AK SB140

Amends AS 37.10.085 to create an exception allowing the state to invest in the Alaska Student Loan Corporation's education loan fund when the fund cannot fully finance loan demand and when tax-exempt private activity revenue bonds are not practicable or economical.

Authorizes the Commissioner of Revenue to invest up to $100 million in the education loan fund to finance education loans under specified statutes, with the corporation required to repay under terms established by the commissioner.

Permits the Commissioner of Revenue to enter into a bond purchase agreement and letter of credit with the Alaska Student Loan Corporation (up to $106 million commitment) when credit enhancement mechanisms are uneconomical, with the corporation paying associated costs.

Sets limits on interest rates the commissioner may charge: interest on investments capped at the five-year average return on the state's general fund, annual service fees capped at 0.15 percent of average principal outstanding, and additional interest up to 3 percent if a draw occurs.

Limits the term of investments and credit commitments to five years from commencement and takes effect immediately.