00 CS FOR HOUSE BILL NO. 161(FIN) 01 "An Act directing the Alaska Permanent Fund Corporation to transfer $22,700,000 02 from the principal of the mental health trust fund to a separate trust land development 03 account; relating to the development of revenue-producing facilities on mental health 04 trust land and to the Alaska Mental Health Trust Authority Subport Office Building; 05 authorizing the issuance of certificates of participation for construction of the building; 06 approving leases of all or part of the building by the Department of Administration; 07 authorizing the Alaska Housing Finance Corporation to acquire the building that it 08 occupies for an amount that does not exceed $14,500,000; and providing for an effective 09 date." 10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 11  * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 12 to read: 01 LEGISLATIVE FINDINGS AND INTENT. (a) The legislature finds that the 02 (1) Alaska Mental Health Trust Authority intends to use up to $22,700,000 03 from the mental health trust fund (AS 37.14.031) in the construction of a new facility to be 04 known as the Alaska Mental Health Trust Authority Subport Office Building, to be located on 05 land held in trust by the authority in Juneau; and 06 (2) cost of constructing and equipping the new facility will be $45,400,000. 07 (b) The legislature intends that the state provide up to $22,700,000 from the issuance 08 of certificates of participation for the construction of the new facility and that the Department 09 of Administration lease all or part of the facility on its completion for use as office space for 10 state agencies under two separate leases, with the lease payments from one of them used to 11 pay the principal of and interest on the certificates of participation to the extent needed to 12 meet the debt obligation. 13  * Sec. 2. AS 37.14.009(a) is amended to read: 14 (a) The Alaska Mental Health Trust Authority 15 (1) has a fiduciary obligation to ensure that the assets of the trust are 16 managed consistent with the requirements of the Alaska Mental Health Enabling Act, 17 P.L. 84-830, 70 Stat. 709 (1956); 18 (2) shall contract with the Department of Natural Resources to manage 19 the land assets of the trust; the contract must provide for the recording of at least one 20 conveyance to the authority by quitclaim deed of mental health trust land in each 21 recording district in the state in which mental health trust land is located; a 22 conveyance to the authority is exempt from the platting and surveying requirements of 23 AS 38.04.045(b) and municipal ordinances adopted under AS 29.40; when the 24 Department of Natural Resources manages land assets of the trust under a contract 25 entered into under this paragraph, the department shall 26 (A) manage in conformity with AS 38.05.801; 27 (B) consult with the authority before adopting regulations 28 under AS 38.05.801(c); 29 (C) provide notice to, and consult with, the authority regarding 30 all proposed actions subject to public notice under AS 38.05.945 before giving 31 that public notice; 01 (D) annually provide the authority with a report including 02 (i) a description of all land management activities 03 undertaken under this section during the prior year; 04 (ii) an accounting of all income and proceeds generated 05 from mental health trust land; 06 (iii) an explanation of the manner in which the income 07 and proceeds were allocated between the mental health trust fund and 08 the mental health trust settlement income account; and 09 (E) obtain the approval of the authority before exchanging 10 mental health trust land under AS 38.05.801(b)(2); and 11 (3) except as provided in (c) of this section, shall contract with 12 Alaska Permanent Fund Corporation for management of the mental health trust fund. 13  * Sec. 3. AS 37.14.009 is amended by adding a new subsection to read: 14 (c) Notwithstanding AS 37.13.300(a), at the direction of the authority, the 15 Alaska Permanent Fund Corporation shall transfer money from the principal of the 16 mental health trust fund to a separate trust land development account. The total 17 amount transferred to the trust land development account may not exceed 18 $22,700,000. The authority shall use money in the trust land development account to 19 finance the development of revenue-producing office and retail buildings and 20 associated facilities on mental health trust land. The authority may use money in the 21 trust land development account for the development of facilities without regard to 22 maintaining reasonable diversification in investments. However, money may be used 23 for a proposed development project only if the authority determines that the proposed 24 development project has a risk level and expected return comparable to or greater than 25 alternative real estate investment opportunities. The authority shall 26 (1) exercise the powers of a fiduciary of a state fund granted in 27 AS 37.10.071 with respect to the management and investment of assets of the trust 28 land development account; and 29 (2) contract with the office established in the Department of Natural 30 Resources to manage the land assets of the Alaska mental health trust, as set out in 31 (a)(2) of this section, to serve as an external real estate investment manager to develop 01 real estate assets of the mental health trust fund. 02  * Sec. 4. AS 37.14.033 is amended to read: 03 Sec. 37.14.033. Management of trust fund. Except as provided in  04 AS 37.14.009(c), the [THE] mental health trust fund shall be managed by the Alaska 05 Permanent Fund Corporation under AS 37.13.300. 06  * Sec. 5. AS 37.14.035(a) is amended to read: 07 (a) Except as provided in AS 37.14.009(c), the [THE] cash principal of the 08 mental health trust fund shall be retained perpetually in the fund for investment by the 09 Alaska Permanent Fund Corporation, as specified in AS 37.13.300. 10  * Sec. 6. AS 37.14.035(b) is amended to read: 11 (b) The net income of the fund, including the net income of the separate  12 trust land development account, shall be transferred [BY THE CORPORATION] to 13 the mental health trust settlement income account at the end of each fiscal year. 14  * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to 15 read: 16 FINANCING AND LEASE AGREEMENTS. (a) The state bond committee is 17 authorized to provide for the issuance of certificates of participation in one or more series in 18 the aggregate principal amount of up to $22,700,000 for the construction of a facility to be 19 known as the Alaska Mental Health Trust Authority Subport Office Building in Juneau if the 20 balance of the construction costs in the amount of up to $22,700,000 is made available by the 21 Alaska Mental Health Trust Authority from the trust land development account of the mental 22 health trust fund (AS 37.14.031). Interest income on the certificate of participation proceeds 23 may be used to pay arbitrage rebates, with the balance to be used for debt service during 24 construction or additional costs of construction and equipping the facility. The estimated total 25 cost of construction, acquisition, and equipping the facility is $45,400,000, including costs of 26 credit enhancement, underwriting, rating agency fees, bond counsel fees, financial advisor 27 fees, printing, and advertising. 28 (b) The state bond committee may contract for credit enhancement, underwriting, 29 credit ratings, bond counsel, financial advisors, printing, advertising, and trustee services that 30 the committee considers necessary in financing the acquisition and construction of the Alaska 31 Mental Health Trust Authority Subport Office Building. 01 (c) The Department of Administration is authorized to enter into a lease agreement 02 with the Alaska Mental Health Trust Authority with a term of 20 years for the use of all or 03 part of the Alaska Mental Health Trust Authority Subport Office Building by state agencies. 04 In addition to other funds that may be available for the purpose, as much of the lease 05 payments for the facility as are necessary to pay the principal of and interest on the 06 certificates of participation when due shall be used for that purpose. The estimated annual 07 amount of rental obligation under a lease agreement executed under this subsection is 08 $1,759,802. The estimated total amount of lease payments for the full term of the lease 09 agreement is $35,196,035. At the end of the term of the lease, ownership shall be vested in the 10 Alaska Mental Health Trust Authority. This subsection constitutes the approval required by 11 AS 36.30.080. 12 (d) The Department of Administration is authorized to enter into a lease agreement 13 with the Alaska Mental Health Trust Authority with a term of 30 years for the use of all or 14 part of the Alaska Mental Health Trust Authority Subport Office Building by state agencies. 15 The estimated annual amount of rental obligation under a lease agreement executed under this 16 subsection is $3,665,000. The estimated total amount of lease payments for the full term of 17 the lease agreement is $125,243,047. This subsection constitutes the approval required by 18 AS 36.30.080. 19 (e) The lease payments owed under a lease agreement executed under (c) of this 20 section and the lease payments owed under a lease agreement executed under (d) of this 21 section are subject to annual appropriation by the legislature. 22 (f) The Alaska Mental Health Trust Authority shall manage and operate the Alaska 23 Mental Health Trust Authority Subport Office Building. 24  * Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to 25 read:  26 AUTHORIZING THE ALASKA HOUSING FINANCE CORPORATION TO 27 ACQUIRE A BUILDING. The Alaska Housing Finance Corporation is authorized to acquire 28 the building in Anchorage it occupies on the effective date of this Act for an amount that does 29 not exceed $14,500,000. This section constitutes the approval required by AS 18.55.100(d) 30 and AS 18.56.090(d) for that acquisition.  31  * Sec. 9. This Act takes effect immediately under AS 01.10.070(c).