SB 213: "An Act establishing the Knik Arm Bridge and Toll Authority and relating to that authority; and providing for an effective date."

00 SENATE BILL NO. 213 01 "An Act establishing the Knik Arm Bridge and Toll Authority and relating to that 02 authority; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 44 is amended by adding a new chapter to read: 05 Chapter 90. Knik Arm Bridge and Toll Authority. 06 Article 1. Establishment and Organization. 07 Sec. 44.90.011. Purpose. The purpose of the authority created by this chapter 08 is to develop, stimulate, and advance the economic welfare of the state and further the 09 development of public transportation systems in the vicinity of the Upper Cook Inlet 10 with construction of a bridge to span Knik Arm and connect the Municipality of 11 Anchorage and the Matanuska-Susitna Borough. 12 Sec. 44.90.021. Establishment of authority. (a) There is established the 13 Knik Arm Bridge and Toll Authority. The authority is a public corporation and an 14 instrumentality of the state within the Department of Transportation and Public

01 Facilities but the authority has a separate and independent legal existence from the 02 state. The exercise by the authority of the powers in this chapter is considered an 03 essential governmental function of the state. 04 (b) The authority may not be terminated as long as it has bonds, notes, or other 05 obligations outstanding. Upon termination of the authority, its rights and property 06 pass to the state. 07 Sec. 44.90.031. Board of directors of authority. (a) The authority shall be 08 governed by a board of directors consisting of the following: 09 (1) the commissioner of transportation and public facilities or the 10 commissioner's designee; 11 (2) the commissioner of revenue or the commissioner's designee; 12 (3) one public member, appointed by the governor, who is a state 13 resident and United States citizen. 14 (b) The public member of the board shall serve for a term of five years and 15 may be reappointed to a single successive five-year term. The public member may 16 only be removed for cause. 17 (c) If a vacancy occurs in the public member seat on the board, the governor 18 shall make an appointment, effective immediately, for the unexpired portion of that 19 member's term. 20 Sec. 44.90.041. Operation of authority. (a) The powers of the authority are 21 vested in the board. 22 (b) Two members of the board constitute a quorum. 23 (c) The public member of the board serves as the chair of the board. Members 24 shall elect other officers they determine desirable. 25 (d) Action may be taken and motions and resolutions adopted by the board at a 26 meeting by the affirmative vote of at least two members. 27 (e) The public member of the board shall receive a stipend of $300 a day 28 while performing business of the authority. 29 (f) The members of the board serving under AS 44.90.031(a)(1) and (2) serve 30 without compensation, but are entitled to per diem and travel expenses authorized by 31 law under AS 39.20.180.

01 Sec. 44.90.051. Executive director. The authority shall employ an executive 02 director who may not be a member of the board. The executive director shall serve at 03 the pleasure of the board. The board shall establish the duties and compensation of the 04 executive director. 05 Sec. 44.90.061. Employment of personnel. The executive director may hire 06 employees of the authority. The board shall prescribe the duties and compensation of 07 authority employees. 08 Sec. 44.90.071. Personnel exempt from State Personnel Act. The executive 09 director and employees of the authority are in the exempt service under AS 39.25 10 (State Personnel Act). 11 Sec. 44.90.081. Legal advisor. The attorney general is the legal counsel for 12 the authority. The attorney general shall advise the authority in legal matters and 13 represent it in suits. 14 Article 2. Powers and Duties. 15 Sec. 44.90.111. Powers and duties of the authority. (a) In furtherance of its 16 purposes, the authority may 17 (1) own, acquire, construct, develop, create, reconstruct, equip, 18 operate, maintain, extend, and improve the Knik Arm bridge and its appurtenant 19 facilities; 20 (2) sue and be sued; 21 (3) adopt a seal; 22 (4) adopt, amend, and repeal regulations under AS 44.62 and establish 23 bylaws; 24 (5) make and execute agreements, contracts, and other instruments for 25 the exercise of its powers and functions under this chapter, including contracts with 26 any person, firm, corporation, governmental agency, or other entity; 27 (6) in its own name acquire, lease, rent, or convey real and personal 28 property; 29 (7) issue bonds and otherwise incur indebtedness, in accordance with 30 AS 44.90.211, in order to pay the cost of the Knik Arm bridge and its appurtenant 31 facilities; the authority may also secure payment of the bonds or other indebtedness as

01 provided in AS 44.90.221; 02 (8) apply for and accept gifts, grants, or loans from a federal agency or 03 an agency or instrumentality of the state, or from a municipality, private organization, 04 or other source; 05 (9) fix and collect fees, rents, tolls, rates, or other charges for the use of 06 the Knik Arm bridge and appurtenant facilities, or for a service developed, operated, 07 or provided by the authority; notwithstanding AS 37.10.050(a), fees, rents, tolls, rates, 08 and other charges fixed and collected under this paragraph may exceed the actual 09 operating cost of the use of the bridge, facility, or service; 10 (10) pledge fees, rents, tolls, rates, charges, or other revenue of the 11 authority as security for bonds of the authority; 12 (11) deposit or invest its funds, subject to agreements with 13 bondholders; 14 (12) procure insurance against any loss in connection with its 15 operation; 16 (13) contract for and engage the services of consultants, experts, and 17 financial and technical advisors that the authority considers necessary for the exercise 18 of its powers and functions under this chapter; 19 (14) apply for, obtain, hold, and use permits, licenses, or approvals 20 from appropriate agencies of the state, the United States, a foreign country, and any 21 other proper agency in the same manner as any other person; 22 (15) perform reconnaissance studies and engineering, survey, and 23 design studies with respect to the Knik Arm bridge and its appurtenant facilities; 24 (16) exercise powers of eminent domain or file a declaration of taking 25 as necessary for the Knik Arm bridge and appurtenant facilities under AS 09.55.240 - 26 09.55.460 to acquire land or an interest in land; 27 (17) confer with municipal and other governments, metropolitan 28 planning organizations, and the department, concerning the Knik Arm bridge; 29 (18) do all acts and things necessary to carry out the powers expressly 30 granted or necessarily implied in this chapter. 31 (b) The authority shall

01 (1) prepare an annual report of its operations to include a balance 02 sheet, an income statement, a statement of changes in financial position, a 03 reconciliation of changes in equity accounts, a summary of significant accounting 04 principles, an auditor's report, comments regarding the year's business, and prospects 05 for the next year; the report shall be completed by the third day of each regular session 06 of the legislature, and the authority shall notify the governor, the commissioner of the 07 department, the presiding officers of each house of the legislature, and the Legislative 08 Budget and Audit Committee that the report is available; 09 (2) comply with the provisions of AS 37.07 (Executive Budget Act), 10 except that AS 37.07 does not apply to the activities of the authority that relate to the 11 authority's borrowing of money as provided in this chapter, including the issuing of its 12 obligations or evidence of that borrowing and the repayment of the debt obligation; 13 (3) establish a personnel management system for hiring employees and 14 setting employee-benefit packages; 15 (4) establish procedures, rules, and rates governing per diem and travel 16 expenses of the employees of the authority in substantial conformity to statutes, 17 procedures, rules, and rates applicable to state employees of similar state entities; 18 (5) coordinate the exercise of its powers to plan, design, construct, 19 operate, and maintain the Knik Arm bridge with the department, and with the mayors 20 of the Municipality of Anchorage and the Matanuska-Susitna Borough. 21 Sec. 44.90.211. Bonds of the authority. The authority may borrow money 22 and issue bonds on which the principal and interest are payable from money derived 23 from the fees, rents, tolls, rates, charges, and other revenue of the authority under this 24 chapter. Before issuing bonds for the Knik Arm bridge, the authority shall submit to 25 the state bond committee a description of the bond issue and a preliminary prospectus, 26 offering circular, or official statement relating to the bond issue. Bonds may not be 27 issued unless the state bond committee finds, based upon the information submitted by 28 the authority under this section and other information that is reasonably available to 29 the committee, that the Knik Arm bridge revenue and other revenue available to the 30 authority can be reasonably expected to be adequate for payment of the principal and 31 interest on the bonds to be issued and that issuance of the bonds by the authority

01 would not be expected to adversely affect the ability of the state or its political 02 subdivisions to market bonds. Bonds may not be issued unless the principal amount 03 of the bond issue is authorized by law. 04 Sec. 44.90.221. Trust indentures and trust agreements. (a) In the 05 discretion of the authority, an issue of bonds may be secured by a trust indenture or 06 trust agreement between the authority and a corporate trustee, by a secured loan 07 agreement or other instrument, or by a resolution giving powers to a corporate trustee, 08 by means of which the authority may 09 (1) make agreements with the trustee or the holders of the bonds that 10 the authority determines to be necessary or desirable, including agreements as to the 11 (A) application, investment, deposit, use, and disposition of 12 (i) the proceeds of bonds of the authority; 13 (ii) money or other property of the authority; or 14 (iii) money or other property in which the authority has 15 an interest; 16 (B) fixing and collecting of fees, rents, tolls, rates, or other 17 charges; 18 (C) assignment by the authority of its rights in any contract 19 with respect to the Knik Arm bridge or in a mortgage or other security interest 20 created with respect to the Knik Arm bridge to a trustee for the benefit of 21 bondholders; 22 (D) terms and conditions under which the authority may issue 23 additional bonds; 24 (E) vesting in a trustee of rights, powers, duties, money, or 25 property in trust for the benefit of bondholders, including the right to enforce 26 payment, performance, and all other rights of the authority or of the 27 bondholders, under a lease, power of contract, contract of sale, mortgage, 28 security agreement, or trust by injunction or other proceeding or by taking 29 possession by agent or otherwise, and operating the Knik Arm bridge and 30 collecting rents or other consideration and applying the same in accordance 31 with the trust agreement;

01 (2) pledge, mortgage, or assign money, leases, agreements, property, 02 or other rights or assets of the authority either presently in hand or to be received in 03 the future, or both; and 04 (3) provide for any other matters that affect the security or protection 05 of the bonds. 06 (b) Notwithstanding any other provisions of this chapter, the trust agreement 07 must contain an agreement by the authority that the authority will at all times maintain 08 fees, rents, tolls, rates, or other charges sufficient to 09 (1) pay the costs of operation and maintenance of the Knik Arm bridge 10 and its appurtenant facilities and the principal of and interest on bonds issued under 11 the trust agreement as the bonds severally become due and payable; 12 (2) provide for debt service coverage as considered necessary by the 13 authority for the marketing of its bonds; and 14 (3) provide for renewals, replacements, and improvements of the Knik 15 Arm bridge, and to maintain reserves required by the terms of the trust agreement. 16 (c) For the purpose of securing one or more issues of its bonds, the authority 17 may establish one or more special funds, called "capital reserve funds," and shall pay 18 into those capital reserve funds the proceeds of the sale of its bonds and any other 19 money that is available to the authority for the purposes of those funds. The funds 20 shall be established only if the authority determines that the establishment would 21 enhance the marketability of the bonds. All money held in a capital reserve fund, 22 except as provided in this section, shall be used as required solely for (1) the payment 23 of the principal of and interest on bonds or of the sinking fund payments with respect 24 to those bonds, (2) the purchase or redemption of bonds, or (3) the payment of a 25 redemption premium required to be paid when those bonds are redeemed before 26 maturity. However, money in a fund may not be withdrawn from the fund at any time 27 in an amount that would reduce the amount of the fund to less than the capital reserve 28 requirement set out in (d) of this section, except for the purpose of making, with 29 respect to those bonds, payment, when due, of principal, interest, redemption 30 premiums, and the sinking fund payments for the payment of which other money of 31 the authority is not available. Income or interest earned by or increment to a capital

01 reserve fund due to the investment of the fund or any other amounts in the fund may 02 be transferred by the authority to other funds or accounts of the authority to the extent 03 that the transfer does not reduce the amount of the capital reserve fund below the 04 capital reserve fund requirement. 05 (d) If the authority decides to issue bonds secured by a capital reserve fund, 06 the bonds may not be issued if the amount in the capital reserve fund is less than the 07 amount of the capital reserve fund requirement, if any, established by resolution of the 08 authority, unless the authority, at the time of issuance of the obligations, deposits in 09 the capital reserve fund from the proceeds of the obligations to be issued or from other 10 sources an amount that, together with the amount then in the fund, will not be less than 11 the capital reserve fund requirement. 12 (e) In computing the amount of a capital reserve fund for the purpose of this 13 section, securities in which all or a portion of the fund is invested shall be valued by 14 some reasonable method established by the authority by resolution. Valuation on a 15 particular date shall include the amount of any interest earned or accrued to that date. 16 (f) The chair of the board shall annually, not later than January 2, deliver to 17 the governor and the legislature a certificate stating the sum, if any, required to restore 18 any capital reserve fund to the capital reserve fund requirement. Money appropriated 19 during that fiscal year for capital reserve fund restoration shall be deposited by the 20 authority in the proper capital reserve fund. 21 (g) If the authority decides to issue bonds secured by a capital reserve fund, 22 the bonds may not be issued until 30 days after the authority has mailed notification to 23 the state bond committee and the Legislative Budget and Audit Committee by certified 24 mail of its intention to establish a capital reserve fund to secure the bond issue. The 25 notification must include the amount of the capital reserve fund to be established, the 26 amount of bonds proposed to be issued, and the total cost for which the bonds are to 27 be issued. The notification shall be accompanied by an estimate by the authority of 28 the need to withdraw money from the capital reserve fund during the term of the bond 29 issue, the amount that may be necessary to withdraw, and the time at which 30 withdrawals are estimated to be needed. By January 30 of each year, the authority 31 shall prepare, and provide to the state bond committee and the Legislative Budget and

01 Audit Committee, a revised estimate, considering the same factors, and a statement of 02 all withdrawals that have occurred from the date of issuance of the bonds to the end of 03 the preceding calendar year. 04 (h) Nothing in this section creates a debt or liability of the state. 05 Sec. 44.90.231. Validity of pledge. It is the intention of the legislature that a 06 pledge made in respect of bonds shall be perfected and shall be valid and binding from 07 the time the pledge is made, that the money or property so pledged and after that 08 received by the authority shall immediately be subject to the lien of the pledge without 09 physical delivery or further act, and that the lien of the pledge shall be valid and 10 binding against all parties having claims of any kind in tort, contract, or otherwise 11 against the authority irrespective of whether the parties have notice. Neither the 12 resolution, trust agreement, nor any other instrument by which a pledge is created need 13 be recorded or filed under the provisions of the Uniform Commercial Code in order to 14 be perfected or to be valid, binding, or effective against the parties. This section does 15 not affect title to or conveyances of real property, and does not limit the applicability 16 of AS 40.17.080(b). 17 Sec. 44.90.241. Nonliability on bonds. (a) Neither the members of the board 18 nor a person executing the bonds of the authority is liable personally on the bonds or is 19 subject to personal liability or accountability by reason of the issuance of the bonds. 20 (b) The bonds issued by the authority do not constitute an indebtedness or 21 other liability of the state or of a political subdivision of the state other than the 22 authority, but shall be payable solely from the income, receipts, or other money or 23 property of the authority. 24 (c) The authority may not pledge the faith or credit of the state or of a political 25 subdivision of the state other than the authority, and the issuance of a bond by the 26 authority does not directly, indirectly, or contingently obligate the state or a political 27 subdivision of the state to apply money from, levy, or pledge any form of taxation to 28 the payment of the bond. 29 (d) Each obligation issued under this chapter other than a state guaranteed 30 bond shall contain on its face a statement that the authority is not obligated to pay it 31 nor the interest on it except from the revenue or assets of the authority and that neither

01 the faith and credit nor the taxing power of the state or of any political subdivision of 02 the state is pledged to the payment of the principal of or the interest on the obligation. 03 Sec. 44.90.251. Pledge of the state. The state pledges to and agrees with the 04 holders of bonds issued under this chapter and with a federal agency that loans or 05 contributes money in respect to the Knik Arm bridge that the state will not limit or 06 alter the rights and powers vested in the authority under this chapter to fulfill the terms 07 of a contract made by the authority with the holders or federal agency or in any way 08 impair the rights and remedies of the holders until the bonds, together with the interest 09 on them, with interest on unpaid installments of interest, and all costs and expenses in 10 connection with an action or proceeding by or on behalf of the holders, are fully met 11 and discharged. The authority may include this pledge and agreement of the state, 12 insofar as it refers to holders of bonds of the authority, in a contract with the holders 13 and, insofar as it relates to a federal agency, in a contract with the federal agency. 14 Sec. 44.90.261. Exemption from taxation. The real and personal property of 15 the authority and its assets, income, and receipts are declared to be the property of a 16 political subdivision of the state and are exempt from all taxes and special assessments 17 of the state or a political subdivision of the state. All bonds of the authority are 18 declared to be issued by a political subdivision of the state and for an essential public 19 and governmental purpose. The bonds, the interest on the bonds, the income from the 20 bonds and the transfer of the bonds, and all assets, income, and receipts pledged to pay 21 or secure the payment of the bonds or interest on the bonds are, at all times, exempt 22 from taxation by or under the authority of the state, except for inheritance and estate 23 taxes and taxes on transfers by or in contemplation of death. Nothing in this section 24 affects or limits an exemption from license fees, property taxes, or excise, income, or 25 other taxes provided under any other law, nor does it create a tax exemption with 26 respect to the interest of any business enterprise or other person, other than the 27 authority, in any property, assets, income, receipts, project, or lease, regardless of 28 whether financed under this chapter. 29 Sec. 44.90.271. Bonds legal investments for fiduciaries. The bonds of the 30 authority are securities in which all public officers and bodies of the state and all 31 municipalities and municipal subdivisions, all insurance companies and associations

01 and other persons carrying on an insurance business, all banks, bankers, trust 02 companies, savings banks, savings associations, including savings and loan 03 associations and building and loan associations, investment companies and other 04 persons carrying on banking business, all administrators, guardians, executors, 05 trustees, and other fiduciaries, and other persons who are now or may afterward be 06 authorized to invest in bonds or other obligations of the state may properly and legally 07 invest money, including capital in their control or belonging to them. Notwithstanding 08 any other provision of law, the bonds of the authority are also securities that may be 09 deposited with and may be received by all public officers and bodies of the state and 10 all municipalities and municipal subdivisions for any purpose for which the deposit of 11 bonds or other obligations of the state is now or may afterward be authorized. 12 Sec. 44.90.281. Audit. The legislative auditor annually shall audit, or cause to 13 have audited, the financial records of the authority. The legislative auditor may 14 prescribe the form and content of the financial records of the authority and shall have 15 access to these records at any reasonable time. 16 Sec. 44.90.291. State appropriations for Knik Arm bridge and 17 appurtenant facilities not affected. This chapter does not prevent the state from 18 making appropriations for or in aid of the acquisition, design, construction, or 19 operation of the Knik Arm bridge and its appurtenant facilities. 20 Sec. 44.90.301. Insurance. The authority shall keep in force public liability 21 insurance in an amount reasonably calculated to cover potential claims for bodily 22 injury, death or disability, and property damage that may arise from or be related to its 23 operation and activities, naming the state as an additional insured. 24 Sec. 44.90.311. Safeguarding of money. The authority shall maximize 25 revenue from and deposit all money in depositories acceptable to the commissioner of 26 revenue and otherwise safeguard the money under instructions as the commissioner of 27 revenue may from time to time issue. 28 Sec. 44.90.321. Fidelity bond. The authority shall obtain a fidelity bond in an 29 amount determined by the board, for the members of the board and any official 30 responsible for authority accounts and finances. A bond must be in effect for the 31 tenure of the bonded person.

01 Article 3. General Provisions. 02 Sec. 44.90.911. Exemption from local regulation. Notwithstanding any 03 contrary provision of law, the activities of the authority are exempt from land use 04 planning, zoning, permitting, or other similar governmental powers of political 05 subdivisions of the state. 06 Sec. 44.90.980. Definitions. In this chapter, unless the context requires 07 otherwise, 08 (1) "authority" means the Knik Arm Bridge and Toll Authority; 09 (2) "board" means the board of directors of the authority; 10 (3) "department" means the Department of Transportation and Public 11 Facilities. 12 Sec. 44.90.990. Short title. This chapter may be cited as the Knik Arm 13 Bridge and Toll Authority Act. 14 * Sec. 2. AS 36.30.015(f) is amended to read: 15 (f) The board of directors of the Alaska Housing Finance Corporation, 16 notwithstanding AS 18.56.088, and the board of directors of the Knik Arm Bridge 17 and Toll Authority under AS 44.90.111, shall adopt regulations under AS 44.62 18 (Administrative Procedure Act) and the board of trustees of the Alaska State Pension 19 Investment Board shall adopt regulations under AS 37.10.240 to govern the 20 procurement of supplies, services, professional services, and construction for the 21 respective public corporation and board. The regulations must reflect competitive 22 bidding principles and provide vendors reasonable and equitable opportunities to 23 participate in the procurement process and must include procurement methods to meet 24 emergency and extraordinary circumstances. Notwithstanding the other provisions of 25 this subsection, the Alaska Housing Finance Corporation, the Knik Arm Bridge and 26 Toll Authority, and the Alaska State Pension Investment Board shall comply with 27 AS 36.30.170(b). 28 * Sec. 3. AS 39.25.110 is amended by adding a new paragraph to read: 29 (39) the executive director and employees of the Knik Arm Bridge and 30 Toll Authority under AS 44.90.051 and 44.90.061. 31 * Sec. 4. This Act takes effect immediately under AS 01.10.070(c).