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CSHB 105(RES): "An Act relating to the programs and bonds of the Alaska Industrial Development and Export Authority; requiring the Alaska Industrial Development and Export Authority to deliver to the legislature reports relating to the Interior energy project; relating to the financing authorization through the Alaska Industrial Development and Export Authority of a liquefied natural gas production plant and natural gas energy projects and distribution systems in the state; amending and repealing bond authorizations granted to the Alaska Industrial Development and Export Authority; and providing for an effective date."

00                       CS FOR HOUSE BILL NO. 105(RES)                                                                    
01 "An Act relating to the programs and bonds of the Alaska Industrial Development and                                     
02 Export Authority; requiring the Alaska Industrial Development and Export Authority                                      
03 to deliver to the legislature reports relating to the Interior energy project; relating to the                          
04 financing authorization through the Alaska Industrial Development and Export                                            
05 Authority of a liquefied natural gas production plant and natural gas energy projects                                   
06 and distribution systems in the state; amending and repealing bond authorizations                                       
07 granted to the Alaska Industrial Development and Export Authority; and providing for                                    
08 an effective date."                                                                                                     
09 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
10    * Section 1. The uncodified law of the State of Alaska is amended by adding a new section                          
11 to read:                                                                                                                
12       LEGISLATIVE INTENT. It is the intent of the legislature that the financing                                        
01 authorized in sec. 9 of this Act be used only for the Interior energy project described in sec. 9                       
02 of this Act.                                                                                                            
03    * Sec. 2. AS 42.05.711(b) is amended to read:                                                                      
04            (b)  Except as otherwise provided in this subsection and in (o) of this section,                             
05       public utilities owned and operated by a political subdivision of the state, or electric                          
06       operating entities established as the instrumentality of two or more public utilities                             
07       owned and operated by political subdivisions of the state, are exempt from this                                   
08       chapter, other than AS 42.05.221 - 42.05.281 and 42.05.385. However,                                              
09                 (1)  the governing body of a political subdivision may elect to be                                      
10       subject to this chapter; [AND]                                                                                    
11                 (2)  a utility or electric operating entity that is owned and operated by a                             
12       political subdivision and that directly competes with another utility or electric                                 
13       operating entity is subject to this chapter and any other utility or electric operating                           
14       entity owned and operated by the political subdivision is also subject to this chapter;                           
15       this paragraph does not apply to a utility or electric operating entity owned and                                 
16       operated by a political subdivision that competes with a telecommunications utility;                          
17       and                                                                                                           
18                 (3)  a natural gas distribution system and affiliated infrastructure                                
19       that provides natural gas to Interior Alaska and receives financing through the                               
20       Alaska Industrial Development and Export Authority sustainable energy                                         
21       transmission and supply development fund (AS 44.88.660) is subject to this                                    
22       chapter.                                                                                                    
23    * Sec. 3. AS 44.88.095(c) is amended to read:                                                                      
24            (c)  Before entering into a lease or other agreement under AS 44.88.090(e)                                   
25       regarding a project for which the authority agrees to issue bonds in an amount in                                 
26       excess of $10,000,000 [$6,000,000], there must be filed with the authority a certified                        
27       copy of a resolution of the governing body of the political subdivision of the state, if                          
28       any, in which the project is to be located, consenting to the location of the project. The                        
29       consent need only refer to the general nature of the project ultimately to be acquired or                     
30       financed, as set out in a request of the proposed project applicant. Before entering into                     
31       a lease or other agreement under AS 44.88.090(e) regarding a project, the authority                               
01       shall find, on the basis of all information reasonably available to it, that                                      
02                 (1)  the project and its development under this chapter will be                                         
03       economically advantageous to the state and the general public welfare and will                                    
04       contribute to the economic growth of the state;                                                                   
05                 (2)  the project applicant is financially responsible;                                                  
06                 (3)  provision to meet increased demand on [UPON] public facilities                                 
07       that might result from the project is reasonably assured; and                                                     
08                 (4)  the project will provide, or retain, employment reasonably related                                 
09       to the amount of the financing by the authority, considering the amount of investment                             
10       for each [PER] employee for comparable facilities and other relevant factors.                                 
11    * Sec. 4. AS 44.88.095(g) is amended to read:                                                                      
12            (g)  The authority may issue bonds in an amount greater than $25,000,000                                 
13       [$10,000,000] to assist in the financing of a development project under AS 44.88.172 -                            
14       44.88.177 only if approved by the legislature [LAW], excluding refunding bonds.                               
15       Refunding bonds may be issued without further approval by law in a principal amount                               
16       sufficient to provide funds for the payment of all bonds to be refunded by them and, in                           
17       addition, for the payment of all other amounts that the authority considers appropriate                           
18       in connection with the refunding, including expenses incident to the redeeming,                                   
19       calling, retiring, or paying of the outstanding bonds, the funding of reserves, and the                           
20       issuance of the refunding bonds.                                                                                  
21    * Sec. 5. AS 44.88.155(d) is amended to read:                                                                      
22            (d)  A loan participation purchased by the authority with assets of the                                      
23       enterprise development account or with proceeds of bonds secured by assets of the                                 
24       enterprise development account                                                                                    
25                 (1)  may not exceed $25,000,000 [$20,000,000]; however, in the case                                 
26       of a loan participation for qualified energy development, the loan participation may                              
27       exceed $25,000,000 [$20,000,000] with legislative approval;                                                   
28                 (2)  may not be purchased unless                                                                        
29                      (A)  the project applicant is not, or, if the applicant is not a                                   
30            single proprietorship, all members of the business enterprise or enterprises                                 
31            constituting the project applicant are not, in default on another loan made by                               
01            the state or by a public corporation of the state; and                                                       
02                      (B)  at least 10 percent of the principal amount of the loan is                                    
03            retained by the loan originator, or the loan is for financing improvements in                                
04            energy efficiency;                                                                                           
05                 (3)  may not be purchased if the loan to be purchased exceeds 75                                        
06       percent of the appraised value of the collateral offered as security for the loan unless                          
07       the amount of the loan in excess of this limit is federally insured or guaranteed or is                           
08       insured by a qualified mortgage insurance company, except that the loan to be                                     
09       purchased under this paragraph may not exceed the total of loan proceeds used to                                  
10       refinance an existing debt plus the cost of new construction, expansion, or acquisition                           
11       unless the proceeds from the additional amounts of the loan to be purchased are                                   
12       restricted to uses approved by the authority to finance commercial activity in the state                          
13       by a business enterprise;                                                                                         
14                 (4)  may not be purchased if the participation in the loan to be                                        
15       purchased is for a term longer than the following, except that a loan under (A) or (C)                            
16       of this paragraph may not have a term longer than three-quarters of the authority's                               
17       estimate of the life of the collateral offered as security for the loan:                                          
18                      (A)  40 years from the date the loan is made in the case of a                                      
19            loan participation for a project described in AS 44.88.900(11)(E);                                           
20                      (B)  50 years from the date the loan is made in the case of a loan                                 
21            participation for qualified energy development;                                                              
22                      (C)  25 years from the date the loan is made in the case of a loan                                 
23            participation for other projects;                                                                            
24                 (5)  may be made only if the participation in the loan to be purchased                                  
25       contains amortization provisions; the amortization provisions                                                     
26                      (A)  must be complete and satisfactory to the authority and                                        
27            require periodic payments by the borrower;                                                                   
28                      (B)  may allow the loan originator to amortize the portion of the                                  
29            loan retained by the loan originator using a shorter amortization schedule than                              
30            the amortization schedule for the portion of the loan held by the authority if                               
31                           (i)  in the authority's opinion, the project financed can                                     
01                 support the increased debt service; and                                                                 
02                           (ii)  the accelerated amortization schedule is required to                                    
03                 induce the originator to make the loan;                                                                 
04                 (6)  may be made only if the participation in the loan to be purchased is                               
05       in the form and contains the terms and provisions with respect to insurance, repairs,                             
06       alterations, payment of taxes and assessments, default reserves, delinquency charges,                             
07       default remedies, acceleration of maturity, secondary liens, and other matters the                                
08       authority prescribes; and                                                                                         
09                 (7)  may be made only if the participation in the loan to be purchased is                               
10       secured as to repayment by a mortgage or other security instrument in the manner the                              
11       authority determines is feasible to assure timely repayment under the loan documents                              
12       entered into with the borrower.                                                                                   
13    * Sec. 6. AS 44.88.170(a) is amended to read:                                                                      
14            (a)  Except as provided in (c) of this section, nothing [NOTHING] in this                                
15       chapter prevents the inclusion in a lease or other agreement relating to a project of a                           
16       provision granting the right to purchase the project, or to renew or extend the lease or                          
17       agreement, upon the terms and conditions that [WHICH] may be provided for in the                              
18       lease or agreement.                                                                                               
19    * Sec. 7. AS 44.88.170 is amended by adding a new subsection to read:                                              
20            (c)  The authority, without first obtaining legislative approval, may not                                    
21                 (1)  purchase or acquire gas reserves or a gas lease or become a                                        
22       working interest owner of a natural gas lease; or                                                               
23                 (2)  negotiate or enter into a gas supply contract with a natural gas                                   
24       producer unless the contract is between a natural gas producer and natural gas                                    
25       distribution utility that is owned by the authority or a subsidiary corporation of the                            
26       authority and the contract is for the natural gas producer to provide the utility, and                            
27       only the utility, with a natural gas supply for distribution to customers of the utility.                         
28    * Sec. 8. AS 44.88.900(16) is amended to read:                                                                     
29                 (16)  "qualified energy development" means a development in the state                                   
30       that involves                                                                                                     
31                      (A)  transmission, generation, conservation, storage, or                                           
01            distribution of heat or electricity;                                                                         
02                      (B)  liquefaction, regasification, distribution, storage, or use of                                
03            natural gas, propane, or propane and air mixture; in this subparagraph,                                  
04            "distribution" does not include [EXCEPT] a natural gas pipeline project for                              
05            transporting natural gas from the North Slope or Cook Inlet to market unless                             
06            the pipeline has a diameter of 12 inches or less and transports the natural                              
07            gas to Interior Alaska;                                                                                  
08                      (C)  distribution or storage of refined petroleum products;                                        
09    * Sec. 9. The uncodified law of the State of Alaska enacted in sec. 11(a), ch. 26, SLA 2013,                       
10 is amended to read:                                                                                                     
11            (a)  The Alaska Industrial Development and Export Authority, through the                                     
12       Alaska Industrial Development and Export Authority sustainable energy transmission                                
13       and supply development fund (AS 44.88.660), may provide financing up to a principal                               
14       amount of $275,000,000 for the development, construction, and installation of, and the                            
15       start-up costs of operation and maintenance for, a liquefied natural gas production                               
16       plant and system and affiliated infrastructure in the state that will provide natural                         
17       gas to Interior Alaska as a primary market [ON THE NORTH SLOPE] and [A]                                       
18       natural gas delivery and distribution systems [SYSTEM] and affiliated infrastructure                      
19       that will provide natural gas to [IN] Interior Alaska, if the Alaska Industrial                           
20       Development and Export Authority prepares a project plan and receives                                         
21       legislative approval of the plan. The project plan must                                                       
22                 (1)  identify the source of the natural gas or propane;                                             
23                 (2)  include the estimated cost of the project; and                                                 
24                 (3)  include the estimated price of natural gas under the project for                               
25       natural gas utilities in Fairbanks before distribution to consumers.                                          
26    * Sec. 10. The uncodified law of the State of Alaska enacted in sec. 25, ch. 123, SLA 1990,                        
27 as repealed and reenacted by sec. 1, ch. 3, FSSLA 1992, is amended to read:                                             
28            Sec. 25. The Alaska Industrial Development and Export Authority may issue                                    
29       bonds to finance the acquisition, design, and construction of aircraft maintenance air                            
30       cargo/air transport support facilities located at Anchorage International Airport, to be                          
31       owned by the Authority. The principal amount of the bonds may not exceed $28,000,000                          
01       [$85,000,000]. This section grants the legislative approval required by AS 44.88.095.                             
02    * Sec. 11. Section 2, ch. 27, SLA 1993, as amended by sec. 19, ch. 111, SLA 1996; sec. 3,                          
03 ch. 27, SLA 1993; sec. 7, ch. 76, SLA 1995; sec. 24, ch. 111, SLA 1996; secs. 24(a) and                                 
04 24(b), ch. 109, SLA 1998; sec. 24(d), ch. 109, SLA 1998, as amended by sec. 1, ch. 93, SLA                              
05 2006; and sec. 1, ch. 37, SLA 2004, are repealed.                                                                       
06    * Sec. 12. The uncodified law of the State of Alaska is amended by adding a new section to                         
07 read:                                                                                                                   
08       REPORT. (a) The Alaska Industrial Development and Export Authority shall submit                                   
09 quarterly to the legislature a written report on the Interior energy project. The authority shall                       
10 deliver the report to the senate secretary and the chief clerk of the house of representatives                          
11 and notify the legislature that the report is available. The report must include                                        
12            (1)  a description of project progress on all components;                                                    
13            (2)  an update on the status of local distribution infrastructure buildout;                                  
14            (3)  to-date and anticipated conversions; and                                                                
15            (4)  a financial accounting of funds expended and funds anticipated to be spent,                             
16 including loans, grants, and bonds.                                                                                     
17       (b)  If requested, the Alaska Industrial Development and Export Authority shall                                   
18 provide a project briefing on the Interior energy project to the Legislative Budget and Audit                           
19 Committee.                                                                                                              
20    * Sec. 13. This Act takes effect immediately under AS 01.10.070(c).