HB 123: "An Act relating to the Alaska clean water fund."
00 HOUSE BILL NO. 123 01 "An Act relating to the Alaska clean water fund." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 * Section 1. AS 46.03.032(d) is amended to read: 04 (d) Except as otherwise limited by federal law, the Alaska clean water fund 05 may be used 06 (1) for the following categories of projects: 07 (A) planning, designing, building, constructing, and 08 rehabilitating a public wastewater collection, treatment, or discharge system; 09 (B) implementing a management program for controlling water 10 pollution from nonpoint sources under 33 U.S.C. 1329, including planning, 11 designing, building, constructing, and rehabilitating a solid waste management 12 system; and 13 (C) developing and implementing an estuary conservation and 14 management program under 33 U.S.C. 1330; 15 (2) to provide the following types of financial assistance for the
01 categories of projects listed in (1) of this subsection: 02 (A) making loans to municipalities and other qualified entities 03 or facilitating loans to persons, municipalities, or other qualified entities 04 through a linked deposit program as provided under (q) of this section; 05 (B) buying or refinancing the debt obligations of a municipality 06 or other qualified entity; 07 (C) providing collateral security for or purchasing insurance for 08 a municipal, state agency, or other qualified entity debt obligation; and 09 (3) to pay and secure the payment of the principal of and interest on 10 revenue bonds issued by the state and to pay the costs of issuance and administration 11 of the bonds, so long as the proceeds of the bond sale are deposited in the Alaska clean 12 water fund. 13 * Sec. 2. AS 46.03.032 is amended by adding a new subsection to read: 14 (q) The department shall establish a linked deposit loan program to provide a 15 source of low-interest financing for certain nonpoint source pollution control programs 16 or projects undertaken by a person, municipality, or other qualified entity. The 17 department shall establish by regulation standards, criteria, and procedures for the 18 linked deposit loan program under this subsection. The department may invest funds 19 under this subsection in a participating financial institution that is authorized to do 20 business in the state, the investments to be evidenced by certificates of deposit. The 21 department may accept a rate of return on the investments from the financial 22 institution that is lower than the rate that would otherwise apply to the investments 23 under the current market conditions but not lower than the minimum rate of return 24 authorized by the department for direct loans to municipalities and other qualified 25 entities under (d)(2)(A) of this section. A participating financial institution shall 26 evaluate the creditworthiness of a person, municipality, or other qualified entity that 27 applies for financing. If the participating financial institution determines that an 28 applicant's credit is acceptable, the financial institution may apply to the department 29 for an investment from the department under this subsection that is equal to the 30 amount and term of the loan that the institution proposes to make to the applicant 31 borrower. The department's investment shall receive a below market rate of interest.
01 The difference between the below market rate of interest received by the department's 02 investment and the market rate for that investment shall be applied by the participating 03 financial institution to reduce the rate of interest charged on a loan to an applicant 04 borrower. Notwithstanding that a loan made by a participating financial institution 05 under this subsection is linked to the department's investment, a loan under this 06 subsection is between the participating financial institution and a borrower approved 07 by the department, and the participating financial institution shall assume all risk of 08 default and may charge origination and other reasonable fees associated with the loan.