreement by the commissioner. An agreement to convey land must (1) be in a form that may be recorded under AS 34.15 and that sufficiently identifies the land that is subject to the agreement, (2) convey a right to enter the land, and (3) contain other terms and provisions relating to the future conveyance of title to the land to the state in trust which the commissioner determines are appropriate.
History
- Authority: AS 44.33.755(a)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.035 Partial tender
The commissioner will, in his or her discretion, accept a tender of land from a village corporation which only partially satisfies that corporation's obligation under sec. 14(c)(3) of ANCSA. If a partial tender is accepted, the commissioner will credit that land against the corporation's remaining obligation. The final tender, together with other previous partial tenders, must fully satisfy the requirements of sec. 14(c)(3) of ANCSA, as amended by Public Law 96-487, sec. 1405, and must fully satisfy the standards set out in 3 AAC 190.020.
History
- Authority: AS 44.33.755(a)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.040 Less-than-fee interests
The commissioner will, in his or her discretion, accept less-than-fee interests in land under this chapter. If conveyance of a less-than-fee interest is necessary because less-than-fee interest was conveyed to a village corporation by the United States, the acreage subject to such a less-than-fee interest will be credited against the corporation's obligation under sec. 14(c)(3) of ANCSA and under 3 AAC 190.045. The commissioner will, in his or her discretion, accept other less-than-fee interests and credit them under 3 AAC 190.045 only upon a written determination, made after consulting the recognized village entity or the village residents as provided in 3 AAC 190.110 - 3 AAC 190.290, that there is an appropriate reason to accept less than the entire fee interest in land that the village corporation has tendered and that the interests of any future city would not be prejudiced by that acceptance. The commissioner will not accept a conveyance that contains a reversionary clause or condition subsequent created by the village corporation.
History
- Authority: AS 44.33.755(a)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.045 Completion of municipal trust land conveyance requirements
The commissioner will issue a Certificate of Satisfaction to the village corporation upon a determination under 3 AAC 190.020 and sec. 14(c)(3) of ANCSA that the village corporation has fully discharged its obligation under sec. 14(c)(3) of ANCSA, as amended. The certificate will be in a form that the village corporation may record under AS 34.15.
History
- Authority: ANCSA, sec. 14(c)(3)AS 44.17.030; AS 44.33.755(a)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.050 Notification of commissioner of proposed village corporation land transactions
Repealed 11/19/88.
3 AAC 190.055 Procedure to clear corporation land title for conveyance to third parties
At any time before the completion of a village corporation's conveyance of all ANCSA, sec. 14(c)(3) land to the state in trust, the commissioner will, in his or her discretion, and upon the request of the corporation, execute a written disclaimer of interest under ANCSA, sec. 14(c)(3), and under AS 44.33.755, for any specific parcel of land or interest in it which the corporation proposes to convey to a third party. The decision to request a disclaimer of interest is solely that of the corporation. In determining whether to execute a waiver of interest under this section, the commissioner will evaluate the specific parcel with reference to the standards set out in 3 AAC 190.020, and will consult the recognized village entity or the village residents, as provided in 3 AAC 190.110 - 3 AAC 190.290. If the commissioner decides to issue a disclaimer of interest contrary to the views of the recognized village entity or the village residents, the commissioner will issue a written determination that includes a specific statement of the reasons why those views have not been accepted. A final disclaimer of interest will not be issued until after the commissioner's determination has been published and posted, and becomes final, in the manner prescribed by 3 AAC 190.015(3).
History
- Authority: ANCSA, sec. 14(c)(3)AS 44.33.755(a)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.060 Review by regional corporations
Repealed 11/19/88.
3 AAC 190.063 Notification of subsurface owner
Upon receipt of a tender of conveyance, the commissioner will notify the subsurface owner of the receipt of the tender. The commissioner will also send to the subsurface owner a copy of the determination to accept or reject the tender.
History
- Authority: ANCSA, sec. 14(c)(3)and (5)AS 44.33.755(a)
- Eff. 11/19/88, Register 108
3 AAC 190.065 Unincorporated villages within existing political subdivisions
In the case of a village corporation for a Native village lying wholly or partially within a borough or unified home-rule municipality incorporated under state law, the commissioner will interpose no objection to an ANCSA sec. 14(c)(3) reconveyance by the corporation to the borough or unified home-rule municipality rather than to the state in trust if the commissioner finds, after presenting the reconveyance proposal to the recognized village entity or the village residents, as provided in 3 AAC 190.110 - 3 AAC 190.290, that the entity or residents approve of the proposal. The proposal may be for either partial or total satisfaction of the corporation's obligation under sec. 14(c)(3) of ANCSA. If the proposal is for the total obligation, the commissioner will construe the approval by the recognized village entity or the village residents under 3 AAC 190.110 - 3 AAC 190.290, and the subsequent reconveyance to the borough or unified home-rule municipality by the village corporation, as a final and complete discharge of any further potential trust obligation of the state under sec. 14(c)(3) of ANCSA and AS 44.47.150 on behalf of a future municipal corporation in the Native village. After the reconveyance, the commissioner will issue a Certificate of Satisfaction to the village corporation as provided in 3 AAC 190.045.
History
- Authority: ANCSA, sec. 14(c)(3)AS 44.33.755
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
Article 2 Official Recognition of Village Entities Under as 44.33.755(B)
3 AAC 190.110 Recognized village entities
With respect to each village covered by AS 44.33.755, the commissioner will, in his or her discretion, upon petition by any person or group, or upon the commissioner's own motion, officially recognize an "appropriate village entity" within the meaning of AS 44.33.755(b). After its recognition, a recognized village entity will be consulted by the commissioner in accordance with the provisions of this chapter. In the case of an action or decision concerning village corporation or municipal trust land located where no recognized village entity exists, the commissioner will consult with the residents of the village and ascertain their views under the procedures set out in 3 AAC 190.210 - 3 AAC 190.290.
History
- Authority: AS 44.17.030; AS 44.33.755(b)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.120 Minimum eligibility requirements
To be eligible for consideration for recognition as an "appropriate village entity," an entity must, at minimum, meet all of the following standards:
(1) the entity must be an active organization (but not necessarily a formal organization having its own independent legal identity) which represents, in a traditional or democratic manner, the collective views of the bona fide residents of the village; and
(2) there must be no substantial and particularized objection by any bona fide resident to the entity's suitability to represent accurately and effectively the collective views of the bona fide residents of the village; however, such an objection will only constitute a bar to eligibility if it is substantial in the judgment of the commissioner and if it addresses itself to the entity's overall suitability rather than only to the entity's position on a specific substantive issue.
History
- Authority: AS 44.33.755(b)
- Eff. 9/21/79, Register 71
3 AAC 190.130 Priorities among entities eligible for official recognition
(a) If more than one entity is determined by the commissioner to be eligible under the standards for recognition in 3 AAC 190.120, then, as a general rule, the commissioner will give preference among eligible entities according to the following, in descending order of priority:
(1) a traditional village council, as defined in 3 AAC 190.990;
(2) a village council organized under the Indian Reorganization Act (Act of June 13, 1934, 48 Stat. 984, as amended);
(3) a joint village entity consisting of representatives of more than one existing local entity or group for the specific purpose of functioning as a recognized village entity under this chapter;
(4) any other entity meeting the minimum eligibility requirements of 3 AAC 190.120.
(b) If no entity listed in (a) of this section has been recognized under 3 AAC 190.110 then the commissioner will hold a meeting or referendum of village residents, to ascertain the views of the residents under 3 AAC 190.210 - 3 AAC 190.290.
History
- Authority: AS 44.33.755(b)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.140 Recognition procedure
(a) Any entity wishing to be recognized by the commissioner under this chapter may initiate proceedings to obtain formal recognition by filing with the commissioner a written petition for recognition.
(b) Upon receipt of a petition for recognition, or upon his or her own motion, the commissioner will make an informal preliminary determination of whether the entity might be able to meet the minimum eligibility requirements set out in 3 AAC 190.120. Upon a preliminary determination that the requirement might be met, the commissioner will publish and post a written notice, as provided in 3 AAC 190.910, advising the public of the potential recognition of an entity, soliciting comments on the petition or potential recognition, and stating that any other entity that wishes to be considered for recognition must, within 30 days after the date the notice is posted, file a petition for recognition.
(c) No less than 40 days nor more than 60 days after the notice is posted and published, if no other entity has filed a petition and no adverse written comments have been submitted on the initiating petition, the commissioner will, in his or her discretion, either deny recognition or issue a written Statement of Intent to Recognize the entity under consideration. The Statement of Intent to Recognize will be posted and published in the same manner as the original notice.
(d) Except as provided otherwise in this subsection, if more than one entity has filed a petition for recognition with respect to a particular Native village, or if adverse written comments are received by the commissioner in response to the original notice or the Statement of Intent to Recognize, then the commissioner will schedule an informal hearing in the village. The informal hearing will be held after public notice in the village, as provided in 3 AAC 190.910, and anyone present may state views as to the propriety of recognizing an entity under consideration. The commissioner need not maintain a formal written record or tape-recording of the informal hearing. If, after an informal hearing, a written Request for Formal Decision-Making Procedure, signed by at least 10 bona fide residents of the village or by 15 percent of the bona fide residents of the village, is filed, then the commissioner will initiate a formal decision-making procedure under 3 AAC 190.950. The commissioner will, in his or her discretion, elect to proceed with a formal decision-making procedure without first holding an informal hearing under this section.
(e) The commissioner might, on his or her own motion, initiate a village meeting under 3 AAC 190.220 to obtain the collective views of the village residents on any proposed recognition of a village entity under AS 44.33.755(b). The collective views of the residents will be obtained and documented in the same manner as prescribed in 3 AAC 190.240. If a simple majority approve the proposed recognition, and the entity is otherwise qualified under 3 AAC 190.120, the commissioner will recognize the entity as the "appropriate village entity" under AS 44.33.755(b). This procedure will, in the commissioner's discretion, be combined with the informal hearing process described in (d) of this section.
(f) Upon compliance with the procedures prescribed by this section, the commissioner will make a single final written determination upon all petitions for recognition pending in respect to the village.
History
- Authority: AS 44.33.755(b)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.150 Change of recognized village entity
The commissioner will, in his or her discretion, review the official recognition of a village entity upon receipt of a petition signed by 15 percent of the residents of the village, or upon request of the village entity itself, or upon the commissioner's own initiative, at any time. If the commissioner determines that there should be a change in the recognized village entity, the procedure for recognizing another entity is that prescribed in 3 AAC 190.140(b) - (e).
History
- Authority: AS 44.33.755(b)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
Article 3 Ascertaining the Views of Village Residents Where No Organized Village Entity Is Recognized
3 AAC 190.210 Applicability
If the commissioner is to make a decision or determination under this chapter concerning a village for which no village entity is formally recognized under 3 AAC 190.110 - 3 AAC 190.150, the commissioner will first consult with a meeting of village residents. A meeting of village residents will be convened and conducted under the procedures set out in 3 AAC 190.210 - 3 AAC 190.290. After the first meeting of village residents held under 3 AAC 190.210 - 3 AAC 190.290, the commissioner will, in his or her discretion, consult with and obtain the views of the residents by the village referendum method set out in 3 AAC 190.270, rather than convening a meeting, if use of the referendum method has been approved by a prior village meeting.
History
- Authority: AS 44.17.030; AS 44.33.755(b)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.220 Procedure for convening meeting of village residents
If consultation with a meeting of village residents is required, the commissioner will give notice of the village meeting in the manner required by 3 AAC 190.910.
History
- Authority: AS 44.17.030; AS 44.33.755(b)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.230 General procedure for conducting meetings of village residents
A meeting of village residents convened by the commissioner under this chapter will be conducted under the general direction of the commissioner, who may designate a chairman pro tempore to preside over the meeting.
History
- Authority: AS 44.17.030; AS 44.33.755(b)
- Eff. 9/21/79, Register 71
3 AAC 190.240 Village meeting resolution
If prior approval of a village acting through a meeting of village residents is required, the prior approval must be in the form of either a written village meeting resolution adopted under this section, or a village referendum adopted under 3 AAC 190.270. A resolution must bear the signatures of all of the village residents in attendance who wish to be recorded as supporting or opposing the resolution. A village meeting resolution that has the support of the simple majority of those who have signed it will be regarded by the commissioner as the official position of the village meeting concerning the proposed action to which it refers.
History
- Authority: AS 44.33.755(b)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.250 Request for reconsideration
The position of the village residents expressed in a resolution adopted by a village meeting under 3 AAC 190.240 will be treated by the commissioner as final unless a request for reconsideration is made by a village resident who signed the resolution as a member of the majority. In order to be effective, a request for reconsideration made to the commissioner must be received, or postmarked if transmitted by mail, within 10 days after the date of the meeting at which the resolution was adopted. If a disaster or other emergency has occurred, or exists, reconsideration may be waived in a resolution adopted by a meeting of village residents under this chapter, if expedited transfer of title involving municipal trust land is necessary to alleviate a threat to life, property, or the welfare of persons in the village. If reconsideration is requested, the commissioner will reconvene the village meeting, upon notice, at least 20 but not more than 45 days after receiving the request. No request for reconsideration of the vote of the residents may be made respecting a position adopted by the village residents in a meeting held as a result of a request for reconsideration.
History
- Authority: AS 44.33.755(b)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.260 Initiation of village meeting by residents
No meeting of village residents has any legal effect under this chapter unless it is convened by the commissioner in the manner required by this chapter. Village residents who wish to initiate a village meeting for any purpose falling within the scope of this chapter may do so by making a written request for one to the commissioner signed by at least 10 percent of the village residents. Upon receiving the request, the commissioner will initiate the procedure to convene a meeting.
History
- Authority: AS 44.33.755(b)
- Eff. 9/21/79, Register 71
3 AAC 190.270 Village referendum
(a) For a village as to which no village entity is formally recognized under 3 AAC 190.110 - 3 AAC 190.150, the commissioner will, in his or her discretion, consult with and ascertain the views of village residents by the use of a village referendum if
(1) a meeting of the village residents has, within the immediately preceding two years, adopted a resolution authorizing the use of a village referendum as an alternative to a village meeting;
(2) no notice to rescind has been filed under (c) of this section; and
(3) the commissioner determines, in his or her discretion and on a case-by-case basis, that the views of the village residents regarding a specific proposed action or determination can be obtained effectively by referendum.
(b) A village meeting resolution authorizing subsequent village referenda must contain a listing of the names and mailing addresses of all bona fide village residents eligible to vote on a village referendum.
(c) If a notice to rescind a village meeting resolution authorizing village referenda has been signed by at least 10 percent of the bona fide residents of the village and filed with the commissioner, then the commissioner will not initiate a village referendum, but will instead treat the resolution authorizing use of referenda as rescinded and will initiate a meeting of the village residents to consider, among other things, the approval of a new village meeting resolution authorizing village referenda.
(d) A village referendum must be taken by mail. The commissioner will mail a written statement of the specific proposed action or determination to each person listed in the authorizing village meeting resolution as a bona fide village resident of the village, giving each an opportunity to vote upon the proposition and return his ballot to the commissioner within 30 days. A majority vote of the ballots timely cast and returned to the commissioner will determine the outcome of the proposition; however, if the majority vote cast is less than 25 percent of the village residents listed on the authorizing village meeting resolution, the proposition fails. Individual votes will be kept confidential. The tabulated results of the balloting will be mailed to each listed resident.
History
- Authority: AS 44.33.755(b)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.280 Participation by bona fide village residents only
Only persons who are bona fide residents of the village, as that term is defined in 3 AAC 190.990, on the date of a meeting or referendum may vote on a proposition or sign a resolution. A person whose claim as a bona fide village resident is challenged by another bona fide village resident may cast a challenged vote at a village meeting, or sign a resolution or referendum under protest. A challenged vote will be given weight by the commissioner, if at all, only if its inclusion in the tabulation of votes would determine the outcome of votes on the proposition. If it is necessary to determine the validity of a challenged vote, the commissioner will
(1) attempt to resolve the dispute by informal discussion and mediation at the time and place where the dispute first arises;
(2) failing successful discussion and mediation, hold an informal hearing to resolve the dispute;
(3) instead of or after the steps in (1) and (2) of this section, initiate formal decision-making procedures under 3 AAC 190.950(3).
History
- Authority: AS 44.33.755(b)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.290 Vacant villages
If a village, with respect to which a village corporation has an obligation under ANCSA, sec. 14(c)(3), is vacant of bona fide residents at a time when the commissioner is obligated under this chapter to respond to a corporation's tender or to make any other decision regarding municipal trust land under this chapter, the commissioner will recognize under 3 AAC 190.110 - 3 AAC 190.150 an appropriate village entity, if any, which might exist for that village. If no such entity qualifies for recognition, the commissioner will recognize as the village entity pro tempore, a group consisting of all persons enrolled under sec. 5 of ANCSA to that village who are at least 18 years of age or who, if less than 18 years of age, are the head of a household. The commissioner will consult with and obtain the views of this group in a village meeting convened and conducted in accordance with 3 AAC 190.220 - 3 AAC 190.280 at a place in Alaska where the majority of that group resides or can conveniently assemble at their own expense. If the commissioner determines that a meeting in Alaska of a majority of the group is impossible or impracticable, the commissioner will obtain the views of the group by mailed referendum.
History
- Authority: AS 44.33.755(b)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
Article 4 Management of Municipal Trust Land
3 AAC 190.310 Inventories of landholdings
For each village as to which municipal trust land is accepted by the state, the commissioner will maintain a separate inventory of landholdings. This inventory of landholdings will include, at a minimum
(1) the land status history of each parcel of municipal trust land;
(2) an account of the number of acres of land that have been conveyed by the village corporation to the state in trust under sec. 14(c)(3) of ANCSA, and this chapter, including separate determinations of (A) acreage credits made under 3 AAC 190.035, (B) acreage as to which the corporation conveyed less than its entire fee interest in the land under 3 AAC 190.040, and (C) acreage as to which only equitable title has been conveyed under an agreement to convey land under 3 AAC 190.030;
(3) documentation of the creation and administration of each third party interest in the land; and
(4) an account of revenues received in respect of the land.
History
- Authority: AS 44.17.030; AS 44.33.755(d)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.320 Advisory land planning
The commissioner will, using the resources of the municipal land trustee program, identify and evaluate the resource and location values of municipal trust land and will, in his or her discretion, after consultation with the recognized village entity or the village residents as provided in 3 AAC 190.110 - 3 AAC 190.290, formulate and adopt advisory community land-use plans to serve as guideposts for future management and disposal actions involving municipal trust land. Such advisory land-use plans will recognize and conform to any requirements of a planning, platting, and zoning authority as provided in 3 AAC 190.330.
History
- Authority: AS 44.17.030; AS 44.33.755
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.330 Planning, platting, and zoning
(a) Where municipal trust land is located within the boundary of any municipality having planning, platting, and zoning powers, it is subject to the regulations and ordinances of that municipality pertaining to planning, platting, and zoning.
(b) Where municipal trust land is located outside the boundary of any municipality having planning, platting, and zoning powers, it is subject to all statutes and regulations, if any, of the State of Alaska concerning planning, platting, and zoning which would apply to privately owned land similarly located.
History
- Authority: AS 29.35; AS 40.15.305; AS 44.33.755(a) AS 38.05.037; AS 44.17.030
- Eff. 9/21/79, Register 71
3 AAC 190.340 Trespass
If the commissioner is advised as to the existence of trespass, waste, or other tortious or criminal actions or conditions taking place on or relating to municipal trust land, the commissioner, in his or her discretion, will take action, including, in appropriate cases, referring the matter to the attorney general for the initiation of legal proceedings, to curtail the action or condition, and to obtain compensation for it if appropriate.
History
- Authority: AS 44.17.030; AS 44.33.755
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
Article 5 Disposal by State of Municipal Trust Land
3 AAC 190.410 General
The commissioner will, in his or her discretion, dispose of municipal trust land or interests in it in any manner provided for by AS 44.33.755(b), under the procedures set out in 3 AAC 190.410 - 3 AAC 190.490. No action purporting to create an interest or legal right to, or in respect of, municipal trust land has any legal effect whatsoever unless it is taken in strict compliance with AS 44.33.755 and this chapter.
History
- Authority: AS 44.17.030; AS 44.33.755
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.420 Prior public notice
No disposal authorized by AS 44.33.733(b) will be made without prior public notice in the manner prescribed by 3 AAC 190.910, except that the posting period will be at least 30 days. This requirement will, in the commissioner's discretion, be waived by the commissioner with the prior approval, by resolution, of the recognized village entity or the village residents, as provided in 3 AAC 190.110 - 3 AAC 190.290, if a disaster or other emergency has occurred or exists, and if expedited transfer of title to a specific parcel of municipal trust land is necessary to alleviate a threat to life, property, or the welfare of the persons in the village.
History
- Authority: AS 44.17.030; AS 44.33.755(a)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.430 Prior written approval of entity
Before a disposal, the commissioner will obtain written approval, by resolution, of the recognized village entity or the village residents as provided in 3 AAC 190.110 - 3 AAC 190.290. If the disposal is to the recognized village entity, the entity's resolution requesting the disposal will constitute the necessary approval. No disposal will be made based upon a resolution that was approved by the recognized village entity or the village residents more than 13 months before the proposed action. A written approval granted under this section which ultimately results in a disposal will be filed by the commissioner with the appropriate inventory of landholdings maintained under 3 AAC 190.310.
History
- Authority: AS 44.33.755
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.435 Rescission or modification of prior approval by entity or village residents
A recognized village entity or the village residents, as provided in 3 AAC 190.110 - 3 AAC 190.290, may rescind or modify a prior resolution of approval to dispose of municipal trust land or interests in it. The commissioner will, in his or her discretion, postpone, modify, or cancel a pending disposal action, as appropriate under the circumstances, if a recognized village entity timely files a resolution of rescission or modification with the commissioner or if the residents of a village not having a village entity recognized under 3 AAC 190.110 - 3 AAC 190.150 timely file a request, under 3 AAC 190.260, for the convening of a village meeting for the purpose of rescinding or modifying a prior resolution or referendum of approval. A resolution of a recognized village entity or a request for a village meeting will be considered timely filed for the purposes of this section if it is received by the commissioner before a vesting of property rights in a prospective grantee of municipal trust land that had been previously approved for disposal by a recognized village entity, meeting, or referendum of village residents.
History
- Authority: AS 44.33.755
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.440 Commissioner's approval required for disposal
The commissioner will not dispose of specific municipal trust land or interests in it if he or she finds that the disposal would be inconsistent with the good faith execution of the commissioner's trust responsibility to a first or second class city that might be incorporated in the Native village. A resolution of a recognized village entity or the village residents, as provided in 3 AAC 190.110 - 3 AAC 190.290, requesting and approving the disposal of specific municipal trust land does not unilaterally impose a duty upon the commissioner to make such a disposal. If the commissioner does not approve of a specific disposal as requested and approved by resolution of the recognized village entity or the village residents, the commissioner will, within 120 days after receipt of such a resolution, state to the recognized village entity or village residents, in a written decision, his or her reasons for deciding not to proceed with that specific disposal. The commissioner will cause a copy of that written decision to be posted publicly in the manner provided by 3 AAC 190.910(b)(2) for 30 days.
History
- Authority: ANCSA, sec. 14(c)(3)AS 44.17.030; AS 44.33.755(a)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.450 Disposals for fair market value
Except in the case of a disposal as to which a waiver has been issued by the commissioner under 3 AAC 190.460, all disposals of municipal trust land or interests in it will be for at least fair market value as defined in 3 AAC 190.990. The fair market value of a parcel will be determined by the commissioner in writing in advance of a final consultation with the recognized village entity or the village residents as provided in 3 AAC 190.110 - 3 AAC 190.290, concerning that specific parcel. In determining the fair market value of a parcel, the commissioner will, in his or her discretion, obtain an independent appraisal. If an independent appraisal is obtained, the appraisal fee will be added as a surcharge to the fair market value, and the disposal will not be made for less than the aggregated amount.
History
- Authority: AS 44.33.755
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.460 Waiver of fair market value requirement
The commissioner will, in his or her discretion, and with the specific approval of the recognized village entity or the village residents as provided in 3 AAC 190.110 - 3 AAC 190.290, make a written waiver, in whole or in part, of the fair market value requirements of 3 AAC 190.450 as to the disposal of specific parcels of municipal trust land. If the disposal is to the recognized village entity, the entity's resolution requesting the disposal constitutes the necessary approval. A waiver of the fair market value requirement will, in the commissioner's discretion, be made under the following circumstances and subject to the following terms and conditions:
(1) Disposal for public or charitable purposes. No waiver under this paragraph is effective unless it sets out with specificity the public or charitable purpose of the proposed use of the parcel for which disposal is proposed. When a parcel is disposed of pursuant to a waiver under this paragraph, the deed, lease, or other document of conveyance issued by the commissioner is valid only if it contains a condition subsequent which insures that if the land is used for any purpose other than the purpose set out in the condition, title and all other interests automatically revert to the state in trust or to any successor municipality established in the Native village in the future.
(2) Disposal for village relocation or reestablishment purposes. A waiver under this paragraph is not effective except as to land conveyed to a person who is a resident or occupant of the Native village at the time of a general relocation or reestablishment of the village as determined and approved by the recognized village entity or the village residents as provided in 3 AAC 190.110 - 3 AAC 190.290. The grantee shall, however, reimburse the state in trust for expenses that the state incurs related to the disposal, which are accounted for under 3 AAC 190.480.
(3) Disposal based upon equitable interest. A waiver under this paragraph is not effective except as to a parcel of land conveyed to a person who has a valid claim of equitable interest in improvements located upon that parcel which is recognized under 3 AAC 190.470. The grantee shall, however, reimburse the state in trust for expenses that the state incurs related to the disposal which are accounted for under 3 AAC 190.480.
(4) Disposal to village residents for residential expansion purposes. A waiver under this paragraph is not effective except as to a parcel of land conveyed to, or for the benefit of, a bona fide village resident, as defined by 3 AAC 190.990, of the respective Native village who seeks the parcel for development and use as a personal place of residence. The grantee shall reimburse the state in trust for expenses that the state incurs related to the disposal, which shall be accounted for under 3 AAC 190.480. If a parcel of municipal trust land is disposed of under a waiver under this paragraph, the deed, lease, or other document of conveyance issued by the commissioner will contain a condition subsequent that insures that if the land is used for any use other than residential use during a period of 10 years after the disposal, title reverts to the state in trust or to any successor municipality established in the Native village in the future.
History
- Authority: AS 44.33.755
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.470 Preference right based on equity
Upon first obtaining the general approval, by resolution of the recognized village entity or the village residents as provided in 3 AAC 190.110 - 3 AAC 190.290, that a specific parcel of improved municipal trust land should be made available for disposal under this section, the commissioner will, in his or her discretion, offer and grant, to any person who has a valid claim based upon equity in the improvements located on that parcel, a preference right to acquire that parcel. In order to be eligible for a preference right under this section, the claimant's equity must be based upon improvements existing on the parcel before tender of that parcel by the village corporation under 3 AAC 190.010 - 3 AAC 190.065. Before conveying land or an interest in land under this section, the commissioner will first give public notice of the proposed transaction as provided in 3 AAC 190.910. The notice will require that any person having an adverse equity interest in the improvements located on that parcel must file a claim with the commissioner within 30 days after publication of the notice in order that the adverse claimant's interests may be considered before disposal of the parcel. If a conflict arises between two or more claimants under this section, the commissioner will give each party an opportunity to present evidence to support his or her claim of equitable interest in the improvements before making a written decision concerning an award of a preference right. The commissioner will also give the recognized village entity or the village residents, as provided in 3 AAC 190.110 - 3 AAC 190.290, an opportunity to review the evidence presented by the parties in the conflict and to make a recommendation to the commissioner concerning the relative equities of the parties. A written decision of the commissioner as to the appropriate party having a sufficient interest superior to all others, if any, which justifies granting a preference right under this section, may be appealed to superior court by an aggrieved party.
History
- Authority: AS 44.33.755
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.480 Accounting of surcharged appraisal fees and allocable shares of survey and certain other expenses of land disposal
The commissioner will account for appraisal and survey expenses, and for any other expenses that result in either a physical improvement to the land or an addition of economic value to the land, and which thereby increase the income that the state might derive, on behalf of the future municipality, from the disposal. Any such expense will be prorated acre-for-acre and allocated on that basis to each affected parcel. When attributable revenues are reported under 3 AAC 190.530 to a future municipality incorporated in the Native village, the net proceeds reported from each disposal will include deductions for all expenses that are to be accounted for under this section.
History
- Authority: AS 44.33.755
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.490 No prescriptive rights
No title or interest in municipal trust land will be acquired by adverse possession or prescription.
History
- Authority: AS 38.95.010; AS 44.33.755
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
Article 6 Disposition of Land and Funds upon Incorporation of a Municipality in a Native Village
3 AAC 190.510 Applicability
The provisions of 3 AAC 190.510 - 3 AAC 190.550 apply in any instance in which a first or second class city is incorporated in, or encompasses in whole or part, a Native village in respect of which municipal trust land has been accepted by the state in trust.
History
- Authority: ANCSA, sec. 14(c)(3)AS 44.17.030; AS 44.33.755
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.520 Conveyance of title to municipal trust land
Within one complete state fiscal year after incorporation of the city, the commissioner will convey by one or more quitclaim deeds, without cost to the city, all municipal trust land held by the state in trust for the city. The conveyance is effective upon delivery and acceptance by the city of the deed or deeds.
History
- Authority: AS 44.33.755
- Eff. 9/21/79, Register 71
3 AAC 190.530 Reporting of attributable municipal trust land proceeds
Upon the conveyance of municipal trust land to a city under 3 AAC 190.520, the commissioner will account to the city in writing for all proceeds received by the state which are attributable to that municipal trust land. The accounting of proceeds will reflect, for each parcel of municipal trust land:
(1) the gross receipts;
(2) allocable costs pro-rated under 3 AAC 190.480;
(3) the profits represented by the excess of gross receipts over prorated allocable costs; and
(4) interest or other income earned on or imputed to the profits.
History
- Authority: AS 44.33.755(e)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.540 Transfer of administration of third-party interests in municipal trust land
Upon the conveyance of municipal trust land to a city under 3 AAC 190.520, all prerogatives and responsibilities for administration of third-party interests for that land transfer automatically to the city. The commissioner will notify all affected third parties, in writing, to that effect, and will relinquish to the city all records maintained with respect to the third-party interests.
History
- Authority: AS 44.33.755(c)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.550 Transitional management agreements
The commissioner will, in his or her discretion, enter into a transitional management agreement with a city established in the Native village in the future, in anticipation of the conveyance of municipal trust land under 3 AAC 190.520. Under the agreement, the city will have the opportunity to participate in any decisions relating to the administration of third-party interests.
History
- Authority: AS 44.33.755; AS 44.47.980
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
Article 7 General and Miscellaneous Provisions
3 AAC 190.910 Public notice procedure
(a) Whenever public notice is required under a regulation in this chapter, unless the regulation specifically requires a different kind of notice, the public notice must contain, at a minimum
(1) an informative summary of the proposed or requested action;
(2) a statement of the time, place, and nature of any meeting, hearing, or other proceeding to be held in respect to the proposed or requested action; and
(3) a reference to the legal authority under which the action is proposed or requested to be taken.
(b) Publication and posting of public notice will consist of at least two of the following:
(1) publication of a notice in the Tundra Times and one other newspaper of general circulation distributed within the village, if any, at least once, no more than eight and not less than two weeks before the date of the proposed action or proceeding;
(2) posting of a written notice in at least one conspicuous public location in the Native village for a substantially uninterrupted duration of at least one week within the time period during which publication is permitted under (1) of this subsection, or for at least one week immediately before any proposed meeting, hearing, or other proceeding, unless the village is a "vacant" village as described in 3 AAC 190.290; for a vacant village, posting of the written notice will occur in at least one conspicuous public location in the locality in Alaska, if any, where the majority of the group described in 3 AAC 190.290 resides; and
(3) publication of a notice through broadcast on the electronic media serving the area; such a notice will be broadcast at least twice a day on five or more days; the broadcasts will occur within a period of no more than eight and not less than two weeks before the date of the proposed action or proceeding.
History
- Authority: AS 44.17.030; AS 44.33.755
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.920 Meetings; procedure for rescheduling noticed meeting or hearing
No meeting under this chapter will begin after 10:00 p.m. If a meeting or hearing for which notice has been given cannot be held because of unforeseen logistical problems or due to the unavoidable absence of the commissioner or commissioner's designee, the meeting time will be postponed on an hour-to-hour basis that same day, and if necessary, the following day between 8:00 a.m. and 10:00 p.m. If the meeting cannot be held on the following day, the meeting will be postponed from day to day as is necessary.
History
- Authority: AS 44.17.030; AS 44.33.755
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.930 Delegation of authority by commissioner
The commissioner will, in his or her discretion, delegate in writing to the municipal land trust officer the commissioner's authority to make a decision or take an action authorized or contemplated by this chapter. Such a delegation of authority will be executed by the commissioner, and filed with the lieutenant governor's office, and will be revoked only in writing. If revoked, the written order of revocation will be filed with the lieutenant governor's office. A decision or action taken by the municipal land trust officer acting under a delegation of authority from the commissioner is subject to review by the commissioner in the manner prescribed in 3 AAC 190.940.
History
- Authority: AS 44.17.010; AS 44.17.030; AS 44.33.755
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.935 Combining of decision to accept and notice of disposal
At the discretion of the commissioner, a decision to accept a tender of land under 3 AAC 190.015 and a notice of disposal of municipal trust land under 3 AAC 190.420 will be combined into one decision and one public notice in order to expedite a conveyance and subsequent transfer of the same parcel of land.
History
- Authority: AS 44.17.030; AS 44.33.755
- Eff. 11/19/88, Register 108
3 AAC 190.940 Appeal to commissioner
A decision made by the municipal land trust officer may be appealed to the commissioner by a person whose interests are adversely affected by the decision or action. The appeal must be postmarked, or otherwise delivered to the municipal land trust officer, within 30 days after the date of delivery of the decision, or the date of publication announcing it, or posting date announcing it, whichever is later. The municipal land trust officer shall transmit the appeal to the commissioner within 15 days after its receipt. Within 120 days after the filing of the appeal with the municipal land trust officer, the commissioner will act to modify, reverse, or affirm the decision and will issue a written decision setting out the reasons for the modification, reversal, or affirmation.
History
- Authority: AS 44.17.030; AS 44.33.755(a)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.950 Decision-making procedure in contested cases
If a dispute arises regarding a discretionary determination or proposed action to be taken by the commissioner, the following procedure is applicable unless another specific procedure is prescribed in respect to the dispute by another provision of this chapter:
(1) the commissioner will, in his or her discretion, first attempt to mediate the dispute informally;
(2) instead of, or after attempting, mediation, the commissioner will, in his or her discretion, call for written submissions by all interested parties; after receiving the written submissions, the commissioner will:
(A) make a written determination of the matter, or
(B) convene an informal public meeting, upon notice, wherein the views and arguments of all interested parties may be stated orally and on the record, or
(C) treat the matter as a formal administrative adjudication under the Alaska Administrative Procedure Act, AS 44.62 et seq., and request that a hearing officer be appointed by the governor's office;
(3) instead of, or after the steps in either (1) or (2) of this section, the commissioner will, in his or her discretion, treat the matter as a formal administrative adjudication under the Alaska Administrative Procedure Act, AS 44.62, and request that a hearing officer be appointed by the governor's office.
History
- Authority: AS 44.17.030; AS 44.33.755(a)
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.960 Conflicts of interest
Neither the commissioner, the deputy commissioner, the municipal land trust officer, nor any employee of the Department of Commerce, Community, and Economic Development, nor any relative of the first degree of such a person, nor any legal entity which is owned or controlled by such a person or relative, may acquire, directly or indirectly, any interest in municipal trust land or any interest in land held by a village corporation which has or had an obligation to convey land to the state in trust under this chapter, with the exception of land required to be reconveyed under ANCSA, sec. 14(c)(1) or (2), or as a part of any general distribution of land to shareholders of a village corporation. This prohibition remains in effect
(1) as to municipal trust land, until one year following termination of the person's employment with the department; and
(2) as to other land held by the village corporation, until one year following completion of the corporation's conveyance of all required municipal trust land to the state in trust.
History
- Authority: AS 44.17.030; AS 44.33.755
- Eff. 9/21/79, Register 71
3 AAC 190.970 General trustee's authority
The commissioner reserves the authority to take any action in the exercise of his or her duties as a trustee which is not forbidden by law.
History
- Authority: AS 44.17.030; AS 44.33.755
- Eff. 9/21/79, Register 71; am 11/19/88, Register 108
3 AAC 190.980 Non-discrimination
It is the policy of the commissioner respecting the acceptance, administration, management, and disposal of unimproved municipal trust land not to discriminate against any person because of sex, race, religion, color, national origin, marital status or changes in marital status, pregnancy, or parenthood.
History
- Authority: AS 18.80.210; AS 44.33.755 AS 18.80.240(2)Art. I, Sec. 3, Ak. Const.
- Eff. 9/21/79, Register 71
3 AAC 190.985 Severability
If any provision of this chapter or any application of it is held invalid or unenforceable, the remainder of this chapter and any other application of it is not affected by that holding.
History
- Authority: AS 44.17.030
- Eff. 9/21/79, Register 71
3 AAC 190.990 Definitions
In this chapter, unless the context requires otherwise, the following words and phrases have the following meanings:
(1) "ANCSA" means the Alaska Native Claims Settlement Act of 1971, P.L. 92-203, 85 Stat. 688, as amended (43 U.S.C. 1601 et seq.);
(2) "bona fide village resident" means a natural person who is at least 18 years of age or who is the head of a household if less than 18 years of age, as to whom residency in the village can be established on the date for which a determination of residency is required by application of the rules set out in AS 15.05.020;
(3) "commissioner" means the commissioner of the Department of Commerce, Community, and Economic Development of the State of Alaska acting as the trustee of municipal trust land, whose incumbent is responsible under AS 44.33.755 to accept, administer, and dispose of such land;
(4) "fair market value" means the appraised price attributable to a parcel of municipal trust land, including the value of any survey which identifies and describes the land, which a willing and knowledgeable buyer would pay and which a willing and knowledgeable seller would accept, with respect to that parcel;
(5) "improved land" means the land conveyed under ANCSA to village corporations which is so changed from its natural state through valuable additions made to the land or through regular use by the residents of the village, that failure to treat that land as municipal trust land would substantially and adversely affect the community as a whole, of which it forms a part;
(6) "less-than-fee interest," where used in reference to land held by a village corporation, means an interest in land which is less than the entire estate in the land which was received by the village corporation from the United States under ANCSA; and, when used in reference to municipal trust land, means an interest in land which is less than the entire estate in the land which was received from the village corporation by the state in trust for any future city in the Native village;
(7) "municipal land trust officer" means that position within the Department of Commerce, Community, and Economic Development whose incumbent is principally responsible, under delegation and general direction of the commissioner, to carry out municipal trust land program activities under AS 44.33.755 and the regulations of this chapter;
(8) "municipal trust land" means land the legal or equitable title to which is held by the State of Alaska in trust for a future first or second class city under ANCSA, sec. 14(c)(3) and AS 44.33.755;
(9) "person" means any qualified person, firm, corporation, cooperative association, partnership, or other legal entity legally capable of entering into an agreement or contract;
(10) "state fiscal year" means the fiscal year described in AS 37.05.920;
(11) "Tundra Times" means that state-wide newspaper which is owned and edited by Eskimo, Indian, Aleut Publishing Corporation, 639 I Street, Anchorage, Alaska 99501;
(12) "village" or "Native village" means any unincorporated community, vicinity, or locality which was certified by the Secretary of the Interior under ANCSA as having selection rights under secs. 12(a) or 16(b) of ANCSA, as amended, and includes all those persons living in the same community, vicinity, or locality, irrespective of race or enrollment under sec. 5 of ANCSA, who have common community ties or interests;
(13) "village council" means an active local social organization, which need not be a formal organization having its own independent legal identity, functioning in the Native village under tradition which is fundamentally representative of all residents of the Native village;
(14) "village entity" means an organization or group officially recognized by the commissioner under 3 AAC 190.110 - 3 AAC 190.150 as being "an appropriate village entity" within the meaning of AS 44.33.755.
History
- Authority: AS 44.17.030; AS 44.33.755(a)
- Eff. 9/21/79, Register 71
Chapter 194 Real Property from Dissolved Municipalities
3 AAC 194.010 Acceptance of title to real property from dissolved municipalities
If a municipality is dissolved under AS 29.06.450 - 29.06.510, the commissioner, will in the commissioner's discretion, accept title to real property of the dissolved municipality. The purpose of this chapter is to provide a legal procedure for the commissioner's subsequent conveyance of title to real property to a local entity.
History
- Authority: AS 44.33.755
- Eff. 11/26/95, Register 136
3 AAC 194.015 Disposal of real property from dissolved municipalities
(a) Upon approval by the dissolved municipality's voters under 3 AAC 196.020 or by approval of an appropriate village entity under AS 44.33.755(a)(2), the commissioner will, in the commissioner's discretion, convey title to real property of a dissolved municipality to a local entity. A local entity designated in the transition plan for dissolution issued by the Local Boundary Commission under AS 44.33.812 and 3 AAC 110.900 may be
(1) a council formed under the provision of 25 U.S.C. 473a;
(2) a council that operates in a community among its residents as a matter of federal law; or
(3) an incorporated nonprofit entity qualified to receive and spend an entitlement under AS 29.60.140.
(b) The conveyance of real property under (a) of this section is subject to the conditions required by the Local Boundary Commission in the transition plan for dissolution.
History
- Authority: AS 44.33.755
- Eff. 11/26/95, Register 136
3 AAC 194.020 Approval by appropriate village entity
If voters of the dissolved municipality approve the plan for disposition of assets in an election administered by the director of elections under AS 29.06.510, that approval by the voters will satisfy the requirement under AS 44.33.755(a)(2) for approval by an appropriate village entity.
History
- Authority: AS 44.33.755
- Eff. 11/26/95, Register 136
3 AAC 194.900 Definitions
In this chapter
(1) "appropriate village entity" means an entity that has been officially recognized under AS 44.33.755(b) and 3 AAC 190.110;
(2) "commissioner" means the commissioner of the Department of Commerce, Community, and Economic Development;
(3) "local entity" means an active local organization having its own independent legal identity, functioning in the community, and being fundamentally representative of the residents of the community; "local entity" includes an appropriate village entity, a council formed under 25 U.S.C. 473a, and an incorporated nonprofit entity under AS 29.60.140;
(4) "municipality" means a political subdivision incorporated under the laws of this state;
(5) "real property" means land and those things permanently affixed to the land.
History
- Authority: AS 44.33.755
- Eff. 11/26/95, Register 136
Chapter 195 Alaska Climate Change Impact Mitigation Program
3 AAC 195.010 Purpose of regulations
Repealed.
History
- Eff. 6/30/2008, Register 187; repealed 11/23/2008, Register 188
3 AAC 195.020 Program authority
Repealed.
History
- Eff. 6/30/2008, Register 187; repealed 11/23/2008, Register 188
3 AAC 195.030 Applicability
The provisions of this chapter apply, subject to the availability of appropriations, to the allocation and distribution by the department of money to address the immediate planning needs of communities imminently threatened by climate change-related impacts, including erosion, flooding, storm surge, thawing permafrost, and wildfires.
History
- Authority: AS 44.33.020
- Eff. 6/30/2008, Register 187; am 11/23/2008, Register 188
3 AAC 195.040 Eligible communities
(a) Subject to the availability of appropriations, and subject to 3 AAC 195.070 - 3 AAC 195.110, the department will award on a non-competitive basis mini-grants of no less than $10,000 per community and no more than $50,000 per community, to be negotiated with each community listed in (c) of this section, for hazard impact assessments to identify the nature of climate change-related impacts, including erosion, flooding, storm surge, thawing permafrost, and wildfires, if that community has not yet undergone a hazard impact assessment, and to recommend actions in response to the identified impacts.
(b) From the balance of available appropriations after allocation and distribution of money under (a) of this section, and subject to 3 AAC 195.050 - 3 AAC 195.110, the department will award on a non-competitive basis grants of no more than $150,000 per community, to be negotiated with each community listed in (c) of this section, for planning services based on the recommendation of a hazard impact assessment that the community had previously undergone or for which the department awarded a mini-grant under (a) of this section.
(c) Each of the following communities that are imminently threatened by the effects of climate change are eligible for a non-competitive grant described in (a) or (b) of this section:
(1) Kivalina;
(2) Koyukuk;
(3) Newtok;
(4) Shaktoolik;
(5) Shishmaref;
(6) Unalakleet.
(d) From the balance of available appropriations after allocation and distribution of money under (a) and (b) of this section, and subject to 3 AAC 195.070 - 3 AAC 195.110, the department will award on a competitive basis mini-grants of no less than $10,000 per community and no more than $50,000 per community, to be negotiated with each community, for hazard impact assessments to identify the nature of climate change-related impacts in communities where those impacts, including erosion, flooding, storm surge, thawing permafrost, and wildfires, could result in one or more of the following hazards, and to recommend actions in response to the identified impacts:
(1) risk to life or safety during storm or flood events;
(2) loss of critical infrastructure;
(3) threats to public health;
(4) loss of 10 percent or more of residential dwellings.
(e) From the balance of available appropriations after allocation and distribution of money under (a), (b), and (d) of this section, and subject to 3 AAC 195.070 - 3 AAC 195.110, the department will award, on a competitive basis, grants of no more than $150,000 per community, to be negotiated with each community, for planning services based on the recommendation of a hazard impact assessment for which the department awarded a mini-grant under (d) of this section.
(f) An incorporated non-profit entity with articles of incorporation and a certificate of incorporation in good standing under AS 10.20, or a federal or state government agency, may administer a grant on behalf of a community, with the authorization of that community's governing body.
(g) To be eligible to receive a grant under this chapter, an unincorporated community must have a village council or incorporated nonprofit entity that will agree to receive and spend the grant money for the applicable purpose specified in this chapter. If an unincorporated community has more than one of the organizations described in this subsection, and each is eligible to receive a grant, the department will determine which organization is to receive the grant money. In making this determination, the department will consider factors relevant to achieving the purpose of the grant, including
(1) the administrative capability of each village council or incorporated nonprofit entity, including past performance on any previous grant awards;
(2) for each incorporated nonprofit entity, that the entity has articles of incorporation and a certificate of incorporation in good standing under AS 10.20;
(3) the ability of each village council or incorporated nonprofit entity to manage its debt and other finances, including whether amounts due to the United States Internal Revenue Service are timely paid;
(4) the degree to which each village council or incorporated nonprofit entity is representative of the community; and
(5) the purpose for which each village council or incorporated nonprofit entity intends to spend the grant money.
History
- Authority: AS 44.33.020
- Eff. 6/30/2008, Register 187; am 11/23/2008, Register 188
3 AAC 195.050 Eligibility of planning projects for non-competitive grants
Subject to the availability of appropriations, all projects that address planning activities and that are described in the Office of the Governor, Governor's Subcabinet on Climate Change, Immediate Action Workgroup's Recommendations Report to the Governor's Subcabinet on Climate Change, pages 3 - 8 and 27 - 45, dated April 17, 2008 and adopted by reference, are eligible for non-competitive grants awarded under 3 AAC 195.040(b).
History
- Authority: AS 44.33.020
- Eff. 6/30/2008, Register 187; am 11/23/2008, Register 188
3 AAC 195.060 Program operation and use of funds
Repealed.
History
- Eff. 6/30/2008, Register 187; repealed 11/23/2008, Register 188
3 AAC 195.070 Application and award process
(a) An application for a grant under this chapter must be completed on a form prescribed by the department.
(b) The department will send application forms to each community identified in 3 AAC 195.040(c) as eligible for a grant awarded under 3 AAC 195.040(a) or (b) on a non-competitive basis. The department will provide applications on request to a community that seeks a grant to be awarded under 3 AAC 195.040(d) or (e) on a competitive basis. The department will solicit applications for grants under 3 AAC 195.040(d) or (e) by publishing notice of the solicitation in a newspaper of general circulation, posting the notice on the Alaska Online Public Notice System established under AS 44.62.175 and on the department's website, and, when appropriate in the judgment of the department, publishing the notice in an additional form or manner that the department prescribes.
(c) For a grant to be awarded under 3 AAC 195.040(d) or (e) on a competitive basis, the department will evaluate each eligible application according to the extent to which each community demonstrates need based on one or more of the following criteria related to erosion, flooding, storm surge, thawing permafrost, wildfires, or other climate-change related impacts:
(1) risk to life or safety during storm or flood events;
(2) loss of critical infrastructure;
(3) threats to public health;
(4) loss of 10 percent or more of residential dwellings.
History
- Authority: AS 44.33.020
- Eff. 6/30/2008, Register 187; am 11/23/2008, Register 188
3 AAC 195.080 Acceptance of grant offer; grant conditions
(a) Upon issuance of a final award determination under this chapter, the department will negotiate with the recipient to develop a grant agreement. If the recipient does not enter into a grant agreement satisfactory to the department within 30 days after the final award, the department may consider the award rejected. A recipient of a final award determination does not have a vested right or other entitlement to a grant until a mutually acceptable definitive written agreement is negotiated and is executed by the department.
(b) In a grant agreement, the department will incorporate any audit requirements made applicable by 2 AAC 45.010.
(c) In a grant agreement, the department may require applicants to procure, maintain, and demonstrate liability, hazard, or workers' compensation insurance, may designate required policy limits, and may provide that the state will be an additional insured under a policy.
(d) During the term of a grant agreement, the grantee shall maintain and provide, at the department's request, all grant-related records, reports, invoices, documents, or other information required under the grant agreement.
(e) The department may withhold payment under the grant for the grantee's failure to comply with this chapter.
History
- Authority: AS 44.33.020
- Eff. 6/30/2008, Register 187; am 11/23/2008, Register 188
3 AAC 195.090 Appeals
(a) Within 20 days of receipt of written notice that the department has denied or deferred a grant application or revoked a grant, the applicant or grantee may appeal that decision to the commissioner. The appeal must be in writing and must identify each part of the decision to which the applicant objects.
(b) Within 30 days of receipt of an appeal of a decision, the commissioner will review the application and any relevant supplemental material and will notify the applicant or grantee of the final determination affirming, reversing, or modifying the decision, and of the reasons for the final determination.
(c) If the applicant fails to file an appeal within the time set out in (a) of this section, the department's decision constitutes the final determination of the department.
History
- Authority: AS 44.33.020
- Eff. 6/30/2008, Register 187; am 11/23/2008, Register 188
3 AAC 195.100 Technical assistance
The department may provide technical assistance in project planning, administration, and implementation of a grant if assistance is requested by a grantee.
History
- Authority: AS 44.33.020
- Eff. 6/30/2008, Register 187; am 11/23/2008, Register 188
3 AAC 195.110 Waiver of sovereign immunity
The department will not pay a grant award under this chapter to a village council or a community defined in 3 AAC 195.900(2)(D) unless the department receives, on a form approved by the Department of Law, a waiver of sovereign immunity from suit adopted by the governing body for claims related to the grant award.
History
- Authority: AS 44.33.020
- Eff. 6/30/2008, Register 187; am 11/23/2008, Register 188
3 AAC 195.900 Definitions
In this chapter, unless the context requires otherwise,
(1) "commissioner" means the commissioner of commerce, community and economic development;
(2) "community" means
(A) a borough within the meaning given in AS 29.71.800(3);
(B) a city within the meaning given in AS 29.71.800(4);
(C) a municipality within the meaning given in AS 29.71.800(13);
(D) the Annette Island Reserve established by 25 U.S.C. 495 for the Metlakatla Indian Community; or
(E) an unincorporated community;
(3) "department" means the Department of Commerce, Community, and Economic Development;
(4) "governing body" means
(A) a governing body within the meaning given in AS 29.71.800(10), for a municipality defined in AS 29.71.800(13);
(B) the council for the community defined in (2)(D) of this section; or
(C) a village council or the board of directors of an incorporated nonprofit entity, for an unincorporated community;
(5) "village council" means
(A) a council organized under 25 U.S.C. 476 (sec. 16 of the Indian Reorganization Act);
(B) a traditional village council recognized by the United States as eligible for federal aid to Indians; or
(C) a council recognized by the commissioner under 3 AAC 190.110 - 3 AAC 190.150.
History
- Authority: AS 44.33.020
- Eff. 6/30/2008, Register 187; am 11/23/2008, Register 188
Chapter 196 Coastal Impact Assistance Program Public Solicitation
3 AAC 196.010 Applicability
Subject to the availability of appropriations, this chapter applies to the award, allocation, and distribution of money that is
(1) disbursed through the coastal impact assistance program established under 43 U.S.C. 1356a;
(2) allocated directly to the state under 43 U.S.C. 1356a; and
(3) subject to final approval under 43 U.S.C. 1356a by the United States Secretary of the Interior, as subgrants for non-state proposals.
History
- Authority: AS 44.33.020
- Eff. 3/7/2010, Register 193
3 AAC 196.020 Eligible entities
The following entities are eligible to submit a proposal under this chapter:
(1) a local government within the meaning given in 43 C.F.R. 12.43;
(2) an incorporated nonprofit entity with articles of incorporation and a certificate of incorporation or authority in good standing under AS 10.20;
(3) a postsecondary educational institution;
(4) repealed 3/14/2012;
(5) an Alaska Native tribe that is recognized by the United States Secretary of the Interior to exist as Indian tribe under 25 U.S.C. 479a (Federally Recognized Indian Tribe List Act of 1994).
History
- Authority: AS 44.33.020
- Eff. 3/7/2010, Register 193; am 3/14/2012, Register 201
3 AAC 196.030 Eligible subgrant proposals
To be eligible for a subgrant under this chapter, a proposal must benefit the natural coastal environment of the coastal area and meet one or more of the following uses authorized by 43 U.S.C. 1356a(d)(1):
(1) projects and activities for the conservation, protection, or restoration of coastal areas, including wetland;
(2) mitigation of damage to fish, wildlife, or natural resources;
(3) planning assistance and the administrative costs of complying with 43 U.S.C. 1356a;
(4) implementation of a federally approved marine, coastal, or comprehensive conservation management plan;
(5) mitigation of the impact of outer continental shelf activities through funding of onshore infrastructure projects and public service needs.
History
- Authority: AS 44.33.020
- Eff. 3/7/2010, Register 193
3 AAC 196.040 Solicitation process
The department will publish a subgrant application guide. The department will solicit applications for subgrants under this chapter by publishing notice of the solicitation in a newspaper of general circulation, and posting the notice on the Alaska Online Public Notice System established under AS 44.62.175. The department may publish the notice in an additional form or manner that the department considers helpful in making the solicitation known to the public. The department will provide applications on request to an applicant.
History
- Authority: AS 44.33.020
- Eff. 3/7/2010, Register 193
3 AAC 196.050 Application requirements
An application submitted in response to a solicitation under 3 AAC 196.040 must be
(1) complete, and must be submitted on forms provided by the department; those forms must include a project narrative for inclusion in the amended coastal impact assistance plan that is submitted, as described in 3 AAC 196.100, for approval under 43 U.S.C. 1356a(c)(3) and (4) by the United States Secretary of the Interior;
(2) submitted by an eligible entity as described in 3 AAC 196.020; and
(3) for a project that is eligible under 3 AAC 196.030 and no more than three and one-half years in duration.
History
- Authority: AS 44.33.020
- Eff. 3/7/2010, Register 193
3 AAC 196.060 Preliminary proposal review
The department will conduct a preliminary review of an application to ensure that it meets the requirements of 3 AAC 196.050. At any time during the review under this section, the department will request additional information if it considers that information necessary to a complete review of the application, If the department determines that the application meets the requirements of 3 AAC 196.050, the proposal review committee shall accept, score, and rank the application.
History
- Authority: AS 44.33.020
- Eff. 3/7/2010, Register 193
3 AAC 196.070 Proposal review committee
The department will assemble a proposal review committee. The department will offer a seat on the proposal review committee to, at a minimum, representatives from the Department of Commerce, Community, and Economic Development, the Department of Environmental Conservation, the Department of Fish and Game, and the Department of Natural Resources.
History
- Authority: AS 44.33.020
- Eff. 3/7/2010, Register 193
3 AAC 196.080 Proposal scoring process and criteria
(a) Each member of the proposal review committee shall score a proposal on a scale of 0 - 100 total points, and shall award
(1) no more than 30 points for its rating of a proposed project's design, goals, and results, as set out in the project description; the committee shall give a higher score to
(A) a proposal that clearly explains the project goals and identifies measurable outcomes;
(B) a proposed project that will have tangible and lasting results and that addresses project goals within the time allowed for completion;
(C) a proposal that demonstrates an ability to provide for continuing financial and administrative support, if the proposal is for an ongoing project;
(2) no more than 20 points for its rating of a proposed project's demonstrated need and potential benefit; the committee shall give a higher score to
(A) a proposed project that addresses a demonstrated need under one of the uses identified in 3 AAC 196.030;
(B) a proposed project that will likely result in a lasting benefit for a community, a region, or the state, or that will result in a product that can be used by an agency in the state or by a similarly situated community in the state;
(C) a proposed project that effectively shares the results of the project with appropriate entities to maximize the project's benefits;
(3) no more than 10 points for its rating of a proposed project's cost effectiveness; the committee shall give a higher score to
(A) a proposal in which the costs are explained and justified;
(B) a proposal for which the costs of administration and overhead do not exceed 16 percent of the total proposed project costs;
(4) no more than 10 points for its rating of a proposal's collaboration with other agencies, the community, and the public and a proposal's level of support from those entities; the committee shall give a higher score to
(A) a proposal that includes appropriate consultation or collaboration with state agencies, communities, the public, or other appropriate entities;
(B) a proposal that includes a resolution or letter of support from the governing body of a community, a commitment of in-kind resources or financing, or other evidence of support from appropriate state agencies, communities, or the public;
(5) no more than 10 points for its rating of a proposed project's readiness; the committee shall give a higher score to
(A) a proposal that is well thought out and prepared to be implemented;
(B) a proposal that demonstrates a likelihood of receiving required permits or required landowner support;
(C) a proposal that has secured additional sources of financing, if those additional sources are necessary;
(6) no more than 15 points for its rating of the applicant's capability to manage and implement the subgrant; the committee shall give a higher score to
(A) a proposal that demonstrates that the applicant has the capability to manage the administration of the subgrant, including the maintenance of an accurate accounting and reporting system;
(B) a proposal that demonstrates that key individuals have the experience, qualifications, and technical ability to successfully complete the project; and
(7) no more than five points for its rating of the proposed project's nexus with oil and gas development on the outer continental shelf; the committee shall give a higher score to proposals that address informational needs related to, or the potential effects of, oil and gas development on the outer continental shelf.
(b) Once all its members have completed their individual scores for a proposal, the proposal review committee shall average those individual scores to calculate a final score for that proposal. After it completes scoring the proposal, the proposal review committee shall rank them by score. The department shall forward the results of the scored and ranked applications to the following individuals for comment:
(1) the commissioner of environmental conservation, or the commissioner's designee;
(2) the commissioner of fish and game, or the commissioner's designee;
(3) the commissioner of natural resources, or the commissioner's designee;
(4) the fisheries policy advisor in the Office of the Governor.
(c) The department may modify the scoring calculations and ranking of the proposal review committee as a result of comments received, if any, from the individuals in (b)(1) - (4) of this section. The department will make final proposal selections based on the final scoring calculations and project rankings.
(d) The department will select two tiers of projects. For Tier 1, the department will select the highest-ranked projects, and will allocate to those projects all of the money available. For Tier 2, the department will rank and select projects for which subgrants will be awarded if money previously allocated to a Tier 1 project becomes available.
(e) The department will recommend a subgrant amount smaller than the amount sought if the department considers a reduced amount to be
(1) necessary to increase the amount supplied to the project by the recipient if the department considers the recipient to have additional resources available;
(2) necessary to eliminate money for inefficient or excessive components of the proposed project; or
(3) warranted by the merits of the project.
(f) The department will send an applicant written notification
(1) whether the applicant's project has been selected as a Tier 1 project, and if so, the department's recommended amount of any subgrant; or
(2) whether the project is assigned to Tier 2, and if so, the project's ranking within Tier 2 and the department's recommended amount of any subgrant.
History
- Authority: AS 44.33.020
- Eff. 3/7/2010, Register 193
3 AAC 196.090 Reconsideration
(a) No more than 10 days after receiving the department's written notification under 3 AAC 196.080(f), the applicant may make a request for reconsideration to the commissioner. The request must be in writing and must identify each part of the decision to which the applicant objects.
(b) No more than 15 days after receiving a request for reconsideration, the commissioner will review the request, the application, and any relevant supplemental material and may issue a written decision. If a written decision is not issued during the 15 days after a request for reconsideration is received, the request is considered denied. The commissioner's decision on a request for reconsideration constitutes the final determination of the department.
(c) If the applicant fails to request reconsideration during the time set out in (a) of this section, the department's decision constitutes the final determination of the department.
History
- Authority: AS 44.33.020
- Eff. 3/7/2010, Register 193
3 AAC 196.100 Integration into state coastal impact assistance plan
The department will forward its project selections and rankings, recommended subgrant amounts, and identification of projects as Tier 1 or Tier 2 to the division within the Department of Natural Resources designated as the official state contact for the United States Department of the Interior, Minerals Management Service, Coastal Impact Assistance Program, in accordance with 43 U.S.C. 1356a(c)(2)(B)(ii)(I), for integration into an amendment to the state's coastal impact assistance plan, solicitation of public comment consistent with 43 U.S.C. 1356a(c)(1) on the plan amendment, and submission of the amended plan for approval under 43 U.S.C. 1356a(c)(3) and (4) by the United States Secretary of the Interior.
History
- Authority: AS 44.33.020
- Eff. 3/7/2010, Register 193
3 AAC 196.110 Acceptance of subgrant offer; subgrant conditions
(a) After federal approval under 43 U.S.C. 1356a(c)(3) and (4) of the state's amended coastal impact assistance plan, after issuance of federal grant awards, and subject to the availability of appropriations, the department will negotiate a subgrant agreement with the recipient. A recipient of a final award determination does not have a vested right or other entitlement to a subgrant until a mutually acceptable definitive written agreement is negotiated and is executed by the department.
(b) In a subgrant agreement, the department will incorporate any audit requirements made applicable by 2 AAC 45.010.
(c) In a subgrant agreement, the department may require applicants to procure, maintain, and demonstrate liability, hazard, or workers' compensation insurance, may designate required policy limits, and may provide that the state will be an additional insured under a policy.
(d) During the term of a subgrant agreement, the subgrantee shall maintain and provide, at the department's request, all subgrant-related records, reports, invoices, documents, or other information required under the subgrant agreement.
(e) The department may withhold payment under the subgrant for the subgrantee's failure to comply with this chapter or the subgrant agreement.
History
- Authority: AS 44.33.020
- Eff. 3/7/2010, Register 193
3 AAC 196.120 Waiver of sovereign immunity
If the subgrantee is an entity that possesses sovereign immunity, the subgrantee must agree as a condition of receiving a subgrant that the subgrantee irrevocably waive its sovereign immunity with respect to enforcement of the subgrant agreement or claims related to the subgrant agreement. The waiver of sovereign immunity must be on a form approved by the Department of Law.
History
- Authority: AS 44.33.020
- Eff. 3/7/2010, Register 193
3 AAC 196.900 Definitions
In this chapter, unless the context requires otherwise,
(1) repealed 4/1/2012, Register 201;
(2) "coastal impact assistance plan" means the plan that the state submits under 43 U.S.C. 1356a(c) for approval by the United States Secretary of the Interior;
(3) repealed 3/14/2012;
(4) "commissioner" means the commissioner of commerce, community, and economic development;
(5) "department" means the Department of Commerce, Community, and Economic Development;
(6) "proposal review committee" means the group assembled under 3 AAC 196.070.
History
- Authority: AS 44.33.020
- Eff. 3/7/2010, Register 193; am 3/14/2012, Register 201; am 4/1/2012, Register 201
Chapter 198 Library Construction and Major Expansion Matching Grant Program
3 AAC 198.010 Applicability
This chapter applies to the public library construction and major expansion matching grant program established in AS 14.56.355.
History
- Authority: AS 14.56.355; AS 14.56.356
- Eff. 1/1/2010, Register 192
3 AAC 198.020 Uses of grant
An eligible applicant that receives a grant under this section
(1) shall use the grant to
(A) construct a new public library; or
(B) make a major expansion, including associated renovations, to an existing public library;
(2) may not use the grant for
(A) costs of ordinary maintenance and operating expenses of a public library;
(B) equipment or furnishings that are not part of the construction or major expansion of a public library; or
(C) other purposes not authorized under AS 14.56.355 and 14.56.356.
History
- Authority: AS 14.56.355; AS 14.56.356
- Eff. 1/1/2010, Register 192; am 11/5/2011, Register 200
3 AAC 198.030 Eligible applicant
(a) The following are eligible applicants that may submit a proposal under this chapter:
(1) municipality;
(2) Native Village Council;
(3) community in the unorganized borough, if the community
(A) is an incorporated nonprofit organization in good standing under AS 10.20; and
(B) agrees to receive and spend the grant money for the applicable purpose specified in this chapter.
(b) If a community has more than one of the organizations described in this section, and each is eligible to receive a grant, the department will determine which organization is to receive the grant money. In making this determination, the department will consider factors relevant to achieving the purpose of the grant, including the
(1) administrative capability of each incorporated nonprofit organization, including past performance on any previous grant awards;
(2) ability of each incorporated nonprofit organization to manage its debt and other finances;
(3) degree to which each incorporated nonprofit organization is representative of the community; and
(4) purpose for which each incorporated nonprofit organization intends to spend the grant money.
History
- Authority: AS 14.56.355; AS 14.56.356
- Eff. 1/1/2010, Register 192
3 AAC 198.040 Maximum amount of grant
(a) Subject to appropriation, the department may make grants under the program in an amount not to exceed 50 percent of the total proposed grant project costs.
(b) For purposes of AS 14.56.355(c) and this section, the total proposed grant project costs for a public library that is combined with a municipal or other community facility includes only those costs that are attributable, as determined by the department, to uses relating to construction, or major expansion, including associated renovations, of a public library within the proposed combined facility.
History
- Authority: AS 14.56.355; AS 14.56.356
- Eff. 1/1/2010, Register 192; am 11/5/2011, Register 200
3 AAC 198.050 Local match
(a) An applicant must provide, as a local match, the portion of the total proposed grant project costs not met by the grant payable under AS 14.56.355 and 14.56.356 and this chapter.
(b) The local match may be in the form of
(1) money;
(2) land; or
(3) services.
History
- Authority: AS 14.56.355; AS 14.56.356
- Eff. 1/1/2010, Register 192; am 11/5/2011, Register 200
3 AAC 198.060 Application
(a) An applicant must apply for a grant on a form provided by the department.
(b) The application must include
(1) a detailed study outlining how the library space needs of the community and library service area in which the project will be or has been constructed will be met for at least the 10 year period following the date of application;
(2) a detailed description of the project, the associated costs of the project, and the funding sources that will support construction of the project and the operation and maintenance of the public library after construction; and
(3) assurances that
(A) the applicant will provide the local match required by AS 14.56.356 and 3 AAC 198.050;
(B) ownership of a public library to be constructed or to undergo a major expansion with money received under the grant will conform to the requirements of AS 14.56.356 and this chapter; and
(C) the new construction, or existing facility, including the expansion, will be primarily dedicated for use as a library for a period of not less than 20 years or the life of the building, whichever is less.
(c) In addition to the requirements of (b) of this section, if the application for a grant is for the construction or major expansion of a combined facility in which the public library is to be located as part of a municipal or other community facility, the applicant shall submit a copy of a valid agreement between the governing body of the public library, and
(1) the governing body of the community, if the application is for a combined facility in a community building;
(2) the board, committee, or other organization managing or operating the portion of a community facility not used for library purposes, if the application is for a combined facility for which a community is not responsible.
(d) The agreement provided under (c) of this section must clearly delineate the responsibilities of the public library, the community, or other organization, with provisions for
(1) financial responsibility for the maintenance and care of the combined facility;
(2) library personnel;
(3) use of equipment; and
(4) hours of service.
(e) Nothing in this section makes a public or private school library eligible for a grant under AS 14.56.355 and 14.56.356.
History
- Authority: AS 14.56.355; AS 14.56.356
- Eff. 1/1/2010, Register 192; am 11/5/2011, Register 200
3 AAC 198.070 Preliminary proposal review
The department will conduct a preliminary proposal review of an application to ensure the applicant meets the requirements of 3 AAC 198.060. At any time during the preliminary proposal review, the department may request additional information if the department considers the information necessary to complete the review of application.
History
- Authority: AS 14.56.355; AS 14.56.356
- Eff. 1/1/2010, Register 192; am 11/5/2011, Register 200
3 AAC 198.080 Standards for decision on grant application
The department will make a decision on a grant application for a grant under AS 14.56.355 and 14.56.356 and this chapter based on the
(1) compliance of the proposed project with minimum space requirements as follows:
(A) for a project serving a community with an estimated population of fewer than 400: at least 800 square feet;
(B) for a project serving a community with an estimated population of 400 - 1,000: at least 1,200 square feet;
(C) for a project serving a community with an estimated population of more than 1,000: 2,000 square feet or 0.7 square feet per capita, whichever is greater;
(2) compliance of the proposed project with applicable municipal, state, and federal law, including 42 U.S.C. 12101 - 12213 (Americans with Disabilities Act);
(3) conformance of the proposed project to the needs of the community and the anticipated users of the public library;
(4) suitability of the proposed project to meet the library needs of the community for at least 10 years;
(5) appropriateness of the amount requested in the grant application to the proposed project and the library requirements of the community served by the applicant; and
(6) ability of the applicant to operate and maintain the proposed project, including an evaluation of the applicant's past performance in operating a library, if applicable.
History
- Authority: AS 14.56.355; AS 14.56.356
- Eff. 1/1/2010, Register 192; am 11/5/2011, Register 200
3 AAC 198.090 Priority for grant approval
(a) During a fiscal year, if amounts requested in grant applications approved by the department under 3 AAC 198.080 exceed amounts appropriated for payment of grants, the department will give priority to grants as follows:
(1) the first priority is given to an application submitted by a community that does not have a public library, but has created a plan for public library service;
(2) the second priority is given to an application that the commissioner, in consultation with the division within the Department of Education and Early Development that oversees libraries, evaluates as having the highest beneficial impact on the provision of library services to the public.
(b) If there are projects that are ranked as relatively equal under (a)(2) of this section, the department will give preference to an applicant that has not previously received a grant under AS 14.56.355 and 14.56.356 and this chapter.
History
- Authority: AS 14.56.355; AS 14.56.356
- Eff. 1/1/2010, Register 192
3 AAC 198.100 Administrative hearing
Repealed.
History
- Eff. 1/1/2010, Register 192; repealed 11/5/2011, Register 200
3 AAC 198.105 Decision; notification
The department will issue a decision on the application and the award of any grant. The department will send a copy of the decision to the applicant.
History
- Authority: AS 14.56.355; AS 14.56.356
- Eff. 11/5/2011, Register 200
3 AAC 198.107 Reconsideration
(a) No later than 10 days after receipt of the department's written notification under 3 AAC 198.105, the applicant may make a written request for reconsideration of all or part of the decision to the commissioner. The request must be in writing and must identify each part of the decision to which the applicant objects and clearly state each objection to the department's decision.
(b) No later than 15 days after receiving a request for reconsideration, the commissioner will review the request, the application, and any relevant supplemental material, and may issue a written decision. If a written decision is not issued during the 15 days after a request for reconsideration is received, the request is automatically denied. The commissioner's decision on a request for reconsideration is final.
(c) If the applicant fails to request reconsideration during the time set out in (a) of this section, the department's decision is final.
History
- Authority: AS 14.56.355; AS 14.56.356
- Eff. 11/5/2011, Register 200
3 AAC 198.110 Acceptance of grant offer; grant conditions
(a) Upon issuance of a final award determination under this chapter, the department and the applicant will develop a grant agreement. A recipient of a final award determination does not have a vested right or other entitlement to a grant until a mutually acceptable definitive written agreement is negotiated and is executed by the department.
(b) In the grant agreement, the department will
(1) incorporate the project close-out requirements of 3 AAC 198.130 and the applicable audit requirements under 2 AAC 45.010;
(2) set out a payment schedule for the amount of the grant to be paid by the department under 3 AAC 198.040;
(3) include a statement of the rights and responsibilities of the department and the applicant regarding the proposed project;
(4) require the applicant to procure, maintain, and demonstrate liability, hazard, or workers' compensation insurance;
(5) designate required policy limits; and
(6) require the applicant to provide assurances that the project, when constructed or expanded, will be operated as a public library for not less than 20 years or for the life of the building, whichever is less.
(c) During the term of a grant agreement, the applicant shall maintain and provide, at the department's request, all grant-related records, reports, invoices, documents, or other information required under the grant agreement.
(d) A grant agreement with a community or a corporation must be accompanied by a resolution sufficient to bind the applicant to the terms of the agreement.
History
- Authority: AS 14.56.355; AS 14.56.356
- Eff. 1/1/2010, Register 192; am 11/5/2011, Register 200
3 AAC 198.120 Withheld money
Repealed.
History
- Eff. 1/1/2010, Register 192; repealed 11/5/2011, Register 200
3 AAC 198.130 Project close-out
(a) In addition to complying with the applicable audit requirements under 2 AAC 45.010, the grantee shall file a final project report with the department when a project has been completed.
(b) The project report must include
(1) a narrative report outlining the tasks associated with project completion;
(2) a final financial progress report by the grantee of all receipts and expenditures for the project; and
(3) the grantee's certification that all project expenditures conform to law.
(c) If the grantee fails to provide a final financial progress and narrative report as required under (b) of this section, the department will notify the grantee of the failure and give 30 days after the date of notification to comply with this section. If the grantee continues to fail to comply with this section, the department may require repayment of all or a portion of the grant that has been paid to the grantee for the project.
History
- Authority: AS 14.56.355; AS 14.56.356
- Eff. 1/1/2010, Register 192; am 11/5/2011, Register 200
3 AAC 198.140 Grant program administration
Repealed.
History
- Eff. 1/1/2010, Register 192; repealed 11/5/2011, Register 200
3 AAC 198.150 Waiver of sovereign immunity
If the grantee is an entity that possesses sovereign immunity, the grantee must agree as a condition of receiving a grant that the grantee irrevocably waives its sovereign immunity with respect to enforcement of the grant agreement or claims related to the grant agreement. The waiver of sovereign immunity must be on a form approved by the Department of Law.
History
- Authority: AS 14.56.355; AS 14.56.356
- Eff. 1/1/2010, Register 192
3 AAC 198.990 Definitions
In this chapter, unless the context otherwise requires,
(1) "commissioner" means the commissioner of the Department of Commerce, Community, and Economic Development;
(2) "community" means a place in which 25 or more individuals reside as a social unit;
(3) "department" means the Department of Commerce, Community, and Economic Development;
(4) "grant" means a grant applied for or awarded under the program;
(5) "municipality" has the meaning given in AS 29.71.800;
(6) "Native village council" means
(A) a council organized under 25 U.S.C. 476 (sec. 16 of the Indian Reorganization Act);
(B) the council for the Annette Island Reserve established by 25 U.S.C. 495 for the Metlakatla Indian Community; or
(C) a traditional village council recognized by the United States as eligible for federal aid to Indians;
(7) "operating expenses"
(A) means expenses for personal services, communications, library materials, supplies, equipment, and other services necessary to provide library services;
(B) does not include construction expenses;
(8) "program" means the public library construction and major expansion matching grant program under AS 14.56.355 and 14.56.356 and this chapter;
(9) "public library" means a library as described in AS 14.56.356(a)(2).
History
- Authority: AS 14.56.355; AS 14.56.356
- Eff. 1/1/2010, Register 192
Part 18 Alaska Science and Technology Foundation
Chapter 233 Alaska Science and Technology Foundation
Article 1 Endowment Grants and Bidco Assistance
3 AAC 233.010 Scope of chapter
This chapter applies to
(1) grant proposals solicited by and submitted to the foundation for financing of basic and applied research and the development and commercialization of technology that achieve the purposes set out in AS 37.17.010(b)(1) or that enhance and promote other innovations in this state as identified by the foundation to achieve those purposes, including infrastructure for scientific education and training;
(2) grant proposals solicited by and submitted to the foundation under AS 37.17.225 for implementing the BIDCO assistance program; and
(3) loan proposals solicited by and submitted to the foundation under AS 37.17.220 for implementing the BIDCO assistance program.
History
- Authority: AS 37.17.010; AS 37.17.110; AS 37.17.225 AS 37.17.090; AS 37.17.220
- Eff. 5/12/90, Register 114; am 8/14/99, Register 151
Article 2 Science and Technology Grants
3 AAC 233.020 Solicitation and award of grant proposals
(a) At least once a year, and in accordance with 3 AAC 233.030, the board will solicit grant proposals consistent with the purposes of the foundation as specified in AS 37.17.010(b). Subject to the availability of money as set out in AS 37.17.225, the board will, in its discretion, solicit grant proposals to accomplish the purposes of AS 37.17.200. Unless the board sets a specific deadline in a competitive solicitation for submission of proposals, preproposals and final proposals may be submitted to the foundation at any time for consideration under 3 AAC 233.060.
(b) The board will include the following items in a competitive solicitation:
(1) instructions and information to applicants concerning the solicitation submission requirements including requirements for submission of preproposals and final proposals, conditions of confidentiality of trade secrets and other proprietary information submitted with proposals, and any other special information;
(2) a project description; in that description, the board will include the area of basic or applied science that the foundation seeks to promote or enhance in the particular solicitation, unless the grant for which proposals are sought is a grant under AS 37.17.225;
(3) the evaluation factors that the board will use in reviewing a proposal;
(4) a general description of applicable grant agreement terms and conditions for the award of a grant; and
(5) other requirements particular to the solicitation, including, as necessary, financial disclosure information, business licenses or permits, and character references.
(c) If a correction or modification to a solicitation under this section is necessary, the board will issue notice of that correction or solicitation under 3 AAC 233.030.
History
- Authority: AS 37.17.010; AS 37.17.110
- Eff. 5/12/90, Register 114; am 8/14/99, Register 151
3 AAC 233.030 Public notice
(a) Notice of a solicitation for preproposals shall be published in at least one newspaper of general circulation in each judicial district of the state at least one time.
(b) The board will, in its discretion, make notice of a solicitation through other appropriate media.
(c) Nothing in this section limits the additional forms of public notice that may be used by the foundation.
(d) The foundation will, in its discretion, require payment of duplication costs of a solicitation.
History
- Authority: AS 37.17.010; AS 37.17.110
- Eff. 5/12/90, Register 114; am 8/14/99, Register 151
3 AAC 233.040 Review of preproposals
(a) Upon receipt of a preproposal, the executive director or the executive director's designee shall review the preproposal to determine whether the application is responsive to the solicitation requirements.
(b) Repealed 8/14/99.
(c) If the executive director or the executive director's designee determines that a preproposal is responsive to the solicitation, the executive director or the executive director's designee shall accept the preproposal and invite the applicant to submit a final proposal.
(d) If the executive director or the executive director's designee determines that a preproposal generally complies with the solicitation requirements but that the applicant has failed to respond to a minor requirement, the executive director or the executive director's designee shall inform the applicant of the inadequacy and request the applicant to cure the inadequacy in an amended preproposal or in the applicant's final proposal.
(e) If the executive director or the executive director's designee determines that a preproposal is not responsive to the solicitation, the executive director or the executive director's designee shall inform the applicant that the preproposal is nonresponsive and the reasons the preproposal was determined to be nonresponsive.
(f) An applicant whose preproposal is determined to be nonresponsive under (e) of this section, may submit a final proposal for review by the board. However, if the board determines that the final proposal is nonresponsive, the board will, in its discretion, reject the final proposal without submitting it for peer review under 3 AAC 233.070.
(g) Repealed 8/14/99.
(h) Repealed 8/14/99.
(i) Repealed 8/14/99.
History
- Authority: AS 37.17.010; AS 37.17.110
- Eff. 5/12/90, Register 114; am 8/14/99, Register 151
3 AAC 233.050 Only one responsive preproposal received
If only one responsive preproposal is received in response to a competitive solicitation, the executive director or the executive director's designee may
(1) accept the preproposal and inform the applicant of the deadline to submit a final proposal;
(2) reject the preproposal without soliciting new proposals; or
(3) reject the preproposal and resolicit for new proposals.
History
- Authority: AS 37.17.010; AS 37.17.110
- Eff. 5/12/90, Register 114; am 8/14/99, Register 151
3 AAC 233.060 Unsolicited proposals
The board will, in its discretion, accept unsolicited proposals that it determines are in furtherance of the purposes of the foundation as set out in AS 37.17.010(b)(1). An unsolicited proposal is treated like a preproposal under 3 AAC 233.040 and is subject to the requirements for the submission of final proposals, peer review, and grant agreement requirements consistent with this chapter.
History
- Authority: AS 37.17.110
- Eff. 5/12/90, Register 114; am 8/14/99, Register 151
3 AAC 233.070 Final proposals
(a) A final proposal is subject to impartial and competitive peer review by a panel of experts.
(b) At least two members of the peer review panel shall review a final proposal. However, if an insufficient number of members are available due to conflicts of interest, a single member may review the final proposal.
(c) The identity of the members of the peer review panel is confidential until board takes action on a proposal. The foundation will not match evaluation scores or comments on a proposal with a peer review panel member's name.
(d) To be a member of the peer review panel an individual must, before serving on the panel, sign a conflict-of-interest and confidentiality statement on a form provided by the foundation in which the individual
(1) discloses whether the individual has a financial interest or personal interest, as defined in AS 39.52.960, in a particular proposal under review; and
(2) agrees not to
(A) divulge the contents of a proposal under review; or
(B) use, in any way, information in a proposal under review, unless that information is already in the public domain.
History
- Authority: AS 37.17.010; AS 37.17.110 AS 37.17.090; AS 37.17.225
- Eff. 5/12/90, Register 114; am 8/14/99, Register 151
3 AAC 233.080 Evaluation of and decisions on proposals
(a) After the completion of a peer review under AS 37.17.090(b) and 3 AAC 233.070, the board will evaluate and make a determination on a final proposal.
(b) The board will make an evaluation of and determination on final proposals consistent with the evaluation factors set out in the proposal solicitation and corrections or modifications of the solicitation, if any, that apply to the proposal.
(c) The board will, in its discretion, award a grant in an amount less than the amount sought in the final proposal.
(d) If the board accepts a final proposal, the board will send the applicant a written notification that sets out the amount of the grant and the general terms and conditions for the board's acceptance.
(e) If the board rejects a final proposal, the board will send the applicant a written notification that states the reasons for the rejection. The foundation will retain, for at least two years, at least one copy of each proposal that has been submitted to the foundation. The foundation will return the original preproposal or final proposal to an applicant at the applicant's request.
(f) The foundation will not reimburse an applicant for fees or costs that the applicant incurs in the preparation of a preproposal or final proposal. The applicant may not pay for or offset fees or costs for preparation of a preproposal or final proposal with grant money provided by the foundation.
(g) The board is not required to provide money for a proposal submitted in response to a solicitation if the board determines that the proposal does not meet the criteria of AS 37.17.
History
- Authority: AS 37.17.010; AS 37.17.110
- Eff. 5/12/90, Register 114; am 8/14/99, Register 151
3 AAC 233.090 Grant agreements
(a) After the board sends an applicant the notification described in 3 AAC 233.080(d), the executive director or the executive director's designee shall negotiate, as directed by the board and on the board's behalf, the specific terms and conditions of the resulting grant agreement with the successful applicant.
(b) A successful applicant does not have a vested right or other entitlement to a grant from the foundation until a mutually acceptable definitive written agreement is negotiated and is signed by the foundation.
(c) A grant agreement must contain the terms and conditions of repayment, require periodic and final financial reporting by the applicant on a form required by the foundation, and allow for inspection of the applicant's business and financial books and records and place of business by members of the board, the executive director, or representatives of the foundation.
(d) Repealed 8/14/99.
(e) A grant agreement must contain a requirement that the applicant not use grant money for lobbying or political activities.
(f) The board will require in the grant agreement a fair and reasonable return to the foundation from the revenue, economic value, or profits that the applicant derives from or as a result of the grant. The board will, in its discretion, require that a fair and reasonable return consist of a percentage of gross revenue, net revenue, receipts, before-tax income, or after-tax income that the applicant receives, directly or indirectly, as a result of goods or services sold, leased, licensed, or otherwise provided by the applicant, if those goods or services include or are based upon inventions or technology conceived, reduced to practice, or developed with grant money. The board will, in its discretion, specify other terms and conditions that the board considers necessary or appropriate.
History
- Authority: AS 37.17.010; AS 37.17.090; AS 37.17.110
- Eff. 5/12/90, Register 114; am 8/14/99, Register 151
Article 3 BIDCO Loan Assistance
3 AAC 233.100 BIDCO Loan Assistance
(a) The board will, in its discretion, issue solicitations for proposals to form, capitalize, and operate BIDCOs. Subject to the availability of appropriations from the legislature, the foundation will capitalize a BIDCO with at least $1,000,000 of foundation money, if the applicant provides a matching amount of $1,000,000.
(b) If a BIDCO proposal submitted in response to a solicitation under this section contains proprietary information, the foundation will treat that information as confidential as in 3 AAC 233.950. To receive a loan under this section, a BIDCO must agree to treat applications to the BIDCO for assistance as confidential as described in 3 AAC 233.950
(c) The foundation will make BIDCO loans under AS 37.17.220 only to companies that are licensed under AS 43.70 and that meet the evaluation standards set out in AS 37.17.240.
(d) The board will specify in the loan agreement
(1) the terms and conditions for repayment of a loan under AS 37.17.220; the board will develop those terms and conditions in accordance with the requirements of AS 37.17.220 - 37.17.390 and with good business practice; and
(2) the formula for calculating the credits described in AS 37.17.280.
History
- Authority: AS 37.17.010; AS 37.17.110; AS 37.17.220
- Eff. 8/14/99, Register 151
Article 4 General Provisions
3 AAC 233.900 Definitions
Repealed.
History
- Eff. 5/12/90, Register 114; repealed 8/14/99, Register 151
3 AAC 233.950 Confidentiality
(a) The foundation will maintain the confidentiality of material in a proposal that the applicant identifies as a trade secret or proprietary information, unless
(1) the board determines that the identified material is not a trade secret or propriety information; or
(2) the applicant subsequently specifies in writing that the material may be released to the public.
(b) If a BIDCO that receives assistance under AS 37.17.200 - AS 37.17.390 identifies information that the BIDCO submits to the foundation as a trade secret or proprietary information, consistence with AS 37.17.090(f) and AS 37.17.350, except to the extent that the board determines the information not to be a trade secret or proprietary information.
(c) The board will, in its discretion, and consistent with AS 37.17.090(f), treat information submitted under AS 37.17.090(f) confidentiality.
(d) The board will meet at least twice a year to consider confidentiality issues that arise in the interim.
History
- Authority: AS 37.17.010; AS 37.17.110; AS 37.17.225 AS 37.17.090; AS 37.17.200; AS 37.17.350
- Eff. 8/14/99, Register 151
3 AAC 233.990 Definitions
In this chapter, unless the context requires otherwise,
(1) "applicant" means a person who
(A) submits a preproposal, or final proposal to the foundation for a grant or loan; or
(B) receives a grant or loan;
(2) "BIDCO" has the meaning given in AS 37.17.390;
(3) "board" means the board of directors of the foundation;
(4) "executive director" means the executive director whom the board employs under AS 37.17.080;
(5) "final proposal" means a proposal submitted to the foundation for final review;
(6) "foundation" has the meaning given in AS 37.17.390;
(7) "peer review panel" means the recognized experts appointed to conduct an impartial and competitive peer review of a final proposal;
(8) "preproposal" means a proposal submitted to the foundation for initial review by the executive director or the executive director's designee;
(9) "proposal" means a preproposal or final proposal.
History
- Authority: AS 37.17.010; AS 37.17.110; AS 37.17.225 AS 37.17.090; AS 37.17.200
- Eff. 8/14/99, Register 151; am 8/14/99, Register 151
Part 19 Alcoholic Beverage Control Board
Chapter 304 Alcoholic Beverage Control Board
Article 1 Administration
3 AAC 304.005 Submissions to the board
Repealed.
History
- Eff. 11/29/81, Register 80; am 9/11/98, Register 147; repealed 1/1/2024, Register 248
3 AAC 304.015 Staff
Repealed.
History
- Eff. 11/29/81, Register 80; repealed 1/1/2024, Register 248
3 AAC 304.025 Conduct of board meetings
Repealed.
History
- Eff. 11/29/81, Register 80; am 5/11/96, Register 138; repealed 1/1/2024, Register 248
3 AAC 304.035 Public comment at board meetings
Repealed.
History
- Eff. 11/29/81, Register 80; repealed 1/1/2024, Register 248
Article 2 Licensing
3 AAC 304.100 When licenses become available
Repealed.
History
- Eff. 4/28/84, Register 90; am 2/21/2019, Register 229; repealed 1/1/2024, Register 248
3 AAC 304.105 Application generally
Repealed.
History
- Eff. 11/29/81, Register 80; am 10/4/87, Register 104; am 7/30/89, Register 111; am 5/1/94, Register 130; am 5/11/96, Register 138; am 6/13/2003, Register 166; am 7/1/2018, Register 226; repealed 1/1/2024, Register 248
3 AAC 304.106 Security interest transfers
Repealed.
History
- Eff. 6/22/2019, Register 230; repealed 1/1/2024, Register 248
3 AAC 304.107 Compelled transfer of license; security interest
Repealed.
History
- Eff. 7/30/89, Register 111; am 5/1/94, Register 130; am 6/22/2019, Register 230; repealed 1/1/2024, Register 248
3 AAC 304.110 Mutually exclusive and competing applications
Repealed.
History
- Eff. 4/28/84, Register 90; am 5/1/94, Register 130; repealed 1/1/2024, Register 248
3 AAC 304.112 Selection among competing applications within incorporated cities, organized boroughs, and unified municipalities
Repealed.
History
- Eff. 4/28/84, Register 90; am 5/19/85, Register 94; am 5/1/94, Register 130; repealed 1/1/2024, Register 248
3 AAC 304.115 Petitions
Repealed.
History
- Eff. 11/29/81, Register 80; am 10/24/87, Register 104; am 4/11/2020, Register 234; repealed 1/1/2024, Register 248
3 AAC 304.125 Public notice
Repealed.
History
- Eff. 11/29/81, Register 80; am 5/1/94, Register 130; repealed 1/1/2024, Register 248
3 AAC 304.135 Action upon application
Repealed.
History
- Eff. 11/29/81, Register 80; repealed 5/11/96, Register 138
3 AAC 304.145 Local governing body protest
Repealed.
History
- Eff. 11/29/81, Register 80; am 4/28/84, Register 90; am 5/22/92, Register 122; am 5/11/96, Register 138; am 2/21/2019, Register 229; repealed 1/1/2024, Register 248
3 AAC 304.147 Processing fees for renewals after late payment of taxes
Repealed.
History
- Eff. 5/1/94, Register 130; repealed 1/1/2024, Register 248
3 AAC 304.150 Procedure on objection or protest; appeals
Repealed.
History
- Eff. 7/30/89, Register 111; repealed 1/1/2024, Register 248
3 AAC 304.155 Issuance of license
Repealed.
History
- Eff. 11/29/81, Register 80; repealed 1/1/2024, Register 248
3 AAC 304.160 License renewals
Repealed.
History
- Eff. 9/11/98, Register 147; am 6/13/2003, Register 166; am 2/21/2019, Register 229; repealed 1/1/2024, Register 248
3 AAC 304.165 Renewals
Repealed.
History
- Eff. 11/29/81, Register 80; repealed 5/11/96, Register 138
3 AAC 304.170 Waiver of annual operating requirement and minimum operating requirements
Repealed.
History
- Eff. 11/30/90, Register 116; am 5/22/92, Register 122; am 5/1/94, Register 130; am 5/11/96, Register 138; am 2/21/2019, Register 229; am 11/28/2019, Register 232; repealed 1/1/2024, Register 248
3 AAC 304.175 Transfers
Repealed.
History
- Eff. 11/29/81, Register 80; am 4/28/84, Register 90; am 5/11/96, Register 138; am 8/24/2001, Register 159; am 6/13/2003, Register 166; am 10/27/2018, Register 228; repealed 1/1/2024, Register 248
3 AAC 304.180 Denial, suspension, revocation, or refusal to renew or transfer, in the public interest
Repealed.
History
- Eff. 4/28/84, Register 90; am 5/1/94, Register 130; am 5/11/96, Register 138; am 11/28/2019, Register 232; repealed 1/1/2024, Register 248
3 AAC 304.185 Licensed premises
Repealed.
History
- Eff. 11/29/81, Register 80; am 12/13/2009, Register 192; am 7/1/2018, Register 226; am 8/17/2018, Register 227; am 4/16/2020, Register 234; am 8/23/2020, Register 235; am 11/17/2020, Register 236; repealed 1/1/2024, Register 248
3 AAC 304.190 Seasonal licenses
Repealed.
History
- Eff. 2/21/2019, Register 229; repealed 1/1/2024, Register 248
3 AAC 304.195 Surrender of license
Repealed.
History
- Eff. 11/29/81, Register 80; repealed 1/1/2024, Register 248
3 AAC 304.196 Transfer of location of licenses under AS 04.11.400(k)
Repealed.
History
- Eff. 12/13/2009, Register 192; repealed 1/1/2024, Register 248
3 AAC 304.197 Process for transfer of a beverage dispensary license under AS 04.11.400(k)
Repealed.
History
- Eff. 12/13/2009, Register 192; repealed 1/1/2024, Register 248
3 AAC 304.205 Exercise of authority
Repealed.
History
- Eff. 11/29/81, Register 80; repealed 1/1/2024, Register 248
3 AAC 304.215 Death of a sole licensee
Repealed.
History
- Eff. 11/29/81, Register 80; am 7/4/2021, Register 239; repealed 1/1/2024, Register 248
3 AAC 304.216 Death of an individual with a controlling interest in a license issued to a business entity
Repealed.
History
- Eff. 7/4/2021, Register 239; repealed 1/1/2024, Register 248
3 AAC 304.217 Death of an individual with less than a controlling interest in a license issued to a business entity
Repealed.
History
- Eff. 7/4/2021, Register 239; repealed 1/1/2024, Register 248
3 AAC 304.225 Alternating licensed premises
Repealed.
History
- Eff. 12/16/2016, Register 220; am 8/17/2018, Register 227; am 4/9/2023, Register 246; am 8/23/2023, Register 247; repealed 1/1/2024, Register 248
Article 3 Licenses
3 AAC 304.305 Restaurant or eating place license
Repealed.
History
- Eff. 11/29/81, Register 80; am 6/25/88, Register 106; am 5/1/94, Register 130; am 5/11/96, Register 138; am 9/11/98, Register 147; am 12/16/2016, Register 220; repealed 1/1/2024, Register 248
3 AAC 304.310 Seasonal restaurant or eating place tourism license
Repealed.
History
- Eff. 4/09/2023, Register 246; repealed 1/1/2024, Register 248
3 AAC 304.315 Beverage dispensary license
Repealed.
History
- Eff. 11/29/81, Register 80; am 3/31/85, Register 93; repealed 1/1/2024, Register 248
3 AAC 304.325 License issued to encourage tourism
Repealed.
History
- Eff. 11/29/81, Register 80; am 5/19/85, Register 94; am 10/24/87, Register 104; am 5/22/92, Register 122; repealed 1/1/2024, Register 248
3 AAC 304.335 License issued for public convenience
Repealed.
History
- Eff. 11/29/81, Register 80; am 3/31/85, Register 93; am 10/24/87, Register 104; am 8/24/2001, Register 159; repealed 1/1/2024, Register 248
3 AAC 304.340 Common carrier dispensary license
Repealed.
History
- Eff. 11/6/2004, Register 172; am 7/19/2017, Register 223; repealed 1/1/2024, Register 248
3 AAC 304.345 Golf course license
Repealed.
History
- Eff. 7/19/2000, Register 155; repealed 1/1/2024, Register 248
3 AAC 304.355 Club license
Repealed.
History
- Eff. 12/13/2009, Register 192; repealed 1/1/2024, Register 248
3 AAC 304.365 Package store license repackaging
Repealed.
History
- Eff. 7/25/2012, Register 203; am 1/1/2021, Register 237; repealed 1/1/2024, Register 248
3 AAC 304.375 Distillery license
Repealed.
History
- Eff. 12/16/2016, Register 220; repealed 1/1/2024, Register 248
3 AAC 304.380 Winery license
Repealed.
History
- Eff. 7/19/2017, Register 223; repealed 1/1/2024, Register 248
Article 4 General Provisions Regarding Licensees and Licensed Premises
3 AAC 304.405 Adulteration, misbranding and false advertising
Repealed.
History
- Eff. 11/29/81, Register 80; am 9/11/98, Register 147; repealed 1/1/2024, Register 248
3 AAC 304.410 Resealing wine served with a meal for removal from licensed premises
Repealed.
History
- Eff. 8/23/2009, Register 191; repealed 1/1/2024, Register 248
3 AAC 304.415 Storing, warehousing and transporting
Repealed.
History
- Eff. 11/29/81, Register 80; am 10/24/87, Register 104; am 1/1/2024, Register 248
3 AAC 304.425 Determining age of patron
Repealed.
History
- Eff. 11/29/81, Register 80; am 5/22/92, Register 122; am 5/11/2012, Register 202; repealed 1/1/2024, Register 248
3 AAC 304.430 Compliance checks and surveys by nongovernmental organizations
Repealed.
History
- Eff. 12/13/2009, Register 192; repealed 1/1/2024, Register 248
3 AAC 304.435 Presence of minors on licensed premises
Repealed 10/24/87.
3 AAC 304.440 Pricing and marketing of alcoholic beverages
Repealed.
History
- Eff. 5/11/96, Register 138; repealed 1/1/2024, Register 248
3 AAC 304.445 Employment of minors
Repealed 10/24/87.
3 AAC 304.455 Recordkeeping requirements
Repealed.
History
- Eff. 11/29/81, Register 80; am 5/1/94, Register 130; repealed 1/1/2024, Register 248
3 AAC 304.465 Alcohol server education course
Repealed.
History
- Eff. 4/1/94, Register 129; am 8/24/2001, Register 159; am 12/13/2009, Register 192; am 9/16/2017, Register 223; am 2/23/2020, Register 233; am 4/14/2021, Register 238; repealed 1/1/2024, Register 248
Article 5 Enforcement
3 AAC 304.505 Powers of investigative personnel
Repealed.
History
- Eff. 11/29/81, Register 80; am 3/13/99, Register 149; repealed 1/1/2024, Register 248
3 AAC 304.515 Inspection
Repealed.
History
- Eff. 11/29/81, Register 80; repealed 1/1/2024, Register 248
3 AAC 304.525 Communication with licensees
Repealed.
History
- Eff. 11/29/81, Register 80; am 7/30/89, Register 111; repealed 1/1/2024, Register 248
3 AAC 304.535 Suspension and revocation of license
Repealed.
History
- Eff. 11/29/81, Register 80; am 6/13/2003, Register 166; repealed 1/1/2024, Register 248
3 AAC 304.540 Civil fine
Repealed.
History
- Eff. 5/22/92, Register 122; am 8/24/2001, Register 159; repealed 1/1/2024, Register 248
3 AAC 304.545 Effect of revocation
Repealed.
History
- Eff. 11/29/81, Register 80; repealed 1/1/2024, Register 248
Article 6 Miscellaneous Provisions
3 AAC 304.605 Determining population criteria
Repealed 4/28/84.
3 AAC 304.610 Refunds to municipalities
Repealed.
History
- Eff. 7/19/2000, Register 155; am 12/13/2009, Register 192; repealed 1/1/2024, Register 248
3 AAC 304.615 Petitions
Repealed.
History
- Eff. 11/29/81, Register 80; repealed 4/11/2020, Register 234
3 AAC 304.620 Colleges and universities
Repealed.
History
- Eff. 7/30/89, Register 111; repealed 1/1/2024, Register 248
3 AAC 304.625 Community prohibitions on alcoholic beverages
Repealed.
History
- Eff. 11/29/81, Register 80; am 5/11/96, Register 138; am 9/11/98, Register 147; repealed 1/1/2024, Register 248
3 AAC 304.635 Third-party purchases for consideration
Repealed.
History
- Eff. 11/29/81, Register 80; repealed 1/1/2024, Register 248
3 AAC 304.640 Direct winery shipments for personal use
Repealed.
History
- Eff. 12/13/2009, Register 192; repealed 1/1/2024, Register 248
3 AAC 304.642 Wine clubs
Repealed.
History
- Eff. 8/18/2013, Register 207; repealed 1/1/2024, Register 248
3 AAC 304.645 Written orders for alcoholic beverages; other transporting of alcoholic beverages; local governing body authority
Repealed.
History
- [Eff. 11/29/81, Register 80; am 3/31/85, Register 93; am 10/24/87, Register 104; am 7/30/89, Register 111; am 5/1/94, Register 130; am 5/11/96, Register 138; am 9/11/98, Register 147; am 7/19/2000, Register 155; am 8/24/2001, Register 159; am 12/13/2009, Register 192; am 3/14/2012, Register 201; repealed, 1/1/2024 Register 248.
3 AAC 304.647 Package store license delivery permit
Repealed.
History
- [Eff. 8/24/2001, Register 159; repealed, 1/1/2024 Register 248.
3 AAC 304.650 Alcoholic beverages stocked in guest rooms
Repealed.
History
- [Eff. 3/31/96, Register 137; repealed, 1/1/2024 Register 248.
3 AAC 304.655 Involuntary transfer of license
Repealed 7/30/89.
3 AAC 304.660 Temporary dedesignation of licensed premises
Repealed.
History
- Eff. 7/30/89, Register 111; repealed 1/1/2024, Register 248
3 AAC 304.665 Employment of parolees and probationers
Repealed 3/31/85.
3 AAC 304.670 Municipal golf course license. [Annulled; see editor's note.]
Repealed.
History
- [Eff. 5/22/92, Register 122; am 5/1/94, Register 130; repealed, 1/1/2024 Register 248.
3 AAC 304.675 Permits
Repealed.
History
- Eff. 11/29/81, Register 80; repealed 1/1/2024, Register 248
3 AAC 304.680 Restaurant caterer's dinner permit
Repealed.
History
- Eff. 10/24/87, Register 104; am 6/13/2003, Register 166; repealed 1/1/2024, Register 248
3 AAC 304.685 Caterer's permit
Repealed.
History
- Eff. 11/29/81, Register 80; repealed 1/1/2024, Register 248
3 AAC 304.690 Club license caterer's permit
Repealed.
History
- Eff. 7/30/89, Register 111; am 9/11/98, Register 147; repealed 1/1/2024, Register 248
3 AAC 304.695 Theatre license
Repealed.
History
- Eff. 10/24/87, Register 104; am 7/30/89, Register 111; am 5/1/94, Register 130; am 8/24/2001, Register 159; repealed 1/1/2024, Register 248
3 AAC 304.697 Art exhibit permit
Repealed.
History
- Eff. 6/13/2003, Register 166; repealed 1/1/2024, Register 248
3 AAC 304.699 Wine auction permit
Repealed.
History
- Eff. 6/13/2003, Register 166; am 2/21/2019, Register 229; repealed 1/1/2024, Register 248
Article 7 Restaurant Designation Permits
3 AAC 304.715 Application for designation
Repealed.
History
- Eff. 10/24/87, Register 104; am 9/11/98, Register 147; am 7/19/2000, Register 155; am 12/16/2016, Register 220; am 4/9/2023, Register 246; repealed 1/1/2024, Register 248
3 AAC 304.725 Dining by persons under the age of 21
Repealed.
History
- Eff. 10/24/87, Register 104; repealed 1/1/2024, Register 248
3 AAC 304.745 Employment of persons under the age of 21
Repealed.
History
- Eff. 10/24/87, Register 104; am 5/1/94, Register 130; repealed 1/1/2024, Register 248
3 AAC 304.765 Limitation of designation
Repealed.
History
- Eff. 10/24/87, Register 104; repealed 1/1/2024, Register 248
3 AAC 304.775 Certificate of designation
Repealed.
History
- Eff. 10/24/87, Register 104; repealed 1/1/2024, Register 248
3 AAC 304.785 Termination of designation
Repealed.
History
- Eff. 10/24/87, Register 104; repealed 1/1/2024, Register 248
3 AAC 304.795 Suspension or revocation of designation
Repealed.
History
- Eff. 10/24/87, Register 104; repealed 1/1/2024, Register 248
Article 8 General Provisions
3 AAC 304.905 Determining population criteria
Repealed.
History
- Eff. 4/28/84, Register 90; am 10/24/87, Register 104; am 4/11/2020, Register 234; repealed 1/1/2024, Register 248
3 AAC 304.907 Determining visitor population
Repealed.
History
- Eff. 4/9/2023, Register 246; repealed 1/1/2024, Register 248
3 AAC 304.908 Determining available seasonal restaurant eating place licenses
Repealed.
History
- Eff. 4/9/2023, Register 246; repealed 1/1/2024, Register 248
3 AAC 304.910 Restaurant definition
Repealed.
History
- Eff. 2/21/2019, Register 229; repealed 1/1/2024, Register 248
3 AAC 304.920 Curbside pickup
Repealed.
History
- Eff. 4/16/2020, Register 234; am 8/23/2020, Register 235; am 11/17/2020, Register 236; repealed 1/1/2024, Register 248
3 AAC 304.925 Home delivery
Repealed.
History
- Eff. 4/16/2020, Register 234; am 4/23/2020, Register 234; am 8/23/2020, Register 235; am 11/17/2020, Register 236; repealed 1/1/2024, Register 248
3 AAC 304.980 Prohibited financial interest; representative or owner; management agreements
Repealed.
History
- Eff. 7/25/2012, Register 203; am 12/16/2016, Register 220; repealed 1/1/2024, Register 248
3 AAC 304.990 Definition
Repealed.
History
- Eff. 4/28/84, Register 90; am 6/13/2003, Register 166; repealed 1/1/2024, Register 248
Chapter 305 Alcoholic Beverage Control Board
Article 1 Manufacturer Licenses; Endorsements; Permits
3 AAC 305.010 Conduct of board meetings
(a) The board will select a chair from current board members at the first regular board meeting of each calendar year. The chair will preside over board meetings during the ensuing year.
(b) The board will meet at the call of the chair after reasonable public notice is given.
(c) The director is responsible for preparing an informative agenda for each board meeting. A copy of the agenda will be posted on the Alcohol and Marijuana Control Office's Internet website.
History
- Authority: AS 04.06.005; AS 04.06.060 AS 04.06.050; AS 04.06.100
- Eff. 1/1/2024, Register 248
3 AAC 305.015 Submissions to the board
Except as otherwise specifically provided in this chapter, applications and communications of a formal nature must be submitted in writing, upon prescribed forms, as applicable to the board through its online licensing system or at its main office and are not considered timely filed until received by the board's main office.
History
- Authority: AS 04.06.005; AS 04.06.090; AS 04.06.100
- Eff. 1/1/2024, Register 248
3 AAC 305.020 Public comment at board meetings
(a) At its regular public meetings held in each judicial district in compliance with AS 04.06.050, the board will receive public comment upon items of agenda business and other issues of the public interest related to alcoholic beverages, including the conduct of business by licensees and others with the statutes and regulations related to alcoholic beverages. Public comment may also be submitted to the board in writing by any person at any time.
(b) The right to be heard provided for in this section does not constitute intervention in a proceeding or exhaustion of an administrative remedy.
History
- Authority: AS 04.06.005; AS 04.06.050; AS 04.06.100
- Eff. 1/1/2024, Register 248
3 AAC 305.025 Duties of director
(a) The director of the board is responsible for the management of the board's offices, the administration of the board's functions, and the enforcement of AS 04 and this chapter.
(b) The director shall employ and supervise necessary administrative, professional, paraprofessional, and investigative personnel and shall prescribe their duties and authority. The director may employ a person to a position with the special investigator job classification only if the person
(1) possesses a certificate issued by the Alaska Police Standards Council demonstrating that the person meets the standards for appointment as a police officer under AS 18.65.240;
(2) provides evidence satisfactory to the director that
(A) the person meets the standards of another state or a federal jurisdiction for appointment as a police officer; and
(B) the standards of the state or federal jurisdiction are equivalent to the standards required for issuance of a certificate by the Alaska Police Standards Council under AS 18.65.240; or
(3) is eligible for appointment as a police officer through reciprocity in accordance with 13 AAC 85.060.
(c) The director will prescribe forms for application for a new license, endorsement, transfer, renewal and for a permit, petition, and other necessary documents as approved by the board.
(d) The director shall prepare and submit an annual, fiscal year budget to the board that includes funding for administration, enforcement, education, training, and prevention activities under this title.
(e) The director shall post information on the Alcohol and Marijuana Control Office's Internet website about fetal alcohol spectrum disorder and fetal alcohol effects resulting from a woman consuming alcohol during pregnancy.
History
- Authority: AS 04.06.005; AS 04.06.080; AS 04.06.100 AS 04.06.075; AS 04.06.090; AS 04.06.110
- Eff. 1/1/2024, Register 248; am 6/13/2024, Register 250
3 AAC 305.030 Issuance of license and endorsement
The director will issue an appropriate license or endorsement on
(1) approval of an application for a new license, a new license with one or more endorsements, a renewal or transfer of an existing license, a renewal or transfer of an existing license with one or more endorsements, or an application for an endorsement;
(2) receipt by the board of necessary public health and public safety approvals; and
(3) completion of any inspection considered necessary by the director.
History
- Authority: AS 04.06.005; AS 04.06.090; AS 04.06.100
- Eff. 1/1/2024, Register 248
3 AAC 305.035 Additional delegation of authority
The board shall review delegations of authority to the director made pursuant to AS 04.06.080 or 04.11.395 on an annual basis and upon change of director.
History
- Authority: AS 04.06.005; AS 04.06.100 AS 04.06.080; AS 04.11.395
- Eff. 1/1/2024, Register 248
3 AAC 305.040 When licenses become available
Except as provided in 3 AAC 305.100, if the board receives an application at a time when there are no available licenses of the type specified in the application, the board will deny the application. In this chapter, a license becomes available
(1) on the date the director determines the relevant population under 3 AAC 305.900 where the license becomes available because of an increase in the population during the preceding year;
(2) 30 days after a notice of expiration has been sent to a licensee due to nonrenewal of the license and not later than April 15 where the license becomes available based upon the count of the relevant population;
(3) on the conclusion of all appeals of the denial of renewal, revocation, or on waiver of appeal by the licensee, whichever is later, where the license becomes available because of the denial or revocation of another license and the license is available based upon the count of the relevant population; or
(4) on the date determined by the board or the director in any other case.
History
- Authority: AS 04.06.005; AS 04.06.100; AS 04.11.400 AS 04.06.080; AS 04.11.320 AS 04.06.090; AS 04.11.340
- Eff. 1/1/2024, Register 248
3 AAC 305.045 Application for license and endorsement
(a) Except for an applicant for a manufacturer direct shipment license issued under AS 04.09.370, an applicant for a new alcoholic beverage license, an alcoholic beverage license with one or more endorsements, or an endorsement must file an application. The application may be initiated and completed electronically. An application must be on a form prescribed by the board and include the information and documentation set out in this section, the application fee, license fee, and applicable endorsement fees set out under 3 AAC 305.145. For an applicant applying for a new license, the application must include fingerprint cards required under AS 04.11.295 and fees required under 3 AAC 305.145.
(b) An application for a new alcoholic beverage license, an alcoholic beverage license with one or more endorsements, or an endorsement must contain the information required by AS 04.11.260 and the information required under AS 04.11.295(a) and 04.11.310, if applicable.
(c) An application for a new license must contain the following:
(1) written authorization for release of an applicant's conviction and arrest records, as well as the conviction and arrest records of the applicant's affiliates as defined at 3 AAC 305.950 to the director and the board; the release must include a list of the applicant's and the applicant's affiliates' convictions in any state or territory for a crime or for a violation of alcoholic beverage control laws;
(2) a statement that no person other than the applicant has a financial interest in the business to be licensed;
(3) a copy of the following business entity documents, as applicable:
(A) partnership or joint venture agreement if the applicant is a partnership or joint venture;
(B) certificate of incorporation if the applicant is a corporation;
(C) articles of organization, certificate of organization, or operating agreement if the applicant is a limited liability company; under this paragraph, the applicant must also submit a statement that the limited liability organization is in good standing; or
(D) statement of qualification if the applicant is a limited liability partnership;
(4) a statement that the applicant and the applicant's affiliates as defined at 3 AAC 305.950 have read and are familiar with AS 04 and with this chapter;
(5) copies of any deed, lease agreement, or other documentation that shows the applicant's right or title to, or interest in, the land and buildings at the location of the business to be licensed;
(6) required biennial license fees and applicable endorsement fees as set out under 3 AAC 305.145, if the application is for a new license or endorsement;
(7) a non-refundable application fee as set out under 3 AAC 305.145; and
(8) the doing-business-as name the applicant will use for the proposed alcohol establishment, along with the applicant's state business license number issued under AS 43.70.
History
- Authority: AS 04.06.005; AS 04.06.090; AS 04.06.100
- Eff. 1/1/2024, Register 248; am 12/27/2024, Register 252
3 AAC 305.050 Application for renewal of a license and endorsement
(a) Except for an applicant for renewal of a manufacturer direct shipment license issued under AS 04.09.370, an applicant for renewal of an alcoholic beverage license or an alcoholic beverage license with one or more endorsements must file a completed application. The application may be initiated and completed electronically. A complete application must be on a form prescribed by the board and include the information and documentation set out in this section, the application fee, and fees for renewal of licenses and endorsements as set out under 3 AAC 305.145.
(b) An application for renewal of an alcoholic beverage license or an alcoholic beverage license with one or more endorsements must contain the information required under AS 04.11.270.
(c) An application for renewal of an alcoholic beverage license or renewal of an alcoholic beverage license with one or more endorsements must contain the following:
(1) a list of the applicant's convictions for violations of AS 04 and this chapter, or an ordinance adopted under AS 04.21.010, that occurred in the preceding two calendar years;
(2) a written authorization for release of conviction and arrest records to the director and the board, as required by the board;
(3) a statement that no person other than the applicant has a financial interest in the business to be licensed;
(4) any change in business entity documents in the preceding two calendar years;
(5) any change to proof of possession in the preceding two calendar years;
(6) required biennial license fees and applicable endorsement fees as set out under 3 AAC 305.145;
(7) a non-refundable application fee as set out under 3 AAC 305.145; and
(8) the doing-business-as name the applicant uses for the alcohol establishment, along with the applicant's state business license number issued under AS 43.70.
(d) For the purposes of AS 04.11.270(b), an application for renewal of an alcoholic beverage license or for renewal of an alcoholic beverage license with one or more endorsements is timely if received along with the payment of application and license fees through the board's online licensing system or at the board's main office not later than December 31, or if postmarked not later than December 31.
(e) For the purposes of AS 04.11.540, an application for renewal of an alcoholic beverage license or for renewal of an alcoholic beverage license with one or more endorsements as set out in that section is considered submitted by February 28 if the applicant files the renewal application through the board's online licensing system or at the board's main office not later than February 28, or if postmarked not later than February 28.
(f) If a mailed renewal application has an illegible postmark or an undated postmark, the postmark date is rebuttably presumed to be five calendar days before the board's office received the application.
(g) In this section, "postmark" means the official cancellation stamp used by the United States Postal Service that records the date and place of mailing.
History
- Authority: AS 04.06.005; AS 04.06.090; AS 04.06.100
- Eff. 1/1/2024, Register 248; am 12/27/2024, Register 252
3 AAC 305.055 Reinstatement of license
(a) For the purposes of AS 04.11.540, if a license expires because an applicant fails to file a complete application for renewal or fails to pay the required renewal fees and penalty fees by February 28, the board will consider a written request to reinstate the license. A request to reinstate a license must include
(1) the complete renewal application;
(2) a license reinstatement fee of $1,000;
(3) all other required fees and penalty fees; and
(4) proof of good cause for the applicant's failure to file the renewal application by February 28.
(b) The board will deny a request for reinstatement of a license submitted under (a) of this section if
(1) the license became available in accordance with 3 AAC 305.040 and the license was issued to a different applicant, unless the limit of licenses under AS 04.11.400 has not been reached; or
(2) the board finds that the applicant's failure to timely file or pay was caused by
(A) the applicant's failure to notify the board of a change of the applicant's electronic mail address;
(B) a transfer of ownership of the business for which the license was issued without written approval of the board in violation of AS 04.11.040;
(C) a lease of the licensed business to another person in violation of AS 04.11.450(c); or
(D) any other action of the applicant, whether active or tacit, that the board finds constitutes a failure to lawfully operate the business for which the license was issued.
History
- Authority: AS 04.06.005; AS 04.06.100; AS 04.11.540 AS 04.06.090; AS 04.11.270; AS 04.11.680
- Eff. 1/1/2024, Register 248
3 AAC 305.060 Application for transfer of a license to another person
(a) Except for an applicant for a manufacturer direct shipment license issued under AS 04.09.370, an application for transfer of an alcoholic beverage license or an alcoholic beverage license with one or more endorsements to another person under AS 04.11.280 may be initiated and completed electronically. The application must contain the same information about the transferee as is required of an applicant for a new license or endorsement under AS 04.11.260 and 3 AAC 305.045 and the information required under AS 04.11.295(a) and 04.11.310.
(b) In addition to including the information, statements, documentation, and fees required in (a) of this section, an application for transfer of an alcoholic beverage license or an alcoholic beverage license with one or more endorsements under this section must include a statement under oath, executed by the transfer or, listing all debts of and taxes due by the business. The office of the board will promptly notify each identified creditor of the application and the amount the transfer or shows as owing to the creditor.
(c) If a license is automatically transferred under AS 04.11.280(c) and the office of the board subsequently receives criminal justice information and records obtained under AS 04.11.295 that potentially disqualifies a transferee, the director will file an accusation to suspend or revoke the license under 3 AAC 305.875 so the board may determine if the licensee meets the qualifications for transfer of a license or license with one or more endorsements.
History
- Authority: AS 04.06.005; AS 04.06.090; AS 04.06.100
- Eff. 1/1/2024, Register 248
3 AAC 305.065 Application for return of a license to a person with a retained security interest
(a) A licensee who wishes to establish a security interest in an alcoholic beverage license before the license is transferred to another person under 3 AAC 305.060 shall submit the following additional documents with the transfer application:
(1) a leasehold conveyance or contract of sale of real property made in the course of the license transfer;
(2) a list of personal property being conveyed from the transferor to the transferee, including
(A) the value of the property; and
(B) a draft Uniform Commercial Code financing statement in which a security interest in the license is claimed under AS 04.11.670 and 04.11.360(4)(8), containing the following statement: "Under the terms of AS 04.11.670, AS 04.11.360(4)(8), and 3 AAC 305.065, the transferor/lessor retains a security interest in the liquor license that is the subject of this conveyance, and may, as a result, be able to obtain a retransfer of the license without satisfaction of other creditors."; the value of the personal property must be sufficient for the board to determine that the license is not being used as collateral except as provided under AS 04.11.670; and
(3) all transaction and security documents relating to the lease or sale of real property and sale of personal property in conjunction with the license transfer.
(b) The transferor must include the following statement in the published notice of transfer required by AS 04.11.31 0(a): "Under the terms of AS 04.11.360(4)(8), AS 04.11.670, and 3 AAC 305.065, the transferor/lessor retains a security interest in the liquor license that is the subject of this conveyance, and may, as a result, be able to obtain a retransfer of the license without satisfaction of other creditors."
(c) After board approval, a copy of the recorded leasehold conveyance or contract of sale of real property and the recorded Uniform Commercial Code financing statement must be provided to the director before the transferred license may be operated.
(d) A security interest in a license may not be established when the license transfer contemplates a transfer of less than 100 percent of the interest in the license.
(e) A license with an established security interest may not be transferred to another person, unless all obligations under the security interest are satisfied before or as part of the transfer, except that the board may make an exception in the case of the death of a licensee.
History
- Authority: AS 04.06.005; AS 04.11.260; AS 04.11.450 AS 04.06.080; AS 04.11.270; AS 04.11.670 AS 04.06.090; AS 04.11.280 AS 04.11.050; AS 04.11.290
- Eff. 1/1/2024, Register 248
3 AAC 305.070 Application for transfer of location
(a) An applicant to transfer an alcoholic beverage license to a new location shall file an application on a form prescribed by the board. The application must include the information and documentation described in this section. The application may be initiated and completed electronically.
(b) An application to transfer an alcoholic beverage license to a new location must contain the information required by AS 04.11.260 for the new location and be executed as described under AS 04.11.260(a). The application must also contain proof of public notice under AS 04.11.310 and 3 AAC 305.075 for the new location and the petition required under AS 04.11.460, if applicable.
(c) In addition to the requirements set out in (b) of this section, an application for a transfer of an alcoholic beverage license to a new location must contain the following:
(1) a copy of a deed, lease agreement, or other documentation that shows right or title to, or interest in, the land and buildings at the location of the business to be licensed;
(2) a statement identifying whether the transfer to a new location is subject to AS 04.11.400(k) and identifying the involved borough and incorporated city;
(3) a non-refundable application fee under 3 AAC 305.145; and
(4) the doing-business-as name the applicant will use for the alcohol establishment, along with the applicant's state business license number issued under AS 43.70.
(d) If a transfer of an alcoholic beverage license to another location is subject to AS 04.11.400(k), before the application is submitted to the board
(1) not more than 10 business days after the board office determines that the application is complete and the prerequisites of AS 04.11.400(k) are satisfied, the office of the board will notify the affected borough and incorporated city of the transfer of location application, and an accompanying transfer of license to another person, if applicable; the notice will include
(A) the date the board office received the complete application;
(B) the license number;
(C) the present or previous business name of the license to be transferred;
(D) the names of the transferee and the transferor, if the application includes a request to transfer a license to another person; and
(E) the proposed new location of the license;
(2) the borough and incorporated city affected by the transfer request under AS 04.11.400(k) may respond to the notice under (a) of this section not later than 60 days after receipt of the notice; the borough or incorporated city may request that the board grant an extension of up to 120 additional days to respond;
(3) within the notification period, the borough and the municipality must provide written notification that they agree to the transfer under AS 04.11.400(k) to be approved by the office of the board; the board will not approve a transfer of location if the notification required by this paragraph is not received within the time allowed under (d)(2) of this section; if the borough and municipality timely respond, the board may consider whether to approve the relocation under 3 AAC 305.130.
History
- Authority: AS 04.06.005; AS 04.11.050; AS 04.11.290 AS 04.06.090; AS 04.11.260; AS 04.11.450 AS 04.06.100; AS 04.11.270; AS 04.11.670 AS 04.11.045; AS 04.11.280
- Eff. 1/1/2024, Register 248; am 10/25/2024, Register 252; am 12/27/2024, Register 252
3 AAC 305.075 Public notice
(a) After initiating an application for a new license or transfer of a license, the applicant must give notice of the application to the public by
(1) posting a copy of the application for 10 days at
(A) the location of the proposed licensed premises; and
(B) one other conspicuous location in the area of the proposed premises accessible to the general public;
(2) publishing an announcement once a week for three consecutive weeks in a newspaper of general circulation as defined in (d) of this section, or arrange for broadcast announcements twice a week for three consecutive weeks on a radio station serving the local area where the proposed licensee seeks to operate during triple A advertising time; the newspaper or radio notice must include
(A) the name of the applicant;
(B) the doing-business-as name and location of the proposed premises;
(C) the type of license specified in the application and a citation to a provision of this chapter authorizing that type of license; and
(D) a statement that any comment or objection may be submitted to the board.
(b) In addition to English, the director will require the announcement set out in (a) of this section to be given in the predominant languages in the area of the proposed premises if
(1) the board determines that an announcement in multiple languages is necessary to provide adequate public notice; or
(2) a local governing body or village council requests that announcement be given in multiple languages.
(c) The public notice under this section must be given within the 90 days immediately preceding the filing of the application.
(d) In this section, "newspaper of general circulation" means a publication that
(1) is published in print or electronic newspaper format;
(2) is distributed at least bi-weekly each year within the judicial district where the proposed licensed premises is located, excluding a period when publication is interrupted by a casualty that the publisher cannot control;
(3) is not published primarily to distribute advertising; and
(4) is not intended primarily for a particular professional or occupational group.
History
- Authority: AS 04.06.005; AS 04.06.100; AS 04.11.310 AS 04.06.090; AS 04.11.260
- Eff. 1/1/2024, Register 248; am 12/27/2024, Register 252
3 AAC 305.080 Petition for licenses
(a) If required by AS 04.11.460, a petition is a necessary part of an application. All petitions must be on forms prescribed by the board. Petition signatures must be obtained within the 90-day period immediately preceding the submission of the application. However, signatures may be added to the petition before an application has been deemed complete.
(b) A person signing a petition relating to a license must be 21 years of age or older and a permanent resident of the geographical area relevant to the petition. A person may have only one permanent residence. Municipal boundaries shall be disregarded when gathering petition signatures.
(c) When submitting a petition under AS 04.11.460, an applicant shall assist in the determination of population by submitting the following information with the application:
(1) a graphic designation on a United States Geodetic Survey map with a scale of at least one inch to the mile showing the population within a circle of the applicable radius, and showing where petition signatures were obtained; and
(2) the population within the applicable area and narrative of how the population was determined.
History
- Authority: AS 04.06.005; AS 04.06.100; AS 04.11.460
- Eff. 1/1/2024, Register 248
3 AAC 305.085 Local governing body protest
(a) A local governing body may protest an application filed under this chapter. The protest must be in writing, filed with the board, and copied to the applicant, and must include the governing body's reason for the protest. The reasons stated by a local governing body must be logical grounds for opposing the application or continued operation of the license and have a reasonable basis in fact. Under this section, a protest may be filed for
(1) an application to
(A) issue a new license, a license with one or more endorsements, or endorsement;
(B) renew an existing license, a license with one or more endorsements, or endorsement;
(C) transfer the location of an existing license;
(D) transfer an existing license, or a license with one or more endorsements to another person; or
(2) the continued operation of a license or endorsement issued under this chapter; under this paragraph, a local governing body may only protest the continued operation of a license or endorsement during the second year of the biennial license period if the local governing body files the protest and the reasons for the protest with the board and copies the licensee not later than January 31 of the second year of the license.
(b) The board will not take final action upon an application until at least
(1) 60 days after a local governing body receives the notice issued by the board required by AS 04.11.520, unless the local governing body waives the right to protest the application in writing to the director; and
(2) 15 days after completion of public notice of the application.
(c) A protest received after the 60-day period may not be accepted by the board. A protest may not cause the board to reconsider an approved renewal, transfer of location, or transfer to another person.
(d) A local governing body that protests an application shall allow the applicant a reasonable opportunity to defend the application before a meeting of the local governing body.
(e) A local governing body protest may be based upon facts that render the particular application objectionable to the local body or may be based upon a general public policy. If based on a general public policy, the policy must have a reasonable basis in fact, may not be contrary to law, and may not be patently inapplicable to the particular application being protested. The board will not substitute the board's judgment for that of the local governing body on a matter of public policy that has reasonable factual support.
(f) If the application is denied because of a protest by the local governing body and the applicant requests a hearing, the local governing body must, at the board's request, appear or otherwise meaningfully participate in the hearing and must assist in or undertake the defense of the local governing body's protest.
(g) In addition to the other grounds for protest set out in this section, a local governing body may protest the
(1) renewal or transfer of a license based on nonpayment of delinquent taxes or fees, whether single or in combination, of at least $1,000 arising in whole or in part from the conduct of the licensed business; and
(2) transfer of a license if the local governing body has adopted an ordinance under which the local governing body may estimate the amount of taxes due in the tax year of the proposed transfer and arising in whole or in part from the conduct of the licensed business, and requires the licensee to pay the estimated amount; and
(3) the licensee fails to pay that amount or give security under AS 04.11.360.
(h) The board may uphold a protest of an application or continued operation with an initial abeyance period of not more than 180 days if the local governing body indicates that the protest is subject to rescission and that it will be withdrawn if the applicant meets conditions set by the local governing body. If the local governing body notifies the board within the period of the abeyance that the protest has been removed, the application or continued operation will be approved when all other applicable requirements have been met. If the local governing body has not notified the board within the period of the abeyance that the local governing body has removed the protest, the application or continued operation is denied.
History
- Authority: AS 04.06.005; AS 04.11.330; AS 04.11.510 AS 04.06.090; AS 04.11.360; AS 04.11.520 AS 04.06.100; AS 04.11.480
- Eff. 1/1/2024, Register 248; am 10/25/2024, Register 252
3 AAC 305.090 Procedure for action on a license or endorsement application
(a) The board will decide whether to grant or deny an application not later than 90 days after receiving the complete application. The board will not grant or deny the application before the time allowed for a local governing body to file a protest as set out under 3 AAC 305.085(b) unless the local governing body waives its right to protest.
(b) Not later than seven days before a scheduled meeting that includes board action on applications, the director shall post a meeting agenda that includes a list of matters scheduled for action at that meeting on the office of the board's Internet website. The director shall also send written notification to each applicant with an application scheduled for action at that meeting through the board's online licensing system or to the electronic mail address identified in the application. The board may review an application without additional notice to the applicant.
(c) The board will consider any written objection, protest, suggested condition, or petition, and any testimony received at a hearing on public protest held under 3 AAC 305.095 when considering an application. The director shall retain any written objection, protest, suggested condition, or petition and the hearing record as part of the permanent record of the board's application review.
History
- Authority: AS 04.06.005; AS 04.11.320; AS 04.11.360 AS 04.06.090; AS 04.11.330; AS 04.11.370 AS 04.06.100; AS 04.11.340; AS 04.11.480
- Eff. 1/1/2024, Register 248
3 AAC 305.095 Procedure on objection or protest; appeals
(a) If the board receives an objection described in AS 04.11.470, a protest described in AS 04.11.480(a) and 3 AAC 305 .085, or a protest described in AS 04.11.480(b), the board will follow the following procedures:
(1) in the case of an objection described in AS 04.11.4 70, the board will consider the objection at its first regular meeting at which it considers the application after the objection is received and determine whether it is appropriate to hold a public hearing under AS 04.11.51 0(b)(2) to ascertain the reaction of the public or a local governing body to the application; if the board determines that it is appropriate to hold a public hearing, the board will follow the procedures in (b) of this section;
(2) if the board receives a protest of an application from a local governing body described in AS 04.11.480(a), the board will review the protest at its first regular meeting at which it considers the application after the protest is received and, if the board has any indication that the protest might be arbitrary, capricious, or unreasonable, the board will first determine whether the protest is based on a question of law; if the protest is found to be based in whole or in part on a question of law, the board will schedule the matter for a public hearing under (b) of this section and AS 04.11.510(b)(4); unless a hearing is required by another provision of law, if the protest is found not to be based on a question of law the board may conduct a public hearing under (b) of this section to ascertain the reaction of the public or a local governing body to the application in question; if the board has no indication that the protest is arbitrary, capricious, or unreasonable, it may vote to uphold the protest, and the applicant and the board will follow the procedure set in AS 04.11.510(b)(1); if the board decides to overrule the protest, the local governing body may appeal the board's decision under AS 44.62.
(3) if the board receives a protest described in AS 04.11.480(b), the board will conduct a public hearing as required by AS 04.11.510(b)(3).
(b) A public hearing under this section will, be conducted after proper notice to interested parties and members of the public. The board shall exercise all other powers relating to the conduct of the hearing.
(c) A public hearing conducted under this section will be recorded by a qualified court reporter or the board's staff.
(d) A hearing required to be held under AS 44.62 is delegated to a hearing officer alone, unless the board decides to sit along with a hearing officer for a specific matter.
History
- Authority: AS 04.06.005; AS 04.06.090; AS 04.06.100
- Eff. 1/1/2024, Register 248
3 AAC 305.100 Procedure for mutually exclusive and competing applications
(a) If the board receives an application for a license that requires denial because it would exceed the amount of licenses available for that license type under AS 04.11.400(a), the application will be considered "mutually exclusive."
(b) The board will consider, and grant or deny, mutually exclusive applications in the order in which they are received. However, all "competing applications," as defined under (c) of this section, will be treated as if they were received at the same time, and will be considered together.
(c) For the purpose of this section, competing applications are those mutually exclusive applications for licenses, with or without an endorsement, that
(1) inside a unified municipality, organized borough, or incorporated city;
(A) are for one or more licenses which have become available because of a change of local option or a change in population and are received during the 30-day period beginning on the date the license or licenses first become available; or
(B) are for the last available license other than a license described in (A) of this paragraph and are received during the 30-day period beginning on the date the board received the first application for the license; and
(2) outside a unified municipality, organized borough, or incorporated city, are received not more than 30 days after the immediately preceding application for the license.
(d) Nothing in this section may be interpreted to allow the 90-day time limit for a decision on an application set by AS 04.11.510 to be exceeded.
History
- Authority: AS 04.06.005; AS 04.06.100; AS 04.11.400 AS 04.06.080; AS 04.11.320 AS 04.06.090; AS 04.11.340
- Eff. 1/1/2024, Register 248
3 AAC 305.105 Selection among mutually exclusive and competing applications
(a) Within an incorporated city, organized borough, or unified municipality, all competing applications, as defined in 3 AAC 305.100(c) will be considered together by the board under this section.
(b) If affiliates, or persons who are related by birth or marriage, have filed competing applications for premises at a single location, the board will deny all but one of those applications.
(c) The board will deny any competing applications which are required to be denied under AS 04.11.320, 04.11.340, 04.11 .480, or 3 AAC 305.110.
(d) If the denial of one or more competing applications under (b) or (c) of this section makes any other competing applications no longer mutually exclusive, the board will approve the applications that are no longer mutually exclusive.
(e) If competing applications remain after the board takes action under (b), (c), or (d) of this section, the board may grant any applications the board considers to be most in the public interest. In determining the public interest, the board may consider factors including
(1) the safety, suitability, and proximity of the proposed premises to other licensed premises;
(2) the size of the proposed premises;
(3) community amenities associated with the premises including entertainment, dining facilities, and tourist accommodations; and
(4) preferences or priorities expressed by the local governing body.
(f) If competing applications remain after the board takes action under (b), (c), (d), or (e) of this section, the board may conduct a drawing to determine which remaining competing applications to approve.
(g) A competing application not granted under this section will be denied without prejudice to future application.
(h) A license, with or without an endorsement, granted under this section will be issued after the time within which unsuccessful competing applicants may appeal the denial of their applications, and after all statutory requirements are met by the successful applicant.
History
- Authority: AS 04.06.005; AS 04.11.260; AS 04.11.400 AS 04.06.090; AS 04.11.320; AS 04.11.480 AS 04.06.100; AS 04.11.340; AS 04.11.560
- Eff. 1/1/2024, Register 248
3 AAC 305.110 Factors for consideration; denial of application
(a) In determining whether to grant an application for an alcoholic beverage license, alcoholic beverage license with one or more endorsements, or an endorsement, the board may consider the following factors:
(1) the applicant's and the applicant's affiliates' histories of felony conviction in this state, the United States, or another state or territory of the United States during the 15 years immediately preceding the date of application;
(2) the applicant's or the applicant's affiliates'
(A) violation of AS 04 or regulations adopted by the board; or
(B) violation of the alcoholic beverage control laws of another state, as a licensee of that state;
(3) whether the applicant or the applicant's affiliates are untrustworthy, unfit to conduct a licensed business, or a potential source of harm to the public;
(4) whether the applicant or the applicant's affiliates have permitted, on licensed premises belonging to the applicant, the occurrence of sexual contact between persons; for the purpose of this paragraph, "sexual contact" has the meaning given in AS 11.81.900(b);
(5) whether the application is not complete as required by an applicable provision of AS 04 and 3 AAC 305.010 - 3 AAC 305.165 or contains a false or misleading statement;
(6) whether the license or endorsement would violate any requirement of the license or endorsement under AS 04 or this chapter;
(7) whether the license or endorsement would violate any particular restriction applicable to the particular license or endorsement authorized under AS 04 or this chapter;
(8) whether the license or endorsement is prohibited under this chapter as a result of an ordinance or election conducted under AS 04.11.491;
(9) whether a protest by the local governing body is not arbitrary, capricious, or unreasonable;
(10) all other factors identified in AS 04.11.320 that are present and of concern; and
(11) all other factors the board determines relevant to the public interest.
(b) For an application for renewal of a license or for consideration of continued operation of a license, in addition to applicable factors identified in (a) of this section, the board may consider whether
(1) the license or endorsement has been operated in violation of a condition or restriction the board previously imposed;
(2) the applicant has lost the right to possession of the licensed premises;
(3) the applicant has satisfied the minimum operating requirements;
(4) the applicant is delinquent in the payment of taxes due in whole or in part from operation of the licensed business; and
(5) other factors identified at AS 04.11.330 are present.
(c) For an application for transfer of a license to another person, in addition to applicable factors identified in (a) of this section, the board may consider whether
(1) the transferor has not paid all debts or taxes arising from the operation of the business licensed under this chapter, unless the transferor gives security for the payment of the debts or taxes satisfactory to the creditor or taxing authority;
(2) the transfer of the license to another person would result in violation of the provisions of AS 04 and this chapter relating to identity of licensees and financing of licensees;
(3) the prospective transferee does not have the qualifications of an original applicant required under AS 04 or this chapter; and
(4) other factors identified at AS 04.11.360 are present.
(d) For an application for transfer of location of an alcoholic beverage license, in addition to applicable factors identified in (a) of this section, the board may consider whether
(1) the new location would violate any requirement of the license under AS 04 or this chapter
(2) the license would violate any particular restriction applicable to the particular license authorized under AS 04 or this chapter;
(3) the license is prohibited under this chapter as a result of an ordinance or election conducted under AS 04.11.491; and
(4) other factors identified at AS 04.11.340 are present.
(e) A local governing body may use the factors set out in (a) of this section to properly protest an alcoholic beverage application under AS 04.11.480 and 3 AAC 305.085.
(f) The board may deny an alcoholic beverage license application if the board finds that any of the applicable discretionary factors set out in (a) - (d) of this section do not support the application's approval. The board will deny an application if
(1) approving the application would violate any mandatory provision of or restriction under AS 04 or this chapter;
(2) if denial is required under AS 04.11.320, 04.11.330, 04.11.340, or 04.11.360;
(3) if denial is required under 3 AAC 305.090, 3 AAC 305.100, 3 AAC 305.120 - .130, or 3 AAC 305.160; or
(4) if the board concludes a protest of a local governing body is not arbitrary, capricious, or unreasonable.
(g) The board has discretion to approve a license application but deny an endorsement application for the approved license.
History
- Authority: AS 04.06.005; AS 04.11.320; AS 04.11.360 AS 04.06.090; AS 04.11.330; AS 04.11.370 AS 04.06.100; AS 04.11.340; AS 04.11.480
- Eff. 1/1/2024, Register 248
3 AAC 305.115 Consideration of endorsement
(a) An endorsement is valid only in conjunction with a license. An endorsement may be transferred to another person only if the license for which the endorsement was issued is also transferred to that person. An endorsement expires if the licensed premises are relocated, the license expires, or the license is revoked.
(b) An endorsement is valid for the duration of the license and renews concurrently with the license.
(c) The board will consider the factors identified in 3 AAC 305.105 when determining whether to grant or deny an application for an endorsement.
History
- Authority: AS 04.06.005; AS 04.06.090; AS 04.06.100
- Eff. 1/1/2024, Register 248
3 AAC 305.120 Waiver of annual operating requirement and minimum operating requirements
(a) Except as provided in this section, the board will deny an application for renewal of a license or a license with one or more endorsements if the licensed premises were not operated for the time required under AS 04.11.330(a)(3) or (d).
(b) A licensee may submit a waiver application to the board to request a waiver of the operating requirement in AS 04.11.330 (a)(3) or (d). Under AS 04.11.330(a)(3), the board will determine whether, through no fault of the licensee or because the premises are under construction, the licensed premises could not be operated for the required time during the preceding calendar year.
(c) A waiver application for a calendar year must be made in writing to the board and must be accompanied by the non-refundable application fee of
(1) an amount equal to one-half the applicable biennial license fee if a waiver application was not made for the previous year; or
(2) double the amount of the fee paid for the previous waiver application.
(d) A waiver application must include a statement from the licensee explaining why the licensed premises was not in compliance with AS 04.11.330(a)(3) or (d). The licensee must provide a copy of the waiver application to any local governing body with jurisdiction over the license and licensed premises.
(e) The board may deny a third or subsequent, consecutive application for waiver
(1) unless the licensee clearly shows that the licensed premises were not operated, because the premises were condemned or substantially destroyed by any cause; or
(2) the licensee holds a common carrier dispensary license and is a boat weighing over 1,000 tons;
(f) Absent circumstances to the contrary, the board will deny a third or subsequent, consecutive application for waiver in the event of condemnation or destruction of the premises if the premises identified on an applicant's license are not leased or owned by the licensee Additionally, a third or subsequent consecutive application for waiver that does not identify a licensed premises location will be denied.
(g) The board may impose conditions along with the approval of a waiver application.
(h) If a waiver application is denied, an application for license renewal for the succeeding license period will be denied by the board under AS 04.11.330(a)(3).
(i) In addition to the application fee under (c) of this section, the applicant shall pay $1,000 for an application that is received too late for board consideration at its last meeting of the calendar year for which the waiver is requested.
(j) In the event of the death of a licensee, destruction of the premises, or comparable circumstances showing extraordinary hardship, the board may waive the fees required under (c) and (i) of this section.
(k) If a license is exercised only to satisfy the minimum operating requirement under AS 04.11.330(a)(3) or 3 AAC 305.110, a licensee shall operate in a similar fashion to other licensed premises of the same type by meeting the following operating requirements as appropriate for the license type:
(1) provide signage of sufficient size and visibility to show that the premises is open for business, including the business name and hours of operation;
(2) offer a variety of brewed beverages, wines, and distilled spirits for sale at the licensed premises, as appropriate to the type of license,
(3) for a licensed package store premises, visibly display the alcoholic beverages stock;
(4) for a beverage dispensary licensed premises, provide seating for at least one-half of the maximum number allowed by the occupancy permit;
(5) comply with all state or municipal health, fire, and zoning laws or ordinances required for the operation of business;
(6) maintain a record of all purchases of alcoholic beverages for resale on the licensed premises; and
(7) record sales with a cash register or point of sale system that retains a record of transactions.
(l) The licensee has the burden of proof to show that the licensed premises were operated for the minimum required period of time and met the operating requirements under (k) of this section. The licensee may provide receipts, invoices, photographs, permits, timecards, and other records to meet the burden of proof. If the licensee fails to provide proof that one or more of the operating requirements was met, the board may consider additional documentation provided by the licensee to determine whether the licensee has met the burden of proof.
(m) If a new license is issued between November 20 and December 31, the licensee is exempt from filing a waiver of annual operating requirement for that year.
History
- Authority: AS 04.06.005; AS 04.06.100 AS 04.06.090; AS 04.11.330
- Eff. 1/1/2024, Register 248
3 AAC 305.125 Compelled transfer of a license to the prior licensee with a security interest in the license
(a) If a former licensee seeks to compel the transfer of a license because of a promise given as collateral by the current licensee under AS 04.11.670 to the former licensee during an earlier transfer of the license, followed by a default in payment related to property conveyed or a lease made as part of the previous transfer, the board will deny the transfer if the creditors are not satisfied under AS 04.11.360(4)(A). The board may approve the transfer if circumstances clearly show that
(1) the security interest was established in the previous transfer in accordance with 3 AAC 305.065.
(2) the former licensee operated the license that was transferred for at least 240 hours; and
(3) the term of a security interest in a license to secure payment for personal property did not exceed 10 years.
(b) The director may identify applications for transfer of ownership that are secured as described in this section in board meeting agendas.
(c) After the foreclosure of real property that secures payment of debt that is also secured by a promise under AS 04.11.670, a license may not be retransferred without satisfaction of creditors under AS 04.11.360(4)(A) unless
(1) the board approved an application for retransfer before the foreclosure; or
(2) the amount owed to the former licensee for the real property at the time of foreclosure exceeds the fair market value of the property; the former licensee carries the burden of proof to show that the fair market value is less than the amount owed.
History
- Authority: AS 04.06.005; AS 04.11.260; AS 04.11.450 AS 04.06.090; AS 04.11.270; AS 04.11.670 AS 04.06.100; AS 04.11.280 AS 04.11.050; AS 04.11.290
- Eff. 1/1/2024, Register 248
3 AAC 305.130 Consideration of transfer of location of a license under AS 04.11.400(k)
(a) An application to transfer a license under AS 04.11.400(k) in a borough with a population of 50,000 or more into or within an incorporated city in the borough must comply with the notice requirements set out in AS 04.11.280, 04.11.290, and 3 AAC 305.070(d), as applicable. The criteria for denial of an application to transfer an alcoholic beverage license to another location as set out in AS 04.11.340 and denial of an application to transfer an alcoholic beverage license to another person as set out in AS 04.11.360 also apply to an application to transfer a license under AS 04.11.400(k). The notice requirements set out in this section apply to an application to transfer
(1) an alcoholic beverage dispensary license issued under AS 04.09.200 to a restaurant, eating place, hotel, motel, resort, or similar business that contains a restaurant or eating place,
(2) a package store license issued under AS 04.09.230;
(3) a brewery retail license issued under AS 04.09.320;
(4) a winery retail license issued under AS 04.09.330; or
(5) a distillery retail license issued under AS 04.09.340.
(b) If the board approves an application to transfer a license issued under AS 04.11.400(k), the license becomes a license of the municipality in the new location. The license may be transferred to a new location and new person within the receiving municipality. If a license is transferred with a security interest under AS 04.11.360(4)(B) and 04.11.670, the retransfer back to the previous owner may not be made to the location of the former municipality.
(c) A license located in a municipality as a result of annexation is not counted as a new license for the purposes of AS 04.11.400(k).
(d) When the board receives multiple applications to relocate a license under AS 04.11.400(k) and the board has not allowed three relocations in that decade, the board will approve the completed application that the board received first, if the application meets other applicable requirements of AS 04 and this chapter.
History
- Authority: AS 04.06.005; AS 04.06.100 AS 04.06.090; AS 04.11.400
- Eff. 1/1/2024, Register 248
3 AAC 305.135 Permits
(a) With the exception of a conditional contractor's permit issued under AS 04.09.710, an applicant must submit the proper permit application form and the permit fee to the office of the board to apply for a permit. The applicant must submit the application and fee not fewer than three business days before the first day of the event. The application must include
(1) a description of the proposed premises;
(2) a drawing that designates which areas are for storage, service, and consumption;
(3) a statement of the specific hours of intended operation;
(4) a copy of the approval from the proper local authority
(5) a statement that every person who will serve or sell alcohol or check patron identification during the event will have successfully completed an approved alcohol server education course before the first day of the event; and
(6) other information required by the application form.
(b) To apply for a conditional contractor's permit, an applicant must submit the proper application form, written permission from the commanding officer of the military or naval reservation and the prime contractor of the remotely situated site, and the application and permit fees to the office of the board. The application must include
(1) a description of the proposed premises;
(2) a drawing that designates which areas are for storage, service, and consumption; and
(3) a statement of the specific hours of intended operation.
(c) All other conditions for approval, removal, and expiration for a permit under this section are set out in AS 04.09.710.
(d) The director will approve or deny all applications for permits. If an application is denied, the applicant may appeal the denial to the board.
(e) A permit is not transferable. However, the holder of an approved permit subject to (a) of this section may submit a written amendment not fewer than three business days before the first date of the event to change the event date, site, designated area, or designated time. Any submission must include approval of the law enforcement agency with jurisdiction over the site. Except for a conditional contractor's permit issued under AS 04.09.710, a permit may not be renewed.
(f) The holder of a permit shall comply with all statutes, ordinances, and regulations pertaining to the possession and sale of alcoholic beverages as it applies to the permit or the licensed premises of the alcoholic beverage licensee to which the permit attaches.
History
- Authority: AS 04.06.005; AS 04.06.100; AS 04.11.320 AS 04.06.080; AS 04.11.260
- Eff. 1/1/2024, Register 248
3 AAC 305.140 Application for and board consideration of common carrier approval
(a) An applicant for a common carrier approval to transport and deliver alcoholic beverages to a person in the state must file an application on a form prescribed by the board. The application must include the information and documentation set out in this section, along with the approval fee. A common carrier described under this section must certify it will meet the requirements of AS 04.09.750(c) and (d).
(b) The board will approve a common carrier who meets the definition of common carrier under AS 04.09.750(g) and who provides the certifications required under AS 04.09.750(c) and (d).
(c) The board may remove a previously approved common carrier under this section from the list maintained by the board as required in AS 04.09.750(e) if the common carrier transports or delivers alcoholic beverages in violation of AS 04.09.750(c) or (d).
History
- Authority: AS 04.06.005; AS 04.06.090; AS 04.06.100
- Eff. 1/1/2024, Register 248
3 AAC 305.145 License and endorsement application and biennial fees
(a) A nonrefundable application fee of $500 must accompany an application for a
(1) new license;
(2) new license with one or more endorsements;
(3) transfer of an existing license to another location; or
(4) a transfer of an existing license or an existing license with one or more endorsements to another person.
(b) A non-refundable application fee of $300 must accompany an application to renew a license or a license with one or more endorsements.
(c) Except for an application for a multiple fixed counter endorsement, a non-refundable application fee of $25 must accompany an application for a new endorsement when the endorsement application is not submitted as part of a new, renewal, or transfer application. The initial non-refundable application fee for a multiple fixed counter endorsement is set out in AS 04.09.420(c).
(d) The biennial license fees are as follows:
(1) for a brewery manufacturer license, the amount set out in AS 04.09.020(b);
(2) for a winery manufacturer license, the amount set out in AS 04.09.030(b);
(3) for a distillery manufacturer license, the amount set out in AS 04.09.040(b);
(4) a general wholesale license, the amount set out in AS 04.09. 100(b);
(5) for a limited wholesale brewed beverage and wine license, the amount set out in AS 04.09.110(b);
(6) for a brewery retail license, the amount set out in AS 04.09.320(b);
(7) for a winery retail license, the amount set out in AS 04.09.330(b);
(8) for a distillery retail license, the amount set out in AS 04.09.340(b);
(9) for a beverage dispensary tourism license, the amount set out in AS 04.09.350(b);
(10) for a beverage dispensary license, the amount set out in AS 04.09.200(b);
(11) for a restaurant or eating place license, the amount set out in AS 04.09.210(b);
(12) for a club license, the amount set out in AS 04.09.220(b);
(13) for a package store license, the amount set out in AS 04.09.230(b);
(14) for a pub license, the amount set out in AS 04.09.240(b);
(15) for a theater license, the amount set out in AS 04.09.250(b);
(16) for a common carrier dispensary license, the amount set out in AS 04.09.260(b) or AS 04.09.260(c);
(17) for a sporting activity or event license, the amount set out in AS 04.09.270(b);
(18) for an outdoor recreation lodge license, the amount set out in AS 04.09.280(b);
(19) for a fair license, the amount set out in AS 04.09.290(b);
(20) for a golf course license, the amount set out in AS 04.09.300(b);
(21) for a destination resort license, the amount set out in AS 04.09 .310(b);
(22) for a seasonal restaurant or eating place tourism license, the amount set out in AS 04.09.360(b);
(23) for a manufacturer direct shipment license, the amount set out in AS 04.09.370(b)
(e) The biennial fee for an endorsement is as follows:
(1) for a manufacturer sampling endorsement, the amount set out in AS 04.09.410(b);
(2) for a multiple fixed counter endorsement: the amount set out in AS 04.09.420(b);
(3) for a hotel or motel endorsement, the amount set out in AS 04.09.430(b);
(4) for a large resort endorsement, the amount set out in AS 04.09.440(b);
(5) for a restaurant endorsement, the amount set out in AS 04.09.450(b);
(6) for a package store shipping endorsement, the amount set out in AS 04.09.460(b);
(7) for a package store delivery endorsement, the amount set out in AS 04.09.470(b);
(8) for a package store repackaging endorsement, the amount set out in AS 04.09.480(b);
(9) for a package store sampling endorsement, the amount set out in AS 04.09.490(b);
(10) for a bowling alley endorsement, the amount set out in AS 04.09.500(b);
(11) for a golf course endorsement, the amount set out in AS 04.09.510(b);
(12) for a brewery repackaging endorsement, the amount set out in AS 04.09.520(b).
History
- Authority: AS 04.06.005; AS 04.06.090; AS 04.06.100
- Eff. 1/1/2024, Register 248; am 10/25/2024, Register 252
3 AAC 305.150 Permits and common carrier approval fees
(a) Permit fees are as follows:
(1) a beverage dispensary caterer's permit issued under AS 04.09.610 is $100 for the first two days and $50 for each additional day;
(2) a restaurant caterer's dining permit issued under AS 04.09.620 is $100 for the first two days and $50 for each additional day;
(3) a club caterer's permit issued under AS 04.09.630 is $100 for the first two days and $50 for each additional day;
(4) an art exhibit event permit issued under AS 04.09.640 is $100 for the first two days and $50 for each additional day;
(5) a music festival permit issued under AS 04.09.650 is $100 for the first two days and $50 for each additional day;
(6) a nonprofit organization event permit issued under AS 04.09.660 is $100 for the first two days and $50 for each additional day;
(7) an alcoholic beverage auction permit issued under AS 04.09.670 is $50 per day;
(8) a package store tasting event permit issued under AS 04.09.680 is $100 for the first two days and $50 for each additional day;
(9) an inventory resale permit fee is set out in AS 04.09.690;
(10) a live music or entertainment permit issued under AS 04.09.700 is $100 per event;
(11) a conditional contractor's permit fee is set out in AS 04.09.710;
(12) a de-designation permit application fee under 3 AAC 305.655(b) is $50; for certification required under 3 AAC 305.655(e) the fee is $50.
(b) If an application for a permit described in (a) of this section is subject to AS 04.09.600(b) and is received less than three days before the first day of the event, the application may be approved under the director's discretion. If the application is approved, the fee is twice the amount set out in (a) of this section.
(c) The fee for a common carrier approval issued under AS 04.09.750 is a one-time fee per business entity of $1,250.
History
- Authority: AS 04.06.005; AS 04.06.090; AS 04.06.100
- Eff. 1/1/2024, Register 248
3 AAC 305.155 General wholesale and limited wholesale additional fees
(a) In addition to the biennial license fee set out in AS 04.09.100(b) and 3 AAC 305.145, the holder of a general wholesale license shall pay the biennial declaration fee as set out in AS 04.09.130(b) and an annual fee based on total business transacted as set out in AS 04.09.100 and 04.09.120.
(b) In addition to the biennial license fee set out in AS 04.09.110(b) and 3 AAC 305.145, the holder of a limited wholesale brewed beverages and wine license shall pay the biennial declaration fee as set out in AS 04.09.130(b) and an annual fee based on the total business transacted as set out in AS 04.09.110 and 04.09.120.
History
- Authority: AS 04.06.005; AS 04.06.090; AS 04.06.100
- Eff. 1/1/2024, Register 248
3 AAC 305.160 Processing fees for renewals after late payment of taxes
(a) After a local governing body protests a license renewal under 3 AAC 305.085(g)(l), a licensee shall pay an additional license renewal fee as follows:
(1) if the delinquent taxes are paid after the local governing body files a protest with the board and before the board denies license renewal under AS 04.11.510(a), $50;
(2) if the delinquent taxes are paid after the board denies a license renewal but before a hearing officer is appointed to hear an appeal of the board's denial, $500;
(3) if the delinquent taxes are paid after a hearing officer is appointed but before an administrative hearing is held on appeal of the board's denial of license renewal, $1,000; or
(4) if the delinquent taxes are paid after an administrative hearing but before the board adopts a hearing officer's recommendation to deny license renewal, $2,000.
(b) A fee under (a) of this section will not be charged or will be refunded if the board finds that the local governing body has withdrawn the protest on the basis that the protest was made in error.
(c) Failure to remit fees under this section within 10 days following receipt of written notice from the director is additional grounds for the board to deny an application for renewal.
History
- Authority: AS 04.06.005; AS 04.06.100; AS 04.11.480 AS 04.06.090; AS 04.11.330; AS 04.11.510
- Eff. 1/1/2024, Register 248
3 AAC 305.165 Miscellaneous fees
An applicant shall pay the following fees:
(1) $250 for a diagram change application under 3 AAC 305.630(d);
(2) $250 for a business name change application under 3 AAC 305.630(d);
(3) $250 for a seasonal alternating premises application under 3 AAC 305.630(f)(1);
(4) $250 for an alternating licensed premises application under 3 AAC 305.650;
(5) $250 for a change of officers application required under AS 04.11.045 - 04.11.055;
(6) $250 for an off-site warehouse storage application required under AS 04.21.060;
(7) $250 for a proof of minimum operations application required under AS 04.11.330(a)(3);
(8) $800 for a new alcohol server education course under 3 AAC 305.700(b);
(9) $250 for review of an existing alcohol server education course under 3 AAC 305.700(g);
(10) excluding a permit application submitted under 3 AAC 305.135, a nonrefundable $150 for an application submitted on a paper form that was otherwise available to the applicant for submission through an Internet application process via the Alaska - Alcohol & Cannabis Control Information System (AK-ACCIS);
(11) effective January 1, 2025, a non-refundable $50 for an application for a permit under 3 AAC 305.135 submitted on a paper form that was otherwise available to an applicant for submission through an Internet application process via the Alaska Alcohol & Cannabis Control Information System (AK-ACCIS).
History
- Authority: AS 04.06.005; AS 04.11.050; AS 04.11.510 AS 04.06.090; AS 04.11.055; AS 04.21.060 AS 04.06.100; AS 04.11.330 AS 04.11.045; AS 04.11.480
- Eff. 1/1/2024, Register 248; am 10/25/2024, Register 252
3 AAC 305.200 License required
A license is required to manufacture, package, store, and sell a manufacturer's brewed beverages, wine, or distilled spirits as set out in AS 04.09.020 - 04.09.040.
History
- Authority: AS 04.06.005; AS 04.06.090; AS 04.06.100
- Eff. 1/1/2024, Register 248
3 AAC 305.210 Manufacturer sampling endorsement
An application to obtain a manufacturer sampling endorsement as required under AS 04.09.410 must identify by a line drawing the area of the licensed premises to which the manufacturer sampling endorsement attaches.
History
- Authority: AS 04.06.005; AS 04.06.090; AS 04.06.100
- Eff. 1/1/2024, Register 248
3 AAC 305.220 Brewery repackaging endorsement
A brewery manufacturer who was licensed as a brewpub under the former AS 04.11.135 may hold a repackaging endorsement to permit the sale of its brewed beverages for off-the-licensed premises consumption as set out under AS 04.09.520 if the manufacturer
(1) operated as a brewpub on December 31, 2023; and
(2) holds, wholly or in part, a
(A) beverage dispensary license;
(B) a beverage dispensary tourism license'
(C) a restaurant or eating place license; or
(D) a seasonal restaurant or eating place tourism license.
History
- Authority: AS 04.06.005; AS 04.06.090; AS 04.06.100
- Eff. 1/1/2024, Register 248
3 AAC 305.230 Inventory resale permits
The director may approve an inventory resale permit under the conditions set out in AS 04.09.690.
History
- Authority: AS 04.06.005; AS 04.06.090; AS 04.06.100
- Eff. 1/1/2024, Register 248
Article 3 Retail Licenses; Endorsements; Permits
3 AAC 305.300 License required
(a) Except for manufacturer sampling endorsements issued under AS 04.09.410, a license is required to sell or serve alcoholic beverages for consumption only on the licensed premises as set out in AS 04.09.200 (beverage dispensary license), AS 04.09.220 (club license), AS 04.09.250 (theater license held by a beverage dispensary licensee), AS 04.09.260 (common carrier dispensary license), AS 04.09.310 (destination resort license), and AS 04.09.350 (beverage dispensary tourism license).
(b) Except for manufacturer sampling endorsements issued under AS 04.09.410, a license is required to sell or sell and serve brewed beverages or wine for consumption only on the licensed premises under AS 04.09.210 (restaurant or eating place license), AS 04.09.240 (pub license), AS 04.09.250 (theater license held by a restaurant or eating place licensee), AS 04.09.270 (sporting activity or event license), AS 04.09.290 (fair license), AS 04.09.300 (golf course license), and AS 04.09.360 (seasonal restaurant or eating place tourism license).
(c) Except for manufacturer sampling endorsements issued under AS 04.09.410, a license is required to store, sell, or serve brewed beverages, wine, or distilled spirits on the licensed premises for consumption on and off the licensed premises under AS 04.09.320 (brewery retail license), AS 04.09.330 (winery retail license), and AS 04.09.340 (distillery retail license).
(d) A license is required to operate a package store to store and sell alcoholic beverages for consumption off the licensed premises under AS 04.09.230 (package store license).
(e) A license is required for the holder of a brewery retail license under AS 04.09.320, a winery retail license under AS 04.09.330, a distillery retail license under AS 04.09.340, or the holder of a manufacturer license issued in another state to sell the holder's product in response to an order for shipment to a person located in this state for personal use only and not for resale, as set out in AS 04.09.370.
History
- Authority: AS 04.06.090; AS 04.09.250; AS 04.09.330 AS 04.06.100; AS 04.09.260; AS 04.09.340 AS 04.09.010; AS 04.09.270; AS 04.09.350 AS 04.09.200; AS 04.09.280; AS 04.09.360 AS 04.09.210; AS 04.09.290; AS 04.09.370 AS 04.09.220; AS 04.09.300; AS 04.09.400 AS 04.09.230; AS 04.09.310; AS 04.09.410 AS 04.09.240; AS 04.09.320
- Eff. 1/1/2024, Register 248
3 AAC 305.305 Seasonal restaurant or eating place tourism license
(a) Subject to the limitations of licenses as set out under 3 AAC 305.900, the board may approve an application for a seasonal restaurant or eating place tourism license under AS 04.09.360. The board may approve an application for the transfer of ownership of a seasonal restaurant or eating place tourism license to a person who files a license application under AS 04.11.260, if the applicant's licensed premises qualify as a bona fide restaurant or eating place under the sole control of the applicant and is
(1) located in a municipality or established village that has a population of 40,000 or less; and
(2) receives more than 4,000 visitors a year as determined under 3 AAC 305.910.
(b) The holder of a seasonal restaurant or eating place tourism license may provide entertainment as set out and identified in AS 04.09.360.
History
- Authority: AS 04.06.090; AS 04.06.100; AS 04.09.360
- Eff. 1/1/2024, Register 248
3 AAC 305.310 Determining available seasonal restaurant or eating place tourism licenses
(a) The board will not issue seasonal restaurant or eating place tourism licenses in municipalities or established villages that qualify for this license type if the issuance results in more than one seasonal restaurant or eating place tourism license per 1,500 visitors per visitor day.
(b) Visitor count or fraction of visitor per visitor day is calculated by dividing the total annual visitor count as set out under 3 AAC 305.910 by 182.
(c) The board may further limit the available seasonal restaurant or eating place tourism licenses upon application if the number of restaurant and eating place licenses issued under AS 04.09.210 exceed the restaurant and eating place licenses permissible under AS 04.11.400(a), or as public interest requires.
History
- Authority: AS 04.06.090; AS 04.06.100; AS 04.09.360
- Eff. 1/1/2024, Register 248
3 AAC 305.312 Unlicensed portion of business holding restaurant or eating place or seasonal restaurant or eating place tourism licenses
(a) In considering an application for issuance, transfer, or relocation of a restaurant or eating place license or a seasonal restaurant or eating place tourism license, the board will determine the portion of the premises or proposed premises that constitutes a restaurant or eating place and will license only that portion for the sale and consumption of alcoholic beverages.
(b) The board may require the licensed premises to be separated from the unlicensed portion of the business in a manner acceptable to the board. The board must approve changes in the structure, layout, or use of any portion of the licensed premises before a licensee may begin those changes.
(c) Gross receipts generated from business conducted on unlicensed portions of a licensed business are excluded from the calculation of gross receipts for the of this section, AS 04.09.210, and 04.09.360.
History
- Authority: AS 04.06.090; AS 04.09.210 AS 04.06.100; AS 04.09.360
- Eff. 1/1/2024, Register 248
3 AAC 305.315 Club license
The holder of a club license issued under AS 04.09.220 may not allow a club member who is working as a bartender or server of alcoholic beverages to sign in a non-member of the club as a guest.
History
- Authority: AS 04.06.090; AS 04.06.100; AS 04.09.220
- Eff. 1/1/2024, Register 248
3 AAC 305.320 Common carrier dispensary license
(a) For the purposes of AS 04.09.260, "train" means a set route traveled by a series of one or more passenger cars owned or operated by a common carrier.
(b) An applicant for issuance or renewal of a common carrier dispensary license for an airline shall indicate whether the fee for the license is to be calculated under AS 04.09.260(b) or (c).
(c) The fee for a common carrier dispensary license for an airline under AS 04.09.260(b) requires payment of the specified fee for each aircraft in which alcoholic beverages are served on an intrastate flight operated by the airline.
(d) The fee for a common carrier dispensary license for an airline under AS 04.09.260(c) requires payment of the specified fee for each community served. For the purposes of AS 04.11.260(c) and this subsection, "each community served" means each community in which an airport is located at which the airline has an incoming or outgoing intrastate flight segment on which alcoholic beverages are served.
History
- Authority: AS 04.06.090; AS 04.09.200 AS 04.06.100; AS 04.09.260
- Eff. 1/1/2024, Register 248
3 AAC 305.325 Beverage dispensary tourism licenses
(a) For the purposes of AS 04.09.350(c)(1), an applicant for the issuance, transfer of location, or renewal of a beverage dispensary tourism license shall include a description of how the requested license encourages the tourist trade by promoting the construction or improvement of a hotel, motel, or business as set out under AS 04.09.350(c)(1) or an airport terminal as set out under AS 04.09.350(c)(2).
(b) For purposes of AS 04.09.350(c)(2)(A), "operates" means the holder of the beverage dispensary tourism license controls the functioning of the hotel, motel, resort, or similar business relating to the tourist trade, unless the license was approved before January 1, 2024.
(c) For the purposes of AS 04.09.350(c)(1)(A) and AS 04.09.350(c)(1)(2), "hotel" or "motel" excludes establishments that substantially provide long-term rental units or who are not subject to bed taxes if the local government in which it is located collects bed taxes, unless the license was approved prior to January 1, 2024.
History
- Authority: AS 04.06.090; AS 04.09.200 AS 04.06.100; AS 04.09.350
- Eff. 1/1/2024, Register 248
3 AAC 305.330 Endorsements available to beverage dispensary and beverage dispensary tourism licenses
(a) A beverage dispensary licensee or a beverage dispensary tourism licensee may hold the following endorsements:
(1) a multiple fixed counter endorsement as set out under AS 04.09.420; multiple fixed counters must be located in the same building under the same contiguous premises; unless
(A) a beverage dispensary or beverage dispensary tourism licensee also holds a large resort, hotel or motel endorsement; or
(B) a beverage dispensary or beverage dispensary tourism licensee held a duplicate beverage dispensary or duplicate beverage dispensary tourism license on non-contiguous licensed premises before January 1, 2024;
(2) a hotel or motel endorsement as set out under AS 04.09.430, if the licensee is a hotel, motel, resort, or similar business premises that caters to the traveling public as a substantial part of its business; under this paragraph,
(A) the endorsement permits the holder to sell or serve alcoholic beverages on the licensed premises, including a dining room, banquet room, other public areas approved by the board, and in guest rooms;
(B) the endorsement holder shall also hold a multiple fixed endorsement for secondary locations located in different buildings from the primary premises as described under AS 04.09.430(c); and
(C) subject to the requirements for provision of alcoholic beverages by employees who are 21 and older as set out under AS 04.09.430(d), the holder of the hotel and motel endorsement may stock alcoholic beverages in guest rooms for sale and consumption only in the guest room;
(3) a large resort endorsement, if the licensee is a large resort as defined at AS 04.09.440(h), under this paragraph
(A) the endorsement permits the holder to sell or serve alcoholic beverages on the licensed premises, including in a dining room, banquet room, open air venue, and ingress or egress routes between those areas;
(B) the endorsement holder shall also apply for a multiple fixed counter endorsement to sell or serve alcoholic beverages from multiple locations within the large resort's property as set out under AS 04.09.440(c) - (f); and
(C) subject to the requirements for provision of alcoholic beverages by employees who are 21 and older as described under AS 04.09.440(g), the holder of the hotel and motel endorsement may stock alcoholic beverages in guest rooms for sale and consumption only in the guest room;
(4) a restaurant endorsement as set out under AS 04.09.450, if the establishment or portion of establishment for which the endorsement is sought is a bona fide restaurant as defined at AS 04.21.080(b);
(5) a bowling alley endorsement as described under AS 04.09.500; the endorsement permits the license holder to sell or serve alcoholic beverages in the concourse or lane areas of the bowling alley that are adjacent and contiguous to the primary licensed premises of the beverage dispensary or beverage dispensary tourism license;
(6) a golf course endorsement as described under AS 04.09.510; the endorsement permits the license holder to sell or serve alcoholic beverages on the golf course, driving range, club house, and other buildings located on the course and by vending cart on, to, and from the course, excluding the parking lot; a person under the age of 21 years of age may be present on the premises subject to the endorsement for the purpose of playing golf or attending golf-related events as described under AS 04.16.949(g).
(b) For the purposes of this section,
(1) "contiguous" means having contact on all or most of one side.
(2) "adjacent" means next to or adjoining something else or having a common vertex and a common side.
History
- Authority: AS 04.06.090; AS 04.09.420; AS 04.09.500 AS 04.06.100; AS 04.09.430; AS 04.09.510 AS 04.09.200; AS 04.09.440 AS 04.09.350; AS 04.09.450
- Eff. 1/1/2024, Register 248
3 AAC 305.333 Guest room restocking for licensees with a hotel or motel endorsement or a large resort endorsement
(a) A licensee with a hotel or motel endorsement or a large resort endorsement may sell the following alcoholic beverages in their original closed containers from a secured unit in a guest room:
(1) distilled spirits in containers of not less than one ounce and not more than two ounces;
(2) wine or vinous liquors in containers of not more than 13 fluid ounces;
(3) brewed beverages in containers of not more than 12 fluid ounces.
(b) A licensee, licensee's agent, or licensee's employee subject to this section may not stock or restock a supply of alcoholic beverages in a secured unit in a guest room if that licensee, agent, or employee determines that
(1) a drunken person is in the room;
(2) a person under the age of 21 is consuming alcohol in the room;
(3) illegal gambling, illegal drug use or sales, or prostitution is occurring in the room; or
(4) the amount of alcoholic beverages in the guest room, including that in the secured unit, would exceed the capacity of the secured unit.
(c) A person who purchases an alcoholic beverage stocked in a secured unit in a guest room may not remove the alcoholic beverage from that guest room.
(d) The secured unit may not be a coin-operated machine or similar device.
History
- Authority: AS 04.06.090; AS 04.09.200; AS 04.09.430 AS 04.06.100; AS 04.09.350; AS 04.09.440
- Eff. 1/1/2024, Register 248
3 AAC 305.335 Restaurant endorsements
(a) A restaurant endorsement as described in AS 04.09.450 is available in addition to a license identified at 3 AAC 305.330(a)(4) to holders of a club license, sporting activity or event license, outdoor recreation lodge license, fair license, golf course license, or destination resort license if the establishment or portion of the establishment for which the endorsement is sought is a bona fide restaurant as defined at AS 04.21.080(b).
(b) An application for a restaurant endorsement must include a premises diagram specifying the establishment or portion of the premises to be subject to the endorsement and a security plan that demonstrates how the endorsement holder will comply with AS 04.09.450(d)(2) - (3) and AS 04.16.049, as applicable.
History
- Authority: AS 04.06.090; AS 04.09.270; AS 04.09.310 AS 04.06.100; AS 04.09.280; AS 04.09.450 AS 04.09.200; AS 04.09.290 AS 04.09.220; AS 04.09.300
- Eff. 1/1/2024, Register 248
3 AAC 305.340 Endorsements available to package store licenses
(a) A package store licensee may hold
(1) a package store shipping endorsement as set out in AS 04.09.460;
(2) a package store delivery endorsement as set out in AS 04.09.470;
(3) a package store repackaging endorsement as set out in AS 04.09.480; and
(4) a package store sampling endorsement as set out in AS 04.09.490.
(b) The holder of a package store shipping endorsement shall utilize only common carriers approved under AS 04.09.750 for the purposes of shipping and shall follow the requirements for written orders as set out under at 3 AAC 305.345. A delivery to a purchaser under a shipping endorsement shall not occur within 24 hours of entry of the written order.
(c) A package store delivery endorsement authorizes the holder to deliver alcoholic beverages between the hours of 8:00 a.m. and 5:00 p.m. to a responsible adult at the location of a social event. A delivery under this section may be made only after a sale by written or electronic order received from a person who makes payment in full not less than 48 hours before the delivery. A delivery authorized under this section must
(1) be made following a written or electronic order that includes
(A) the name and address of the purchaser;
(B) the date, time, and address of the delivery; and
(C) the name and address of the responsible adult who will receive the delivery of alcoholic beverages;
(2) be made by the licensee or an employee of the licensee who has completed alcohol server training as required under AS 04.21.025;
(3) only be made to a responsible adult at the delivery address on the written order; the responsible adult shall
(A) provide identification and proof of age as defined in AS 04.21.050; and
(B) acknowledge receipt of the alcoholic beverages in writing.
(d) The package store endorsement holder shall retain the written or electronic order and the responsible adult's written acknowledgment for at least one year after delivery.
(e) For the purposes of AS 04.09.490(e), the holder of a package store sampling endorsement may notify its existing customers of sampling activities by electronic mail or by short message service or multimedia message service for telephone numbers gathered from existing customers while the existing customers are on the licensed premises. No other means of electronic notification is permissible.
(f) For the purposes of this section, a "social event" means a catered event if the delivery of alcoholic beverages is to another licensee responsible for alcoholic beverage service at the event, or to a non-licensee for a private, by-invitation-only event, including a wedding, memorial, graduation, or holiday celebration.
History
- Authority: AS 04.06.090; AS 04.09.460; AS 04.09.490 AS 04.06.100; AS 04.09.470 AS 04.09.230; AS 04.09.480
- Eff. 1/1/2024, Register 248
3 AAC 305.345 Shipments from a package store licensee with a shipping endorsement
(a) A package store licensee with a shipping endorsement issued under AS 04.09.460 may sell alcoholic beverages in response to a written or electronic order.
(b) The licensee shall verify the age of the person who submitted the order by
(1) retaining a clear photocopy or an electronic copy of one of the following documents that includes the purchaser's signature and shows by date of birth or statement of age that the purchaser is at least 21 years of age:
(A) valid government-issued photographic identification from a state or territory of the United States;
(B) a tribal identification card issued by a federally recognized tribe with physical security features, as identified in AS 28.15.111(a)(4);
(C) a foreign or domestic passport; or
(2) using an Internet age and identification verification service; a licensee that uses an Internet age and identification verification service to verify the age of the purchaser shall retain a clear photocopy or an electronic copy of one of the identification documents described in (b)(1) of this section.
(c) A package store licensee with a shipping endorsement under AS 04.09.460 may only sell alcoholic beverages in response to a written or electronic order if the order
(1) is signed and dated by the purchaser;
(2) describes the type and quantity of alcoholic beverages ordered in reasonable detail;
(3) includes the license or identification number of the purchaser's proof-of-age document required by (b) of this section;
(4) includes a signature reasonably determined by the licensee to match that on the proof-of-age document;
(5) states the physical residential address of the purchaser in a manner that is sufficient for the licensee to determine whether the zip code of the purchaser is within an area that has restricted the sale, importation, or possession of alcoholic beverages under AS 04.11.491;
(6) includes the community delivery site's physical address if delivery is at a community delivery site designated under AS 04.111.491(f); and
(7) is entered into the written and electronic order database established under AS 04.06.095 if the alcoholic beverages are to be shipped to an area that has restricted the sale of alcoholic beverages under AS 04.11.491(a)(1), (2), or (3) or AS 04.11.491(b)(1) or (2); an order subject to this paragraph may not be for an amount of alcoholic beverages that exceeds the amount authorized for the purchaser in a calendar month under AS 04.09.460(e), as indicated in the database.
(d) A written or electronic order may be modified by the licensee not later than five working days after the licensee receives the written or electronic order if the modification is in accordance with an oral or written communication from the purchaser. If the licensee makes an order modification, the licensee shall note the date of the modification and the manner in which the purchaser requested the modification on the original order. Alcoholic beverages shipped in response to a written or electronic order must be packaged and shipped within five working days after the licensee, licensee's agent, or licensee's employee receives the initial written or electronic order.
(e) Except as provided under (d) of this section, a written or electronic order that is required under AS 04.09.460(e) to be entered into the written or electronic order database established under AS 04.06.095 may not be modified after it is entered into the database. A licensee shall calculate whether alcoholic beverages may be shipped to a purchaser under AS 04.09.460(e) by using the date that the order is entered into the database to determine if the amount ordered, combined with the amount already shipped in that calendar month to the purchaser, exceeds the amount authorized under AS 04.09.460(e) as indicated in the database. If the amount ordered
(1) does not exceed the amount authorized under AS 04.09.460(e), alcoholic beverages shipped in response to the written or electronic order must be packaged and shipped not later than five working days after the licensee, licensee's agent, or licensee's employee receives the written or electronic order; or
(2) exceeds the amount authorized under AS 04.09.460(e), the licensee shall
(A) hold the order for up to 72 hours and reenter it into the database for the next calendar month as a new order; or
(B) return the order to the purchaser unfilled if the licensee cannot reenter the order as a new order within 72 hours after the licensee, licensee's agent, or licensee's employee receives the order.
(f) In response to a written or electronic order, a licensee
(1) shall provide written or electronic information to the purchaser on fetal alcohol spectrum disorder and fetal alcohol effects resulting from a woman's consumption of alcohol during pregnancy;
(2) may only package or deliver alcoholic beverages or enter a written or electronic order into the electronic or written order database established under AS 04.06.095 if the licensee has received full payment for the order at the licensed premises;
(3) may personally deliver alcoholic beverages on the licensed premises to a purchaser or an individual who may legally possess alcoholic beverages and is specifically authorized in the order to receive the purchase and deliver the alcoholic beverages to the purchaser; to verify the identity of the purchaser or the individual specifically authorized in the order to receive the purchase, the licensee shall require the purchaser or the authorized individual to present an original of one of the forms of identification listed in (b) of this section;
(4) unless the licensee personally delivers alcoholic beverages on the licensed premises under paragraph (3) of this subsection, the licensee shall ship the alcoholic beverages to the purchaser by a common carrier approved under AS 04.09.750; if the order is to be shipped to a community that has specified a delivery site under AS 04.11.491 (f), the licensee shall ship the order to the purchaser at that delivery site address;
(5) shall package an order that is delivered or shipped under this subsection in a shipping container that
(A) is affixed with labelling that
(i) identifies the licensee;
(ii) shows the written order number assigned under (i) of this section; and
(iii) contains the words "alcoholic beverages"; and
(B) contains one copy of the sales invoice enclosed in a sealed envelope that is securely attached to the shipping container; the sales invoice
(i) must be legibly handwritten or typed;
(ii) must be prepared by the licensee, licensee's agent, or licensee's employee;
(iii) must show the description, quantity, unit price, extended price, and total value of the alcoholic beverages in the container;
(iv) may be retained by a municipality if the container is addressed to a delivery site in a municipality that imposes a sales and use tax on alcoholic beverages under AS 04.21.010(c)(4) or controls the quantity that may be imported under AS 04.21.010(a)(1).
(g) A community delivery site must be secure from unauthorized access, reasonably located for access by the public, clean and heated, and controlled by the local governing body to assure protection of a purchaser's order. The site must be open for the purchaser to pick-up the order at least once a week for three hours between 8:00 a.m. and 8:00 p.m. Only the purchaser named on the container may claim alcoholic beverages from the community delivery site. The purchaser shall sign for the order on a form that states that the beverages are not for resale. The local governing body may impose reasonable storage and handling fees chargeable to the purchaser and may label or mark alcoholic beverage containers processed through the community delivery site. Upon approval of a community delivery site, the board will notify licensees that written or electronic orders for shipment into the community may only be shipped to the community delivery site.
(h) The board shall maintain a list of persons convicted after October 24, 1987 of a violation of AS 04.11.010 under AS 04.16.200 and provide the list to package store licensees. A licensee may not sell alcoholic beverages by written or electronic order to a person whose name appears on the list unless the board gives written notice to the licensee that sales to that person are no longer prohibited.
(i) A package store licensee with a shipping endorsement issued under AS 04.09.460 shall keep a physical or electronic copy of the documents pertaining to a written order, including the purchaser's proof-of-age document, on file for not less than one year after the order is delivered. The licensee shall maintain a log of written orders that
(1) is able to cross-reference to the documents for each order;
(2) assigns an order number to each written order; and
(3) shows, for each order, the
(A) purchaser's name;
(B) dates the order was received, modified, and shipped or delivered; and
(C) address to which shipment or delivery was made.
(j) A licensee who sells alcoholic beverages in response to a written or electronic order
(1) shall promptly notify the board of a person who
(A) places one or more written or electronic orders in a single week for, in the aggregate,
(i) more than 36 gallons of brewed beverages;
(ii) more than 12 cases of wine; or
(iii) more than 36 liters of distilled spirits; or
(B) engages in a regular practice of ordering alcoholic beverages in similarly large quantities to those listed under (A) of this paragraph;
(2) shall, if the alcoholic beverages are to be shipped to an area that has restricted the sale of alcoholic beverages under AS 04.11.491(a)(1), (2), or (3) or (b)(1) or (2), notify the board not more than 24 hours after calculating that the amount ordered exceeds the amount authorized under AS 04.09.460, as indicated in the database when added to the amount already shipped in that calendar month to the purchaser.
(k) If alcoholic beverages are not delivered to a purchaser personally on the licensed premises, title to the alcoholic beverages passes from the licensee to the purchaser at the time the alcoholic beverages are packed, addressed to the purchaser, and payment is received, which constitutes a sale of the alcoholic beverages on the licensed premises.
(l) The licensee may not ship alcoholic beverages
(1) to a person other than the purchaser;
(2) in response to a telephonic order; or
(3) by a common carrier not approved by the board under AS 04.09.750.
(m) If a local option municipality submits written notification to the board that the municipality has imposed a sales and use tax on alcoholic beverages under AS 04.21.010(c)(4), a licensee that sells alcoholic beverages by written solicitation under AS 04.09.460 may not ship or deliver alcoholic beverages to that municipality until payment for the taxes is collected at the licensed premises in accordance with the ordinances of that municipality. The licensee shall remit the payment of taxes to the municipality for which the tax was collected.
History
- Authority: AS 04.06.090; AS 04.09.460; AS 04.09.490 AS 04.06.100; AS 04.09.470 AS 04.09.230; AS 04.09.480
- Eff. 1/1/2024, Register 248; am 8/23/2024, Register 251
3 AAC 305.347 Shipments from a manufacturer direct shipment licensee
(a) A holder of a manufacturer direct shipment license issued under AS 04.09.370 may sell and ship alcoholic beverages in response to a written, telephonic, or electronic order.
(b) A manufacturer direct shipment licensee shall verify the age of a person who submitted an order and, if the recipient of the shipment is not the same person as the person who submitted the order, the age of the recipient, by
(1) retaining a clear photocopy or an electronic copy of one of the following documents that includes the person's signature and shows by date of birth or statement of age that the person is at least 21 years of age:
(A) valid government-issued photographic identification from a state or territory of the United States;
(B) a tribal identification card issued by a federally recognized tribe with physical security features, as identified in AS 28.15.111(a)(4);
(C) a foreign or domestic passport; or
(2) using an Internet age and identification verification service.
(c) A manufacturer direct shipment licensee may only sell alcoholic beverages in response to a written, telephonic, or electronic order if the order
(1) describes the type and quantity of alcoholic beverages ordered in reasonable detail;
(2) does not exceed the limits of AS 04.09.370(e)(2); and
(3) states the physical residential address of the purchaser and, if the recipient is not the same person as the purchaser, the recipient, in a manner that is sufficient for the licensee to determine whether the zip code of the purchaser or recipient is within an area that has restricted the sale, importation, or possession of alcoholic beverages under AS 04.11.491.
(d) In response to a written, telephonic, or electronic order, a licensee
(1) shall provide written or electronic information to the person who submitted the order and the named recipient of the alcoholic beverages on fetal alcohol spectrum disorder and fetal alcohol effects resulting from a woman's consumption of alcohol during pregnancy;
(2) may package or ship alcoholic beverages only if the licensee has received full payment for the order at the licensed premises;
(3) shall ship the alcoholic beverages by a common carrier approved by the board under AS 04.09.750; and
(4) shall package an order that is so Id or shipped under this subsection in a shipping container that is affixed with labelling that
(A) identifies the licensee; and
(B) contains the words "alcoholic beverages" and a statement that upon delivery, the order requires signature by a person who is at least 21 years of age.
(e) A licensee shall keep a physical or electronic copy of the documents pertaining to an order, including the purchaser's and, if applicable, the recipient's proof-of-age document or proof of Internet-based age and identification verification service for not less than two years after the order is delivered. The licensee shall maintain a log of orders that
(1) is able to cross-reference to the documents for each order;
(2) assigns an order number to each order; and
(3) shows, for each order, the
(A) purchaser's name and, if different from the purchaser, recipient's name;
(B) dates the order was received, paid for, modified, and shipped or delivered; and
(C) address to which shipment or delivery was made.
History
- Authority: AS 04.06.090; AS 04.09.370 AS 04.06.100; AS 04.09.750
- Eff. 8/23/2024, Register 251
3 AAC 305.350 Wine clubs
(a) A package store licensee with a shipping endorsement may enter into a standing written or electronic shipment order agreement with a purchaser for periodic shipment of wine of the licensee's choice to the purchaser if
(1) the endorsement holder retains the original, a clear photocopy, or an electronic copy of the proof-of-age document in accordance with 3 AAC 305.345(b);
(2) the agreement is signed and dated by the purchaser and contains the information required for written orders under 3 AAC 305.345(c); and
(3) the agreement requires that the endorsement holder receives payment for the wine not fewer than five working days before the date of shipment and allows the endorsement holder or purchaser to terminate the agreement by giving five days' written notice of termination.
(b) A licensee shall consult the database maintained by the board under AS 04.06.095 in the manner required under AS 04.09.460(e) before shipping wine to an area that has restricted the sale of alcoholic beverages under AS 04.11.491(a)(1), (2), or (3) or (b)(1) or (2). Shipment of the wine must be in compliance with applicable provisions of 3 AAC 305.345(d), (e), and (f).
(c) For each standing shipment order agreement, an endorsement holder shall keep a hard copy or electronic file that contains the agreement and a copy of all documents required under this section. The endorsement holder shall retain the agreement file for at least one year after termination of the agreement. The endorsement holder shall maintain a log of monthly shipments of wine in a manner that
(1) allows cross-reference to the documents for each order;
(2) assigns an order number to each shipment; and
(3) for each order, shows the date payment for the shipment was received, the date the order was shipped, and the address to which the shipment was made.
(d) If an agreement under this section requires the endorsement holder to ship wine to an area that has restricted the sale of alcoholic beverages under AS 04.11.491 (a)(1), (2), or (3) or (b)(1) or (2), the licensee shall enter a written order not later than 24 hours after receiving full payment into the written order database established under AS 04.06.095.
(e) After a municipality submits written notification to the board that the municipality has imposed a sales and use tax on alcoholic beverages under AS 04.21.010(c)(4), an endorsement holder may not ship wine under a standing shipment order agreement to that municipality until payment for the taxes is collected at the licensed premises in accordance with the ordinances of that municipality. The licensee shall remit the payments of taxes to the municipality for which the tax was collected.
History
- Authority: AS 04.06.090; AS 04.09.460; AS 04.09.490 AS 04.06.100; AS 04.09.470 AS 04.09.230; AS 04.09.480
- Eff. 1/1/2024, Register 248; am 8/23/2024, Register 251
3 AAC 305.355 Caterer's permits
(a) A beverage dispensary licensee or a beverage dispensary tourism licensee may hold a caterer's permit to sell or dispense alcoholic beverages at a convention, picnic, sporting activity or event, concert, street festival, or similar affair held off the holder's licensed premises for which a beverage dispensary license or a beverage dispensary tourism license would not otherwise be required. The permit may only be issued for designated premises for a specific occasion and for a limited period. The caterer, or a specified employee or agent of the caterer, shall be present on the catered premises at all times alcoholic beverages are possessed, served, or consumed at the premises under the permit.
(b) A restaurant and eating place licensee or a seasonal restaurant or eating place tourism licensee may hold a restaurant caterer's permit to sell brewed beverages and wine before and during the service of food provided by the licensee at a single dining event held off the holder's licensed premises. The licensee shall comply with the requirements for gross receipts from food sales for a restaurant or eating place license under AS 04.09.210(e) or a seasonal restaurant or eating place tourism license under AS 04.09.360(g).
(c) A club licensee may hold a club caterer's permit to sell or dispense alcoholic beverages at an event held off the club's licensed premises. A restriction or prohibition under AS 04.09.630 regarding a club member or guest of a club member applies to the premises covered by the permit. The director may not issue more than three club caterer's permits to a club license in a calendar year.
(d) Violation of a statute, ordinance, or regulations pertaining to alcoholic beverages by a caterer is grounds for disciplinary action, including suspension or revocation of the caterer's alcoholic beverage license.
History
- Authority: AS 04.06.090; AS 04.09.220; AS 04.09 .620 AS 04.06.100; AS 04.09.350; AS 04.09.630 AS 04.09.200; AS 04.09.600 AS 04.09.210; AS 04.09.610
- Eff. 1/1/2024, Register 248
3 AAC 305.360 Art exhibit permits
(a) A beverage dispensary licensee, a beverage dispensary tourism licensee, a restaurant or eating place licensee, or a seasonal restaurant or eating place tourism licensee may hold an art exhibit permit to sell and serve brewed beverages or wine for consumption at a specific art exhibit event as set out in AS 04.09.640. Food must be provided in conjunction with the service of brewed beverages and wine. Brewed beverages and wine may not be transported between specified sites.
(b) An art exhibit permit may not be exercised for an event that is expected to attract an audience under 21 years of age.
(c) Only one art exhibit permit may be exercised at any specified site on a single date.
(d) The art exhibit permit or an exact copy must be posted conspicuously at each specified site at each art exhibit event during times when brewed beverages or wine is served and consumed.
(e) An application for an art exhibit permit must be on a form prescribed by the board and be accompanied by the appropriate fee. An applicant must obtain and submit with the application written approval from the law enforcement agency with jurisdiction over the specified sites of the art exhibit events for which the permit is sought.
(f) An application for an art exhibit permit must clearly identify
(1) each art exhibit event date;
(2) each specified site for each event date;
(3) the designated areas for the service and consumption of brewed beverages and wine at each specified site for each event date; and
(4) the time during which brewed beverages and wine will be served and consumed at each specified site for each event date.
(g) The holder of a multiple events art exhibit permit may submit a written request for amendment of the permit to change event dates, specified sites, designated areas, or designated times where alcoholic beverage consumption is allowed. The request must be submitted to the director in writing not fewer than three days before the event and must include written approval of the law enforcement agency with jurisdiction over the specified sites.
(h) An art exhibit permit may not be transferred, relocated, or renewed.
(i) For the purposes of this section, "art exhibit event" or "event" means a public event involving an art display or similar activity approved by the board that is held for a limited period at one or more art galleries, art studios, art stores, art dealer stores, or museums.
History
- Authority: AS 04.06.090; AS 04.09.200; AS 04.09.350 AS 04.06.100; AS 04.09.210; AS 04.09.360
- Eff. 1/1/2024, Register 248
3 AAC 305.365 Music festival permits
A restaurant or eating place licensee may hold a musical festival permit to sell or dispense brewed beverages and wine for consumption at a festival with multiple live music performances not held on the holder's licensed premises as set out in AS 04.09.650.
History
- Authority: AS 04.06.090; AS 04.09.200; AS 04.09.350 AS 04.06.100; AS 04.09.210; AS 04.09.360
- Eff. 1/1/2024, Register 248
3 AAC 305.370 Colleges and universities
(a) For the purpose of granting a beverage dispensary caterer's permit, a restaurant caterer's permit, or a nonprofit organization event permit under AS 04.09.660 where prohibitions are imposed under AS 04.11.410 and AS 04.16.080, "school" does not include an accredited college or university as defined in AS 04.09.240(f).
(b) Along with other approvals required by statute or regulation, an application for a permit for a designated premises at a college or university event must be approved by the board of regents or a similar governing body of the college or university, or the board's or body's designee.
(c) A holder of a sporting activity or event license under AS 04.09 .270 or a recreational site license issued under AS 04.11.210 for a site where college or university sporting events are held may petition the board for designation of premises at the site where brewed beverages and wine may be sold during a college or university sporting event.
History
- Authority: AS 04.06.090; AS 04.09.270; AS 04.09.660 AS 04.06.100; AS 04.09.610; AS 04.11.270 AS 04.09.240; AS 04.09.620
- Eff. 1/1/2024, Register 248
3 AAC 305.375 Permits available to package store licensees
A package store licensee may hold a tasting event permit as set out in AS 04.09.680.
History
- Authority: AS 04.06.090; AS 04.09.200; AS 04.09.600 AS 04.06.100; AS 04.09.230; AS 04.09.680
- Eff. 1/1/2024, Register 248
3 AAC 305.380 Permits available to brewery retail, winery retail, and distillery retail licensees
A brewery retail licensee, a winery retail licensee, or a distillery retail licensee may hold a live music or entertainment event permit as set out in AS 04.09.700.
History
- Authority: AS 04.06.090; AS 04.09.320; AS 04.09.600 AS 04.06.100; AS 04.09.330; AS 04.09.700 AS 04.09.200; AS 04.09.340
- Eff. 1/1/2024, Register 248
3 AAC 305.385 Inventory resale permits
An inventory resale permit authorizes the sale of a business's remaining inventory of alcoholic beverages when the owner of the business no longer has a valid license under AS 04 and as set out in AS 04.09.690. An inventory resale permit sought by a non-licensee shall be brought to the board for approval.
History
- Authority: AS 04.06.090; AS 04.09.600 AS 04.06.100; AS 04.09.690
- Eff. 1/1/2024, Register 248
3 AAC 305.390 Permits available to nonprofit organizations
(a) A nonprofit organization may hold a nonprofit organization event permit as set out in AS 04.09.660.
(b) a nonprofit organization may hold an alcoholic beverage auction permit as set out in AS 04.09.670.
History
- Authority: AS 04.06.090; AS 04.09.600; AS 04.09.670 AS 04.06.100; AS 04.09.660
- Eff. 1/1/2024, Register 248
3 AAC 305.395 Conditional contractor's permit
A prime contractor may hold a conditional contractor's permit on construction sites as described under AS 04.09.710 and AS 04.11.680.
History
- Authority: AS 04.06.090; AS 04.09.600; AS 04.09.710 AS 04.06.100; AS 04.11.680
- Eff. 1/1/2024, Register 248
3 AAC 305.397 Definitions
For the purposes of AS 04.21.080(b) "a variety of types of food items appropriate for meals is prepared on site" means that the meals are prepared on site in a commercial kitchen and that the majority of meal preparation involves more than warming or rewarming food in movable kitchen appliances, such as slow-cookers and microwave ovens.
History
- Authority: AS 04.06.090; AS 04.06.100; AS 04.21.080
- Eff. 1/1/2024, Register 248
Article 4 Wholesale Licenses
3 AAC 305.400 License required
An alcoholic beverage license is required to sell alcoholic beverages at wholesale as set out in AS 04.09.100. A license is required to sell solely brewed beverages and wine at wholesale as set out in AS 04.09.110.
History
- Authority: AS 04.06.090; AS 04.09.010; AS 04.09.110 AS 04.06.100; AS 04.09.100; AS 04.11.400
- Eff. 1/1/2024, Register 248
3 AAC 305.410 Permissible sales to seasonal retail licenses
In response to an order, the holder of a general wholesale license may sell or deliver alcoholic beverages and the holder of a limited wholesale brewed beverage and wine license may sell or deliver brewed beverages or wine to the holder of a seasonal license during the seasonal licensee's off-season.
History
- Authority: AS 04.06.090; AS 04.09.100; AS 04.11.010 AS 04.06.100; AS 04.09.110; AS 04.11.680
- Eff. 1/1/2024, Register 248
3 AAC 305.420 Donations to permittees
The holder of a general wholesale license may donate alcoholic beverages and the holder of a limited wholesale brewed beverage and wine license may donate brewed beverages or wine to holders of nonprofit organization events permits issued under AS 04.09.660 for the purposes of the event, or to holders of nonprofit organization alcoholic beverage auction permits issued under AS 04.09.670 for the purposes of the auction.
History
- Authority: AS 04.06.090; AS 04.09.110; AS 04.11.010 AS 04.06.100; AS 04.09.660 AS 04.09.100; AS 04.09.670
- Eff. 1/1/2024, Register 248
Article 5 Trade Practices
3 AAC 305.500 Trade practices prohibitions
(a) Except as provided in 3 AAC 305.500 - 3 AAC 305.590, a person holding a brewery manufacturer license under AS 04.09.020, a person holding a winery manufacturer license under AS 04.09.030, a person holding a distillery manufacturer license under AS 04.09.040, a person holding a general wholesale license under AS 04.09.100, a person holding a limited wholesale brewed beverage and wine license under AS 04.09.110, a person engaged in the alcoholic beverage industry in another state or country as a brewer, vintner, distiller, wholesaler, or importer, or a person engaged in the alcoholic beverage industry in another state or country as an agent of a brewer, vintner, distiller, wholesaler, or importer may not induce a person holding a license under AS 04.09 to
(1) operate a tied house;
(2) operate as an exclusive outlet;
(3) engage in commercial bribery; or
(4) engage in consignment sales.
(b) In this section, "commercial bribery," "consignment sales," "exclusive outlet," and "tied house" have the meaning set out in AS 04.16.017(d).
History
- Authority: AS 04.06.090; AS 04.06.100; AS 04.16.017
- Eff. 8/9/2024, Register 251
3 AAC 305.510 Tied house prohibitions
In addition to the prohibitions set out under AS 04.16.017(a)(1), a person described in 3 AAC 305.500(a) may not induce a person holding a retail license under AS 04.09.200 - 04.09.370 to purchase products from an entity to the exclusion, in whole or in part, of products sold or offered for sale by other entities by
(1) providing, purchasing, or supplying the retailer with advertising services, including all forms of print, media, or Internet advertising;
(2) paying or crediting the retailer for an advertising, display, or distribution service;
(3) requiring the retailer to condition the purchase of product by requiring the purchase of any other product or a minimum quantity of any brand;
(4) building, constructing, or otherwise erecting permanent or semi-permanent shelving, refrigeration, or other fixtures for stocking and displaying alcohol beverages at the retailer's premises, or moving retailer fixtures in a manner that obscures or hides other alcoholic beverage products from view;
(5) serving alcohol to the general public on a retailer's premises; or
(6) rearranging or resetting the alcoholic beverages of a competing manufacturer or wholesaler or resetting the retailer's premises.
History
- Authority: AS 04.06.090; AS 04.06.100; AS 04.16.017
- Eff. 8/9/2024, Register 251
3 AAC 305.515 Exceptions to tied house prohibitions
(a) The practices set out in this section are exceptions to the practices listed under AS 04.16.017(a)(1) or 3 AAC 305.510.
(b) The practices prohibited under AS 04.16.017(a)(1) or 3 AAC 305.510 do not apply to
(1) an entity that holds both a brewery manufacturer license under AS 04.09.020 and a brewery retail license under AS 04.09.320;
(2) an entity that holds both a winery manufacturer license under AS 04.09.030 and a winery retail license under AS 04.09.330; or
(3) an entity that holds both a distillery manufacturer license under AS 04.09.040 and a distillery retail license under AS 04.09.340.
(c) Under this section, an entity may
(1) furnish equipment, inside signage, supplies, services, or other things of value to a person holding a retail license under AS 04.09.200 - 04.09.370 if the entity furnishing those items maintains records, including commercial records or invoices, of all items furnished to the person holding the retail license, for a three-year period; the entity's records must show
(A) the retailer's name and address;
(B) the date the item was furnished to the retailer;
(C) a description of the item furnished to the retailer;
(D) the entity's cost of the furnished item, calculated at the invoice price and landed price to the entity's licensed premises in the state; and
(E) charges to the retailer for the furnished item;
(2) give a product display to the person holding a retail license under AS 04.09.200 - 04.09.370, if
(A) the total value of the product display given by the entity to the retailer does not exceed $800 per brand at any one time in any single licensed premises or $4,800 per brand if the retailer has six or more licensed premises, excluding installation costs; under this subparagraph, entities may not pool or combine dollar limitations to provide a retailer a product display valued at more than $800 per brand;
(B) the product display identifies the featured product or information about the product's manufacturer in a manner that is conspicuous, identifiable, and securely affixed; the name and address of the retailer may also appear on the product display; and
(C) a conditioned purchase of the alcoholic beverage on the product display does not exceed the quantity necessary for the initial completion of that display; under this subparagraph, the entity may not impose any other condition on the retailer for the retailer to receive or get the product display;
(3) give, sell, or loan indoor signage, indoor posters, table tents, place mats, menus, pamphlets, writing utensils, product description sheets, light fixtures, and other nonconsumable similar items to a person holding a retail license under AS 04.09.200 - 04.09.370 if
(A) the item identities the featured product or information about the product's manufacturer in a manner that is conspicuous, identifiable, and securely affixed; the name and address of the retailer may also appear on the item; and
(B) the entity does not directly or indirectly pay or credit the retailer for using or distributing the item or for an expense incidental to the item's use;
(4) give or sell outside signage to a person holding a retail license under AS 04.09.200 - 04.09.370 if
(A) the sign bears information about a featured product or the product's manufacturer in a manner that is conspicuous, identifiable, and securely affixed;
(B) the retailer is not compensated, directly or indirectly, for displaying the sign; and
(C) the cost of a single exterior sign does not exceed $400 per location;
(5) furnish things of value to a temporary retailer;
(6) except as provided in (7) of this subsection, provide equipment, consumable supplies, or service ware to a person holding a retail license under AS 04.09.200 - 04.09.370 if
(A) the equipment, supplies, or service ware are sold at a price not less than the cost to the entity who initially purchased them and the landed price to the entity's registered address in the state; and
(B) the purchase cost is collected from the retailer not later than 30 days after the date of delivery or installation of the equipment, supplies, or service ware;
(7) provide or install an alcoholic beverage dispensing system, including alcoholic beverage taps or drafting equipment, to a person holding a retail license under AS 04.09.200 - 04.09.370, if
(A) the cost of the original purchase or installation is billed to the retailer at a price not less than the cost to the entity who initially purchased them and the landed price to the entity's registered address in the state;
(B) the purchase or installation cost is collected from the retailer not later than 30 days after the date of the purchase or installation; and
(C) the purchase or installation is not conditioned on the exclusion, in part or whole, of other entities' products;
(8) provide for the maintenance or cleaning of an alcoholic beverage dispensing system, including alcoholic beverage taps or drafting equipment, to a person holding a retail license under AS 04.09.200 - 04.09.370; maintenance costs exceeding $50 shall be billed to the retailer and collected not later than 30 days after the date of performance of the service; cleaning may be provided free of cost to the retailer;
(9) provide traditional or digital artwork to a person holding a retail license under AS 04.09.200 - 04.09.370 for use in advertising that features the entity's products;
(10) package and distribute alcoholic beverages in combination with other nonalcoholic items for sale to consumers at a retailer's premises;
(11) give or sponsor educational seminars for employees of a person holding a retail license under AS 04.09.200 - 04.09.370; seminars may be held at the entity's facility, a third-party location, or the retailer's facility; the entity may not pay the retailer's expenses for attendance, including travel and lodging costs; an entity may provide nominal hospitality during the event, including non-alcoholic beverages or hors d'oeuvres;
(12) provide a presentation to the general public on the licensed premises of a person holding a retail license under AS 04.09.200 - 04.09.370, including describing featured products during consumer-sampling activities;
(13) furnish coupons at the licensed premises of a person holding a retail license under AS 04.09.200 - 04.09.370 to consumers to redeem for alcoholic beverages or related accessories, if
(A) all licensed retailers within the market where the coupon offer is made may redeem those coupons;
(B) the entity does not reimburse a retailer for more than the face value of all coupons redeemed;
(C) the coupons are only created and provided by a manufacturer of an alcoholic beverage; and
(D) the coupons are only offered for products sold for off-premises consumption;
(14) list the names and addresses of two or more unaffiliated retailers licensed under AS 04.09.200 - 04.09.370 that are selling the products of an entity in an advertisement of the entity if
(A) the advertisement does not also contain the retail price of the product;
(B) the listing is the only reference to the retailers in the advertisement and is relatively inconspicuous in relation to the advertisement as a whole; and
(C) the advertisement does not refer only to one retailer or only to retail establishments controlled directly or indirectly by the same retailer;
(15) manage display space at the licensed premises of a person holding a retail license under AS 04.09.200 - 04.09.370 on a nondiscriminatory basis; that display-space management may include
(A) product rotation of alcoholic beverages, either on retail shelves or in displays or from storage areas to retail shelves and display;
(B) storage area, retail shelf, and display stocking;
(C) construction of freestanding, special, and nonpermanent floor displays; and
(D) delivery and placement of products to the retailer-designated storage areas;
(16) recommend a shelf plan or shelf schematic for alcoholic beverages to a person holding a retail license under AS 04.09.200 - 04.09.370, if the final decision of the placement of product is made by the retailer;
(17) reset the licensed premises of a person holding a retail license under AS 04.09.200 - 04.09.370 if
(A) the retailer sends notice by mail or electronic mail to all entities from which the retailer received alcoholic beverages within the past 12 months or distributors of those entities; notice under this subparagraph must
(i) include the date and time of the contemplated movement or reset; and
(ii) be sent not less than two weeks before the contemplated reset date;
(B) employees of an entity are not used as employees of, or required to provide services to, the retailer on any basis;
(C) the resultant movement of products or reset does not exclude a competing entity from the premises; and
(D) all entities are allowed to participate in the reset;
(18) extend credit to a person holding a retail license under AS 04.09.200 - 04.09.370 for the purchase of alcoholic beverages at standard market price on credit with a line of credit provided by a third-party financial institution, including finance charges and processing fees; and
(19) sell other merchandise, including groceries or pharmaceuticals, to a person holding a retail license under AS 04.09.200 - 04.09.370, if the entity is also in business as a bona fide producer or vendor of that merchandise and
(A) the merchandise is sold at the manufacturer's invoice price and if applicable, landed price to the entity in the state;
(B) the merchandise is not sold in combination with alcoholic beverages, except for packaging and distributing alcoholic beverages in combination with other nonalcoholic items for sale to consumers;
(C) the normal manufacturer's invoice price of the merchandise appears on the retailer's purchase invoices or other records; and
(D) the individual selling prices of merchandise and alcoholic beverages sold in a single transaction can be determined from commercial documents covering the sales transaction.
(d) For the purposes of this section,
(1) "product display" means custom fixtures or special presentations that are used to attract and entice the buying public;
(2) "temporary retailer" means a person who does not hold a retail license under AS 04.09.200 - 04.09.370, but who is supplied with an alcoholic beverage permit not more than five times in a calendar year and where each event does not exceed four days.
History
- Authority: AS 04.06.090; AS 04.06.100; AS 04.16.017
- Eff. 8/9/2024, Register 251
3 AAC 305.520 Exclusive outlet prohibitions
For the purposes of AS 04.16.017(a)(2), an entity may not induce a person holding a retail license under AS 04.09.200 - 04.09.370 to operate as an exclusive outlet for an entity by requiring the retailer to purchase alcoholic beverages from an entity to the exclusion, in whole or in part, of alcoholic beverages sold or offered for sale from other entities, where a required transaction operates by one or more of the following:
(1) an oral promise or written contract;
(2) requiring the retailer to purchase a specific or minimum quantity during the term of an oral promise or written contract; or
(3) a third-party arrangement that does not directly involve the entity, which compels a retailer to purchase alcoholic beverages, in whole or in part, to the exclusion of products for sale by other entities.
History
- Authority: AS 04.06.090; AS 04.06.100; AS 04.16.017
- Eff. 8/9/2024, Register 251
3 AAC 305.525 Practices that do not amount to commercial bribery
The practices set out in this section do not constitute commercial bribery under AS 04.16.017(a)(3). Under this section, an entity may
(1) participate in an association activity of a person holding a retail license under AS 04.09.200 - 04.09.370 by
(A) displaying the entity's products at a convention or trade show;
(B) renting display booth space, if the rental fee is the same as that charged and paid for by all exhibitors at the event;
(C) providing hospitality independent from an association-sponsored activity;
(D) purchasing tickets to a function;
(E) paying registration fees for an entity's participation in a conference, event, or tradeshow, if the payment or fee is the same as those paid by all attendees, participants, or exhibitors at the event; or
(F) paying for an advertisement in a program or brochure issued by the association at a convention or trade show, if the total payments made by an entity for all such advertising do not exceed $25,000 per year for any retailer association;
(2) provide a sample of alcoholic beverages to a person holding a retail license under AS 04.09.200 - 04.09.370, in not more than the following sizes:
(A) one gallon per brand of brewed beverage;
(B) one liter per brand of wine; and
(C) one liter per brand of distilled spirits;
(3) if a brand of brewed beverage, wine, or distilled spirits is not available in the sample size set out in (2) of this subsection, furnish the next larger size of that brand to a retailer as a sample;
(4) offer a contest prize, premium offer, or like item not more than 12 times per year, per brand, to the consumers of a person holding a retail license under AS 04.09.200 - 04.09.370 if
(A) the event at which the prize, premium offer, or like item is featured does not exceed 30 days in length;
(B) the contest prize, premium offer, or like item does not exceed $400 in value on any single licensed premises and that dollar value may not be pooled or combined across multiple licensed premises;
(C) officers, employees, or representatives of the entity and the retailer are excluded from participation;
(D) the entity determines the winner of the contest prize, premium offer, or like item and the name of the winner is posted on the licensed premises of the retailer where the event occurred for a period of 30 days; and
(E) the entity keeps records of prize, offer, or like item winners for a period of three years.
History
- Authority: AS 04.06.090; AS 04.06.100; AS 04.16.017
- Eff. 8/9/2024, Register 251
3 AAC 305.530 Exceptions to consignment sales prohibitions
Notwithstanding the practices set out in AS 04.16.017(a)(4), an entity may accept returned merchandise for ordinary and usual commercial reasons arising after the merchandise has been sold, including return of products that are
(1) unmarketable because of product deterioration, leaking containers, damaged labels, or missing or mutilated tamper evident closures; under this paragraph, products may be exchanged for an equal quantity of identical products or may be returned for cash or credit against outstanding indebtedness, except if the products were damaged after delivery to the retailer;
(2) in error, because of a discrepancy between products ordered and products delivered if the return of products occurs within a reasonable period after delivery, not to exceed 30 days; under this paragraph, delivered products may be exchanged for products that were originally ordered or returned for cash or credit against outstanding indebtedness;
(3) no longer lawfully sold, including due to change in regulation or administrative procedure; under this paragraph, products may be returned for cash or credit against outstanding indebtedness;
(4) in inventory stock on the licensed premises when a retailer terminates operations, excluding seasonal shutdowns; under this paragraph, products may be returned for cash or credit against outstanding indebtedness;
(5) in inventory stock on the licensed premises when a retailer's distribution agreement with an entity has terminated; under this paragraph, products may be returned for cash or credit against outstanding indebtedness;
(6) subject to 27 C.F.R. 11.46 (seasonal products), changed in formula, proof, label, or container; under this paragraph, products may be exchanged for equal quantities of the new version of that product;
(7) from a discontinued production or importation of a product; under this paragraph, products may be returned for cash or credit against outstanding indebtedness;
(8) on the licensed premises of a retailer that operates only seasonally; under this paragraph, products may be returned for cash or for credit against outstanding indebtedness; or
(9) from a permittee approved by the Alcohol and Marijuana Control Office, who is not also licensed under AS 04.
History
- Authority: AS 04.06.090; AS 04.06.100; AS 04.16.017
- Eff. 8/9/2024, Register 251
3 AAC 305.540 Administrative penalties
(a) The board may levy administrative penalties for violation of this section against all participants in an unlawful trade practice at not less than two times the value of the inducement. The penalty imposed may be joint or severable against one or more participants. If applicable,
(1) the value of the inducement permitted under this section may be included in the calculation of the value of the administrative penalty; and
(2) the value of the inducement may include the identifiable market value of the inducement or comparable market value, or reasonable estimated market value.
(b) Administrative penalties will be levied in addition to any other fines levied by another governmental entity of the United States.
(c) The board may calculate the penalty allowed under (a) of this section by considering the severity of the violation and the prior violations of 3 AAC 305.500 - 3 AAC 305.590. by the parties involved in the inducement.
History
- Authority: AS 04.06.090; AS 04.06.100; AS 04.16.017
- Eff. 8/9/2024, Register 251
3 AAC 305.550 Adulteration, misbranding, and false advertising of alcoholic beverages
(a) Adulteration, misbranding, or false advertising of alcoholic beverages is prohibited.
(b) If a person holding a retail license under AS 04.09.200 - 04.09.370 or the retailer's employee or agent sells or serves a mixed alcoholic beverage made with a wine product instead of a distilled spirit, the entity or retailer that furnished the product shall disclose that the alcoholic beverage is "wine based" in all advertising, labeling, or descriptions of the mixed alcoholic beverage made with a wine product. It is prohibited to advertise, label, or make any written or oral representation, about an alcoholic beverage containing wine in a manner that may imply that the alcoholic beverage contains a distilled spirit.
History
- Authority: AS 04.06.090; AS 04.06.100; AS 04.16.017
- Eff. 8/9/2024, Register 251
3 AAC 305.560 Pricing and marketing of alcoholic beverages
For the purpose of AS 04.16.015, except as provided for the holder of a package store sampling endorsement under AS 04.09.490, a person holding a retail license under AS 04.09.200 - 04.09.370 or the retailer's employee or agent may not set a period of time during a day that an alcoholic beverage drink or a brand of alcoholic beverage is sold or delivered that is less than the hours that the licensed premises is open to the general public.
History
- Authority: AS 04.06.090; AS 04.16.015 AS 04.06.100; AS 04.16.017
- Eff. 8/9/2024, Register 251
3 AAC 305.590 Definitions
For the purposes of 3 AAC 305.500 - 3 AAC 305.590,
(1) "brand" means a type of product manufactured by a particular company under a particular name;
(2) "entity" means
(A) a person holding a
(i) brewery manufacturer license under AS 04.09.020;
(ii) winery manufacturer license under AS 04.09.030:
(iii) distillery manufacturer license under AS 04.09.040;
(iv) general wholesale license under AS 04.09.100; or
(v) limited wholesale brewed beverage and wine license under AS 04.09.110;
(B) a brewer, vintner, distiller, wholesaler, or importer that is located outside of the state; or
(C) an agent of a brewer, vintner, distiller, wholesaler, or importer that is located outside of the state;
(3) "product" means any alcoholic beverage;
(4) "retailer" means an entity licensed under AS 04.09.200 - 04.09.370.
History
- Authority: AS 04.06.090; AS 04.06.100; AS 04.16.017
- Eff. 8/9/2024, Register 251
Article 6 Provisions Applicable to More Than One License Type
3 AAC 305.600 Exercise of authority
A licensee shall personally or through employees and agents exercise actual authority and responsibility over the conduct of business upon the licensed premises. Until the licensee surrenders the license to the board, and so long as business is conducted under the license upon the licensed premises, the licensee is solely responsible and liable for the conduct of the business. A person not acting as an agent or employee of the licensee or operating under a management services agreement under 3 AAC 305.610(a) may not exercise actual authority over the conduct of business upon the licensed premises without transfer of the license upon approval of the board.
History
- Authority: AS 04.06.090; AS 04.11.450 AS 04.06.100; AS 04.11.580
- Eff. 1/1/2024, Register 248
3 AAC 305.605 Surrender of license
Not later than 10 days after the loss or surrender of the licensed premises, or if a licensee ceases to conduct business upon the licensed premises for a period expected to continue for one month or more, the licensee shall inform the board and surrender the license to the director. The license will be reissued upon request when the conduct of business is resumed or upon transfer of the license.
History
- Authority: AS 04.06.090; AS 04.06.100; AS 04.11.580
- Eff. 1/1/2024, Register 248
3 AAC 305.610 Prohibited financial interest; representative or owner; management agreements
(a) For the purposes of AS 04.11.450, an alcoholic beverage licensee may enter into a management agreement with a person who does not have an ownership interest in the alcoholic beverage license for the purpose of giving that person responsibility for the day-to-day operations of an alcoholic beverage license.
(b) A management agreement under this section must be in writing and signed by a licensee or transferor whose name is required to be provided with an application for a new or transfer license under AS 04.11.260 or 04.11.280, and by the non-licensee or transferee agreeing to manage the operation of the business. A copy of the signed, written management agreement must be filed with the Alcohol & Marijuana Control Office. The licensee who signs the management agreement shall notify the board of any change to the management agreement, including expiration, termination, or amendment not later than 10 days after each change to the management agreement occurs.
(c) A management agreement may not create a mechanism for a manager who is not a licensee to derive profit from the sale of alcohol in violation of AS 04.11.450, including an agreement for a manager to keep all profit above a certain amount of income when that profit may be derived from the sale of alcoholic beverages.
(d) The director shall review a management agreement for compliance with this section, and any errors or omissions must be corrected by the licensee not later than 10 days after receipt of notification of the error or omission. The director may declare a management agreement that does not comply with this section void. A management agreement must comply with AS 04.11.450(a), AS 04.21.030, and 3 AAC 305.600 and contain language that indicates both parties to the agreement have read, understand, and agree to comply with those statutes and regulation.
History
- Authority: AS 04.06.090; AS 04.09.010 AS 04.06.100; AS 04.09.450
- Eff. 1/1/2024, Register 248
3 AAC 305.615 Death of a sole licensee
(a) Upon the death of an individual who is the sole owner of a license or the sole owner of the licensed entity, the business operating the license shall cease operation unless and until a personal representative of the estate files the following written documentation with the director:
(1) proof that the personal representative has authority to act on behalf of the licensee or the estate of the deceased; and
(2) a request to continue operations.
(b) Upon the director's validation of the personal representative's authority licensee's estate and if the director has not filed or will not file an accusation seeking suspension or revocation of the license, the director will grant permission to operate the business upon the licensed premises as permitted under AS 04.11.030. Under this subsection, permission to operate the business upon the licensed premises expires upon
(1) legal appointment of a different personal representative of the licensee's estate;
(2) approval of an application for transfer of the license submitted in accordance with 3 AAC 305.060; or
(3) license forfeiture in accordance with AS 04.11.030(b).
(c) An application for transfer of a license from a deceased licensee must comply with the time limitations set out in AS 04.11.030(b). An applicant who fails to comply with the provisions of AS 04.11.030(b) forfeits the license unless the board approves a written request to extend the applicable deadline from the personal representative of the licensee's estate. If the board grants a deadline extension, the extension may not exceed the time reasonably necessary to close the affairs of the deceased individual, as determined by the board. A written request to extend the applicable deadline must
(1) be submitted to the board before the applicable deadline expires; however, the board may approve a request that is submitted after the deadline if
(A) there is good cause to approve the deadline extension; and
(B) the license is still available for transfer; and
(2) include an estimated length of time required for the extension from the personal representative and a description of the factors that support the requested time line.
(d) In this section, "personal representative" includes an agent within the meaning given in AS 13.06.050.
History
- Authority: AS 04.06.090; AS 04.09.010; AS 04.11.030 AS 04.06.100; AS 04.09.040
- Eff. 1/1/2024, Register 248
3 AAC 305.620 Death of an individual with a controlling interest in a license issued to a business entity
(a) Upon the death of an individual who owns a controlling interest in a partnership, including a limited partnership, a limited liability company, or a corporation that holds a license under AS 04 and this chapter, the business entity may continue to operate the licensed business but shall file a transfer application as required under AS 04.11.040 and 3 AAC 305.060 or a time extension request under (b) of this section not later than 180 days after the individual's death. If the business entity fails to file a transfer application or time extension by the 180-day deadline the business shall stop operation until the business entity files a transfer application.
(b) A business entity may submit a time extension request. If the board grants a time extension, the extension may not exceed the time reasonably necessary to close the affairs of the deceased individual, as determined by the board; however, the board may extend an extension for good cause. A written request to extend the applicable deadline must
(1) be submitted to the board before the applicable deadline expires; however, the board may approve a request that is submitted after the deadline if there is good cause to approve the deadline extension; and
(2) include an estimated length of time required for the extension from the business entity and a description of the factors that support the requested time line.
History
- Authority: AS 04.06.090; AS 04.09.010; AS 04.11.030 AS 04.06.100; AS 04.11.040
- Eff. 1/1/2024, Register 248
3 AAC 305.625 Death of an individual with less than a controlling interest in a license issued to a business entity
(a) Upon the death of an individual who owns less than a controlling interest in a partnership, including a limited partnership, a limited liability company, or a corporation that holds a license under AS 04 and this chapter, the business entity may continue to operate the licensed business but shall complete one of the following not later than 180 days after the individual's death:
(1) a change of ownership report under AS 04.11.045, 04.11.050, or 04.11.055;
(2) a transfer application if required by AS 04.11.040 and 3 AAC 305.060;
(3) a time extension request under (b) of this section.
(b) A business entity may submit a time extension request. If the board grants a time extension, the extension may not exceed the time reasonably necessary to close the affairs of the deceased individual, as determined by the board; however, the board may extend an extension for good cause. A written request to extend the applicable deadline must
(1) be submitted to the board before the applicable deadline expires; however, the board may approve a request that is submitted after the deadline if there is good cause to approve the deadline extension; and
(2) include an estimated length of time required for the extension from the business entity and a description of the factors that support the requested time line.
History
- Authority: AS 04.06.090; AS 04.09.010; AS 04.11.040 AS 04.06.100; AS 04.09.030
- Eff. 1/1/2024, Register 248
3 AAC 305.630 Licensed premises
(a) A license is issued for a specific place which is the licensed premises, and which must be clearly designated in a line drawing accompanying an application. The address of the proposed licensed premises and the business name under which the licensee is going conduct business must be indicated on the license application.
(b) With the exception of a recreational site license, sporting activity or event license, destination resort license, or outdoor seating area under (g) of this section, the licensed premises must be one area. A licensed premises may include separate rooms if the rooms are contiguous and connected to one another or if they are rooms designated as the licensed premises of a destination resort lodge, beverage dispensary tourism license, or beverage dispensary licensee that holds a hotel or motel endorsement. If the licensed premises consist of more than one room in which a fixed counter is regularly maintained, a multiple fixed counter endorsement is required for the additional rooms. A recreational site license, destination resort license, or licensee with an outdoor seating area under (g) of this section may have multiple separate licensed premises areas with the approval of the board.
(c) A licensee shall conspicuously post the license within the licensed premises.
(d) A licensee may not alter the functional floor plan, reduce, or expand the area, or change the business name of the licensed premises without the prior written approval of the director. The licensee shall provide a new line drawing showing the proposed changes in the premises. A licensee shall pay a fee of $250 to change the business name or line drawing of the licensee's licensed premises if the name or line drawing change is not part of an application for transfer of ownership or location. A request for a business name or line drawing change for a licensed premises that is not part of a license transfer application must be made on a form prescribed by the board.
(e) If a business establishment or facility consists of both licensed premises and an unlicensed area, the licensee shall clearly segregate the licensed premises and the unlicensed area.
(f) A licensee may request to have a portion of its licensed premises alternate as licensed or unlicensed premises on a seasonal basis under the following conditions:
(1) the request is made on a form prescribed by the board, accompanied by a detailed premises diagram and $250 fee;
(2) a debt that is incurred during times when the identified area is unlicensed will be considered a debt incurred in the operation of the licensed business for purposes of transfer of license under AS 04.11.360;
(3) at any time with written notice to the licensee, the board may withdraw its approval of use of the identified area as alternating premises; and
(4) during times the identified area is designated as an unlicensed premises, all alcoholic beverages must either be removed from the identified area or be stored in a location approved by the board to be secure from the public.
(g) A licensed premises may include an outdoor seating area located on the portion of a public street or sidewalk contiguous with a building or structure licensed by the board, if the licensee is granted sole control of the public street or sidewalk by the local government during the licensee's business hours.
(h) Notwithstanding (a) - (f) of this section, a licensee with an approved outdoor seating area under (g) of this section may permit an agent or employee to take an alcoholic beverage across the portion of the public right of way that is still open to the public to access the outdoor seating area. Under this subsection, the local government with jurisdiction over the licensee must grant the licensee sole control of the outdoor seating area during the licensee's business hours.
(i) Notwithstanding (a) - (f) of this section, a licensee with an approved licensed premises that includes non-contiguous rooms may permit an agent or employee to take an alcoholic beverage through a passage linking non-contiguous areas during the licensee's business hours if the passage is part of the undesignated portion of the premises during its regular business hours.
(j) Notwithstanding the definitions set out under (a) of this section, the board may approve a non-contiguous, non-adjacent, or non-adjoining licensed premises as it existed before January 1, 2024. The board may also approve the transfer of ownership of a license subject to this section and maintain the non-contiguous, non-adjacent, or non-adjoining licensed premises.
History
- Authority: AS 04.06.090; AS 04.09.010 AS 04.06.100; AS 04.21.080
- Eff. 1/1/2024, Register 248
3 AAC 305.640 Seasonal license
(a) Except as provided in this section, the rights, privileges, and restrictions of a license issued under AS 04 are limited to the interval stated on the seasonal license.
(b) The holder of a seasonal package store license or a seasonal retail license that serves alcohol for consumption on the premises may purchase alcohol intended for resale not more than 30 days before the seasonal license is effective. The holder of a general wholesale license or a limited wholesale brewed beverage and wine license may sell or deliver alcoholic beverages to a seasonal license holder during the licensee's off-season as applicable to the license.
(c) The holder of a seasonal package store license or a seasonal retail license that serves alcohol for consumption on the premises may store alcohol in accordance with AS 04.21.060 during the period of the year when the seasonal license is not effective.
History
- Authority: AS 04.06.090; AS 04.09.230; AS 04.09.300 AS 04.06.100; AS 04.09.240; AS 04.09.310 AS 04.09.200; AS 04.09.250; AS 04.09.350 AS 04.09.210; AS 04.09.270 AS 04.09.220; AS 04.09.280
- Eff. 1/1/2024, Register 248
3 AAC 305.650 Alternating licensed premises
Upon a licensee's written request accompanied by a detailed premises diagram, the board may approve a portion of a premises of a retail license licensed for onsite consumption to alternate as a licensed or unlicensed premises under the following conditions:
(1) the request is made on a form prescribed by the board, accompanied by a detailed premises diagram and $250 fee;
(2) approval will be granted only if the board finds that use of the identified area as alternating premises will stimulate tourism or promote activities open to the general public;
(3) a debt that is incurred during times when the identified area is unlicensed will be considered a debt incurred in the operation of the licensed business for purposes of transfer of the license under AS 04.11.360;
(4) at any time with written notice to the licensee, the board may withdraw its approval of use of the identified area as alternating premises.
(5) a permit issued under AS 04.09.610, 04.09.620, 04.09.630, 04.09.650, 04.09.660, 04.09.670, and 04.09.700 may be exercised in the alternating area during the times the identified area is unlicensed premises;
(6) during times the identified area is designated as an unlicensed premises, all alcoholic beverages must either be removed from the identified area or be stored in a location approved by the board to be secure from the public;
(7) a licensee may apply hours that it is operating as an alternating unlicensed premises to meet the operating requirement described under AS 04.11.330(a)(3).
History
- Authority: AS 04.06.090; AS 04.09.260; AS 04.09.350 AS 04.06.100; AS 04.09.270; AS 04.09.360 AS 04.09.200; AS 04.09.300; AS 04.09.610 AS 04.09.210; AS 04.09.310; AS 04.11.330
- Eff. 1/1/2024, Register 248
3 AAC 305.655 Temporary de-designation of licensed premises
(a) A de-designation permit allows the holder of a retail license for onsite consumption to use the licensed premises or a portion of the licensed premises on a temporary basis for an event at which persons under 21 years of age will be present. Alcoholic beverages may not be sold, served, or consumed on the licensed premises two hours before and one hour after the times identified in the permit during which the persons under 21 years of age will be on the premises. A permit may not be exercised during hours of closure under AS 04.16.010.
(b) Application for a de-designation permit must be made on a form provided by the board and include a non-refundable application fee of $50, the information required in (c) of this section, and a certification as set out in (e) of this section. A permit may be approved by the director for not more than three consecutive days for an event.
(c) An application for a de-designation permit must include information about the relevant event as required by the board and must include proof of written notice to the law enforcement agency having jurisdiction over the designated premises of the event for which the permit is sought.
(d) An application for a de-designation permit must be filed with the director not later than three business days before the event for which the permit is requested unless the director grants an exception to address a more immediate need for an event.
(e) A licensed premises must be certified as suitable for the purposes of this section before applying for a de-designation permit. Certification must be requested by the licensee on an application form provided by and filed with the board. An application for certification must include a detailed diagram showing the proposed de-designated area, provide a security plan to keep unaccompanied minors separated from the designated licensed premises, and payment of a non-refundable $50 application fee.
(f) The director may place limitations or restrictions on the premises certification and the permit as necessary to assure adequate security and control in the public interest.
(g) The de-designation permit and a copy of the approved application for certification must be conspicuously posted at the main entrance to the licensed premises during the time a permit is exercised. The licensee shall submit a copy of the approved application for certification to the law enforcement agency with jurisdiction over the designated premises of the event for which the permit is sought.
(h) A de-designation permit may not be transferred, relocated, or renewed.
(i) A person who possesses or consumes alcoholic beverages, is suspected of possessing or consuming alcoholic beverages, or exhibits characteristics of intoxication on the de-designated premises during the permit period must be removed immediately from the entire licensed premises for the duration of the event.
(j) The director or a peace officer whose jurisdiction includes the licensed premises may terminate a permit at any time in the public interest if any conditions on the de-designation permit are violated.
(k) The event premises are still a licensed premises under AS 04 during the time when a de-designation permit is exercised under this section. Violation of a statute, regulation, or local ordinance governing alcoholic beverages on the licensed premises is grounds for suspension or revocation of the licensee's premises certification and license. A debt that is incurred for or during an event for which a de-designation permit is granted is considered a debt incurred in the operation of the license for the purposes of transfer of ownership of the holder's license under AS 04.11.360.
History
- Authority: AS 04.06.090; AS 04.09.260; AS 04.09.350 AS 04.06.100; AS 04.09.270; AS 04.09.360 AS 04.09.200; AS 04.09.300; AS 04.09.610 AS 04.09.210; AS 04.09.310; AS 04.11.330
- Eff. 1/1/2024, Register 248
3 AAC 305.660 Overlapping licensed premises
(a) Except as provided in (h) of this section, the board may approve an application for overlapping premises for two or more licenses owned by the same person or group of persons required to be identified in an application submitted under AS 04.11.260. The application must be in writing and include a detailed premises diagram. The board may approve an overlapping premises application under the following conditions:
(1) licensed premises for manufacturer licenses issued under AS 04.09.020 (brewery manufacturer), AS 04.09.030 (winery manufacturer), and AS 04.09.040 (distillery manufacturer) may overlap with each other as permissible under federal law;
(2) licensed premises for a manufacturer license issued under AS 04.09.020 (brewery manufacturer); AS 04.09.030 (winery manufacturer), and AS 04.09.040 (distillery manufacturer) may overlap with a manufacturer direct shipment license issued under AS 04.09.370;
(3) licensed premises for a manufacturer license issued under AS 04.09.020 (brewery manufacturer), AS 04.09.030 (winery manufacturer), and AS 04.09.040 (distillery manufacturer) may overlap with the following retail licenses for consumption on the licensed premises:
(A) beverage dispensary licenses issued under AS 04.09.200;
(B) restaurant or eating place licenses issued under AS 04.09.210;
(C) beverage dispensary tourism licenses issued under AS 04.09.350;
(D) brewery retail licenses issued under AS 04.09.320;
(E) winery retail licenses issued under AS 04.09.330;
(F) distillery retail licenses issued under AS 04.09.340;
(G) seasonal restaurant or eating place tourism licenses issued under AS 04.09.360.
(b) Unless provided otherwise in AS 04.09.520, overlapping licensed premises may not be utilized to offer the license holder's alcoholic beverages for sale for consumption off the licensed premises or to subdivide and sell the license holder's alcoholic beverages from original packages with federally compliant labels to smaller containers with the standard federal government warnings and the product name.
(c) In addition to overlapping premises permissible under (b) of this section, licensed premises for a brewery retail license issued under AS 04.09.320, winery retail license issued under AS 04.09.330, or distillery retail license issued under AS 04.09.340 may overlap with a manufacturer direct shipment license issued under AS 04.09.370 or with the following retail licenses for consumption on the licensed premises:
(1) beverage dispensary licenses issued under AS 04.09.200;
(2) restaurant or eating place licenses issued under AS 04.09.210;
(3) seasonal restaurant or eating place tourism licenses issued under AS 04.09.360;
(4) beverage dispensary tourism licenses issued under AS 04.09.350.
(d) Licensed premises for a package store issued under AS 04.09.230 may overlap with the following retail licenses for consumption off the licensed premises:
(1) beverage dispensary licenses subject to the requirements described under AS 04.09.230(d);
(2) brewery retail licenses issued under AS 04.09.320;
(3) winery retail licenses issued under AS 04.09.330;
(4) distillery retail licenses issued under AS 04.09.340.
(e) Licensed premises for manufacturer licenses issued under AS 04.09.020 (brewery manufacturer), AS 04.09.030 (winery manufacturer), and AS 04.09.040 (distillery manufacturer) may overlap with a package store license as described under AS 04.09.230.
(f) Licensed premises for a package store issued under AS 04.09.230 may overlap with the licensed premises of a restaurant or eating place license or a seasonal restaurant or eating place tourism license, subject to the controlled access conditions required by the board.
(g) Licensed premises for general wholesalers issued under AS 04.09.100 or limited wholesale brewed beverage and wine licenses issued under AS 04.09.110 may share overlapping premises.
(h) For all overlapping licensed premises permitted under this section, the permissible consumption on premises, permissible sales for off premises consumption, and compliance with AS 04.16.049 is determined by the specific combination of licenses.
(i) The restriction that both licenses must be held by the same person or group of persons as described in (a) of this section does not apply to an overlapping premises for two or more licenses approved by the board before January 1, 2024.
History
- Authority: AS 04.06.010; AS 04.09.100; AS 04.09.330 AS 04.06.090; AS 04.09.110; AS 04.09.340 AS 04.06.100; AS 04.09.200; AS 04.09.350 AS 04.09.020; AS 04.09.210; AS 04.09.360 AS 04.09.030; AS 04.09.230; AS 04.09.370 AS 04.09.040; AS 04.09.320
- Eff. 1/1/2024, Register 248; am 10/25/2024, Register 252
3 AAC 305.665 Resealing wine served with a meal for removal from the licensed premises
For the purposes of AS 04.16.120(c), one opened bottle of wine served with a meal may be removed from licensed premises if
(1) the licensee reinserts the original cork or a similar type of cork so that the top of the cork is flush with the bottle opening and can only be removed by a corkscrew or other similar device; or
(2) the licensee replaces the original or a similar screw-on cap on the bottle tightly and seals the cap with tamper-evident tape; and
(3) the licensee places the resealed bottle in a single-use bag that has a tamper-evident seal and that is manufactured expressly for the removal of partially consumed bottles of wine from licensed premises.
History
- Authority: AS 04.06.090; AS 04.06.100; AS 04.16.120
- Eff. 1/1/2024, Register 248
3 AAC 305.670 Storing, warehousing, and transporting
(a) Except as provided in AS 04.21.060, an alcoholic beverage licensee may not stock, warehouse, or otherwise store alcoholic beverages in a place other than the licensed premises.
(b) Alcoholic beverages may not be sold or consumed at an approved storage facility. Alcoholic beverages may not be removed from the facility except at the direction of the licensee.
History
- Authority: AS 04.06.010; AS 04.06.100 AS 04.06.090; AS 04.21.060
- Eff. 1/1/2024, Register 248
3 AAC 305.680 Keg registration
(a) On a registration form prescribed by the director or a local governing body with jurisdiction over the sale or offer, a licensee or an agent or employee of a manufacturer license described under AS 04.09.020, AS 04.09.030, or AS 04.09.040 or a package store license issued under AS 04.09.230 who sells or offers for sale a keg or similar container holding four or more gallons of an alcoholic beverage shall require a purchaser to show acceptable proof of age under AS 04.21.050(b) and sign a sworn statement.
(b) The licensee shall complete the registration form required under (a) of this section and affix to the keg or container a temporary tag with a unique identifier before releasing the keg or container to the purchaser.
(c) The licensee shall retain a copy of the registration form for one year and make the form available for inspection.
(d) A keg or container donated to a permittee under AS 04.09.660 or 04.09.670 is exempt from the requirements of (a) - (c) of this section.
(e) A keg or container owned and supplied by a purchaser is exempt from the requirements in (a) - (c) of this section.
(f) The temporary tag required under AS 04.21.012 shall be provided by the licensee. The tag must
(1) consist of plastic metal, paper, or durable material that is not easily damaged or destroyed;
(2) be attached to a keg at the time of sale with a nylon tie or cording, wire tie, other metal attachment device, or other durable means of tying or attaching the tag to the keg;
(3) contain:
(A) the licensee's name, address, and telephone number;
(B) a prominently visible warning that intentional removal or defacement of the tag is a violation of AS 04.21.012; and
(C) the unique identifying number from the accompanying keg registration form.
History
- Authority: AS 04.06.090; AS 04.21.012 AS 04.06.100; AS 04.21.050
- Eff. 1/1/2024, Register 248
3 AAC 305.690 Definitions
For the purposes of 3 AAC 305.600 - 3 AAC 305.690,
(1) "adjacent" means on the same legal property, on a property adjoining the legal property containing the licensed premises, or across a single public right of way from the legal property containing the licensed premises;
(2) "adjoining" means meeting and touching at some point or line;
(3) "contiguous" means having contact on all or most of one side;
(4) "passage" means a hallway or defined pathway between adjoining rooms of licensed premises;
(5) "purchaser" means a patron or customer of a licensee who does not also hold an alcoholic beverage license or permit issued under AS 04.09.660 or 04.09.670.
History
- Authority: AS 04.06.010; AS 04.06.090; AS 04.06.100
- Eff. 1/1/2024, Register 248
Article 7 Alcohol Server Education Course
3 AAC 305.700 Alcohol server education course
(a) Unless exempt under AS 04.21.025(f), a licensee, employee, or agent of a licensee selling or serving alcoholic beverages shall successfully complete an alcohol server education course. The person or the on-duty supervisor shall carry or have available to show current course cards or photocopies of the cards certifying completion of an approved alcohol server education course. The card is effective for three years from the date of issuance during which time the person shall complete another approved course or successfully complete a written test demonstrating an understanding of the course subjects as required by AS 04.21.025(c). The card must include the name and date of birth of the card holder, the name of the course, and the date of expiration of the card. If the card does not include a photograph of the holder, the person shall also carry a valid identification under 3 AAC 305.800(b). The card or a photocopy of the card must be shown upon request of a peace officer or board representative. If the person cannot show a current card or a copy of it on file on the premises or show a date of hire less than 30 days earlier, the person shall immediately cease selling or serving alcoholic beverages or checking identification.
(b) State or nationally recognized organizations or associations that address the subject of responsible alcoholic beverage service may obtain approval of an alcohol server education course by making written application on forms provided by the board. The application must include the course book or digital materials to be provided to students, any video or audio presentations that will be used, the written test required, or online written test required under (d) of this section, detailed lesson plans, and a description of the qualifications of and training provided to course instructors. The application must identify the communities where the course will be presented and the frequency of the presentation.
(c) In addition to written materials and audio and video presentations provided to students, an instructor shall be available during an alcohol server education course to answer questions from students. Subjects covered by alcohol server education courses must include:
(1) function of Alcoholic Beverage Control Board, licensing procedures, and types of licenses;
(2) server responsibilities to the employer, patron, and law;
(3) criminal, administrative, and civil liability, including discussion of criminal negligence standard;
(4) effects of alcohol consumption, including
(A) effect of food on alcohol consumption;
(B) blood alcohol levels;
(C) identifying a drunken person; and
(D) fetal alcohol spectrum disorder and fetal alcohol effects;
(5) drunken persons and intervention;
(6) underage persons;
(A) checking identification;
(B) identifying valid identification; and
(C) obtaining "statement of proof;
(7) state and local hours of service and cutting off service;
(8) pricing, marketing, and trade practice prohibition laws;
(9) endorsements;
(10) permits;
(11) local option provisions;
(12) warning signs;
(13) gambling, drugs, and prostitution;
(14) adulteration;
(15) penalties for licensees and their agents and employees; and
(16) sale by package stores in response to written orders.
(d) A provider of an alcohol server education course shall issue a card as described under (a) of this section to a student who successfully completes the course. Before issuing the card, the course provider shall require the student to pass a written test that demonstrates that the student understands the course subjects. The test may be an online written test if the course is in an Internet-based webinar or video teleconference format as provided in (j) of this section.
(e) The board will issue a certificate of approval for each alcohol server education course the board approves. Certificates of approval may not be transferred.
(f) A course provider shall
(1) maintain records of each student's participation, and completion of server training, including rural training;
(2) use, at a minimum, the course approved by the board; and
(3) make its records available to peace officers or board investigators.
(g) An organization or association that has received board approval for an alcohol server education course shall apply for board reapproval within 33 months of last board approval. Application must be made on a form provided by the board. If application for reapproval is not approved by the board within 36 months after last board approval, training must cease. The application for reapproval must state the following for training provided since the last application:
(1) the number and names of students trained,
(2) the location and dates of training, and
(3) the names of instructors.
(h) The board will, in its discretion, terminate approval of a course if the board determines that the course is not being presented as approved, that records are not being maintained as required, that students are being certified who have not successfully completed the course, or for other reasons in the public interest. The board will, in its discretion, make its termination of approval effective immediately, if the board determines that immediate termination is in the public interest.
(i) A provider of an alcohol server education course approved by the board under this section shall advise the board of the methods used to train and certify the instructors providing the training.
(j) A provider of an alcohol server education course may obtain approval from the board to provide its course to students in an Internet-based webinar or video teleconference format by making a request with an application required under (b) of this section. An Internet-based or video teleconference alcohol server education course provider shall:
(1) have a live instructor present the approved alcohol server education course material and be available throughout the course to answer questions from students;
(2) check the identity of each student while maintaining the confidentiality of personally identifiable information;
(3) provide a printable certificate of completion to each student who passes the written test required under (d) of this section to be used as temporary proof of completion until the student receives the course card described under (a) of this section;
(4) mail the course card not later than five business days after the date the student passed the test; in this paragraph, "business day" means a day other than Saturday, Sunday, or a federal or state holiday;
(5) certify that each instructor has maintained knowledge of current alcoholic beverage statutes and regulations in the state;
(6) update the course material with any applicable change to AS 04 and this chapter not later than 10 days after the effective date of the change; and
(7) provide a printable digital copy of the written course materials to each student.
(k) For purposes of this section, "licensee, employee, or agent of a licensee" includes every permittee, employee, or agent of permittees who will serve or sell alcohol or check identification of a patron during the following permitted events:
(1) a beverage dispensary caterer's permit issued under AS 04.09.610;
(2) restaurant caterer's dining permit issued under AS 04.09.620;
(3) a club caterer's permit issued under AS 04.09.630;
(4) an art exhibit event permit issued under AS 04.09.640;
(5) a music festival permit issued under AS 04.09.650;
(6) a nonprofit organization event permit issued under AS 04.09.660;
(7) an alcoholic beverage auction permit issued under AS 04.09.670;
(8) a package store tasting event permit issued under AS 04.09.680;
(9) an inventory resale permit issued under AS 04.09.690;
(10) a live music or entertainment permit issued under AS 04.09.700; and
(11) a conditional contractor's permit issued under AS 04.09.710.
(l) The fee for a new alcohol server education course and the fee for review of an existing alcohol server education course are set out in 3 AAC 305.165.
History
- Authority: AS 04.06.090; AS 04.06.110 AS 04.06.100; AS 04.21.025
- Eff. 1/1/2024, Register 248
Article 8 General Provisions
3 AAC 305.800 Determining the age of a patron
(a) For the purposes of AS 04.21.050, a "valid identification card" means an unexpired, unaltered passport or an unexpired, unaltered driver's license or identification card issued by a federal or state agency or federally recognized tribe authorized to issue driver's licenses or identification cards that meet the requirements under AS 04.21.050(b). If a licensee, licensee's employee, or licensee's agent has reason to believe that an identification card presented by a person is fraudulent, the licensee, licensee's employee, or licensee's agent shall refuse to the person entrance to the licensed premises and service or sale.
(b) A licensee, licensee's employee, or licensee's agent may elect to not accept a passport, military identification card, or other identification as proof that the person is not restricted from purchasing alcoholic beverages and may require the person to furnish a valid driver's license or state identification card or otherwise furnish proof that the person is not a resident of the state.
(c) A licensee shall obtain a statement of proof-of-age form as required under AS 04.21.050. The licensee shall retain completed forms for 90 days and make them available for inspection upon the request of the board or a peace officer.
History
- Authority: AS 04.06.090; AS 04.06.100; AS 04.21.050
- Eff. 1/1/2024, Register 248
3 AAC 305.810 Recordkeeping requirements
(a) Except for a holder of a manufacturer direct shipment license subject to the record-keeping requirements under 3 AAC 305.347(e), a licensee shall retain records of the sales, purchases, and expenses of the business for not less than one year, including records sufficient to show the license was actively exercised for at least 240 hours during each of the two preceding calendar years, as set out in AS 04.11.330(a)(3).
(b) A licensee shall maintain records of the purchase and sale of alcoholic beverages separate from records of the sale of other goods or services.
(c) A wholesale licensee shall retain a record of all sales and donations made in the conduct of the business for three years.
History
- Authority: AS 04.06.090; AS 04.06.100; AS 04.11.330
- Eff. 1/1/2024, Register 248; am 8/23/2024, Register 251
3 AAC 305.820 Powers of investigative personnel
(a) The board's investigative personnel may
(1) conduct inspections of licensed premises, issue inspection reports, and investigate licensees, applicants, transferees, and other persons with respect to applications, the possession and sale of alcoholic beverages, or licensed premises;
(2) issue verbal warnings under 3 AAC 305.840;
(3) issue advisory notices under 3 AAC 305.850;
(4) issue citations for violations under 3 AAC 305.860 and subject to AS 04.21.072;
(5) issue administrative violation notices under 3 AAC 305.870;
(6) seize alcoholic beverages subject to forfeiture under AS 04.16.220;
(7) serve subpoenas issued by a hearing officer in a board adjudicative proceeding;
(8) execute search and arrest warrants;
(9) exercise specified peace officer powers upon the written concurrence of the commissioner of public safety filed with the lieutenant governor and the director, but only if necessary to enforce the criminally punishable provisions of AS 04 and regulations adopted under AS 04;
(10) file accusations for suspension or revocation of licenses, endorsements, or conditional contractor permits on the grounds listed under AS 04.11.370; and
(11) take such other action considered necessary by the director to assure the enforcement of AS 04 and this chapter.
(b) Consistent with federal, state, and local law, the board's investigative personnel may carry firearms in the performance of their duties, if individually authorized by the board.
History
- Authority: AS 04.06.075; AS 04.06.100; AS 04.11.370 AS 04.06.090; AS 04.06.110; AS 04.16.220
- Eff. 1/1/2024, Register 248
3 AAC 305.830 Communications and inspection
(a) The board recognizes that compliance by a licensee is a necessary ingredient for the enforcement of alcoholic beverage statutes, regulations, and local laws and that communication with licensees is necessary to assist licensees in conducting the licensee's licensed business in the public interest and in conformity with existing statutes and regulations. Investigative personnel shall memorialize an inspection in a written inspection report on a form approved by the board.
(b) Licensees are considered to consent to the entry upon the licensed premises and inspection of the licensed premises at all reasonable times and in a reasonable manner by investigative personnel of the board or by a peace officer acting in an official capacity.
(c) A licensee shall do all things reasonably necessary and appropriate to cooperate with investigative personnel and employees of the board and peace officers acting in an official capacity to enforce the statutes, regulations and ordinances related to alcoholic beverages, including permitting entry upon and inspection of the licensed premises and providing access, upon request at reasonable times, to business records at the written direction of the director.
History
- Authority: AS 04.06.090; AS 04.06.100; AS 04.11.630
- Eff. 1/1/2024, Register 248
3 AAC 305.840 Verbal warning
(a) A verbal warning addresses the violation of a statute, regulation, or local law on a licensed premises that is quickly correctable and does not pose an immediate risk to public safety or health.
(b) Issuing a verbal warning is at the discretion of investigative personnel of the board. A verbal warning must be documented in the licensee's enforcement file maintained by the director. Logging or documentation of the warning must be made available to the licensee upon request.
(c) The board's investigative personnel may issue verbal warnings to any individual affiliated with a license endorsement or permit.
History
- Authority: AS 04.06.010; AS 04.06.100 AS 04.06.090; AS 04.06.110
- Eff. 1/1/2024, Register 248
3 AAC 305.850 Advisory notice
(a) The board's investigative personnel may issue a written advisory notice to a licensee when an incident occurs, or a defect is identified, that results in the violation of a statute, regulation, or local laws. Investigative personnel may choose to issue a written advisory instead of providing a verbal warning under 3 AAC 305.840.
(b) The notice may be issued from information recorded on an inspection report other documents memorialized by the Board's investigative personnel. An advisory notice may be grounds for issuance of a notice of violation or accusation if the incident or defect continues uncorrected. Issuing an advisory notice is at the discretion of investigative personnel of the board. An advisory notice must be documented in the licensee's enforcement file maintained by the director. A copy of the advisory report must be delivered to the licensee when issued and made available to the licensee at a later time, upon request.
(c) The board's investigative personnel may issue an advisory notice to any individual affiliated with a license endorsement or permit.
History
- Authority: AS 04.06.010; AS 04.06.100 AS 04.06.090; AS 04.06.110
- Eff. 1/1/2024, Register 248
3 AAC 305.860 Violations
(a) The board's investigative personnel or a peace officer may issue a citation for any violation identified under AS 04. The board's investigative personnel may issue a citation to any individual affiliated with a license, endorsement, or permit.
(b) A person who receives a citation for a violation of AS 04 subject to AS 04.21.074 may dispose of the violation without court appearance upon payment and forfeiture of the bail amount.
(c) For the purposes of this section, "violation" has the meaning given in AS 11.81.900(b).
History
- Authority: AS 04.06.010; AS 04.06.100; AS 04.21.076 AS 04.06.090; AS 04.06.110
- Eff. 1/1/2024, Register 248
3 AAC 305.870 Administrative notice of violation
(a) An administrative notice of violation addresses serious or repetitive violations of AS 04, 3 AAC 305, or other law relating to the manufacture and sale of alcoholic beverages that have occurred or are occurring on the licensed premises. An administrative notice of violation is issued at the discretion of the board's investigative personnel or director.
(b) An administrative notice of violation must be in writing on a form approved by the board and must include
(1) a description of the violation or violations;
(2) a description of applicable violated statutes, regulations, or local law;
(3) prior disciplinary history over the preceding five years relevant to the violation or ownership of the license, including
(A) verbal warnings;
(B) advisory notices;
(C) notices of violation and accusation;
(D) fines subject to AS 04.21.074; and
(E) criminal history of the licensee and of the licensed premises; and
(4) the investigating officer's signature.
(c) An administrative notice of violation may be issued as a stand-alone document or from circumstances described in an inspection report or a citation issued under 3 AAC 306.860 or AS 04.21.074. An administrative notice of violation may be issued without a prior inspection report, citation, verbal warning, or advisory notice and may include conduct identified in AS 04.11.370 as grounds for suspension or revocation of a license or permit.
(d) A licensee, endorsement holder, any affiliate, or conditional contractor permittee who receives an administrative notice of violation may request an appearance before the director regarding the administrative notice of violation. The request must be made not more than 10 days after the licensee, endorsement holder, or conditional contractor permittee receives the notice. The director shall grant an appearance not more than 10 days after the request is received. A licensee, endorsement holder, affiliate, or conditional contractor permittee shall respond in writing to the notice of violation.
(e) In considering whether to suspend, revoke, or renew a license, the board may review an administrative notice of violation and a licensee's response to the notice. An administrative notice of violation alone does not constitute grounds for a suspension, revocation, or refusal to renew an alcoholic beverage license; however, if the violation is proven by evidence at a hearing, the violation constitutes grounds for suspension, revocation, or refusal to renew a license.
(f) An administrative notice of violation is issued at the discretion of the board's investigative personnel and becomes part of the licensee's permanent record. A notice must be in writing on a form approved by the board. The director may withdraw a notice.
(g) The board's investigative personnel may issue an administrative notice of violation to any individual affiliated with a license, endorsement, or permit.
(h) Nothing in this section limits the authority of the board to suspend or revoke a license, endorsement, or conditional contractor's permit on grounds stated in AS 04.11.370.
History
- Authority: AS 04.06.010; AS 04.06.100; AS 04.11.370 AS 04.06.090; AS 04.06.110
- Eff. 1/1/2024, Register 248
3 AAC 305.875 Suspension and revocation of licenses, endorsements, and conditional contractor permits
(a) The board may suspend or revoke a license, endorsement, or conditional contractor's permit on the grounds set out in AS 04.11.370 or if a licensee is convicted of a felony.
(b) If a licensee's employee or licensee's agent is convicted of a felony, the board may find under AS 04.11.370(5) that the licensee, endorsement holder, or conditional contractor permittee knowingly allowed the conduct, or recklessly or with criminal negligence failed to act in accordance with the duty prescribed under AS 04.21.030, if that licensee, endorsement holder, or conditional contractor permittee
(1) was physically present when the conduct occurred and knew or should have known the conduct was occurring and took no action to stop it;
(2) failed to adequately supervise the agent or employee;
(3) failed to adequately train the agent or employee in the requirements of AS 04 and 3 AAC 305 relating to alcoholic beverages; or
(4) was reckless or careless in hiring the agent or employee.
(c) For the purposes of this section, if a licensee, endorsement holder, or conditional contractor permittee is a corporation, a conviction of any of the following individuals constitutes a conviction of the licensee:
(1) the director of the corporation;
(2) an officer of the corporation;
(3) a shareholder holding 10 percent or more of the outstanding common stock of the corporation.
(d) For the purposes of this section, if a licensee, endorsement holder, or conditional contractor permittee is a limited liability organization, the conviction of a manager or a member who holds 10 percent or more of the limited liability organization's ownership interest constitutes a conviction of the licensee.
(e) A licensee, endorsement holder, or conditional contractor permittee may request an informal conference with the director not later than 10 days after the individual is served with an accusation under this section, unless the grounds for suspension or revocation are the grounds set out in AS 04.11.370(a)(4). A licensee, endorsement holder, or conditional contractor permittee requesting an informal conference under this section tolls the time for filing a notice of defense required under AS 44.62.390.
History
- Authority: AS 04.06.090; AS 04.11.370 AS 04.06.100; AS 04.11.510
- Eff. 1/1/2024, Register 248
3 AAC 305.880 Fines for trade practice prohibition violations
In addition to administrative penalties, civil fines for violations of 3 AAC 305.500 - 3 AAC 305.590 will be determined by the board on a case-by-case basis.
History
- Authority: AS 04.06.090; AS 04.06.100; AS 04.16.017
- Eff. 8/9/2024, Register 251
3 AAC 305.885 Other civil fines
(a) Except as provided in (b) of this section and in addition to fines subject to AS 04.21.074, the board may impose a civil fine on a licensee in accordance with AS 04.11.575 in a proceeding under AS 04.11.510(c). The civil fine may not exceed the greater of
(1) an amount three times the monetary gain realized by the licensee as a result of the violation as determined by the board;
(2) $10,000 for the first violation;
(3) $30,000 for the second violation; or
(4) $50,000 for the third or subsequent violation.
(b) In a proceeding under AS 04.11.510(c) against a general wholesale licensee or a limited wholesale brewed beverage and wine licensee for a violation of AS 04.16.160 pertaining to the sale of alcoholic beverages to unlicensed persons, the board may impose a civil fine of $5,000 for each illegal sale. The board may suspend all or part of the fine based on the circumstances of the illegal sales. For the purpose of this section, "sale" means a single delivery on a single date to a single purchaser.
History
- Authority: AS 04.06.090; AS 04.09.110; AS 04.16.160 AS 04.06.100; AS 04.11.510 AS 04.09.100; AS 04.11.575
- Eff. 1/1/2024, Register 248
3 AAC 305.890 Probation, suspended time, and fines
(a) The board may elect to place a licensee or permittee on probation for a period of not more than three years in addition to suspending or revoking a license permitted under AS 04.11.370. The board may suspend any portion of time of suspension ordered or civil fines owed to ensure good faith performance of a licensee's or permittee's obligations while under probation. The board may elect to fine the licensee or permittee a portion of or the remainder of the suspended fine or time for any violation of the conditions of probation or additional violation of AS 04 or this chapter.
(b) Nothing in this section limits the authority of the board to suspend or revoke a license or permit on grounds stated in AS 04.11.370.
History
- Authority: AS 04.06.090; AS 04.06.100; AS 04.11.370
- Eff. 1/1/2024, Register 248
3 AAC 305.895 Effect of revocation
A person whose license or permit is revoked by the board may not apply for a license of any type until at least one year after the effective date of the revocation.
History
- Authority: AS 04.06.090; AS 04.11.320 AS 04.06.100; AS 04.11.370
- Eff. 1/1/2024, Register 248
Article 9 Enforcement; Civil Penalties
3 AAC 305.900 Determining population criteria
(a) The board will use population figures generated by the Department of Commerce, Community, and Economic Development to establish a population figure for determining the quota of licenses available under AS 04.11.400(a)(2). The Department of Commerce, Community, and Economic Development figures will be adjusted, however, in the following respects:
(1) prison populations will be excluded;
(2) populations of colleges and universities will be discounted by the number of students who, according to best available information, are domiciled outside of the applicable population area;
(3) populations of military bases and installations will be discounted by the number of military personnel and their families who, according to best available information, are domiciled outside of the applicable population area.
(b) The population of incorporated cities and unified municipalities will be determined annually by the director, within a reasonable time after the figures generated by the Department of Commerce, Community, and Economic Development are made available to the director.
(c) If figures of the Department of Commerce, Community, and Economic Development are not available to the director by July 31 of any year, the director shall employ the best available information to establish the population figures under AS 04.11.400(m) to determine the quota of available licenses not later than August 31.
History
- Authority: AS 04.06.080; AS 04.06.100; AS 04.11.460 AS 04.06.090; AS 04.11.400
- Eff. 1/1/2024, Register 248
3 AAC 305.910 Determining visitor population
(a) For the purposes of determining whether a municipality or established village receives more than 4,000 visitors a year, the board may rely on visitor statistics generated annually by a reliable government, trade association, nonprofit, or commercial source presented by
(1) the municipality or established village;
(2) an applicant that would qualify for a seasonal restaurant or eating place tourism license; or
(3) an applicant for a transfer of ownership of a seasonal restaurant or eating place tourism license.
(b) The board will apply the same annual visitor count to every application filed under AS 04.11.260 for a seasonal restaurant or eating place tourism license in a specific qualifying municipality or established village during each calendar year. The board may reconsider that visitor count and how it calculates that visitor count each calendar year.
History
- Authority: AS 04.06.090; AS 04.09.360; AS 04.11.260
- Eff. 1/1/2024, Register 248
3 AAC 305.920 Allocations to municipalities
(a) For the purposes of AS 04.11.610. a municipality's failure to actively enforce local ordinances, laws of the United States and the state, and the provisions of this chapter relating to the manufacture and sale of alcoholic beverages in the state includes the municipality's peace officers' failure to comply with AS 04.21.070.
(b) If the director determines that the municipality's peace officers have not provided the director with quarterly reports of violations of AS 04 occurring on licensed premises within the municipality or with quarterly reports that evidence a lack of active enforcement of local ordinances, laws of the United States and the state, and the provisions of this chapter relating to the manufacture and sale of alcoholic beverages in the state, the director shall recommend that the commissioner of commerce, community, and economic development deny the allocations of biennial license fees under AS 04.11.610.
History
- Authority: AS 04.06.090; AS 04.11.610 AS 04.06.100; AS 04.21.070
- Eff. 1/1/2024, Register 248
3 AAC 305.930 Colleges and universities
(a) Where prohibitions are imposed under AS 04.11.410 and AS 04.16.080, "school" does not include an accredited college or university as defined in AS 04.09.240 for the granting of a beverage dispensary caterer's permit, nonprofit organization event permit, or restaurant caterer's dining permit under AS 04.09.610, 04.09.660, or 04.09.620.
(b) Along with other approvals required by statute or regulation, the board of regents or similar governing body of the college or university or its designee must approve an application for a permit for a designated premises at a college or university event.
(c) A holder of a recreational site license issued under AS 04.11.210 or a sporting activity or event license under AS 04.09.270 for a site where college or university sporting events are held may petition the board for designation of premises at the site where brewed beverages and wine may be sold during a college or university sporting event.
History
- Authority: AS 04.06.090; AS 04.09.610; AS 04.11.410 AS 04.06.100; AS 04.09.620; AS 04.16.080 AS 04.09.240; AS 04.09.660 AS 04.09.270; AS 04.11.210
- Eff. 1/1/2024, Register 248
3 AAC 305.940 Community prohibitions on alcoholic beverages
The director shall maintain a list of the established villages and municipalities that have adopted a local option under AS 04.11.491.
History
- Authority: AS 04.06.100; AS 04.11.491
- Eff. 1/1/2024, Register 248
3 AAC 305.950 Definitions
(a) Except as provided under AS 04.11.450(g)(2), in this chapter, "affiliate" means
(1) an individual's general partners and joint venturers, including
(A) any corporation of which the individual owns 10 percent or more of the stock;
(B) any corporation of which the individual is an officer or director;
(C) any limited liability organization of which the individual is a member who holds 10 percent or more of the limited liability organization's ownership interest; and
(D) any limited liability organization of which the individual is a manager;
(2) a partnership's partners or joint venturers, including
(A) any affiliates of a partnership's partners or joint venturers;
(B) any corporation of which the partnership or any individual partner holds 10 percent or more of the stock;
(C) any corporation of which any individual partner is an officer or director;
(D) any limited liability organization of which the partnership or any individual partner is a member who holds 10 percent or more of the limited liability organization's ownership interest; and
(E) any limited liability organization of which any individual partner is a manager;
(3) for a corporation,
(A) the corporation's shareholders who hold 10 percent or more of the corporation's stock;
(B) the corporation's officers and directors;
(C) the corporation's partners or joint venturers;
(D) any affiliates of the corporation's partners or joint venturers;
(E) any other corporation of which the subject corporation owns 10 percent or more of the stock;
(F) any other corporation for which the subject corporation appoints one or more directors;
(G) any other corporation of which 10 percent or more of the stock is held by a shareholder holding 10 percent or more of the subject corporation's stock;
(H) any limited liability organization of which the subject corporation is a member and of which the subject corporation holds 10 percent or more of the limited liability organization's ownership interest;
(I) any limited liability organization for which the subject corporation appoints a manager;
(J) any limited liability organization of which a shareholder holding 10 percent or more of the subject corporation's stock is a member who holds 10 percent or more of the limited liability organization's ownership interest; and
(K) any limited liability organization of which a shareholder holding 10 percent or more of the subject corporation's stock is a manager;
(4) other persons who have significant control or influence over a person as determined by the board;
(5) for a limited liability organization,
(A) the limited liability organization's manager
(B) a limited liability organization's members who hold 10 percent or more of the limited liability organization's ownership interest;
(C) a limited liability organization's partners or joint venturers;
(D) any affiliates of a limited liability organization's partners or joint venturers;
(E) any other limited liability organization of which the subject limited liability organization is a member;
(F) any corporation of which the limited liability organization owns 10 percent of more of the stock;
(G) any corporation for which the limited liability organization appoints one or more directors;
(H) and any corporation of which 10 percent of more of the stock is held by a member holding 10 percent or more of the subject limited liability organization's ownership interest.
(b) For the purposes of sec. 169, ch. 8, SLA 2022, a "license issued" means a license in active status or in approved delegated status before January 1, 2024.
History
- Authority: AS 04.06.090Sec. 169, ch. 8, AS 04.06.100SLA 2022
- Eff. 1/1/2024, Register 248
Chapter 306 Regulation of Marijuana Industry
Article 1 Licensing; Fees
3 AAC 306.005 License required
A marijuana establishment may not operate in the state unless it has obtained the applicable marijuana establishment license from the board. The board will issue the following marijuana establishment licenses under this chapter:
(1) a retail marijuana store license, granting authority for activities allowed under AS 17.38.070(a), and subject to the provisions of 3 AAC 306.300 - 3 AAC 306.380 and 3 AAC 306.700 - 3 AAC 306.770;
(2) sell a marijuana product purchased from a licensed marijuana product manufacturing facility, packaged and labeled as required under 3 AAC 306.345, 3 AAC 306.565, and 3 AAC 306.570, in a quantity not exceeding the limit set out in 3 AAC 306.355, to an individual on the licensed premises or as permitted under 3 AAC 306.380 for consumption off the licensed premises;
(3) a marijuana product manufacturing facility license, as described in 3 AAC 306.505 and 3 AAC 306.515, granting authority for activities allowed under AS 17.38.070(c), and subject to the provisions of 3 AAC 306.500 - 3 AAC 306.570 and 3 AAC 306.700 - 3 AAC 306.770; and
(4) a marijuana testing facility license, granting authority for activities allowed under AS 17.38.070(d), and subject to the provisions of 3 AAC 306.600 - 3 AAC 306.675 and 3 AAC 306.700 - 3 AAC 306.770.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 10/17/2018, Register 228; am 9/1/2021, Register 239; am 8/13/2023, Register 247
3 AAC 306.010 License restrictions
(a) The board will not issue a new marijuana establishment license, or approve an application for a transfer of a license to another location, if the licensed premises will be located within 500 feet of a school ground, a recreation or youth center, a building in which religious services are regularly conducted, or a correctional facility. The distance specified in this subsection must be measured by the shortest pedestrian route from the public entrance of the building in which the licensed premises would be located to the outer boundaries of the school ground, the outer boundaries of the recreation or youth center, the main public entrance of the building in which religious services are regularly conducted, or the main public entrance of the correctional facility. This section does not prohibit the renewal of a marijuana establishment license, a license conversion under 3 AAC 306.047, or the transfer of a marijuana establishment license to another person if the licensed premises were in use before the school ground, recreation or youth center, the building in which religious services are regularly conducted, or a correctional facility began use of a site within 500 feet. If a marijuana establishment license for premises located within 500 feet of a school ground, a recreation or youth center, a building in which religious services are regularly conducted, or a correctional facility is revoked or expires, the board will not issue another marijuana establishment license for the same premises unless the school ground, the recreation or youth center, the building in which religious services are regularly conducted, or the correctional facility no longer occupies the site within 500 feet.
(b) The board will not issue a new marijuana establishment license, or approve an application for a transfer of a license to another location, if the licensed premises will be located in a liquor license premises.
(c) The board will not issue a new marijuana establishment license, or approve an application for a transfer of a marijuana establishment license to another location when a local government protests an application under 3 AAC 306.060 on the grounds that the applicant's proposed licensed premises are located in a place within the local government where a local zoning ordinance prohibits the marijuana establishment, unless the local government has approved a variance from the local ordinance.
(d) The board will not issue a marijuana establishment license to a person that
(1) is prohibited under AS 17.38.200(i) from receiving a marijuana establishment license because of a conviction of a felony; if the applicant is a partnership, limited liability company, or corporation, the board will not issue a license if any person named in 3 AAC 306.020(b)(2) is prohibited under AS 17.38.200(i) from obtaining a marijuana establishment license; in this paragraph, "conviction of a felony" includes a suspended imposition of sentence;
(2) has been found guilty of
(A) selling alcohol without a license in violation of AS 04.11.010;
(B) selling alcohol to an individual under 21 years of age in violation of AS 04.16.051 or 04.16.052; or
(C) a misdemeanor crime involving a controlled substance, violence against a person, use of a weapon, or dishonesty within the preceding five years; or
(3) has, within two years before submitting an application, been convicted of a class A misdemeanor relating to selling, furnishing, or distributing marijuana or operating an establishment where marijuana is consumed contrary to state law.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 2/21/2019, Register 229; am 1/22/2023, Register 245
3 AAC 306.015 License conditions
(a) The board will issue each marijuana establishment license to a specific individual, a partnership, including a limited partnership, a limited liability company, a corporation, or a local government. A person other than a licensee may not have a direct or indirect financial interest in the business for which a marijuana establishment license is issued.
(b) Except as set out under 3 AAC 306.035(h), the board will not issue, renew, or approve an application for a transfer of a marijuana establishment license to
(1) an individual or a sole proprietorship unless the individual or proprietor is a resident of the state;
(2) a partnership unless each partner is a resident of the state;
(3) a limited liability company unless the limited liability company is qualified to do business in the state and each member of the limited liability company is a resident of the state; or
(4) a corporation unless the corporation is incorporated or qualified to do business in the state and each corporate officer, director, and shareholder is a resident of the state.
(c) The board will issue each marijuana establishment license for a specific location identified on the application as the licensed premises. A marijuana establishment must have a right to possession of its licensed premises at all times and may not lease its licensed premises to another person for any reason. If a marijuana establishment wishes to reduce or expand the area of the licensed premises used for a marijuana establishment, the marijuana establishment must submit a new line drawing showing the proposed changes to the premises and must obtain the board's written approval.
(d) A person may not transfer a marijuana establishment license to another location without the applicant applying for and receiving written consent of the board. Subject to any applicable provisions of AS 17.38 and this chapter, the board may approve an application for a transfer of a marijuana establishment license to another location in a different local government.
(e) The board will impose other conditions or restrictions on a marijuana establishment license or endorsement issued under this chapter when it finds that it is in the interests of the public to do so.
(f) In this section,
(1) "direct or indirect financial interest"
(A) means a legal or equitable interest in the operation of a business licensed under this chapter;
(B) does not include a person's right to receive
(i) rental charges on a graduated or percentage lease-rent agreement for real estate leased to a licensee; or
(ii) a consulting fee from a licensee for services that are allowed under this chapter;
(2) "resident of the state" means a person who is eligible at the time of application for the most recent permanent fund dividend under AS 43.23.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; add'l am 2/21/2016, Register 217; am 2/21/2019, Register 229; am 4/11/2019, Register 230; am 10/18/2020, Register 236; am 1/22/2023, Register 245
3 AAC 306.020 Application for new license
(a) An applicant for a new marijuana establishment license must file an application as provided in 3 AAC 306.025, on a form the board prescribes, with the information and documents described in this section, along with the application fee and the annual license fee set out in 3 AAC 306.100, and the fingerprint cards and fees required by 3 AAC 306.055(a). The application must be initiated electronically; the completed application and fees may be filed electronically, or mailed or delivered to the director at the office of the board.
(b) An application for a new marijuana establishment license must include
(1) the name of the applicant and any business name the applicant will use for the proposed marijuana establishment, along with the applicant's state business license number issued under AS 43.70;
(2) the name, mailing address, telephone number, and social security number of each proposed licensee; unless the context requires otherwise, "licensee" means each individual named in an application that complies with this section; an individual to be identified as a licensee under this section includes
(A) if the applicant is an individual or a sole proprietor, the individual or sole proprietor;
(B) if the applicant is a partnership, including a limited partnership, each general partner and each partner holding any interest in the partnership;
(C) if the applicant is a limited liability company, each member holding any ownership interest and each manager;
(D) if the applicant is a corporation, each owner of any of the corporation's stock, each officer, and each director; and
(E) if the applicant is a local government, an authorized official of the local government;
(3) for each applicant that is not an individual, the applicable documents and information as follows:
(A) for a partnership, including a limited partnership, the partnership agreement, the name of each general or managing partner, and a list of all partners with the percentage of ownership of each partner;
(B) for a limited liability company, the limited liability company agreement, and a list of all members with the percentage of ownership of each member;
(C) for a corporation, the certificate of incorporation, the corporate bylaws, the name of each corporate officer and each director, and a list of all shareholders with the percentage of ownership of each shareholder;
(D) for a local government, a resolution of the governing body approving the application and designating an official responsible for the proposed marijuana establishment;
(4) for each person listed in compliance with (2) of this subsection, a statement of financial interest on a form the board prescribes;
(5) for each applicant that is not an individual, the name of the individual licensee or designated government official listed in the application under (2) of this subsection who is responsible for
(A) management of the marijuana establishment; and
(B) compliance with state laws;
(6) an electronic mail address at which the applicant agrees to receive any correspondence from the board before and after it receives a license; an applicant and a licensee must ensure that any electronic mail address provided to the board is current so that the board can contact the applicant or licensee at any time;
(7) the type of license the applicant is requesting;
(8) the address of the premises to include global positioning system (GPS) coordinates where the applicant intends to operate a marijuana establishment, and a detailed diagram of the proposed licensed premises; the diagram must show all entrances and boundaries of the premises, restricted access areas, storage areas, and, if applicable, overlapping premises that the board may approve under 3 AAC 306.705(d) and 3 AAC 306.710(d);
(9) the title, lease, or other documentation showing the applicant's sole right to possession of the proposed licensed premises;
(10) an affidavit showing where and when the applicant posted notice of the application, and proof of advertising as required in 3 AAC 306.025(b); and
(11) additional information that the board requires as follows:
(A) for a retail marijuana store, the information required under 3 AAC 306.315;
(B) for a marijuana cultivation facility, the information required under 3 AAC 306.420;
(C) for a marijuana product manufacturing facility, the information required under 3 AAC 306.520;
(D) for a marijuana testing facility, the information required under 3 AAC 306.615.
(c) A marijuana establishment license application must include the applicant's operating plan, in a format the board prescribes, describing to the board's satisfaction the proposed marijuana establishment's plans for
(1) security;
(2) inventory tracking of all marijuana and marijuana products on the premises;
(3) employee qualification and training;
(4) waste disposal;
(5) transportation and delivery of marijuana and marijuana products; and
(6) signage and advertising.
(d) An application for a marijuana establishment license must be signed by
(1) the applicant, if the applicant is an individual;
(2) an authorized general partner if the applicant is a partnership, including a limited partnership;
(3) a member who owns at least 10 percent of the limited liability company if the applicant is a limited liability company;
(4) the authorized officers of the corporation if the applicant is a corporation; or
(5) a designated official if the applicant is a local government.
(e) Each person signing an application for a marijuana establishment license must declare under penalty of unsworn falsification that
(1) the application is true, correct, and complete;
(2) the applicant has read and is familiar with AS 17.38 and this chapter; and
(3) the applicant will provide all information the board requires in support of the application.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 8/11/2018, Register 227; am 12/10/2020, Register 236
3 AAC 306.025 Application procedure
(a) An applicant must initiate a new marijuana establishment license or endorsement application on a form the board prescribes, using the board's electronic system, to create a public notice form.
(b) After initiating a new marijuana license or endorsement application the applicant shall give notice of the application to the public by
(1) posting a copy of the public notice form for 10 days at
(A) the exterior of the proposed licensed premises; and
(B) one other conspicuous location in the area of the proposed premises accessible to the general public;
(2) publishing an announcement once a week for three consecutive weeks in a newspaper of general circulation as defined in (b) of this section or broadcasting an announcement on a radio station serving the local area where the proposed license seeks to operate twice a week for three successive weeks during triple A advertising time; the newspaper or radio notice must include
(A) the name of the applicant;
(B) the name and location of the proposed premises;
(C) the type of license or endorsement applied for along with a citation to the provision of this chapter authorizing that type of license or endorsement; and
(D) a statement that any comment or objection may be submitted to the board; and
(3) submitting a copy of the public notice form to
(A) each local government with jurisdiction over the licensed premises; and
(B) each community council in the area of the proposed licensed premises.
(c) After the applicant completes the notice requirements in (b) of this section and submits each remaining application requirement listed in 3 AAC 306.020, the applicant must pay the application and license fees set out in 3 AAC 306.100. The notice requirements in (b) of this section must be given within the 90 days preceding the submittal of all application requirements listed in 3 AAC 306.020 and the application and license fee.
(d) When the director receives an application for a marijuana establishment license or endorsement, the director shall determine if the application is complete. Any application for a marijuana establishment license or endorsement that the director receives without the application and license fee is incomplete. If the director determines the application is complete, the director shall immediately give written notice to
(1) the applicant;
(2) each local government with jurisdiction over the applicant's proposed licensed premises;
(3) the community council if the proposed licensed premises are located within the boundary of a community council established by municipal charter or ordinance; and
(4) any nonprofit community organization that has requested notification in writing.
(e) If an application for a marijuana establishment license or endorsement is incomplete, the director shall notify the applicant by electronic mail at the address provided by the applicant and shall either
(1) return an incomplete application in its entirety; or
(2) request the applicant to provide additional identified items needed to complete the application.
(f) When the director informs an applicant that its application is incomplete as provided in (e) of this section, the applicant must complete the application not later than 90 days after the date of the director's notice. If an applicant fails to complete its application during the 90-day period after the director's notice, the applicant must file a new application and pay a new application fee to obtain a marijuana establishment license or endorsement.
(g) The director may, not less than 90 days after initiation of an application, inform an applicant by electronic mail at the address provided by the applicant that missing application requirements listed in 3 AAC 306.020 must be submitted within 90 days. If an applicant fails to submit all missing application requirements during the 90-day period after the director's notice, the applicant must file a new application and pay a new application fee to obtain a marijuana establishment license.
(h) In this section, "newspaper of general circulation" means a publication that
(1) is published in newspaper format;
(2) is distributed at least once a week for at least 50 weeks each year within the judicial district where the proposed licensed premises is located, excluding a period when publication is interrupted by a casualty that the publisher cannot control;
(3) holds a second-class mail permit from the United States Postal Service;
(4) is not published primarily to distribute advertising; and
(5) is not intended primarily for a particular professional or occupational group.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 12/28/2017, Register 224; am 2/21/2019, Register 229; am 4/11/2019, Register 230; am 3/25/2020, Register 233; am 4/9/2023, Register 246
3 AAC 306.030 Petition for license or endorsement in area with no local government
(a) The board will not approve a new marijuana establishment license, a new onsite consumption endorsement, or an application for a transfer of a license to another location in an area outside, but within 50 miles of, the boundary of a local government unless the board receives a petition to issue the license or endorsement, signed by a majority of the permanent residents residing within one mile of the proposed premises.
(b) The board will not approve a new license, a new onsite consumption endorsement, or an application for a transfer of a license to another location in an area that is 50 miles or more from the boundary of a local government unless the board receives a petition to issue the license or endorsement, containing the signatures of two-thirds of the permanent residents residing within a radius of five miles of the United States post office station nearest to the proposed licensed premises. If there is no United States post office station within a radius of five miles of the proposed licensed premises, the petition must be signed by two-thirds of the permanent residents residing within a five-mile radius of the proposed licensed premises.
(c) A petition authorized by this section must be on a form the board prescribes. The applicant must obtain the required signatures within the 90-day period immediately before submitting the petition to the board. A signature may not be added to or removed from the petition after the board has approved the application.
(d) In this section, "permanent resident" means a person 21 years of age or older who has established a permanent place of abode. A person may be a permanent resident of only one place.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 8/7/2021, Register 239; am 1/22/2023, Register 245
3 AAC 306.035 Application for renewal of license; reinstatement for failure to timely renew
(a) On or before May 1 of each year, the director shall send notice that a marijuana establishment with a license in active and operating status must file a renewal application not later than June 30 of the current year. The director shall send the notice to the marijuana establishment's electronic mailing address on file with the board. In the notice the director shall include a hyperlink for the marijuana establishment to access the electronic renewal application by means of the Internet, along with instructions on using and submitting the form. Any marijuana establishment with a license in active and operating status on or before June 30 of the current year must submit the completed renewal application, along with the license renewal fee, to the director not later than June 30 of each year. If June 30 falls on a Saturday or Sunday, the deadline is extended to 4:30 p.m. on the first business day following June 30. If mailed, the complete renewal application and fee must be postmarked by the deadline. A marijuana establishment must maintain a current electronic mailing address on file with the director. A marijuana establishment is not excused from filing a renewal application as required in this section even if the marijuana establishment fails to receive a renewal notice from the director.
(b) A marijuana establishment's renewal application must
(1) identify the license sought to be renewed by license number, license type, establishment name, and premises address;
(2) provide the information required for a new license application under 3 AAC 306.020(b)(1) - (2) and (4) - (8);
(3) report, for each licensee listed in 3 AAC 306.020(b)(2),
(A) any criminal charge on which that licensee has been convicted in the previous two calendar years; and
(B) any civil violation of AS 04, AS 17.38, or this chapter in the previous two calendar years;
(4) upon request, provide adequate proof of right to possession of the licensed premises; and
(5) declare under penalty of unsworn falsification that
(A) the application is true, correct and complete;
(B) the applicant has read and is familiar with AS 17.38 and this chapter; and
(C) the applicant will provide all information the board requires in support of the renewal application.
(c) If the director determines that the renewal application is complete, the director shall give written notice of a renewal application to
(1) the applicant;
(2) each local government with jurisdiction over the applicant's proposed licensed premises;
(3) the community council if the proposed licensed premises are located within the boundary of a community council established by municipal charter or ordinance; and
(4) any nonprofit community organization that has requested notification in writing.
(d) The director may require an applicant for renewal or reinstatement of a license under this chapter to submit fingerprints and pay fees as required by 3 AAC 306.055(a).
(e) A licensee required to submit a renewal application under (a) of this section that does not deliver a renewal application to the director on or before June 30 of each year is delinquent and must pay the late renewal application fee under 3 AAC 306.100(b) with the renewal application.
(f) On or before August 15 of each year, the director shall deliver a notice of expiration to each marijuana establishment required to submit a renewal application under (a) of this section that has not filed a complete application for renewal of a license, along with any applicable affidavit and the required fee, unless the marijuana establishment has notified the director that it does not intend to seek a renewal of its license. The director shall deliver the notice of expiration to the electronic mail address the marijuana establishment has provided to the director. A marijuana establishment is not excused from filing a license renewal application not later than August 31 of each year even if the marijuana establishment does not receive the notice of expiration described in this section.
(g) If a marijuana establishment required to submit a renewal application under (a) of this section fails to deliver a complete license renewal application or fails to pay the required renewal fee and the late renewal application fee on or before August 31 of each year, that marijuana establishment license expires at 12:00 midnight on August 31 of that year. A holder of an expired license shall immediately surrender the license to the board. Any holder of an expired license that seeks authority to operate must file a complete new application under 3 AAC 306.020, and 3 AAC 306.025, along with the required fees. A holder of an expired license may apply for reinstatement as described in (i) of this section.
(h) The board may renew a license where a licensee is not considered a resident of the state as defined at 3 AAC 306.015(f)(2), if, as part of the renewal application, the licensee submits documentation to the board's satisfaction that
(1) the licensee's primary residence is in the state;
(2) the licensee has good cause for not meeting the requirements to be a resident of the state as defined at 3 AAC 306.015(f)(2); and
(3) the cause of not meeting the requirements to be a resident of the state as defined at 3 AAC 306.015(f)(2) is temporary.
(i) A holder of an expired license under (g) of this section may apply to the board for reinstatement of a license not later than September 30 of the year on which the license expired. When applying for reinstatement, the applicant shall
(1) submit a statement of reason, on a form prescribed by the board, for not submitting a renewal application on time;
(2) submit a complete renewal application as required in (b) of this section, including the license renewal fees, and, if applicable, fingerprints and fees as required by 3 AAC 306.055(a);
(3) attest that the applicant has not been granted reinstatement under this section during the prior five years;
(4) satisfy any additional requirements for reinstatement of the license as required by the board; and
(5) pay the non-refundable license reinstatement fee set out under 3 AAC 306.10(b).
(j) Nothing in (i) of this section gives any person a right to reinstatement of the license. License reinstatement will be granted solely as described under this chapter.
(k) Granting license reinstatement does not prevent the board from taking additional disciplinary action against the licensee.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 12/28/2017, Register 224; am 2/21/2019, Register 229; am 3/25/2020, Register 233; am 7/30/2022, Register 243; am 1/22/2023, Register 245; am 3/11/2023, Register 245
3 AAC 306.040 Ownership change
(a) An application for an ownership change shall be submitted on a form prescribed by the board.
(b) If any change required to be submitted under this section will result in a change in controlling interest of the marijuana establishment license, the marijuana establishment must file an application for transfer of license to another person under 3 AAC 306.045.
(c) An individual identified in this section shall submit the individual's fingerprints and the fees required by the Department of Public Safety under AS 12.62.160 for criminal justice information. The director shall follow the procedure set out in 3 AAC 306.055(b) for submitting the fingerprints of any individual added under this section.
(d) An individual identified in this section shall be a resident of the state as required under 3 AAC 306.015(b) and 3 AAC 306.015(f)(2).
(e) The director shall approve an ownership change application when any new owner
(1) is not disqualified under 3 AAC 306.010(d), 3 AAC 306.015(b), 3 AAC 306.300(b), 3 AAC 306.400(c), 3 AAC 306.500(c), or 3 AAC 306.605(c); and
(2) is a resident of the state.
(f) In this section, "ownership change" means
(1) if the licensee is a partnership, including a limited partnership, any change in the identity of the partners, or in the ownership percentages held by any partners;
(2) if the licensee is a limited liability company, any change in the identity of the members or managers, or in the ownership percentage held by any member; or
(3) if the licensee is a corporation, any change in its corporate officers, any sale of corporate stock to a person not currently an owner, any change of the percentage ownership of an existing shareholder, or any change in its directors.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 7/19/2017, Register 223; am 2/21/2019, Register 229; am 10/18/2020, Register 236; am 1/22/2023, Register 245
3 AAC 306.045 Application for transfer of a license to another person
(a) A person may not receive or transfer a marijuana establishment license or a controlling interest in a marijuana establishment license issued to a partnership, including a limited partnership, a limited liability company, a corporation, or a local government, without applying for and receiving the written consent of the board. Transfer of a license includes a sale of all or part of the interest of an individual owner.
(b) An application for transfer of a marijuana establishment license, or of a controlling interest in a marijuana establishment license issued to a partnership, a limited liability company, a corporation, or a local government, must be filed in writing on a form the board prescribes, in compliance with the application procedure set out in 3 AAC 306.025. The application must name the current holder of the marijuana establishment license and the proposed transferee, including all persons listed in 3 AAC 306.020 if the transferee is a partnership, limited liability company, a corporation, or a local government. The application must contain
(1) the same information about each transferee as is required of an applicant for a new license under 3 AAC 306.020;
(2) a statement, under oath, executed by the current holder of the marijuana establishment license, listing all debts of the business, all taxes the business owes, current contact information for each creditor, and an affirmation that the current holder of the marijuana establishment license has submitted a copy of the transfer application to all creditors; and
(3) any other information required by the board for the type of marijuana establishment license sought to be transferred.
(c) When the board receives a complete application for transfer of a license to another person, the director shall immediately send written notice of the proposed transfer to
(1) each listed creditor of the current holder of the marijuana establishment license, along with the amount shown as owed to that creditor;
(2) each local government with jurisdiction over the applicant's proposed licensed premises;
(3) the community council if the licensed premises are located within the boundary of a community council established by municipal charter or ordinance; and
(4) any nonprofit community organization that has requested notification in writing.
(d) A current holder of a marijuana establishment license must submit a license renewal application before or at the same time as an application for a transfer of a marijuana establishment license to another person that is submitted after April 30 and before August 31.
(e) When a transferee intends to continue to operate a marijuana license with the operating plan approved by the board for the transferor, the transferee may submit a form approved by the board certifying that the transferee is making no changes to the operating plan or licensed premises, instead of submitting information required by 3 AAC 306.020(b)(8), 3 AAC 306.020(c), 3 AAC 306.315(1)(B), 3 AAC 306.420, 3 AAC 305.520(2) and (3), and 3 AAC 306.615.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 12/28/2017, Register 224; am 2/21/2019, Register 229; am 1/22/2023, Register 245
3 AAC 306.046 Application for transfer of a marijuana establishment license to another location
(a) A person may not transfer to another location a marijuana establishment license issued under AS 17.38 and this chapter without applying for and receiving the written consent of the board.
(b) An application for transfer of a marijuana establishment license to another location must be filed in writing on a form or forms the board prescribes in compliance with the applicable application procedures set out under 3 AAC 306.025.
(c) An application for transfer of a marijuana establishment license to another location must identify the name of the current license holder, the current location of the licensed premises, the current local government, the proposed location of the proposed licensed premises including global positioning system coordinates, and, if applicable, the local government for the proposed location, the endorsements applicable to the current location, and a statement of whether the license holder intends to transfer the endorsements. An application for a transfer of a license to another location must also contain
(1) the same information about each person as is required of an applicant for a new license under 3 AAC 306.020;
(2) a statement, under oath, executed by the current holder of the license, listing all debts of the business, all taxes the business owes, current contact information for each creditor, and an affirmation that the current holder of the license has submitted a copy of the application of the transfer of location to all creditors if the transfer of a license to another location is concurrent with a transfer of a license to another person;
(3) an operating plan and proposed licensed premises as described under 3 AAC 306.020(b)(8), 3 AAC 306.020(c), 3 AAC 306.315(1)(B), 3 AAC 306.420, 3 AAC 306.520(2) and (3), 3 AAC 306.615, 3 AAC 306.705(d), and 3 AAC 306.710(d), if applicable;
(4) an affidavit showing where and when the applicant posted notice of the application, when the applicant notified each local government with jurisdiction over the proposed licensed premises, when the applicant notified the community council in the area of the proposed licensed premises, and where and when an announcement of the application was published, in compliance with 3 AAC 306.025(b);
(5) the title, lease, or other documentation showing the applicant's sole right to possession of the proposed licensed premises;
(6) the application fee under 3 AAC 306.100; and
(7) any other information required by the board for the type of marijuana establishment license sought to be transferred.
(d) When the board receives a complete application for transfer of a marijuana establishment license to another location, the director shall send notice of the proposed transfer to
(1) the local government with jurisdiction over the current location and, if different, the local government with jurisdiction over the applicant's proposed new location;
(2) the community council with jurisdiction over the current location and, if different, the community council with jurisdiction over the proposed new location if the new location is located within the boundary of a community council established by municipal charter or ordinance;
(3) any nonprofit community organization that has requested the notice in writing; and
(4) any other state or local government entity whose approval is necessary for the transfer of the license to another location, as the board determines necessary.
(e) If the transfer of a license to another location is concurrent with the transfer of the license to another person as described under 3 AAC 306.045, the application must be filed in writing on a form or forms the board prescribes, in compliance with this section, the applicable application procedures set out in 3 AAC 306.025, and 3 AAC 306.045, and submit the person's fingerprints and fees as required under 3 AAC 306.055(a).
(f) A current holder of a marijuana establishment license shall submit a license renewal application before or at the same time as an application for a transfer of a license to another location that is submitted after April 30 and before August 31.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 1/22/2023, Register 245
3 AAC 306.047 License conversion
(a) An application must be filed in writing on a form the board prescribes, in compliance with the application procedure set out under 3 AAC 306.025 to convert an existing
(1) limited marijuana cultivation facility license to a standard marijuana cultivation facility license;
(2) standard marijuana cultivation facility license to a limited marijuana cultivation facility license;
(3) marijuana concentrate manufacturing facility license to a standard marijuana product manufacturing facility license; or
(4) standard marijuana product manufacturing facility license to a marijuana concentrate manufacturing facility license.
(b) To qualify for a license conversion under this section, neither the licensee nor the license location may change.
(c) The license conversion application must contain
(1) an affidavit showing where and when the applicant posted notice of the application, when the applicant notified each local government with jurisdiction over the licensed premises, proof of advertising, and, if applicable, the community council. in compliance with 3 AAC 306.025(b);
(2) any changes proposed to the approved operating plan;
(3) a detailed diagram of the licensed premises; the diagram must show all entrances and boundaries of the premises, restricted access areas, storage areas, and, if applicable, overlapping premises that the board may approve under 3 AAC 306. 705(d) and 3 AAC 306.710(d);
(4) if applicable, the title, lease, or other documentation showing the licensee's sole right to possession of the proposed licensed premises, if the proposed licensed premises for the converted license differ from the existing licensed premises;
(5) the balance of the license fee, if the post-conversion license fee is greater than the pre-conversion license fee;
(6) the application fee under 3 AAC 306.100; and
(7) any other information required by the board.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2019, Register 229; am 12/10/2020, Register 236; am 1/22/2023, Register 245; am 4/16/2023, Register 246
3 AAC 306.049 Foreclosures
A marijuana establishment license issued under AS 17.38 and this chapter is not subject to foreclosure and may not be used as collateral to secure a debt. If a license is transferred to another person, the transferor may secure payment for real and personal property conveyed to the transferee upon the promise of the transferee to transfer the license back to the transferor upon default in payment.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 3/22/2024, Register 249
3 AAC 306.050 Relocation of licensed premises not allowed
Repealed.
History
- Eff. 2/21/2016, Register 217; repealed 1/22/2023, Register 245
3 AAC 306.051 Application for return of a license to a person with a retained security interest
(a) A licensee who wishes to establish a security interest in a marijuana establishment license proposed for transfer to another person under 3 AAC 306.045 shall submit the following additional documents with the transfer application:
(1) a leasehold conveyance or contract of sale of real property made in the course of the license transfer;
(2) a list of personal property being conveyed from the transferor to the transferee, along with the value of the property and a draft Uniform Commercial Code financing statement in which a security interest in the license is claimed under 3 AAC 306.049, this section, and 3 AAC 306.080(d)(2)(B), containing the following statement: "Under the terms of 3 AAC 306.049, 3 AAC 306.051, and 3 AAC 306.080(d)(2)(B), the transferor/lessor retains a security interest in the marijuana license that is the subject of this conveyance, and may, as a result, be able to obtain a retransfer of the license without satisfaction of other creditors."; the value of the personal property must be sufficient for the board to determine that the license is not being used as collateral except as provided under 3 AAC 306.049; and
(3) all transaction and security documents relating to the lease or sale of real property and sale of personal property in conjunction with the license transfer.
(b) The transferor must include in the published notice of transfer required by 3 AAC 306.025(b), the following statement: "Under the terms of 3 AAC 306.049, 3 AAC 306.051, and 3 AAC 306.080(d)(2)(B), the transferor/lessor retains a security interest in the marijuana license that is the subject of this conveyance, and may, as a result, be able to obtain a retransfer of the license without satisfaction of other creditors."
(c) After board approval, a copy of the recorded leasehold conveyance or contract of sale of real property and the recorded Uniform Commercial Code financing statement must be provided to the director before the transferred license may be operated.
(d) A security interest in a marijuana establishment license may not be established when the license transfer contemplates a transfer of less than 100 percent of the interest in the license.
(e) A marijuana establishment license with an established security interest may not be transferred to another person unless all obligations under the security interest are satisfied before or as part of the transfer. The board may make an exception in the case of the death of a licensee.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 3/22/2024, Register 249
3 AAC 306.052 Compelled transfer of a license to the prior licensee with a security interest in the license
(a) If a former licensee seeks to compel the transfer of a marijuana establishment license because of a promise under 3 AAC 306.049 given as collateral by the current licensee to the former licensee in the course of an earlier transfer of the license, followed by a default in payment in connection with property conveyed or a lease made in the course of the previous transfer, the board will deny the transfer if the creditors are not satisfied under 3 AAC 306.080(d)(2)(A), unless it clearly appears that
(1) the security interest was established in the previous transfer in accordance with 3 AAC 306.051; and
(2) the term of a security interest in a license to secure payment for personal property did not exceed 10 years.
(b) The director may identify, in board meeting agendas, those applications for transfer of ownership that are secured as described in this section.
(c) After the foreclosure of real property that secures payment of debt also secured by a promise under 3 AAC 306.049, a marijuana establishment license may not be retransferred without satisfaction of creditors under 3 AAC 306.080(d)(2)(A) unless
(1) the board approved an application for retransfer before the foreclosure; or
(2) the amount owed to the former licensee for the real property at the time of foreclosure exceeds the fair market value of the property; the former licensee carries the burden of proof to show that the fair market value is less than the amount owed.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 3/22/2024, Register 249
3 AAC 306.055 Criminal justice information and records
(a) When filing an application for a new marijuana establishment license, transfer of a license to another person, or ownership change, the applicant, including each individual listed in 3 AAC 306.020(b)(2), must submit the person's fingerprints and the fees required by the Department of Public Safety under AS 12.62.160 for criminal justice information. An individual who has submitted fingerprints and fees under this section is not required to submit a new set of fingerprints and fees for a second or subsequent application for a new license, transfer of a marijuana establishment license to another person, or ownership change, if the second or subsequent application is submitted not later than 12 calendar months after the date criminal justice information is received in response to the initial submission of fingerprints and fees.
(b) The director shall submit the fingerprints to the Department of Public Safety to obtain a report of criminal justice information under AS 12.62. The board will use the information obtained under this section to determine if an applicant is qualified for a marijuana establishment license.
(c) In this section, "criminal justice information" has the meaning given in AS 12.62.900.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 5/9/2019, Register 230; am 1/22/2023, Register 245
3 AAC 306.060 Protest by local government
(a) Not later than 60 days after the director sends notice of an application for a new marijuana establishment license, a new onsite consumption endorsement, renewal of a marijuana establishment license, renewal of an onsite consumption endorsement, license conversion, endorsement, transfer of a marijuana establishment license to another person, or transfer of a marijuana establishment license to another location, a local government with jurisdiction over the location of the proposed licensed premises may protest the application by sending the director and the applicant a written protest and the reasons for the protest. If an application for a transfer of a marijuana establishment license to another location proposes to relocate a licensed establishment within the jurisdiction of a different local government, the local government with jurisdiction over the proposed location may protest the application on the basis of taxes owed to the local government with jurisdiction over the current location of the licensed premises. The director may not accept a protest received after the 60-day period. If the protest is a conditional protest, the board will require the applicant to show, to the board's satisfaction, that the requirements of the local government have been met before the director may issue the marijuana establishment license. If the protest is not a conditional protest, the board will deny the application unless the board finds that the protest is arbitrary, capricious, and unreasonable.
(b) A local government may recommend that the board approve an application for a new marijuana establishment license, a new onsite consumption endorsement, renewal of a marijuana establishment license, renewal of an onsite consumption endorsement, license conversion, transfer of a marijuana establishment license to another person, or transfer of a marijuana establishment license to another location subject to a condition. If an application for a transfer of a marijuana establishment license to another location proposes to relocate a licensed establishment within the jurisdiction of a different local government, the local government with jurisdiction over the proposed location may recommend that the board approve the marijuana establishment license subject to a condition that is based on reasons identified by the local government with jurisdiction over the current location, if those reasons are still relevant to the proposed location. The board will impose a condition a local government recommends unless the board finds the recommended condition is arbitrary, capricious, and unreasonable. If the board imposes a condition a local government recommends, the local government shall assume responsibility for monitoring compliance with the condition unless the board provides otherwise.
(c) If a local government with jurisdiction over the location of the licensed premises determines that a marijuana establishment has violated a provision of AS 17.38, this chapter, or a condition the board has imposed on the licensee, the local government may notify the board. Unless the director finds that the local government's notice is arbitrary, capricious, and unreasonable, the director shall prepare the determination as an accusation against the licensee under AS 44.62.360 and conduct proceedings to resolve the matter as provided under 3 AAC 306.820.
(d) In this section,
(1) "local government" means each local government with jurisdiction over the licensed premises; in case of an application for a transfer of a marijuana establishment license to another location, "local government" means the local government with jurisdiction over the proposed licensed premises;
(2) "conditional protest" means a protest by a local government based on the local government's requirements that the applicant must meet before licensure, and that the applicant has not yet met but that the local government expects the applicant will be able to meet within a reasonable period of time.
(e) Not later than 60 days after the director sends notice of an application for a transfer of a marijuana establishment license to another location where the local government would be different, the local government with jurisdiction over the current licensed premises may protest the application upon the basis of taxes owed by the licensee to that local government by sending the director and the applicant a written protest and the reasons for the protest. The director may not accept and the board will not consider a protest received under this subsection after the 60-day period.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 12/28/2017, Register 224; am 2/21/2019, Register 229; am 4/11/2019, Register 230; am 5/9/2019, Register 230; am 1/22/2023, Register 245
3 AAC 306.065 Public participation
A person may object to an application for a new marijuana establishment license, renewal of a marijuana establishment license, license conversion, transfer of a marijuana establishment license to another person, or transfer of a marijuana establishment license to another location by submitting a written statement of reasons for the objection to the board and the applicant not later than 30 days after the director has determined that the application is complete and has given written notice to the local government in accordance with 3 AAC 306.025. The objection must be sent to the applicant at the mailing address or electronic mail address provided in the notice of application and also to the board. If the board determines to conduct a public hearing under this section, an interested person may give oral testimony at the public hearing.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 12/28/2017, Register 224; am 2/21/2019, Register 229; am 1/22/2023, Register 245
3 AAC 306.070 Hearing on public protest
The board may, on its own initiative or in response to an objection or protest, hold a hearing to ascertain the reaction of the public or a local government to an application. The director shall send notice of a hearing under this section as provided in AS 44.62.330 - 44.62.630 (Administrative Procedure Act).
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217
3 AAC 306.075 Procedure for action on license application
(a) The board will decide whether to grant or deny an application for a marijuana establishment license not later than 90 days after receiving the complete application. However, the board will not grant or deny the application before the time allowed for a protest under 3 AAC 306.060, unless the local government waives its right to protest.
(b) Not later than seven days before the date set for board action on applications, the director shall post a meeting agenda listing the matters scheduled for action at that meeting. The board may review an application without additional notice to the applicant.
(c) The board will consider any written objection, protest, suggested condition, or petition, and also will consider any testimony received at a hearing on public protest held under 3 AAC 306.070 when it considers the application. The director shall retain the written objection, protest, or suggested condition or petition, and the hearing record as part of the permanent record of the board's review of an application.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 12/28/2017, Register 224; am 2/21/2019, Register 229; am 1/22/2023, Register 245
3 AAC 306.080 Denial of license or endorsement application
(a) After review of the application, including the applicant's proposed operating plan and all relevant information, the board will deny an application for a new license or new onsite consumption endorsement if the board finds that
(1) the application is not complete as required under the applicable provisions of 3 AAC 306.020 - 3 AAC 306.055, or contains any false statement of material fact;
(2) the license or endorsement would violate any restriction in 3 AAC 306.010 or 3 AAC 306.015;
(3) the license or endorsement would violate any restriction applicable to the particular license type authorized under this chapter;
(4) the license or endorsement is prohibited under this chapter as a result of an ordinance or election conducted under AS 17.38.210, 3 AAC 306.200, or 3 AAC 306.230;
(5) the applicant's actions or the operating plan does not adequately demonstrate that the applicant will comply with applicable provisions of this chapter;
(6) the license or endorsement would not be in the best interests of the public; or
(7) a protest by the local government is not arbitrary, capricious, and unreasonable.
(b) After review of the application and all relevant information, the board will deny an application for renewal of a marijuana establishment license if the board finds
(1) any cause listed in (a) of this section;
(2) that the license or endorsement has been operated in violation of a condition or restriction the board previously imposed;
(3) that the applicant is delinquent in the payment of taxes due in whole or in part from operation of the licensed business;
(4) that a protest by the local government is not arbitrary, capricious, and unreasonable; or
(5) that the applicant has lost right to possession of the applicant's licensed premises.
(c) After review of the application and all relevant information, the board will deny an application for reinstatement of license due to failure to submit a timely renewal if the board finds
(1) any cause listed in (a) or (b) of this section;
(2) violation of any terms of an administrative hold on or seizure of marijuana or any marijuana product as described in 3 AAC 306.830;
(3) the application was submitted later than September 30 of the given applicable year;
(4) the applicant has had an application for reinstatement granted during the five years before application submittal; or
(5) the failure to submit a timely renewal application is due to inexcusable oversight; inexcusable oversight includes failure to submit a renewal application, if the director proves that the licensee
(A) was sent communications by the director that an application was due but ignored the notice; or
(B) engaged in other conduct evidencing bad faith or disregard of the application requirements.
(d) After review of the application and all relevant information, the board will deny an application for transfer of license to another person if the board finds
(1) any cause listed in (a) of this section;
(2) that the transferor has not paid all debts or taxes arising from the operation of the business licensed under this chapter unless
(A) the transferor gives security for the payment of the debts or taxes satisfactory to the creditor or taxing authority; or
(B) the transfer is under a promise given as collateral
(i) by the transferor to the transferee in the course of an earlier transfer of the license; and
(ii) that obliges the transferor to transfer the license back to the transferee in the event of default in payment for property conveyed as part of the earlier transfer of the license;
(3) that transfer of the license to another person would result in violation of the provisions of this chapter relating to identity of licensees and financing of licensees;
(4) that the prospective transferee does not have the qualifications of an original applicant required under this chapter; or
(5) that a protest by the local government is not arbitrary, capricious, and unreasonable.
(e) If the board denies an application for a new marijuana establishment license, renewal of a marijuana establishment license, license conversion, transfer of a marijuana establishment license to another person, or transfer of a marijuana establishment license to another location, the board will, not later than 15 days after the board meeting at which the application was denied, furnish a written statement of issues to the applicant, explaining the reason for the denial in clear and concise language, and identifying any statute or regulation on which the denial is based. In the notice of denial, the board will inform the applicant of the right to an informal conference under 3 AAC 306.085 and to a formal hearing under 3 AAC 306.090.
(f) After review of the application and all relevant information, the board will deny an application for license conversion if the board finds that
(1) the application contains any false statement of material fact;
(2) the license would violate any restriction applicable to the particular license type authorized under this chapter;
(3) the license is prohibited under this chapter as a result of an ordinance or election conducted under AS 17.38.210, 3 AAC 306.200, or 3 AAC 306.230;
(4) the applicant's actions or the application does not adequately demonstrate that the applicant will comply with applicable provisions of this chapter;
(5) a protest by the local government is not arbitrary, capricious, and unreasonable;
(6) the license conversion would not be in the best interest of the public.
(g) After review of the application and all relevant information, the board will deny an application for a transfer of a marijuana establishment license to another location if the board finds that
(1) the application contains any false statement of material fact;
(2) the application is not complete as required under the applicable provisions of 3 AAC 306.020 - 3 AAC 306.055;
(3) the license or endorsement would violate any restriction in 3 AAC 306.010 or 3 AAC 306.015;
(4) the license or endorsement would violate any restriction applicable to the particular license type authorized under this chapter;
(5) the license or endorsement is prohibited under this chapter as a result of an ordinance or election conducted under AS 17.38.210 and 3 AAC 306.200 - 3 AAC 306.250;
(6) the applicant's actions or the operating plan does not adequately demonstrate that the applicant will comply with applicable provision of AS 17.38 and this chapter;
(7) the license or endorsement would not be in the best interest of the public;
(8) a protest by the local government is not arbitrary, capricious, and unreasonable;
(9) a protest by the current local government in the case of a transfer of location of the license to a different local government is based on taxes owed to the current local government; or
(10) that the licensee has not paid all debts or taxes arising from the operation of the business licensed under this chapter unless the transferor gives security for the payment of the debts or taxes satisfactory to the creditor or taxing authority.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 2/21/2019, Register 229; am 8/21/2019, Register 231; am 8/7/2021, Register 239; am 7/30/2022, Register 243; am 1/22/2023, Register 245; am 3/22/2024, Register 249
3 AAC 306.085 Informal conference
(a) If an applicant for a new marijuana establishment license, renewal of a marijuana establishment license, license reinstatement, license conversion, transfer of a marijuana establishment license to another person, or transfer of a marijuana establishment license to another location is aggrieved by an action of the board denying the application, the applicant may, not later than 15 days after the date of the written notice of denial, request an informal conference with the director or the board. An informal conference requested under this section must be held at a time and place convenient to the applicant and the board, but not later than the next scheduled meeting of the board. An informal conference may be conducted telephonically.
(b) If the informal conference does not resolve the matter to the applicant's satisfaction, the applicant may, not later than 15 days after the last day of the informal conference, request a formal hearing under 3 AAC 306.090 by filing a notice of defense in compliance with AS 44.62.390(b).
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 2/21/2019, Register 229; am 7/30/2022, Register 243; am 1/22/2023, Register 245
3 AAC 306.090 Formal hearing
(a) If an applicant for a new marijuana establishment license, renewal of a marijuana establishment license, license reinstatement, license conversion, transfer of a marijuana establishment license to another person, or transfer of a marijuana establishment license to another location is aggrieved by an action of the board denying the application, the applicant may request a formal hearing by filing a notice of defense in compliance with AS 44.62.390 not later than 15 days after the date of the written notice of the denial, or as provided under 3 AAC 306.085(b) if the applicant requested and participated in an informal conference. Failure to file a notice of defense as provided in this section constitutes a waiver of the right to a formal hearing.
(b) When an aggrieved person requests a hearing under the section, the board may request the office of administrative hearings to conduct the hearing in compliance with due process, AS 44.62.330 - AS 44.62.630 (Administrative Procedure Act), and 2 AAC 64.100 - 2 AAC 64.990, as applicable.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 2/21/2019, Register 229; am 7/30/2022, Register 243; am 1/22/2023, Register 245
3 AAC 306.095 Appeals
(a) An aggrieved applicant or marijuana establishment license holder may appeal to the board regarding any action of the director, or an employee or agent of the board regarding an application for a new marijuana establishment license, renewal of a marijuana establishment license, license reinstatement, license conversion, transfer of a marijuana establishment license to another person, or transfer of a marijuana establishment license to another location.
(b) An applicant or marijuana establishment license holder aggrieved by a final decision of the board regarding an application for a new marijuana establishment license, renewal of a marijuana establishment license, license reinstatement, license conversion, transfer of a marijuana establishment license to another person, or transfer of a marijuana establishment license to another location may appeal to the superior court under AS 44.62.560.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 2/21/2019, Register 229; am 7/30/2022, Register 243; am 1/22/2023, Register 245
3 AAC 306.100 Fees; refund
(a) The non-refundable fee for an application for a new marijuana establishment license, license conversion, transfer of a marijuana establishment license to another person, or transfer of a marijuana establishment license to another location is $1,000. The non-refundable fee for a new onsite consumption endorsement is $1,000.
(b) The non-refundable application fee for a license renewal application is $600. If a renewal application is late as provided under 3 AAC 306.035(e), an additional non-refundable late renewal application fee is $1,000. The non-refundable application fee for renewal of an onsite consumption endorsement is $600. The non-refundable reinstatement fee for an expired license under 3 AAC 306.035(i) is equal to 100 percent of the applicable renewal license fee in addition to the applicable renewal fees.
(c) The non-refundable fee to request board approval of a change in a licensed marijuana establishment's business name, licensed premises diagram, operating plan, or proposed new marijuana product is $250. A change fee does not apply to an application for transfer of a marijuana establishment license, transfer of controlling interest to another person, or transfer of a marijuana establishment license to another location.
(d) The annual license or endorsement fee, to be paid with each application for a new marijuana establishment facility license or endorsement and each license or endorsement renewal application is as follows:
(1) for a new retail marijuana store license, $5,000, and for a renewed retail marijuana store license, $5,000;
(2) for a new limited marijuana cultivation facility license, $1,000, and for a renewed limited marijuana cultivation facility license, $1,000:
(3) for a new standard marijuana cultivation facility license, $5,000, and for a renewed standard marijuana cultivation facility license, $5,000;
(4) for a new marijuana concentrate manufacturing facility license, $1,000, and for a renewed marijuana concentrate manufacturing facility license, $1,000;
(5) for a new standard marijuana product manufacturing facility license, $5,000, and for a renewed standard marijuana product manufacturing facility license, $5,000;
(6) for a new marijuana testing facility license, $1,000, and for a renewed marijuana testing facility license, $1,000;
(7) for an onsite consumption endorsement to a retail marijuana store license, $2,000.
(e) The fee for a new marijuana handler permit card is $50. The fee for a renewed marijuana handler permit card is $50.
(f) If the board denies an application for a license or endorsement, or for renewal of a license or endorsement, the board will refund the annual license or endorsement fee. The board will not refund a license or endorsement fee after the license or endorsement has been issued.
(g) Processing fees for late renewal after failure to pay taxes are as follows:
(1) if a licensee pays its delinquent tax after a local government protests renewal of the license, but before the board denies license renewal, $200;
(2) if a licensee pays its delinquent tax after appealing the board's denial of a license renewal, but before a hearing officer is appointed to hear the applicant's appeal, $500;
(3) if a licensee pays its delinquent tax after appealing the board's denial of a license renewal, but before the administrative hearing begins, $5,000;
(4) if a licensee pays its delinquent tax after an administrative hearing that results in a hearing officer recommendation to deny the license renewal, $10,000.
(h) The fee for a second or subsequent inspection for a new marijuana establishment is $500. The fee applies to an inspection requested after a marijuana establishment fails a preliminary inspection and is not issued a license. The director may waive the fee upon submission of a written request.
(i) The non-refundable fee for an application to request board approval of an ownership change under 3 AAC 306.040 is $250 when the licensee requesting the change owns one license and $500 when the licensee requesting the change owns two or more licenses.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 7/19/2017, Register 223; am 8/11/2018, Register 227; am 2/21/2019, Register 229; am 4/11/2019, Register 230; am 5/1/2019, Register 230; am 5/9/2019, Register 230; am 3/25/2020, Register 233; am 7/30/2022, Register 243; am 1/22/2023, Register 245; am 4/16/2023, Register 246; am 1/19/2024, Register 249; am 5/29/2025, Register 254
3 AAC 306.110 Endorsements generally
(a) An endorsement expands the boundaries of a licensed premises or the authorized activities of the licensed business.
(b) Only the board may issue an endorsement.
(c) An endorsement is valid only in conjunction with a license. An endorsement may only be transferred to another person if the license for which the endorsement was issued is also transferred to that person. An endorsement expires if the license expires or the license is revoked. An endorsement is suspended if the license is suspended.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 4/11/2019, Register 230
Article 2 Local Options
3 AAC 306.200 Local options
(a) If a majority of the persons voting on the question vote to approve the option, or if a local government's assembly or city council passes an ordinance to the same effect, the local government shall adopt a local option to prohibit
(1) the sale or importation for sale of marijuana and any marijuana product;
(2) the operation of any marijuana establishment, including one or more of the following license or endorsement types:
(A) a retail marijuana store;
(B) a marijuana cultivation facility;
(C) a marijuana product manufacturing facility;
(D) a marijuana testing facility;
(E) an onsite consumption endorsement to a marijuana retail store license.
(3) specific operational characteristics of an onsite consumption endorsement to a marijuana retail store license, including consumption by smoking or vaping, or outdoor consumption.
(b) A ballot question to adopt a local option under this section must at least contain language substantially similar to: "Shall (name of local government) adopt a local option to prohibit (local option under (a) of this section)? (yes or no)."
(c) The ballot for an election on the options set out in (a)(2) of this section must include a brief explanation of the activity that each license or endorsement type on the ballot may carry out.
(d) If a local government dissolves under AS 29.06.450, any marijuana establishment license issued to that local government expires when the local government dissolves.
(e) A local government may not prohibit the personal use and possession of marijuana and marijuana products as authorized under AS 17.38.020.
(f) Nothing in 3 AAC 306.200 - 3 AAC 306.260 precludes a local government from applying for a marijuana establishment license or endorsement under other provisions of this chapter.
History
- Authority: AS 17.38.020; AS 17.38.200; AS 17.38.900 AS 17.38.190; AS 17.38.210
- Eff. 2/21/2016, Register 217; am 4/11/2019, Register 230
3 AAC 306.210 Change of local option
If a majority of persons voting on the question vote to approve a local option different from one previously adopted under 3 AAC 306.200 and currently in effect, or if the local government's assembly or city council passes an ordinance to the same effect, the local government shall change the local option to the newly approved option. A ballot question to change a local option under this section must at least contain language substantially similar to: "Shall (name of local government) change the local option currently in effect, that prohibits (current local option), and adopt in its place a local option to prohibit (proposed local option)? (yes or no)."
History
- Authority: AS 17.38.020; AS 17.38.200; AS 17.38.900 AS 17.38.190; AS 17.38.210
- Eff. 2/21/2016, Register 217
3 AAC 306.220 Removal of local option
(a) If a majority of the persons voting on the question vote to remove a local option previously adopted under 3 AAC 306.200 or 3 AAC 306.210 and currently in effect, or if a local government's assembly or city council passes an ordinance to the same effect, that local option is repealed effective the first day of the month after the election is certified. A ballot question to remove a local option under this section must at least contain language substantially similar to: "Shall (name of local government) remove the local option currently in effect, that prohibits (current local option), so that no local option continues in effect? (yes or no)."
(b) When issuing a license within the boundaries of a local government that has removed a local option, the board will give priority to any formerly licensed applicant whose license was not renewed because of the results of the previous local option election. However, an applicant described in this subsection does not have a legal right to a license and the board is not required to approve the application.
History
- Authority: AS 17.38.020; AS 17.38.200; AS 17.38.900 AS 17.38.190; AS 17.38.210
- Eff. 2/21/2016, Register 217
3 AAC 306.230 Procedure for local option election
When it receives a petition to adopt, change, or remove a local option under 3 AAC 306.200 - 3AAC 306.220, the local government shall conduct the election in compliance with the initiative process under the local government's election ordinances and regulations and the applicable provisions of AS 29.
History
- Authority: AS 17.38.020; AS 17.38.200; AS 17.38.900 AS 17.38.190; AS 17.38.210
- Eff. 2/21/2016, Register 217
3 AAC 306.240 Prohibition of importation or purchase after election
(a) If a majority of the voters vote to prohibit the importation for sale of marijuana and any marijuana product under 3 AAC 306.200(a)(1), or if the local government's assembly or city council passes an ordinance to the same effect, a person, beginning on the first day of the month after the results of the election are certified, may not knowingly bring, send, or transport marijuana or marijuana products for sale into the area within the boundary of the local government.
(b) A person who resides within the boundary of a local government that has adopted a local option under 3 AAC 306.200(a) may not purchase marijuana or a marijuana product from another person that has brought, sent, or transported marijuana or a marijuana product into the local government for sale in violation of the local option.
(c) Notwithstanding (a) or (b) of this section, a licensed marijuana establishment may transport marijuana or any marijuana product through the boundaries of a local government that has prohibited importation or purchase of marijuana if the marijuana or marijuana product is shipped with an attached transport manifest created in compliance with 3 AAC 306.750 and documenting that the shipment originates and terminates in a place that does not prohibit importation and purchase of marijuana or a marijuana product.
(d) In this section,
(1) "bring" means to carry or convey or to attempt or solicit to carry or convey;
(2) "send"
(A) means to cause to be taken or distributed or to attempt or solicit or cause to be taken or distributed;
(B) includes use of the United States Postal Service;
(3) "transport"
(A) means to ship by any method;
(B) includes delivering or transferring or attempting or soliciting to deliver or transfer marijuana or marijuana products to be shipped to, delivered to, or left or held for pickup by any person.
History
- Authority: AS 17.38.020; AS 17.38.200; AS 17.38.900 AS 17.38.190; AS 17.38.210
- Eff. 2/21/2016, Register 217
3 AAC 306.250 Effect on licenses of restriction on sale
If a majority of the voters vote under 3 AAC 306.200(a) to prohibit the sale of marijuana and marijuana products or the operation of marijuana establishments, or if the assembly or city council passes an ordinance to the same effect, the board will not issue, renew, reinstate, or transfer to another person or location a license, including any endorsement, for a marijuana establishment with premises located within the boundary of the local government. A license for a marijuana establishment or endorsement within the boundary of the local government is void 90 days after the results of the election are certified, or after the effective date of an ordinance to the same effect if the local government opted out by ordinance. A marijuana establishment license or endorsement that expires during the 90 days after the certification of a local option election, or during the period of time between passage of an ordinance to the same effect and the effective date of that ordinance, may be extended until it is void under this section, by payment of a prorated portion of the annual license or endorsement fee.
History
- Authority: AS 17.38.020; AS 17.38.200; AS 17.38.900 AS 17.38.190; AS 17.38.210
- Eff. 2/21/2016, Register 217; am 7/27/2017, Register 223; am 4/11/2019, Register 230; am 1/22/2023, Register 245
3 AAC 306.260 Notice of the results of a local option election
If a majority of the voters vote to adopt, change, or remove a local option under 3 AAC 306.200 - 3 AAC 306.220 or if the assembly or city council passes an ordinance to the same effect, the board will notify the Department of Law and the Department of Public Safety of the results of the election.
History
- Authority: AS 17.38.020; AS 17.38.200; AS 17.38.900 AS 17.38.190; AS 17.38.210
- Eff. 2/21/2016, Register 217
Article 3 Retail Marijuana Stores
3 AAC 306.300 Retail marijuana store license required
(a) Except as permitted under AS 17.38.020, a person may not sell, give, distribute, deliver, or offer to sell, give, distribute, or deliver marijuana or any marijuana product to a consumer unless the person has obtained a retail marijuana store license from the board in compliance with this chapter, or is an employee or agent acting for a licensed retail marijuana store operating in compliance with this chapter.
(b) A licensee of any retail marijuana store, or an employee or agent of a retail marijuana store, may not have an ownership interest in, or a direct or indirect financial interest in a licensed marijuana testing facility.
History
- Authority: AS 17.38.010; AS 17.38.121; AS 17.38.200 AS 17.38.020; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190
- Eff. 2/21/2016, Register 217; am 10/17/2018, Register 228; am 9/1/2021, Register 239; am 1/22/2023, Register 245
3 AAC 306.305 Retail marijuana store privileges
(a) A licensed retail marijuana store is authorized to
(1) sell marijuana purchased from a licensed marijuana cultivation facility, packaged and labeled as required under 3 AAC 306.345, 3 AAC 306.470, and 3 AAC 306.475 in an amount not exceeding the limit set out in 3 AAC 306.355, to an individual on the licensed premises or as permitted under 3 AAC 306.380 for consumption off the licensed premises;
(2) reject or revoke acceptance of marijuana purchased from a licensed marijuana cultivation facility;
(3) sell a marijuana product purchased from a licensed marijuana product manufacturing facility, packaged and labeled as required under 3 AAC 306.345, 3 AAC 306.565, and 3 AAC 306.570, in a quantity not exceeding the limit set out in 3 AAC 306.355, to an individual on the licensed premises or as permitted under 3 AAC 306.380 for consumption off the licensed premises;
(4) reject or revoke acceptance of a marijuana product purchased from a licensed marijuana product manufacturing facility;
(5) salvage and sell kief, trim, or flower separated from marijuana purchased from a licensed marijuana cultivation facility while preparing the marijuana with required packaging and labeling under 3 AAC 306.345, 3 AAC 306.565, and 3 AAC 306.570 to an individual on the licensed premises;
(6) store marijuana and marijuana product on the licensed premises in a manner consistent with 3 AAC 306.710 - 3 AAC 306.720;
(7) with prior approval of the board, permit consumption of marijuana or a marijuana product purchased on the licensed premises, in a designated area on the licensed premises.
(b) This section does not prohibit a licensed retail marijuana store from refusing to sell marijuana or a marijuana product to a consumer.
(c) A licensee of a retail marijuana store may also apply for a marijuana cultivation facility license, marijuana product manufacturing facility license, or both. A licensee of a retail marijuana store who obtains a marijuana cultivation facility license, marijuana product manufacturing facility license, or both shall
(1) except for overlapping premises approved by the board under 3 AAC 306.710(d), conduct a marijuana cultivation operation or marijuana product manufacturing operation in a room separate from any other operation and the retail marijuana store; if the rooms are connected and co-located in an area that is not approved by the board as overlapping premises, a secure door must separate the rooms from each other; a secure door must separate any room connected to and co-located with the retail marijuana store; and
(2) comply with each provision of this chapter that applies to any other type of marijuana establishment license that the licensee of a retail marijuana store obtains.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; em am 4/17/2020 - 8/14/2020, Register 234; am 11/24/2020, Register 236; am 8/13/2023, Register 247; am 1/5/2024, Register 249; am 8/16/2024, Register 251
3 AAC 306.310 Acts prohibited at retail marijuana store
(a) A licensed retail marijuana store may not sell, give, distribute, deliver, or offer to sell, give, distribute, or deliver, marijuana or a marijuana product
(1) to a person under 21 years of age;
(2) to a person that is under the influence of an alcoholic beverage, inhalant, or controlled substance;
(3) that is not labeled and packaged as required in 3 AAC 306.345 and
(A) 3 AAC 306.470 and 3 AAC 306.475; or
(B) 3 AAC 306.565 and 3 AAC 306.570;
(4) in a quantity exceeding the limit set out in 3 AAC 306.355;
(5) repealed 8/13/2023;
(6) after the expiration date shown on the label of the marijuana or marijuana product.
(b) A licensed retail marijuana store may not
(1) conduct business on or allow a consumer to access the retail marijuana store's licensed premises between the hours of 5:00 a.m. and 8:00 a.m. each day;
(2) allow a person to consume marijuana or a marijuana product on the retail marijuana store's licensed premises, except as provided in 3 AAC 306.305(a)(4);
(3) offer, deliver, or sell an alcoholic beverage to a consumer for any reason;
(4) allow intoxicated or drunken persons to enter or to remain on the licensed premises.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 4/11/2019, Register 230; em am 4/17/2020 - 8/14/2020, Register 234; am 11/24/2020, Register 236; am 8/13/2023, Register 247; am 10/8/2023, Register 248
3 AAC 306.315 Application for retail marijuana store license
A person seeking a new retail marijuana store license must
(1) submit an application on a form the board prescribes, including the information required under 3 AAC 306.020 and
(A) repealed 6/13/2024;
(B) a description of the way marijuana and marijuana products at the retail marijuana store will be displayed and sold in the applicant's operating plan required under 3 AAC 306.020(c); and
(2) demonstrate, to the board's satisfaction, that the applicant will operate in compliance with
(A) each applicable provision of 3 AAC 306.300 - 3 AAC 306.380 and 3 AAC 306.700 - 3 AAC 306.770;
(B) each applicable health, fire, safety, and tax code and ordinance of the state and the local government in which the applicant's proposed licensed premises is located.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 7/27/2017, Register 223; am 1/22/2023, Register 245; am 8/13/2023, Register 247; am 6/13/2024, Register 250
3 AAC 306.320 Marijuana handler permit required
A retail marijuana store shall ensure that
(1) each agent who is required or permitted to be physically present on the licensed premises at any time, each licensee, and each employee obtains a marijuana handler permit as provided in 3 AAC 306.700 before being licensed or employed at a retail marijuana store; and
(2) each licensee, employee, or agent has that person's marijuana handler permit card in that person's immediate possession, or a valid copy on file on the premises, at all times when on the licensed premises of the retail marijuana store.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 2/21/2019, Register 229
3 AAC 306.325 Access restricted at retail marijuana store
(a) Except as provided under 3 AAC 306.712, a person under 21 years of age may not enter a retail marijuana store.
(b) Each entry to a retail marijuana store must be posted with a sign that says "No one under 21 years of age allowed." The sign must be not less than 12 inches long and 12 inches wide, with letters at least one-half inch in height in high contrast to the background of the sign.
(c) An area of a retail marijuana store's licensed premises where marijuana or any marijuana product is stocked for sale or dispensed for sale is a restricted access area. The retail marijuana store must post signs, require identification, and escort visitors in compliance with 3 AAC 306.710.
(d) If a retail marijuana store displays marijuana to a consumer for the purpose of smelling the marijuana before purchase, the retail marijuana store shall package the marijuana in a sample jar that is protected by a plastic, metal, or other protective mesh screen, and the jar must remain in the monitored custody of the retail marijuana store during consumer inspection.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 5/9/2019, Register 230; am 1/1/2021, Register 237
3 AAC 306.330 Marijuana inventory tracking system
(a) A retail marijuana store shall use a marijuana inventory tracking system as provided in 3 AAC 306.730 to ensure all marijuana and marijuana product in the retail marijuana store's possession is identified and tracked from the time the retail marijuana store receives, rejects, or revokes acceptance of any batch of marijuana or lot of marijuana product through the sale, transfer to another licensed marijuana establishment, or disposal of the batch of marijuana or lot of marijuana product.
(b) When marijuana from a marijuana cultivation facility or marijuana product from a marijuana product manufacturing facility is delivered or transported to the licensed premises of a retail marijuana store, the retail marijuana store shall immediately enter identification information for that batch of marijuana or lot of marijuana product into the retail marijuana store's marijuana inventory tracking system. A retail marijuana store shall reject marijuana or a marijuana product that does not have a valid transport manifest generated from the marijuana inventory tracking system of the marijuana establishment that originated the delivery.
(c) A retail marijuana store shall reconcile each transaction from the retail marijuana store's point-of-sale system and current inventory to its marijuana inventory tracking system at the close of business each day.
(d) A retail marijuana store shall account for any variance in the quantity of marijuana or marijuana product the retail marijuana store received and the quantity it sold, transferred, or disposed of.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 1/22/2023, Register 245; am 1/5/2024, Register 249
3 AAC 306.335 Health and safety requirements
A retail marijuana store shall comply with each applicable health and safety requirement set out in 3 AAC 306.735.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217
3 AAC 306.340 Testing required for marijuana and marijuana products
A retail marijuana store may not sell, give, distribute, deliver, or offer to sell, give, distribute, or deliver, marijuana or a marijuana product until all laboratory testing required under 3 AAC 306.645 has been completed, and the label required under 3 AAC 306.475 or 3 AAC 306.570 is affixed.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217
3 AAC 306.345 Packaging and labeling
(a) A retail marijuana store shall assure that
(1) marijuana sold on its licensed premises is packaged and labeled in compliance with 3 AAC 306.470 and 3 AAC 306.475;
(2) any marijuana product sold on its licensed premises is packaged and labeled in compliance with 3 AAC 306.565 and 3 AAC 306.570;
(3) at the point of sale, marijuana or a marijuana product sold is packaged in resealable, child-resistant packaging designed or constructed to be significantly difficult for children under five years of age to open, but not normally difficult for adults to use properly; and
(4) unless already packaged by the cultivation facility or the manufacturing facility in an opaque package for final retail sale, any marijuana or marijuana product purchased by the consumer is placed in an opaque package by the retail marijuana store or the consumer before the consumer exits the retail marijuana store.
(b) In addition to labeling requirements provided in (a) of this section, a retail marijuana store shall affix a label to each package of marijuana or marijuana product that
(1) identifies the retail marijuana store selling the marijuana product by name or distinctive logo and marijuana establishment license number;
(2) states the estimated amount of THC in the labeled product; and
(3) contains each of the following statements:
(A) "Marijuana has intoxicating effects and may be habit forming and addictive.";
(B) "Marijuana impairs concentration, coordination, and judgment. Do not operate a vehicle or machinery under its influence.";
(C) "There are health risks associated with consumption of marijuana.";
(D) "For use only by adults twenty-one and older. Keep out of the reach of children.";
(E) "Marijuana should not be used by women who are pregnant or breast feeding.".
(c) In this section, "opaque" means a packaging material that does not allow the contents of the package to be seen without opening the package.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 11/8/2018, Register 228; am 12/5/2021, Register 240
3 AAC 306.350 Identification requirement to prevent sale to person under 21
(a) A retail marijuana store shall refuse to sell marijuana or a marijuana product or complete a walk-up or drive-through exterior window order of marijuana or marijuana product to a person who does not produce a form of valid photographic identification showing that person is 21 years of age or older.
(b) For the purposes of this section, a valid form of photographic identification is
(1) an unexpired, unaltered passport;
(2) an unexpired, unaltered driver's license, instruction permit, or identification card of a state or territory of the United States, the District of Columbia, or a province or territory of Canada;
(3) an identification card issued by a federal or state agency authorized to issue a driver's license or identification card; or
(4) a tribal identification card, issued by a federally recognized tribe, that meets the following criteria:
(A) the identification card has a photograph, a signature, and a date of birth; and
(B) the identification card has security features as identified by AS 28.15.111(a)(4).
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 9/24/2021, Register 239; am 8/13/2023, Register 247
3 AAC 306.355 Limit on quantity sold
(a) A retail marijuana store may not sell to any one person per day
(1) more than one ounce of usable marijuana;
(2) more than seven grams of marijuana concentrate for inhalation; or
(3) more than 5,600 milligrams of THC in combined sales of marijuana and marijuana products.
(b) The limits set out in (a) of this section include marijuana or marijuana product sold for onsite consumption under 3 AAC 306.370.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 4/11/2019, Register 230; am 10/18/2020, Register 236
3 AAC 306.360 Restriction on advertising of marijuana and marijuana products
Repealed.
History
- Eff. 2/21/2016, Register 217; repealed 10/17/2018, Register 228
3 AAC 306.365 Required consumer notices for retail marijuana stores
(a) A retail marijuana store shall post, in a conspicuous location visible to customers, the following notices:
(1) "Consumption of marijuana in public is prohibited by law.";
(2) "Transportation or carriage of marijuana or marijuana products on Alaska waterways, including cruise ships, or by air carrier is prohibited by federal law.";
(3) "Transportation or shipment of marijuana or marijuana products outside the State of Alaska is prohibited by federal law.";
(4) "Providing marijuana to persons under 21 years of age is prohibited by law."
(b) Notification signs required under (a) of this section must be at least 11 inches by 14 inches in size. Lettering must be at least one-half inch in height and in colors that contrast with the background.
History
- Authority: AS 17.38.190; AS 17.38.220; AS 17.38.900
- Eff. 7/22/2017, Register 223
3 AAC 306.370 Onsite consumption endorsement for retail marijuana stores
(a) Unless prohibited by local or state law, the board may approve an onsite consumption endorsement for a licensed retail marijuana store for consumption, on the marijuana retail store premises,
(1) of edible marijuana products only, in compliance with this section, in an indoor or outdoor area, regardless of whether the licensed retail marijuana store is freestanding;
(2) by any method, in compliance with this section, in an indoor or outdoor area of a freestanding licensed retail marijuana store.
(b) A licensed retail marijuana store with an approved onsite consumption endorsement is authorized to sell, for consumption at the time of purchase and only in an area designated as the marijuana consumption area,
(1) marijuana bud or flower, in quantities not to exceed one gram to any one person per day;
(2) edible marijuana products in quantities not to exceed 25 milligrams of THC to any one person per day; and
(3) a vaping device that contains not more than 0.3 grams of marijuana concentrate to any one person per day; a person may not consume marijuana concentrate onsite by a means other than vaping as described in this paragraph.
(c) A licensed retail marijuana store with an approved onsite consumption endorsement may
(1) sell food or beverages not containing marijuana or alcohol; and
(2) allow a person to remove from the licensed premises marijuana or marijuana products that have been purchased on the licensed premises for consumption under this section, if they are packaged in accordance with 3 AAC 306.345.
(d) A licensed retail marijuana store with an approved onsite consumption endorsement may not
(1) allow any licensee, employee, or agent of a licensee to consume marijuana or marijuana products, including marijuana concentrate, during the course of a work shift;
(2) allow a person to consume tobacco or tobacco products in the marijuana consumption area;
(3) allow a person to bring into or consume in the marijuana consumption area any marijuana or marijuana products that were not purchased at the licensed retail marijuana store;
(4) sell, offer to sell, or deliver marijuana or marijuana products at a price less than the price regularly charged for the marijuana or marijuana products during the same calendar week;
(5) sell, offer to sell, or deliver an unlimited amount of marijuana or marijuana products during a set period of time for a fixed price;
(6) sell, offer to sell, or deliver marijuana or marijuana products on any one day at prices less than those charged the general public on that day;
(7) encourage or permit an organized game or contest on the licensed premises that involves consuming marijuana or marijuana products or the awarding of marijuana or marijuana products as prizes; or
(8) advertise or promote in any way, either on or off the licensed premises, a practice prohibited under this section.
(e) A marijuana consumption area must have the following characteristics:
(1) if consumption would be permitted by any method under 3 AAC 306.370(a)(2), the marijuana consumption area must
(A) be isolated from the other areas of the retail marijuana store;
(B) be separated by walls and a secure door; and
(C) have access only from the retail marijuana store;
(2) the licensed marijuana retail store must provide a smoke-free area for employees to monitor the marijuana consumption area;
(3) a marijuana consumption area that is indoors and in which smoking is permitted must have a ventilation system
(A) that is separate from the ventilation system of the other areas of the licensed retail marijuana store or other licensed marijuana establishments in a freestanding building; and
(B) that directs air from the marijuana consumption area to the outside of the building through a filtration system sufficient to remove visible smoke, consistent with all applicable building codes and ordinances, and adequate to eliminate odor at the property line;
(4) if outdoors, the marijuana consumption area must be found by the board to be compatible with uses in the surrounding area through evaluation of
(A) neighboring uses;
(B) the location of air intake vents on neighboring buildings, if consumption by smoking is permitted;
(C) a sight-obscuring wall or fence around the outdoor marijuana consumption area;
(D) objections of property owners, residents, and occupants within 250 linear feet or the notification distance required by the local government, whichever is greater; and
(E) any other information the board finds relevant.
(f) An applicant for an onsite consumption endorsement must file an application on a form the board prescribes, including the endorsement fee set out in 3 AAC 306.100, and
(1) the applicant's operating plan, in a format the board prescribes, describing the retail marijuana store's plan for
(A) security, in addition to what is required for a retail marijuana store, including
(i) doors and locks;
(ii) windows;
(iii) measures to prevent diversion; and
(iv) measures to prohibit access to persons under 21 years of age;
(B) ventilation, if consumption by smoking is to be permitted in an indoor area; ventilation plans must be
(i) signed and approved by a licensed mechanical engineer;
(ii) sufficient to remove visible smoke; and
(iii) consistent with all applicable building codes and ordinances;
(C) monitoring overconsumption;
(D) unconsumed marijuana, by disposal or by packaging in accordance with 3 AAC 306.345; and
(E) preventing introduction into the marijuana consumption area of marijuana or marijuana products not sold by the retail marijuana store, and marijuana or marijuana products not sold specifically for onsite consumption;
(2) the applicant's detailed diagram of the marijuana consumption area which must show the location of
(A) the licensed premises of the retail marijuana store;
(B) the serving area or areas;
(C) ventilation exhaust points, if applicable;
(D) the employee monitoring area;
(E) doors, windows, or other exits; and
(F) access control points;
(3) the title, lease, or other documentation showing the applicant's sole right of possession of the proposed marijuana consumption area, if the area is not already part of the approved licensed premises for the retail marijuana store; and
(4) for an outdoor marijuana consumption area,
(A) an affidavit that notice of an outdoor marijuana consumption area has been mailed to property owners, residents, and occupants of properties within 250 linear feet of the boundaries of the property on which the onsite consumption endorsement is proposed, or the notification distance required by the local government, whichever is greater.
(g) The retail marijuana store holding an onsite consumption endorsement under this chapter shall
(1) destroy all unconsumed marijuana left abandoned or unclaimed in the marijuana consumption area in accordance with the operating plan and 3 AAC 306.740;
(2) monitor patrons in the marijuana consumption area at all times, specifically for overconsumption;
(3) display all warning signs required under 3 AAC 306.360 and 3 AAC 306.365 within the marijuana consumption area, visible to all consumers;
(4) provide, at no cost to patrons, written materials containing marijuana dosage and safety information for each type of marijuana or marijuana product sold for consumption in the marijuana consumption area;
(5) package and label all marijuana or marijuana products sold for consumption on the premises as required in 3 AAC 306.345; and
(6) comply with any conditions set by the local government or placed on the endorsement by the board.
(h) The holder of an onsite consumption endorsement must apply for renewal annually at the time of renewal of the underlying retail marijuana store license.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190; AS 18.35.301 AS 17.38.121; AS 17.38.200
- Eff. 4/11/2019, Register 230; am 8/7/2021, Register 239; am 12/8/2024, Register 252
3 AAC 306.380 Walk-up or drive-through exterior window pick-up for retail marijuana stores
(a) Unless prohibited by local law, a licensed retail marijuana store may serve a consumer through a walk-up or drive-through exterior window in compliance with the requirements of this section.
(b) Before accepting orders for sales of marijuana or marijuana products through a walk-up or drive-through exterior window, a licensed retail marijuana store shall submit an operating plan or modification of an operating plan of the licensed premises to the board for approval. The operating plan or modified operating plan must depict the walk-up or drive-through exterior window area and the video surveillance of the walk-up or drive-through exterior window area.
(c) The area immediately outside a walk-up or drive-through exterior window must be under the licensee's sole possession and control and may not include any public property including public streets, public sidewalks, or public parking lots.
(d) The licensed retail marijuana store may accept Internet or telephone orders or may accept orders from the consumer at the walk-up or drive-through exterior window. Internet or telephone orders must be paid for and picked up in person by the consumer placing the order. All orders received through the walk-up or drive-through exterior window must be placed by the consumer from a menu. The retail marijuana store may not display marijuana or marijuana products at the walk-up or drive-through exterior window.
(e) Before completing a sale at a walk-up or drive-through exterior window, the licensee or the employee shall physically view and inspect the consumer's photographic identification. Each person in a vehicle at the drive-through exterior window must be 21 years of age or older, unless the person is the consumer's own child, grandchild, or ward who is not older than seven years of age seated or otherwise required by local or state law to be seated in a car seat or booster seat.
(f) All sales must occur within the licensed premises. This requirement is satisfied if payment is made through the following means:
(1) by an electronic Internet-based payment platform;
(2) by a mobile payment point-of-sale system;
(3) by payment transferred through the walk-up or drive-through exterior window into the interior of the retail marijuana store.
(g) A walk-up or drive-through exterior window area
(1) must be located
(A) so that compromises to security are minimized;
(B) so that for each transfer of marijuana or marijuana product through the walk-up or drive-through exterior window, the licensed retail marijuana store's video surveillance records
(i) the licensee's or employee of the licensee's verification of the consumer's photographic identification; and
(ii) the complete transaction; and
(C) within the licensed premises of the retail marijuana store;
(2) may not be
(A) in a building separate from the licensed premises of the retail marijuana store;
(B) in a movable structure, including a trailer or separate drive-through structure; or
(C) accessible only through a licensed premises of a different license type or the overlapping premises with another license type.
(h) The licensee shall ensure that sales and all interactions at the walk-up or drive-through exterior window are video recorded and the records are stored in compliance with 3 AAC 306.720.
(i) Sales of marijuana or marijuana products via a walk-up or drive-through exterior window are subject to requirements and restrictions imposed by the relevant local government.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 8/13/2023, Register 247; am 12/8/2024, Register 252
Article 4 Marijuana Cultivation Facilities
3 AAC 306.400 Marijuana cultivation facility license required
(a) Except as provided under AS 17.38.020, a person may not plant, propagate, cultivate, harvest, trim, dry, cure, package, or label marijuana grown at a place under that person's control or sell marijuana grown at a place under that person's control to a marijuana establishment unless the person has obtained a marijuana cultivation facility license from the board in compliance with this chapter or is an employee or agent acting for a licensed marijuana cultivation facility. The board will issue the following types of marijuana cultivation facility licenses, with the privileges and subject to the prohibitions set out in 3 AAC 306.405 and 3 AAC 306.410:
(1) a standard marijuana cultivation facility license;
(2) a limited marijuana cultivation facility license to a person operating a marijuana cultivation facility with fewer than 500 square feet under cultivation.
(b) A person seeking a standard or limited marijuana cultivation facility license as provided in (a) of this section must
(1) submit an application for the applicable marijuana cultivation facility license on a form the board prescribes, including the information set out under 3 AAC 306.020 and 3 AAC 306.420; and
(2) demonstrate to the board's satisfaction that the applicant will operate in compliance with
(A) each applicable provision of 3 AAC 306.400 - 3 AAC 306.480 and 3 AAC 306.700 - 3 AAC 306.770; and
(B) each applicable public health, fire, safety, and tax code and ordinance of the state and the local government in which the applicant's proposed licensed premises are located.
(c) A licensee of a marijuana cultivation facility, or an employee or agent of a marijuana cultivation facility, may not have an ownership interest in, or a direct or indirect financial interest in a licensed marijuana testing facility.
History
- Authority: AS 17.38.010; AS 17.38.121; AS 17.38.200 AS 17.38.030; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190
- Eff. 2/21/2016, Register 217
3 AAC 306.405 Standard marijuana cultivation facility: privileges and prohibited acts
(a) A licensed standard marijuana cultivation facility is authorized to
(1) propagate, cultivate, harvest, prepare, cure, package, store, and label marijuana;
(2) sell marijuana only to a licensed retail marijuana store, to another licensed marijuana cultivation facility, or to a licensed marijuana product manufacturing facility;
(3) accept marijuana from a licensed retail marijuana store that
(A) rejected a shipment of marijuana; or
(B) revoked acceptance of a shipment of marijuana;
(4) provide samples to a licensed marijuana testing facility for testing;
(5) store inventory on the licensed premises; any stored inventory must be secured in a restricted access area and accounted for in the marijuana cultivation facility's marijuana inventory tracking system as required under 3 AAC 306.730;
(6) transport marijuana in compliance with 3 AAC 306.750;
(7) conduct in-house testing for the marijuana cultivation facility's own use;
(8) provide marijuana samples to a licensed retail marijuana store or marijuana product manufacturing facility for the purpose of negotiating a sale;
(9) begin initial operations at the time of preliminary inspection by an employee or agent of the board with
(A) 12 or fewer mature, non-flowering plants, designated and used as mother plants;
(B) any number of immature plants; and
(C) any number of seeds for cultivation on the licensed premises;
(10) introduce a new strain after written approval by the director on a form prescribed by the board, by
(A) receiving not more than twenty clones or cuttings from a person 21 years of age or older, without compensation; or
(B) receiving seeds from a person 21 years of age or older, without compensation, for cultivation on the licensed premises.
(b) A licensee of a standard marijuana cultivation facility may also apply for a marijuana product manufacturing facility license, retail marijuana store license, or both. A licensee of a standard marijuana cultivation facility who obtains a marijuana product manufacturing facility license, retail marijuana store license, or both shall
(1) except for overlapping premises approved by the board under 3 AAC 306.710(d), conduct a marijuana product manufacturing operation or retail marijuana store operation in a room separate from any other operation and the marijuana cultivation facility; if the rooms are connected and co-located in an area that is not approved by the board as overlapping premises, a secure door must separate the rooms from each other; a secure door must separate any room connected to and co-located with the marijuana cultivation facility; and
(2) comply with each provision of this chapter that applies to any other type of marijuana establishment license that the licensee of a standard marijuana cultivation facility licensee obtains.
(c) A licensed standard marijuana cultivation facility may not
(1) sell, distribute, or transfer marijuana or a marijuana product to a consumer, with or without compensation;
(2) allow any person, including a licensee, employee, or agent, to consume marijuana or a marijuana product on the licensed premises or within 20 feet of the exterior of any building or outdoor cultivation facility on the licensed premises;
(3) treat or otherwise adulterate marijuana with any organic or nonorganic chemical or other compound to alter the color, appearance, weight, or odor of the marijuana;
(4) sell marijuana that is not packaged and labeled in compliance with 3 AAC 306.470 and 3 AAC 306.475;
(5) introduce marijuana or a marijuana product including plants and seeds, onto the licensed premises from any outside source after the initial preliminary inspection, except
(A) as acquired from another licensed marijuana cultivation facility and accounted for in each marijuana cultivation facility's marijuana inventory tracking system as required under 3 AAC 306.730; or
(B) as provided under this section; or
(6) produce or possess marijuana concentrate that was extracted using any process described in 3 AAC 306.555 on the marijuana cultivation facility's licensed premises, unless the licensee of the standard marijuana cultivation facility also has a marijuana product manufacturing facility license; a licensed standard marijuana cultivation facility must conduct any extraction or production of marijuana concentrate on the premises
(A) in a room that
(i) is separate as required in (b) of this section from the marijuana cultivation area; and
(ii) is posted with a sign that complies with 3 AAC 306.710(b) and warns unauthorized persons to stay out; and
(B) in compliance with all applicable provisions of 3 AAC 306.500 - 3 AAC 306.570.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 10/20/2018, Register 228; am 12/10/2020, Register 236; am 12/31/2023, Register 248; am 1/5/2024, Register 249; am 8/16/2024, Register 251
3 AAC 306.410 Limited marijuana cultivation facility: privileges and prohibited acts
A licensed limited marijuana cultivation facility
(1) has the privileges set out in 3 AAC 305.405(a) and (b), except that it must have fewer than 500 square feet under cultivation; and
(2) is subject to each prohibition set out in 3 AAC 306.405(c).
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217
3 AAC 306.420 Application for marijuana cultivation facility license
An applicant for a new standard marijuana cultivation facility license or a new limited marijuana cultivation facility license must file an application on a form the board prescribes, including
(1) the information required under 3 AAC 306.020; and
(2) the proposed marijuana cultivation facility's operating plan, including, in addition to the infonnation required under 3 AAC 306.020(c),
(A) the size of the space intended to be under cultivation;
(B) the growing medium to be used;
(C) fertilizers, chemicals, gases, and delivery systems, including carbon dioxide, management, to be used;
(D) the irrigation and waste water systems to be used;
(E) waste disposal arrangements;
(F) odor control; and
(G) the testing procedure and protocols the marijuana cultivation facility will follow.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217
3 AAC 306.425 Marijuana handler permit required
A marijuana cultivation facility shall ensure that each agent who is required or permitted to be physically present on the licensed premises at any time, each licensee, and each employee
(1) obtains a marijuana handler permit as provided in 3 AAC 306.700 before being licensed or employed at the marijuana cultivation facility's licensed premises; and
(2) has the marijuana handler permit card in the person's immediate possession, or a valid copy on file on the premises, at all times while on the marijuana cultivation facility's licensed premises.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 2/21/2019, Register 229
3 AAC 306.430 Restricted access area
(a) A marijuana cultivation facility shall conduct any operation in a restricted access area in compliance with 3 AAC 306.710 and this section.
(b) A marijuana cultivation facility shall conduct any marijuana growing operation within a fully enclosed secure indoor facility or greenhouse with rigid walls, a roof, and doors. Where not prohibited by local government, outdoor production may take place in non-rigid greenhouses, other structures, or an expanse of open or cleared ground fully enclosed by a physical barrier. To obscure public view of the premises, outdoor production must be enclosed by a sight-obscuring wall or fence at least six feet high.
(c) A marijuana cultivation facility shall ensure that any marijuana at the marijuana cultivation facility
(1) cannot be observed by the public from outside the marijuana cultivation facility; and
(2) does not emit an odor that is detectable by the public from outside the cultivation facility except as specifically allowed by a local government approval.
(d) A marijuana cultivation facility shall have full video surveillance of the licensed premises as required under 3 AAC 306.720, including any area where marijuana is grown, processed, packaged, or stored, or where marijuana waste is destroyed.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 8/11/2018, Register 227
3 AAC 306.435 Marijuana inventory tracking system
(a) A marijuana cultivation facility shall
(1) use a marijuana inventory tracking system in compliance with 3 AAC 306.730 to ensure all marijuana propagated, grown, or cultivated on the marijuana cultivation facility's premises is identified and tracked from the time the marijuana is propagated through transfer to another licensed marijuana establishment, including when marijuana or marijuana product is
(A) relocated to a new licensed premises in the case of a transfer of a marijuana establishment license to another location approved by the board; or
(B) destroyed;
(2) assign a tracking number to each
(A) plant that is
(i) mature; or
(ii) flowering; and
(B) package of marijuana to be transferred to another facility; a package of marijuana may not exceed 10 pounds;
(3) assign a plant batch name or number to each batch of immature plants propagated from seed, clones, or cuttings.
(b) A marijuana cultivation facility shall record each sale and transport of any plants or seeds and each package in its marijuana inventory tracking system and shall generate a valid transport manifest to accompany any transported plants and seeds and each transported package.
(c) A marijuana cultivation facility shall record in its marijuana inventory tracking system all marijuana used to provide a sample authorized under 3 AAC 306.460 for the purpose of negotiating sales, including
(1) the amount of each sample;
(2) the retail marijuana store or marijuana product manufacturing facility that received the sample; and
(3) the disposal of any expired or outdated promotional sample returned to the marijuana cultivation facility.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 3/13/2020, Register 233; am 1/22/2023, Register 245; am 8/16/2024, Register 251; am 4/20/2025, Register 254; am 4/25/2025, Register 254
3 AAC 306.440 Health and safety requirements
(a) A marijuana cultivation facility shall comply with all applicable health and safety requirements set out in 3 AAC 306.735 and the additional requirements set out in this section.
(b) A marijuana cultivation facility shall ensure that any licensee, employee, or agent who is present at the marijuana cultivation facility and in contact with any marijuana
(1) wears clean clothing appropriate for the duties that person performs;
(2) wears protective apparel, such as head, face, hand, and arm coverings, as necessary to protect marijuana from contamination; and
(3) practices good sanitation and health habits.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217
3 AAC 306.445 Standards for cultivation and preparation
(a) A marijuana cultivation facility shall use registered scales in compliance with AS 45.75.080 and 3 AAC 306.745.
(b) A marijuana cultivation facility shall segregate harvested marijuana into harvest batches.
(c) Once a harvest batch has been uniformly dried and cured, the marijuana cultivation facility shall divide the harvest batch into packages not exceeding 10 pounds each. A sample of each harvest batch package must be submitted to a marijuana testing facility for required testing under 3 AAC 306.455.
(d) Once a harvest batch sample has passed all required testing, a marijuana cultivation facility may repackage marijuana from that harvest batch package for sale or transfer.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 3/13/2020, Register 233
3 AAC 306.450 Production of marijuana concentrate prohibited
Repealed.
History
- Eff. 2/21/2016, Register 217; repealed 12/10/2020, Register 236
3 AAC 306.455 Required laboratory testing
(a) A marijuana cultivation facility shall provide samples from each harvest batch package of marijuana produced at the facility to a marijuana testing facility and may not sell or transport any marijuana, except as provided for in (c) of this section, until all laboratory testing required under 3 AAC 306.645 has been completed.
(b) To comply with (a) of this section, a marijuana cultivation facility shall
(1) collect a representative sample for testing from each harvest batch package that has been uniformly dried and cured, in an amount as set out in the following table:
Harvest Batch Package SizeNumber of 1g sub-samples to make up required sample (pounds) 14 24 35 46 58 6 10 7 11 8 13 9 14 10 16
(2) designate an individual responsible for collecting each sample; that individual shall
(A) prepare a signed statement showing that each sample is representative of the harvest batch package;
(B) provide the signed statement to the marijuana testing facility; and
(C) maintain a copy as a business record under 3 AAC 306.755; and
(3) transport the samples to the marijuana testing facility's licensed premises in compliance with 3 AAC 306.750.
(c) A marijuana cultivation facility shall segregate the harvest batch package from which the testing sample was selected until the marijuana testing facility reports the results from its tests. During this period of segregation, the marijuana cultivation facility that provided the sample shall maintain the harvest batch package in a secure, cool, and dry location to prevent the marijuana from becoming contaminated or losing its efficacy. The marijuana cultivation facility that provided the sample may not sell or transport any marijuana from the segregated harvest batch package until the marijuana testing facility has completed its testing and provided those results, in writing, to the marijuana cultivation facility that provided the sample. A marijuana cultivation facility may transfer untested marijuana to a licensed marijuana concentrate or standard marijuana product manufacturing facility to be used to make carbon dioxide- or solvent-based extract before receiving test results in writing. After processing, the carbon dioxide- or solvent-based extract must pass all required tests. The marijuana cultivation facility shall maintain the testing results as part of its business books and records.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 11/8/2018, Register 228; am 3/13/2020, Register 233; am 4/16/2023, Register 246
3 AAC 306.460 Samples
(a) A marijuana cultivation facility may provide a free sample of marijuana to a retail marijuana store if packaged in a sample jar containing not more than three and one-half grams of marijuana and protected by a plastic or metal mesh screen to allow the retail marijuana store to smell the product before purchase.
(b) A marijuana cultivation facility may provide a free sample of marijuana to a retail marijuana store or marijuana product manufacturing facility as follows:
(1) a sample provided for the purpose of negotiating a sale may be not more than one ounce;
(2) a marijuana cultivation facility may not provide any one licensed retail marijuana store or marijuana product manufacturing facility with more than one ounce of marijuana per month free-of-charge for the purpose of negotiating a sale.
(c) A retail marijuana store that receives a marijuana sample may not sell the marijuana sample to a customer, and shall either
(1) return the marijuana sample to the marijuana cultivation facility that provided the sample; or
(2) destroy the marijuana sample after use and document the destruction in the retail marijuana store's marijuana inventory control system.
(d) A marijuana cultivation facility may provide a sample of marijuana grown at that facility to an employee of the facility, who is in possession of a valid marijuana handler card for the purpose of quality control only if
(1) samples provided to employees for quality control do not exceed a cumulative total of one ounce per 30-day period;
(2) each sample is registered and tracked using the marijuana inventory tracking system in accordance with 3 AAC 306.730;
(3) consumption of marijuana does not occur on the licensed premises;
(4) no sample provided under this subsection is sold or given to another licensee or consumer;
(5) each employee who receives a marijuana sample for the purpose of quality control completes a quality control form approved by the board for each sample;
(6) the licensee maintains copies of completed forms required under (5) of this subsection in accordance with 3 AAC 306.755;
(7) samples that leave the licensed premises are packaged in opaque, resealable, child resistant packaging and clearly marked or labeled "For Quality Control" and the packaging is designed or constructed to be significantly difficult for children under five years of age to open, but not normally difficult for adults to use properly; and
(8) each sample is tested under 3 AAC 306.455 and 3 AAC 306.645 before being provided to an employee under this section.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 5/25/2018, Register 226; am 11/8/2018, Register 228; am 5/9/2019, Register 230; am 12/25/2020, Register 236
3 AAC 306.465 Random sampling
(a) The board will or the director shall from time to time require a standard or limited marijuana cultivation facility to provide samples of the growing medium, soil amendments, fertilizers, crop production aids, pesticides, or water for random compliance checks. The sample may be screened for pesticides and chemical residues, screened for unsafe levels of metals, and used for other laboratory tests the director finds to be in the interests of the public. The marijuana cultivation facility shall bear all costs of testing under this subsection.
(b) When the board or the director orders random sampling under this section, the director shall identify a licensed marijuana testing facility to perform the testing. The marijuana testing facility shall collect the test samples. The marijuana cultivation facility shall cooperate to facilitate the collection of samples.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217
3 AAC 306.470 Packaging of marijuana
(a) A marijuana cultivation facility shall package its marijuana bud and flower for sale
(1) to a retail marijuana store, either
(A) in a package not exceeding one ounce for resale to consumers without additional handling by the retail marijuana store except to add the retail marijuana store's own
(i) identifying name or logo; and
(ii) license number; or
(B) in a wholesale package not exceeding 10 pounds for repackaging by the retail marijuana store; or
(2) to a marijuana product manufacturing facility in a wholesale package
(A) not exceeding 10 pounds; and
(B) consisting of a single strain or a mixture of strains as identified on the label.
(b) When a marijuana cultivation facility packages marijuana for a retail marijuana store to sell to a consumer without repackaging, the packaging may not have any printed images, including cartoon characters, that specifically target persons under 21 years of age. In addition, the packaging must protect the product from contamination and may not impart any toxic or damaging substance to the marijuana.
(c) Each package prepared in compliance with this section must be identified by a tracking label generated for tracking by the marijuana cultivation facility's marijuana inventory tracking system.
(d) A marijuana cultivation facility shall prepare marijuana for transport or transfer to another marijuana establishment by
(1) placing marijuana packaged in compliance with (a) - (c) of this section within a sealed, tamper-evident shipping container;
(2) affixing a label in compliance with 3 AAC 306.475 to the shipping container; and
(3) generating a transport manifest from the marijuana cultivation facility's marijuana inventory tracking system; the transport manifest must remain with the marijuana at all times while being transported, and a copy must be given to the licensed marijuana establishment that receives the shipment.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 3/13/2020, Register 233
3 AAC 306.475 Labeling of marijuana
(a) When a marijuana cultivation facility packages marijuana for a retail marijuana store to sell to a consumer without re-packaging, the marijuana cultivation facility shall affix a label to each package of marijuana or marijuana product that contains each of the following statements:
(1) "Marijuana has intoxicating effects and may be habit forming and addictive.";
(2) "Marijuana impairs concentration, coordination, and judgment. Do not operate a vehicle or machinery under its influence.";
(3) "There are health risks associated with consumption of marijuana.";
(4) "For use only by adults twenty-one and older. Keep out of the reach of children.";
(5) "Marijuana should not be used by women who are pregnant or breast feeding.".
(b) With each harvest batch of marijuana sold, a marijuana cultivation facility shall disclose in writing
(1) each soil amendment, fertilizer, and other crop production aid applied to the growing medium or marijuana plant included in the batch, including any pesticide, herbicide, or fungicide that was used; and
(2) the name of the licensed marijuana testing facility that performed any required laboratory test and the results of each required laboratory test.
(c) A marijuana cultivation facility may not label marijuana as organic.
(d) To each package of marijuana sold to another marijuana establishment, a marijuana cultivation facility shall affix a label setting out.
(1) the name and license number of the marijuana cultivation facility where the marijuana was grown;
(2) the inventory tracking number assigned to the marijuana in the package;
(3) the net weight of the marijuana in the package,
(A) not including weight of the shipping container; and
(B) using a standard of measure compatible with the marijuana cultivation facility's marijuana inventory tracking system; and
(4) a complete list of all pesticides, fungicides, and herbicides used in cultivation of the marijuana.
(e) If a marijuana cultivation facility transports wholesale marijuana to another marijuana establishment for sale at retail or for use in manufacturing a marijuana product, a label must be affixed to the shipping container showing that a licensed marijuana testing facility has tested each harvest batch in the shipment as provided in 3 AAC 306.645. The label must report the test results, including
(1) a cannabinoid potency profile expressed as a range of percentages that extends from the lowest percentage to highest percentage of concentration for each cannabinoid listed from every test conducted on that strain of marijuana from the same marijuana cultivation facility within the last three months;
(2) a statement listing the results of microbial testing required under 3 AAC 306.645(b)(2); and
(3) a statement listing the results of residual solvent testing required under 3 AAC 306.645(b)(3), if applicable.
(f) If a marijuana cultivation facility ships wholesale marijuana from a harvest batch that has not been tested for each contaminant listed in (g) of this section, the label for that batch must include a statement identifying each contaminant listed in (g) of this section for which that harvest batch has not been tested.
(g) If a marijuana cultivation facility transports wholesale marijuana to another marijuana establishment for sale at retail or for use in manufacturing a marijuana product, the marijuana cultivation facility shall produce a statement that lists contaminants for which the wholesale marijuana was tested in addition to the contaminant testing required under 3 AAC 306.645(b) immediately upon request of the receiving marijuana establishment. Additional tested contaminants may include
(1) molds, mildew, and filth;
(2) herbicides, pesticides, and fungicides; and
(3) harmful chemicals.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 11/8/2018, Register 228; am 4/19/2025, Register 254
3 AAC 306.480 Marijuana tax to be paid
A marijuana cultivation facility shall submit monthly reports to the Department of Revenue and pay the excise tax required under AS 43.61.010 and 43.61.020 on all marijuana sold or provided as a sample to a marijuana establishment.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 1/5/2024, Register 249
Article 5 Marijuana Product Manufacturing Facilities
3 AAC 306.500 Marijuana product manufacturing facility license required
(a) A person may not extract marijuana concentrate for sale or formulate or manufacture any marijuana product for sale unless that person has obtained a marijuana product manufacturing facility license from the board in compliance with this chapter, or is an employee or agent acting for a licensed marijuana product manufacturing facility. The board will issue
(1) a standard marijuana product manufacturing facility license; and
(2) a marijuana concentrate manufacturing facility license.
(b) Repealed 1/22/2023.
(c) A licensee of a marijuana product manufacturing facility, or an employee or agent of a marijuana product manufacturing facility, may not have an ownership interest in or a direct or indirect financial interest in a licensed marijuana testing facility.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 1/22/2023, Register 245
3 AAC 306.505 Marijuana product manufacturing facility privileges
(a) Except as provided in 3 AAC 306.515, a licensed marijuana product manufacturing facility is authorized to
(1) purchase marijuana from a marijuana cultivation facility or from another marijuana product manufacturing facility;
(2) extract marijuana concentrate in compliance with 3 AAC 306.555;
(3) manufacture, refine, process, cook, package, label, and store marijuana product approved under 3 AAC 306.525, including
(A) marijuana concentrate; or
(B) any product intended for consumption or use on the body that is comprised of marijuana and other ingredients, including edible products, ointments, salves, patches, or tinctures;
(4) sell, distribute, or deliver marijuana extract or any marijuana product only to a licensed retail marijuana store or to another licensed marijuana product manufacturing facility;
(5) reject or revoke acceptance of marijuana purchased from a licensed marijuana cultivation facility or another marijuana product manufacturing facility;
(6) accept marijuana product from a licensed retail marijuana store or another marijuana product manufacturing facility that
(A) rejected a shipment of marijuana product; or
(B) revoked acceptance of a shipment of marijuana product;
(7) provide and transport samples of marijuana concentrate or other marijuana product to a licensed marijuana testing facility for testing;
(8) provide a sample of marijuana concentrate or a marijuana product approved under 3 AAC 306.525 to a licensed retail marijuana store for the purpose of negotiating a sale;
(9) store inventory in a restricted access area on the licensed premises as provided in 3 AAC 306.535;
(10) transport marijuana in compliance with 3 AAC 306.750;
(11) conduct in-house testing for the marijuana product manufacturing facility's own use.
(b) A licensee of a marijuana product manufacturing facility may also apply for a marijuana cultivation facility license, retail marijuana store license, or both. A licensee of a marijuana product manufacturing facility who obtains a marijuana cultivation facility license, retail marijuana store license, or both shall
(1) except for overlapping premises approved by the board under 3 AAC 306.710(d), conduct a marijuana cultivation operation or retail marijuana store operation in a room separate from any other operation and the marijuana product manufacturing facility; if the rooms are connected and co-located in an area that is not approved by the board as overlapping premises, a secure door must separate the rooms from each other; a secure door must separate any room connected to and co-located with the marijuana product manufacturing facility; and
(2) comply with each provision of this chapter that applies to any other type of marijuana establishment license that the licensee of a marijuana product manufacturing facility obtains.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 12/10/2020, Register 236; am 4/16/2023, Register 246; am 1/5/2024, Register 249; am 8/16/2024, Register 251
3 AAC 306.510 Acts prohibited at marijuana product manufacturing facility
(a) A licensed marijuana product manufacturing facility may not
(1) sell, deliver, distribute, or transfer marijuana, marijuana concentrate, or a marijuana product directly to a consumer, with or without compensation;
(2) sell marijuana, marijuana concentrate, or a marijuana product that is not manufactured, packaged, and labeled in compliance with 3 AAC 306.500 - 3 AAC 306.570;
(3) allow any person, including a licensee, employee, or agent, to consume marijuana, marijuana concentrate, or a marijuana product on the licensed premises;
(4) manufacture or sell any product that
(A) is an adulterated food or drink;
(B) closely resembles a familiar food or drink item including candy; or
(C) is packaged to look like candy, or in bright colors or with cartoon characters or other pictures or images that would appeal to children.
(b) A licensed marijuana product manufacturing facility may not accept any marijuana from a marijuana cultivation facility or another marijuana product manufacturing facility unless
(1) all marijuana in the shipment is properly identified with a label generated in the marijuana inventory tracking system of the facility that provided the marijuana; and
(2) a valid transport manifest showing the source and destination of the marijuana is attached to the shipment.
(c) In this section, "closely resemble" or "look like" means the product or its packaging has a shape, color, markings, or decorative patterns that are familiar to the public from a widely distributed branded food product, so that the marijuana product could reasonably be mistaken for that branded product, especially by children.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 4/16/2023, Register 246
3 AAC 306.515 Marijuana concentrate manufacturing facility license
A licensed marijuana concentrate manufacturing facility has the privileges set out in 3 AAC 306.505, except that it may not
(1) manufacture, refine, process, cook, package, label, or store any marijuana product other than marijuana concentrate;
(2) sell, distribute, or deliver a marijuana product other than marijuana concentrate to a retail marijuana store or to another marijuana product manufacturing facility;
(3) provide or transport a sample of a marijuana product other than marijuana concentrate to a licensed marijuana testing facility for testing;
(4) provide samples of a product other than marijuana concentrate to a licensed retail marijuana store for purposes of negotiating a sale; or
(5) prepare or package infused dairy butter, oils, or fats as a stand-alone edible product for sale other than on wholesale to another marijuana product manufacturing facility.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 4/16/2023, Register 246
3 AAC 306.520 Application for marijuana product manufacturing facility license
An applicant for a marijuana product manufacturing facility license must file an application on a form the board prescribes, and provide the information required under 3 AAC 306.020 and
(1) file an application on a form the board prescribes, including the information required under 3 AAC 306.020 and
(A) repealed 6/13/2024;
(B) a diagram of the proposed license premises required in 3 AAC 306.020(b), identifying the area where
(i) in-house testing, if any, will occur;
(ii) marijuana and any marijuana product, including marijuana concentrate, will be stored;
(C) the applicant's operating plan required under 3 AAC 306.020(c), which includes a description of
(i) the equipment, solvents, gases, chemicals, and other compounds used to create concentrates and the processes to be used;
(ii) each marijuana product the applicant intends to process at this location;
(iii) the color, shape, texture, ingredients and standard production procedure to be used;
(iv) the additional information required for product approval in 3 AAC 306.525;
(D) the packaging to be used for each type of product;
(E) sample labels showing how the labeling information required in 3 AAC 306.570 will be set out;
(F) the applicant's plan for disposal of waste; and
(2) demonstrate, to the board's satisfaction, that the applicant will operate in compliance with
(A) each applicable provision of 3 AAC 306.500 - 3 AAC 306.570 and 3 AAC 306.700 - 3 AAC 306.770; and
(B) each applicable public health, fire, safety, and tax code and ordinance of the state and the local government in which the applicant's proposed licensed premises are located.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 7/27/2017, Register 223; am 1/22/2023, Register 245; am 4/16/2023, Register 246; am 6/13/2024, Register 250
3 AAC 306.525 Approval of concentrates and marijuana products
(a) A marijuana product manufacturing facility must obtain the board's approval for each product that it will manufacture for sale or transfer to another licensed marijuana establishment. A standard marijuana product manufacturing facility must obtain the board's approval for each product that it will use as an in-house ingredient in another marijuana product. The board will not approve a marijuana product that is prohibited under 3 AAC 306.510(a)(4).
(b) An applicant for a marijuana product manufacturing facility license may request the board's approval of its intended products with a new license application by including, in its operating plan
(1) a photograph, drawing, or graphic representation of the expected appearance of each final product; and
(2) the proposed standard production procedure and detailed manufacturing process for each product.
(c) A licensed marijuana product manufacturing facility may submit at any time a new product approval request to the board on a form the board prescribes along with the fee required under 3 AAC 306.100(c).
(d) A licensed marijuana product manufacturing facility shall keep its ingredient list and potency limits for any food-based concentrate or food product containing marijuana on file at the marijuana product manufacturing facility's licensed premises. The ingredient list and potency limits for any product manufactured at the facility must be made available for inspection on request by the director, or an employee or agent of the board.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 4/16/2023, Register 246
3 AAC 306.530 Marijuana handler permit and food safety worker training
(a) A marijuana product manufacturing facility shall ensure that each agent who is required or permitted to be physically present on the licensed premises at any time, each licensee, and each employee
(1) obtains a marijuana handler permit as provided in 3 AAC 306.700 before being licensed or employed at the marijuana product manufacturing facility's licensed premises; and
(2) has the marijuana handler permit card in the person's immediate possession, or a valid copy on file on the premises, at all times while on the marijuana product manufacturing facility's licensed premises.
(b) A licensee, employee, or agent of a marijuana product manufacturing facility who handles marijuana at the facility shall obtain a food worker card in compliance with 18 AAC 31.330 and keep that card in that person's possession at all times while on the licensed premises of the marijuana product manufacturing facility.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 2/21/2019, Register 229; am 4/16/2023, Register 246
3 AAC 306.535 Restricted access and storage areas
(a) A marijuana product manufacturing facility shall conduct any extraction or product manufacturing operation in a restricted access area in compliance with 3 AAC 306.710.
(b) A marijuana product manufacturing facility shall have full video surveillance of the licensed premises as provided in 3 AAC 306.720, including each area where
(1) marijuana concentrate is produced;
(2) any operation involved in manufacturing any product containing marijuana occurs;
(3) marijuana or a marijuana product is stored or stockpiled; or
(4) marijuana waste is destroyed.
(c) Any area where marijuana or a marijuana product is stored must be moisture- and temperature-controlled and protected from pests and vermin.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217
3 AAC 306.540 Marijuana inventory tracking system
(a) A marijuana product manufacturing facility shall use a marijuana inventory tracking system as provided in 3 AAC 306.730 to ensure that the marijuana product manufacturing facility identifies and tracks any marijuana or marijuana product from the time the marijuana or marijuana product is received, through
(1) use of the marijuana or marijuana product in manufacturing any other marijuana product;
(2) sale or transfer of the marijuana or marijuana product originally received, or any marijuana product manufactured at that marijuana product manufacturing facility to another licensed marijuana establishment;
(3) return of marijuana product from a licensed retail marijuana store or another marijuana product manufacturing facility that
(A) rejected a shipment of marijuana product; or
(B) revoked acceptance of a shipment of marijuana product;
(4) disposal of any expired or outdated marijuana or marijuana product that is not sold or transferred to another licensed marijuana establishment; and
(5) relocation of marijuana or marijuana product to the new licensed premises in the case of a transfer of a marijuana establishment license to another location approved by the board.
(b) When marijuana from a marijuana cultivation facility or a marijuana product from another marijuana product manufacturing facility is delivered or transported to the licensed premises of a marijuana product manufacturing facility, the marijuana product manufacturing facility shall immediately enter tracking information for that marijuana or marijuana product into the marijuana inventory tracking system. A marijuana product manufacturing facility may not accept any marijuana or marijuana product that does not have a valid transport manifest generated from the marijuana inventory tracking system of the licensed marijuana establishment that supplies the marijuana or marijuana product.
(c) A marijuana product manufacturing facility shall track any received marijuana or marijuana product to its use in a marijuana product, and shall reconcile each transaction to the marijuana product manufacturing facility's marijuana inventory tracking system at the close of business each day.
(d) A marijuana product manufacturing facility shall account for any variance in the quantity of marijuana or marijuana product the facility received, and the quantity the facility sold, transferred, or disposed of.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 1/22/2023, Register 245; am 1/5/2024, Register 249
3 AAC 306.545 Health and safety standards
(a) A marijuana product manufacturing facility shall comply with the health and safety standards set out in 3 AAC 306.735, 18 AAC 31 (Alaska Food Code), if applicable, and any local kitchen-related health and safety standards for retail food establishments.
(b) In addition to inspection by the director or an employee or agent of the board, a marijuana product manufacturing facility is subject to inspection by local safety officials, including a local fire department, building inspector, or code enforcement officer.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217
3 AAC 306.550 Required laboratory testing
(a) A marijuana product manufacturing facility shall provide a sample of each marijuana product manufactured at the facility to a licensed marijuana testing facility, and may not sell or transport a marijuana product until all laboratory testing required under 3 AAC 306.645 has been completed.
(b) To comply with (a) of this section, a marijuana product manufacturing facility shall
(1) collect a random sample for testing by selecting a product from each production lot in an amount required by the marijuana testing facility;
(2) designate an individual responsible for collecting each sample; that individual shall
(A) prepare a signed statement showing that each sample has been randomly selected for testing;
(B) provide the signed statement to the marijuana testing facility; and
(C) maintain a copy as a business record under 3 AAC 306.755; and
(3) transport the sample to the marijuana testing facility in compliance with 3 AAC 306.750.
(c) After collecting and transporting a sample for testing, a marijuana product manufacturing facility shall segregate the entire production lot from which the testing sample was selected until the marijuana testing facility reports the results from its tests. During this period of segregation, the marijuana product manufacturing facility that provided the sample shall maintain the production lot in a secure, cool, and dry location to prevent the marijuana product from becoming contaminated or losing its efficacy. The marijuana product manufacturing facility may not sell or transport any marijuana product from the segregated lot until the marijuana testing facility has completed its testing and analysis and provided those results, in writing, to the marijuana product manufacturing facility that provided the sample. The marijuana product manufacturing facility shall maintain the testing results as part of its business records.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217
3 AAC 306.555 Production of marijuana concentrate
(a) Before producing marijuana concentrate for sale, a marijuana product manufacturing facility shall develop standard operating procedures, good manufacturing practices, a safety plan, and a training plan for each individual employed in an extraction process.
(b) A marijuana product manufacturing facility may create marijuana concentrates only as follows:
(1) water-based marijuana concentrate may be produced by extracting cannabinoids from marijuana by using only water, ice, or dry ice;
(2) food-based marijuana concentrate may be produced by extracting cannabinoids from marijuana through the use of propylene glycol, glycerin, butter, olive oil, or other typical cooking fats; infused dairy butter, oils, or fats derived from natural sources may be used to prepare infused edible products;
(3) solvent-based marijuana concentrate may be produced using the hydrocarbons N-butane, isobutane, propane, or heptane or other solvents or gases the board approves that exhibit low to minimal potential human health-related toxicity; approved solvents must be of at least 99 percent purity and must be used
(A) in a professional grade closed-loop extraction system designed to recover the solvents;
(B) in an environment with proper ventilation; and
(C) with control of all sources of ignition if a flammable atmosphere is or may be present.
(c) A marijuana product manufacturing facility using a professional grade c1osed-loop gas extraction system shall ensure that
(1) each vessel is used in compliance with the manufacturer's stated pressure ratings;
(2) any carbon dioxide used is of at least 99 percent purity;
(3) a person using a solvent or gas to extract marijuana concentrate in the closed-loop system is fully trained on how to use the system, has direct access to applicable material safety data sheets, and handles and stores the solvent and gas safely;
(4) a licensed engineer has certified that the professional grade closed-loop system was commercially manufactured, is safe for its intended use, and is built to codes of recognized and generally accepted engineering practices; and
(5) any professional grade closed-loop system, and other equipment and facilities used in the extraction process are approved for their use by the local fire code official and meet any applicable fire, safety, and building code requirements.
(d) A marijuana product manufacturing facility may use heat, screens, presses, steam distillation, ice water, and other methods without employing solvents or gases to create
(1) kief;
(2) hashish;
(3) bubble hash;
(4) infused dairy butter, oils, or fats derived from natural sources; or
(5) other extracts.
(e) A marijuana product manufacturing facility may use food-grade glycerin, ethanol, and propylene glycol solvents to create extracts. All ethanol must be removed from the extract in a manner to recapture the solvent and ensure that it is not vented into the atmosphere.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 4/16/2023, Register 246
3 AAC 306.557 Quality control sampling
A marijuana product manufacturing facility may provide a sample of marijuana concentrate or other marijuana product manufactured by that facility to an employee of the facility, who is in possession of a valid marijuana handler card for the purpose of quality control only if
(1) samples provided to employees for quality control do not exceed a cumulative total set out in 3 AAC 306.355 in a 30-day period;
(2) each sample is registered and tracked using the marijuana inventory tracking system in accordance with 3 AAC 306.730;
(3) consumption of marijuana does not occur on the licensed premises;
(4) no sample provided under this section is sold or given to another licensee or consumer;
(5) each employee who receives a marijuana sample for the purpose of quality control completes a quality control form approved by the board for each sample;
(6) the licensee maintains copies of completed forms required under (5) of this subsection in accordance with 3 AAC 306.755;
(7) samples that leave the licensed premises are packaged in opaque, resealable, child-resistant packaging and clearly marked or labeled "For Quality Control" and the packaging is designed or constructed to be significantly difficult for children under five years of age to open, but not normally difficult for adults to use properly; and
(8) each sample is tested under 3 AAC 306.445 and 3 AAC 306.550 before being provided to an employee under this section.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 5/25/2018, Register 226; am 12/25/2020, Register 236
3 AAC 306.560 Potency limits per serving and transaction for edible marijuana products
A marijuana product manufacturing facility may not prepare a marijuana product with potency levels exceeding the following, as tested in compliance with 3 AAC 306.645:
(1) for a single serving of a marijuana product, not more than 10 milligrams of active tetrahydrocannabinol (THC) or Delta 9;
(2) in a single packaged unit of a marijuana product to be eaten or swallowed, not more than 10 servings or 100 milligrams of active THC or Delta 9; the THC content must be homogenous, or evenly distributed throughout the marijuana-infused product.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 9/1/2021, Register 239
3 AAC 306.565 Packaging of marijuana products
(a) A marijuana product manufacturing facility shall observe the potency limits set out in 3 AAC 306.560 in packaging each product for resale by a retail marijuana store.
(b) A container or packaging for any edible marijuana product produced by a marijuana product manufacturing facility may not have any printed images, including cartoon characters, that specifically target individuals under 21 years of age. In addition, the packaging must
(1) protect the product from contamination and may not impart any toxic or damaging substance to the product; and
(2) if the marijuana product contains multiple servings, be designed so that the marijuana product itself has markings or demarcations clearly delineating each serving of the product; for liquid marijuana products with multiple servings, the packaging must indicate the number and size of individual servings.
(c) A licensed marijuana product manufacturing facility may transfer marijuana concentrates in wholesale packages not to exceed 10 pounds to another licensed marijuana product manufacturing facility or a licensed retail marijuana store, except that infused dairy butter, oils, or fats may not be transferred in wholesale to a retail marijuana store by any marijuana product manufacturing facility.
(d) Each packaged marijuana product must be identified by a tracking label generated by the marijuana product manufacturing facility's marijuana inventory tracking system.
(e) A licensed marijuana product manufacturing facility shall prepare marijuana products for transfer to another marijuana establishment by
(1) placing marijuana products within a sealed, tamper-evident shipping container;
(2) affixing a label that complies with 3 AAC 306.570(d) to the shipping container; and
(3) generating a transport manifest from the marijuana product manufacturing facility's marijuana inventory tracking system; the transport manifest must remain with the marijuana products at all times while being transported, and a copy must be given to the licensed marijuana establishment that receives the shipment.
(f) A marijuana product manufacturing facility may create a variety pack with one or more products. The single packaged unit requirement under 3 AAC 306.560(2) applies to each product inside the variety pack. All required labels under 3 AAC 306.570 must be affixed to each product inside the variety pack as well as the exterior of the variety pack. The total amount of THC inside the variety pack may not exceed the limits set out under 3 AAC 306.355.
History
- Authority: AS 17.38.070; AS 17.38.150 AS 17.38.121; AS 17.38.190
- Eff. 2/21/2016, Register 217; am 2/21/2019, Register 229; am 3/13/2020, Register 233; am 4/16/2023, Register 246; am 12/31/2023, Register 248
3 AAC 306.570 Labeling of marijuana products
(a) With each production lot of marijuana product sold, a marijuana product manufacturing facility shall disclose in writing the name of the licensed marijuana testing facility that performed any required test and the results of each required test.
(b) A marijuana product may not be labeled as organic.
(c) To each package of marijuana product sold to a retail marijuana store for resale to a consumer, a marijuana product manufacturing facility shall affix a label setting out
(1) the name and license number of the marijuana product manufacturing facility where the marijuana product was prepared;
(2) the production lot number assigned to the product in the package;
(3) the net weight of the product in the package,
(A) not including weight of packaging; and
(B) using a standard of measure compatible with the marijuana product manufacturing facility's marijuana inventory tracking system; and
(4) each of the following statements:
(A) "Marijuana has intoxicating effects and may be habit forming and addictive.";
(B) "Marijuana impairs concentration, coordination, and judgment. Do not operate a vehicle or machinery under its influence.";
(C) "There are health risks associated with consumption of marijuana.";
(D) "For use only by adults twenty-one and older. Keep out of the reach of children.";
(E) "Marijuana should not be used by women who are pregnant or breast feeding.".
(d) A marijuana product manufacturing facility transporting a marijuana product to a retail marijuana store shall affix a label to the shipping container showing that a licensed marijuana testing facility has tested each lot of marijuana product in the shipment and giving the test results, including
(1) a cannabinoid potency profile expressed as a range of percentages that extends from the lowest percentage to highest percentage of concentration for each cannabinoid listed from every test conducted on that production lot from the same marijuana product manufacturing facility within the last three months;
(2) a statement listing the results of microbial testing required under 3 AAC 306.645(b)(2);
(3) a statement listing the results of residual solvent testing required under 3 AAC 306.645(b)(3), if applicable; and
(4) a statement listing any contaminants for which the product was tested in addition to contaminants for which 3 AAC 306.645(b) requires testing; any additional tested contaminants include
(A) molds, mildew, and filth;
(B) herbicides, pesticides, and fungicides; and
(C) harmful chemicals.
(e) If a marijuana product manufacturing facility ships wholesale marijuana product from a production lot of marijuana product that has not been tested for each contaminant listed in (d)(4) of this section, the label for that lot must include a statement identifying each contaminant listed in (d)(4) of this section for which that lot has not been tested.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217
Article 6 Marijuana Testing Facilities
3 AAC 306.600 Applicability
(a) The provisions of 3 AAC 306.600 - 3 AAC 306.675 apply to a person offering a service testing, analyzing, or certifying potency, moisture content, pesticide or solvent residue, mold, mildew, bacteria, or other contaminants in marijuana or a marijuana product to another person including a marijuana establishment or a member of the public, whether for compensation or not, as a independent or third-party testing facility.
(b) The provisions of 3 AAC 306.600 - 3 AAC 306.675 do not apply to a licensed marijuana establishment that controls marijuana testing equipment used solely for its own in-house testing of its own cultivated crop, of products produced or manufactured at its own facility, or of retail products placed or offered for sale in its retail marijuana store.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217
3 AAC 306.605 Marijuana testing facility license required
(a) A person may not offer or provide a marijuana testing service or test results unless the person has obtained a marijuana testing facility license from the board in compliance with this chapter, or is an employee or agent acting for a licensed marijuana testing facility.
(b) Repealed 1/22/2023.
(c) A licensee of a marijuana testing facility, or an employee or agent of a licensed marijuana testing facility, may not have an ownership interest in or a direct or indirect financial interest in another licensed marijuana establishment.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 1/22/2023, Register 245
3 AAC 306.610 Marijuana testing facilities: privileges and prohibitions
(a) A licensed marijuana testing facility may have any amount of marijuana and marijuana products on its premises at any given time if the marijuana testing facility's marijuana inventory tracking system and other records document that all marijuana and marijuana products are on the premises only for the testing purposes described in 3 AAC 306.600 - 3 AAC 06.675.
(b) A licensed marijuana testing facility may not
(1) have a licensee, employee, or agent who holds a type of marijuana establishment license other than a marijuana testing facility license issued under this chapter;
(2) sell, deliver, distribute, or transfer marijuana or a marijuana product to a consumer, with or without compensation;
(3) allow a person to consume marijuana or a marijuana product on its licensed premises; or
(4) have overlapping premises, including restricted access areas, with any other marijuana establishment licensee.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 12/10/2020, Register 236
3 AAC 306.615 Application for marijuana testing facility license
An applicant for a new marijuana testing facility license must
(1) file an application on a form the board prescribes, including
(A) the information required under 3 AAC 306.020;
(B) the proposed marijuana testing facility's operating plan, including, in addition to the information required under 3 AAC 306.020(c),
(i) each test the marijuana testing facility will offer;
(ii) the marijuana testing facility's standard operating procedure for each test the marijuana testing facility will offer; and
(iii) the acceptable range of results for each test the marijuana testing facility will offer; and
(2) demonstrate to the board's satisfaction that the applicant
(A) will operate in compliance with each applicable provision of 3 AAC 306.600 - 3 AAC 306.675 and 3 AAC 306.700 - 3 AAC 306.770;
(B) will operate in compliance with each applicable public health, fire, safety, and tax code and ordinance of the state and the local government in which the applicant's proposed licensed premises are located;
(C) does not hold a marijuana establishment license in this state other than a marijuana testing facility license, or have a financial interest in common with a person that is a licensee of marijuana establishment in this state other than a marijuana testing facility license; and
(D) meets the board's standards for approval as set out in 3 AAC 306.620 - 3 AAC 306.625.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 1/22/2023, Register 245
3 AAC 306.620 Approval of testing facility
(a) A person seeking a marijuana testing facility license must first obtain the approval of the board by showing competence to perform each test the licensee will offer as an independent third-party testing facility, including tests to identify
(1) THC, THCA, CBD, CBDA and CBN potency;
(2) harmful microbials including Escherichia coli (E. Coli) or salmonella;
(3) residual solvents;
(4) poisons or toxins;
(5) harmful chemicals;
(6) dangerous molds, mildew, or filth;
(7) pesticides.
(b) In evaluating whether a person has shown competence in testing under this section, the board or the board's contractor may
(1) conduct an on-site inspection of the applicant's premises;
(2) require the applicant to demonstrate proficiency in testing; and
(3) examine compliance with any applicable requirement of 3 AAC 306.630 - 3 AAC 306.675, and 3 AAC 306.700 - 3 AAC 306.770, including
(A) qualifications of personnel;
(B) the standard operating procedure for each testing methodology the marijuana testing facility will use;
(C) proficiency testing results;
(D) quality control and quality assurance;
(E) security;
(F) chain of custody;
(G) specimen retention;
(H) space;
(I) records; and
(J) reporting of results.
(c) The board will approve a marijuana testing facility license if, after the board or the board's contractor has examined the qualifications and procedures of the marijuana testing facility license applicant and documented the conclusions of the examination in a written report, the board finds the qualifications and procedures, generally in compliance with good laboratory practices and that the application meets the requirements of this section. Nothing in AS 17.38 or this chapter constitutes a board guarantee that a licensed marijuana testing facility can or will protect the public from all potential hazards of marijuana including microbials, poisons or toxins, residual solvents, pesticides, or other contaminants.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 3/25/2020, Register 233
3 AAC 306.622 Marijuana handler permit required
A marijuana testing facility shall ensure that each agent who is required or permitted to be physically present on the licensed premises at any time, each licensee, and each employee
(1) obtains a marijuana handler permit as provided in 3 AAC 306.700 before being licensed or employed at the marijuana testing facility's licensed premises; and
(2) has the marijuana handler permit card in the person's immediate possession, or a valid copy on file on the premises, at all times while on the marijuana testing facility's licensed premises.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2019, Register 229
3 AAC 306.625 Proficiency testing program
(a) When an accredited proficiency testing program becomes available in the state, the board may require an applicant for a marijuana testing facility license to participate successfully in a proficiency testing program not earlier than 12 months before receiving a license. The proficiency testing program must require an applicant for a marijuana testing facility license or a participating licensed marijuana testing facility to analyze test samples using the same procedures with the same number of replicate analyses, standards, testing analysts, and equipment that will be used for product testing. Successful participation is the positive identification of 80 percent of the target analytes that the marijuana testing facility reports, and must include quantitative results when applicable. Any false positive results reported constitute an unsatisfactory score for the proficiency test.
(b) Before renewing the license of a marijuana testing facility, the board may require the facility to participate in a proficiency testing program with documentation of continued performance satisfactory to the board. The license of a marijuana testing facility may be limited, suspended, or revoked if the facility fails to participate and receive a passing score in a proficiency testing program.
(c) The scientific director employed under 3 AAC 306.630 and each testing analyst of an applicant for a marijuana testing facility license and a licensed marijuana testing facility that participated in a proficiency test shall sign a corresponding attestation statement. The scientific director shall review and evaluate each proficiency test result.
(d) An applicant for a marijuana testing facility license, and a licensed marijuana testing facility participating in the proficiency testing program, shall take and document remedial action when the applicant or the facility meets the standards of (a) of this section, but scores less than 100 percent in a proficiency test. To take and document remedial action, the marijuana testing facility's scientific director shall, at a minimum, review all samples tested and results reported after the date of the marijuana testing facility's last successful proficiency test.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217
3 AAC 306.630 Scientific director
(a) A marijuana testing facility shall employ a scientific director who must be responsible for
(1) overseeing and directing the scientific methods of the laboratory within the marijuana testing facility;
(2) ensuring that the laboratory achieves and maintains quality standards of practice; and
(3) supervising all staff of the laboratory.
(b) The scientific director of a marijuana testing facility must have
(1) a doctorate degree in chemical or biological sciences from an accredited college or university and have at least two years of post-degree laboratory experience;
(2) a master's degree in chemical or biological sciences from an accredited college or university and have at least four years of post-degree laboratory experience; and
(3) a bachelor's degree in chemical or biological sciences from an accredited college or university and have at least six years of post-degree laboratory experience.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217
3 AAC 306.635 Testing methodologies
(a) An applicant for a marijuana testing facility license and a licensed marijuana testing facility shall
(1) use as guidelines or references for testing methodologies
(A) the American Herbal Pharmacopoeia's Cannabis Inflorescence: Standards of Identity, Analysis, and Quality Control, Revision 2014, adopted by reference; and
(B) the United Nations Office on Drugs and Crime's Recommended Methods for the Identification and Analysis of Cannabis and Cannabis Products: Manual for Use by National Drug Analysis Laboratories, dated 2009 and adopted by reference;
(2) notify the board of any alternative scientifically valid testing methodology the marijuana testing facility proposes to use for any laboratory test it conducts; the board may require third-party validation of any monograph, peer-reviewed scientific journal article, or analytical method the marijuana testing facility proposes to follow to ensure the methodology produces comparable and accurate results; and
(3) comply with the Alcohol and Marijuana Control Office's Cannabis Testing Laboratory Compliance Document , dated September 30, 2019 and adopted by reference; a marijuana testing facility whose license was first issued before March 25, 2020 shall comply with this paragraph not later than September 25, 2020.
(b) An applicant for a marijuana testing facility license and the holder of a marijuana testing facility license shall observe good laboratory practices.
(c) The board or the board's contractor may inspect the practices, procedures, and programs adopted, followed, and maintained by the applicant or the licensed marijuana testing facility and may examine all records of the applicant or the licensed marijuana testing facility that are related to the inspection. The board may require an applicant or a licensed marijuana testing facility to have an independent third party inspect and monitor laboratory operations to assess testing competency and the marijuana testing facility's compliance with its quality program. The board may require random validation of a marijuana testing facility's execution of each testing methodology the facility uses.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 3/25/2020, Register 233
3 AAC 306.640 Standard operating procedure manual
(a) An applicant for a marijuana testing facility license and a licensed marijuana testing facility shall have a written manual of standard operating procedures, with detailed instructions explaining how to perform each testing method the applicant or marijuana testing facility uses and minimum standards for each test. The written manual of standard operating procedures must be available to each employee of the marijuana testing facility at all times. The written manual of standard operating procedures must cover at least
(1) sample preparation for each matrix that will be tested;
(2) reagent, solution, and reference standard preparation;
(3) instrument setup, if applicable;
(4) standardization of volumetric reagent solutions, if applicable;
(5) data acquisition;
(6) calculation of results;
(7) identification criteria;
(8) quality control frequency;
(9) quality control acceptance criteria; and
(10) corrective action protocol.
(b) The scientific director of a marijuana testing facility shall approve, sign, and date each standard operating procedure, and each revision to any standard operating procedure. Each revision to any standard operating procedure shall be provided to the board not later than 10 days after approval by the scientific director for review by the board or the board's contractor. The revised standard operating procedure may not be implemented until approved by the board or the board's contractor.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217: am 3/25/2020, Register 233
3 AAC 306.645 Laboratory testing of marijuana and marijuana products
(a) A marijuana testing facility shall use the general body of required laboratory tests as set out in this section for marijuana plant material, an extract or concentrate of marijuana, and a marijuana product. Required tests may include potency analysis, moisture content, foreign matter inspection, microbial screening, pesticide, other chemical residue, and metals screening, and residual solvents levels. A marijuana testing facility shall establish a schedule of fees required for each test it offers, and shall perform tests using methods in compliance with guidelines prescribed by the board.
(b) The tests required for each marijuana type or marijuana product, are as follows:
(1) potency testing is required on marijuana bud and flower, marijuana concentrate, and a marijuana product, as follows:
(A) the required cannabinoid potency test must at least determine the concentration of THC, THCA, CBD, CBDA, and CBN cannabinoids; a marijuana testing facility may test and report results for any additional cannabinoid if the test is conducted in compliance with a validated method;
(B) a marijuana testing facility shall report potency test results as follows:
(i) for a potency test on marijuana and marijuana concentrate, the marijuana testing facility shall list for each required cannabinoid a single percentage concentration, based on dry weight, that represents an average of all samples within the test batch; additionally, total THC and total CBD shall be reported.
(ii) for a potency test on a marijuana product, whether conducted on each individual production lot or using process validation, the marijuana testing facility shall list for each cannabinoid the total number of milligrams contained within a single retail marijuana product unit for sale;
(iii) for testing whether the THC content is homogenous, the marijuana testing facility shall report the THC content of each single serving in a multi-unit package; the reported content must be within 20 percent of the manufacturer's target; for example, in a 100 milligrams total THC package with 10 servings, each serving must contain between eight and 12 milligram of THC;
(C) the marijuana testing facility shall determine an edible marijuana product to have failed potency testing if
(i) an individually packaged edible retail marijuana product with 10 servings that is contained within a test lot is determined to have more than 120 milligrams of THC within it; or
(ii) the THC content of an edible marijuana product is not homogenous;
(2) microbial testing for the listed substances on the listed marijuana and marijuana products is required as follows:
Substance
Acceptable
Limits
Per Gram
Product to be
Tested
Shiga-toxin prod-
ucing Escherichia
coli (STEC) -
bacteria Less than 1
colony form-
ing unit
(CFU/g)
Marijuana; retail
marijuana prod-
ucts; water- and
food-based concen-
trates Salmonella species -
bacteria Less than 1
colony form-
ing unit
(CFU/g)
Aspergillus fumiga-
tus, Aspergillus fla-
vus, Aspergillus
niger - fungus
Less than 1
colony form-
ing unit
(CFU/g)
(3) testing for the listed residual solvents and metals on the listed marijuana products is required as follows:
Substance
Acceptable Limits
Per Gram
Product to be
Tested
butanes less than 800 parts
per million (PPM)
solvent-based
concentrates heptanes less than 500 parts
per million (PPM)
benzene less than 1 parts
per million (PPM)
toluene less than 1 parts
per million (PPM)
hexane less than 10 parts
per million (PPM)
Total xylenes (meta-
xylenes, para-xylenes,
or ortho-xyleres)
less than 1 parts
per million (PPM)
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 7/5/2017, Register 223; am 11/8/2018, Register 228; am 9/1/2021, Register 239
3 AAC 306.650 Chain of custody
A marijuana testing facility shall establish an adequate chain of custody and sample requirement instructions that include
(1) issuing instructions for the minimum sample requirements and storage requirements;
(2) documenting the condition of the external package and integrity seals utilized to prevent contamination of or tampering with the sample;
(3) documenting the condition and amount of sample provided at the time the sample is received at the marijuana testing facility;
(4) documenting each person handling the original samples, aliquots, and extracts;
(5) documenting any transfer of samples, aliquots, and extracts to another marijuana testing facility for additional testing or at the request of the marijuana cultivation facility or marijuana product manufacturing facility that provided the testing sample;
(6) maintaining a current list of authorized persons and restricting entry to the marijuana testing facility to those authorized persons;
(7) securing the marijuana testing facility during non-working hours;
(8) securing short-term and long-term storage areas when not in use;
(9) using a secured area to log in and aliquot samples;
(10) ensuring samples are stored appropriately; and
(11) documenting the disposal of samples, aliquots, and extracts.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217
3 AAC 306.655 Marijuana inventory tracking system
(a) A marijuana testing facility shall use a marijuana inventory tracking system as provided in 3 AAC 306.730 to ensure all marijuana transported to the marijuana testing facility's premises is identified and tracked from the time the marijuana arrives at the marijuana testing facility to the use and destruction of the marijuana in testing, or to disposal in compliance with 3 AAC 306.740.
(b) A marijuana testing facility shall use its marijuana inventory tracking system, as required under this section, to track all marijuana or marijuana products transported to the new licensed premises in the case of a transfer of a marijuana establishment license to another location approved by the board.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 1/22/2023, Register 245
3 AAC 306.660 Failed materials; retests
(a) If a sample tested by a marijuana testing facility does not pass the required tests based on the standards set out in 3 AAC 306.645, including a visual foreign matter inspection, the marijuana establishment that provided the sample shall dispose of the harvest batch package or production lot from which the sample was taken, as required under 3 AAC 306.740.
(b) If a marijuana sample fails a required test, any marijuana plant trim, leaf, and other usable material from the same harvest batch package fail the required test. The board or director may approve a written request, on a form prescribed by the board, to allow a batch of marijuana that fails a required test to be used to make carbon dioxide- or solvent-based extract. After processing, the carbon dioxide- or solvent-based extract must pass all required tests.
(c) If a marijuana cultivation facility or a marijuana product manufacturing facility submits a written request, on a form prescribed by the board, for a retest of marijuana or a marijuana product that failed a required test, the board or director may authorize a retest to validate the test results. The marijuana cultivation facility or a marijuana product manufacturing facility shall pay all costs of a retest.
(d) When requested by a marijuana product manufacturing facility, the director may authorize a retest of a marijuana concentrate that passed a required test when the licensee wishes to reprocess a marijuana product to further reduce residual solvent levels. The marijuana product manufacturing facility shall pay all costs of a retest.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 7/5/2017, Register 223; am 10/20/2018, Register 228; am 3/13/2020, Register 233
3 AAC 306.665 Supplemental marijuana quality testing
(a) The board or director may at any time determine that the interests of the public require random supplemental testing of marijuana or a marijuana product. When the board or director requires random supplemental testing, the board will or director shall direct the marijuana cultivation facility that produced the marijuana, or the marijuana product manufacturing facility that manufactured the product, to submit a specified sample, batch, or packaged product to a designated marijuana testing facility. The material must be packaged in a manner that ensures the marijuana testing facility will be able to confirm that it has received and is testing the correct supplemental sample.
(b) When a marijuana testing facility receives a sample for random supplemental testing under this section, the marijuana testing facility shall
(1) perform any required laboratory test the board or director requests; and
(2) report its results to
(A) the board or director; and
(B) the facility that provided the sample.
(c) A marijuana testing facility that conducts laboratory testing under this section shall bill all costs directly to the marijuana cultivation facility or the marijuana product manufacturing facility that provided the samples for testing.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217
3 AAC 306.670 Reporting; verification
(a) A marijuana testing facility shall report the result of each required laboratory test directly into its marijuana inventory tracking system not later than 24 hours after the test is completed. A marijuana testing facility shall provide the final report
(1) in a timely manner to the marijuana establishment that submitted the sample; and
(2) to the director not later than 72 hours after the marijuana testing facility determines that results of tested samples exceed allowable levels.
(b) A marijuana testing facility shall establish procedures to ensure that reported results are accurate, precise, and scientifically valid. To ensure reported results are valid, a marijuana testing facility shall report results in compliance with guidelines prescribed by the board and shall include in a final report
(1) the name and location of the marijuana testing facility;
(2) the unique sample identifier assigned by the marijuana testing facility;
(3) the marijuana establishment or other person that submitted the testing sample;
(4) the sample identifier provided by the marijuana establishment or other person that submitted the testing sample;
(5) the date the marijuana testing facility received the sample;
(6) the chain of custody identifier;
(7) the date of the report;
(8) the type of marijuana or marijuana product tested;
(9) the test results;
(10) the units of measure; and
(11) any other information or qualifiers needed for interpretation of the test method and the results being reported, including any identified and documented discrepancy.
(c) A marijuana testing facility may amend a final report for clerical purposes except that test results may not be amended.
(d) A marijuana testing facility shall notify the director in writing not later than 24 hours after a significant equipment malfunction or failure that prevents the completion of required marijuana or marijuana product testing. The licensee shall notify the director of any action the licensee intends to take to provide for re-testing or destruction of the marijuana or marijuana product.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 8/23/2018, Register 227; am 11/8/2018, Register 228
3 AAC 306.675 Records retention
A marijuana testing facility shall maintain the business records required under 3 AAC 306.755 for the period of time specified in that section. The books and records required under 3 AAC 306.755(a)(1) include
(1) test results;
(2) quality control and quality assurance records;
(3) standard operating procedures;
(4) chain-of-custody records;
(5) proficiency testing records;
(6) analytical data to include printouts generated by the instrumentation;
(7) accession numbers;
(8) specimen type;
(9) raw data of calibration standards and curves, controls, and subject results;
(10) final and amended reports;
(11) acceptable reference range parameters;
(12) the identity of the analyst; and
(13) the date of the analysis.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217
Article 7 Operating Requirements for All Marijuana Establishments
3 AAC 306.700 Marijuana handler permit
(a) Each agent of the marijuana establishment who sells, cultivates, manufactures, tests, or transports marijuana or a marijuana product, or who checks the identification of a consumer or visitor, and each licensee and employee must obtain a marijuana handler permit from the board before being licensed or beginning employment at a marijuana establishment.
(b) To obtain a marijuana handler permit, a person must complete a marijuana handler permit education course approved by the board, pass a written test demonstrating an understanding of the course material, and obtain a certificate of course completion from the course provider.
(c) To obtain a marijuana handler permit, a person who has completed the marijuana handler permit education course described 3 AAC 306.701 shall present the course completion certificate to the director. The director shall issue a marijuana handler permit card valid for three years from the date of issue of the course completion certificate. A person may renew a card issued under this section by taking a marijuana handler permit education course approved by the board and passing a written test demonstrating an understanding of the course subjects.
(d) A licensee, employee, or agent of a marijuana establishment shall keep the marijuana handler permit card described in (c) of this section in that person's immediate possession or a valid copy on file on the premises at all times when on the licensed premises of the marijuana establishment.
(e) Repealed 8/21/2019.
(f) The board will not issue a marijuana handler permit to a person who
(1) has been convicted of a felony in the state and either
(A) less than five years have elapsed from the time of the person's conviction; or
(B) the person is currently on probation or parole for that felony,
(2) has within the two year period immediately preceding submission of an application, been convicted of a class A misdemeanor in the state involving a controlled substance other than a Schedule VIA controlled substance, under AS 11.71.190,
(3) has within the two year period immediately preceding submission of an application, been convicted of a class A misdemeanor in the state relating to selling, furnishing, or distributing marijuana; or,
(4) is currently under indictment for an offense listed in this section.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 5/23/2018, Register 226; am 9/7/2018, Register 227; am 2/21/2019, Register 229; am 8/21/2019, Register 231
3 AAC 306.701 Marijuana handler permit education course
(a) The board shall approve all marijuana handler permit education courses before a course provider may issue a marijuana handler permit.
(b) The topics that an approved marijuana handler permit education course covers must include
(1) AS 17.38 and this chapter;
(2) the effects of consumption of marijuana and marijuana products;
(3) how to identify a person impaired by consumption of marijuana;
(4) how to determine valid photographic identification;
(5) how to intervene to prevent unlawful marijuana consumption; and
(6) the penalty for an unlawful act by a licensee, an employee, or an agent of a marijuana establishment.
(c) An approved course provider shall update the course with any applicable change to AS 17.38 and this chapter not later than 10 days after the effective date of the change. The course provider shall notify the board of a change to an approved course not later than three days after the change.
(d) The board will review an approved marijuana handler permit education course at least once every three years, and may rescind approval of the course if the board finds that the education course contents are insufficient or inaccurate.
(e) An approved course provider shall provide continuous access to the course to the board and the director for the purpose of reviewing course materials at any time.
(f) The fee for a new marijuana handler permit education course and for a three-year review of a marijuana handler permit education course is $500.
(g) In addition to the topics set out under (b) of this section, a marijuana handler permit education course may advertise that the course provides specialized education that is employee-focused and is for employees of a retail marijuana store (AS 17.38.070(a); 3 AAC 306.300 - 3 AAC 306.380), marijuana cultivation facility (AS 17.38.070(b); 3 AAC 306.400 - 3 AAC 306.480), marijuana product manufacturing facility (AS I 7.38.070(c); 3 AAC 306.500 - 3 AAC 306.580), or marijuana concentrate manufacturing facility (3 AAC 306.515), if the marijuana handler permit education course includes not less than 20 questions on its final examination that are specific to the applicable license type's employees and employment conditions.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 8/21/2019, Register 231; am 9/24/2021, Register 239; am 4/20/2025, Register 254
3 AAC 306.703 Operations
A licensed marijuana establishment shall operate in accordance with the operating plan approved by the board. The licensee may request an operating plan change in accordance with 3 AAC 306.100(c).
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 5/9/2019, Register 230
3 AAC 306.705 Licensed premises; alteration
(a) A marijuana establishment license will be issued for specific licensed premises. Unlicensed areas may not separate portions of licensed premises, except that the board may approve adjacent portions of the licensed premises that are not a restricted access area as permitted under 3 AAC 306.710. Specific licensed premises must constitute a place clearly designated in a license application and described by a line drawing submitted with the license application. The licensed premises must
(1) have adequate space for its approved operations, including growing, manufacturing, processing, packaging, or storing marijuana or marijuana products; and
(2) be located and constructed to facilitate cleaning, maintenance, and proper operation.
(b) A marijuana establishment's license and, if applicable, an endorsement issued under 3 AAC 306.110, including 3 AAC 306.370, must be posted in a conspicuous place within the licensed premises.
(c) A holder of a marijuana establishment 1icense may not alter the functional floor plan or reduce or expand the area of the licensed premises without first obtaining the director's written approval. A marijuana establishment license holder seeking to change or modify the licensed premises must submit a request for approval of the change on a form prescribed by the board, along with
(1) the fee prescribed in 3 AAC 306.100;
(2) a drawing showing the proposed change;
(3) evidence that the proposed change conforms to any local restrictions; and
(4) evidence that the licensee has obtained any applicable local building permit.
(d) The board may approve two or more licenses for overlapping premises that are owned by the same person or same group of persons and within the same building or with abutting premises to use in common for an office, employee breakroom, bathroom, non-marijuana storage area, or a combination of those uses. The overlapping premises may not be restricted access areas, unless approved by the board under 3 AAC 306.710.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 12/10/2020, Register 236; am 1/5/2024, Register 249
3 AAC 306.710 Restricted access areas
(a) A marijuana establishment shall restrict access to any part of the licensed premises where marijuana or a marijuana product is grown, processed, tested, stored, or stocked.
(b) Except as provided in 3 AAC 306.325 for a retail marijuana store, each entrance to a restricted access area must be marked by a sign that says "Restricted access area. Visitors must be escorted." A marijuana establishment shall limit the number of visitors to not more than five visitors for each licensee, employee, or agent of the licensee who is actively engaged in supervising those visitors.
(c) In a restricted access area, a licensee, employee, or agent of the marijuana establishment shall have on display, either on the person or in a readily accessible location on the licensed premises, a current identification badge bearing the person's photograph. A person under 21 years of age may not enter a restricted access area. Any visitor to the restricted access area must
(1) show identification as required in 3 AAC 306.350 to prove that person is 21 years of age or older;
(2) obtain a visitor identification badge before entering the restricted access area; and
(3) be escorted at all times by a licensee, employee, or agent of the marijuana establishment.
(d) The board may approve two or more licenses for overlapping premises owned by the same person or same group of persons and within the same building to use in common as a restricted access area if
(1) the marijuana or marijuana product is properly accounted for in the marijuana establishment's inventory tracking system required under 3 AAC 306.730;
(2) the marijuana or marijuana product is expressly identified as inventory of the appropriate marijuana establishment to which the marijuana or marijuana product belongs; and
(3) the area is in compliance with this section and any other provision of this chapter that applies to restricted access areas, including video surveillance as required under 3 AAC 306.720 and restricted access area provisions specific to the license type to which the marijuana or marijuana product belongs.
(e) Failure to comply with (d) of this section is grounds for issuance of a notice of violation under 3 AAC 306.805(a) or other enforcement action under 3 AAC 306.800 - 3 AAC 306.850.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 12/10/2020, Register 236; am 1/19/2022, Register 241; am 1/5/2024, Register 249; am 8/16/2024, Register 251
3 AAC 306.712 Breastfeeding on licensed premises
(a) A licensee or employee of a licensee may bring a child up to 18 months of age, who is the child of the licensee or employee, onto the licensed premises for the purpose of breastfeeding.
(b) A licensee may designate an area for breastfeeding or for the expression of breast milk. An area designated for breastfeeding must not expose the child in any way to marijuana or any marijuana product, including marijuana pollen. A designated area may not include an onsite consumption area described under 3 AAC 306.370.
(c) This section may not be construed to supersede or change the requirements of 29 U.S.C. 207 (Section 7 of the Fair Labor Standards Act of 1938) or any other law applicable to breastfeeding in the workplace.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 1/1/2021, Register 237; am. 10/11/2023, Register 248
3 AAC 306.715 Security alarm systems and lock standards
(a) Each licensee, employee, or agent of a marijuana establishment shall have on display, either on the person or in a readily accessible location on the licensed premises, an identification badge issued by the marijuana establishment at all times when on the marijuana establishment's licensed premises.
(b) The licensed premises of a marijuana establishment must have
(1) exterior lighting to facilitate surveillance;
(2) a security alarm system on all exterior doors and windows; and
(3) continuous video monitoring as provided in 3 AAC 306.720.
(c) A marijuana establishment shall have policies and procedures that
(1) are designed to prevent diversion of marijuana or marijuana product;
(2) prevent loitering;
(3) describe the use of any additional security device, such as a motion detector, pressure switch, and duress, panic, or hold-up alarm to enhance security of licensed premises; and
(4) describe the actions to be taken by a licensee, employee, or agent of the marijuana establishment when any automatic or electronic notification system alerts a local law enforcement agency of an unauthorized breach of security.
(d) A marijuana establishment shall use ecommercial grade, non-residential door locks on all exterior entry points to the licensed premises.
(e) A marijuana establishment shall notify the Department of Commerce, Community, and Economic Development, Alcohol and Marijuana Control Office as soon as reasonably practical and in any case not more than 24 hours after any unauthorized access to the premises or the establishment's knowledge of evidence or circumstances that reasonably indicate theft, diversion, or unexplained disappearance of marijuana, marijuana products, or money from the licensed premises.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 5/25/2018, Register 226; am 1/19/2022, Register 241
3 AAC 306.720 Video surveillance
(a) A marijuana establishment shall install and maintain a video surveillance and camera recording system as provided in this section. The video system must cover
(1) each restricted access area and each entrance to a restricted access area within the licensed premises;
(2) each entrance to the exterior of the licensed premises; and
(3) each point-of-sale area.
(b) At a marijuana establishment, a required video camera must be placed in a way that produces a clear view adequate to identify any individual inside the licensed premises, or within 20 feet of each entrance to the licensed premises. Both the interior and the exterior of each entrance to the facility must be recorded by a video camera.
(c) Any area where marijuana is grown, cured, or manufactured, or where marijuana waste is destroyed, must have a camera placement in the room facing the primary entry door, and in adequate fixed positions, at a height that will provide a clear, unobstructed view of the regular activity without a sight blockage from lighting hoods, fixtures, or other equipment, in order to allow for the clear and certain identification of any person and activity in the area at all times.
(d) Surveillance recording equipment and video surveillance records must be housed in a locked and secure area or in a lock box, cabinet, closet or other secure area that is accessible only to a marijuana establishment licensee or authorized employee, and to law enforcement personnel including a peace officer or an agent of the board. A marijuana establishment may house surveillance recording equipment and video surveillance records in an area approved by the board under 3 AAC 306.705(d) and 3 AAC 306.710(d) if the area meets the security requirements under this subsection.
(e) A marijuana establishment may use an offsite monitoring service and offsite storage of video surveillance records if security requirements at the offsite facility are at least as strict as onsite security requirements as described in (d) of this section.
(f) Each surveillance recording must be preserved for a minimum of 40 days, in a format that can be easily accessed for viewing. All recorded images must clearly and accurately display the time and date, and must be archived in a format that does not permit alteration of the recorded image, so that the images can readily be authenticated. After 40 days, a marijuana establishment may erase video recordings, unless the licensee knows or should know of any pending criminal, civil, or administrative investigation for which the video recording may contain relevant information.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 12/10/2020, Register 236
3 AAC 306.725 Inspection of licensed premises
(a) A marijuana establishment or an applicant for a marijuana establishment license under this chapter shall, upon request, make the licensed premises or the proposed licensed premises, including any place for storage and overlapping premises described under 3 AAC 306.705(d) and 3 AAC 306.710(d), available for inspection by the director, an employee or agent of the board, or an officer charged with the enforcement of this chapter. The board or the director may also request a local fire protection agency or any other state agency with health and safety responsibilities to inspect licensed premises or proposed licensed premises.
(b) Inspection under this section includes inspection of the premises, facilities, qualifications of personnel, methods of operation, business and financial records, marijuana inventory tracking system, policies, and purposes of any marijuana establishment and of any applicant for a marijuana establishment license.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 12/10/2020, Register 236
3 AAC 306.730 Marijuana inventory tracking system
(a) A marijuana establishment shall use a marijuana inventory tracking system capable of sharing information with the system the board implements to ensure all marijuana cultivated and sold in the state, and each marijuana product processed and sold in the state, is identified and tracked from the time the marijuana is a seed or cutting to a completed sale of marijuana or a marijuana product, or disposal of the harvest batch of marijuana or production lot of marijuana product.
(b) Marijuana delivered to a marijuana establishment must be weighed on a scale registered in compliance with 3 AAC 306.745.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 10/20/2018, Register 228
3 AAC 306.735 Health and safety standards
(a) A marijuana establishment is subject to inspection by the local fire department, building inspector, or code enforcement officer to confirm that health or safety concerns are not present.
(b) A marijuana establishment shall take all reasonable measures and precautions to ensure that
(1) any person who has an illness, an open sore or infected wound, or other potential source of infection does not come in contact with marijuana or a marijuana product while the illness or source of infection persists;
(2) the licensed premises have
(A) adequate and readily accessible toilet facilities that are maintained in good repair and sanitary condition; and
(B) convenient handwashing facilities with running water at a suitable temperature; the marijuana establishment shall require employees to wash or sanitize their hands, and shall provide effective hand-cleaning, sanitizing preparations, and drying devices;
(3) each person working in direct contact with marijuana or a marijuana product conforms to good hygienic practices while on duty, including
(A) maintaining adequate personal cleanliness; and
(B) washing hands thoroughly in an adequate hand-washing area before starting work, after using toilet facilities, and at any other time when the person's hands may have become soiled or contaminated;
(4) litter, waste, and rubbish are properly removed; the waste disposal equipment must be maintained and adequate to
(A) avoid contaminating any area where marijuana or any marijuana product is stored, displayed, or sold; and
(B) prevent causing odors or attracting pests;
(5) floors, walls, and ceilings are constructed to allow adequate cleaning, and are kept clean and in good repair;
(6) adequate lighting is installed in any area where marijuana or a marijuana product is stored, displayed, or sold, and where any equipment or utensil is cleaned;
(7) screening or other protection adequately protects against the entry of pests;
(8) each building, fixture, and other facility is maintained in sanitary condition;
(9) each toxic cleaning compound, sanitizing agent, and pesticide chemical is identified and stored in a safe manner to protect against contamination of marijuana or a marijuana product and in compliance with any applicable local, state, or federal law;
(10) adequate sanitation principles are used in receiving, inspecting, transporting, and storing marijuana or a marijuana product; and
(11) marijuana or a marijuana product is held in a manner that prevents the growth of bacteria, microbes, or other undesirable microorganisms.
(c) A marijuana establishment shall ensure that any marijuana or marijuana product that has been stored beyond its usable life, or was stored improperly, is not salvaged and returned to the marketplace. In this subsection, "stored improperly" means being exposed to extremes in temperature, humidity, smoke, fumes, pressure, or radiation due to a natural disaster, fire, accident, or equipment failure.
(d) If a marijuana establishment does not have reliable information about the age or storage conditions of marijuana or a marijuana product in its possession, the marijuana establishment may salvage the marijuana only if
(1) a licensed marijuana testing facility determines from quality assurance testing that the marijuana or marijuana product meets all applicable standards of moisture, potency, and contaminants;
(2) inspection of the premises where a disaster or accident occurred shows that the marijuana or marijuana product stored there was not adversely affected by the disaster or accident; and
(3) the marijuana establishment maintains a record of the salvaged marijuana or marijuana product in its marijuana inventory tracking system, including the name, lot number, and final disposition.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217
3 AAC 306.740 Waste disposal
(a) A marijuana establishment shall store, manage, and dispose of any solid or liquid waste, including wastewater generated during marijuana cultivation production, processing, testing, or retail sales, in compliance with applicable federal, state, and local statutes, ordinances, regulations, and other law.
(b) Marijuana waste must be rendered unusable for any purpose for which it was grown or produced before it leaves a marijuana establishment. Marijuana waste includes
(1) marijuana plant waste, including stalks, leaves, and stems that have not been processed with solvent;
(2) solid marijuana sample plant waste in the possession of a marijuana testing facility; and
(3) marijuana or a marijuana product that has been found by the licensee unfit for sale or consumption;
(4) expired marijuana products; and
(5) other waste as determined by the board.
(c) A marijuana establishment shall
(1) repealed 10/16/2022;
(2) record the waste in the marijuana inventory tracking system required under 3 AAC 306.730; and
(3) keep a record through the marijuana inventory tracking system of the final destination of marijuana waste made unusable.
(d) Marijuana plant waste must be made unusable by grinding the marijuana plant waste and mixing it with at least an equal amount of other compostable or non-compostable materials. A marijuana establishment may use another method to make marijuana waste unusable if the board approves the method in advance. Material that may be mixed with the marijuana waste includes
(1) compostable materials including food waste, yard waste, vegetable based grease or oils, or other wastes approved by the board when the mixed material can be used as compost feedstock or in another organic waste method such as an anaerobic digester with approval of any applicable local government entity; or
(2) non-compostable materials including paper waste, cardboard waste, plastic waste, oil, or other wastes approved by the board when the mixed material may be delivered to a permitted solid waste facility, incinerator, or other facility with approval of any applicable local government entity.
(e) If marijuana or a marijuana product is found by, or surrendered to, a law enforcement officer including a peace officer or an airport security officer, the officer may dispose of the marijuana or marijuana product as provided in this section or by any method that is allowed under any applicable local ordinance.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 10/20/2018, Register 228; am 10/16/2022, Register 244
3 AAC 306.745 Standardized scales
A marijuana establishment shall use registered scales in compliance with AS 45.75.080 (Weights and Measures Act). A marijuana establishment shall
(1) maintain registration and inspection reports of scales registered under AS 45.75.080 and 17 AAC 90.920 - 17 AAC 90.935; and
(2) upon request by the board or the director, provide a copy of the registration and inspection reports of the registered scales to the board or the director for review.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217
3 AAC 306.750 Transportation
(a) Marijuana or a marijuana product may only be transported to a licensed marijuana establishment by a licensee or an agent or employee of a licensee.
(b) A marijuana establishment from which a shipment of marijuana or marijuana product originates is responsible for preparing, packaging, and securing the marijuana or marijuana product during shipment, for recording the transfer in the marijuana inventory tracking system, and for preparing the transport manifest. An individual transporting marijuana in compliance with this section shall have a marijuana handler permit required under 3 AAC 306.700.
(c) When marijuana or a marijuana product is transported, the marijuana establishment that originates the transport shall use the marijuana inventory tracking system to record the type, amount and weight of marijuana or marijuana product being transported, the name of the transporter, the time of departure and expected delivery, and the make, model, and license plate number of the transporting vehicle. A complete printed transport manifest on a form prescribed by the board must be kept with the marijuana or marijuana product at all times.
(d) During transport, the marijuana or marijuana product must be in a sealed package or container and in a locked, safe, and secure storage compartment in the vehicle transporting the marijuana or marijuana product. While the secure storage compartment may be opened to access or rearrange its contents, the sealed package containing the marijuana or marijuana product may not be opened during transport. A vehicle transporting marijuana or a marijuana product must travel directly from the shipping marijuana establishment to the receiving marijuana establishment, and may not make unnecessary stops in between except to deliver or pick up marijuana or a marijuana product at another licensed marijuana establishment. For the purposes of this subsection, "unnecessary stops" do not include stops for the safe delivery of marijuana or marijuana products, including
(1) transport vehicle refueling;
(2) basic transport vehicle maintenance;
(3) necessary rest and food breaks for a person transporting marijuana or marijuana product;
(4) delivery or deposit of monetary receipts at a financial institution or payment of state excise taxes if the delivery, deposit, or payment location is not significantly off the transport route.
(e) When a marijuana establishment receives marijuana or a marijuana product transported in compliance with this section, the recipient of the shipment shall use the marijuana inventory tracking system to report the type, amount, and weight of marijuana or marijuana product received. The recipient shall refuse to accept any shipment of marijuana or marijuana product that is not accompanied by the transport manifest.
(f) A marijuana establishment shall keep records of all marijuana or marijuana products shipped from or received at that marijuana establishment as required under 3 AAC 306.755.
(g) A marijuana establishment may transport marijuana or a marijuana product to and from a trade show or similar industry event in accordance with 3 AAC 306.760 and this section.
(h) Expired 8/14/2020.
(i) A marijuana establishment shall keep records of all marijuana or marijuana products relocated to the new licensed premises in the case of transfer of a marijuana establishment license to another location approved by the board.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 10/11/2017, Register 224; am 8/11/2018, Register 227; em am 4/17/2020 - 8/14/2020, Register 234; em am 5/7/2020 - 8/14/2020, Register 234; am 1/22/2023, Register 245; am 1/5/2024, Register 249
3 AAC 306.755 Business records
(a) A marijuana establishment shall maintain in a format that is readily understood by a reasonably prudent business person
(1) all books and records necessary to fully account for each business transaction conducted under its license for the current year and three preceding calendar years; records for the last six months must be maintained on the marijuana establishment's licensed premises or in overlapping premises approved by the board under 3 AAC 306.705(d); older records may be archived on or off premises;
(2) a current employee list setting out the full name and marijuana handler permit number of each licensee, employee, and agent who works at the marijuana establishment;
(3) the business contact information for vendors that maintain video surveillance systems and security alarm systems for the licensed premises;
(4) records related to advertising and marketing;
(5) a current diagram of the licensed premises including each restricted access area and all overlapping premises approved by the board under 3 AAC 306.705(d) and 3 AAC 306.710(d);
(6) a log recording the name, and date and time of entry of each visitor permitted in a restricted access area;
(7) all records normally retained for tax purposes;
(8) accurate and comprehensive inventory tracking records that account for all marijuana inventory activity from seed or immature plant stage until the retail marijuana or retail marijuana product is sold to a consumer, to another marijuana establishment, or destroyed;
(9) transportation records for marijuana and marijuana products as required under 3 AAC 306.750(f); and
(10) transportation records for marijuana or marijuana products being relocated in the case of a transfer of a marijuana establishment license to another location approved by the board.
(b) A marijuana establishment shall provide any record required to be kept on the licensed premises to an employee of the board upon request. Any record kept off premises must be provided to the board's employees not later than three business days after a request for the record.
(c) A marijuana establishment shall exercise due diligence in preserving and maintaining all required records. Loss of records and data, including electronically maintained records, does not excuse a violation of this section. The board may determine a failure to retain records required under this section to be a license violation affecting public safety.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217; am 12/10/2020, Register 236; am 1/22/2023, Register 245
3 AAC 306.760 Trade Shows
(a) Licensed marijuana establishments must comply with this section when participating in trade shows and similar industry events.
(b) A licensed cultivation facility may bring one plant to the trade show or event for display. The removal from and return of the plant to the licensed premises must be tracked in the marijuana inventory tracking system. Any marijuana removed from the plant at the event (for example, in a trimming demonstration) must be retained by the licensee and returned to the licensed premises.
(c) A licensed cultivation facility and a licensed retail facility may bring up to one ounce of each strain of marijuana to the trade show or event for display. The removal from and return of the marijuana to the licensed premises must be tracked in the marijuana inventory tracking system. The marijuana shall be contained so that the marijuana may not be removed from the display's immediate vicinity by a member of the public.
(d) A licensed product manufacturing facility and a licensed retail facility may bring one sample package of each marijuana product made or sold to the event for display. The removal from and return of the marijuana product made or sold by the facility to the event for display. The removal from and return of the marijuana product to the licensed premises must be tracked in the marijuana inventory tracking system. The marijuana product must remain packaged in the approved packaging throughout the duration of the event.
(e) A licensed testing facility may not perform required tests on samples from a licensed facility at any trade show or similar event.
(f) No marijuana or marijuana product may be sold or distributed by a licensee at the event.
(g) Marijuana and marijuana product displayed at an event by a licensee must be handled only by a licensee, or employee or agent of a licensee, who holds valid marijuana handler permit.
(h) Advertising or promotions displayed or distributed at the event by a licensee shall comply with the requirements of this chapter.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 8/11/2018, Register 227; am 3/5/2023, Register 245
3 AAC 306.770 Signs, merchandise, advertisements, and promotions
(a) Business cards and merchandise, including t-shirts, hats, and stickers, that are distributed by a licensed marijuana establishment and contain only the business name and logo, licensee name, and location and contact information, are not advertising or promotions.
(b) A licensed marijuana establishment operating within the boundary of a local government shall comply with the local government's laws regarding the size, number, and placement of any sign displayed at the licensed premises. In areas without a local government, a licensed marijuana establishment sign may not violate AS 19.25.075 - 19.25.160. A sign meeting these requirements is not advertising or promotions.
(c) An advertisement for a licensed marijuana establishment and for marijuana or a marijuana product must include the business name and license number.
(d) An advertisement for a licensed marijuana establishment is exempt from providing the warning statements in (g) of this section if
(1) the advertisement contains only the business name, logo, business type, contact information, location, and hours of operation; and
(2) the advertisement does not contain any written information about marijuana or a marijuana product or any photographic or illustrative depictions of marijuana or a marijuana product, other than depictions contained within the established business name font and logo.
(e) A logo or an advertisement for a licensed marijuana establishment and for marijuana or a marijuana product may not contain a statement or illustration that
(1) is false or misleading;
(2) promotes excessive consumption;
(3) represents that the use of marijuana has curative or therapeutic effects;
(4) depicts a person under 21 years of age consuming marijuana; or
(5) includes any object or character, including a toy, a cartoon character, or any other depiction that appeals to a person under 21 years of age.
(f) An advertisement for a licensed marijuana establishment and for marijuana or a marijuana product may not be placed
(1) within 1,000 feet of the perimeter of any child-centered facility, including a school, a child care facility or other facility providing services to children, a playground or recreation center, a public park, a library, or a game arcade that is open to persons under 21 years of age, except when included in an established publication intended for general readership;
(2) on or in a publicly owned or operated property; or
(3) within 1,000 feet of a substance abuse or treatment facility.
(g) Each of the following warnings must appear in an advertisement for marijuana or any marijuana product with visual contrast for print advertisements and intelligible audio for audio advertisements:
(1) "Marijuana has intoxicating effects and may be habit forming and addictive.";
(2) "Marijuana impairs concentration, coordination, and judgment. Do not operate a vehicle or machinery under its influence.";
(3) "There are health risks associated with consumption of marijuana.";
(4) "For use only by adults twenty-one and older. Keep out of the reach of children.";
(5) "Marijuana should not be used by women who are pregnant or breast feeding."
(h) A licensed marijuana establishment that advertises by means of a web page must utilize appropriate measures to ensure that individuals visiting the web page are 21 years of age or older.
(i) A licensed marijuana establishment may not engage in advertising by means of marketing directed towards location-based devices, including cellular phones, unless the marketing is a mobile device application installed on the device by the owner of the device who is 21 years of age or older and the application includes a permanent and easy opt-out feature.
(j) As long as no more than 30 percent of the event's participants and audience is reasonably expected to be under 21 years of age, a licensed marijuana establishment may sponsor
(1) an industry trade show;
(2) a charitable event;
(3) a sports event or competition;
(4) a concert; or
(5) any other event approved in advance by the board.
(k) A licensed marijuana establishment may not encourage the sale of marijuana or a marijuana product
(1) by conducting games or competitions related to the consumption of marijuana or a marijuana product; or
(2) by providing promotional materials or activities of a manner or type that would be especially appealing to children.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 10/17/2018, Register 228; am 10/8/2023, Register 248
Article 8 Enforcement; Civil Penalties
3 AAC 306.800 Inspection and investigation
Repealed.
History
- Eff. 2/21/2016, Register 217; am 12/6/2020, Register 236; am 12/10/2020, Register 236; repealed 7/23/2023, Register 247
3 AAC 306.801 Powers and duties
(a) The director, an enforcement agent, an employee of the board, or a peace officer acting in an official capacity may
(1) inspect, at a reasonable time and in a reasonable manner, the licensed premises of a marijuana establishment, including
(A) overlapping premises approved by the board under 3 AAC 306.705(d) and 3 AAC 306.710(d);
(B) marijuana and marijuana products;
(C) equipment used in cultivating, processing, testing, or storing marijuana, and
(D) the marijuana establishment's marijuana inventory tracking system, business records, and computers;
(2) issue a verbal warning, an inspection report, an advisory notice, or a notice of violation as set out under 3 AAC 306.806;
(3) seize or place an administrative hold on marijuana or any marijuana product as set out under 3 AAC 306.830;
(4) execute a search warrant;
(5) exercise peace officer powers as authorized under AS 17.38.131;
(6) file an accusation for suspension, revocation, or other disciplinary action on a license, permit, or endorsement; and
(7) take any other action the director considers necessary to ensure the enforcement of AS 17.38 and this chapter.
(b) A marijuana establishment, licensee, employee, or agent in charge shall cooperate with the director, an enforcement agent, an employee of the board, or a peace officer acting in an official capacity to enforce AS 17.38 or this chapter including to
(1) permit entry to and inspection of the licensed premises; and
(2) provide access to business records not later than 10 business days after a request by the director, an enforcement agent, an employee of the board, or a peace officer.
History
- Authority: AS 17.38.010; AS 17.38.131; AS 17.38.200 AS 17.38.070; AS 17.38.150; AS 17.38.900 AS 17.38.121; AS 17.38.190
- Eff. 7/23/2023, Register 247
3 AAC 306.805 Report or notice of violation
Repealed.
History
- Eff. 2/21/2016, Register 217; repealed 7/23/2023, Register 247
3 AAC 306.806 Verbal warning, inspection report, advisory notice, or notice of violation
(a) The director, an enforcement agent, an employee of the board, or a peace officer acting in an official capacity may issue a verbal warning, an inspection report, an advisory notice, or a notice of violation on a license, permit, or endorsement.
(b) A verbal warning may be issued to address a situation where a violation of a statute, regulation, or local law on the licensed premises is quickly correctable and does not pose an immediate risk to public safety or health. A verbal warning may be documented in the licensee's enforcement file maintained by the director.
(c) An inspection report may be issued to document an inspection of the licensed premises. An inspection report must be prepared on a form prescribed by the board and include information set out under AS 17.38, this chapter, or required by the board. An inspection report must be documented in the licensee's enforcement file maintained by the director.
(d) A written advisory notice may be issued to document an incident or defect that violates statute, regulation, or local law for which a verbal warning is not provided. The advisory notice may be issued based on information recorded on an inspection report or another record maintained by the director. An advisory notice may be grounds for issuance of a notice of violation or accusation. The advisory notice must be documented in the licensee's enforcement file maintained by the director.
(e) A written notice of violation may be issued to address more serious or repetitive violations of AS 17.38, this chapter, or local law that has occurred or is occurring on the licensed premises, including overlapping premises. It may be issued as a stand-alone document or based on a single event described in a previously issued inspection report or advisory notice. A notice of violation must meet the requirements set out under 3 AAC 306.809.
History
- Authority: AS 17.38.010; AS 17.38.131; AS 17.38.200 AS 17.38.070; AS 17.38.150; AS 17.38.900 AS 17.38.121; AS 17.38.190
- Eff. 7/23/2023, Register 247
3 AAC 306.809 Notice of violation
(a) A notice of violation must be in writing on a form approved by the board and include
(1) a description of each violation;
(2) a statement of applicable statutes, regulations, or local laws that were violated;
(3) a description of any history of prior violations of AS 17.38 and this chapter by the licensee;
(4) the recommended disciplinary action, including a fine or probation; and
(5) the signature of the investigator from the office.
(b) The notice of violation must be delivered to the licensee at the licensee's licensed premises, filed with the board, and, if applicable, delivered to the appropriate law enforcement agency. The notice of violation must be documented in the licensee's enforcement file maintained by the director.
(c) A licensee may contest a notice of violation or a recommended disciplinary action by filing a written response to the director not later than 10 days after licensee's receipt of the notice. In the written response, the licensee may either contest the notice of violation as an appeal of the director's decision as described under 3 AAC 306.845 or request an informal conference with the director under 3 AAC 306.844.
(d) If a licensee's written response requests an informal conference with the director under 3 AAC 306.844, the director shall schedule the conference not later than 10 days after receipt of the request. Thereafter, the director may uphold the recommended disciplinary action, reduce the disciplinary action, or dismiss the notice of violation. The director's decision to uphold the recommended disciplinary action, reduce the disciplinary action, or dismiss the notice of violation must be documented in the licensee's enforcement file maintained by the director.
(e) If the licensee requests that the notice of violation be addressed by the board, either after or without conferencing with the director, the board will consider the notice of violation as an appeal of a director's decision at its next regularly scheduled meeting. At that meeting, the director shall present information and witnesses sufficient to prove to the satisfaction of the board that the violation occurred and the recommended fine or other disciplinary action is consistent with board precedent; the licensee may present information and witnesses to contest the disciplinary action and rebut the director's presentation.
(f) Following the presentation described in (e) of this section, the board shall determine whether a preponderance of evidence supports upholding the notice of violation and, if so, determine the appropriate fine or other disciplinary action based on board precedent. The board may vacate the notice of violation, decrease the recommended disciplinary action, or order additional disciplinary action, including a request that the director prepare an accusation for suspension or revocation of the license.
(g) A decision by the board relating to a notice of violation, civil fine, or other disciplinary action may be appealed to the superior court under AS 44.62.560, excluding a request that the director prepare an accusation for suspension or revocation of a license.
(h) A notice of violation may be the basis of a proceeding to suspend or revoke a marijuana establishment's license as set out under 3 AAC 306.810.
History
- Authority: AS 17.38.010; AS 17.38.131; AS 17.38.200 AS 17.38.070; AS 17.38.150; AS 17.38.900 AS 17.38.121; AS 17.38.190
- Eff. 7/23/2023, Register 247
3 AAC 306.810 Suspension or revocation of license
(a) The board will suspend or revoke a marijuana establishment license issued under this chapter if any licensee is convicted of a felony or of a crime listed in 3 AAC 306.010(d)(2) or (3), or if the board becomes aware that a licensee did not disclose a previous felony conviction or a conviction of a crime listed in 3 AAC 306.010(d)(2) or (3).
(b) The board may suspend or revoke a license issued under this chapter, refuse to renew a license, order probation as described under 3 AAC 306.836, or impose a civil fine as described under 3 AAC 306.840 if the board finds that a licensee for a marijuana establishment
(1) misrepresented a material fact on an application for a marijuana establishment license, or an affidavit, report, or signed statement under AS 17.38 or this chapter; or
(2) is following any practice or procedure that is contrary to the best interests of the public, including
(A) using any process not approved by the board for extracting or manufacturing marijuana concentrate or products; or
(B) selling or distributing any marijuana concentrate or product that has not been approved by the board;
(3) failed, within a reasonable time, to correct any defect that is the subject of an advisory notice or the notice of violation of
(A) AS 17.38 or this chapter;
(B) a condition or restriction imposed by the board; or
(C) other applicable law;
(4) knowingly allowed an employee or agent to violate AS 17.38, this chapter, or a condition or restriction imposed by the board;
(5) violated a condition or restriction imposed by the board;
(6) failed to comply with any applicable public health, fire, safety, or tax statute, ordinance, regulation, or other law in the state; or
(7) used the licensed premises for an illegal purpose including gambling, possession or use of narcotics other than marijuana, prostitution, or sex trafficking.
(c) A local government may notify the director if it obtains evidence that a marijuana establishment has violated a provision of AS 17.38, this chapter, or a condition or restriction the board has imposed on the marijuana establishment. Unless the board finds that the local government's notice is arbitrary, capricious, and unreasonable, the director shall prepare the notice and supporting evidence as an accusation against the marijuana establishment under AS 44.62.360, and conduct proceedings to resolve the matter as described under 3 AAC 306.810 - 3 AAC 306.816.
History
- Authority: AS 17.38.010; AS 17.38.131; AS 17.38.200 AS 17.38.070; AS 17.38.150; AS 17.38.900 AS 17.38.121; AS 17.38.190
- Eff. 2/21/2016, Register 217; am 7/23/2023, Register 247
3 AAC 306.811 Suspension or revocation of a license based on the act of an employee
If, in a proceeding to suspend, revoke, or otherwise discipline a marijuana establishment license under 3 AAC 306.809, 3 AAC 306.810, or 3 AAC 306.836, evidence shows that an employee or agent of a licensed marijuana establishment was responsible for an act that would justify suspension, revocation, or other discipline of the marijuana establishment's license if committed by a licensee, the board may find that the licensee knowingly allowed the act if
(1) the licensee
(A) was physically present when the violation occurred;
(B) knew or should have known the violation was occurring; and
(C) did not take action to stop the violation;
(2) the licensee failed to adequately supervise the employee or agent;
(3) the licensee failed to adequately train the employee or agent on the requirements of AS 17.38 and this chapter relating to marijuana; or
(4) the licensee was reckless or careless in hiring the employee or agent.
History
- Authority: AS 17.38.010; AS 17.38.131; AS 17.38.200 AS 17.38.070; AS 17.38.150; AS 17.38.900 AS 17.38.121; AS 17.38.190
- Eff. 7/23/2023, Register 247
3 AAC 306.812 Suspension or revocation of marijuana handler permit
(a) The board may suspend or revoke a permit issued under 3 AAC 306.700, impose probation under 3 AAC 306.836, or impose a civil fine under 3 AAC 306.840 if the board finds that a marijuana handler permit holder acted in violation of a statute, regulation, or local law.
(b) The director may issue a director's decision to discipline a permit holder under 3 AAC 306.700 by submitting to the board a written statement of reasons for the requested discipline. The permit holder may appeal the director's decision by submitting to the director and to the board a written statement of reasons for the appeal.
(c) The director shall provide an electronic notice to a permit holder at the electronic mail address provided by the permit holder in the holder's permit application that a hearing conducted in compliance with 3 AAC 306.845 will take place at the board's next regularly scheduled meeting.
(d) The director shall maintain a list of suspended, revoked, expired, or otherwise disciplined permit holders. Upon request, the list shall be made available to licensees and the public.
(e) Notwithstanding the requirements of (a) - (d) of this section, the director may suspend a permit issued under 3 AAC 306.700 if a permit holder's check is returned for any reason by the withdrawing financial institution until the permit fee and any associated fees are paid.
History
- Authority: AS 17.38.010; AS 17.38.131; AS 17.38.200 AS 17.38.070; AS 17.38.150; AS 17.38.900 AS 17.38.121; AS 17.38.190
- Eff. 5/23/2018, Register 226; am 3/25/2020, Register 233; am 7/23/2023, Register 247
3 AAC 306.815 Suspension or revocation based on act of employee
Repealed.
History
- Eff. 2/21/2016, Register 217; repealed 7/23/2023, Register 247
3 AAC 306.816 Accusation
(a) A proceeding to suspend, revoke, or otherwise discipline a license, excluding proceedings under 3 AAC 306.809 and 3 AAC 306.836, must be initiated by service of an accusation on the licensee in compliance with AS 44.62.360 and 44.62.380.
(b) The accusation must be served at the address of the licensed premises or at the address of the licensee responsible for management of the marijuana establishment and compliance with state laws listed in the marijuana establishment license application under 3 AAC 306.020(b)(5).
(c) A licensee served with an accusation under this section is entitled to a hearing as provided under AS 44.62.390. If a notice of defense is filed, a hearing shall be held in compliance with AS 44.62.330 - 44.62.630 before the office of administrative hearings created under AS 44.64.010. Failure to file a notice of defense under AS 44.62.390 constitutes a waiver of the right to further appeal.
(d) A person aggrieved by a final decision of the board following a hearing conducted in compliance with AS 44.62.330 - 44.62.630 may appeal to the superior court under AS 44.62.560.
History
- Authority: AS 17.38.010; AS 17.38.131; AS 17.38.200 AS 17.38.070; AS 17.38.150; AS 17.38.900 AS 17.38.121; AS 17.38.190
- Eff. 7/23/2023, Register 247
3 AAC 306.820 Procedure for action on license suspension or revocation
Repealed.
History
- Eff. 2/21/2016, Register 217; repealed 7/23/2023, Register 247
3 AAC 306.825 Summary suspension to protect public health, safety, or welfare
(a) If the director finds that a person holding a marijuana establishment license has acted and appears to be continuing to act in a way that constitutes an immediate threat to the public health, safety or welfare, the director may issue an order immediately suspending the license of that person, and ordering an immediate stop to the activity that constitutes the threat to the public health, safety, or welfare.
(b) When the director issues a summary suspension under this section, the director shall immediately give the marijuana establishment subject to the summary suspension order notice of the reasons for the summary suspension, and of the time and place for an expedited hearing before the board. Unless the marijuana establishment subject to the summary suspension order requests a delay, the hearing will be held not later than five days after the director gives notice of the reasons for the summary suspension and the scheduled hearing.
History
- Authority: AS 17.38.010; AS 17.38.131; AS 17.38.200 AS 17.38.070; AS 17.38.150; AS 17.38.900 AS 17.38.121; AS 17.38.190
- Eff. 2/21/2016, Register 217
3 AAC 306.830 Seizure of or administrative hold on marijuana or marijuana products
(a) The director, an enforcement agent, an employee of the board, or a peace officer acting in an official capacity may seize or place an administrative hold on marijuana or any marijuana product from a licensed or previously licensed marijuana establishment
(1) if the marijuana establishment has any marijuana or marijuana product not properly logged into the marijuana establishment's marijuana inventory tracking system;
(2) if the marijuana establishment has any adulterated marijuana food or drink product prohibited under 3 AAC 306.510(a)(4);
(3) if the marijuana establishment has any marijuana or marijuana product that is not properly packaged and labeled as provided in
(A) 3 AAC 306.470 and 3 AAC 306.475; or
(B) 3 AAC 306.565 and 3 AAC 306.570;
(4) if the marijuana establishment has not renewed its license as required under 3 AAC 306.035 or if the board has denied renewal of the marijuana establishment's license under 3 AAC 306.080(b);
(5) upon the development of reasonable grounds to believe that any marijuana or marijuana product
(A) constitutes evidence of a violation of a state statute or regulation; or
(B) poses an immediate threat to worker or public health, safety, or welfare; or
(6) if the marijuana establishment has engaged or attempted to engage in
(A) the diversion of marijuana or a marijuana product; or
(B) a crime on the establishment's licensed premises; in this subparagraph, "crime" has the meaning given in AS 11.81.900(b).
(b) The director, an enforcement agent, an employee of the board, or a peace officer acting in an official capacity may choose, for a reason set out in (a) of this section, whether to place an administrative hold on marijuana or a marijuana product or seize the marijuana or marijuana product. The director may change an administrative hold to a seizure. The director shall update the marijuana inventory control tracking system to reflect the administrative hold or seizure or a change from an administrative hold to a seizure.
(c) If marijuana or a marijuana product is placed on an administrative hold, the marijuana establishment shall
(1) physically separate the marijuana or marijuana product from the public and store it in a secured and restricted-access area of the establishment's licensed premises; and
(2) receive the express written consent of the director to sell, move, transfer, or engage in any other commercial activity relating to the marijuana or marijuana product
(A) after the conclusion of the investigation of the reason for the administrative hold, the payment of any civil fine, the lifting of any suspension, and the conclusion of any informal conference, any formal hearing, and any hearing under AS 44.62.330 - 44.62.630 (Administrative Procedure Act) and, if applicable, 2 AAC 64.100 - 2 AAC 64.990;
(B) if seizure of the marijuana or marijuana product has not been ordered under (d) of this section; and
(C) if destruction of the marijuana or marijuana product has not been ordered under (j) of this section.
(d) If the director, an enforcement agent, an employee of the board, or a peace officer acting in an official capacity seizes marijuana or a marijuana product under this section, the director shall ensure that the items physically removed from the establishment's licensed premises are stored in a reasonable manner.
(e) The director shall immediately give the marijuana establishment at which the marijuana or marijuana product was placed on administrative hold or from which the item was seized notice of whether the action is an administrative hold or seizure and the reasons for the administrative hold or seizure. In the notice, the director shall state that the marijuana establishment may request, not later than 15 days after receiving the notice,
(1) an informal conference, before either the director or the board, if the establishment is aggrieved by an administrative hold; the director shall also state in the notice that selection of an informal conference does not affect the establishment's right to request a formal hearing from the administrative hold; or
(2) a formal hearing before the board from an administrative hold or seizure; in the notice, the director shall schedule a date and time for a formal hearing that is not later than 15 days after the establishment receives the notice, unless the establishment requests a delay.
(f) If a marijuana establishment aggrieved by an administrative hold selects an informal conference
(1) with the director, the informal conference must be held at a time and place convenient to the establishment and the director, but not later than 15 days after the establishment receives notice of the administrative hold, unless the establishment elects a later time for the conference; an informal conference with the director may be conducted telephonically; or
(2) with the board, the informal conference must be held at a time and place convenient to the establishment and the board, but not later than the next scheduled meeting of the board; an informal conference with the board may be conducted telephonically.
(g) If an informal conference does not resolve the matter of an administrative hold to the satisfaction of a marijuana establishment, the establishment, not later than 15 days after the last day of the informal conference, may request a formal hearing. The hearing will be held not later than 15 days after the director's receipt of the request for a formal hearing.
(h) If a marijuana establishment's request for a formal hearing is from an informal conference regarding an administrative hold, the director shall send the establishment a notice with the date and time of the formal hearing, scheduled as described in (g) of this section, unless the establishment has requested a delay. If the request for the formal hearing is from an administrative hold or seizure, and the establishment did not request an informal conference, the formal hearing will be held on the date and time scheduled in the notice sent under (e)(2) of this section, unless the establishment has requested a delay. If the administrative hold or seizure occurs in connection with a summary suspension under 3 AAC 306.825, the hearing will be combined with a hearing on the summary suspension.
(i) If an administrative hold is on marijuana plants in a licensed standard or limited marijuana cultivation facility, the order setting the administrative hold must
(1) direct the facility to continue care of the plants until the conclusion of any informal conference, any formal hearing, and any hearing under AS 44.62.330 - 44.62.630 (Administrative Procedure Act) and, if applicable, 2 AAC 64.100 - 2 AAC 64.990; and
(2) prohibit any transfer, sale, or commercial activity related to the plants, until the conclusion of any informal conference, any formal hearing, and any hearing under AS 44.62.330 - 44.62.630 (Administrative Procedure Act) and, if applicable, 2 AAC 64.100 - 2 AAC 64.990.
(j) If after a formal hearing the administrative hold or seizure is upheld as justified, the marijuana establishment at or from which the marijuana or marijuana product was placed on administrative hold or seized may request a hearing under AS 44.62.330 - 44.62.630 and, if applicable, 2 AAC 64.100 - 2 AAC 64.990.
(k) If a marijuana establishment from which marijuana or marijuana product was placed on administrative hold or seized does not contest the seizure or hold, or if after any informal conference and any final hearing the administrative hold on or seizure of the marijuana or marijuana product is upheld as justified, the board may order the destruction of the marijuana or marijuana product, in addition to or in place of any fines or civil remedies. The marijuana or marijuana product must be destroyed by burning, crushing, or mixing with other material to make the marijuana or marijuana product unusable as provided in 3 AAC 306.740.
(l) The board will not consider marijuana or marijuana product placed on administrative hold or seized to be part of a marijuana establishment's physical inventory until the administrative hold is lifted or the marijuana or marijuana product is removed from seizure. The director shall notify, for information purposes, local governments and taxing authorities with jurisdiction over a marijuana establishment subject to the administrative hold and seizure not later than 30 days after the administrative hold or seizure is put in place or lifted.
History
- Authority: AS 17.38.010; AS 17.38.131; AS 17.38.200 AS 17.38.070; AS 17.38.150; AS 17.38.900 AS 17.38.121; AS 17.38.190
- Eff. 2/21/2016, Register 217; am 12/6/2020, Register 236; am 7/23/2023, Register 247
3 AAC 306.835 Hearing
Repealed.
History
- Eff. 2/21/2016, Register 217; repealed 7/23/2023, Register 247
3 AAC 306.836 Probation
(a) In a disciplinary decision on a notice of violation or suspension order, the board may place a license, permit, or endorsement on probation for a period of no greater than three years. To ensure good faith performance of all obligations by a party while under probation, the board may suspend any portion of time of suspension or civil fines owed.
(b) The director may file a probation violation at their discretion. To initiate a probation violation, the director shall detail in a written communication to the board
(1) a description of the circumstances that support that request;
(2) a statement of statutes, regulations, or local laws that were violated;
(3) prior violations or criminal history of the licensee and any violations recorded on the licensed premises;
(4) a recommendation of the amount of unsuspended time or fines to levy; and
(5) the signature of the investigator from the office.
(c) The written communication described in (b) of this section must be documented in the licensee's enforcement file maintained by the director. A copy of the communication must be delivered to the licensee, filed with the board, and, if applicable, delivered to the appropriate law enforcement agency.
(d) An aggrieved party may contest a probation violation or the recommended disciplinary action issued under (a) of this section as an appealed director's decision by filing a written response to the director not later than 10 days after the licensee's receipt of the notice. If the licensee does not contest the violation and sanction, the director shall impose the violation and sanction.
(e) If the aggrieved party contests the probation violation, the board will consider the violation at its next regularly scheduled meeting. At that meeting the director shall present information and witnesses sufficient to prove to the satisfaction of the board that the violation occurred and the recommended unsuspended time or fine is consistent with board precedent. The licensee may present information and witnesses to contest the probation violation and rebut the director's presentation.
(f) Following the presentation described in (e) of this section, the board shall determine whether there is substantial evidence to uphold the probation violation, and if so, determine whether the penalty imposed by the director is appropriate. The board may vacate the probation violation, decrease the recommended disciplinary action, or order additional disciplinary action, including a request that the director prepare an accusation for suspension or revocation of the license.
(g) A decision by the board related to a notice of violation, civil fine, or other disciplinary action, excluding a request that the director prepare an accusation for suspension or revocation of a license, may be appealed to the superior court under AS 44.62.560.
(h) Nothing in this section limits the authority of the board to suspend or revoke a license for a violation of AS 17.38 or this chapter.
History
- Authority: AS 17.38.010; AS 17.38.131; AS 17.38.200 AS 17.38.070; AS 17.38.150; AS 17.38.900 AS 17.38.121; AS 17.38.190
- Eff. 7/23/2023, Register 247
3 AAC 306.840 Civil fines
(a) The board may, in addition to any other penalties imposed under this chapter, impose a civil fine in accordance with the Marijuana Control Board Fine Schedule dated March 23, 2021, and adopted by reference, on a marijuana establishment, licensee, or person that the board determines has violated a provision of AS 17.38 or this chapter.
(b) In a proceeding under 3 AAC 306.810 - 3 AAC 306.830, the board may impose a civil fine, not to exceed the greater of
(1) the fine imposed in the fine schedule adopted by reference in (a) of this section;
(2) an amount that is three times the monetary gain realized by the marijuana establishment, licensee, or person as a result of the violation, as determined by the board; or
(3) if applicable because of the seriousness of the conduct and the related facts,
(A) $10,000 for the first violation;
(B) $30,000 for the second violation; or
(C) $50,000 for the third or subsequent violation.
History
- Authority: AS 17.38.010; AS 17.38.131; AS 17.38.200 AS 17.38.070; AS 17.38.150; AS 17.38.900 AS 17.38.121; AS 17.38.190
- Eff. 2/21/2016, Register 217; am 1/19/2022, Register 241; am 7/23/2023, Register 247
3 AAC 306.844 Informal conference
An aggrieved licensee or permittee subject to any action under 3 AAC 306.800 - 3 AAC 306.840 may request an informal conference with the director. The director will set the informal conference not later than ten days after receipt of the request.
History
- Authority: AS 17.38.010; AS 17.38.131; AS 17.38.200 AS 17.38.070; AS 17.38.150; AS 17.38.900 AS 17.38.121; AS 17.38.190
- Eff. 7/23/2023, Register 247
3 AAC 306.845 Appeal
(a) An aggrieved party may appeal to the board regarding any other action of the director, an enforcement agent, or an employee of the board charged with enforcing AS 17.38 or this chapter. The board will consider the appeal at the next regularly scheduled meeting of the board.
(b) Repealed 7/23/2023.
History
- Authority: AS 17.38.010; AS 17.38.131; AS 17.38.200 AS 17.38.070; AS 17.38.150; AS 17.38.900 AS 17.38.121; AS 17.38.190
- Eff. 2/21/2016, Register 217; am 12/6/2020, Register 236; am 7/23/2023, Register 247
3 AAC 306.850 Surrender or destruction of license
A license issued under this chapter must be surrendered to the director, an enforcement agent, or an employee of the board on demand if the director or board so orders. A license issued under this chapter must be surrendered not later than 10 days after the marijuana establishment loses or vacates the licensed premises. If a license is destroyed, the marijuana establishment shall promptly notify the board.
History
- Authority: AS 17.38.010; AS 17.38.131; AS 17.38.200 AS 17.38.070; AS 17.38.150; AS 17.38.900 AS 17.38.121; AS 17.38.190
- Eff. 2/21/2016, Register 217
Article 9 General Provisions
3 AAC 306.905 Public records
Marijuana establishment applications are public records. The board may, at the request of any applicant, designate materials confidential if they
(1) contain proprietary information including trade secrets; or
(2) are required to be kept confidential by any federal or state law.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 40.25.110 AS 17.38.070; AS 17.38.200 AS 17.38.121; AS 17.38.900
- Eff. 2/21/2016, Register 217
3 AAC 306.910 Refusal to sell marijuana
Nothing in this chapter prohibits a licensee from refusing to sell marijuana or marijuana products to any person unless that refusal is a violation of AS 18.80.210.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217
3 AAC 306.915 Exercise of authority
Until a marijuana establishment surrenders its license to the board, and so long as business is conducted under the license on the licensed premises, the person holding the license, whether an individual, a partnership, a limited liability company, a corporation, or a local government, is responsible and liable for the conduct of the business. Any individual exercising actual authority over the conduct of business on the licensed premises must be the holder of the marijuana establishment license, or an agent or employee of that person unless the board has approved a transfer of the license to a different person.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217
3 AAC 306.920 Death of licensee
(a) If an individual who is the sole licensee of a marijuana establishment dies, the marijuana establishment shall cease operation. A personal representative appointed by the superior court for the estate of the deceased licensee may submit to the director a written request to reopen the business, along with a copy of the court order appointing the personal representative. If the licensed marijuana establishment is in good standing, and the personal representative is not a person prohibited from holding a marijuana establishment license under AS 17.38.200(i), the director shall grant permission to the personal representative to operate the business on the licensed premises subject to (b) of this section. In this section, a marijuana establishment is in good standing if the marijuana establishment
(1) has a valid current license;
(2) has paid all fees due under this chapter and all local taxes due; and
(3) has no unresolved suspension or revocation proceedings against it.
(b) A personal representative authorized to operate a marijuana establishment under (a) of this section must submit an application for a transfer of ownership to another person in compliance with 3 AAC 306.045 not later than 90 days after obtaining the director's approval to operate. The board may extend the time allowed in this section for another 90 days if the personal representative requests the additional time.
(c) This section does not authorize the transfer of a marijuana establishment license unless the board approves the personal representative's application for transfer of license to another person.
History
- Authority: AS 17.38.010; AS 17.38.150; AS 17.38.900 AS 17.38.070; AS 17.38.190 AS 17.38.121; AS 17.38.200
- Eff. 2/21/2016, Register 217
3 AAC 306.925 Submissions to the board
Except as otherwise specifically provided in this chapter, applications and communications of a formal nature must be submitted in writing, upon prescribed forms as appropriate, to the board at its main office, and are not considered timely filed until received there.
History
- Authority: AS 17.38.190; AS 17.38.200
- Eff. 12/28/2016, Register 220
3 AAC 306.930 Staff
(a) The director of the board is responsible for the management of the board's offices, the administration of the board's functions, and the enforcement of AS 17.38 and this chapter.
(b) The director shall employ and supervise necessary clerical and investigative personnel and shall prescribe their duties and authority. The director may employ a person to a position with the special investigator job classification only if the person
(1) possesses a certificate issued by the Alaska Police Standards Council demonstrating that the person meets the standards for appointment as a police officer under AS 18.65.240;
(2) provides evidence satisfactory to the director that the person
(A) meets the standards of another state or a federal jurisdiction for appointment as a police officer; and
(B) the standards of the state or federal jurisdiction are equivalent to the standards required for issuance of a certificate by the Alaska Police Standards Council under AS 18.65.240; or
(3) is eligible for appointment as a police officer through reciprocity in accordance with 13 AAC 85.060.
(c) The director shall have available to the public forms for application for new marijuana establishment licenses, transfers, renewals, endorsements, petitions, and other necessary documents as approved by the board.
History
- Authority: AS 17.38.121; AS 17.38.140; AS 17.38.190 AS 17.38.131; AS 17.38.150
- Eff. 12/28/2016, Register 220; am 1/22/2023, Register 245; am 5/26/2024, Register 250
3 AAC 306.935 Conduct of board meetings
(a) The board will, at the first meeting of each calendar year, select a chair from among its members to preside over board meetings during the ensuing year.
(b) The board will meet at the call of the chair after reasonable public notice is given.
(c) For the purposes of AS 17.38.111(b), the whole membership is all persons appointed and serving as members of the board.
(d) The director is responsible for preparing an informative agenda for each board meeting. A copy of the agenda must be available for inspection by persons who request it.
History
- Authority: AS 17.38.111; AS 17.38.150 AS 17.38.121; AS 17.38.190
- Eff. 12/28/2016, Register 220
3 AAC 306.990 Definitions
(a) In AS 17.38 and this chapter,
(1) "assisting" does not include
(A) using, displaying, purchasing, or transporting marijuana in excess of the amount allowed in AS 17.38.020;
(B) possessing, growing, processing, or transporting marijuana plants in excess of the number allowed in AS 17.38.020;
(C) growing marijuana plants for another person in a place other than
(i) that other person's primary residence; or
(ii) a garage, shed, or similar place under the other person's control;
(2) "delivering"
(A) means handing to a person who purchases the product on licensed premises only;
(B) does not include transferring or transporting to a consumer off licensed premises;
(3) "flowering" means a marijuana plant that has visible crystals, buds, or flowers, or for which the exposure to light is scheduled with the intent to produce crystals, buds, or flowers;
(4) "immature" means a marijuana plant 18 inches or less in height, with no visible crystals, buds, or flowers, and in which the exposure to light is scheduled with the intent to prevent formation of crystals, buds, or flowers;
(5) "in public"
(A) means in a place to which the public or a substantial group of people has access;
(B) except as provided in (C) of this paragraph, includes highways, transportation facilities, schools, places of amusement or business, parks, playgrounds, prisons, and hallways, lobbies and other portions of apartment houses and hotels not constituting rooms or apartments designed for actual residence;
(C) does not include an area on the premises of a licensed retail marijuana store designated for onsite consumption under 3 AAC 306.305;
(6) "mature" means a marijuana plant over 18 inches in height;
(7) "personal cultivation" does not include
(A) using, displaying, purchasing, or transporting marijuana in excess of the amount allowed in AS 17.38.020;
(B) possessing, growing, processing, or transporting marijuana plants in excess of the number allowed in AS 17.38.020;
(C) growing marijuana plants for another person in a place other than
(i) that other person's primary residence; or
(ii) a garage, shed, or similar place under the other person's control;
(8) "possess" means having physical possession or control over property;
(9) "registration" means licensure or license.
(10) Repealed 10/11/2017.
(b) In this chapter, unless the context requires otherwise,
(1) "adulterated food or drink product"
(A) means a product that is intended to be consumed orally and that existed without marijuana in a form ready for consumption before marijuana was added by any process;
(B) does not include raw ingredients that are combined with marijuana in a manufacturing process;
(2) "agent"
(A) means a representative who is authorized to act for a licensee, the board, or the director;
(B) includes a contractor or subcontractor;
(3) "batch" or "harvest batch" means a specifically identified quantity of bud and flower, plant trim, leaf, and other usable product from marijuana plants, that are uniform in strain, cultivated in one place and under the same conditions, using the same medium and agricultural chemicals including pesticides and fungicides, and harvested at the same time;
(4) "bud and flower" means the hairy, sticky, or crystal-covered parts of mature female marijuana plants generally harvested for their high potency content;
(5) "business day" means a day other than a Saturday, Sunday, or a state holiday;
(6) "CBD" means cannabidiol;
(7) "CBDA" means CBD Acid;
(8) "CBN" means cannabinol;
(9) "clones" or "cuttings" means small starter plants
(A) shorter than eight inches tall; and
(B) used to propagate marijuana plants;
(10) "compensation"
(A) means money, bartered objects or services, or anything else of value, whether given as payment or voluntarily as a donation, when accepted by a person who gives, distributes, or delivers marijuana to another;
(B) includes a cover charge, a delivery charge, and a packaging charge;
(11) "concentrate" or "marijuana concentrate" means resin, oil, wax, or any other substance produced by extracting or isolating cannabinoids, THC, or other components from a marijuana plant or from materials harvested from a marijuana plant;
(12) "consumer"
(A) means an individual who purchases and uses marijuana or a marijuana product; and
(B) does not include a marijuana establishment that resells marijuana or incorporates marijuana into a manufactured product;
(13) "contaminant" means one or more of the following:
(A) harmful microbials, including Escherichia coli (E. coli). or Salmonella species;
(B) residual solvents;
(C) poisons or toxins;
(D) harmful chemicals, including pesticides;
(E) dangerous molds, mildew, or filth;
(14) "controlling interest" means ownership or control of
(A) 50 percent or more of the ownership interest or voting shares of a corporation; or
(B) less than 50 percent if a person and family members jointly exert actual control as demonstrated by
(i) making decisions for the corporation without independent participation of other owners;
(ii) exercising day-to-day control over the corporation's affairs;
(iii) disregarding formal legal requirements;
(iv) using corporation funds for personal expenses or investments, or intermingling corporation finances with personal finances; or
(v) taking other actions that indicate the corporation is a mere instrumentality of the individual;
(15) "distribute" means spread out or pass out among several or many members of a group;
(16) "edible" and "edible marijuana product"
(A) means a marijuana product that is intended to be consumed orally, whether as food or drink;
(B) does not include an adulterated food or drink product;
(17) "extraction" or "marijuana extraction" means production of marijuana concentrate by any water-based, food-based, or solvent-based method;
(18) "homogenous" means a component or quality, such as THC, is spread evenly throughout the product, or can be found in equal amounts in each part of a multi-serving unit;
(19) "individual" means a natural person;
(20) "in-house testing"
(A) means laboratory testing as provided in 3 AAC 306.635 and that does not meet the requirements of 3 AAC 306.645;
(B) does not include consumption of any marijuana or marijuana product on the licensed premises;
(21) "licensed"
(A) means holding a current and valid license that the board has issued under this chapter;
(B) does not include holding a formerly valid license that has expired or that the board has suspended or revoked;
(22) "licensee" means each individual identified in 3 AAC 306.020 who must be listed in an application for a marijuana establishment license under this chapter;
(23) "licensed premises" means any or all designated portions of a building or structure, or rooms or enclosures in the building or structure, including overlapping premises approved by the board under 3 AAC 306.705(d) and 3 AAC 306.710(d) or designated outdoor areas, at the specific location for which a marijuana establishment license is issued, and used, controlled, or operated by the marijuana establishment to carry out the business for which it is licensed;
(24) "lot" or "production lot" means a group of marijuana products that were prepared at the same time from the same batch of marijuana, using the same recipe or process;
(25) "marijuana" has the meaning given in AS 17.38.900;
(26) "marijuana cultivation facility" has the meaning given in AS 17.38.900;
(27) "marijuana infused product"
(A) means a product that contains marijuana or marijuana concentrate and is intended for human use;
(B) does not include bud and flower marijuana;
(28) "marijuana plant" means a living organism of the genus Cannabis capable of absorbing water and inorganic substances through its roots, and synthesizing nutrients in its leaves by photosynthesis;
(29) "marijuana product" has the meaning given in AS 17.38.900;
(30) "marijuana product manufacturing facility" has the meaning given in AS 17.38.900;
(31) "peace officer" has the meaning given in AS 01.10.060;
(32) "person" has the meaning given in AS 01.10.060;
(33) "process" or "processing" means harvesting, curing, drying, or trimming of a marijuana plant;
(34) "propagate" means to cause a marijuana plant to grow by planting clones or cuttings, and nurturing them into viable plants up to eight inches in height;
(35) "recreation or youth center" means a building, structure, athletic playing field, or playground
(A) run or created by a local government or the state to provide athletic, recreational, or leisure activities for persons under 21 years of age; or
(B) operated by a public or private organization licensed to provide shelter, training, or guidance for persons under 21 years of age;
(36) "retail marijuana store" has the meaning given in AS 17.38.900;
(37) "square feet under cultivation"
(A) means an area of the licensed premises of a standard or limited marijuana cultivation facility that is used for growing marijuana, measured from the perimeter of the floor or growing space for marijuana;
(B) does not include a processing or storage area, an equipment storage area, an office, a hallway, or another area, if that area is not used for growing marijuana;
(38) "THC" means tetrahydrocannabinol, the main psychoactive substance found in marijuana;
(39) "THCA" means THC Acid;
(40) "transaction" means one single occurrence in which marijuana or a marijuana product not exceeding the limits set out in 3 AAC 306.355 is passed from a licensed marijuana establishment to another person.
(41) "drunken person" has the meaning given in AS 04.21.080(b)(9);
(42) "freestanding"
(A) has the meaning given in AS 18.35.301(i)(1);
(B) does not include a building that contains a tenant other than one or more licensed marijuana establishments owned by the same business, individual, or group of individuals that seeks an onsite consumption endorsement;
(43) "intoxicated" has the meaning given in AS 11.81.900(b);
(44) "marijuana consumption area" means a designated area within the licensed premises of a retail marijuana store that holds a valid onsite consumption endorsement, where marijuana and marijuana products may be consumed, excluding marijuana concentrates other than those consumed by vaping under 3 AAC 306.370(b)(3);
(45) "retail marijuana store premises" means an area encompassing both the retail marijuana store and any marijuana consumption area.
(46) "sight-obscuring wall or fence" means a wall or fence, including any gates, constructed of solid material and a minimum of six feet in height.
(47) "total CBD" means the sum of CBD and (0.877) * (CBDA);
(48) "total THC" means the sum of THC and (0.877) * (THCA).
(49) "smoking" has the meaning given in AS 18.35.399;
(50) "vaping" means the action or practice of inhaling the aerosol produced by an electronic device that heats up and vaporizes a liquid or solid; and
(51) "office" means the Alcohol and Marijuana Control Office;
(52) "filth" has the meaning given "contaminated with filth" in AS 17.20.370 (Alaska Food, Drug, and Cosmetic Act; definitions);
(53) "plant batch" means a specifically identified quantity of immature plants that are propagated at the same time and from the seeds, clones, or cuttings of a marijuana plant or marijuana plants that are uniform in strain, cultivated in one place and under the same conditions, and using the same medium and agricultural chemicals including pesticides and fungicides.
History
- Authority: AS 17.38.010; AS 17.38.121; AS 17.38.900 AS 17.38.040; AS 17.38.190; AS 18.35.301 AS 17.38.070; AS 17.38.200
- Eff. 2/24/2015, Register 213; am 2/21/2016, Register 217; am 10/11/2017, Register 224; am 8/11/2018, Register 227; am 10/20/2018, Register 228; am 4/11/2019, Register 230; am 5/9/2019, Register 230; am 3/13/2020, Register 233; am 12/6/2020, Register 236; am 12/10/2020, Register 236; am 8/7/2021, Register 239; am 7/23/2023, Register 247; am 4/19/2025, Register 254; am 4/25/2025, Register 254
3 AAC 306.995 Internet and phone orders
Repealed.
History
- Eff. 4/17/2020, Register 234; am 8/23/2020, Register 235; am 11/24/2020, Register 236; repealed 8/13/2023, Register 247
Earlier captured publisher context
Earlier captions and authority/source notes are retained below. Their inclusion does not determine their current legal effect.
Article 4 “Regulation D” Registration and Notice Procedure
Chapter 21 Insurer — Financial
Article 4 Definition of Standards and Director’s Authority for Companies Deemed to Be in an Impaired Financial Condition
Chapter 25 Surplus Lines — Unauthorized Insurers
Chapter 30 Workers’ Compensation
Article 3 Workers’ Compensation Review and Advisory Committee
Article 4 Workers’ Compensation Loss Reimbursement Requirements
Article 8 Specifications and Requirements — Orifice Meters
Article 9 User Requirements, Gas Measuring Devices — General
Part 5 Division of Veterans’ Affairs
Chapter 41 Veteran’s Loan Assumptions
Chapter 58 Silver Hand and “Made in Alaska” Programs
Chapter 150 National Petroleum Reserve — Alaska Impact Program
Article 4 –Regulation D– Registration and Notice Procedure
Chapter 21 Insurer – Financial
Article 4 Definition of Standards and Director–s Authority for Companies Deemed to Be in an Impaired Financial Condition
Chapter 25 Surplus Lines – Unauthorized Insurers
Chapter 30 Workers– Compensation
Article 3 Workers– Compensation Review and Advisory Committee
Article 4 Workers– Compensation Loss Reimbursement Requirements
Article 8 Specifications and Requirements – Orifice Meters
Article 9 User Requirements, Gas Measuring Devices – General
Part 5 Division of Veterans– Affairs
Chapter 41 Veteran–s Loan Assumptions
Chapter 58 Silver Hand and –Made in Alaska– Programs
Chapter 150 National Petroleum Reserve – Alaska Impact Program
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