CSSB 207(JUD): "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 SENATE BILL NO. 207(JUD) 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 bonds; 06 authorizing certain measures to secure payment of the bonds; and amending 07 Rule 3, Alaska 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. It is the intent of the legislature in enacting this Act to establish a 14 public enterprise of the State of Alaska, as permitted by art. IX, sec. 11, Constitution of the
01 State of Alaska, for the contracting of debt through the issuance of revenue bonds secured by 02 the revenues of the enterprise. 03 * Sec. 2. AS 37.15 is amended by adding new sections to read: 04 ARTICLE 3A. ALASKA CLEAN WATER FUND BONDS. 05 Sec. 37.15.560. BOND AUTHORIZATION. (a) For purposes of providing 06 part of the money to be used to provide financial assistance to municipalities and other 07 qualified entities for the purposes stated in AS 46.03.032(d), including the costs of 08 bond issuance and administration, the issuance and sale of revenue bonds of the state 09 is authorized, subject to (b) of this section. The bonds are to be issued by the state 10 bond committee, as provided in AS 37.15.560 - 37.15.605, as part of the Alaska clean 11 water fund revolving loan fund program (AS 46.03.032), a public enterprise of the 12 state. The net proceeds of the sale of the bonds, remaining after any payment of costs 13 of issuance and administration, shall be paid into the Alaska clean water fund. 14 Accrued interest paid on the bonds shall be paid into the Alaska clean water fund for 15 transfer to the Alaska clean water fund revenue bond redemption fund (AS 37.15.565). 16 (b) The state bond committee may not issue more than $15,000,000 in revenue 17 bonds under AS 37.15.560 - 37.15.605 during a fiscal year, excluding refunding bonds. 18 The total unpaid principal amount of revenue bonds may not exceed $150,000,000, 19 including refunding bonds, but excluding refunded bonds, issued under AS 37.15.560 - 20 37.15.605. 21 (c) The bonds do not constitute a general obligation of the state. Authorization 22 by the voters of the state or the legislature is not required. 23 (d) The state bond committee may enter into agreements with other state 24 agencies as necessary or convenient to implement AS 37.15.560 - 37.15.605. 25 (e) The state bond committee may contract for the services of underwriters, 26 paying agents, trustees, bond printers, rating agencies, bond insurance, credit 27 enhancement providers, accountants, financial advisors, and bond counsel, and other 28 services as are necessary to accomplish the bond issuance and sale. 29 Sec. 37.15.565. BOND REDEMPTION FUND. (a) There is established a 30 special fund of the state, known as the "Alaska clean water fund revenue bond 31 redemption fund," which is a trust fund for paying and securing the payment of the
01 principal of and interest and redemption premium, if any, on the bonds and which shall 02 be at all times completely segregated and set apart from all other funds of the state. 03 The committee, on behalf of the state, may obligate and bind the state to set aside and 04 pay into the bond redemption fund, on a monthly or other periodic basis, any part or 05 parts of, or all of, or a fixed proportion of, or a fixed amount of the money in the 06 Alaska clean water fund (AS 46.03.032) sufficient to pay the principal of and interest 07 and redemption premium, if any, on the bonds and, if it considers it necessary, to set 08 aside and maintain reserves for this purpose. The bond redemption fund shall be 09 drawn upon only for the purpose of paying the principal of and interest and redemption 10 premium, if any, on the bonds, together with related trustee fees, if any. 11 (b) Money in the bond redemption fund may be invested in the same manner 12 and on the same conditions as permitted for investment of money belonging to the 13 state or held in the treasury under AS 37.10.070; however, the committee may agree 14 with the bondholders to further limit these investments. Earnings on investments must 15 be retained in the bond redemption fund. 16 (c) Separate accounts may be created in the bond redemption fund for the 17 purposes of paying and securing the bonds. The accounts may be combined for 18 purposes of investment. 19 Sec. 37.15.570. BOND TERMS. (a) The bonds may be issued and sold at 20 public or negotiated sale in the manner, in the amounts or series, and at the time or 21 times that the committee determines. The bonds, or each series of them, shall be sold 22 at the price and upon the terms, conditions, and covenants set by the committee after 23 considering market conditions. Interest rates may be fixed or variable. 24 (b) The bonds mature at the time or times fixed by the committee. The bonds 25 may be subject to redemption before their fixed maturities, as determined by the 26 committee, with or without a premium or premiums. The bonds may be in 27 denominations determined by the committee; may be issued in fully or partially 28 registered form; must be payable as to principal and interest at the place or places 29 determined by the committee; must be signed on behalf of the state in the manner 30 provided by the committee; must be issued under and subject to the terms, conditions, 31 covenants, and protective features safeguarding payment of the bonds and relating to
01 the funding of projects as found necessary by the committee, including covenants 02 requiring the setting aside and maintenance of certain reserves to secure the payment 03 of principal and interest, all under regulations and conditions of the committee. 04 (c) The committee may pledge to the payment of the principal of and interest 05 on bonds issued by the committee part or all of the legally available money or other 06 assets on hand in the Alaska clean water fund (AS 46.03.032); part or all of the 07 revenue of the Alaska clean water fund, including federal capitalization grants, the 08 proceeds of loan repayments, and interest on money in the fund; the proceeds of the 09 sale of bonds; and money on hand in the bond redemption fund. Revenue of the 10 Alaska clean water fund, if so pledged, must be paid into the Alaska clean water fund. 11 The committee may provide for the issuance of additional bonds, secured by a pledge 12 of such money and revenue, ranking junior to, senior to, or on a parity with, 13 outstanding bonds, upon conditions prescribed in the bond resolution. A pledge of 14 loan repayments securing bonds may be made applicable to specific loans from the 15 Alaska clean water fund or, on a pooled basis, to all loan repayments received. 16 (d) If the committee finds it reasonably necessary, the committee may select 17 a trustee or trustees for the holders of the bonds, or any series of them, for the 18 safeguarding and disbursement of any of the money in the bond redemption fund 19 created by AS 37.15.565, or for duties with respect to the enforcement, authentication, 20 delivery, payment, and registration of the bonds as the committee may determine. The 21 committee shall fix the rights, duties, powers, and obligations of the trustee or trustees. 22 (e) In its determination of all matters and questions relating to the issuance and 23 sale of the bonds and the fixing of their maturities, terms, conditions, and covenants 24 as provided in (a) - (d) of this section, the decisions of the committee shall be those 25 that are reasonably necessary for the best interests of the state and its inhabitants and 26 that will accomplish the most advantageous sale of the bonds, with due regard, 27 however, for the continued funding under AS 46.03.032 of the categories of projects 28 identified in AS 46.03.032(d). Decisions of the committee, as expressed in a bond 29 resolution, are final and are conclusively considered to comply with the requirements 30 of AS 37.15.560 - 37.15.605 and AS 46.03.032. 31 (f) A bond resolution may provide that the bonds issued must contain a recital
01 that they are issued under AS 37.15.560 - 37.15.605 and AS 46.03.032, and a bond 02 containing this recital is conclusively considered to be valid and to have been issued 03 in conformity with AS 37.15.560 - 37.15.605 and AS 46.03.032. 04 Sec. 37.15.573. BOND RESOLUTION. The committee shall authorize the 05 issuance of bonds by adopting a resolution and shall prepare all other documents and 06 proceedings necessary for the issuance, sale, and delivery of the bonds or any part or 07 series of them. The bond resolution must fix the principal amount, denominations, 08 date, maturities, manner of sale, place or places of payment, rights of redemption, if 09 any, terms, form, conditions, and covenants of the bonds or each series of them. A 10 bond resolution may state terms, conditions, amounts, and other limitations on loans 11 to be made from the Alaska clean water fund (AS 46.03.032) from the relevant bond 12 proceeds. 13 Sec. 37.15.575. STATE AID INTERCEPT. If a municipality is in default on 14 the payment of principal or interest on a loan from the Alaska clean water fund 15 (AS 46.03.032), the committee may provide written notice of default to any state 16 agency that is the custodian of money that is payable to the municipality. If the 17 committee determines to provide notice, a separate written notice shall be given in 18 each instance of default. Notwithstanding any other provision of law, at any time after 19 receipt of written notice of default, the agency head shall withhold payment of the 20 money from the municipality. The agency head shall pay over the withheld money to 21 the committee for deposit in the Alaska clean water fund for the purpose of paying or 22 securing the principal and interest on the loan. 23 Sec. 37.15.580. PLEDGE OF THE STATE. The state pledges to and agrees 24 with the holders of bonds issued by the committee under AS 37.15.560 - 37.15.605 25 and AS 46.03.032 that the state will not limit or alter the rights and powers vested in 26 the committee by AS 37.15.560 - 37.15.605 and AS 46.03.032 to fulfill the terms of 27 any contract made by the committee with the holders, or in any way impair the rights 28 and remedies of the holders until the principal amount of the bonds, together with the 29 interest on them with interest on unpaid installments of interest, are fully met and 30 discharged. The committee may include this pledge and agreement of the state in a 31 contract with the holders.
01 Sec. 37.15.583. ENFORCEMENT BY BONDOWNER. (a) The owner or 02 owners of not less than 10 percent of the aggregate principal amount of any series or 03 issue of bonds or the trustee for the owners of the bonds or any series of them may, 04 by appropriate proceedings in state court, require and compel the transfer, setting aside, 05 and payment of money and the enforcement of all of the terms, conditions, and 06 covenants as required and provided in AS 37.15.560 - 37.15.605, AS 46.03.032, and 07 the bond resolution. 08 (b) A proceeding under (a) of this section may be commenced and conducted 09 only in the Superior Court for the State of Alaska, First Judicial District at Juneau. 10 Sec. 37.15.585. AMOUNTS REQUIRED FOR PAYMENTS. The committee 11 shall, before June 30 of each year or from time to time within the year, as appropriate, 12 commencing with the year in which the bonds are issued, certify to the commissioners 13 of revenue and environmental conservation the amounts required in the current fiscal 14 year and the next ensuing fiscal year by the bond resolution or resolutions to be paid 15 out of the Alaska clean water fund into the bond redemption fund and to be paid into 16 and maintained in any reserve fund or account or other fund or account created by the 17 bond resolution or resolutions, and shall also certify to the commissioners the last date 18 or dates upon which payments may be made. 19 Sec. 37.15.587. PURPOSES AND SUFFICIENCY OF REVENUE. The 20 proceeds of bonds may be used for the purposes described in AS 46.03.032(d). Bonds 21 may not be issued unless the committee first finds that revenue to be derived from 22 repayment of loans from the Alaska clean water fund will be sufficient, together with 23 other available money, to comply with all the covenants of the bond resolutions. 24 Sec. 37.15.590. REFUNDING. (a) The committee may refund the bonds or 25 any part of them at or before their maturities or redemption dates by the issuance of 26 refunding revenue bonds of the state if, in the opinion of the committee, refunding is 27 advantageous to and in the best interests of the state and its inhabitants. 28 (b) The issuance of refunding bonds need not be authorized by the voters of 29 the state or by an act of the legislature. The committee shall adopt the resolution or 30 resolutions and prepare all other documents and proceedings necessary for the 31 issuance, exchange or sale, and delivery of the refunding bonds. All provisions of
01 AS 37.15.560 - 37.15.605 and AS 46.03.032 applicable to revenue bonds are applicable 02 to the refunding bonds and to the issuance, sale, or exchange of them, except as 03 otherwise provided in this section. 04 (c) Refunding bonds may be issued in a principal amount sufficient to provide 05 money for the advance or current refunding of all bonds to be refunded and interest 06 on the refunded bonds and, in addition, for the payment of all costs of issuance and 07 administration of the refunding bonds. These expenses also include the difference in 08 amount between the par value of the refunding bonds and any amount less than par for 09 which the refunding bonds are sold; the premium, if any, necessary to be paid in order 10 to call or retire the outstanding bonds and the interest accruing on them to date of the 11 call or retirement; and other such costs. The committee is authorized to incur such 12 expenses. 13 (d) The committee may contract with a refunding trustee to hold the proceeds 14 of refunding bonds in trust until the proceeds, together with earnings on the proceeds, 15 are applied to pay the principal of, premium, if any, and interest on the bonds to be 16 refunded. Until the refunding bond proceeds are applied, the proceeds may be invested 17 in direct obligations of, or obligations guaranteed by, the United States or an agency 18 or corporation of the United States whose obligations constitute direct obligations of, 19 or obligations guaranteed by, the United States. 20 Sec. 37.15.595. BONDS AS LEGAL INVESTMENTS. The bonds are legal 21 investments for all banks, trust companies, savings banks, savings and loan 22 associations, and other persons carrying on a banking business, all insurance companies 23 and other persons carrying on an insurance business, and all executors, administrators, 24 trustees, and other fiduciaries. The bonds may be accepted as security for deposits of 25 all money of the state and its political subdivisions. 26 Sec. 37.15.603. REGULATIONS. The committee may adopt regulations 27 necessary to implement the provisions of AS 37.15.560 - 37.15.605. 28 Sec. 37.15.605. DEFINITIONS. In AS 37.15.560 - 37.15.605, 29 (1) "bond redemption fund" means the Alaska clean water fund revenue 30 bond redemption fund established in AS 37.15.565; 31 (2) "bond resolution" means the resolution or resolutions adopted by
01 the committee under AS 37.15.573 authorizing the issuance of bonds; 02 (3) "bonds" means the Alaska clean water fund revenue bonds 03 authorized in AS 37.15.560 - 37.15.605; 04 (4) "commissioner of revenue" means the principal executive officer 05 of the Department of Revenue as provided in AS 44.25.010, or a successor; 06 (5) "commissioner of environmental conservation" means the principal 07 executive officer of the Department of Environmental Conservation as provided in 08 AS 44.46.010, or a successor; 09 (6) "committee" means the state bond committee created in 10 AS 37.15.110 or any other committee, body, department, or officer of the state that 11 succeeds to the rights, powers, duties, and obligations of the state bond committee by 12 lawful act of the legislature; 13 (7) "costs of issuance and administration" means all costs associated 14 with issuance and administration of Alaska clean water fund revenue bonds and 15 refunding bonds, including costs of bond printing, official statements, financial 16 advisors, travel costs, rating agencies, bond insurance, letters and lines of credit for 17 credit enhancement, underwriters, legal services, paying agents, bond registrars, bond 18 and escrow trustees, arbitrage rebate, and all other costs, including administrative costs, 19 both direct and indirect. 20 * Sec. 3. AS 46.03.032(a) is amended to read: 21 (a) There is established as a separate fund the Alaska clean water fund, which 22 is distinct from any other money or fund in the treasury, and which consists of money 23 appropriated by the legislature to meet federal matching requirements, federal 24 capitalization grants, loan repayments, interest received from loan repayments, [AND] 25 interest received from investment of money in the Alaska clean water fund, and the 26 proceeds and accrued interest received from the sale of revenue bonds issued 27 under AS 37.15.560 - 37.15.605 and secured by the Alaska clean water fund. 28 Separate accounts may be created in the Alaska clean water fund. The accounts 29 may be combined for purposes of investment. 30 * Sec. 4. AS 46.03.032(b) is amended to read: 31 (b) The department shall administer the Alaska clean water fund consistent
01 with the requirements of this section and AS 37.15.560 - 37.15.605. 02 * Sec. 5. AS 46.03.032(c) is amended to read: 03 (c) The department may accept and make use of all capitalization grants 04 provided by the federal government under 33 U.S.C. 1251 - 1387 (the federal Clean 05 Water Act), as amended [BY P.L. 100-4]. 06 * Sec. 6. AS 46.03.032(d) is repealed and reenacted to read: 07 (d) Except as otherwise limited by federal law, the Alaska clean water fund 08 may be used 09 (1) for the following categories of projects: 10 (A) planning, designing, building, constructing, and 11 rehabilitating a public wastewater collection, treatment, or discharge system; 12 (B) implementing a management program for controlling water 13 pollution from nonpoint sources under 33 U.S.C. 1329, including planning, 14 designing, building, constructing, and rehabilitating a solid waste management 15 system; and 16 (C) developing and implementing an estuary conservation and 17 management program under 33 U.S.C. 1330; 18 (2) to provide the following types of financial assistance for the 19 categories of projects listed in (1) of this subsection: 20 (A) making loans to municipalities and other qualified entities; 21 (B) buying or refinancing the debt obligations of a municipality 22 or other qualified entity; 23 (C) providing collateral security for or purchasing insurance for 24 a municipal or other qualified entity debt obligation; and 25 (3) to pay and secure the payment of the principal of and interest on 26 revenue bonds issued by the state and to pay the costs of issuance and administration 27 of the bonds, so long as the proceeds of the bond sale are deposited in the Alaska 28 clean water fund. 29 * Sec. 7. AS 46.03.032(f) is repealed and reenacted to read: 30 (f) The department 31 (1) may spend money from the Alaska clean water fund to pay the
01 costs of 02 (A) administering the fund; and 03 (B) the department in conducting activities under this section 04 and AS 37.15.560 - 37.15.605, including the costs of issuance and 05 administration as defined in AS 37.15.605; 06 (2) shall spend money from the Alaska clean water fund to pay 07 (A) into the bond redemption fund (AS 37.15.565), and into any 08 other bond redemption fund or account created by a relevant bond resolution, 09 the amount certified by the state bond committee under AS 37.15.585; and 10 (B) the costs of the state bond committee in conducting 11 activities under this section and AS 37.15.560 - 37.15.605, including the costs 12 of issuance and administration as defined in AS 37.15.605. 13 * Sec. 8. AS 46.03.032(g) is amended to read: 14 (g) A municipality or other qualified entity wishing to borrow money from 15 the Alaska clean water fund shall demonstrate to the satisfaction of the department that 16 it [THE MUNICIPALITY] 17 (1) has sufficient legal authority to incur the debt for which it is 18 applying; and 19 (2) will establish and maintain a dedicated source of revenue or other 20 acceptable revenue source for repayment of the loan and sufficient reserves for the 21 loan as may be necessary. 22 * Sec. 9. AS 46.03.032(j) is amended to read: 23 (j) Except as necessary to comply with the covenants of a bond resolution 24 under AS 37.15.573, a [A] loan made by the department shall be made according to 25 the standards, criteria, and procedures established by regulations under this section. 26 A loan made from the Alaska clean water fund may be subject to the state aid 27 intercept provisions of AS 37.15.575. Except as necessary to comply with the 28 covenants of a bond resolution under AS 37.15.573, in [IN] making a loan from the 29 Alaska clean water fund for a solid waste management system [FACILITY], the 30 department shall give priority to a project that will alleviate severe health or 31 environmental concerns in the community or region proposing the system
01 [FACILITY]. In addition, the department may consider 02 (1) the extent of local or regional support for the proposed system 03 [FACILITY]; and 04 (2) the extent to which the applicant can demonstrate that the full range 05 of solid waste management options has been reasonably considered and that the 06 proposed system [FACILITY] is consistent with the promotion of the solid and 07 hazardous waste management practices established in AS 46.06.021 [IN THE 08 FOLLOWING ORDER OF PRIORITY: 09 (A) WASTE SOURCE REDUCTION; 10 (B) RECYCLING OF WASTE; 11 (C) WASTE TREATMENT; AND 12 (D) WASTE DISPOSAL]. 13 * Sec. 10. AS 46.03.032(k) is amended to read: 14 (k) The department shall prepare reports required by the federal government 15 in conjunction with federal capitalization grant award conditions. The department 16 shall also prepare reports and notices, including notices of default, required by 17 the state bond committee in conjunction with bonds issued under AS 37.15.560 - 18 37.15.605. The department shall also prepare a biennial report on the Alaska clean 19 water fund and notify the legislature that it is available on or before the first day of 20 each first regular session of the legislature. 21 * Sec. 11. AS 46.03.032(o) is amended to read: 22 (o) In this section, 23 (1) "other qualified entity" means an intermunicipal or interstate 24 agency as those terms are used in 33 U.S.C. 1383, and may include an authority, 25 corporation, instrumentality, enterprise, or other entity formed through an 26 agreement between a municipality and one or more other governmental entities 27 under AS 29.35.010(13) or under art. X, sec. 13, Constitution of the State of 28 Alaska, or between a municipality and a regional housing authority under 29 AS 18.55.996(b); 30 (2) "solid waste management system [FACILITY]" includes capital 31 improvements and equipment used for the purpose of solid and hazardous waste source
01 reduction, recycling, treatment, or disposal. 02 * Sec. 12. AS 46.03.032 is amended by adding a new subsection to read: 03 (p) Regulations adopted by the department under this section that would affect 04 issuance or repayment of revenue bonds under AS 37.15.560 - 37.15.605 may not be 05 inconsistent with those statutes or with regulations adopted by the state bond 06 committee under those statutes. To the extent that regulations adopted by the 07 department are inconsistent with AS 37.15.560 - AS 37.15.605, with regulations 08 adopted by the state bond committee under those statutes, or with the covenants of a 09 bond resolution adopted under AS 37.15.573, the provisions of AS 37.15.560 - 10 37.15.605, the regulations adopted under those statutes, and the covenants of the bond 11 resolution govern. 12 * Sec. 13. The provisions of AS 37.15.583(b), enacted by sec. 2 of this Act, have the effect 13 of changing Rule 3, Alaska Rule of Civil Procedure by limiting, to the Superior Court for the 14 State of Alaska, First Judicial District at Juneau, the venue district in which a proceeding 15 under AS 37.15.583(a), enacted by sec. 2 of this Act, may be commenced and conducted. 16 * Sec. 14. The provisions of AS 37.15.583(b), enacted by sec. 2 of this Act, take effect 17 only if sec. 13 of this Act receives the two-thirds majority vote of each house required by 18 art. IV, sec. 15, Constitution of the State of Alaska.