Banking

Business and Industrial Development Corporations (BIDCO) Act

The BIDCO Act was passed by Alaska's Legislature to promote economic development by encouraging the formation of a business entity whose purpose would be to provide financial and management assistance for other businesses in the state.

The Banking Section provides for licensing, regulation, and enforcement to enable a BIDCO to satisfy the eligibility requirements for participating in programs that further the purposes of BIDCOs; to prevent fraud, conflict of interest, and mismanagement; and to promote competent management, accurate record keeping, and appropriate communication with shareholders;

An application to the Division shall provide information on the directors, officers, and controlling persons of the applicant. The application must also set a business plan, with at least 10 years of detailed financial projections including the following:

  • an applicant must demonstrate to the satisfaction of the department that the applicant has raised sufficient capital so that
    1. the net worth of the BIDCO is expected to be adequate, in the context of its business plan, to support the BIDCO's management team and to achieve an appropriate spreading of the risk involved in the BIDCO's provisions of financing assistance; and
    2. the BIDCO has a reasonable promise of being a viable, ongoing BIDCO, satisfying the basic objectives of its business plan and achieving long-term financial success.

Unless the BIDCO receives a loan under AS 37.17.200 - 37.17.390, the department may not establish a minimum net worth for a BIDCO under this section of less than $1,500,000. If the BIDCO, as part of its initial capitalization, receives a loan under AS 37.17.200 - 37.17.390, the minimum net worth of the BIDCO may be $500,000, excluding organization costs paid for or owed by the BIDCO.

A BIDCO license may only be issued if the department determines that each director, officer, and controlling person of the applicant is

  • of good character and sound financial standing;
  • competent to perform the director's or officer's functions for the applicant; and
  • when considered collectively with the other directors, officers, and controlling persons, adequate to manage the business of the applicant as a BIDCO.

The department may determine that a director, officer, or controlling person of an applicant is not of good character. Grounds the department may use to make that determination include proof that the director, officer, or controlling person, or a director or officer of a controlling person has

  • had an administrative sanction imposed under 31 U.S.C. 3801 - 3812 (Program Fraud Civil Remedies Act of 1986) for an offense under 15 U.S.C. 645; or
  • been convicted of a crime involving fraud or dishonesty, including a conviction for an offense under 15 U.S.C. 645; in this paragraph, "conviction" includes a conviction based on a guilty plea or plea of nolo contendere.

For application forms, contact

The Division of Banking and Securities
P.O. Box 110807
Juneau, AK 99811-0807
(907) 465-2521