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.