CSHB 338(FIN): "An Act relating to the bulk fuel bridge loan fund and program, power project fund, and the bulk fuel revolving loan fund; authorizing the Alaska Energy Authority to borrow money from the power project fund for the bulk fuel revolving loan fund and to repay money borrowed; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 338(FIN) 01 "An Act relating to the bulk fuel bridge loan fund and program, power project fund, 02 and the bulk fuel revolving loan fund; authorizing the Alaska Energy Authority to 03 borrow money from the power project fund for the bulk fuel revolving loan fund and to 04 repay money borrowed; and providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 29.60 is amended by adding a new section to read: 07 Article 8A. Bulk Fuel Bridge Loan Fund and Program. 08 Sec. 29.60.660. Bulk fuel bridge loan fund and program. (a) The bulk fuel 09 bridge loan fund is established in the department to assist communities, utilities 10 providing power in communities, fuel retailers, and other persons in communities in 11 purchasing bulk fuel to generate power or supply the public with fuel for use in 12 communities, if no other funding source exists for the purchase. The fund consists of 13 appropriations to the fund and income earned on investment of money in the fund. 14 (b) A community, utility, fuel retailer, or other person generating power or
01 supplying fuel in a community as described in (a) of this section is eligible to receive a 02 loan from the bulk fuel bridge loan fund for a purchase of bulk fuel to be used in the 03 community if the community, utility, fuel retailer, or other person 04 (1) has a written endorsement from the governing body of the 05 community for which a loan from the fund under this section is sought; and 06 (2) first applied for and has been denied a loan from 07 (A) the bulk fuel revolving loan fund (AS 42.45.250) 08 administered by the Alaska Energy Authority; 09 (B) any other funding source used by the community, utility, 10 fuel retailer, or other person in the past three years to finance purchases of bulk 11 fuel for the community; and 12 (C) any other funding source that the department determines is 13 available to the community, utility, fuel retailer, or other person to purchase 14 bulk fuel. 15 (c) Loans made from the bulk fuel bridge loan fund to one borrower in a fiscal 16 year 17 (1) may not exceed $500,000; and 18 (2) shall be repaid within one year after the date of the award. 19 (d) Interest may not be charged on a loan made from the bulk fuel bridge loan 20 fund. 21 (e) Repayments of the loans made under this section shall be paid into the bulk 22 fuel bridge loan fund. Money in the fund does not lapse. This fund is not a dedicated 23 fund. Amounts in the fund may be appropriated for expenses directly related to 24 administration of the fund. 25 (f) The department may contract for the administration of the bulk fuel bridge 26 loan program established in this section. 27 (g) The department may adopt regulations under AS 44.62 necessary to carry 28 out the provisions of this section. 29 (h) In this section, 30 (1) "community" means a municipality or unincorporated village that 31 is a social unit, if the municipality or unincorporated village has a population of less
01 than 2,000 people; 02 (2) "fund" means the bulk fuel bridge loan fund established in (a) of 03 this section; 04 (3) "person" 05 (A) has the meaning given in AS 01.10.060; 06 (B) includes a cooperative, a joint venture, and a governmental 07 entity. 08 * Sec. 2. AS 42.45.010(b) is amended to read: 09 (b) The authority may make loans from the power project fund 10 (1) to electric utilities, regional electric authorities, municipalities, 11 regional and village corporations, village councils, and independent power producers 12 [, AND NONPROFIT MARKETING COOPERATIVES] to pay the costs of 13 (A) reconnaissance studies, feasibility studies, license and 14 permit applications, preconstruction engineering, and design of power projects; 15 and 16 (B) constructing, equipping, modifying, improving, and 17 expanding small-scale power production facilities that are designed to produce 18 less than 10 megawatts of power, bulk fuel storage facilities, and transmission 19 and distribution facilities, including energy production, transmission and 20 distribution, waste energy, energy conservation, energy efficiency, and 21 alternative energy facilities and equipment; [AND 22 (C) RECONNAISSANCE STUDIES, PRECONSTRUCTION 23 ENGINEERING, DESIGN, CONSTRUCTION, EQUIPPING, 24 MODIFICATION, AND EXPANSION OF POTABLE WATER SUPPLY 25 INCLUDING SURFACE STORAGE AND GROUNDWATER SOURCES 26 AND TRANSMISSION OF WATER FROM SURFACE STORAGE TO 27 EXISTING DISTRIBUTION SYSTEMS;] 28 (2) to a borrower for a power project or for bulk fuel, waste energy, 29 energy conservation, energy efficiency, or alternative energy facilities or equipment if 30 (A) the loan is entered into under a leveraged lease financing 31 arrangement;
01 (B) the party that will be responsible for the power project or 02 the bulk fuel, waste energy, energy conservation, energy efficiency, or 03 alternative energy facilities or equipment is an electric utility, regional electric 04 authority, municipality, regional or village corporation, village council, or 05 independent power producer [, OR NONPROFIT MARKETING 06 COOPERATIVE]; and 07 (C) the borrower seeking the loan demonstrates to the authority 08 that the financing arrangement for the power project or the bulk fuel, waste 09 energy, energy conservation, energy efficiency, or alternative energy facilities 10 or equipment will reduce financing costs for the project, facilities, or 11 equipment below costs of comparable public power projects, facilities, or 12 equipment; 13 (3) to the bulk fuel revolving loan fund for the purposes described 14 in AS 42.45.250(m) under terms, including interest, that the authority determines 15 are appropriate to maintain the viability of the power project fund and the bulk 16 fuel revolving loan fund; however, the authority may not make a loan under this 17 paragraph if 18 (A) the cumulative outstanding balance of the loans would 19 exceed the lesser of $2,000,000 or 10 percent of the cash balance of the 20 power project fund on June 30 of the preceding fiscal year; or 21 (B) the cash balance of the power project fund is less than 22 $5,000,000. 23 * Sec. 3. AS 42.45.010(f) is amended to read: 24 (f) A loan for power [POWER] projects and bulk fuel, waste energy, 25 energy conservation, energy efficiency, and alternative energy facilities or 26 equipment [ARE SUBJECT TO THE FOLLOWING LIMITATIONS ON 27 INTEREST AND SPECIFIC RESTRICTIONS:] 28 (1) [POWER PROJECTS FOR WHICH LOANS ARE 29 OUTSTANDING FROM THE FORMER WATER RESOURCES REVOLVING 30 LOAN FUND (FORMER AS 45.86) ON JULY 13, 1978, MAY RECEIVE 31 ADDITIONAL FINANCING FROM THE POWER PROJECT FUND; IF
01 GRANTED, 02 (A) THE TERM OF THE ADDITIONAL FINANCING MAY 03 NOT EXCEED 50 YEARS; 04 (B) THE INTEREST OF THE ADDITIONAL FINANCING 05 MUST BE AT A RATE OF NOT LESS THAN THREE OR MORE THAN 06 FIVE PERCENT A YEAR ON THE UNPAID BALANCE; 07 (C) THE GRANT OF THE ADDITIONAL FINANCING 08 MUST BE CONDITIONED ON THE REPAYMENT OF LOAN PRINCIPAL 09 AND INTEREST TO BEGIN ON THE EARLIER OF 10 (i) THE DATE OF THE START OF COMMERCIAL 11 OPERATION OF THE PROJECT; OR 12 (ii) 10 YEARS FROM THE DATE THE LOAN IS 13 GRANTED; 14 (2) A LOAN FOR A POWER PROJECT 15 (A)] may not be granted for a term that exceeds 50 years; and 16 (2) [(B)] shall be granted at an interest rate that is not less than zero 17 percent and that is the lesser of 18 (A) [(i)] a rate equal to the percentage that is the average 19 weekly yield of municipal bonds for the 12 months preceding the date of the 20 loan, as determined by the authority from municipal bond yield rates reported 21 in the 30-year revenue index of The [THE WEEKLY] Bond Buyer; or 22 (B) [(ii)] a rate determined by the authority that allows the 23 project to meet criteria of financial feasibility established under (c) of this 24 section. 25 * Sec. 4. AS 42.45.250(f) is amended to read: 26 (f) Interest may be charged on a loan made from the bulk fuel revolving loan 27 fund. Interest shall be charged on a loan at a rate equal to the percentage of the 28 average weekly yield of municipal bonds for the 12 months preceding the date of the 29 loan, as determined by the authority from municipal bond yield rates reported in the 30 30-year revenue index of The [THE WEEKLY] Bond Buyer. However, if the 31 authority finds that a community cannot afford to repay a portion of interest on a loan,
01 and makes a determination in writing, the authority may reduce or eliminate the 02 interest rate applicable to the loan. 03 * Sec. 5. AS 42.45.250 is amended by adding a new subsection to read: 04 (m) Subject to the limitations of AS 42.45.010(b)(3), the authority may 05 borrow money from the power project fund (AS 42.45.010) when necessary to meet 06 commitments for loans from the bulk fuel revolving loan fund. The authority shall use 07 the money in the bulk fuel revolving loan fund to repay the money borrowed from the 08 power project fund and any interest charged on the money borrowed. 09 * Sec. 6. This Act takes effect immediately under AS 01.10.070(c).