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HB 101: "An Act relating to the Alaska Municipal Bond Bank Authority; authorizing the Alaska Municipal Bond Bank Authority to issue bonds or notes for a regional health organization; and providing for an effective date."

00                             HOUSE BILL NO. 101                                                                          
01 "An Act relating to the Alaska Municipal Bond Bank Authority; authorizing the Alaska                                    
02 Municipal Bond Bank Authority to issue bonds or notes for a regional health                                             
03 organization; and providing for an effective date."                                                                     
04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
05    * Section 1. AS 44.85.005 is amended to read:                                                                      
06            Sec. 44.85.005. Legislative findings. The legislature finds that                                           
07                 (1)  the rapid growth of municipalities in the state and the incorporation                              
08       of new municipalities has created a demand for capital improvements that can only be                              
09       met by these municipalities borrowing money through the issuance of bonds or notes;                               
10                 (2)  many of these municipalities, although creditworthy, either have                                   
11       not issued bonds or notes or have little outstanding debt;                                                        
12                 (3)  the cost of borrowed money to these municipalities is or may be                                    
13       unnecessarily high due to lack of investor familiarity with the municipalities;                                   
14                 (4)  other municipalities in the state pay unnecessarily high borrowing                                 
01       costs because of the distance of the state from capital markets or may find borrowing                             
02       difficult or impossible because of temporary economic dislocation due to loss of                                  
03       employment or prospective loss of employment;                                                                     
04                 (5)  the University of Alaska has limited debt capacity and may pay                                     
05       higher interest rates because of lower credit ratings;                                                        
06                 (6)  many municipalities provide for or partner with nonprofit                                      
07       organizations to provide for delivery of health care;                                                         
08                 (7)  nonprofit regional health organizations deliver services in                                    
09       many locations where municipal partners are unavailable.                                                      
10    * Sec. 2. AS 44.85.010(a) is amended to read:                                                                      
11            (a)  It is the policy of the state to                                                                        
12                 (1)  foster and promote by all reasonable means the provision of                                        
13       adequate capital markets and facilities for borrowing money by municipalities in the                              
14       state to finance capital improvements or for other authorized purposes, to assist these                           
15       municipalities in fulfilling their capital needs and requirements by use of borrowed                              
16       money within statutory interest rate or cost of borrowing limitations, to the greatest                            
17       extent possible to reduce costs of borrowed money to taxpayers and residents of the                               
18       state, and equally to encourage continued investor interest in the purchase of bonds or                           
19       notes of municipalities as sound and preferred securities for investment;                                         
20                 (2)  encourage municipalities to continue their independent                                             
21       undertakings and financing of capital improvements and other authorized purposes                                  
22       and to assist them by making capital funds available at reduced interest costs for                                
23       orderly financing of capital improvements and other purposes especially during                                    
24       periods of restricted credit or money supply, particularly for those municipalities not                           
25       otherwise able to borrow for capital needs;                                                                       
26                 (3)  assist municipalities to provide for adequate insurance coverage by                                
27       authorizing the Alaska Municipal Bond Bank Authority to issue negotiable or                                       
28       nonnegotiable revenue bonds, notes, or certificates of participation either directly or                           
29       through an entity it may create for the purpose of providing a self-insurance program                             
30       for municipalities or municipal joint insurance arrangements organized under                                      
31       AS 21.76;                                                                                                         
01                 (4)  assist governmental employers to prepay all or a portion of their                                  
02       share of unfunded accrued actuarial liabilities of retirement systems in an effort to                             
03       reduce their costs of satisfying their contractual obligations to provide retirement and                          
04       other benefits to public employees through the issuance of bonds, notes, commercial                               
05       paper, or other obligations by the bond bank authority or by a subsidiary corporation                             
06       created by the bond bank authority under AS 44.85.085, but only if the state bond                                 
07       rating is the equivalent of AA- or better; this assistance is limited as provided in                              
08       AS 37.15.903;                                                                                                     
09                 (5)  assist the University of Alaska to provide heating or energy                                       
10       projects by providing capital funds through loans that minimize costs and the effects                             
11       on the debt capacity of the University of Alaska;                                                             
12                 (6)  assist regional health organizations to provide health care                                    
13       facilities by providing capital funds through loans that minimize costs and the                               
14       effects on the debt capacity of regional health organizations when the                                        
15       commissioner of health and social services anticipates a state financial benefit                              
16       and an increase in regional quality of care.                                                                  
17    * Sec. 3. AS 44.85.090 is amended to read:                                                                         
18            Sec. 44.85.090. Limitations. Under this chapter, the bond bank authority may                               
19       not                                                                                                               
20                 (1)  make loans of money to a person, firm, or corporation other than a                                 
21       municipality, [OR] the University of Alaska, or a regional health organization or                         
22       purchase securities issued by a person, other than a municipality, except for                                 
23       investment as provided in this chapter;                                                                           
24                 (2)  emit bills of credit, accept deposits of money for time or demand                                  
25       deposit, administer trusts, or engage in any form or manner in, or in the conduct of, a                           
26       private or commercial banking business, or act as a savings bank or savings and loan                              
27       association;                                                                                                      
28                 (3)  be or constitute a bank or trust company within the jurisdiction or                                
29       under the control of a regulatory or supervisory board or department of the state, or the                         
30       Comptroller of the Currency of the United States, or the Department of the Treasury,                              
31       or Federal Reserve Board of the United States; or                                                                 
01                 (4)  be or constitute a bank, banker, or dealer in securities within the                                
02       meaning of or subject to the provisions of securities, securities exchange, or securities                         
03       dealers law, of the United States or of this state or of another state.                                           
04    * Sec. 4. AS 44.85.180(e) is amended to read:                                                                      
05            (e)  Notwithstanding (a), (b), and (c) of this section, the bond bank authority                              
06       may issue its bonds or notes                                                                                      
07                 (1)  in principal amounts not to exceed $87,500,000 for the purpose of                              
08       making loans to the University of Alaska; and                                                                 
09                 (2)  in principal amounts not to exceed $250,000,000 for the                                        
10       purpose of making loans to a regional health organization.                                                    
11    * Sec. 5. AS 44.85.410(4) is amended to read:                                                                      
12                 (4)  "municipal bond" means a bond or note or evidence of debt that                                     
13       constitutes                                                                                                       
14                      (A)  a general obligation bond that is a direct and general                                        
15            obligation of a political subdivision of the state, all the taxable property within                          
16            which is subject to taxation to pay the bond, note, or evidence of debt, and the                             
17            interest without limitation, as to rate or amount generally to the extent                                    
18            permitted by law or to avoid a default as provided for second class cities under                             
19            AS 29.45.590;                                                                                                
20                      (B)  a revenue bond issued by a municipality, the University of                                    
21            Alaska, a solid waste management authority, or a port authority that pledges                                 
22            the revenue of a revenue-producing capital improvement and that is payable                                   
23            solely from the revenue of the revenue-producing capital improvement;                                        
24                      (C)  a general obligation bond or revenue bond combined or                                         
25            additionally secured;                                                                                        
26                      (D)  a bond of a borough issued as a general obligation of a                                       
27            service area under AS 29.47.440 or former AS 29.58.340; [OR]                                                 
28                      (E)  an obligation of a municipality secured only by                                               
29                           (i)  special assessments on benefited property;                                               
30                           (ii)  tax increments and a letter of credit or equal                                          
31                 security; or                                                                                            
01                           (iii)  a lease; or                                                                        
02                      (F)  a bond, note, or other obligation of a regional health                                    
03            organization that is a general obligation of the regional health                                         
04            organization, that is secured by a pledge of a special fund of the regional                              
05            health organization, or that is a combination of them or additionally                                    
06            secured;                                                                                                 
07    * Sec. 6. AS 44.85.410 is amended by adding a new paragraph to read:                                               
08                 (9)  "regional health organization" has the meaning given in                                            
09       AS 18.28.100.                                                                                                     
10    * Sec. 7. This Act takes effect immediately under AS 01.10.070(c).