Enrolled SB 66: Creating a new markets tax credit assistance guarantee and loan program within the Alaska Industrial Development and Export Authority and relating to the program; extending a mandatory exemption from municipal property taxes for certain assets of the Alaska Industrial Development and Export Authority; relating to an Alaska Energy Authority loan; providing for an effective date by amending the effective dates of sec. 2, ch. 10, SLA 2010, and sec. 2, ch. 71, SLA 2010; and providing for an effective date.
00Enrolled SB 66 01 Creating a new markets tax credit assistance guarantee and loan program within the Alaska 02 Industrial Development and Export Authority and relating to the program; extending a 03 mandatory exemption from municipal property taxes for certain assets of the Alaska Industrial 04 Development and Export Authority; relating to an Alaska Energy Authority loan; providing 05 for an effective date by amending the effective dates of sec. 2, ch. 10, SLA 2010, and sec. 2, 06 ch. 71, SLA 2010; and providing for an effective date. 07 _______________ 08 * Section 1. AS 44.88.155(c) is amended to read: 09 (c) Money and other assets of the enterprise development account may be used 10 to secure bonds of the authority issued to finance the purchase of loans for projects, 11 [OR MAY BE USED] to purchase participation in the loans for projects, or to fund a 12 new markets tax credit assistance guarantee or loan under AS 44.88.700 -
01 44.88.799. 02 * Sec. 2. AS 44.88 is amended by adding new sections to read: 03 Article 7A. New Markets Tax Credit Assistance Guarantee and Loan Program. 04 Sec. 44.88.700. New markets tax credit assistance guarantees and loans. (a) 05 Subject to the requirements of AS 44.88.700 - 44.88.799, the authority may 06 (1) guarantee new markets tax credit assistance leveraged loans; and 07 (2) make new markets tax credit assistance leveraged loans. 08 (b) New markets tax credit assistance guarantees and loans are limited to 09 projects in the state for which new markets tax credits are allocated by a qualified 10 community development entity. 11 (c) The authority shall determine that the project will promote economic 12 development in the state before guaranteeing a leveraged loan or making a leveraged 13 loan under AS 44.88.700 - 44.88.799. 14 (d) The authority may agree to restrictions and guidelines arising from the 15 federal new markets tax credit program, including, for the seven-year tax credit period 16 of the new markets tax credit project, 17 (1) that interest only payments be made on the leveraged loan; 18 (2) that substantially all capital remain invested in the project; 19 (3) that acceptable collateral may be an interest in a qualified 20 community development entity or an investment entity rather than in the project; and 21 (4) substantive restrictions on foreclosure of collateral. 22 Sec. 44.88.710. Effect of guarantee. (a) A guarantee under AS 44.88.700 - 23 44.88.799 does not create a debt or liability of the state. 24 (b) A guarantee under AS 44.88.700(a)(1) may not be terminated, cancelled, 25 or revoked except under its terms. A guarantee held by a participating financial 26 institution is presumed to be valid. 27 Sec. 44.88.715. Qualifications of applicant for new loan guarantee. (a) A 28 business enterprise that qualifies for new markets tax credits for a project may apply 29 for a loan guarantee under AS 44.88.700(a)(1). 30 (b) The authority may establish additional applicant qualifications by 31 regulation. Those qualifications may vary depending on the type of business in which
01 the applicant is engaged. 02 Sec. 44.88.720. Application for loan guarantee. An applicant for a loan 03 guarantee shall provide information that the authority may require by regulation. The 04 authority may require submission of an economic benefit analysis prepared by a 05 person acceptable to the authority. 06 Sec. 44.88.730. Conditions of loan guarantee. (a) The authority may 07 guarantee a loan under AS 44.88.700 - 44.88.799 if the 08 (1) loan 09 (A) is commercially reasonable; 10 (B) contains payment provisions satisfactory to the authority; 11 and 12 (C) is secured by acceptable collateral; 13 (2) project 14 (A) is allocated new markets tax credits by a qualified 15 community development entity; 16 (B) promotes economic development in the state; and 17 (C) is not a housing project; 18 (3) borrower demonstrates the ability to repay the loan from either or 19 both of the following: 20 (A) net cash flow of the borrower; 21 (B) proceeds from the sale of current assets that are collateral 22 for the loan if the sale or receipt of proceeds from the sale is an event that 23 creates a payment obligation; in this subparagraph, "current asset" means 24 property that will be or could be converted into cash within one year in the 25 normal operation of a business; 26 (4) term of the loan does not exceed 10 years; 27 (5) loan is originated with and serviced by a financial institution. 28 (b) The authority may provide a guarantee for up to 100 percent of a loan that 29 qualifies under AS 44.88.700 - 44.88.799. 30 Sec. 44.88.740. Servicing of guaranteed loans. (a) The financial institution 31 that holds a loan guaranteed by the authority under AS 44.88.700 - 44.88.799 shall
01 (1) service the loan; 02 (2) exercise diligence in collecting amounts due under the loan; and 03 (3) comply with all requirements of the loan guarantee agreement. 04 (b) Amounts received toward satisfaction of a default on a loan guaranteed 05 under AS 44.88.700 - 44.88.799 shall be allocated between the lender and the 06 revolving fund according to the guaranteed percentage of the loan until the principal 07 balance and accrued interest have been repaid. 08 Sec. 44.88.750. New markets tax credit assistance leveraged loan. (a) The 09 authority may make a new markets tax credit assistance leveraged loan under 10 AS 44.88.700(a)(2) only if the authority determines that an applicant for a new 11 markets tax credit assistance guarantee is unable to obtain a leveraged loan from a 12 financial institution under commercially reasonable terms. Before making the 13 determination, the authority shall require the applicant to document that at least two 14 financial institutions have reviewed an application for a leveraged loan for which the 15 authority would issue a new markets tax credit assistance guarantee for the loan, and 16 either rejected the application or approved the application subject to terms the 17 authority determines are commercially unreasonable. The authority may require the 18 applicant to submit applications for a leveraged loan to one or more additional 19 financial institutions. 20 (b) Subject to (a) of this section, the authority may make a new markets tax 21 credit assistance leveraged loan under AS 44.88.700 - 44.88.799 to the applicant to 22 finance a portion of the project using funds from the enterprise development account 23 (AS 44.88.155). 24 Sec. 44.88.760. Limitations of guarantees and leveraged loans. The 25 combined outstanding principal balance of loan guarantees and loans under 26 AS 44.88.700 - 44.88.799 may not exceed $40,000,000. 27 Sec. 44.88.770. Powers of the authority. The authority may 28 (1) adopt regulations to implement AS 44.88.700 - 44.88.799; 29 (2) establish terms and conditions for loan guarantees and loans, 30 subject to the requirements of AS 44.88.700 - 44.88.799; 31 (3) make and execute contracts and other instruments to implement
01 AS 44.88.700 - 44.88.799; 02 (4) charge reasonable fees and interest rates that the authority may 03 establish by regulation for the service it provides under AS 44.88.700 - 44.88.799; 04 (5) acquire real or personal property by purchase, transfer, or 05 foreclosure when the acquisition is necessary to protect the authority's interest in a 06 loan or a loan guarantee; 07 (6) exercise any other power necessary to implement AS 44.88.700 - 08 44.88.799; and 09 (7) to the extent the authority considers it to be in its best interest to do 10 so, use money to pay expenses relating to the liquidation of collateral securing loans 11 guaranteed or made by the authority under AS 44.88.700 - 44.88.799. 12 Sec. 44.88.799. Definitions. In AS 44.88.700 - 44.88.799, 13 (1) "federal new markets tax credit program" means the program 14 administered by the Community Development Financial Institutions Fund that arises 15 out of 26 U.S.C. 45D (Internal Revenue Code) and related regulations; 16 (2) "new markets tax credit" means tax credits that arise out of 26 17 U.S.C. 45D (Internal Revenue Code) and related regulations; 18 (3) "new markets tax credit assistance leveraged loan" and "leveraged 19 loan" mean a loan made into an investment entity, the proceeds of which, together 20 with other funds, including tax credit equity, are invested as a qualified equity 21 investment in a qualified community development entity that will use the funds to 22 finance a project for which the entity allocates new markets tax credits; 23 (4) "qualified community development entity" has the meaning given 24 in 26 U.S.C. 45D(c) (Internal Revenue Code) and related regulations; 25 (5) "qualified equity investment" means an equity investment in a 26 qualified community development entity that satisfies the conditions described in 26 27 U.S.C. 45D(b) (Internal Revenue Code) and related regulations. 28 * Sec. 3. The uncodified law of the State of Alaska is amended by adding a new section to 29 read: 30 LEGISLATIVE APPROVAL OF LOAN FROM THE POWER PROJECT FUND. 31 Provided the Alaska Energy Authority approves a loan for the Metlakatla Power and Light
01 Triangle Lake hydroelectric project, the legislature authorizes the Alaska Energy Authority to 02 loan an amount not to exceed $26,000,000 from the power project fund (AS 42.45.010) for 03 the Metlakatla Power and Light Triangle Lake hydroelectric project. This section constitutes 04 legislative approval under AS 42.45.010(j) for a loan from the fund that exceeds $5,000,000. 05 * Sec. 4. Section 8, ch. 10, SLA 2010, is amended to read: 06 Sec. 8. Section 2, ch. 10, SLA 2010, [OF THIS ACT] takes effect 07 November 30, 2017 [2012]. 08 * Sec. 5. Section 10, ch. 71, SLA 2010, is amended to read: 09 Sec. 10. Section 2, ch. 71, SLA 2010, [OF THIS ACT] takes effect 10 November 30, 2017 [2012]. 11 * Sec. 6. This Act takes effect immediately under AS 01.10.070(c).