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CSHB 105(FIN): "An Act relating to the programs and bonds of the Alaska Industrial Development and Export Authority; relating to the Alaska Industrial Development and Export Authority sustainable energy transmission and supply development fund; 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; authorizing the Alaska Industrial Development and Export Authority to issue bonds to finance the infrastructure and construction costs of the Sweetheart Lake hydroelectric project; authorizing the Alaska Industrial Development and Export Authority to issue bonds to finance the infrastructure and construction costs of rebuilding transmission between the Hope substation and Portage, rebuilding transmission between Powerline Pass to Indian, and the Eklutna hydroelectric transmission system upgrade project; relating to legislative approval for loans from the power project fund to the City of King Cove; and providing for an effective date."

00                       CS FOR HOUSE BILL NO. 105(FIN)                                                                    
01 "An Act relating to the programs and bonds of the Alaska Industrial Development and                                     
02 Export Authority; relating to the Alaska Industrial Development and Export Authority                                    
03 sustainable energy transmission and supply development fund; requiring the Alaska                                       
04 Industrial Development and Export Authority to deliver to the legislature reports                                       
05 relating to the Interior energy project; relating to the financing authorization through                                
06 the Alaska Industrial Development and Export Authority of a liquefied natural gas                                       
07 production plant and natural gas energy projects and distribution systems in the state;                                 
08 amending and repealing bond authorizations granted to the Alaska Industrial                                             
09 Development and Export Authority; authorizing the Alaska Industrial Development and                                     
10 Export Authority to issue bonds to finance the infrastructure and construction costs of                                 
11 the Sweetheart Lake hydroelectric project; authorizing the Alaska Industrial                                            
12 Development and Export Authority to issue bonds to finance the infrastructure and                                       
01 construction costs of rebuilding transmission between the Hope substation and Portage,                                  
02 rebuilding transmission between Powerline Pass to Indian, and the Eklutna                                               
03 hydroelectric transmission system upgrade project; relating to legislative approval for                                 
04 loans from the power project fund to the City of King Cove; and providing for an                                        
05 effective date."                                                                                                        
06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
07    * Section 1. The uncodified law of the State of Alaska is amended by adding a new section                          
08 to read:                                                                                                                
09       LEGISLATIVE INTENT. It is the intent of the legislature that the financing                                        
10 authorized in sec. 10 of this Act be used only for the Interior energy project described in sec.                        
11 10 of this Act.                                                                                                         
12    * Sec. 2. AS 44.88.095(c) is amended to read:                                                                      
13            (c)  Before entering into a lease or other agreement under AS 44.88.090(e)                                   
14       regarding a project for which the authority agrees to issue bonds in an amount in                                 
15       excess of $10,000,000 [$6,000,000], there must be filed with the authority a certified                        
16       copy of a resolution of the governing body of the political subdivision of the state, if                          
17       any, in which the project is to be located, consenting to the location of the project. The                        
18       consent need only refer to the general nature of the project ultimately to be acquired or                     
19       financed, as set out in a request of the proposed project applicant. Before entering into                     
20       a lease or other agreement under AS 44.88.090(e) regarding a project, the authority                               
21       shall find, on the basis of all information reasonably available to it, that                                      
22                 (1)  the project and its development under this chapter will be                                         
23       economically advantageous to the state and the general public welfare and will                                    
24       contribute to the economic growth of the state;                                                                   
25                 (2)  the project applicant is financially responsible;                                                  
26                 (3)  provision to meet increased demand on [UPON] public facilities                                 
27       that might result from the project is reasonably assured; and                                                     
28                 (4)  the project will provide, or retain, employment reasonably related                                 
29       to the amount of the financing by the authority, considering the amount of investment                             
01       for each [PER] employee for comparable facilities and other relevant factors.                                 
02    * Sec. 3. AS 44.88.095(g) is amended to read:                                                                      
03            (g)  The authority may issue bonds in an amount greater than $25,000,000                                 
04       [$10,000,000] to assist in the financing of a development project under AS 44.88.172 -                            
05       44.88.177 only if approved by the legislature [LAW], excluding refunding bonds.                               
06       Refunding bonds may be issued without further approval by the legislature [LAW] in                            
07       a principal amount sufficient to provide funds for the payment of all bonds to be                                 
08       refunded by them and, in addition, for the payment of all other amounts that the                                  
09       authority considers appropriate in connection with the refunding, including expenses                              
10       incident to the redeeming, calling, retiring, or paying of the outstanding bonds, the                             
11       funding of reserves, and the issuance of the refunding bonds.                                                     
12    * Sec. 4. AS 44.88.155(d) is amended to read:                                                                      
13            (d)  A loan participation purchased by the authority with assets of the                                      
14       enterprise development account or with proceeds of bonds secured by assets of the                                 
15       enterprise development account                                                                                    
16                 (1)  may not exceed $25,000,000 [$20,000,000]; however, in the case                                 
17       of a loan participation for qualified energy development, the loan participation may                              
18       exceed $25,000,000 [$20,000,000] with legislative approval;                                                   
19                 (2)  may not be purchased unless                                                                        
20                      (A)  the project applicant is not, or, if the applicant is not a                                   
21            single proprietorship, all members of the business enterprise or enterprises                                 
22            constituting the project applicant are not, in default on another loan made by                               
23            the state or by a public corporation of the state; and                                                       
24                      (B)  at least 10 percent of the principal amount of the loan is                                    
25            retained by the loan originator, or the loan is for financing improvements in                                
26            energy efficiency;                                                                                           
27                 (3)  may not be purchased if the loan to be purchased exceeds 75                                        
28       percent of the appraised value of the collateral offered as security for the loan unless                          
29       the amount of the loan in excess of this limit is federally insured or guaranteed or is                           
30       insured by a qualified mortgage insurance company, except that the loan to be                                     
31       purchased under this paragraph may not exceed the total of loan proceeds used to                                  
01       refinance an existing debt plus the cost of new construction, expansion, or acquisition                           
02       unless the proceeds from the additional amounts of the loan to be purchased are                                   
03       restricted to uses approved by the authority to finance commercial activity in the state                          
04       by a business enterprise;                                                                                         
05                 (4)  may not be purchased if the participation in the loan to be                                        
06       purchased is for a term longer than the following, except that a loan under (A) or (C)                            
07       of this paragraph may not have a term longer than three-quarters of the authority's                               
08       estimate of the life of the collateral offered as security for the loan:                                          
09                      (A)  40 years from the date the loan is made in the case of a                                      
10            loan participation for a project described in AS 44.88.900(11)(E);                                           
11                      (B)  50 years from the date the loan is made in the case of a loan                                 
12            participation for qualified energy development;                                                              
13                      (C)  25 years from the date the loan is made in the case of a loan                                 
14            participation for other projects;                                                                            
15                 (5)  may be made only if the participation in the loan to be purchased                                  
16       contains amortization provisions; the amortization provisions                                                     
17                      (A)  must be complete and satisfactory to the authority and                                        
18            require periodic payments by the borrower;                                                                   
19                      (B)  may allow the loan originator to amortize the portion of the                                  
20            loan retained by the loan originator using a shorter amortization schedule than                              
21            the amortization schedule for the portion of the loan held by the authority if                               
22                           (i)  in the authority's opinion, the project financed can                                     
23                 support the increased debt service; and                                                                 
24                           (ii)  the accelerated amortization schedule is required to                                    
25                 induce the originator to make the loan;                                                                 
26                 (6)  may be made only if the participation in the loan to be purchased is                               
27       in the form and contains the terms and provisions with respect to insurance, repairs,                             
28       alterations, payment of taxes and assessments, default reserves, delinquency charges,                             
29       default remedies, acceleration of maturity, secondary liens, and other matters the                                
30       authority prescribes; and                                                                                         
31                 (7)  may be made only if the participation in the loan to be purchased is                               
01       secured as to repayment by a mortgage or other security instrument in the manner the                              
02       authority determines is feasible to assure timely repayment under the loan documents                              
03       entered into with the borrower.                                                                                   
04    * Sec. 5. AS 44.88.170(a) is amended to read:                                                                      
05            (a)  Except as provided in (c) of this section, nothing [NOTHING] in this                                
06       chapter prevents the inclusion in a lease or other agreement relating to a project of a                           
07       provision granting the right to purchase the project, or to renew or extend the lease or                          
08       agreement, upon the terms and conditions that [WHICH] may be provided for in the                              
09       lease or agreement.                                                                                               
10    * Sec. 6. AS 44.88.170 is amended by adding a new subsection to read:                                              
11            (c)  The authority, without first obtaining legislative approval, may not enter                              
12       into a gas supply contract with a natural gas producer to provide natural gas to Interior                         
13       Alaska as a primary market unless the contract is for the benefit of a natural gas                                
14       liquefaction or distribution utility that is owned by the authority or a subsidiary of the                        
15       authority and the contract is for the natural gas producer to provide the utility, and                            
16       only the utility, with a natural gas supply that the utility uses to serve customers in                           
17       Interior Alaska.                                                                                                
18    * Sec. 7. AS 44.88.690(a) is amended to read:                                                                      
19            (a)  Unless the authority has obtained legislative approval by law, the authority                            
20       may not use the Alaska Industrial Development and Export Authority sustainable                                    
21       energy transmission and supply development fund established in AS 44.88.660 to                                    
22       [MAKE]                                                                                                            
23                 (1)  make a loan for more than one-third of the capital cost of qualified                           
24       energy development; [OR]                                                                                          
25                 (2)  make a loan guarantee if the amount of the guarantee exceeds                                   
26       $20,000,000; or                                                                                               
27                 (3)  purchase or acquire gas reserves or a gas lease or become a                                    
28       working interest owner of a natural gas lease.                                                              
29    * Sec. 8. AS 44.88.900(16) is amended to read:                                                                     
30                 (16)  "qualified energy development" means a development in the state                                   
31       that involves                                                                                                     
01                      (A)  transmission, generation, conservation, storage, or                                           
02            distribution of heat or electricity;                                                                         
03                      (B)  liquefaction, regasification, distribution, storage, or use of                                
04            natural gas, propane, or propane and air mixture; in this subparagraph,                                  
05            "distribution" does not include [EXCEPT] a natural gas pipeline project for                              
06            transporting natural gas from the North Slope or Cook Inlet to market unless                             
07            the pipeline has a diameter of 12 inches or less and transports the natural                              
08            gas to Interior Alaska;                                                                                
09                      (C)  distribution or storage of refined petroleum products;                                        
10    * Sec. 9. Section 2(a), ch. 27, SLA 1993, as amended by sec. 19, ch. 111, SLA 1996, is                             
11 amended to read:                                                                                                        
12            (a)  The Alaska Industrial Development and Export Authority may issue bonds                                  
13       to finance the acquisition, design, and construction of a port facility and [RELATED                              
14       LOADING AND CONVEYOR] equipment related to the development and operation                                          
15       of a bulk commodity loading and shipping terminal, to be located at Point                                     
16       MacKenzie [. THE TERMINAL MAY BE LOCATED ANYWHERE WITHIN                                                      
17       COOK INLET]. The facility will be owned by the authority. The principal amount of                                 
18       the bonds may not exceed $50,000,000.                                                                             
19    * Sec. 10. The uncodified law of the State of Alaska enacted by sec. 11(a), ch. 26, SLA                            
20 2013, is amended to read:                                                                                               
21            (a)  The Alaska Industrial Development and Export Authority, through the                                     
22       Alaska Industrial Development and Export Authority sustainable energy transmission                                
23       and supply development fund (AS 44.88.660), may provide financing up to a principal                               
24       amount of $275,000,000 for the development, construction, and installation of, and the                            
25       start-up costs of operation and maintenance for, a liquefied natural gas production                               
26       plant and system and affiliated infrastructure in the state that will provide natural                         
27       gas to Interior Alaska as a primary market [ON THE NORTH SLOPE] and [A]                                       
28       natural gas delivery and distribution systems [SYSTEM] and affiliated infrastructure                      
29       that will provide natural gas to [IN] Interior Alaska, if the members of the Alaska                       
30       Industrial Development and Export Authority approve by resolution a project                                   
31       plan. The project plan must                                                                                   
01                 (1)  identify the source of the natural gas or propane;                                             
02                 (2)  include the estimated cost of the project; and                                                 
03                 (3)  include the estimated price of natural gas supplied to natural                                 
04       gas utilities in Interior Alaska before distribution to consumers.                                            
05    * Sec. 11. The uncodified law of the State of Alaska enacted by sec. 25, ch. 123, SLA 1990,                        
06 as repealed and reenacted by sec. 1, ch. 3, FSSLA 1992, is amended to read:                                             
07            Sec. 25. The Alaska Industrial Development and Export Authority may issue                                    
08       bonds to finance the acquisition, design, and construction of aircraft maintenance air                            
09       cargo/air transport support facilities located at Anchorage International Airport, to be                          
10       owned by the Authority. The principal amount of the bonds may not exceed $28,000,000                          
11       [$85,000,000]. This section grants the legislative approval required by AS 44.88.095.                             
12    * Sec. 12. Section 3, ch. 27, SLA 1993; sec. 7, ch. 76, SLA 1995; sec. 24, ch. 111, SLA                            
13 1996; secs. 24(a) and 24(b), ch. 109, SLA 1998; sec. 24(d), ch. 109, SLA 1998, as amended                               
14 by sec. 1, ch. 93, SLA 2006; and sec. 1, ch. 37, SLA 2004, are repealed.                                                
15    * Sec. 13. Section 2(a), ch. 27, SLA 1993, as amended by sec. 19, ch. 111, SLA 1996, and                           
16 sec. 9 of this Act is repealed June 30, 2019.                                                                           
17    * Sec. 14. The uncodified law of the State of Alaska is amended by adding a new section to                         
18 read:                                                                                                                   
19       LEGISLATIVE APPROVAL; SWEETHEART LAKE HYDROELECTRIC                                                               
20 PROJECT. (a) The Alaska Industrial Development and Export Authority may issue bonds to                                  
21 finance the infrastructure and construction costs of the Sweetheart Lake hydroelectric project.                         
22 The Sweetheart Lake hydroelectric facility shall be owned and operated by the authority or                            
23 financed under AS 44.88.172. The principal amount of the bonds provided by the authority                                
24 for the Sweetheart Lake hydroelectric project may not exceed $120,000,000 and may include                             
25 the costs of issuing bonds considered reasonable and appropriate by the Alaska Industrial                               
26 Development and Export Authority.                                                                                       
27       (b)  This section constitutes legislative approval required by AS 44.88.095(g).                                   
28    * Sec. 15. The uncodified law of the State of Alaska is amended by adding a new section to                         
29 read:                                                                                                                   
30       LEGISLATIVE APPROVAL; ALASKA RAILBELT COOPERATIVE                                                                 
31 TRANSMISSION AND ELECTRIC COMPANY. (a) The Alaska Industrial Development                                                
01 and Export Authority may issue bonds to finance the infrastructure and construction costs for                           
02            (1)  rebuilding transmission between the Hope substation and Portage by the                                  
03 Alaska Railbelt Cooperative Transmission and Electric Company;                                                          
04            (2)  rebuilding transmission between Powerline Pass to Indian by the Alaska                                  
05 Railbelt Cooperative Transmission and Electric Company; and                                                             
06            (3)  the Eklutna hydroelectric transmission system upgrade project by the                                    
07 Alaska Railbelt Cooperative Transmission and Electric Company.                                                          
08       (b)  The projects listed in (a) of this section shall be owned and operated by the                                
09 authority or financed under AS 44.88.172.                                                                               
10       (c)  The principal amount of the bonds provided by the authority for the projects in                              
11 (a)(1) and (2) of this section may not exceed a combined total of $107,100,000, and may                               
12 include the costs of issuing bonds considered reasonable and appropriate by the Alaska                                  
13 Industrial Development and Export Authority.                                                                            
14       (d)  The principal amount of the bonds provided by the authority for the project in                               
15 (a)(3) of this section may not exceed $20,400,000 and may include the costs of issuing bonds                            
16 considered reasonable and appropriate by the Alaska Industrial Development and Export                                   
17 Authority.                                                                                                              
18       (e)  This section constitutes legislative approval required by AS 44.88.095(g).                                   
19    * Sec. 16. The uncodified law of the State of Alaska is amended by adding a new section to                         
20 read:                                                                                                                   
21       LEGISLATIVE APPROVAL OF LOAN FROM THE POWER PROJECT FUND. If                                                      
22 the Alaska Energy Authority approves a loan to the City of King Cove for the Waterfall Creek                            
23 hydroelectric project, the legislature authorizes the Alaska Energy Authority to loan an                                
24 amount not to exceed $3,000,000 from the power project fund (AS 42.45.010) to the City of                               
25 King Cove for the Waterfall Creek hydroelectric project. This section constitutes legislative                           
26 approval under AS 42.45.010(j) for a loan from the fund for a project in which the cumulative                           
27 state involvement exceeds $5,000,000.                                                                                 
28    * Sec. 17. The uncodified law of the State of Alaska is amended by adding a new section to                         
29 read:                                                                                                                   
30       REPORT. (a) The Alaska Industrial Development and Export Authority shall submit                                   
31 quarterly to the legislature a written report on the Interior energy project. The authority shall                       
01 deliver the report to the senate secretary and the chief clerk of the house of representatives                          
02 and notify the legislature that the report is available. The report must include                                        
03            (1)  a description of project progress on all components;                                                    
04            (2)  an update on the status of local distribution infrastructure buildout;                                  
05            (3)  to-date and anticipated conversions; and                                                                
06            (4)  a financial accounting of funds expended and funds anticipated to be spent,                             
07 including loans, grants, and bonds.                                                                                     
08       (b)  If requested, the Alaska Industrial Development and Export Authority shall                                   
09 provide a project briefing on the Interior energy project to the Legislative Budget and Audit                           
10 Committee.                                                                                                              
11    * Sec. 18. Sections 14 - 16 of this Act are repealed June 30, 2019.                                                
12    * Sec. 19. Section 17 of this Act is repealed June 30, 2020.                                                       
13    * Sec. 20. This Act takes effect immediately under AS 01.10.070(c).