HB 230: "An Act allowing the Alaska Industrial Development and Export Authority to issue bonds for an oil or gas processing facility; and creating the oil and gas infrastructure fund to finance construction or improvement of an oil or gas processing facility."
00 HOUSE BILL NO. 230 01 "An Act allowing the Alaska Industrial Development and Export Authority to issue 02 bonds for an oil or gas processing facility; and creating the oil and gas infrastructure 03 fund to finance construction or improvement of an oil or gas processing facility." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 06 to read: 07 FINDINGS. The legislature finds that 08 (1) it is in the long-term best interest of the state to increase oil production; 09 (2) small producers are unable to access existing oil and gas processing 10 facilities, which could be detrimental to the goal of increasing production; 11 (3) one small oil company has reached the point of oil production but, because 12 of the lack of available oil and gas facilities, is unable to process oil and ship the oil through 13 the pipeline; 14 (4) near-term investment of $200,000,000 in oil and gas processing facilities
01 would for allow new production from new fields to enter the pipeline; 02 (5) the prohibition on the issuance of bonds of the Alaska Industrial 03 Development and Export Authority in an amount exceeding $400,000,000 does not provide 04 flexibility for participation in project financing; 05 (6) removing that limit on bonding authority for processing facilities and other 06 infrastructure would allow small companies that do not have capital to finance oil and gas 07 processing facilities to move more oil from new fields; 08 (7) the Alaska Industrial Development and Export Authority has sufficient 09 expertise to control risk in the state's participation in oil and gas processing facilities; and 10 (8) participation by the Alaska Industrial Development and Export Authority 11 in a large oil or gas processing facility project over a 10-year period would bring more income 12 to the state than the typical short-term investment in the low-interest-rate environment. 13 * Sec. 2. AS 44.88.140(a) is amended to read: 14 (a) Except as provided in AS 29.45.030(a)(1) and AS 44.88.168, the real and 15 personal property of the authority and its assets, income, and receipts are declared to 16 be the property of a political subdivision of the state and, together with any project or 17 development project financed under AS 44.88.155 - 44.88.159 or 44.88.172 - 18 44.88.177, and a leasehold interest created in a project or development project 19 financed under AS 44.88.155 - 44.88.159 or 44.88.172 - 44.88.177, devoted to an 20 essential public and governmental function and purpose, and the property, assets, 21 income, receipts, project, development project, and leasehold interests shall be exempt 22 from all taxes and special assessments of the state or a political subdivision of the 23 state, including, without limitation, all boroughs, cities, municipalities, school 24 districts, public utility districts, and other taxing units. All bonds of the authority are 25 declared to be issued by a political subdivision of the state and for an essential public 26 and governmental purpose and to be a public instrumentality, and the bonds, and the 27 interest on them, the income from them and the transfer of the bonds, and all assets, 28 income, and receipts pledged to pay or secure the payments of the bonds, or interest on 29 them, shall at all times be exempt from taxation by or under the authority of the state, 30 except for inheritance and estate taxes and taxes on transfers by or in contemplation of 31 death. Nothing in this section affects or limits an exemption from license fees,
01 property taxes, or excise, income, or any other taxes, provided under any other law, 02 nor does it create a tax exemption with respect to the interest of any business 03 enterprise or other person, other than the authority, in any property, assets, income, 04 receipts, project, development project, or lease whether or not financed under this 05 chapter. By January 10 of each year, the authority shall submit to the governor a report 06 describing the nature and extent of the tax exemption of the property, assets, income, 07 receipts, project, development project, and leasehold interests of the authority under 08 this section. The authority shall notify the legislature that the report is available. 09 * Sec. 3. AS 44.88 is amended by adding a new section to read: 10 Sec. 44.88.168. Oil and gas infrastructure fund. (a) The oil and gas 11 infrastructure fund is established in the authority. The oil and gas infrastructure fund 12 consists of money appropriated to the authority for deposit in the fund, and money 13 deposited in the fund by the authority. The fund is not an account in the revolving loan 14 fund established in AS 44.88.060, and the authority shall account for the fund 15 separately from the revolving fund. Money in the fund may be used to finance the 16 construction and improvement of an oil or gas processing facility on the North Slope 17 and flow lines and other surface infrastructure for the facility. 18 (b) Notwithstanding AS 44.88.140, the state or a political subdivision of the 19 state may levy a tax or special assessment on an oil or gas processing facility, flow 20 lines, and other surface infrastructure for the facility financed by the oil and gas 21 infrastructure fund. 22 (c) In this section, "North Slope" means that area of the state lying north of 68 23 degrees North latitude. 24 * Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to 25 read: 26 LEGISLATIVE APPROVAL; NORTH SLOPE OIL OR GAS PROCESSING 27 FACILITY. (a) The Alaska Industrial Development and Export Authority may issue bonds to 28 finance the construction and improvement of an oil or gas processing facility on the Alaska 29 North Slope and flow lines and other surface infrastructure for the facility. The processing 30 facility, flow lines, and other surface infrastructure for the facility shall be used to secure 31 bonds issued under this section. The principal amount of the bonds provided by the authority
01 for the facility, flow lines, and other surface infrastructure may not exceed $200,000,000 and 02 may include the costs of funding reserves and other costs of issuing the bonds that the 03 authority considers reasonable and appropriate. Notwithstanding AS 44.88.140, an oil or gas 04 processing facility, flow lines, and other surface infrastructure for the facility constructed or 05 financed by the oil and gas infrastructure fund (AS 44.88.168) are subject to taxes and special 06 assessments of the state or a political subdivision of the state. 07 (b) This section constitutes the legislative approval required by AS 44.88.095(g) and 08 44.88.690. 09 (c) The prohibition on the issuance of bonds in an amount exceeding $400,000,000 10 under AS 44.88.095 does not apply to bonds issued under this section, and the principal 11 amount of bonds issued under this section may not be considered in determining whether the 12 limit in AS 44.88.095 has been reached.