CSSB 222(STA): "An Act relating to the financing authority, programs, operations, and projects of the Alaska Industrial Development and Export Authority; providing an exemption from the procurement code for certain projects of the authority; and providing for an effective date."
00CS FOR SENATE BILL NO. 222(STA) 01 "An Act relating to the financing authority, programs, operations, and projects of 02 the Alaska Industrial Development and Export Authority; providing an exemption 03 from the procurement code for certain projects of the authority; and providing 04 for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 36.30.850(b) is amended by adding a new paragraph to read: 07 (34) contracts of the Alaska Industrial Development and Export Authority 08 related to integrated transportation and port facilities owned by the authority. 09 * Sec. 2. AS 44.88.095(g) is amended to read: 10 (g) Without prior legislative approval, the authority may not issue bonds to 11 assist in the financing of a development project under AS 44.88.172 - 44.88.177 12 [, EXCEPT REFUNDING BONDS]. 13 * Sec. 3. AS 44.88.159(a) is amended to read: 14 (a) The interest rate on a loan participation purchased [FINANCED] from the
01 proceeds of tax-exempt bonds or expected by the authority to be purchased 02 [FINANCED] from the proceeds of tax-exempt bonds is equal to the cost of funds to the 03 authority. In this subsection "cost of funds" means the true interest cost expressed as a 04 rate on tax-exempt bonds of the authority plus an additional percentage as determined 05 by the authority to represent the allocable expenses of operation, costs of issuance, and 06 loan servicing. 07 * Sec. 4. AS 44.88.159(b) is amended to read: 08 (b) The interest rate on a loan participation purchased [FINANCED] from the 09 proceeds of taxable bonds or expected by the authority to be purchased [FINANCED] 10 from the proceeds of taxable bonds is equal to the cost of funds to the authority. In this 11 subsection "cost of funds" means the true interest cost expressed as a rate on taxable 12 bonds, plus an additional percentage as determined by the authority to represent the 13 allocable expenses of operation, costs of issuance, and loan servicing costs. 14 * Sec. 5. AS 44.88.159(e) is amended to read: 15 (e) The interest rate on a loan participation purchased [FINANCED] directly 16 from the assets of the authority shall be determined under the regulations adopted by the 17 authority under AS 44.88.085(g)(2)(C). 18 * Sec. 6. AS 44.88.205(b) is amended to read: 19 (b) To further ensure effective budgetary decision making by the legislature, the 20 authority shall 21 (1) annually review the authority's assets to determine whether assets of 22 the authority exceed an amount required to fulfill the purposes of the authority as defined 23 in this chapter; in making its review, [THE MEMBERS OF] the authority shall 24 determine whether, and to what extent, assets in excess of the amount required to fulfill 25 the purposes of the authority during at least the next fiscal year are available without 26 (A) breaching any agreement entered into by the authority; 27 (B) materially impairing the operations or financial integrity of 28 the authority; or 29 (C) materially affecting the ability of the authority to fulfill the 30 authority's purposes set out in AS 44.88.070; and 31 (2) present to the legislature by January 10 of each year a complete
01 accounting of all assets of the authority and a report of the review and determination 02 made under (1) of this subsection; the accounting shall be audited by the auditor who 03 conducts the audit required by AS 44.88.200 and must include a full description of all 04 loan interest and principal payments and program receipts, including 05 (A) loan commitment fees received by or accrued to the authority 06 during the preceding fiscal year; [,] and 07 (B) all income earned on assets of the authority during that 08 period. 09 * Sec. 7. AS 44.88.500(a) is amended to read: 10 (a) [THE BUSINESS ASSISTANCE FUND IS ESTABLISHED IN THE 11 AUTHORITY FROM MONEY IN THE AUTHORITY'S RESERVES DESIGNATED 12 BY THE AUTHORITY FOR THE PURPOSE.] Subject to the requirements of 13 AS 44.88.500 - 44.88.599, the authority may [USE MONEY IN THE FUND] 14 (1) [TO] guarantee new business assistance loans; and 15 (2) [TO] guarantee new business assistance loans made to refinance 16 existing loans. 17 * Sec. 8. AS 44.88.530 is amended to read: 18 Sec. 44.88.530. APPLICABILITY OF PROVISIONS. AS 44.88.535 - 44.88.560 19 apply to 20 [(1)] new loan guarantees and refinancing guarantees under 21 AS 44.88.500 [AS 44.88.500(a)(1); AND 22 (2) DEBT REFINANCING GUARANTEES UNDER 23 AS 44.88.500(a)(2)]. 24 * Sec. 9. AS 44.88.535(a) is amended to read: 25 (a) The authority may guarantee a loan under AS 44.88.500 - 44.88.599 if the 26 (1) loan 27 (A) is commercially reasonable; 28 (B) contains amortization provisions satisfactory to the authority; 29 (C) is secured by adequate collateral; however, the authority may 30 waive on a case-by-case basis the requirement of collateral in the manner and 31 under requirements established by the authority by regulation [FOR A
01 LOAN GUARANTEE OF $75,000 OR LESS FOR WHICH THE PROPOSED 02 LOAN AMORTIZATION PERIOD DOES NOT EXCEED FIVE YEARS], but 03 the ability to waive the requirement of this subparagraph or the grant of a waiver 04 does not prevent the financial institution that holds the loan guaranteed by the 05 authority from requiring reasonable collateral for the loan; 06 (2) net cash flow from the borrower provides adequate coverage for the 07 debt service on the loan; 08 (3) term of the loan does not exceed 20 years; 09 (4) loan is originated with and serviced by a state chartered or federally 10 chartered financial institution; 11 (5) portion of the loan not guaranteed by the authority is held by the 12 originating financial institution or another [FINANCIAL] institution approved by the 13 authority; 14 (6) proceeds of the loan will be used [IS MADE] to benefit a business 15 conducted in the [WITH A MAJORITY INTEREST HELD BY] state [RESIDENTS]; 16 and 17 (7) loan guarantee provides a benefit to the borrower. 18 * Sec. 10. AS 44.88.535(b) is amended to read: 19 (b) The authority may provide a guarantee [FROM THE FUND 20 (1)] of 80 percent of a loan [OF $50,000 OR LESS] that qualifies under 21 AS 44.88.500 - 44.88.599; 22 [(2) FOR UP TO 80 PERCENT OF A LOAN OF MORE THAN 23 $50,000 THAT QUALIFIES UNDER AS 44.88.500 - 44.88.599;] the ratio of the 24 guarantee to the outstanding principal of the loan may not increase over the term of the 25 loan. 26 * Sec. 11. AS 44.88.540 is amended to read: 27 Sec. 44.88.540. LIMITATIONS OF GUARANTEES [FROM THE FUND]. The 28 authority may not issue a total of [GUARANTEE] 29 (1) [A TOTAL OF] more than $50,000,000 of loan guarantees 30 [LOANS]; 31 (2) more than $25,000,000 of loan guarantees [LOANS] in which the
01 amount of the loan guarantee exceeds $500,000. 02 * Sec. 12. AS 44.88.550(a) is amended to read: 03 (a) The maximum interest rate that may be charged by a financial institution 04 on a loan guaranteed by the authority is two and three-quarters percentage points above 05 the prime rate. 06 * Sec. 13. AS 44.88.560 is amended to read: 07 Sec. 44.88.560. POWERS OF THE AUTHORITY. The authority may 08 (1) adopt regulations to implement AS 44.88.500 - 44.88.599; 09 (2) establish terms and conditions for loan guarantees and refinancing 10 agreements subject to the requirements of AS 44.88.500 - 44.88.599; 11 (3) make and execute contracts and other instruments to implement 12 AS 44.88.500 - 44.88.599; 13 (4) charge 14 (A) one percent of the amount guaranteed for the service it 15 provides under AS 44.88.500 - 44.88.599; and 16 (B) any other reasonable fee that the authority may establish by 17 regulation; 18 (5) acquire real or personal property by purchase, transfer, or foreclosure 19 when the acquisition is necessary to protect the authority's [AN] interest [IN THE 20 FUND]; 21 (6) exercise any other power necessary to implement AS 44.88.500 - 22 44.88.599; and 23 (7) to the extent the authority considers it to be in its best interest to do 24 so, use money [IN THE BUSINESS ASSISTANCE FUND] to pay expenses relating to 25 the liquidation of collateral securing loans guaranteed by the authority [BUSINESS 26 ASSISTANCE FUND]. 27 * Sec. 14. AS 44.88.900(3) is amended to read: 28 (3) "development project" has the meaning given to "project" in (9)(A) 29 and (D) - (F) [, (D), AND (E)] of this section; 30 * Sec. 15. AS 44.88.900(7) is repealed and reenacted to read: 31 (7) "loan participation" means the purchase of a portion of a loan from
01 a financial institution if the financial institution has obtained a commitment from the 02 authority to purchase the portion of that loan before the financial institution has disbursed 03 money as part of the loan to the borrower; 04 * Sec. 16. AS 44.88.900(9) is amended to read: 05 (9) "project" means 06 (A) a plant or facility used or intended for use in connection with 07 making, processing, preparing, transporting, or producing in any manner, goods, 08 products, or substances of any kind or nature or in connection with developing 09 or utilizing a natural resource, or extracting, smelting, transporting, converting, 10 assembling, or producing in any manner, minerals, raw materials, chemicals, 11 compounds, alloys, fibers, commodities and materials, products, or substances of 12 any kind or nature; 13 (B) a plant or facility used or intended for use in connection with 14 a business enterprise; 15 (C) commercial activity by a business [SMALL] enterprise; 16 (D) a plant or facility demonstrating technological advances of 17 new methods and procedures and prototype commercial applications for the 18 exploration, development, production, transportation, conversion, and use of 19 energy resources; 20 (E) infrastructure for a new tourism destination facility or for the 21 expansion of a tourism destination facility; 22 (F) a plant or facility, other than a plant or facility described in 23 (D) of this paragraph, for the generation, transmission, development, 24 transportation, conversion, or use of energy resources; 25 * Sec. 17. Section 4, ch. 162, SLA 1988, as amended by sec. 4, ch. 25, SLA 1991, and 26 sec. 4, ch. 27, SLA 1993, is amended to read: 27 Sec. 4. AS 44.88.500 - 44.88.599 are repealed July 1, 1999 [1996]. 28 * Sec. 18. AS 44.88.500(b), 44.88.542, 44.88.599(1), and 44.88.900(14) are repealed. 29 * Sec. 19. Sections 1 and 2, ch. 27, SLA 1993, are repealed. 30 * Sec. 20. TRANSITION. On the effective date of this Act, assets of the business assistance 31 fund (AS 44.88.500(a)) shall be transferred to the Alaska Industrial Development and Export
01 Authority revolving fund (AS 44.88.060). 02 * Sec. 21. (a) The Alaska Industrial Development and Export Authority (AIDEA) may issue 03 bonds to finance the expansion, improvement, and modification of the existing port facilities 04 owned by AIDEA with respect to the DeLong Mountain transportation system and to finance 05 the construction of new facilities to be owned by AIDEA related to the DeLong Mountain 06 transportation system, or may finance these projects by other means available to AIDEA. The 07 principal amount of the bonds and other financing provided by AIDEA may not exceed 08 $60,000,000. 09 (b) Subsection (a) of this section constitutes the legislative approval required by 10 AS 44.88.095(g). 11 * Sec. 22. (a) Upon approval of the Alaska Industrial Development and Export Authority 12 (AIDEA), AIDEA may acquire the Snettisham hydroelectric project and related assets from the 13 Alaska Power Administration. 14 (b) AIDEA may issue bonds to finance the acquisition of the Snettisham hydroelectric 15 project and related assets, or may finance the acquisition by other means available to AIDEA. 16 The principal amount of the bonds and other financing provided by AIDEA to finance the 17 acquisition of the Snettisham hydroelectric project may not exceed $100,000,000. 18 (c) To secure bonds issued under (b) of this section, AIDEA may establish a capital 19 reserve fund with respect to those bonds under AS 44.88.105. If AIDEA establishes a capital 20 reserve fund as provided in this subsection, the executive director of AIDEA shall annually, no 21 later than January 2 of each year, certify in writing to the governor and the legislature the 22 amount, if any, required to restore the capital reserve fund to the capital reserve fund 23 requirement as defined in AS 44.88.105(h). The legislature may appropriate to AIDEA the 24 amount so certified by the executive director of AIDEA. AIDEA shall deposit the amounts 25 appropriated under this subsection during a fiscal year in the capital reserve fund. Nothing in 26 this section creates a debt or liability of the state. 27 (d) Subsection (b) of this section grants the legislative approval required by 28 AS 44.88.095(g). 29 * Sec. 23. This Act takes effect immediately under AS 01.10.070(c).