(a) To increase the return to the state, the Board of Agriculture and Conservation may restructure loans (1) in existence on January 1, 1987, made by the former Agricultural Revolving Loan Fund Board or by the former Alaska Agricultural Action Council based upon guidelines approved by the Board of Agriculture and Conservation; (2) of a borrower in an area that has been declared a farm disaster area under AS 03.10.058; or (3) of a borrower who has experienced an agricultural disaster based upon regulations adopted by the Board of Agriculture and Conservation. Notwithstanding any other provision of law that relates to loan terms, the restructuring may only include reduction of interest to a fixed rate not less than five percent a year, an extension of the term of the loan, and an improvement to the security interest of the state. It may not reduce the amount of principal and interest owed before the loan is restructured.

(b) The maximum term of a loan modified under (a) of this section is 30 years from the date of restructuring.

(c) Notwithstanding any other provision of this section, the Board of Agriculture and Conservation may approve an application for restructuring under this section only upon

(1) the applicant's written release of the state, including the University of Alaska, from all potential liability for actions and omissions occurring before the date of restructuring that relate in any way to a state farm project, land sale, land sale relinquishment, farm loan, or loan application or loan modification application, whether granted or denied by the state; and

(2) assignment by the applicant to the board of the proceeds from the federal government under 7 U.S.C. 1442 (Conservation Reserve Program) and P.L. 88-26 (Feed Grain Act of 1963), as amended.

(d) If the board receives proceeds under (c)(2) of this section that exceed the amount owed and credited to the loan during the year, the board shall refund the extra proceeds to the applicant.