HB 401: "An Act authorizing the issuance and sale of revenue bonds to fund public wastewater systems, nonpoint source water pollution control projects, including solid waste management systems, and estuary conservation and management projects; authorizing the use of the Alaska clean water fund to pay and secure the bonds and to pay costs related to issuance and administration of the bonds; authorizing certain measures to secure payment of the bonds; and amending Alaska Rule of Civil Procedure 3."
00HOUSE BILL NO. 401 01 "An Act authorizing the issuance and sale of revenue bonds to fund public 02 wastewater systems, nonpoint source water pollution control projects, including 03 solid waste management systems, and estuary conservation and management 04 projects; authorizing the use of the Alaska clean water fund to pay and secure 05 the bonds and to pay costs related to issuance and administration of the 06 bonds; authorizing certain measures to secure payment of the bonds; and 07 amending Alaska Rule of Civil Procedure 3." 08 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 09 * Section 1. POLICY AND PURPOSES. The legislature finds that the expenditures, 10 transfers, and applications of money, and the use of the public credit through the issuance of 11 revenue bonds, as authorized by this Act, will serve a public purpose by allowing the 12 financing of needed public water quality improvements substantially sooner than would 13 otherwise be possible. 14 * Sec. 2. AS 37.15 is amended by adding new sections to read:
01 ARTICLE 3A. ALASKA CLEAN WATER FUND BONDS. 02 Sec. 37.15.560. BOND AUTHORIZATION. (a) For purposes of providing 03 part of the money to be used to provide financial assistance to Alaska municipalities 04 and state agencies for the purposes stated in AS 46.03.032(d), including the costs of 05 bond issuance and administration, the issuance and sale of revenue bonds of the state 06 is authorized. The bonds are to be issued by the state bond committee, as provided 07 in AS 37.15.560 - 37.15.605, as part of the Alaska clean water fund revolving loan 08 fund program (AS 46.03.032), a public enterprise of the state. The net proceeds of the 09 sale of the bonds, remaining after any payment of costs of issuance and administration, 10 shall be paid into the Alaska clean water fund. Any accrued interest paid on the bonds 11 shall be paid into the Alaska clean water fund, for transfer to the Alaska clean water 12 fund revenue bond redemption fund (AS 37.15.565). 13 (b) The bonds do not constitute a general obligation of the state. No 14 authorization by the voters of the state or the legislature is required. 15 (c) The state bond committee may enter into agreements with other state 16 agencies as necessary or convenient to implement AS 37.15.560 - 37.15.605. 17 (d) The state bond committee may contract for the services of underwriters, 18 paying agents, trustees, bond printers, rating agencies, bond insurance, credit 19 enhancement providers, accountants, financial advisors, and bond counsel, and other 20 services as are necessary to accomplish the bond issuance and sale. 21 Sec. 37.15.565. BOND REDEMPTION FUND. (a) There is established a 22 special fund of the state, known as the "Alaska clean water fund revenue bond 23 redemption fund," which is a trust fund for paying and securing the payment of the 24 principal of and interest and redemption premium, if any, on the bonds and which shall 25 be at all times completely segregated and set apart from all other funds of the state. 26 The committee, on behalf of the state, may obligate and bind the state to set aside and 27 pay into the bond redemption fund, on a monthly or other periodic basis, any part or 28 parts of, or all of, or a fixed proportion of, or a fixed amount of the money in the 29 Alaska clean water fund (AS 46.03.032) sufficient to pay the principal of and interest 30 and redemption premium, if any, on the bonds and, if it considers it necessary, to set 31 aside and maintain reserves for this purpose. The bond redemption fund shall be
01 drawn upon only for the purpose of paying the principal of and interest and redemption 02 premium, if any, on the bonds, together with related trustee fees, if any. 03 (b) Money in the bond redemption fund may be invested in the same manner 04 and on the same conditions as permitted for investment of money belonging to the 05 state or held in the treasury under AS 37.10.070; however, the committee may agree 06 with the bondholders to further limit these investments. Earnings on investments must 07 be retained in the bond redemption fund. 08 (c) Separate accounts may be created in the bond redemption fund for the 09 purposes of paying and securing the bonds. Such accounts may be combined for 10 purposes of investment. 11 Sec. 37.15.570. BOND TERMS. (a) The bonds may be issued and sold at 12 public or negotiated sale in the manner, in the amounts or series, and at the time or 13 times that the committee determines. The bonds, or each series of them, shall be sold 14 at the price and upon the terms, conditions, and covenants set by the committee, after 15 considering market conditions. Interest rates may be fixed or variable. 16 (b) The bonds mature at the time or times fixed by the committee. The bonds 17 may be subject to redemption before their fixed maturities, as determined by the 18 committee, with or without a premium or premiums. The bonds may be in 19 denominations determined by the committee; may be issued in fully or partially 20 registered form; must be payable as to principal and interest at the place or places 21 determined by the committee; must be signed on behalf of the state in the manner 22 provided by the committee; must be issued under and subject to the terms, conditions, 23 covenants, and protective features safeguarding payment of the bonds and relating to 24 the funding of projects as found necessary by the committee, including covenants 25 requiring the setting aside and maintenance of certain reserves to secure the payment 26 of principal and interest, all under regulations and conditions of the committee. 27 (c) The committee may pledge to the payment of the principal of and interest 28 on bonds issued by the committee part or all of the legally available money or other 29 assets on hand in the Alaska clean water fund (AS 46.03.032); part or all of the 30 revenue of the Alaska clean water fund, including federal capitalization grants, the 31 proceeds of loan repayments, and interest on money in the fund; the proceeds of the
01 sale of bonds; and money on hand in the bond redemption fund. Revenue of the 02 Alaska clean water fund, if so pledged, must be paid into the Alaska clean water fund. 03 The committee may provide for the issuance of additional bonds, secured by a pledge 04 of such money and revenue, ranking junior to, senior to, or on a parity with, 05 outstanding bonds, upon conditions prescribed in the bond resolution. A pledge of 06 loan repayments securing bonds may be made applicable to specific loans from the 07 Alaska clean water fund or, on a pooled basis, to all loan repayments received. 08 (d) If the committee finds it reasonably necessary, the committee may select 09 a trustee or trustees for the holders of the bonds or any series of them, for the 10 safeguarding and disbursement of any of the money in the bond redemption fund 11 created by AS 37.15.565, or for duties with respect to the enforcement, authentication, 12 delivery, payment, and registration of the bonds as the committee may determine. The 13 committee shall fix the rights, duties, powers, and obligations of the trustee or trustees. 14 (e) In its determination of all matters and questions relating to the issuance and 15 sale of the bonds and the fixing of their maturities, terms, conditions, and covenants 16 as provided in (a) - (d) of this section, the decisions of the committee shall be those 17 that are reasonably necessary for the best interests of the state and its inhabitants and 18 that will accomplish the most advantageous sale of the bonds, with due regard, 19 however, for the continued funding under AS 46.03.032 of the categories of projects 20 identified in AS 46.03.032(d). Any such decisions of the committee, as expressed in 21 a bond resolution, are final and are conclusively deemed to comply with the 22 requirements of AS 37.15.560 - 37.15.605 and AS 46.03.032. 23 (f) A bond resolution may provide that the bonds issued must contain a recital 24 that they are issued under AS 37.15.560 - 37.15.605 and AS 46.03.032, and a bond 25 containing this recital is conclusively considered to be valid and to have been issued 26 in conformity with AS 37.15.560 - 37.15.605 and AS 46.03.032. 27 Sec. 37.15.573. BOND RESOLUTION. The committee shall authorize the 28 issuance of bonds by adopting a resolution and shall prepare all other documents and 29 proceedings necessary for the issuance, sale, and delivery of the bonds or any part or 30 series of them. The bond resolution must fix the principal amount, denominations, 31 date, maturities, manner of sale, place or places of payment, rights of redemption, if
01 any, terms, form, conditions, and covenants of the bonds or each series of them. A 02 bond resolution may state terms, conditions, amounts, and other limitations on loans 03 to be made from the Alaska clean water fund (AS 46.03.032) from the relevant bond 04 proceeds. 05 Sec. 37.15.575. STATE AID INTERCEPT. If a municipality is in default on 06 the payment of principal or interest on a loan from the Alaska clean water fund 07 (AS 46.03.032), the committee may provide written notice of default to any state 08 agency that is the custodian of money that is payable to the municipality. If the 09 committee determines to provide notice, a separate written notice shall be given in 10 each instance of default. Notwithstanding any other provision of law, at any time after 11 receipt of written notice of default, the agency head shall withhold payment of the 12 money from the municipality. The agency head shall pay over the withheld money to 13 the committee for deposit in the Alaska clean water fund for the purpose of paying or 14 securing the principal and interest on the loan. 15 Sec. 37.15.580. PLEDGE OF THE STATE. The state pledges to and agrees 16 with the holders of bonds issued by the committee under AS 37.15.560 - 37.15.605 17 and AS 46.03.032 that the state will not limit or alter the rights and powers vested in 18 the committee by AS 37.15.560 - 37.15.605 and AS 46.03.032 to fulfill the terms of 19 any contract made by the committee with the holders, or in any way impair the rights 20 and remedies of the holders until the principal amount of the bonds, together with the 21 interest on them with interest on unpaid installments of interest, are fully met and 22 discharged. The committee may include this pledge and agreement of the state in a 23 contract with the holders. 24 Sec. 37.15.583. ENFORCEMENT BY BONDOWNER. (a) The owner or 25 owners of not less than 10 percent of the aggregate principal amount of any series or 26 issue of bonds or the trustee for the owners of the bonds or any series of them may, 27 by appropriate proceedings in state court, require and compel the transfer, setting aside, 28 and payment of money and the enforcement of all of the terms, conditions, and 29 covenants as required and provided in AS 37.15.560 - 37.15.605, AS 46.03.032, and 30 the bond resolution. 31 (b) A proceeding under (a) of this section may be commenced and conducted
01 only in the Superior Court for the State of Alaska, First Judicial District at Juneau. 02 Sec. 37.15.585. AMOUNTS REQUIRED FOR PAYMENTS. The committee 03 shall, before June 30 of each year or from time to time within the year, as appropriate, 04 commencing with the year in which the bonds are issued, certify to the commissioners 05 of revenue and environmental conservation the amounts required in the next ensuing 06 fiscal year by the bond resolution or resolutions to be paid out of the Alaska clean 07 water fund into the bond redemption fund and to be paid into and maintained in any 08 reserve fund or account or any other fund or account created by the bond resolution 09 or resolutions, and shall also certify to the commissioners the last date or dates upon 10 which payments may be made. 11 Sec. 37.15.587. PURPOSES AND SUFFICIENCY OF REVENUE. The 12 proceeds of bonds may be used for the purposes described in AS 46.03.032(d). Bonds 13 may not be issued unless the committee first finds that revenue to be derived from 14 repayment of loans from the Alaska clean water fund will be sufficient, together with 15 other available money, to comply with all the covenants of the bond resolutions. 16 Sec. 37.15.590. REFUNDING. (a) The committee may refund the bonds or 17 any part of them at or before their maturities or redemption dates by the issuance of 18 refunding revenue bonds of the state, if in the opinion of the committee, refunding is 19 advantageous to and in the best interests of the state and its inhabitants. 20 (b) The issuance of refunding bonds need not be authorized by the voters of 21 the state or by an act of the legislature. The committee shall adopt the resolution or 22 resolutions and prepare all other documents and proceedings necessary for the 23 issuance, exchange or sale, and delivery of the refunding. All provisions of 24 AS 37.15.560 - 37.15.605 and AS 46.03.032 applicable to revenue bonds are applicable 25 to the refunding bonds and to the issuance, sale, or exchange of them, except as 26 otherwise provided in this section. 27 (c) Refunding bonds may be issued in a principal amount sufficient to provide 28 money for the advance or current refunding of all bonds to be refunded and interest 29 on the refunded bonds and, in addition, for the payment of all costs of issuance and 30 administration of the refunding bonds. These expenses also include the difference in 31 amount between the par value of the refunding bonds and any amount less than par for
01 which the refunding bonds are sold; the premium, if any, necessary to be paid in order 02 to call or retire the outstanding bonds and the interest accruing on them to date of the 03 call or retirement; and other such costs. The committee is authorized to incur such 04 expenses. 05 (d) The committee may contract with a refunding trustee to hold the proceeds 06 of refunding bonds in trust until the proceeds, together with earnings on the proceeds, 07 are applied to pay the principal of, premium, if any, and interest on the bonds to be 08 refunded. Until the refunding bond proceeds are applied, the proceeds may be invested 09 in direct obligations of, or obligations guaranteed by, the United States or any agency 10 or corporation of the United States whose obligations constitute direct obligations of, 11 or obligations guaranteed by, the United States. 12 Sec. 37.15.595. BONDS AS LEGAL INVESTMENTS. The bonds are legal 13 investments for all banks, trust companies, savings banks, savings and loan 14 associations, and other persons carrying on a banking business, all insurance companies 15 and other persons carrying on an insurance business, and all executors, administrators, 16 trustees, and other fiduciaries. The bonds may be accepted as security for deposits of 17 all money of the state and its political subdivisions. 18 Sec. 37.15.600. STATUTORY CONSTRUCTION. AS 37.15.560 - 37.15.605 19 shall be liberally construed in order to carry out the purposes for which they were 20 enacted. 21 Sec. 37.15.603. REGULATIONS. The committee may adopt regulations 22 necessary to implement the provisions of AS 37.15.560 - 37.15.605. 23 Sec. 37.15.605. DEFINITIONS. In AS 37.15.560 - 37.15.605, 24 (1) "bond redemption fund" means the Alaska clean water fund revenue 25 bond redemption fund established in AS 37.15.565; 26 (2) "bond resolution" means the resolution or resolutions adopted by 27 the committee under AS 37.15.573 authorizing the issuance of bonds; 28 (3) "bonds" means the Alaska clean water fund revenue bonds 29 authorized in AS 37.15.560 - 37.15.605; 30 (4) "commissioner of revenue" means the principal executive officer 31 of the Department of Revenue as provided in AS 44.25.010, or a successor;
01 (5) "commissioner of environmental conservation" means the principal 02 executive officer of the Department of Environmental Conservation as provided in 03 AS 44.46.010, or a successor; 04 (6) "committee" means the state bond committee created in 05 AS 37.15.110 or any other committee, body, department, or officer of the state that 06 succeeds to the rights, powers, duties, and obligations of the state bond committee by 07 lawful act of the legislature; 08 (7) "costs of issuance and administration" means all costs associated 09 with issuance and administration of Alaska clean water fund revenue bonds and 10 refunding bonds, including costs of bond printing, official statements, financial 11 advisors, travel costs, rating agencies, bond insurance, letters of credit for credit 12 enhancement, underwriters, legal services, paying agents, bond registrars, bond and 13 escrow trustees, arbitrage rebate, and all other costs, including administrative costs, 14 both direct and indirect. 15 * Sec. 3. AS 46.03.032(a) is amended to read: 16 (a) There is established as a separate fund the Alaska clean water fund, which 17 is distinct from any other money or fund in the treasury, and which consists of money 18 appropriated by the legislature to meet federal matching requirements, federal 19 capitalization grants, loan repayments, interest received from loan repayments, [AND] 20 interest received from investment of money in the Alaska clean water fund, and the 21 proceeds and accrued interest received from the sale of revenue bonds issued 22 under AS 37.15.560 - 37.15.605 and secured by the Alaska clean water fund. 23 Separate accounts may be created in the Alaska clean water fund. Such accounts 24 may be combined for purposes of investment. 25 * Sec. 4. AS 46.03.032(b) is amended to read: 26 (b) The provisions of this section shall be liberally construed in order to 27 carry out the purposes for which they were enacted. The department shall 28 administer the Alaska clean water fund consistent with the requirements of this 29 section and AS 37.15.560 - 37.15.605. 30 * Sec. 5. AS 46.03.032(c) is amended to read: 31 (c) The department may accept and make use of all capitalization grants
01 provided by the federal government under 33 U.S.C. 1251 - 1387 (the federal Clean 02 Water Act), as amended [BY P.L. 100-4]. 03 * Sec. 6. AS 46.03.032(d) is repealed and reenacted to read: 04 (d) Except as otherwise limited by federal law, the Alaska clean water fund 05 may be used 06 (1) for the following categories of projects: 07 (A) planning, designing, building, constructing, and 08 rehabilitating a public wastewater collection, treatment, or discharge system; 09 (B) implementing a management program for controlling water 10 pollution from nonpoint sources under 33 U.S.C. 1329, including planning, 11 designing, building, constructing, and rehabilitating a solid waste management 12 system; and 13 (C) developing and implementing an estuary conservation and 14 management program under 33 U.S.C. 1330; 15 (2) to provide the following types of financial assistance for the 16 categories of projects listed in (1) of this subsection: 17 (A) making loans to municipalities and state agencies; 18 (B) buying or refinancing the debt obligations of a municipality 19 or state agency; 20 (C) providing collateral security for or purchasing insurance for 21 a municipal or state agency debt obligation; and 22 (3) to pay and secure the payment of the principal of and interest on 23 revenue bonds issued by the state and to pay the costs of issuance and administration 24 of the bonds, so long as the proceeds of the bond sale are deposited in the Alaska 25 clean water fund. 26 * Sec. 7. AS 46.03.032(f) is repealed and reenacted to read: 27 (f) The department 28 (1) may spend money from the Alaska clean water fund to pay 29 (A) the costs of administering the fund; and 30 (B) the costs of the department in conducting activities under 31 this section and AS 37.15.560 - 37.15.605, including the costs of issuance and
01 administration as defined in AS 37.15.605; 02 (2) shall spend money from the Alaska clean water fund to pay 03 (A) into the bond redemption fund (AS 37.15.565), and into any 04 other bond redemption fund or account created by a relevant bond resolution, 05 the amount certified by the state bond committee under AS 37.15.585; and 06 (B) the costs of the state bond committee in conducting activities 07 under this section and AS 37.15.560 - 37.15.605, including the costs of 08 issuance and administration as defined in AS 37.15.605. 09 * Sec. 8. AS 46.03.032(g) is amended to read: 10 (g) A municipality or state agency wishing to borrow money from the Alaska 11 clean water fund shall demonstrate to the satisfaction of the department that it [THE 12 MUNICIPALITY] 13 (1) has sufficient legal authority to incur the debt for which it is 14 applying; and 15 (2) will establish and maintain a dedicated source of revenue or other 16 acceptable revenue source for repayment of the loan and sufficient reserves for the 17 loan as may be necessary. 18 * Sec. 9. AS 46.03.032(j) is amended to read: 19 (j) Except as necessary to comply with the covenants of a bond resolution 20 under AS 37.15.573, a [A] loan made by the department shall be made according to 21 the standards, criteria, and procedures established by regulations under this section. 22 A loan made from the Alaska clean water fund may be subject to the state aid 23 intercept provisions of AS 37.15.575. Except as necessary to comply with the 24 covenants of a bond resolution under AS 37.15.573, in [IN] making a loan from the 25 Alaska clean water fund for a solid waste management system [FACILITY], the 26 department shall give priority to a project that will alleviate severe health or 27 environmental concerns in the community or region proposing the system 28 [FACILITY]. In addition, the department may consider 29 (1) the extent of local or regional support for the proposed system 30 [FACILITY]; and 31 (2) the extent to which the applicant can demonstrate that the full range
01 of solid waste management options has been reasonably considered and that the 02 proposed system [FACILITY] is consistent with the promotion of the solid and 03 hazardous waste management practices established in AS 46.06.021 [IN THE 04 FOLLOWING ORDER OF PRIORITY: 05 (A) WASTE SOURCE REDUCTION; 06 (B) RECYCLING OF WASTE; 07 (C) WASTE TREATMENT; AND 08 (D) WASTE DISPOSAL]. 09 * Sec. 10. AS 46.03.032(k) is amended to read: 10 (k) The department shall prepare reports required by the federal government 11 in conjunction with federal capitalization grant award conditions. The department 12 shall also prepare reports and notices, including notices of default, required by 13 the state bond committee in conjunction with bonds issued under AS 37.15.560 - 14 37.15.605. The department shall also prepare a biennial report on the Alaska clean 15 water fund and notify the legislature that it is available on or before the first day of 16 each first regular session of the legislature. 17 * Sec. 11. AS 46.03.032(o) is amended to read: 18 (o) In this section, 19 (1) "solid waste management system [FACILITY]" includes capital 20 improvements and equipment used for the purpose of solid and hazardous waste source 21 reduction, recycling, treatment, or disposal; 22 (2) "state agency" means a department, authority, public 23 corporation, instrumentality, or other administrative unit of the executive branch 24 of state government. 25 * Sec. 12. AS 46.03.032 is amended by adding a new subsection to read: 26 (p) Regulations adopted by the department under this section that would affect 27 issuance or repayment of revenue bonds under AS 37.15.560 - 37.15.605 may not be 28 inconsistent with those statutes or with regulations adopted by the state bond 29 committee under those statutes. To the extent that regulations adopted by the 30 department are inconsistent with AS 37.15.560 - AS 37.15.605, with regulations 31 adopted by the state bond committee under those statutes, or with the covenants of a
01 bond resolution adopted under AS 37.15.573, the provisions of AS 37.15.560 - 02 37.15.605, the regulations adopted under those statutes, and the covenants of the bond 03 resolution govern. 04 * Sec. 13. The provisions of AS 37.15.583(b), enacted by sec. 2 of this Act, have the effect 05 of changing Alaska Rule of Civil Procedure 3 by limiting, to the Superior Court for the State 06 of Alaska, First Judicial District at Juneau, the venue district in which a proceeding under 07 AS 37.15.583(a), enacted by sec. 2 of this Act, may be commenced and conducted. 08 * Sec. 14. The provisions of AS 37.15.583(b), enacted by sec. 2 of this Act, take effect 09 only if that subsection receives the two-thirds majority vote of each house required by art. IV, 10 sec. 15, Constitution of the State of Alaska.