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).