(a) The department may make loans for the purchase, construction, and installation of an energy conservation improvement in a residential building.

(b) A loan for the purchase, construction, and installation of an energy conservation improvement under AS 45.88.100 - 45.88.190 may not exceed the lesser of

(1) an amount, as determined by an energy audit, that is equal to the estimated total energy cost saving attributable to the energy conservation improvement at a date that is 10 years after purchase, construction, or installation of the energy conservation improvement;

(2) $5,000.

(c) A loan for the purchase, construction, and installation of an energy conservation improvement under AS 45.88.100 - 45.88.190 may be made for only an energy conservation improvement that has been recommended, in any energy audit, as a measure that is likely to result in energy conservation or energy cost savings.

(d) A loan made under AS 45.88.100 - 45.88.190 may be used to finance

(1) all of the cost of purchasing, constructing, and installing an energy conservation improvement; and

(2) the costs of labor for the installation of an energy conservation improvement.

(e) Interest shall be charged on a loan made under AS 45.88.100 - 45.88.190. If a loan is made before January 1, 1984, interest shall be five percent. If the loan is made after December 31, 1983, interest shall equal the percentage of the average weekly yield of municipal bonds for the 12 months preceding the loan, as determined by the commissioner from the municipal bond yield rates reported in the 30-year revenue index of the Weekly Bond Buyer.

(f) The duration of repayment of a loan made under AS 45.88.100 - 45.88.190 may not exceed 10 years.

(g) The department may require security for a loan under this section. When a loan is made under this section, the department may require the loan applicant to present copies of invoices or billings for expenses which the proceeds of the loan will be used to pay.

(h) All principal and interest payments, and money chargeable to principal or interest that is collected through liquidation by foreclosure or other process on a loan made under AS 45.88.100 - 45.88.190, shall be paid into the residential energy conservation fund.

(i) A person who receives a loan under this section and knowingly uses the loan proceeds for purposes other than those set out in (d) of this section is guilty of the crime of misapplication of property under AS 11.46.620.

(j) If, in the opinion of the department, it is not necessary to conduct an energy audit to determine that a loan application meets the requirements of this section, the department may waive the audit requirement for the applicant.

(k) The department may not make a loan under AS 45.88.100 - 45.88.190 to a person who has a past due child support obligation established by court order or by the child support services agency under AS 25.27.160 - 25.27.220 at the time of application.