CSHB 388(RES): "An Act relating to state loans for oil and gas development projects in the Cook Inlet sedimentary basin; relating to the creation of subsidiaries by the Alaska Industrial Development and Export Authority; relating to the Cook Inlet reserve-based lending fund and the payment of dividends from the fund; relating to a report to the legislature related to oil and gas development projects in the Cook Inlet sedimentary basin; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 388(RES) 01 "An Act relating to state loans for oil and gas development projects in the Cook Inlet 02 sedimentary basin; relating to the creation of subsidiaries by the Alaska Industrial 03 Development and Export Authority; relating to the Cook Inlet reserve-based lending 04 fund and the payment of dividends from the fund; relating to a report to the legislature 05 related to oil and gas development projects in the Cook Inlet sedimentary basin; and 06 providing for an effective date." 07 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 08 * Section 1. AS 44.88.088(a) is amended to read: 09 (a) The authority shall adopt a policy for payment of a dividend from the 10 revolving fund, the Alaska Industrial Development and Export Authority sustainable 11 energy transmission and supply development fund (AS 44.88.660), [AND] the Arctic 12 infrastructure development fund (AS 44.88.810), and the Cook Inlet reserve-based 13 lending fund (AS 44.88.850) to the state each fiscal year. The dividends for a fiscal
01 year shall be made available by the authority before the end of that fiscal year. The 02 authority shall notify the commissioner of revenue when the dividends for a fiscal year 03 are available for appropriation. The amount of the dividend payable from the 04 (1) revolving fund for a fiscal year may not be less than 25 percent nor 05 more than 50 percent of the net income of the revolving fund for the base fiscal year; 06 however, in no event [,] may the dividend payable from the revolving fund for a fiscal 07 year exceed the total unrestricted net income of the revolving fund for the base year; 08 (2) Alaska Industrial Development and Export Authority sustainable 09 energy transmission and supply development fund (AS 44.88.660) for a fiscal year 10 may not be less than 25 percent nor more than 50 percent of the net income of the 11 Alaska Industrial Development and Export Authority sustainable energy transmission 12 and supply development fund for the base fiscal year; however, the dividend payable 13 from the Alaska Industrial Development and Export Authority sustainable energy 14 transmission and supply development fund for a fiscal year may not exceed the total 15 unrestricted net income of the Alaska Industrial Development and Export Authority 16 sustainable energy transmission and supply development fund for the base year; 17 (3) Arctic infrastructure development fund (AS 44.88.810) for a fiscal 18 year may not be less than 25 percent nor more than 50 percent of the net income of the 19 Arctic infrastructure development fund for the base fiscal year; however, the dividend 20 payable from the Arctic infrastructure development fund for a fiscal year may not 21 exceed the total unrestricted net income of the Arctic infrastructure development fund 22 for the base year; 23 (4) Cook Inlet reserve-based lending fund (AS 44.88.850) for a 24 fiscal year may not be less than 25 percent nor more than 50 percent of the net 25 income of the Cook Inlet reserve-based lending fund for the base fiscal year; 26 however, the dividend payable from the Cook Inlet reserve-based lending fund 27 for a fiscal year may not exceed the total unrestricted net income of the Cook 28 Inlet reserve-based lending fund for the base year. 29 * Sec. 2. AS 44.88.178 is amended to read: 30 Sec. 44.88.178. Creation of subsidiaries. The authority may create one or 31 more subsidiary corporations for the purpose of acquiring, constructing, owning,
01 operating, or financing a project financed by the authority [UNDER AS 44.88.172]. 02 A subsidiary corporation created under this section may be incorporated under 03 AS 10.20.146 - 10.20.166. The authority may transfer assets of the authority to a 04 subsidiary created under this section. A subsidiary created under this section may 05 borrow money and issue bonds as evidence of that borrowing [,] and has all the 06 powers of the authority that the authority grants to it. Unless otherwise provided by the 07 authority, the debts, liabilities, and obligations of a subsidiary corporation created 08 under this section are not the debts, liabilities, or obligations of the authority. 09 * Sec. 3. AS 44.88 is amended by adding a new section to read: 10 Sec. 44.88.385. Cook Inlet oil and gas development projects; report. The 11 authority shall evaluate oil and gas development projects that have the potential to 12 increase oil and gas production from the Cook Inlet sedimentary basin. Each year, the 13 authority shall prepare a report related to those oil and gas development projects and 14 shall, by the first day of each regular session of the legislature, deliver the report to the 15 senate secretary and the chief clerk of the house of representatives and notify the 16 legislature that the report is available. At the request of a legislative committee, a 17 representative of the authority shall appear in that committee to review the report. For 18 each oil and gas development project, the report must include 19 (1) a cost estimate for the project; 20 (2) the potential recoverable gas from the project; and 21 (3) the amount necessary to be appropriated to the Cook Inlet reserve- 22 based lending fund to finance the project. 23 * Sec. 4. AS 44.88 is amended by adding a new section to read: 24 Article 10A. Cook Inlet Reserve-Based Lending. 25 Sec. 44.88.850. Cook Inlet reserve-based lending fund. (a) The Cook Inlet 26 reserve-based lending fund is established in the authority. The fund consists of 27 appropriations made to the fund by the legislature, money or other assets transferred to 28 the fund by a vote of the members of the authority under AS 44.88.050 from any other 29 fund controlled by the authority, and unrestricted loan repayments, interest, or other 30 income earned on loans, investments, or assets of the fund. The fund is not an account 31 in the revolving fund established in AS 44.88.060, and the authority shall account for
01 the fund separately from the revolving fund. The authority may create additional 02 accounts in the fund. Subject to agreements made with the holders of the authority's 03 bonds or with other persons, the authority may transfer amounts from an account in 04 the fund to another account in the fund. The authority may not transfer to another fund 05 in the authority amounts that were appropriated to the fund by the legislature. 06 (b) The authority may use money in the fund to make one or more reserve- 07 based loans to fund oil and gas development projects the authority considers necessary 08 to increase oil and gas production from the Cook Inlet sedimentary basin. 09 (c) The authority shall set the interest rate for a reserve-based loan under this 10 section. The interest rate may be less than the cost of funds to the authority. In this 11 subsection, "cost of funds" means earnings, expressed as an annual interest rate, the 12 authority would receive on a comparable financial security. 13 * Sec. 5. AS 44.88.900 is amended by adding new paragraphs to read: 14 (20) "oil and gas development project" means a development project to 15 produce proven oil or gas reserves; 16 (21) "reserve-based loan" means a loan made against and secured by 17 an oil and gas field or undeveloped or developed oil and gas assets. 18 * Sec. 6. This Act takes effect immediately under AS 01.10.070(c).