AK HB123

Amends AS 46.03.032(d) to add facilitation of loans to persons, municipalities, and other qualified entities through a linked deposit program as an allowable use of Alaska clean water fund financial assistance.

Establishes a new linked deposit loan program under AS 46.03.032(q) to provide low-interest financing for nonpoint source pollution control programs or projects.

Authorizes the department to invest clean water fund money in certificates of deposit at participating financial institutions at below-market rates of return, not lower than the minimum rate authorized for direct loans.

Requires participating financial institutions to evaluate creditworthiness of applicants and apply the difference between the below-market and market interest rates to reduce loan rates charged to borrowers.

Specifies that participating financial institutions assume all default risk and may charge origination and other reasonable fees, with the department having no obligation for loan defaults despite linking its investment to the loan.