CSHB 304(FIN) AM: "An Act relating to issuance and sale of revenue bonds to fund drinking water projects, to the Alaska clean water fund, 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."
00CS FOR HOUSE BILL NO. 304(FIN) am 01 "An Act relating to issuance and sale of revenue bonds to fund drinking water 02 projects, to the Alaska clean water fund, to creation of an Alaska clean water 03 administrative fund and an Alaska drinking water administrative fund, to fees to 04 be charged in connection with loans made from the Alaska clean water fund and 05 the Alaska drinking water fund, and to clarification of the character and 06 permissible uses of the Alaska drinking water fund; amending Rule 3, Alaska 07 Rules of Civil Procedure; and providing for an 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 06 fund or the Alaska drinking water fund, as appropriate . Accrued interest paid on 07 the bonds shall be paid into the Alaska clean water fund or the Alaska drinking 08 water fund for transfer to the Alaska clean water fund revenue bond redemption fund 09 or the Alaska drinking water fund revenue bond redemption fund (AS 37.15.565) , 10 as appropriate . 11 * Sec. 2. AS 37.15.560(b) is amended to read: 12 (b) The state bond committee may not issue more than $15,000,000 in revenue 13 bonds under AS 37.15.560 - 37.15.605 during a fiscal year for each revolving loan 14 fund program referred to in (a) of this section , excluding refunding bonds. The 15 total unpaid principal amount of revenue bonds, including refunding bonds, but 16 excluding refunded bonds, issued under AS 37.15.560 - 37.15.605 [,] may not exceed 17 $150,000,000 for each program . 18 * Sec. 3. AS 37.15.565 is amended to read: 19 Sec. 37.15.565. Bond redemption funds [FUND]. (a) There are [IS] 20 established [A] special funds [FUND] of the state, known as the "Alaska clean water 21 fund revenue bond redemption fund [,]" and the "Alaska drinking water fund 22 revenue bond redemption fund," which are [IS A] trust funds [FUND] for paying 23 and securing the payment of the principal of and interest and redemption premium, if 24 any, on the bonds and which shall be at all times completely segregated and set apart 25 from all other funds of the state. The committee, on behalf of the state, may obligate 26 and bind the state to set aside and pay into the bond redemption funds [FUND], on 27 a monthly or other periodic basis, any part or parts of, or all of, or a fixed proportion 28 of, or a fixed amount of the money in the Alaska clean water fund (AS 46.03.032) or 29 the Alaska drinking water fund (AS 46.03.036) sufficient to pay the principal of and 30 interest and redemption premium, if any, on the bonds and, if it considers it necessary, 31 to set aside and maintain reserves for this purpose. The bond redemption funds
01 [FUND] shall be drawn upon only for the purpose of paying the principal of and 02 interest and redemption premium, if any, on the bonds, together with related trustee 03 fees, if any. 04 (b) Money in the bond redemption funds [FUND] may be invested in the same 05 manner and on the same conditions as permitted for investment of money belonging 06 to the state or held in the treasury under AS 37.10.070; however, the committee may 07 agree with the bondholders to further limit these investments. Earnings on investments 08 must be retained in the bond redemption funds [FUND]. 09 (c) Separate accounts may be created in the bond redemption funds [FUND] 10 for the purposes of paying and securing the bonds. The accounts may be combined for 11 purposes of investment and for financial support to achieve the purposes of 12 AS 37.15.570(c) . 13 * Sec. 4. AS 37.15.570(c) is amended to read: 14 (c) The committee may pledge to the payment of the principal of and interest 15 on bonds issued by the committee part or all of the legally available money or other 16 assets on hand in the Alaska clean water fund (AS 46.03.032) or the Alaska drinking 17 water fund (AS 46.03.036) ; part or all of the revenue of the Alaska clean water fund 18 or the Alaska drinking water fund , including federal capitalization grants, the 19 proceeds of loan repayments, and interest on money in the funds [FUND]; the 20 proceeds of the sale of bonds; and money on hand in the bond redemption funds 21 [FUND]. Revenue of the Alaska clean water fund or the Alaska drinking water fund , 22 if so pledged, must be paid into the Alaska clean water fund or the Alaska drinking 23 water fund, as appropriate . The committee may provide for the issuance of 24 additional bonds, secured by a pledge of such money and revenue, ranking junior to, 25 senior to, or on a parity with, outstanding bonds, upon conditions prescribed in the 26 bond resolution. A pledge of loan repayments securing bonds may be made applicable 27 to specific loans from the Alaska clean water fund or the Alaska drinking water 28 fund, or, on a pooled basis, to all loan repayments received. 29 * Sec. 5. AS 37.15.570(d) is amended to read: 30 (d) If the committee finds it reasonably necessary, the committee may select 31 a trustee or trustees for the holders of the bonds, or any series of them, for the
01 safeguarding and disbursement of any of the money in the bond redemption funds 02 [FUND] created by AS 37.15.565, or for duties with respect to the enforcement, 03 authentication, delivery, payment, and registration of the bonds as the committee may 04 determine. The committee shall fix the rights, duties, powers, and obligations of the 05 trustee or trustees. 06 * Sec. 6. AS 37.15.570(e) is amended to read: 07 (e) In its determination of all matters and questions relating to the issuance and 08 sale of the bonds and the fixing of their maturities, terms, conditions, and covenants 09 as provided in (a) - (d) of this section, the decisions of the committee shall be those 10 that are reasonably necessary for the best interests of the state and its inhabitants and 11 that will accomplish the most advantageous sale of the bonds, with due regard, 12 however, for the continued funding under AS 46.03.032 and AS 46.03.306 of the 13 categories of projects identified in AS 46.03.032(d) and 46.03.036(b) . Decisions of 14 the committee, as expressed in a bond resolution, are final and are conclusively 15 considered to comply with the requirements of AS 37.15.560 - 37.15.605 , [AND] 16 AS 46.03.032 , and 46.03.036 . 17 * Sec. 7. AS 37.15.570(f) is amended to read: 18 (f) A bond resolution may provide that the bonds issued must contain a recital 19 that they are issued under AS 37.15.560 - 37.15.605 and under AS 46.03.032 or 20 46.03.036, as appropriate , and a bond containing this recital is conclusively 21 considered to be valid and to have been issued in conformity with AS 37.15.560 - 22 37.15.605 and with AS 46.03.032 or 46.03.036, as appropriate . 23 * Sec. 8. AS 37.15.573 is amended to read: 24 Sec. 37.15.573. Bond resolution. The committee shall authorize the issuance 25 of bonds by adopting a resolution and shall prepare all other documents and 26 proceedings necessary for the issuance, sale, and delivery of the bonds or any part or 27 series of them. The bond resolution must fix the principal amount, denominations, 28 date, maturities, manner of sale, place or places of payment, rights of redemption, if 29 any, terms, form, conditions, and covenants of the bonds or each series of them. A 30 bond resolution may state terms, conditions, amounts, and other limitations on loans 31 to be made from the Alaska clean water fund (AS 46.03.032) or the Alaska drinking
01 water fund (AS 46.03.036), as appropriate, from the relevant bond proceeds. 02 * Sec. 9. AS 37.15.575 is amended to read: 03 Sec. 37.15.575. State aid intercept. If a municipality is in [THE] default on 04 the payment of principal or interest on a loan from the Alaska clean water fund 05 (AS 46.03.032) or the Alaska drinking water fund (AS 46.03.036) , the committee 06 may provide written notice of default to any state agency that is the custodian of 07 money that is payable to the municipality. If the committee determines to provide 08 notice, a separate written notice shall be given in each instance of default. 09 Notwithstanding any other provision of law, at any time after receipt of written notice 10 of default, the agency head shall withhold payment of the money from the 11 municipality. The agency head shall pay over the withheld money to the committee 12 for deposit in the Alaska clean water fund or the Alaska drinking water fund, as 13 appropriate, for the purpose of paying or securing the principal and interest on the 14 loan. 15 * Sec. 10. AS 37.15.580 is amended to read: 16 Sec. 37.15.580. Pledge of the state. The state pledges to and agrees with the 17 holders of bonds issued by the committee under AS 37.15.560 - 37.15.605 and under 18 AS 46.03.032 or 46.03.036, as appropriate, that the state will not limit or alter the 19 rights and powers vested in the committee by AS 37.15.560 - 37.15.605 and by 20 AS 46.03.032 or 46.03.036, as appropriate, to fulfill the terms of any contract made 21 by the committee with the holders, or in any way impair the rights and remedies of the 22 holders until the principal amount of the bonds, together with the interest on them with 23 interest on unpaid installments of interest, are fully met and discharged. The 24 committee may include this pledge and agreement of the state in a contract with the 25 holders. 26 * Sec. 11. AS 37.15.583(a) is amended to read: 27 (a) The owner or owners of not less than 10 percent of the aggregate principal 28 amount of any series or issue of bonds or the trustee for the owners of the bonds or 29 any series of them may, by appropriate proceedings in state court, require and compel 30 the transfer, setting aside, and payment of money and the enforcement of all of the 31 terms, conditions, and covenants as required and provided in AS 37.15.560 -
01 37.15.605, AS 46.03.032 or 46.03.036, as appropriate , and the bond resolution. 02 * Sec. 12. AS 37.15.585 is amended to read: 03 Sec. 37.15.585. Amounts required for payments. The committee shall, 04 before June 30 of each year or from time to time within the year, as appropriate, 05 commencing with the year in which the bonds are issued, certify to the commissioners 06 of revenue and environmental conservation the amounts required in the current fiscal 07 year and the next ensuing fiscal year by the bond resolution or resolutions to be paid 08 out of the Alaska clean water fund or the Alaska drinking water fund into the 09 appropriate bond redemption fund and to be paid into and maintained in any reserve 10 fund or account or other fund or account created by the bond resolution or resolutions, 11 and shall also certify to the commissioners the last date or dates upon which payments 12 may be made. 13 * Sec. 13. AS 37.15.587 is amended to read: 14 Sec. 37.15.587. Purposes and sufficiency of revenue. The proceeds of bonds 15 may be used for the purposes described in AS 46.03.032 or 46.03.036, as appropriate 16 [AS 46.03.032(d)]. Bonds may not be issued unless the committee first finds that 17 revenue to be derived from repayment of loans from the Alaska clean water fund or 18 the Alaska drinking water fund, as appropriate, will be sufficient, together with 19 other available money, to comply with all covenants of the bond resolutions. 20 * Sec. 14. AS 37.15.590(b) is amended to read: 21 (b) The issuance of refunding bonds need not be authorized by the voters of 22 the state or by an act of the legislature. The committee shall adopt the resolution or 23 resolutions and prepare all other documents and proceedings necessary for the 24 issuance, exchange or sale, and delivery of the refunding bonds. All provisions of 25 AS 37.15.560 - 37.15.605 and of AS 46.03.032 and 46.03.036, as appropriate, 26 applicable to revenue bonds are applicable to the refunding bonds and to the issuance, 27 sale, or exchange of them, except as otherwise provided in this section. 28 * Sec. 15. AS 37.15.605(1) is amended to read: 29 (1) "bond redemption funds [FUND]" means the Alaska clean water 30 fund revenue bond redemption fund and the Alaska drinking water fund revenue 31 bond redemption fund established in AS 37.15.565 , as applicable ;
01 * Sec. 16. AS 37.15.605(3) is amended to read: 02 (3) "bonds" means the Alaska clean water fund revenue bonds or the 03 Alaska drinking water fund revenue fonds authorized in AS 37.15.560 - 37.15.605 , 04 as applicable ; 05 * Sec. 17. AS 37.15.605(7) is amended to read: 06 (7) "costs of issuance and administration" means all costs associated 07 with issuance and administration of Alaska clean water fund revenue bonds or the 08 Alaska drinking water fund revenue bonds, as applicable, and refunding bonds, 09 including costs of bond printing, official statements, financial advisors, travel costs, 10 rating agencies, bond insurance, letters and lines of credit for credit enhancement, 11 underwriters, legal services, paying agents, bonds registrars, bond and escrow trustees, 12 arbitrage rebate, and all other costs, including administrative costs, both direct and 13 indirect. 14 * Sec. 18. AS 46.03.032(p)(1) is amended to read: 15 (1) "other qualified entity" means 16 (A) an intermunicipal or interstate agency as those terms are 17 used in 33 U.S.C. 1383, and may include an authority, corporation, 18 instrumentality, enterprise, or other entity formed through an agreement 19 between a municipality and one or more other governmental entities under 20 AS 29.35.010(13) or under art. X, sec. 13, Constitution of the State of Alaska, 21 or between a municipality and a regional housing authority under 22 AS 18.55.996(b); or 23 (B) an organization that is eligible for assistance under 33 24 U.S.C. 1383, that is not exempted from regulation under AS 42.05.711(d), 25 that provides waste water service under a certificate of convenience and 26 necessity from the former Alaska Public Utilities Commission or the 27 Regulatory Commission of Alaska, and that is economically regulated by 28 the Regulatory Commission of Alaska; 29 * Sec. 19. AS 46.03.034 is repealed and reenacted to read: 30 Sec. 46.03.034. Alaska clean water administrative fund. (a) The Alaska 31 clean water administrative fund is established as a separate fund that is distinct from
01 other money or funds in the treasury. The fund is composed of two accounts, the 02 (1) Alaska clean water administrative operating account; and 03 (2) Alaska clean water administrative income account. 04 (b) The legislature may appropriate to the Alaska clean water administrative 05 operating account the annual balance of the Alaska clean water administrative income 06 account. 07 (c) The department shall administer the Alaska clean water administrative 08 fund. 09 (d) The Alaska clean water administrative operating account may be used to 10 pay for the department's operational and administrative costs necessary to manage the 11 Alaska clean water fund and the Alaska clean water administrative fund and for such 12 other purposes permitted by federal law. 13 (e) Money received in payment of fees charged by the department under the 14 authority of AS 46.03.035 and earnings on the Alaska clean water administrative fund 15 shall be deposited in the Alaska clean water administrative income account. 16 * Sec. 20. AS 46.03 is amended by adding a new section to read: 17 Sec. 46.03.035. Fees charged for loans made from the Alaska clean water 18 fund. The department may charge and collect reasonable fees in connection with 19 making and servicing loans made by the department under the authority of 20 AS 46.03.032. The department shall by regulation specify the rates and amounts of 21 the fees. 22 * Sec. 21. AS 46.03.036 is repealed and reenacted to read: 23 Sec. 46.03.036. Alaska drinking water fund. (a) The Alaska drinking water 24 fund is established as a separate fund that is distinct from other money or funds in the 25 treasury. The fund shall be administered by the department. The Alaska drinking 26 water fund consists of the following items, all of which shall be deposited into the 27 fund upon receipt: 28 (1) the proceeds and accrued interest received from the sale of revenue 29 bonds issued under AS 37.15.560 - 37.15.605 and secured by the Alaska drinking 30 water fund; 31 (2) money appropriated by the legislature, including federal
01 capitalization grants; 02 (3) loan repayments; and 03 (4) interest received from loan repayments and interest received from 04 investment of money in the Alaska drinking water fund. 05 (b) Except as otherwise limited by federal law, the department may use money 06 in the Alaska drinking water fund to 07 (1) provide financial assistance for drinking water system projects, 08 including projects to plan, design, build, construct, or rehabilitate a public drinking 09 water collection, storage, treatment, or distribution system, to 10 (A) municipalities; 11 (B) organizations that are not exempted from regulation under 12 AS 42.05.711(d), that provide water service under a certificate of convenience 13 and necessity from the former Alaska Public Utilities Commission or the 14 Regulatory Commission of Alaska, and that are economically regulated by the 15 Regulatory Commission of Alaska; 16 (2) earn interest on the amounts deposited in the fund; 17 (3) pay the costs of administering the fund and conducting activities 18 under this section and AS 37.15.560 - 37.15.605, including the costs of issuance and 19 administration as defined in AS 37.15.605; 20 (4) pay and secure the payment of the principal of and interest on 21 revenue bonds issued by the state and to pay the costs of issuance and administration 22 of the bonds, so long as the proceeds of the bond sale are deposited in the Alaska 23 drinking water fund; 24 (5) pay 25 (A) into the bond redemption fund (AS 37.15.565), and into any 26 other bond redemption fund or account created by a relevant bond resolution, 27 the amount certified by the state bond committee under AS 37.15.585; and 28 (B) the costs of the state bond committee in conducting 29 activities under this section and AS 37.15.560 - 37.15.605, including the costs 30 of issuance and administration as defined in AS 37.15.605. 31 (c) Repayment of loans shall be secured in a manner that the department
01 determines is feasible to ensure prompt repayment under a loan agreement entered into 02 with the borrower. 03 (d) Separate accounts may be created in the Alaska drinking water fund. The 04 accounts may be combined for purposes of investment. 05 (e) The department may adopt regulations necessary to implement the Alaska 06 drinking water fund in a manner consistent with federal law. The regulations adopted 07 by the department under (h) of this section may establish different loan terms, charges, 08 rates, and standards for different classes of borrowers to accommodate the different 09 levels of risk and costs that the different classes may present. 10 (f) An organization that qualifies for financial assistance under (b)(1)(B) of this 11 section or a municipality wishing to borrow money from the Alaska drinking water 12 fund shall demonstrate to the satisfaction of the department that it 13 (1) has sufficient legal authority to incur the debt for which it is 14 applying; and 15 (2) will establish and maintain a dedicated source of revenue or other 16 acceptable revenue source for repayment of the loan and sufficient reserves for the 17 loan as may be necessary. 18 (g) Allocation of Alaska drinking water fund loans shall be made in 19 accordance with a priority list developed by the department, using criteria specified in 20 regulations adopted by the department. A loan may not be made to an organization 21 that is not a municipality to refinance debt of that organization. 22 (h) Before making a loan from the Alaska drinking water fund, the department 23 shall, by regulation, specify 24 (1) standards for the eligibility of borrowers and the type of projects 25 to be financed with loans; 26 (2) loan term and interest rate policies for loans made from the fund; 27 (3) standards regarding the technical and economic viability and 28 revenue of self-sufficiency of eligible projects; 29 (4) collateral or other security required for loans; 30 (5) terms of loans; and 31 (6) other relevant standards or procedures.
01 (i) Except as necessary to comply with the covenants of a bond resolution 02 under AS 37.15.573, a loan made by the department shall be made according to the 03 standards and procedures established by regulations under this section. A loan made 04 from the Alaska drinking water fund may be subject to the state aid intercept 05 provisions of AS 37.15.575. 06 (j) The department shall also prepare reports and notices, including notices of 07 default, required by the state bond committee in conjunction with bonds issued under 08 AS 37.15.560 - 37.15.605. 09 (k) Regulations adopted by the department under this section that would affect 10 issuance or repayment of revenue bonds under AS 37.15.560 - 37.15.605 may not be 11 inconsistent with those statutes or with regulations adopted by the state bond 12 committee under those statutes. To the extent that regulations adopted by the 13 department are inconsistent with AS 37.15.560 - 37.15.605, with regulations adopted 14 by the state bond committee under those statutes, or with the covenants of a bond 15 resolution adopted under AS 37.15.573, the provisions of AS 37.15.560 - 37.15.605, 16 the regulations adopted under those statutes, and the covenants of the bond resolution 17 govern. 18 * Sec. 22. AS 46.03.038 is repealed and reenacted to read: 19 Sec. 46.03.038. Alaska drinking water administrative fund. (a) The Alaska 20 drinking water administrative fund is established as a separate fund that is distinct from 21 other money or funds in the state treasury. The fund is composed of two accounts, the 22 (1) Alaska drinking water administrative operating account; and 23 (2) Alaska drinking water administrative income account. 24 (b) The legislature may appropriate to the Alaska drinking water administrative 25 operating account the annual balance of the Alaska drinking water administrative 26 income account. 27 (c) The department shall administer the Alaska drinking water administrative 28 fund. 29 (d) The Alaska drinking water administrative operating account may be used 30 to pay for the department's operational and administrative costs necessary to manage 31 the Alaska drinking water fund and the Alaska drinking water administrative fund and
01 for such other purposes permitted by federal law. 02 (e) Money received in payment of fees charged by the department under the 03 authority of AS 46.03.039 and earnings on the Alaska drinking water administrative 04 fund shall be deposited in the Alaska drinking water administrative income account. 05 * Sec. 23. AS 46.03 is amended by adding a new section to read: 06 Sec. 46.03.039. Fees charged for loans made from the Alaska drinking 07 water fund. The department may charge and collect reasonable fees in connection 08 with making and servicing loans made by the department under the authority of 09 AS 46.03.036. The department shall by regulation specify the rates and amounts of 10 such fees. 11 * Sec. 24. The uncodified law of the State of Alaska is amended by adding a new section 12 to read: 13 INDIRECT COURT RULE AMENDMENT. The provisions of sec. 11 of this Act 14 have the effect of changing Rule 3, Alaska Rules of Civil Procedure, by limiting to the 15 Superior Court for the State of Alaska, First Judicial District at Juneau the venue district in 16 which a proceeding under AS 37.15.583(a) may be commenced and conducted. 17 * Sec. 25. The uncodified law of the State of Alaska is amended by adding a new section 18 to read: 19 TEMPORARY LIMITATION ON LOANS. Until July 1, 2002, loans may be made 20 from the Alaska drinking water fund only to municipalities, notwithstanding the provision 21 authorizing financial assistance to certain other organizations in AS 46.03.036(b)(1)(B), as 22 repealed and reenacted in sec. 21 of this Act. 23 * Sec. 26. The uncodified law of the State of Alaska is amended by adding a new section 24 to read: 25 CONDITIONAL EFFECT. Section 11 of this Act takes effect only if sec. 24 of this 26 Act receives the two-thirds majority vote of each house required by art. IV, sec. 15, 27 Constitution of the State of Alaska. 28 * Sec. 27. The uncodified law of the State of Alaska is amended by adding a new section 29 to read: 30 TRANSITION: REGULATIONS. The respective state agencies may proceed to adopt 31 any regulations necessary to implement their duties under this Act. The regulations take effect
01 under AS 44.62 (Administrative Procedure Act), but not before the effective date of secs. 1 - 02 23 and 25 of this Act. 03 * Sec. 28. Section 27 of this Act takes effect immediately under AS 01.10.070(c).