CSHB 364(STA): "An Act relating to capital projects for deferred maintenance, replacement, modification, and expansion of state facilities; relating to leases to secure financing for those projects; relating to the issuance of certificates of participation to finance those projects for certain capital facilities owned by the state; giving notice of and approving the entry into, and the issuance of certificates of participation in, lease-financing agreements for those projects; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 364(STA) 01 "An Act relating to capital projects for deferred maintenance, replacement, 02 modification, and expansion of state facilities; relating to leases to secure financing for 03 those projects; relating to the issuance of certificates of participation to finance those 04 projects for certain capital facilities owned by the state; giving notice of and approving 05 the entry into, and the issuance of certificates of participation in, lease-financing 06 agreements for those projects; and providing for an effective date." 07 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 08 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 09 to read: 10 FINDINGS AND INTENT RELATED TO SEC. 2 OF THIS ACT. (a) The 11 legislature finds that 12 (1) as a result of long-standing budget constraints, many state-owned 13 buildings, including office structures, Pioneers' Homes, prisons, and other facilities, have
01 accumulated a considerable backlog of deferred maintenance; these facilities are in serious 02 need of repair, major maintenance, and modification to maintain and extend their useful lives; 03 (2) in 1998, the Deferred Maintenance Task Force determined that deferred 04 maintenance on state-owned buildings, not including University of Alaska buildings, totaled 05 over $169,000,000; because of budget constraints, little money has been provided in the last 06 several years to address deferred maintenance in state-owned buildings other than university 07 buildings; with the lack of money, facilities have continued to deteriorate, increasing the 08 deferred maintenance total to over $200,000,000; and 09 (3) the expenditures required to make these essential facility repairs are too 10 great to accommodate in a single year's capital budget, and an alternative financing approach 11 must be used to accomplish the necessary projects; the financing of the necessary projects will 12 be the first major step in eliminating the deferred maintenance backlog. 13 (b) The legislature intends to provide the required investment in deferred maintenance 14 capital projects for state-owned facilities described in sec. 2 of this Act. 15 * Sec. 2. The uncodified law of the State of Alaska is amended by adding a new section to 16 read: 17 DEFERRED MAINTENANCE AND FINANCING PLAN; LEASE OF 18 FACILITIES; USE OF PROCEEDS. (a) The Department of Administration shall implement 19 the plan that has been developed by the office of management and budget to undertake and 20 finance deferred maintenance for capital facilities owned by the state. The plan has identified 21 the deferred maintenance capital projects to be addressed under the plan, determined the 22 estimated total costs of each project, and established priorities among the projects based on 23 available resources and emergent need. The implementation of the plan shall include the 24 issuance of certificates of participation by the state bond committee under sec. 5 of this Act 25 and may provide for the payment of all costs of the issuance and the appointment of trustees. 26 (b) The costs of the deferred maintenance capital projects identified in the plan 27 described in (a) of this section shall be financed through lease-financing agreements under 28 sec. 5 of this Act. The cost of all necessary architectural, engineering, and other consulting 29 services, inspection and testing, administrative and relocation expenses, site acquisition, on- 30 and off-site utilities, related improvements, and other costs incurred in connection with the 31 deferred maintenance capital projects are a part of the costs of the projects.
01 (c) In order to implement or secure the financing for the deferred maintenance capital 02 projects identified in the plan described in (a) of this section, the Department of 03 Administration may lease all or some of those facilities or other capital facilities owned by the 04 state and may enter into ground leases and lease agreements with respect to capital facilities 05 of the state. The term of a ground lease of land owned by the state may extend for up to 10 06 years beyond the term of the lease-financing agreements under sec. 5 of this Act. The terms 07 of a lease entered into under this subsection may not permit the mortgage of any fee interest in 08 public land or otherwise permanently deprive the state of its equity interest in public land and 09 the improvements constructed on that public land. 10 (d) The net proceeds, exclusive of the cost of other capital projects identified in sec. 3 11 of this Act and the cost of issuance, capitalized interest, and interest earnings, derived from 12 the lease-financing agreements authorized in sec. 5 of this Act shall be used for the deferred 13 maintenance capital projects identified in the plan described in (a) of this section. 14 (e) The supreme court may delegate its authority under AS 22.05.025 regarding court 15 facilities to the Department of Administration for the purpose of facilitating the financing of 16 deferred maintenance projects under this section. 17 * Sec. 3. The uncodified law of the State of Alaska is amended by adding a new section to 18 read: 19 OTHER CAPITAL PROJECTS IN STATE-OWNED FACILITIES; LEASE OF 20 FACILITIES; USE OF PROCEEDS. (a) The costs of capital projects for the replacement, 21 modification, and expansion of certain state-owned facilities as described in (b) of this section 22 shall be financed through lease-financing agreements under sec. 5 of this Act. The costs of 23 necessary architectural, engineering, and other consulting services, inspection and testing, 24 administrative and relocation expenses, site acquisition, on-site utilities, off-site utilities, 25 related improvements, and other costs incurred in connection with these capital projects are a 26 part of the costs of those projects. 27 (b) The capital projects to be financed as described in (a) of this section are 28 (1) University of Alaska, capital projects to comply with the Americans with 29 Disabilities Act, and University of Alaska Anchorage emergency renovation and replacement 30 projects; 31 (2) Office of the Governor, capital projects for state agencies to comply with
01 the Americans with Disabilities Act; 02 (3) Department of Administration, veterans' housing; 03 (4) Department of Military and Veterans' Affairs, a Southeast Alaska joint 04 readiness center and student activities center in Juneau, shared with the University of Alaska 05 Southeast; 06 (5) Department of Education and Early Development, land acquisition and 07 expansion planning for the state museum described in AS 14.57.010; 08 (6) Department of Public Safety, facility replacement in Ketchikan and hangar 09 construction in Anchorage and Juneau; 10 (7) Department of Health and Social Services, renovation and expansion of the 11 youth detention facility in Nome; and 12 (8) Department of Transportation and Public Facilities, replacement of 13 highway maintenance stations at Chandalar, Willow, East Fork, and Nome. 14 (c) In order to implement or secure the financing for the capital projects identified in 15 (b) of this section, the Department of Administration may lease all or some of those facilities 16 or other capital facilities owned by the state and may enter into ground leases and lease 17 agreements with respect to capital facilities of the state. The term of a ground lease of land 18 owned by the state may extend for up to 10 years beyond the term of the lease-financing 19 agreements under sec. 5 of this Act. The terms of a lease entered into under this subsection 20 may not permit the mortgage of a fee interest in public land or otherwise permanently deprive 21 the state of its equity interest in public land and the improvements constructed on that public 22 land. 23 (d) The net proceeds, exclusive of the cost of the deferred maintenance capital 24 projects identified in the plan described in sec. 2(a) of this Act and the cost of issuance, 25 capitalized interest, and interest earnings, derived from the lease-financing agreements 26 authorized in sec. 5 of this Act, shall be used for the capital projects identified in (b) of this 27 section. 28 * Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to 29 read: 30 LEASE-FINANCING AGREEMENT PAYMENTS. (a) The lease payments owed 31 under a lease-financing agreement executed under sec. 5 of this Act are subject to annual
01 appropriation by the legislature. 02 (b) The legislature intends that money from the general fund will be sufficient to 03 make all lease payments; however, if that source of money is insufficient to make the 04 payments, the payments shall be made from any other valid source, subject to appropriation. 05 * Sec. 5. The uncodified law of the State of Alaska is amended by adding a new section to 06 read: 07 NOTICE OF THE ENTRY INTO AND FINANCING OF LEASE-FINANCING 08 AGREEMENTS. (a) Subject to annual appropriation and to the applicable conditions set out 09 in secs. 2 and 3 of this Act, the Department of Administration is authorized to enter into lease- 10 financing agreements for the deferred maintenance capital projects identified in the plan 11 described in sec. 2(a) of this Act and for the other capital projects identified in sec. 3(b) of this 12 Act. 13 (b) The state bond committee is authorized to provide for the issuance of certificates 14 of participation in one or more series in the aggregate principal amount of $156,932,000, plus 15 costs of required reserves and costs of issuance, to pay the costs of the deferred maintenance 16 capital projects identified in the plan described in sec. 2(a) of this Act and of the other capital 17 projects identified in sec. 3(b) of this Act. The estimated total cost of construction, 18 acquisition, and equipping the projects is $159,160,000, which shall be paid from the 19 proceeds of the lease-financing agreements and from interest earnings during construction. 20 The estimated aggregate annual amount of rental obligations under the lease-financing 21 agreements is $14,842,000. The estimated total lease payments for the full term of the lease- 22 financing agreements is $222,637,000. In this subsection, "cost of construction" includes 23 credit enhancement and underwriting expenses, rating agency fees, bond counsel fees, 24 financial advisor fees, printing fees, trustee fees, advertising fees, capitalized interest, interest 25 earnings used for lease payments, other costs of issuance, and costs of required reserves. 26 (c) The state bond committee may contract for credit enhancement, underwriting, 27 credit ratings, bond counsel, financial advisor, printing, advertising, and trustee services that 28 the committee considers necessary in financing the deferred maintenance capital projects 29 identified in the plan described in sec. 2(a) of this Act and the other capital projects identified 30 in sec. 3(b) of this Act. 31 (d) The supreme court may delegate its authority under AS 36.30.085 to the
01 Department of Administration for the purpose of facilitating lease-financing agreements for 02 deferred maintenance projects and the issuance of certificates of participation for those 03 projects under this section. 04 * Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to 05 read: 06 NOTICE AND APPROVAL OF AGREEMENTS. Section 5 of this Act constitutes 07 the notice and approval required by AS 36.30.085. 08 * Sec. 7. This Act takes effect July 1, 2002.