CSHB 401(STA): "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 Rule 3, Alaska Rules of Civil Procedure."
00CS FOR HOUSE BILL NO. 401(STA) 01 "An Act authorizing the issuance and sale of revenue bonds to fund public 02 wastewater systems, nonpoint source water pollution control projects, including solid 03 waste management systems, and estuary conservation and management projects; 04 authorizing the use of the Alaska clean water fund to pay and secure the bonds 05 and to pay costs related to issuance and administration of the bonds; authorizing 06 certain measures to secure payment of the bonds; and amending Rule 3, Alaska 07 Rules of Civil Procedure." 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 municipalities and other 04 qualified entities 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 subject to (b) of this section. The bonds are to be issued by the state 07 bond committee, as provided in AS 37.15.560 - 37.15.605, as part of the Alaska clean 08 water fund revolving loan fund program (AS 46.03.032), a public enterprise of the 09 state. The net proceeds of the sale of the bonds, remaining after any payment of costs 10 of issuance and administration, shall be paid into the Alaska clean water fund. 11 Accrued interest paid on the bonds shall be paid into the Alaska clean water fund for 12 transfer to the Alaska clean water fund revenue bond redemption fund (AS 37.15.565). 13 (b) The state bond committee may not issue more than $15,000,000 in revenue 14 bonds during a fiscal year, excluding refunding bonds. The total amount of revenue 15 bonds outstanding at any one time may not exceed $150,000,000, including principal 16 and interest owed on the bonds. 17 (c) The bonds do not constitute a general obligation of the state. Authorization 18 by the voters of the state or the legislature is not required. 19 (d) The state bond committee may enter into agreements with other state 20 agencies as necessary or convenient to implement AS 37.15.560 - 37.15.605. 21 (e) The state bond committee may contract for the services of underwriters, 22 paying agents, trustees, bond printers, rating agencies, bond insurance, credit 23 enhancement providers, accountants, financial advisors, and bond counsel, and other 24 services as are necessary to accomplish the bond issuance and sale. 25 Sec. 37.15.565. BOND REDEMPTION FUND. (a) There is established a 26 special fund of the state, known as the "Alaska clean water fund revenue bond 27 redemption fund," which is a trust fund for paying and securing the payment of the 28 principal of and interest and redemption premium, if any, on the bonds and which shall 29 be at all times completely segregated and set apart from all other funds of the state. 30 The committee, on behalf of the state, may obligate and bind the state to set aside and 31 pay into the bond redemption fund, on a monthly or other periodic basis, any part or
01 parts of, or all of, or a fixed proportion of, or a fixed amount of the money in the 02 Alaska clean water fund (AS 46.03.032) sufficient to pay the principal of and interest 03 and redemption premium, if any, on the bonds and, if it considers it necessary, to set 04 aside and maintain reserves for this purpose. The bond redemption fund shall be 05 drawn upon only for the purpose of paying the principal of and interest and redemption 06 premium, if any, on the bonds, together with related trustee fees, if any. 07 (b) Money in the bond redemption fund may be invested in the same manner 08 and on the same conditions as permitted for investment of money belonging to the 09 state or held in the treasury under AS 37.10.070; however, the committee may agree 10 with the bondholders to further limit these investments. Earnings on investments must 11 be retained in the bond redemption fund. 12 (c) Separate accounts may be created in the bond redemption fund for the 13 purposes of paying and securing the bonds. The accounts may be combined for 14 purposes of investment. 15 Sec. 37.15.570. BOND TERMS. (a) The bonds may be issued and sold at 16 public or negotiated sale in the manner, in the amounts or series, and at the time or 17 times that the committee determines. The bonds, or each series of them, shall be sold 18 at the price and upon the terms, conditions, and covenants set by the committee after 19 considering market conditions. Interest rates may be fixed or variable. 20 (b) The bonds mature at the time or times fixed by the committee. The bonds 21 may be subject to redemption before their fixed maturities, as determined by the 22 committee, with or without a premium or premiums. The bonds may be in 23 denominations determined by the committee; may be issued in fully or partially 24 registered form; must be payable as to principal and interest at the place or places 25 determined by the committee; must be signed on behalf of the state in the manner 26 provided by the committee; must be issued under and subject to the terms, conditions, 27 covenants, and protective features safeguarding payment of the bonds and relating to 28 the funding of projects as found necessary by the committee, including covenants 29 requiring the setting aside and maintenance of certain reserves to secure the payment 30 of principal and interest, all under regulations and conditions of the committee. 31 (c) The committee may pledge to the payment of the principal of and interest
01 on bonds issued by the committee part or all of the legally available money or other 02 assets on hand in the Alaska clean water fund (AS 46.03.032); part or all of the 03 revenue of the Alaska clean water fund, including federal capitalization grants, the 04 proceeds of loan repayments, and interest on money in the fund; the proceeds of the 05 sale of bonds; and money on hand in the bond redemption fund. Revenue of the 06 Alaska clean water fund, if so pledged, must be paid into the Alaska clean water fund. 07 The committee may provide for the issuance of additional bonds, secured by a pledge 08 of money and revenue, ranking junior to, senior to, or on a parity with, outstanding 09 bonds, upon conditions prescribed in the bond resolution. A pledge of loan 10 repayments securing bonds may be made applicable to specific loans from the Alaska 11 clean water fund or, on a pooled basis, to all loan repayments received. 12 (d) If the committee finds it reasonably necessary, the committee may select 13 a trustee or trustees for the holders of the bonds, or any series of them, for the 14 safeguarding and disbursement of any of the money in the bond redemption fund 15 created by AS 37.15.565, or for duties with respect to the enforcement, authentication, 16 delivery, payment, and registration of the bonds as the committee may determine. The 17 committee shall fix the rights, duties, powers, and obligations of the trustee or trustees. 18 (e) In its determination of all matters and questions relating to the issuance and 19 sale of the bonds and the fixing of their maturities, terms, conditions, and covenants 20 as provided in (a) - (d) of this section, the decisions of the committee shall be those 21 that are reasonably necessary for the best interests of the state and its inhabitants and 22 that will accomplish the most advantageous sale of the bonds, with due regard, 23 however, for the continued funding under AS 46.03.032 of the categories of projects 24 identified in AS 46.03.032(d). Decisions of the committee, as expressed in a bond 25 resolution, are final and are conclusively considered to comply with the requirements 26 of AS 37.15.560 - 37.15.605 and AS 46.03.032. 27 (f) A bond resolution may provide that the bonds issued must contain a recital 28 that they are issued under AS 37.15.560 - 37.15.605 and AS 46.03.032, and a bond 29 containing this recital is conclusively considered to be valid and to have been issued 30 in conformity with AS 37.15.560 - 37.15.605 and AS 46.03.032. 31 Sec. 37.15.573. BOND RESOLUTION. The committee shall authorize the
01 issuance of bonds by adopting a resolution and shall prepare all other documents and 02 proceedings necessary for the issuance, sale, and delivery of the bonds or any part or 03 series of them. The bond resolution must fix the principal amount, denominations, 04 date, maturities, manner of sale, place or places of payment, rights of redemption, if 05 any, terms, form, conditions, and covenants of the bonds or each series of them. A 06 bond resolution may state terms, conditions, amounts, and other limitations on loans 07 to be made from the Alaska clean water fund (AS 46.03.032) from the relevant bond 08 proceeds. 09 Sec. 37.15.575. STATE AID INTERCEPT. If a municipality is in default on 10 the payment of principal or interest on a loan from the Alaska clean water fund 11 (AS 46.03.032), the committee may provide written notice of default to the state 12 agency that is the custodian of money that is payable to the municipality. If the 13 committee determines to provide notice, a separate written notice shall be given in 14 each instance of default. Notwithstanding any other provision of law, at any time after 15 receipt of written notice of default, the agency head shall withhold payment of the 16 money from the municipality. The agency head shall pay over the withheld money to 17 the committee for deposit in the Alaska clean water fund for the purpose of paying or 18 securing the principal and interest on the loan. 19 Sec. 37.15.580. PLEDGE OF THE STATE. The state pledges to and agrees 20 with the holders of bonds issued by the committee under AS 37.15.560 - 37.15.605 21 and AS 46.03.032 that the state will not limit or alter the rights and powers vested in 22 the committee by AS 37.15.560 - 37.15.605 and AS 46.03.032 to fulfill the terms of 23 any contract made by the committee with the holders, or in any way impair the rights 24 and remedies of the holders until the principal amount of the bonds, together with the 25 interest on them with interest on unpaid installments of interest, are fully met and 26 discharged. The committee may include this pledge and agreement of the state in a 27 contract with the holders. 28 Sec. 37.15.583. ENFORCEMENT BY BOND OWNER. (a) The owner or 29 owners of not less than 10 percent of the aggregate principal amount of any series or 30 issue of bonds or the trustee for the owners of the bonds or any series of them may, 31 by appropriate proceedings in state court, require and compel the transfer, setting aside,
01 and payment of money and the enforcement of all of the terms, conditions, and 02 covenants as required and provided in AS 37.15.560 - 37.15.605, AS 46.03.032, and 03 the bond resolution. 04 (b) A proceeding under (a) of this section may be commenced and conducted 05 only in the Superior Court for the State of Alaska, First Judicial District at Juneau. 06 Sec. 37.15.585. AMOUNTS REQUIRED FOR PAYMENTS. The committee 07 shall, before June 30 of each year or from time to time within the year, as appropriate, 08 commencing with the year in which the bonds are issued, certify to the commissioners 09 of revenue and environmental conservation the amounts required in the current fiscal 10 year and the next ensuing fiscal year by the bond resolution or resolutions to be paid 11 out of the Alaska clean water fund into the bond redemption fund and to be paid into 12 and maintained in any reserve fund or account or other fund or account created by the 13 bond resolution or resolutions, and shall also certify to the commissioners the last date 14 or dates upon which payments may be made. 15 Sec. 37.15.587. PURPOSES AND SUFFICIENCY OF REVENUE. The 16 proceeds of bonds may be used for the purposes described in AS 46.03.032(d). Bonds 17 may not be issued unless the committee first finds that revenue to be derived from 18 repayment of loans from the Alaska clean water fund will be sufficient, together with 19 other available money, to comply with all the covenants of the bond resolutions. 20 Sec. 37.15.590. REFUNDING. (a) The committee may refund the bonds or 21 any part of them at or before their maturities or redemption dates by the issuance of 22 refunding revenue bonds of the state if, in the opinion of the committee, refunding is 23 advantageous to and in the best interests of the state and its inhabitants. 24 (b) The issuance of refunding bonds need not be authorized by the voters of 25 the state or by an act of the legislature. The committee shall adopt the resolution or 26 resolutions and prepare all other documents and proceedings necessary for the 27 issuance, exchange or sale, and delivery of the refunding. All provisions of 28 AS 37.15.560 - 37.15.605 and AS 46.03.032 applicable to revenue bonds are applicable 29 to the refunding bonds and to the issuance, sale, or exchange of them, except as 30 otherwise provided in this section. 31 (c) Refunding bonds may be issued in a principal amount sufficient to provide
01 money for the advance or current refunding of all bonds to be refunded and interest 02 on the refunded bonds and, in addition, for the payment of all costs of issuance and 03 administration of the refunding bonds. These expenses also include the difference in 04 amount between the par value of the refunding bonds and any amount less than par for 05 which the refunding bonds are sold; the premium, if any, necessary to be paid in order 06 to call or retire the outstanding bonds and the interest accruing on them to date of the 07 call or retirement; and other such costs. The committee is authorized to incur such 08 expenses. 09 (d) The committee may contract with a refunding trustee to hold the proceeds 10 of refunding bonds in trust until the proceeds, together with earnings on the proceeds, 11 are applied to pay the principal of, premium, if any, and interest on the bonds to be 12 refunded. Until the refunding bond proceeds are applied, the proceeds may be invested 13 in direct obligations of, or obligations guaranteed by, the United States or an agency 14 or corporation of the United States whose obligations constitute direct obligations of, 15 or obligations guaranteed by, the United States. 16 Sec. 37.15.595. BONDS AS LEGAL INVESTMENTS. The bonds are legal 17 investments for all banks, trust companies, savings banks, savings and loan 18 associations, and other persons carrying on a banking business, all insurance companies 19 and other persons carrying on an insurance business, and all executors, administrators, 20 trustees, and other fiduciaries. The bonds may be accepted as security for deposits of 21 all money of the state and its political subdivisions. 22 Sec. 37.15.600. STATUTORY CONSTRUCTION. AS 37.15.560 - 37.15.605 23 shall be liberally construed in order to carry out the purposes for which they were 24 enacted. 25 Sec. 37.15.603. REGULATIONS. The committee may adopt regulations 26 necessary to implement the provisions of AS 37.15.560 - 37.15.605. 27 Sec. 37.15.605. DEFINITIONS. In AS 37.15.560 - 37.15.605, 28 (1) "bond redemption fund" means the Alaska clean water fund revenue 29 bond redemption fund established in AS 37.15.565; 30 (2) "bond resolution" means the resolution or resolutions adopted by 31 the committee under AS 37.15.573 authorizing the issuance of bonds;
01 (3) "bonds" means the Alaska clean water fund revenue bonds 02 authorized in AS 37.15.560 - 37.15.605; 03 (4) "commissioner of revenue" means the principal executive officer 04 of the Department of Revenue as provided in AS 44.25.010, or a successor; 05 (5) "commissioner of environmental conservation" means the principal 06 executive officer of the Department of Environmental Conservation as provided in 07 AS 44.46.010, or a successor; 08 (6) "committee" means the state bond committee created in 09 AS 37.15.110 or any other committee, body, department, or officer of the state that 10 succeeds to the rights, powers, duties, and obligations of the state bond committee by 11 lawful act of the legislature; 12 (7) "costs of issuance and administration" means all costs associated 13 with issuance and administration of Alaska clean water fund revenue bonds and 14 refunding bonds, including costs of bond printing, official statements, financial 15 advisors, travel costs, rating agencies, bond insurance, letters and lines of credit for 16 credit enhancement, underwriters, legal services, paying agents, bond registrars, bond 17 and escrow trustees, arbitrage rebate, and all other costs, including administrative costs, 18 both direct and indirect. 19 * Sec. 3. AS 46.03.032(a) is amended to read: 20 (a) There is established as a separate fund the Alaska clean water fund, which 21 is distinct from any other money or fund in the treasury, and which consists of money 22 appropriated by the legislature to meet federal matching requirements, federal 23 capitalization grants, loan repayments, interest received from loan repayments, [AND] 24 interest received from investment of money in the Alaska clean water fund, and the 25 proceeds and accrued interest received from the sale of revenue bonds issued 26 under AS 37.15.560 - 37.15.605 and secured by the Alaska clean water fund. 27 Separate accounts may be created in the Alaska clean water fund. The accounts 28 may be combined for purposes of investment. 29 * Sec. 4. AS 46.03.032(b) is amended to read: 30 (b) The provisions of this section shall be liberally construed in order to 31 carry out the purposes for which they were enacted. The department shall
01 administer the Alaska clean water fund consistent with the requirements of this 02 section and AS 37.15.560 - 37.15.605. 03 * Sec. 5. AS 46.03.032(c) is amended to read: 04 (c) The department may accept and make use of all capitalization grants 05 provided by the federal government under 33 U.S.C. 1251 - 1387 (the federal Clean 06 Water Act), as amended [BY P.L. 100-4]. 07 * Sec. 6. AS 46.03.032(d) is repealed and reenacted to read: 08 (d) Except as otherwise limited by federal law, the Alaska clean water fund 09 may be used 10 (1) for the following categories of projects: 11 (A) planning, designing, building, constructing, and 12 rehabilitating a public wastewater collection, treatment, or discharge system; 13 (B) implementing a management program for controlling water 14 pollution from nonpoint sources under 33 U.S.C. 1329, including planning, 15 designing, building, constructing, and rehabilitating a solid waste management 16 system; and 17 (C) developing and implementing an estuary conservation and 18 management program under 33 U.S.C. 1330; 19 (2) to provide the following types of financial assistance for the 20 categories of projects listed in (1) of this subsection: 21 (A) making loans to municipalities and other qualified entities; 22 (B) buying or refinancing the debt obligations of a municipality 23 or other qualified entity; 24 (C) providing collateral security for or purchasing insurance for 25 a municipal or state agency debt obligation; and 26 (3) to pay and secure the payment of the principal of and interest on 27 revenue bonds issued by the state and to pay the costs of issuance and administration 28 of the bonds, so long as the proceeds of the bond sale are deposited in the Alaska 29 clean water fund. 30 * Sec. 7. AS 46.03.032(f) is repealed and reenacted to read: 31 (f) The department
01 (1) may spend money from the Alaska clean water fund to pay the 02 costs of 03 (A) administering the fund; and 04 (B) the department in conducting activities under this section 05 and AS 37.15.560 - 37.15.605, including the costs of issuance and 06 administration as defined in AS 37.15.605; 07 (2) shall spend money from the Alaska clean water fund to pay 08 (A) into the bond redemption fund (AS 37.15.565), and into any 09 other bond redemption fund or account created by a relevant bond resolution, 10 the amount certified by the state bond committee under AS 37.15.585; and 11 (B) the costs of the state bond committee in conducting activities 12 under this section and AS 37.15.560 - 37.15.605, including the costs of 13 issuance and administration as defined in AS 37.15.605. 14 * Sec. 8. AS 46.03.032(g) is amended to read: 15 (g) A municipality or other qualified entity wishing to borrow money from 16 the Alaska clean water fund shall demonstrate to the satisfaction of the department that 17 it [THE MUNICIPALITY] 18 (1) has sufficient legal authority to incur the debt for which it is 19 applying; and 20 (2) will establish and maintain a dedicated source of revenue or other 21 acceptable revenue source for repayment of the loan and sufficient reserves for the 22 loan as may be necessary. 23 * Sec. 9. AS 46.03.032(j) is amended to read: 24 (j) Except as necessary to comply with the covenants of a bond resolution 25 under AS 37.15.573, a [A] loan made by the department shall be made according to 26 the standards, criteria, and procedures established by regulations under this section. 27 A loan made from the Alaska clean water fund may be subject to the state aid 28 intercept provisions of AS 37.15.575. Except as necessary to comply with the 29 covenants of a bond resolution under AS 37.15.573, in [IN] making a loan from the 30 Alaska clean water fund for a solid waste management system [FACILITY], the 31 department shall give priority to a project that will alleviate severe health or
01 environmental concerns in the community or region proposing the system 02 [FACILITY]. In addition, the department may consider 03 (1) the extent of local or regional support for the proposed system 04 [FACILITY]; and 05 (2) the extent to which the applicant can demonstrate that the full range 06 of solid waste management options has been reasonably considered and that the 07 proposed system [FACILITY] is consistent with the promotion of the solid and 08 hazardous waste management practices established in AS 46.06.021 [IN THE 09 FOLLOWING ORDER OF PRIORITY: 10 (A) WASTE SOURCE REDUCTION; 11 (B) RECYCLING OF WASTE; 12 (C) WASTE TREATMENT; AND 13 (D) WASTE DISPOSAL]. 14 * Sec. 10. AS 46.03.032(k) is amended to read: 15 (k) The department shall prepare reports required by the federal government 16 in conjunction with federal capitalization grant award conditions. The department 17 shall also prepare reports and notices, including notices of default, required by 18 the state bond committee in conjunction with bonds issued under AS 37.15.560 - 19 37.15.605. The department shall also prepare a biennial report on the Alaska clean 20 water fund and notify the legislature that it is available on or before the first day of 21 each first regular session of the legislature. 22 * Sec. 11. AS 46.03.032(o) is amended to read: 23 (o) In this section, 24 (1) "other qualified entity" means an intermunicipal or interstate 25 agency as those terms are used in 33 U.S.C. 1383, and may include an authority, 26 corporation, instrumentality, enterprise, or other entity formed through an 27 agreement between a municipality and one or more other governmental entities 28 under AS 29.35.010(13) or under art. X, sec. 13, Constitution of the State of 29 Alaska, or between a municipality and a regional housing authority under 30 AS 18.55.996(b); 31 (2) "solid waste management system [FACILITY]" includes capital
01 improvements and equipment used for the purpose of solid and hazardous waste source 02 reduction, recycling, treatment, or disposal. 03 * Sec. 12. AS 46.03.032 is amended by adding a new subsection to read: 04 (p) Regulations adopted by the department under this section that would affect 05 issuance or repayment of revenue bonds under AS 37.15.560 - 37.15.605 may not be 06 inconsistent with those statutes or with regulations adopted by the state bond 07 committee under those statutes. To the extent that regulations adopted by the 08 department are inconsistent with AS 37.15.560 - AS 37.15.605, with regulations 09 adopted by the state bond committee under those statutes, or with the covenants of a 10 bond resolution adopted under AS 37.15.573, the provisions of AS 37.15.560 - 11 37.15.605, the regulations adopted under those statutes, and the covenants of the bond 12 resolution govern. 13 * Sec. 13. The provisions of AS 37.15.583(b), enacted by sec. 2 of this Act, have the effect 14 of changing Rule 3, Alaska Rules of Civil Procedure, by limiting, to the Superior Court for 15 the State of Alaska, First Judicial District at Juneau, the venue district in which a proceeding 16 under AS 37.15.583(a), enacted by sec. 2 of this Act, may be commenced and conducted. 17 * Sec. 14. The provisions of AS 37.15.583(b), enacted by sec. 2 of this Act, take effect 18 only if sec. 13 of this Act receives the two-thirds majority vote of each house required by art. 19 IV, sec. 15, Constitution of the State of Alaska.