HB 304: "An Act relating to issuance and sale of revenue bonds to fund drinking water projects, to creation of an Alaska clean water administrative fund and an Alaska drinking water administrative fund, to fees to be charged in connection with loans made from the Alaska clean water fund and the Alaska drinking water fund, and to clarification of the character and permissible uses of the Alaska drinking water fund; amending Rule 3, Alaska Rules of Civil Procedure; and providing for an effective date."
00HOUSE BILL NO. 304 01 "An Act relating to issuance and sale of revenue bonds to fund drinking water 02 projects, to creation of an Alaska clean water administrative fund and an Alaska 03 drinking water administrative fund, to fees to be charged in connection with loans 04 made from the Alaska clean water fund and the Alaska drinking water fund, and 05 to clarification of the character and permissible uses of the Alaska drinking water 06 fund; amending Rule 3, Alaska Rules of Civil Procedure; and providing for an 07 effective date." 08 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 09 * Section 1. AS 37.15.560(a) is amended to read: 10 (a) For purposes of providing part of the money to be used to provide financial 11 assistance to municipalities and other qualified entities under AS 46.03.032 and 12 46.03.036 [FOR THE PURPOSES STATED IN AS 46.03.032(d)], including the costs 13 of bond issuance and administration, the issuance and sale of revenue bonds of the 14 state is authorized subject to (b) of this section. The bonds are to be issued by the
01 state bond committee, as provided in AS 37.15.560 - 37.15.605, as part of the Alaska 02 clean water fund and the Alaska drinking water fund revolving loan fund programs 03 [PROGRAM] (AS 46.03.032 and 46.03.036 ), [A] public enterprises [ENTERPRISE] 04 of the state. The net proceeds of the sale of the bonds, remaining after any payment 05 of costs of issuance and administration, shall be paid into the Alaska clean water fund 06 or the Alaska drinking water fund respectively . Accrued interest paid on the bonds 07 shall be paid into the Alaska clean water fund or the Alaska drinking water fund for 08 transfer to the Alaska clean water fund revenue bond redemption fund or the Alaska 09 drinking water fund revenue bond redemption fund (AS 37.15.565) respectively. 10 * Sec. 2. AS 37.15.560(b) is amended to read: 11 (b) The state bond committee may not issue more than $15,000,000 in revenue 12 bonds under AS 37.15.560 - 37.15.605 during a fiscal year for each revolving loan 13 fund program referred to in (a) of this section , excluding refunding bonds. The 14 total unpaid principal amount of revenue bonds, including refunding bonds, but 15 excluding refunded bonds, issued under AS 37.15.560 - 37.15.605, may not exceed 16 $150,000,000 for each program . 17 * Sec. 3. AS 37.15.565 is amended to read: 18 Sec. 37.15.565. Bond redemption funds [FUND]. (a) There are [IS] 19 established [A] special funds [FUND] of the state, known as the "Alaska clean water 20 fund revenue bond redemption fund[,]" and the "Alaska drinking water fund 21 revenue bond redemption fund," which are [IS A] trust funds [FUND] for paying 22 and securing the payment of the principal of and interest and redemption premium, if 23 any, on the bonds and which shall be at all times completely segregated and set apart 24 from all other funds of the state. The committee, on behalf of the state, may obligate 25 and bind the state to set aside and pay into the bond redemption funds [FUND], on 26 a monthly or other periodic basis, any part or parts of, or all of, or a fixed proportion 27 of, or a fixed amount of the money in the Alaska clean water fund (AS 46.03.032) or 28 the Alaska drinking water fund (AS 46.03.036) sufficient to pay the principal of and 29 interest and redemption premium, if any, on the bonds and, if it considers it necessary, 30 to set aside and maintain reserves for this purpose. The bond redemption funds 31 [FUND] shall be drawn upon only for the purpose of paying the principal of and
01 interest and redemption premium, if any, on the bonds, together with related trustee 02 fees, if any. 03 (b) Money in the bond redemption funds [FUND] may be invested in the same 04 manner and on the same conditions as permitted for investment of money belonging 05 to the state or held in the treasury under AS 37.10.070; however, the committee may 06 agree with the bondholders to further limit these investments. Earnings on investments 07 must be retained in the bond redemption funds [FUND]. 08 (c) Separate accounts may be created in the bond redemption funds [FUND] 09 for the purposes of paying and securing the bonds. The accounts may be combined 10 for purposes of investment and for financial support to achieve the purposes of 11 AS 37.15.570(c) . 12 * Sec. 4. AS 37.15.570(c) is amended to read: 13 (c) The committee may pledge to the payment of the principal of and interest 14 on bonds issued by the committee part or all of the legally available money or other 15 assets on hand in the Alaska clean water fund (AS 46.03.032) or the Alaska drinking 16 water fund (AS 46.03.036) ; part or all of the revenue of the Alaska clean water fund 17 or the Alaska drinking water fund , including federal capitalization grants, the 18 proceeds of loan repayments, and interest on money in the funds [FUND]; the 19 proceeds of the sale of bonds; and money on hand in the bond redemption funds 20 [FUND]. Revenue of the Alaska clean water fund or the Alaska drinking water 21 fund , if so pledged, must be paid into the Alaska clean water fund or the Alaska 22 drinking water fund, respectively . The committee may provide for the issuance of 23 additional bonds, secured by a pledge of such money and revenue, ranking junior to, 24 senior to, or on a parity with, outstanding bonds, upon conditions prescribed in the 25 bond resolution. A pledge of loan repayments securing bonds may be made applicable 26 to specific loans from the Alaska clean water fund or the Alaska drinking water 27 fund, or, on a pooled basis, to all loan repayments received. 28 * Sec. 5. AS 37.15.570(d) is amended to read: 29 (d) If the committee finds it reasonably necessary, the committee may select 30 a trustee or trustees for the holders of the bonds, or any series of them, for the 31 safeguarding and disbursement of any of the money in the bond redemption funds
01 [FUND] created by AS 37.15.565, or for duties with respect to the enforcement, 02 authentication, delivery, payment, and registration of the bonds as the committee may 03 determine. The committee shall fix the rights, duties, powers, and obligations of the 04 trustee or trustees. 05 * Sec. 6. AS 37.15.570(e) is amended to read: 06 (e) In its determination of all matters and questions relating to the issuance and 07 sale of the bonds and the fixing of their maturities, terms, conditions, and covenants 08 as provided in (a) - (d) of this section, the decisions of the committee shall be those 09 that are reasonably necessary for the best interests of the state and its inhabitants and 10 that will accomplish the most advantageous sale of the bonds, with due regard, 11 however, for the continued funding under AS 46.03.032 and AS 46.03.036 of the 12 categories of projects identified in AS 46.03.032(d) and 46.03.036(b) . Decisions of 13 the committee, as expressed in a bond resolution, are final and are conclusively 14 considered to comply with the requirements of AS 37.15.560 - 37.15.605 and 15 AS 46.03.032 and 46.03.036 . 16 * Sec. 7. AS 37.15.570(f) is amended to read: 17 (f) A bond resolution may provide that the bonds issued must contain a recital 18 that they are issued under AS 37.15.560 - 37.15.605 and AS 46.03.032 or 46.03.036, 19 respectively , and a bond containing this recital is conclusively considered to be valid 20 and to have been issued in conformity with AS 37.15.560 - 37.15.605 and with 21 AS 46.03.032 or 46.03.036, respectively . 22 * Sec. 8. AS 37.15.573 is amended to read: 23 Sec. 37.15.573. Bond resolution. The committee shall authorize the issuance 24 of bonds by adopting a resolution and shall prepare all other documents and 25 proceedings necessary for the issuance, sale, and delivery of the bonds or any part or 26 series of them. The bond resolution must fix the principal amount, denominations, 27 date, maturities, manner of sale, place or places of payment, rights of redemption, if 28 any, terms, form, conditions, and covenants of the bonds or each series of them. A 29 bond resolution may state terms, conditions, amounts, and other limitations on loans 30 to be made from the Alaska clean water fund (AS 46.03.032) or the Alaska drinking 31 water fund (AS 46.03.036), respectively, from the relevant bond proceeds.
01 * Sec. 9. AS 37.15.575 is amended to read: 02 Sec. 37.15.575. State aid intercept. If a municipality is in the default on the 03 payment of principal or interest on a loan from the Alaska clean water fund 04 (AS 46.03.032) or the Alaska drinking water fund (AS 46.03.036) , the committee 05 may provide written notice of default to any state agency that is the custodian of 06 money that is payable to the municipality. If the committee determines to provide 07 notice, a separate written notice shall be given in each instance of default. 08 Notwithstanding any other provision of law, at any time after receipt of written notice 09 of default, the agency head shall withhold payment of the money from the 10 municipality. The agency head shall pay over the withheld money to the committee 11 for deposit in the Alaska clean water fund or the Alaska drinking water fund, 12 respectively, for the purpose of paying or securing the principal and interest on the 13 loan. 14 * Sec. 10. AS 37.15.580 is amended to read: 15 Sec. 37.15.580. Pledge of the state. The state pledges to and agrees with the 16 holders of bonds issued by the committee under AS 37.15.560 - 37.15.605 and 17 AS 46.03.032 or 46.03.036, respectively, that the state will not limit or alter the rights 18 and powers vested in the committee by AS 37.15.560 - 37.15.605 and by 19 AS 46.03.032 or 46.03.036, respectively, to fulfill the terms of any contract made by 20 the committee with the holders, or in any way impair the rights and remedies of the 21 holders until the principal amount of the bonds, together with the interest on them with 22 interest on unpaid installments of interest, are fully met and discharged. The 23 committee may include this pledge and agreement of the state in a contract with the 24 holders. 25 * Sec. 11. AS 37.15.583(a) is amended to read: 26 (a) The owner or owners of not less than 10 percent of the aggregate principal 27 amount of any series or issue of bonds or the trustee for the owners of the bonds or 28 any series of them may, by appropriate proceedings in state court, require and compel 29 the transfer, setting aside, and payment of money and the enforcement of all of the 30 terms, conditions, and covenants as required and provided in AS 37.15.560 - 31 37.15.605, AS 46.03.032 or 46.03.036, respectively , and the bond resolution.
01 * Sec. 12. AS 37.15.585 is amended to read: 02 Sec. 37.15.585. Amounts required for payments. The committee shall, 03 before June 30 of each year or from time to time within the year, as appropriate, 04 commencing with the year in which the bonds are issued, certify to the commissioners 05 of revenue and environmental conservation the amounts required in the current fiscal 06 year and the next ensuing fiscal year by the bond resolution or resolutions to be paid 07 out of the Alaska clean water fund or the Alaska drinking water fund into the 08 respective bond redemption funds [FUND] and to be paid into and maintained in any 09 reserve fund or account or other fund or account created by the bond resolution or 10 resolutions, and shall also certify to the commissioners the last date or dates upon 11 which payments may be made. 12 * Sec. 13. AS 37.15.587 is amended to read: 13 Sec. 37.15.587. Purposes and sufficiency of revenue. The proceeds of bonds 14 may be used for the purposes described in AS 46.03.032 or 46.03.036, respectively 15 [AS 46.03.032(d)]. Bonds may not be issued unless the committee first finds that 16 revenue to be derived from repayment of loans from the Alaska clean water fund or 17 the Alaska drinking water fund, respectively, will be sufficient, together with other 18 available money, to comply with all covenants of the bond resolutions. 19 * Sec. 14. AS 37.15.590(b) is amended to read: 20 (b) The issuance of refunding bonds need not be authorized by the voters of 21 the state or by an act of the legislature. The committee shall adopt the resolution or 22 resolutions and prepare all other documents and proceedings necessary for the 23 issuance, exchange or sale, and delivery of the refunding bonds. All provisions of 24 AS 37.15.560 - 37.15.605 , and of AS 46.03.032 and 46.03.036, respectively, 25 applicable to revenue bonds are applicable to the refunding bonds and to the issuance, 26 sale, or exchange of them, except as otherwise provided in this section. 27 * Sec. 15. AS 37.15.605(1) is amended to read: 28 (1) "bond redemption funds [FUND]" means the Alaska clean water 29 fund revenue bond redemption fund and the Alaska drinking water fund revenue 30 bond redemption fund established in AS 37.15.565 , as applicable ; 31 * Sec. 16. AS 37.15.605(3) is amended to read:
01 (3) "bonds" means the Alaska clean water fund revenue bonds or the 02 Alaska drinking water fund revenue bonds authorized in AS 37.15.560 - 37.15.605 , 03 as applicable ; 04 * Sec. 17. AS 37.15.605(7) is amended to read: 05 (7) "costs of issuance and administration" means all costs associated 06 with issuance and administration of Alaska clean water fund revenue bonds or the 07 Alaska drinking water fund revenue bonds, as applicable, and refunding bonds, 08 including costs of bond printing, official statements, financial advisors, travel costs, 09 rating agencies, bond insurance, letters and lines of credit for credit enhancement, 10 underwriters, legal services, paying agents, bonds registrars, bond and escrow trustees, 11 arbitrage rebate, and all other costs, including administrative costs, both direct and 12 indirect. 13 * Sec. 18. AS 46.03.034 is repealed and reenacted to read: 14 Sec. 46.03.034. Alaska clean water administrative fund. (a) The Alaska 15 clean water administrative fund is established as a separate fund that is distinct from 16 other money or funds in the treasury. The fund is composed of two accounts, the 17 (1) Alaska clean water administrative operating account; and 18 (2) Alaska clean water administrative income account. 19 (b) The legislature may appropriate to the Alaska clean water administrative 20 operating account the annual balance of the Alaska clean water administrative income 21 account. 22 (c) The department shall administer the Alaska clean water administrative 23 fund. 24 (d) The Alaska clean water administrative operating account may be used to 25 pay for the department's operational and administrative costs necessary to manage the 26 Alaska clean water fund and the Alaska clean water administrative fund and for such 27 other purposes permitted by federal law. 28 (e) Money received in payment of fees charged by the department under the 29 authority of AS 46.03.035 and earnings on the Alaska clean water administrative fund 30 shall be deposited in the Alaska clean water administrative income account. 31 * Sec. 19. AS 46.03 is amended by adding a new section to read:
01 Sec. 46.03.035. Fees charged for loans made from the Alaska clean water 02 fund. The department may charge and collect reasonable fees in connection with 03 making and servicing loans made by the department under the authority of 04 AS 46.03.032. The department shall by regulation specify the rates and amounts of 05 such fees. 06 * Sec. 20. AS 46.03.036 is repealed and reenacted to read: 07 Sec. 46.03.036. Alaska drinking water fund. (a) The Alaska drinking water 08 fund is established as a separate fund that is distinct from other money or funds in the 09 treasury. The fund shall be administered by the department. The Alaska drinking 10 water fund consists of the following items, all of which shall be deposited into the 11 fund upon receipt: 12 (1) the proceeds and accrued interest received from the sale of revenue 13 bonds issued under AS 37.15.560 - 37.15.605 and secured by the Alaska drinking 14 water fund; 15 (2) money appropriated by the legislature, including federal 16 capitalization grants; 17 (3) loan repayments; and 18 (4) interest received from loan repayments and interest received from 19 investment of money in the Alaska drinking water fund. 20 (b) Except as otherwise limited by federal law, the department may use money 21 in the Alaska drinking water fund to 22 (1) provide financial assistance to municipalities for municipal drinking 23 water system projects, including projects to plan, design, build, construct, or 24 rehabilitate a public drinking water collection, storage, treatment, or distribution 25 system; 26 (2) earn interest on the amounts deposited in the fund; 27 (3) pay the costs of administering the fund and conducting activities 28 under this section and AS 37.15.560 - 37.15.605, including the "costs of issuance and 29 administration" as defined in AS 37.15.605; 30 (4) to pay and secure the payment of the principal of and interest on 31 revenue bonds issued by the state and to pay the costs of issuance and administration
01 of the bonds, so long as the proceeds of the bond sale are deposited in the Alaska 02 drinking water fund; 03 (5) to pay 04 (A) into the bond redemption fund (AS 37.15.565), and into any 05 other bond redemption fund or account created by a relevant bond resolution, 06 the amount certified by the state bond committee under AS 37.15.585; and 07 (B) the costs of the state bond committee in conducting 08 activities under this section and AS 37.15.560 - 37.15.605, including the costs 09 of issuance and administration as defined in AS 37.15.605. 10 (c) Repayment of loans shall be secured in a manner that the department 11 determines is feasible to assure prompt repayment under a loan agreement entered into 12 with the borrower. 13 (d) Separate accounts may be created in the Alaska drinking water fund. The 14 accounts may be combined for purposes of investment. 15 (e) The department may adopt regulations necessary to implement the Alaska 16 drinking water fund in a manner consistent with federal law. 17 (f) A municipality wishing to borrow money from the Alaska drinking water 18 fund shall demonstrate to the satisfaction of the department that it 19 (1) has sufficient legal authority to incur the debt for which it is 20 applying; and 21 (2) will establish and maintain a dedicated source of revenue or other 22 acceptable revenue source for repayment of the loan and sufficient reserves for the 23 loan as may be necessary. 24 (g) Allocation of Alaska drinking water fund loans shall be made in 25 accordance with a priority list developed by the department, using criteria specified in 26 regulations adopted by the department. 27 (h) Before making a loan from the Alaska drinking water fund, the department 28 shall, by regulation, specify 29 (1) standards for the eligibility of borrowers and the type of projects 30 to be financed with loans; 31 (2) loan term and interest rate policies for loans made from the fund;
01 (3) standards regarding the technical and economic viability and 02 revenue of self-sufficiency of eligible projects; 03 (4) collateral or other security required for loans; 04 (5) terms of loans; and 05 (6) other relevant criteria, standards, or procedures. 06 (i) Except as necessary to comply with the covenants of a bond resolution 07 under AS 37.15.573, a loan made by the department shall be made according to the 08 standards, criteria, and procedures, established by regulations under this section. A 09 loan made from the Alaska drinking water fund may be subject to the state aid 10 intercept provisions of AS 37.15.575. 11 (j) The department shall also prepare reports and notices, including notices of 12 default, required by the state bond committee in conjunction with bonds issued under 13 AS 37.15.560 - 37.15.605. 14 (k) Regulations adopted by the department under this section that would affect 15 issuance or repayment of revenue bonds under AS 37.15.560 - 37.15.605 may not be 16 inconsistent with those statutes or with regulations adopted by the state bond 17 committee under those statutes. To the extent that regulations adopted by the 18 department are inconsistent with AS 37.15.560 - 37.15.605, with regulations adopted 19 by the state bond committee under those statutes, or with the covenants of a bond 20 resolution adopted under AS 37.15.573, the provisions of AS 37.15.560 - 37.15.605, 21 the regulations adopted under those statutes, and the covenants of the bond resolution 22 govern. 23 * Sec. 21. AS 46.03.038 is repealed and reenacted to read: 24 Sec. 46.03.038. Alaska drinking water administrative fund. (a) The Alaska 25 drinking water administrative fund is established as a separate fund that is distinct from 26 other money or funds in the state treasury. The fund is composed of two accounts, the 27 (1) Alaska drinking water administrative operating account; and 28 (2) Alaska drinking water administrative income account. 29 (b) The legislature may appropriate to the Alaska drinking water administrative 30 operating account the annual balance of the Alaska drinking water administrative 31 income account.
01 (c) The department shall administer the Alaska drinking water administrative 02 fund. 03 (d) The Alaska drinking water administrative operating account may be used 04 to pay for the department's operational and administrative costs necessary to manage 05 the Alaska drinking water fund and the Alaska drinking water administrative fund and 06 for such other purposes permitted by federal law. 07 (e) Money received in payment of fees charged by the department under the 08 authority of AS 46.03.039 and earnings on the Alaska drinking water administrative 09 fund shall be deposited in the Alaska drinking water administrative income account. 10 * Sec. 22. AS 46.03 is amended by adding a new section to read: 11 Sec. 46.03.039. Fees charged for loans made from the Alaska drinking 12 water fund. The department may charge and collect reasonable fees in connection 13 with making and servicing loans made by the department under the authority of 14 AS 46.03.036. The department shall by regulation specify the rates and amounts of 15 such fees. 16 * Sec. 23. The uncodified law of the State of Alaska is amended by adding a new section 17 to read: 18 INDIRECT COURT RULE AMENDMENT. (a) The provisions of sec. 11 of this Act 19 have the effect of changing Rule 3, Alaska Rules of Civil Procedure, by limiting, to the 20 Superior Court for the State of Alaska, First Judicial District at Juneau, the venue district in 21 which a proceeding under AS 37.15.583(a) may be commenced and conducted. 22 (b) Section 11 of this Act takes effect only if (a) of this section receives the two-thirds 23 majority vote of each house required by art. IV, sec. 15, Constitution of the State of Alaska. 24 * Sec. 24. The uncodified law of the State of Alaska is amended by adding a new section 25 to read: 26 TRANSITION: REGULATIONS. The respective state agencies may proceed to adopt 27 any regulations necessary to implement their duties under this Act. The regulations take effect 28 under AS 44.62 (Administrative Procedure Act), but not before the effective date of secs. 1 - 29 22 of this Act. 30 * Sec. 25. Section 24 of this Act takes effect immediately under AS 01.10.070(c).