SSSB 25: "An Act establishing the sustainable energy transmission and supply development program in the Alaska Industrial Development and Export Authority."
00 SPONSOR SUBSTITUTE FOR SENATE BILL NO. 25 01 "An Act establishing the sustainable energy transmission and supply development 02 program in the Alaska Industrial Development and Export Authority." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 05 to read: 06 SHORT TITLE. This Act may be known as the Alaska Sustainable Strategy for 07 Energy Transmission and Supply (ASSETS) Act. 08 * Sec. 2. The uncodified law of the State of Alaska is amended by adding a new section to 09 read: 10 LEGISLATIVE INTENT. The legislature intends to appropriate, during fiscal years 11 2013 and 2014, amounts that total $250,000,000 to carry out the purposes of this Act. 12 * Sec. 3. AS 44.88.010(a) is amended to read: 13 (a) The legislature finds, determines, and declares that 14 (1) there exist areas of the state in which seasonal and nonseasonal
01 unemployment exist; 02 (2) this unemployment is a serious menace to the health, safety, and 03 general welfare, not only to the people in those areas, but also to the people of the 04 entire state; 05 (3) the state lacks the basic manufacturing, industrial, energy, export, 06 small business, and business enterprises and the other facilities referred to in this 07 subsection necessary to permit adequate development of its natural resources and the 08 balanced growth of its economy; 09 (4) the establishment and expansion of industrial, manufacturing, 10 energy, export, small business, and business enterprises in the state [ALASKA] and 11 the other facilities referred to in this subsection are essential to the development of the 12 natural resources and the long-term economic growth of the state, and will directly and 13 indirectly alleviate unemployment in the state; 14 (5) the expansion of export trade is vital to the health and growth of the 15 state's economy; 16 (6) many state [ALASKA] businesses could benefit from additional 17 financial and technical assistance with respect to the exportation of their products and 18 services; 19 (7) the [UNITED STATES] Export-Import Bank of the United States 20 has been mandated by the Export-Import Bank Act Amendments of 1983 to provide 21 technical assistance and export financing support to small businesses in cooperation 22 with state export finance agencies; 23 (8) Alaska-based exporters can be effectively assisted through the 24 establishment, as part of the Alaska Industrial Development and Export Authority, of 25 an export financing program designed to work with the [U.S.] Export-Import Bank of 26 the United States and other federal, state, and private institutions; 27 (9) the achievement of the goal of full employment, and of 28 establishment and continuing operation and development of industrial, manufacturing, 29 energy, export, small business, and business enterprises in the state will be accelerated 30 and facilitated by the creation of an instrumentality of the state with powers to incur 31 debt, to own and operate facilities, to make and insure loans to finance and to assist
01 private lenders to make loans to finance the establishment, operation, and development 02 of industrial, manufacturing, energy, export, small business, and business enterprises; 03 (10) it is in the public interest to promote the prosperity and general 04 welfare of all citizens of the state by 05 (A) stimulating commercial and industrial growth and 06 expansion by encouraging an increase of private investment by banks, 07 investment houses, insurance companies, and other financial institutions, 08 including pension and retirement funds, to help satisfy the need for economic 09 expansion; 10 (B) encouraging the production of raw materials and goods for 11 export, the expansion of exports and raw materials and goods, and the 12 rendering of services abroad by residents of the state through the establishment 13 of a program that provides financial assistance in cooperation with federal, 14 state, and private institutions for these purposes in the form provided in this 15 chapter; 16 (C) creating the Alaska Industrial Development and Export 17 Authority with the powers necessary to accomplish the objectives stated in this 18 paragraph, including the power to issue taxable and tax-exempt bonds and to 19 acquire ownership interests in projects as provided in this chapter; 20 (11) it is in the state's interest to import private capital to create new 21 economic activity which would not otherwise take place in the state. 22 * Sec. 4. AS 44.88.010(b) is amended to read: 23 (b) It is declared to be the policy of the state, in the interests of promoting the 24 health, security, and general welfare of all the people of the state, and a public 25 purpose, to increase job opportunities and otherwise to encourage the economic 26 growth of the state, including the development of its natural resources, through the 27 establishment and expansion of manufacturing, industrial, energy, export, small 28 business, and business enterprises and the other facilities referred to in (a) of this 29 section by creating the Alaska Industrial Development and Export Authority with the 30 powers, duties, and functions as provided in this chapter. 31 * Sec. 5. AS 44.88.105(d) is amended to read:
01 (d) The chair [CHAIRMAN] of the authority shall annually, not [NO] later 02 than January 2, certify in writing to the governor and the legislature the amount, if 03 any, required to restore a capital reserve fund to the capital reserve fund requirement. 04 The legislature may appropriate to the authority the amount certified by the chair 05 [CHAIRMAN] of the authority. The authority shall deposit the amounts appropriated 06 under this subsection during a fiscal year in the proper capital reserve fund. Nothing in 07 this section creates a debt or liability of the state. In this subsection, "capital reserve 08 fund" means a capital reserve fund that 09 (1) is created under this section on or before January 1, 1989; 10 (2) secures refunding bonds if the refunding bonds are issued to refund 11 bonds that are secured by a capital reserve fund created under this section on or before 12 January 1, 1989; or 13 (3) secures bonds issued on or after August 11, 1993, for an energy 14 project [A POWER TRANSMISSION INTERTIE]. 15 * Sec. 6. AS 44.88.155(d) is amended to read: 16 (d) A loan participation purchased by the authority with assets of the 17 enterprise development account or with proceeds of bonds secured by assets of the 18 enterprise development account 19 (1) may not exceed $20,000,000; however, in the case of a loan 20 participation for an energy project [A POWER TRANSMISSION INTERTIE], the 21 loan participation may exceed $20,000,000 with legislative approval; 22 (2) may not be purchased unless 23 (A) the project applicant is not, or, if the applicant is not a 24 single proprietorship, all members of the business enterprise or enterprises 25 constituting the project applicant are not, in default on another loan made by 26 the state or by a public corporation of the state; and 27 (B) at least 10 percent of the principal amount of the loan is 28 retained by the loan originator, or the loan is for financing improvements in 29 energy efficiency; 30 (3) may not be purchased if the loan to be purchased exceeds 75 31 percent of the appraised value of the collateral offered as security for the loan unless
01 the amount of the loan in excess of this limit is federally insured or guaranteed or is 02 insured by a qualified mortgage insurance company, except that the loan to be 03 purchased under this paragraph may not exceed the total of loan proceeds used to 04 refinance an existing debt plus the cost of new construction, expansion, or acquisition 05 unless the proceeds from the additional amounts of the loan to be purchased are 06 restricted to uses approved by the authority to finance commercial activity in the state 07 by a business enterprise; 08 (4) may not be purchased if the participation in the loan to be 09 purchased is for a term longer than the following, except that a loan under (A) or (C) 10 of this paragraph may not have a term longer than three-quarters of the authority's 11 estimate of the life of the collateral offered as security for the loan: 12 (A) 40 years from the date the loan is made in the case of a 13 loan participation for a project described in AS 44.88.900(9)(E); 14 (B) 50 years from the date the loan is made in the case of a loan 15 participation for an energy project [A POWER TRANSMISSION 16 INTERTIE]; 17 (C) 25 years from the date the loan is made in the case of a loan 18 participation for other projects; 19 (5) may be made only if the participation in the loan to be purchased 20 contains amortization provisions; the amortization provisions 21 (A) must be complete and satisfactory to the authority and 22 require periodic payments by the borrower; 23 (B) may allow the loan originator to amortize the portion of the 24 loan retained by the loan originator using a shorter amortization schedule than 25 the amortization schedule for the portion of the loan held by the authority if 26 (i) in the authority's opinion, the project financed can 27 support the increased debt service; and 28 (ii) the accelerated amortization schedule is required to 29 induce the originator to make the loan; 30 (6) may be made only if the participation in the loan to be purchased is 31 in the form and contains the terms and provisions with respect to insurance, repairs,
01 alterations, payment of taxes and assessments, default reserves, delinquency charges, 02 default remedies, acceleration of maturity, secondary liens, and other matters the 03 authority prescribes; and 04 (7) may be made only if the participation in the loan to be purchased is 05 secured as to repayment by a mortgage or other security instrument in the manner the 06 authority determines is feasible to assure timely repayment under the loan documents 07 entered into with the borrower. 08 * Sec. 7. AS 44.88.155(g) is amended to read: 09 (g) Notwithstanding any other provision of this section, the authority may 10 waive or modify the requirements of this section as it considers appropriate and 11 prudent in order to finance a project if the authority intends to own the project or in 12 order to finance an energy [A POWER TRANSMISSION INTERTIE] project. 13 * Sec. 8. AS 44.88.159(d) is amended to read: 14 (d) The provisions of this section apply only to a loan participation purchased 15 under AS 44.88.155 - 44.88.159 or 44.88.700 - 44.88.740. 16 * Sec. 9. AS 44.88.159(g) is amended to read: 17 (g) The authority may, in the regulations adopted by the authority under 18 AS 44.88.085(g)(2)(C), establish a program to pay to borrowers of loan participations 19 determined by the authority to meet sufficient job creation, rural development, 20 renewable energy development, or other economic development criteria incentive 21 rate rebates of not more than one percent of the interest rate charged on the authority's 22 portion of a loan participation. The following standards apply to the program: 23 (1) the payment of an incentive rate rebate may reduce the interest rate 24 to a rate that is less than the minimum interest rate required under (a), (b), or (e) of this 25 section; 26 (2) the authority may not commit to pay an incentive rate rebate for a 27 proposed loan participation if the total of the amount of the proposed loan 28 participation plus the combined outstanding balance of all loan participations for 29 which the authority has committed to pay incentive rate rebates would exceed five 30 percent of the total of the amount of the proposed loan participation plus the combined 31 outstanding balance of all loan participations of the authority;
01 (3) an incentive rate rebate may not accrue for more than five years 02 after the date the loan participation is purchased; 03 (4) the authority may establish a separate account for the incentive rate 04 rebate program. 05 * Sec. 10. AS 44.88 is amended by adding new sections to read: 06 Article 7A. Sustainable Energy Transmission and Supply. 07 Sec. 44.88.700. Sustainable energy transmission and supply development 08 program. The sustainable energy transmission and supply development program is 09 created in the authority to promote and provide financing for energy projects in the 10 state to alleviate unemployment and contribute to the state's economic welfare, 11 economic diversity, and economic development. 12 Sec. 44.88.710. Alaska Industrial Development and Export Authority 13 sustainable energy transmission and supply development fund. The Alaska 14 Industrial Development and Export Authority sustainable energy transmission and 15 supply development fund is established in the authority. The development fund 16 consists of appropriations made to the development fund by the legislature, money or 17 other assets transferred to the development fund by the authority, and unrestricted loan 18 repayments, interest, or other income earned on loans, investments, or assets of the 19 development fund. The development fund is not an account in the revolving loan fund 20 established in AS 44.88.060, and the authority shall account for the development fund 21 separately from the revolving fund. The authority may create additional accounts in 22 the development fund. Subject to agreements made with the holders of the authority's 23 bonds or with other persons, the authority may transfer amounts in an account in the 24 development fund to another account in the development fund. Amounts deposited in 25 the development fund may be pledged to the payment of bonds of the authority or 26 expended for the purposes of AS 44.88.700 - 44.88.740. The authority has the powers 27 and responsibilities established in AS 37.10.071 with respect to the investment of 28 amounts held in the development fund. 29 Sec. 44.88.720. Use of fund balance. Subject to the requirements of 30 AS 44.88.710 - 44.88.740, the authority may use money in the Alaska Industrial 31 Development and Export Authority sustainable energy transmission and supply
01 development fund to assist in the construction, improvement, rehabilitation, and 02 expansion of energy projects. 03 Sec. 44.88.730. Powers and duties of the authority. (a) Subject to the 04 limitations of AS 44.88.740, the authority may 05 (1) use the Alaska Industrial Development and Export Authority 06 sustainable energy transmission and supply development fund to finance qualified 07 projects, insure project obligations, guarantee loans or bonds, and establish reserves; 08 (2) acquire real or personal property by purchase, transfer, or 09 foreclosure when the acquisition is necessary to protect the authority's interest in 10 financing; 11 (3) subject to lender approval, defer principal payments or capitalize 12 interest on project financing; 13 (4) subject to AS 36.30.085(e), enter into lease agreements, sales- 14 lease-back agreements, build-operate-transfer, and operate-transfer agreements, or any 15 similar project financing agreement for a qualified project; 16 (5) enter into agreements with government entities for the transfer and 17 control of infrastructure, facilities, rights-of-way, and studies; and 18 (6) contract for services with a professional advisor, including an 19 attorney, bond counsel, engineer, or other technical expert necessary to fulfill the 20 purposes of the program. 21 (b) The authority shall adopt regulations to implement AS 44.88.700 - 22 44.88.740, including 23 (1) an application process for acquiring financing under this section; 24 (2) qualifications for an energy project applying for financing under 25 this section; and 26 (3) fiscal controls and accounting procedures for the development 27 fund. 28 Sec. 44.88.740. Limitations on financing. (a) Unless the authority has 29 obtained legislative approval by law, the authority may not finance or participate in 30 financing of 31 (1) more than one-third of the capital cost of an energy project; or
01 (2) a loan guarantee that exceeds $20,000,000. 02 (b) Financing under AS 44.88.730 is limited to the life of an energy project, 03 which may not be more than 04 (1) 30 years; or 05 (2) 50 years for a transmission line or hydroelectric energy project. 06 * Sec. 11. AS 44.88.900 is amended by adding new paragraphs to read: 07 (15) "development fund" means the sustainable energy transmission 08 and supply development fund created in AS 44.88.710; 09 (16) "energy project" means a project in the state that involves 10 (A) transmission, generation, storage, or distribution of 11 electricity; 12 (B) liquefaction, regasification, distribution, storage, or use of 13 natural gas; 14 (C) conversion of natural gas, coal, or biomass to liquids; 15 (D) processing, refining, or upgrading of oil; 16 (E) distribution or storage of refined petroleum products; or 17 (F) enhanced oil recovery or carbon sequestration. 18 * Sec. 12. The uncodified law of the State of Alaska is amended by adding a new section to 19 read: 20 REVISOR'S INSTRUCTION. References to "this chapter" in AS 44.88 apply to sec. 21 10 of this Act and so should not be changed.