HB 312: "An Act relating to the Public Facilities Financing Corporation; authorizing an advisory vote on whether the legislature should appropriate $1,500,000,000 from the constitutional budget reserve fund to capitalize the build Alaska fund; and providing for an effective date."
00HOUSE BILL NO. 312 01 "An Act relating to the Public Facilities Financing Corporation; authorizing an 02 advisory vote on whether the legislature should appropriate $1,500,000,000 from 03 the constitutional budget reserve fund to capitalize the build Alaska fund; and 04 providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. FINDINGS. The legislature finds that 07 (1) there is an urgent need for deferred maintenance to existing public facilities 08 in the state and for new public facilities throughout the state; 09 (2) the establishment of the Public Facilities Financing Corporation 10 (AS 35.45.010) will provide an affordable and effective means of financing deferred 11 maintenance and new construction of these facilities. 12 * Sec. 2. AS 35 is amended by adding new sections to read: 13 Chapter 45. Public Facilities Financing Corporation. 14 Sec. 35.45.010. Public Facilities Financing Corporation. The Public
01 Facilities Financing Corporation is created as a public corporation of the state in the 02 Department of Revenue. The corporation is an instrumentality of the state but has a 03 legal existence independent of and separate from the state and has continuing 04 succession until its existence is terminated by law. The corporation is subject to 05 AS 37.07 (Executive Budget Act). 06 Sec. 35.45.020. Board of directors. The corporation is governed by a board 07 of five directors, consisting of the commissioner of revenue, the commissioner of 08 transportation and public facilities, the commissioner of education, the executive 09 director of the Alaska Housing Finance Corporation, and the executive director of the 10 Alaska Industrial Development and Export Authority. 11 Sec. 35.45.030. Officers and quorum. (a) The board of directors shall elect 12 one of their number as chair. The board shall elect a secretary and a treasurer who 13 need not be directors. The same person may be elected to serve both as secretary and 14 treasurer. The powers of the corporation are vested in the board of directors, and three 15 directors of the corporation constitute a quorum. Action may be taken and motions 16 and resolutions adopted by the corporation at any meeting by the affirmative vote of 17 at least three directors. A vacancy in the directorship of the corporation does not 18 impair the right of a quorum to exercise all of the powers and perform all of the duties 19 of the corporation. 20 (b) The corporation may employ an executive director but may not employ any 21 other staff. The executive director is in the exempt service under AS 39.25.110. 22 Sec. 35.45.040. Powers of the corporation. The corporation may 23 (1) sue and be sued; 24 (2) adopt and alter an official seal; 25 (3) make and enforce bylaws and regulations for the conduct of its 26 business and for the use of its services and facilities; 27 (4) maintain one office at any place in the state; 28 (5) subject to other provisions of this chapter, acquire, hold, use, and 29 dispose of its income, revenue, funds, and money; 30 (6) acquire, rent, lease, hold, use, and dispose of other personal 31 property for its purposes;
01 (7) subject to AS 35.45.070, issue revenue bonds or notes and provide 02 for and secure payment of the revenue bonds or notes, provide for the rights of their 03 holders, and purchase, hold, and dispose of any of its revenue bonds or notes; 04 (8) fix and revise from time to time and charge and collect fees and 05 charges for the use of its services or facilities; 06 (9) accept gifts or grants from the United States, or from any 07 governmental unit or person, carry out the terms or provisions or make agreements 08 with respect to the gifts or grants, and do all things necessary, useful, desirable, or 09 convenient in connection with procuring, accepting, or disposing of the gifts or grants; 10 (10) do anything authorized by this chapter through its officers, agents, 11 or employee, or by contracts with a person; 12 (11) make, enter into, and enforce all contracts necessary, convenient, 13 or desirable for the purposes of the corporation or pertaining to a purchase or sale of 14 bonds or other investments, or the performance of its duties and execution of any of 15 its powers under this chapter; 16 (12) purchase or hold bonds at prices and in a manner the corporation 17 considers advisable; 18 (13) adopt and amend regulations by motion, by resolution, or in 19 another manner permitted under the bylaws of the corporation; 20 (14) procure insurance against any losses in connection with its 21 property, operations, or assets in amounts and from insurers it considers desirable, or 22 obtain bond insurance or other credit enhancement with the reimbursement, security, 23 interest, remedy, and other provisions the corporation may determine; 24 (15) to the extent permitted under its contracts with the holders of 25 bonds or notes of the corporation, consent to modification of the rate of interest, time 26 and payment of installment of principal or interest, security, or any other term of a 27 bond or note, contract, or agreement of any kind to which the corporation is a party; 28 and 29 (16) do all acts and things necessary, convenient, or desirable to carry 30 out the powers expressly granted or necessarily implied in this chapter. 31 Sec. 35.45.050. Issuance of bonds and notes. (a) Subject to AS 35.45.070,
01 the corporation may issue its bonds or notes in principal amounts sufficient to provide 02 the state share of funds for acquisition, construction, repair, major maintenance, and 03 renovation of public facilities or school facilities that are projects approved under 04 AS 14.11.015(a). 05 (b) Bonds or notes may be issued for a facility under (a) of this section only 06 when 07 (1) the project and the amount of the project cost to be borne by the 08 corporation, if any, is authorized by law; 09 (2) the commissioner of administration has certified that a computerized 10 maintenance management plan is in place for the facility; and 11 (3) the commissioner of transportation and public facilities has certified 12 that 13 (A) the facility is designed in accordance with the energy 14 performance standards adopted under AS 44.42.020(a); 15 (B) the designer and constructor of the facility have certified 16 that the facility will be designed and constructed in accordance with the energy 17 performance standards adopted under AS 44.42.020(a); or 18 (C) if construction of the facility began before July 1, 1980, the 19 facility meets or, upon completion of the project, will meet the energy 20 performance standards that are substantially equivalent to those adopted under 21 AS 44.42.020(a). 22 (c) The corporation may issue its bonds or notes in principal amounts that it 23 considers necessary to provide funds for 24 (1) payment, funding, or refunding of the principal of, or interest or 25 redemption premiums on, bonds or notes issued by it, whether the bonds or notes or 26 interest to be funded or refunded have become due; 27 (2) the establishment or increase of reserves to secure or pay bonds or 28 notes or interest on bonds or notes and all other costs or expenses of the corporation 29 incident to and necessary or convenient to carry out its corporate purposes and powers; 30 (3) capitalized interest for any expected construction or improvement 31 period and for up to one year after that period ends.
01 (d) Bonds may be authorized only by resolution of the corporation and shall 02 be dated and mature as the resolution may provide, except that a bond may not mature 03 more than 25 years from the date of its issue. Bonds shall bear interest at rates, be in 04 the denominations, be in the form, either coupon or registered, carry the registration 05 privileges, be executed in the manner, be payable in the medium of payment, at the 06 place or places, and be subject to the terms of redemption that the resolution or a 07 subsequent resolution may provide. Bonds or notes may be sold at a public or private 08 sale. 09 (e) Bonds issued by the corporation are payable only from revenue and other 10 funds of the corporation, as provided in the resolution authorizing issuance of the 11 bonds, excluding the build Alaska fund and any income of the fund. Bonds are 12 payable from revenue generated by projects financed with bonds, lease rents, or 13 installment purchase payments received by the corporation. Unless the use of the 14 money is restricted by the terms of the grant, appropriation, or agreement, bonds are 15 payable from money received by the corporation under a grant, appropriation, or other 16 agreement with the state. Except for money in the build Alaska fund and income of 17 the fund, the corporation may pledge its assets to secure bonds, including proceeds of 18 its bonds, revenue, and rights under any lease, installment sale, or other agreement or 19 arrangement. 20 (f) For the purpose of securing the financing for projects through the issuance 21 of bonds by the corporation, the state or a department or an agency of the state may 22 buy or lease property or facilities from the corporation, sell or lease property or 23 facilities to the corporation, or enter into other agreements or arrangements with the 24 corporation. The installment purchase, rental, or other payment provisions, term, 25 interest, payment, prepayment, security, default, remedy, and other terms or provisions 26 may be specified in the installment sale, purchase, lease, or other agreement or 27 arrangement between the corporation and the state or a department or an agency of the 28 state. This subsection provides a complete, additional, and alternative method for 29 performing the acts authorized by this subsection, and a sale or lease of property or 30 facilities of the state to the corporation, a purchase or lease of property or facilities 31 from the corporation, and other agreements or arrangements with the corporation, need
01 not comply with the requirements of any other law. 02 (g) Neither bonds issued by the corporation, nor leases, installment sales, or 03 other agreements or arrangements entered into by the state or a department or an 04 agency of the state securing or providing the source of payment for the bonds are 05 obligations for which the full faith and credit of the state is pledged. No person has 06 a claim or lien on any money of the state for the repayment of any obligation of the 07 corporation. The legislature may appropriate money to pay the principal of and 08 interest on corporation bonds or to pay other obligations of the corporation. However, 09 the legislature is under no obligation to appropriate money to make payments on any 10 bonds or other obligations of the corporation. The bonds of the corporation shall recite 11 in substance that they are not a debt or liability of the state or a political subdivision 12 of the state, except the corporation, that bondholders have no claim or lien on any 13 money of the state, except money appropriated by the state for the purpose of paying 14 the bonded indebtedness, that the state is not obligated to appropriate money to pay 15 the bonded indebtedness, and that issuance of bonds by the corporation does not 16 directly, indirectly, or contingently obligate the state or a political subdivision of the 17 state to apply money from, levy, or pledge any form of taxation to the payment of the 18 bonds. 19 Sec. 35.45.060. Trust indentures and trust agreements. (a) In the 20 discretion of the corporation, an issue of bonds may be secured by a trust indenture 21 or trust agreement between the corporation and a corporate trustee, including a trust 22 company, bank, or national banking association, with corporate trust powers, located 23 inside or outside the state, or by a secured loan agreement or other instrument or under 24 a resolution giving powers to a corporate trustee by means of which the corporation 25 may 26 (1) make and enter into any and all the covenants and agreements with 27 the trustee or the holders of the bonds that the corporation may determine to be 28 necessary or desirable, including, without limitation, covenants, provisions, limitations, 29 and agreements as to 30 (A) the application, investment, deposit, use, and disposition of 31 the proceeds of bonds of the corporation or of money or other property of the
01 corporation, excluding the build Alaska fund and income from the fund; 02 (B) the terms and conditions upon which additional bonds of the 03 corporation may be issued; and 04 (C) the vesting in a trustee of rights, powers, duties, funds, or 05 property in trust for the benefit of bondholders, including the right to enforce 06 payment, performance, and all other rights of the corporation or of the 07 bondholders, under an agreement of the corporation; 08 (2) pledge, mortgage, or assign money, agreements, property, or other 09 rights or assets of the corporation either presently in hand or to be received in the 10 future, or both, but excluding the build Alaska fund and income from the fund; and 11 (3) provide for other matters of like or different character that in any 12 way affect the security or protection of the bonds. 13 (b) For the purpose of securing one or more issues of its bonds, the 14 corporation may establish one or more special funds, called "public facility reserve 15 funds," and shall pay into the reserve funds the proceeds of the sale of its bonds and 16 other money that may be made available to the corporation for the purposes of those 17 reserve funds from another source. The reserve funds shall be established only if the 18 corporation determines that the establishment would enhance the marketability of the 19 bonds. Money held in a reserve fund, except as provided in this section, shall be used 20 as required solely for (1) the payment of the principal of and interest on bonds or of 21 the sinking fund payments with respect to those bonds, (2) the purchase or redemption 22 of bonds, or (3) the payment of a redemption premium required to be paid when those 23 bonds are redeemed before maturity. However, money in a reserve fund may not be 24 withdrawn from it at any time in an amount that would reduce the amount of that 25 reserve fund to less than the public facilities reserve fund requirement under (c) of this 26 section except for the purpose of making, with respect to those bonds, payment, when 27 due, of principal, interest, redemption premiums, and the sinking fund payments for 28 the payment of which other money of the corporation is not available. Income or 29 interest earned by, or increment to, a reserve fund, due to the investment of the reserve 30 fund or other amounts in it, may be transferred by the corporation to other funds or 31 accounts of the corporation to the extent that the transfer does not reduce the amount
01 of the reserve fund below the public facilities reserve fund requirement under (c) of 02 this section. 03 (c) If the corporation decides to issue bonds secured by a public facilities 04 reserve fund, the bonds may not be issued if the amount in the reserve fund is less 05 than an amount that may be established by resolution of the corporation, called the 06 "public facilities reserve fund requirement," unless the corporation, at the time of 07 issuance of the obligations, deposits in the reserve fund from the proceeds of the 08 obligations to be issued or from other sources, an amount that, together with the 09 amount then in the reserve fund, is not less than the public facilities reserve fund 10 requirement. 11 (d) In computing the amount of a public facilities reserve fund for the purpose 12 of this section, securities in which all or a portion of the funds are invested shall be 13 valued by a reasonable method established by the corporation by resolution. Valuation 14 on a particular date shall include the amount of any interest earned or accrued to that 15 date. 16 (e) The chair of the corporation shall annually, not later than January 2, make 17 and deliver to the governor and the legislature a certificate stating the amount, if any, 18 required to restore a public facilities reserve fund to the public facilities reserve fund 19 requirement. That amount may be appropriated by the state for deposit by the 20 corporation in the proper reserve fund. Nothing in this subsection creates a debt or 21 liability of the state. 22 (f) If the corporation decides to covenant to issue bonds secured by a public 23 facilities reserve fund, the bonds may not be issued until 10 days after the corporation 24 has mailed notification to the state bond committee and the Legislative Budget and 25 Audit Committee by certified mail of its intention to establish a public facilities 26 reserve fund to secure the bond issue. The notification must include the amount of the 27 reserve fund to be established and the amount of bonds proposed to be issued. The 28 notification must be accompanied by an estimate by the corporation of the need to 29 withdraw money from the reserve fund during the term of the bond issue, the amount 30 that it may be necessary to withdraw, and the time at which withdrawals are estimated 31 to be needed. The corporation shall annually prepare a revised estimate, considering
01 the same factors, and a statement of all withdrawals that have occurred from the date 02 of issuance of the bonds to the end of the calendar year. The revised estimate and 03 statement shall be submitted to the state bond committee and the Legislative Budget 04 and Audit Committee by January 30 of the year following preparation of the revised 05 estimate. 06 Sec. 35.45.070. Bonding limitations. The total amount of bonds of the 07 corporation that may be outstanding at any time may not exceed $2,000,000,000, 08 excluding bonds for which money or security in the amount necessary to redeem the 09 principal of and interest on the bonds, and to pay any redemption premium on the 10 bonds has been deposited in trust for that purpose. 11 Sec. 35.45.080. Nonliability on bonds. A member of the board of directors 12 or an employee of the corporation or a person executing bonds of the corporation is 13 not personally liable on the bonds or subject to personal liability or accountability as 14 a result of the issuance of the bonds. 15 Sec. 35.45.090. Exemption from taxation. All bonds of the corporation are 16 declared to be issued by a political subdivision of the state and for an essential public 17 and governmental purpose, and the bonds, the interest on them, the income from them, 18 the transfer of the bonds, and all assets, income, and receipts pledged to pay or secure 19 the payment of the bonds, or the interest on them, shall at all times be exempt from 20 taxation by or under the authority of the state, except for inheritance and estate taxes 21 and taxes on transfers by or in contemplation of death. 22 Sec. 35.45.100. Pledge of the state. (a) The state pledges to and agrees with 23 the holders of bonds issued under this chapter that the state will not limit or alter the 24 rights and powers vested in the corporation by this chapter to fulfill the terms of a 25 contract made by the corporation with the holders, and that the state will not in any 26 way impair the rights and remedies of the holders until the bonds, together with the 27 interest on them with interest on unpaid installments of interest, and all costs and 28 expenses in connection with an action or proceeding by or on behalf of the holders, 29 are fully met and discharged. The corporation is authorized to use this pledge and 30 agreement of the state in agreements involving holders of bonds of the corporation. 31 (b) It is the intention of the legislature that a pledge made with respect of
01 bonds shall be valid and binding from the time the pledge is made, that the money and 02 property so pledged and thereafter received by the corporation shall immediately be 03 subject to the lien of the pledge without physical delivery or further act, and that the 04 lien of the pledge shall be valid and binding against all parties having claims of any 05 kind in tort, contract, or otherwise against the corporation, irrespective of whether the 06 parties have notice. The resolution, trust agreement, or another instrument by which 07 a pledge is created need not be recorded nor filed under the provisions of the Uniform 08 Commercial Code to be valid, binding, or effective against the parties. 09 (c) The pledge of the state is limited to the express provisions of (a) of this 10 section and is not a guarantee, surety, promise, undertaking, or assurance of repayment 11 or performance of any obligation of the corporation. 12 Sec. 35.45.110. Build Alaska fund. (a) The build Alaska fund is established 13 in the corporation. The build Alaska fund consists of appropriations made to it. The 14 build Alaska fund shall be invested by the Department of Revenue as agent of the 15 corporation. Income from investments shall be deposited into the general fund. 16 (b) The build Alaska fund and income of the fund may not be pledged or used 17 to pay the principal or interest due on bonds issued by the corporation or to pay any 18 obligations of a state department or agency that have been pledged as security for 19 bonds of the corporation. 20 (c) Money in the build Alaska fund may be used only in accordance with an 21 appropriation. Money may be appropriated from the fund 22 (1) to pay costs of issuing bonds of the corporation or the costs of any 23 guaranty, insurance, or other credit enhancement for the bonds; 24 (2) for acquisition, construction, repair, major maintenance, or 25 renovation of public facilities or school facilities that are projects approved under 26 AS 14.11.015(a). 27 Sec. 35.45.120. Annual audit. The corporation shall have its financial records 28 audited annually by a certified public accountant. The legislative auditor may 29 prescribe the form and content of the financial records of the corporation and may 30 have access to the records at any time. 31 Sec. 35.45.130. Annual report. Before March 1 of each year, the corporation
01 shall submit to the governor a comprehensive report describing operations, income, and 02 expenditures for the preceding 12-month period. The corporation shall notify the 03 legislature that the report is available. 04 Sec. 35.45.140. Regulations. The corporation may adopt regulations necessary 05 to carry out the purposes of this chapter. Except for AS 44.62.310 and 44.62.312 06 regarding public meetings, AS 44.62 (Administrative Procedure Act) does not apply 07 to regulations adopted by the corporation. The corporation shall make available to 08 members of the public copies of the regulations it adopts. Within 45 days after its 09 adoption, the chair of the board shall the submit regulation to the chair of the 10 Administrative Regulation Review Committee (AS 24.20.400). 11 Sec. 35.45.900. Definitions. In this chapter, unless the context requires 12 otherwise, 13 (1) "bonds" means revenue bonds, notes, or other obligations of the 14 corporation issued under this chapter; 15 (2) "corporation" means the Public Facilities Financing Corporation 16 established under AS 35.45.010; 17 (3) "public facility" means a building or other structure that serves a 18 public purpose and is constructed or maintained in whole or in part with state money, 19 and includes highways and facilities and vessels of the Alaska marine highway system. 20 * Sec. 3. AS 36.30.850(b) is amended by adding a new paragraph to read: 21 (38) contracts of the Public Facilities Financing Corporation 22 (AS 35.45.010). 23 * Sec. 4. AS 39.25.110 is amended by adding a new paragraph to read: 24 (33) the executive director of the Public Facilities Financing 25 Corporation. 26 * Sec. 5. AS 39.50.200(b) is amended by adding a new paragraph to read: 27 (56) Public Facilities Financing Corporation (AS 35.45.010). 28 * Sec. 6. The lieutenant governor shall place before the qualified voters of the state at the 29 next general election a question advisory to the legislature of whether the legislature should 30 appropriate $1,500,000,000 from the constitutional budget reserve fund (art. IX, sec. 17, 31 Constitution of the State of Alaska) to capitalize the build Alaska fund (AS 35.45.110). The
01 question shall appear on the ballot in the following form: 02 Q U E S T I O N 03 Shall the Legislature of the State of Alaska appropriate $1,500,000,000 from 04 the constitutional budget reserve fund (art. IX, sec. 17, Constitution of the State 05 of Alaska) to capitalize the build Alaska fund (AS 35.45.110)? 06 Yes [ ] No [ ] 07 * Sec. 7. This Act takes effect immediately under AS 01.10.070(c).