Enrolled SB 23: Relating to development project financing by the Alaska Industrial Development and Export Authority; relating to the dividends from the Alaska Industrial Development and Export Authority; relating to the meaning of "net income" and "unrestricted net income" for purposes of the Alaska Industrial Development and Export Authority; authorizing the Alaska Industrial Development and Export Authority to provide financing and issue bonds for a liquefied natural gas production system and natural gas distribution system; and providing for an effective date.
00Enrolled SB 23 01 Relating to development project financing by the Alaska Industrial Development and Export 02 Authority; relating to the dividends from the Alaska Industrial Development and Export 03 Authority; relating to the meaning of "net income" and "unrestricted net income" for purposes 04 of the Alaska Industrial Development and Export Authority; authorizing the Alaska Industrial 05 Development and Export Authority to provide financing and issue bonds for a liquefied 06 natural gas production system and natural gas distribution system; and providing for an 07 effective date. 08 _______________ 09 * Section 1. AS 44.88.010(a) is amended to read: 10 (a) The legislature finds, determines, and declares that 11 (1) there exist areas of the state in which seasonal and nonseasonal 12 unemployment exists; 13 (2) this unemployment is a serious menace to the health, safety, and
01 general welfare, not only to the people in those areas, but also to the people of the 02 entire state; 03 (3) the state lacks the basic manufacturing, industrial, energy, export, 04 small business, and business enterprises and the other facilities referred to in this 05 subsection necessary to permit adequate development of its natural resources and the 06 balanced growth of its economy; 07 (4) the establishment and expansion of industrial, manufacturing, 08 energy, export, small business, and business enterprises in the state and the other 09 facilities referred to in this subsection are essential to the development of the natural 10 resources and the long-term economic growth of the state, and will directly and 11 indirectly alleviate unemployment in the state; 12 (5) the expansion of export trade is vital to the health and growth of the 13 state's economy; 14 (6) many state businesses could benefit from additional financial and 15 technical assistance with respect to the exportation of their products and services; 16 (7) the Export-Import Bank of the United States has been mandated by 17 the Export-Import Bank Act Amendments of 1983 to provide technical assistance and 18 export financing support to small businesses in cooperation with state export finance 19 agencies; 20 (8) Alaska-based exporters can be effectively assisted through the 21 establishment, as part of the Alaska Industrial Development and Export Authority, of 22 an export financing program designed to work with the Export-Import Bank of the 23 United States and other federal, state, and private institutions; 24 (9) the achievement of the goal of full employment [,] and of 25 establishment and continuing operation and development of industrial, manufacturing, 26 energy, export, small business, and business enterprises in the state will be accelerated 27 and facilitated by the creation of an instrumentality of the state with powers to incur 28 debt, to own and operate facilities, and to make and insure loans to finance and to 29 assist private lenders to make loans to finance the establishment, operation, and 30 development of industrial, manufacturing, energy, export, small business, and business 31 enterprises;
01 (10) it is in the public interest to promote the prosperity and general 02 welfare of all citizens of the state by 03 (A) stimulating commercial and industrial growth and 04 expansion by encouraging an increase of private investment by banks, 05 investment houses, insurance companies, and other financial institutions, 06 including pension and retirement funds, to help satisfy the need for economic 07 expansion; 08 (B) encouraging the production of raw materials and goods for 09 export, the expansion of exports and raw materials and goods, and the 10 rendering of services abroad by residents of the state through the establishment 11 of a program that provides financial assistance in cooperation with federal, 12 state, and private institutions for these purposes in the form provided in this 13 chapter; 14 (C) creating the Alaska Industrial Development and Export 15 Authority with the powers necessary to accomplish the objectives stated in this 16 paragraph, including the power to issue taxable and tax-exempt bonds, [AND] 17 to acquire ownership interests in projects, and to provide development 18 project financing as provided in this chapter; 19 (11) it is in the state's interest to import private capital to create new 20 economic activity that [WHICH] would not otherwise take place in the state. 21 * Sec. 2. AS 44.88.070 is amended to read: 22 Sec. 44.88.070. Purpose of the authority. The purpose of the authority is to 23 promote, develop, and advance the general prosperity and economic welfare of the 24 people of the state [ALASKA], to relieve problems of unemployment, and to create 25 additional employment by 26 (1) providing various means of financing and means of facilitating the 27 financing, in cooperation with federal, state, and private institutions, of industrial, 28 manufacturing, export, small business, and business enterprises and the other facilities 29 referred to in AS 44.88.010(a) in the state; 30 (2) owning and operating or providing development project 31 financing for the enterprises and other facilities described in AS 44.88.172;
01 (3) fostering the expansion of exports of [ALASKA] goods, services, 02 and raw materials of the state; 03 (4) cooperating and acting in conjunction with other organizations, 04 public and private, the objects of which are the promotion and advancement of export 05 trade activities in the state; 06 (5) establishing a source of funding credit guarantees and insurance, 07 not otherwise available, to support export development; 08 (6) providing and cooperating or participating with federal, state, and 09 private institutions to provide actual and potential state [ALASKA] exporters, 10 particularly small- and medium-sized exporters, with financial assistance in support of 11 export transactions. 12 * Sec. 3. AS 44.88.080 is amended to read: 13 Sec. 44.88.080. Powers of the authority. In furtherance of its corporate 14 purposes, the authority has the following powers in addition to its other powers: 15 (1) to sue and be sued; 16 (2) to have a seal and alter it at pleasure; 17 (3) to make and alter bylaws for its organization and internal 18 management; 19 (4) to adopt regulations governing the exercise of its corporate powers; 20 (5) to acquire an interest in a project as necessary or appropriate to 21 provide financing for the project, whether by purchase, gift, or lease; 22 (6) to lease to others a project acquired by it for the rentals and upon 23 the terms and conditions the authority may consider advisable, including, without 24 limitation, provisions for options to purchase or renew; 25 (7) to issue bonds and otherwise to incur indebtedness, in accordance 26 with AS 44.88.090, in order to pay the cost of a project or development projects or in 27 order to provide money for the authority's purposes under this chapter; the authority 28 may also secure payment of the bonds or other indebtedness as provided in this 29 chapter; 30 (8) to sell, by installment sale or otherwise, exchange, donate, convey, 31 or encumber, in any manner by mortgage or by creation of any other security interest,
01 real or personal property owned by it, or in which it has an interest, including a 02 project, when, in the judgment of the authority, the action is in furtherance of its 03 corporate purposes; 04 (9) to accept gifts, grants, or loans from, and enter into contracts or 05 other transactions regarding them [,] with, a federal agency, [OR] an agency or 06 instrumentality of the state, a municipality, a private organization, or other source; 07 (10) to deposit or invest its funds, subject to agreements with 08 bondholders; 09 (11) to enter into contracts or agreements with respect to the exercise 10 of any of its powers, and do all things necessary or convenient to carry out its 11 corporate purposes and exercise the powers granted in this chapter; 12 (12) to purchase or insure loans to finance the costs of manufacturing, 13 industrial, and business enterprise projects; 14 (13) to enter into loan agreements with respect to one or more projects 15 upon the terms and conditions the authority considers advisable; 16 (14) to acquire, manage, and operate projects as the authority considers 17 necessary or appropriate to serve a public purpose; 18 (15) to assist private lenders to make loans to finance the costs of 19 projects through loan commitments, short-term financing, or otherwise; 20 (16) to accept gifts, grants, or loans from a federal agency, from an 21 agency or instrumentality of the state or of a municipality, or from any other source; 22 (17) to enter into contracts or other transactions with a federal agency, 23 with an agency or instrumentality of the state or of a municipality, or with a private 24 organization or other entity consistent with the exercise of any power under this 25 chapter; 26 (18) to facilitate the expansion of a secondary market for the resale of 27 federally or commercially insured loans made to finance the costs of projects in the 28 state [ALASKA] held by federal and state chartered financial institutions or by the 29 Alaska Commercial Fishing and Agriculture Bank; 30 (19) to charge fees or other forms of remuneration for the use or 31 possession of the projects described in (14) of this section in accordance with the
01 agreements described in (11) and (17) of this section, other agreements pertaining to 02 the projects, covenants, or representations made in bond documents pertaining to the 03 projects, or regulations of the authority pertaining to the projects; 04 (20) to participate with government or private industry in programs for 05 technical assistance, loans, technology, transfer, or other programs related to the 06 exportation of [ALASKA] goods, services, or raw materials of the state with respect 07 to its financing activities; 08 (21) to provide export finance training for office staff and other 09 individuals involved in export finance assistance, including the training sessions that 10 may be provided by the United States Export-Import Bank or other organizations; 11 (22) to coordinate to the maximum extent possible its efforts to 12 promote the export of [ALASKA] goods, services, and raw materials of the state with 13 programs and goals of the United States Export-Import Bank, the International Trade 14 Administration of the United States Department of Commerce, the Foreign Credit 15 Insurance Association, and other private and public programs designed to provide 16 export assistance and export-related financing; 17 (23) to guarantee loans related to qualified export transactions under 18 regulations adopted by the authority; 19 (24) to provide financing assistance, in cooperation with federal, state, 20 and private institutions, as provided in this chapter for small business enterprises; 21 (25) to make cooperative agreements with the Department of 22 Transportation and Public Facilities, acting on behalf of the international airports 23 revenue fund established under AS 37.15.430, to acquire, equip, operate, maintain, 24 construct, or install facilities that will enhance the competitiveness of the international 25 airports, including a cooperative agreement to lend amounts from the international 26 airports [AIRPORT] revenue fund to finance the development or improvement of 27 utilities serving the airports; 28 (26) to screen potential applicants for a new business incentive grant 29 and recommend the award of the grants under AS 45.81.020; 30 (27) to oversee the administration of outstanding grants awarded by the 31 Alaska Science and Technology Foundation under former AS 37.17.010 - 37.17.110;
01 (28) to oversee the administration of outstanding BIDCO assistance 02 grants and loans made by the Alaska Science and Technology Foundation under 03 former AS 37.17.200 - 37.17.390; 04 (29) to guarantee loans made to the Alaska Insurance Guaranty 05 Association (AS 21.80.040), with these guarantees limited to loans necessary to make 06 the association financially able to meet cash flow needs up to a maximum outstanding 07 principal balance at any time of $30,000,000; 08 (30) with legislative approval and notwithstanding AS 44.88.060, to 09 purchase from the Alaska Energy Authority as an investment of the revolving fund, 10 loans of the power project fund established under AS 42.45.010; 11 (31) to consider, when exercising the powers listed in this section, the 12 interests of local governments affected [IMPACTED] by the authority's activities to 13 share in the benefits of these activities, with appropriate consideration of the 14 authority's ability to meet debt obligations, issue new debt, and fulfill the authority's 15 purposes; 16 (32) to provide development project financing for all or a portion 17 of the cost of a development project as provided in AS 44.88.172. 18 * Sec. 4. AS 44.88.088(a) is amended to read: 19 (a) The authority shall adopt a policy for payment of a dividend from the 20 revolving fund and a dividend from the Alaska Industrial Development and 21 Export Authority sustainable energy transmission and supply development fund 22 (AS 44.88.660) to the state each fiscal year [. THE AMOUNT OF THE DIVIDEND 23 FOR A FISCAL YEAR MAY NOT BE LESS THAN 25 PERCENT NOR MORE 24 THAN 50 PERCENT OF THE NET INCOME OF THE AUTHORITY FOR THE 25 BASE FISCAL YEAR. IN NO EVENT, HOWEVER, SHALL THE DIVIDEND FOR 26 A FISCAL YEAR EXCEED THE TOTAL UNRESTRICTED NET INCOME OF 27 THE AUTHORITY FOR THE BASE FISCAL YEAR]. The dividends [DIVIDEND] 28 for a fiscal year shall be made available by the authority before the end of that fiscal 29 year. The authority shall notify the commissioner of revenue when the dividends 30 [DIVIDEND] for a fiscal year are [IS] available for appropriation. The amount of the 31 dividend payable from the
01 (1) revolving fund for a fiscal year may not be less than 25 percent 02 nor more than 50 percent of the net income of the revolving fund for the base 03 fiscal year; however, in no event, may the dividend payable from the revolving 04 fund for a fiscal year exceed the total unrestricted net income of the revolving 05 fund for the base year; 06 (2) Alaska Industrial Development and Export Authority 07 sustainable energy transmission and supply development fund (AS 44.88.660) for 08 a fiscal year may not be less than 25 percent nor more than 50 percent of the net 09 income of the Alaska Industrial Development and Export Authority sustainable 10 energy transmission and supply development fund for the base fiscal year; 11 however, in no event, shall the dividend payable from the Alaska Industrial 12 Development and Export Authority sustainable energy transmission and supply 13 development fund for a fiscal year exceed the total unrestricted net income of the 14 Alaska Industrial Development and Export Authority sustainable energy 15 transmission and supply development fund for the base year. 16 * Sec. 5. AS 44.88.088(b)(2) is amended to read: 17 (2) "net income" means the [AUTHORITY'S] change in net position, 18 or the equivalent term under generally accepted accounting principles, of the 19 revolving fund or the change in net position of the Alaska Industrial 20 Development and Export Authority sustainable energy transmission and supply 21 development fund (AS 44.88.660) [ASSETS] as set out in the audited financial 22 statements of the authority for the base fiscal year, excluding amounts attributable to 23 intergovernmental transfers, capital contributions, grants, or impairment losses on 24 development projects financed under AS 44.88.172; 25 * Sec. 6. AS 44.88.088(b)(3) is amended to read: 26 (3) "unrestricted net income" means the [AUTHORITY'S] unrestricted 27 change in net position, or the equivalent term under generally accepted 28 accounting principles, of the revolving fund or the Alaska Industrial 29 Development and Export Authority sustainable energy transmission and supply 30 development fund (AS 44.88.660) [ASSETS] as set out in the audited financial 31 statements of the authority for the base fiscal year, excluding amounts attributable to
01 intergovernmental transfers, capital contributions, grants, or impairment losses on 02 development projects financed under AS 44.88.172. 03 * Sec. 7. AS 44.88.105(d) is amended to read: 04 (d) The chair [CHAIRMAN] of the authority shall annually, not [NO] later 05 than January 2, certify in writing to the governor and the legislature the amount, if 06 any, required to restore a capital reserve fund to the capital reserve fund requirement. 07 The legislature may appropriate to the authority the amount certified by the chair 08 [CHAIRMAN] of the authority. The authority shall deposit the amounts appropriated 09 under this subsection during a fiscal year in the proper capital reserve fund. Nothing in 10 this section creates a debt or liability of the state. In this subsection, "capital reserve 11 fund" means a capital reserve fund that 12 (1) is created under this section on or before January 1, 1989; 13 (2) secures refunding bonds if the refunding bonds are issued to refund 14 bonds that are secured by a capital reserve fund created under this section on or before 15 January 1, 1989; [OR] 16 (3) secures bonds issued on or after August 11, 1993, for a power 17 transmission intertie; or 18 (4) secures bonds issued on or after July 1, 2013, for a qualified 19 energy development project financed under AS 44.88.650 - 44.88.690. 20 * Sec. 8. AS 44.88.172(a) is amended to read: 21 (a) The economic development account is established in the revolving fund. 22 The economic development account consists of money or assets appropriated, loaned, 23 or transferred to the authority for deposit in the account and other money or assets 24 deposited in the account by the authority. While money is on deposit in the economic 25 development account, the money may be used [ONLY] to finance, acquire, manage, 26 and operate development projects that the authority intends to own and operate or to 27 provide development project financing for development projects the authority 28 does not intend to own and operate. In this subsection, 29 (1) "operate" includes operation directly by the authority, by an agent 30 of the authority, or by a person as determined under an agreement between the 31 authority and other owners of the development project;
01 (2) "own" includes ownership by the authority of all or a percentage of 02 a development project or all or a percentage of the shares of a corporation or 03 membership in a limited liability company for which the development project is the 04 sole asset of the corporation or limited liability company. 05 * Sec. 9. AS 44.88.172 is amended by adding a new subsection to read: 06 (d) The authority shall adopt regulations to implement this section. The 07 regulations may include provisions for the application process, application fees, 08 interest rates, other charges and fees, terms, conditions, security, and other 09 requirements for development projects the authority undertakes or development 10 project financing the authority provides. 11 * Sec. 10. AS 44.88.900 is amended by adding a new paragraph to read: 12 (17) "development project financing" means money loaned by the 13 authority or a guarantee of a loan, note, debt, or other financial obligation issued by 14 the authority to fund or assist in funding a development project the authority does not 15 intend to own and operate. 16 * Sec. 11. The uncodified law of the State of Alaska is amended by adding a new section to 17 read: 18 LEGISLATIVE APPROVAL; FINANCING OF LIQUEFIED NATURAL GAS 19 PRODUCTION AND DISTRIBUTION FACILITIES. (a) The Alaska Industrial 20 Development and Export Authority, through the Alaska Industrial Development and Export 21 Authority sustainable energy transmission and supply development fund (AS 44.88.660), may 22 provide financing up to a principal amount of $275,000,000 for the development, 23 construction, and installation of, and the start-up costs of operation and maintenance for, a 24 liquefied natural gas production plant and system and affiliated infrastructure on the North 25 Slope and a natural gas distribution system and affiliated infrastructure in Interior Alaska. 26 (b) As a part of the financing authorized under (a) of this section, the Alaska 27 Industrial Development and Export Authority may issue bonds under AS 44.88.090 that are 28 secured by a capital reserve fund (AS 44.88.105). Notwithstanding AS 44.88.105, in 29 establishing a capital reserve fund for the bonds, the authority is not required to determine that 30 the capital reserve fund is necessary to enhance the marketability of the bonds. The authority 31 shall manage the capital reserve fund as provided in AS 44.88.105. The principal amount of
01 the bonds authorized in this section may not exceed $150,000,000 plus the cost of capitalized 02 interest, bond counsel fees, trustee fees, rating fees, financial advisor fees, escrow costs, and 03 other bond issuance costs that the authority considers reasonable and appropriate. 04 (c) Notwithstanding the interest rate requirements of AS 44.88.159, the interest rate 05 the authority may charge for financing authorized under (a) of this section provided from the 06 Alaska Industrial Development and Export Authority sustainable energy transmission and 07 supply development fund (AS 44.88.660) may not exceed three percent or the current market 08 rate for commercial loans at the time the bonds are issued, whichever is less. Notwithstanding 09 the interest rate requirements of AS 44.88.159, the interest rate for financing authorized under 10 (a) of this section provided from the proceeds of bonds authorized under this section may not 11 exceed the interest rate to be paid on the bonds, plus an allowance that the authority 12 establishes for its administrative expenses; however, the allowance for administrative 13 expenses may not exceed 25 basis points. Notwithstanding any contrary provision of law, the 14 interest rate limitations of this subsection supersede and replace any other requirements of law 15 regarding the interest rates that the authority may charge for the financing authorized under 16 (a) of this section. 17 (d) The authorization under (a) of this section constitutes legislative approval for the 18 authority to exceed the limitations of AS 44.88.690 in providing the financing approved under 19 (a) of this section. In providing the financing authorized under (a) of this section, the authority 20 may waive any limitations or requirements of its regulations that are otherwise applicable to 21 the Alaska Industrial Development and Export Authority sustainable energy transmission and 22 supply development fund (AS 44.88.660). 23 (e) The bonds authorized by this section may not be considered in calculating the 24 authority's bonding limitation for a 12-month period under AS 44.88.095(a). 25 (f) The authorization to issue bonds this section grants expires on June 30, 2018, if the 26 authority does not issue bonds before that date. Expiration of the authorization to issue bonds 27 does not affect bonds that the authority issues under this section before July 1, 2018. 28 (g) In this section, 29 (1) "authority" means the Alaska Industrial Development and Export 30 Authority; 31 (2) "financing" means any method or combination of methods of providing
01 funds for a qualified energy development project under AS 44.88.650 - 44.88.690. 02 * Sec. 12. This Act takes effect immediately under AS 01.10.070(c).