CSSB 140(L&C): "An Act creating the Arctic infrastructure development program and fund in the Alaska Industrial Development and Export Authority; and relating to dividends from the Alaska Industrial Development and Export Authority."
00 CS FOR SENATE BILL NO. 140(L&C) 01 "An Act creating the Arctic infrastructure development program and fund in the 02 Alaska Industrial Development and Export Authority; and relating to dividends from 03 the Alaska Industrial Development and Export Authority." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 44.88.088(a) is amended to read: 06 (a) The authority shall adopt a policy for payment of a dividend from the 07 revolving fund, [AND A DIVIDEND FROM] the Alaska Industrial Development and 08 Export Authority sustainable energy transmission and supply development fund 09 (AS 44.88.660), and the Arctic infrastructure development fund (AS 44.88.810) to 10 the state each fiscal year. The dividends for a fiscal year shall be made available by the 11 authority before the end of that fiscal year. The authority shall notify the 12 commissioner of revenue when the dividends for a fiscal year are available for 13 appropriation. The amount of the dividend payable from the 14 (1) revolving fund for a fiscal year may not be less than 25 percent nor
01 more than 50 percent of the net income of the revolving fund for the base fiscal year; 02 however, in no event, may the dividend payable from the revolving fund for a fiscal 03 year exceed the total unrestricted net income of the revolving fund for the base year; 04 (2) Alaska Industrial Development and Export Authority sustainable 05 energy transmission and supply development fund (AS 44.88.660) for a fiscal year 06 may not be less than 25 percent nor more than 50 percent of the net income of the 07 Alaska Industrial Development and Export Authority sustainable energy transmission 08 and supply development fund for the base fiscal year; however, [IN NO EVENT, 09 SHALL] the dividend payable from the Alaska Industrial Development and Export 10 Authority sustainable energy transmission and supply development fund for a fiscal 11 year may not exceed the total unrestricted net income of the Alaska Industrial 12 Development and Export Authority sustainable energy transmission and supply 13 development fund for the base year; 14 (3) Arctic infrastructure development fund (AS 44.88.810) for a 15 fiscal year may not be less than 25 percent nor more than 50 percent of the net 16 income of the Arctic infrastructure development fund for the base fiscal year; 17 however, the dividend payable from the Arctic infrastructure development fund 18 for a fiscal year may not exceed the total unrestricted net income of the Arctic 19 infrastructure development fund for the base year. 20 * Sec. 2. AS 44.88.088(b)(2) is amended to read: 21 (2) "net income" means the change in net position, or the equivalent 22 term under generally accepted accounting principles, of the revolving fund, [OR] the 23 change in net position of the Alaska Industrial Development and Export Authority 24 sustainable energy transmission and supply development fund (AS 44.88.660), or the 25 change in net position of the Arctic infrastructure development fund 26 (AS 44.88.810) as set out in the audited financial statements of the authority for the 27 base fiscal year, excluding amounts attributable to intergovernmental transfers, capital 28 contributions, grants, or impairment losses on development projects financed under 29 AS 44.88.172; 30 * Sec. 3. AS 44.88.088(b)(3) is amended to read: 31 (3) "unrestricted net income" means the unrestricted change in net
01 position, or the equivalent term under generally accepted accounting principles, of the 02 revolving fund, [OR] the Alaska Industrial Development and Export Authority 03 sustainable energy transmission and supply development fund (AS 44.88.660), or the 04 Arctic infrastructure development fund (AS 44.88.810) as set out in the audited 05 financial statements of the authority for the base fiscal year, excluding amounts 06 attributable to intergovernmental transfers, capital contributions, grants, or impairment 07 losses on development projects financed under AS 44.88.172. 08 * Sec. 4. AS 44.88.159(a) is amended to read: 09 (a) The interest rate on a loan purchased from the proceeds of tax-exempt 10 bonds secured by the Alaska Industrial Development and Export Authority sustainable 11 energy transmission and supply development fund (AS 44.88.660) under 12 AS 44.88.650 - 44.88.690 or by the Arctic infrastructure development fund 13 (AS 44.88.810) under AS 44.88.800 - 44.88.840 or a loan participation purchased 14 from the proceeds of tax-exempt bonds or expected by the authority to be purchased 15 from the proceeds of tax-exempt bonds under AS 44.88.155 shall be determined under 16 the regulations adopted by the authority under AS 44.88.085(g)(2)(C) and shall be not 17 less than the cost of funds to the authority. In this subsection, "cost of funds" means 18 the true interest cost expressed as a rate on tax-exempt bonds of the authority plus an 19 additional percentage as determined by the authority to represent the allocable 20 expenses of operation, costs of issuance, and loan servicing costs. 21 * Sec. 5. AS 44.88.159(b) is amended to read: 22 (b) The interest rate on a loan purchased from the proceeds of taxable bonds 23 secured by the Alaska Industrial Development and Export Authority sustainable 24 energy transmission and supply development fund (AS 44.88.660) under 25 AS 44.88.650 - 44.88.690 or by the Arctic infrastructure development fund 26 (AS 44.88.810) under AS 44.88.800 - 44.88.840 or a loan participation purchased 27 from the proceeds of taxable bonds under AS 44.88.155 or expected by the authority 28 to be purchased from the proceeds of taxable bonds under AS 44.88.155 shall be 29 determined under the regulations adopted by the authority under 30 AS 44.88.085(g)(2)(C) and shall be not less than the cost of funds to the authority. In 31 this subsection, "cost of funds" means the true interest cost expressed as a rate on
01 taxable bonds, plus an additional percentage as determined by the authority to 02 represent the allocable expenses of operation, costs of issuance, and loan servicing 03 costs. 04 * Sec. 6. AS 44.88.159(d) is amended to read: 05 (d) The provisions of this section apply only to a loan participation purchased 06 under AS 44.88.155 - 44.88.159 or to a loan made under AS 44.88.650 - 44.88.690 or 07 44.88.800 - 44.88.840. 08 * Sec. 7. AS 44.88.159(e) is amended to read: 09 (e) The interest rate on a loan made under AS 44.88.650 - 44.88.690 or 10 44.88.800 - 44.88.840 or a loan participation purchased directly from the assets of the 11 authority shall be determined under the regulations adopted by the authority under 12 AS 44.88.085(g)(2)(C) and shall be not less than the total of a percentage as 13 determined by the authority to represent the allocable expenses of operation and costs 14 of loan origination and servicing, plus the cost of funds. In this subsection, 15 (1) "comparable financial security" means a type or category of 16 financial security the authority identifies in the regulations adopted by the authority 17 under AS 44.88.085(g)(2)(C) that has a term and financial conditions comparable to 18 the term and financial conditions of a loan participation or a loan made under 19 AS 44.88.650 - 44.88.690 or 44.88.800 - 44.88.840 and for which a regularly 20 published, nationally recognized market index is available; 21 (2) "cost of funds" means the earnings, expressed as an annual interest 22 rate, the authority would receive on a comparable financial security, and, for a loan 23 participation or a loan made under AS 44.88.650 - 44.88.690 or 44.88.800 - 44.88.840 24 with a fixed interest rate, the cost of funds must equal or exceed the minimum interest 25 rate; 26 (3) "minimum interest rate" means the five-year return on investment 27 funds of the authority, expressed as an annual interest rate, achieved by all internal and 28 external investment managers of the authority combined. 29 * Sec. 8. AS 44.88.159(f) is amended to read: 30 (f) In determining an interest rate under the regulations adopted by the 31 authority under AS 44.88.085(g)(2)(C), the authority may determine to disregard the
01 minimum interest rate required under (a), (b), or (e) of this section for a loan 02 participation purchased by the authority or a loan made under AS 44.88.650 - 03 44.88.690 or 44.88.800 - 44.88.840 to resolve lending limits or reserve restrictions 04 imposed on the financial institution and may instead determine to retain the interest 05 rate existing at the time the authority makes the loan or purchases the authority's loan 06 participation. 07 * Sec. 9. AS 44.88.159(g) is amended to read: 08 (g) The authority may, in the regulations adopted by the authority under 09 AS 44.88.085(g)(2)(C), establish a program to pay to borrowers of loan participations 10 determined by the authority to meet sufficient job creation, rural development, Arctic 11 infrastructure development, renewable energy development, or other economic 12 development criteria incentive rate rebates of not more than one percent of the interest 13 rate charged on the authority's portion of a loan participation. The following standards 14 apply to the program: 15 (1) the payment of an incentive rate rebate may reduce the interest rate 16 to a rate that is less than the minimum interest rate required under (a), (b), or (e) of this 17 section; 18 (2) the authority may not commit to pay an incentive rate rebate for a 19 proposed loan participation if the total of the amount of the proposed loan 20 participation plus the combined outstanding balance of all loan participations for 21 which the authority has committed to pay incentive rate rebates would exceed five 22 percent of the total of the amount of the proposed loan participation plus the combined 23 outstanding balance of all loan participations of the authority; 24 (3) an incentive rate rebate may not accrue for more than five years 25 after the date the loan participation is purchased; 26 (4) the authority may establish a separate account for the incentive rate 27 rebate program. 28 * Sec. 10. AS 44.88 is amended by adding new sections to read: 29 Article 9A. Arctic Infrastructure Development. 30 Sec. 44.88.800. Arctic infrastructure development program. The Arctic 31 infrastructure development program is created in the authority to promote and provide
01 financing for Arctic infrastructure development. 02 Sec. 44.88.810. Arctic infrastructure development fund. The Arctic 03 infrastructure development fund is established in the authority. The fund consists of 04 appropriations made to the fund by the legislature, money or other assets transferred to 05 the fund by a majority vote of the members of the authority under AS 44.88.050 from 06 any other fund controlled by the authority, and unrestricted loan repayments, interest, 07 or other income earned on loans, investments, or assets of the fund. The fund is not an 08 account in the revolving fund established in AS 44.88.060, and the authority shall 09 account for the fund separately from the revolving fund. The authority may create 10 additional accounts in the fund. Subject to agreements made with the holders of the 11 authority's bonds or with other persons, the authority may transfer amounts in an 12 account in the fund to another account in the fund. Amounts deposited in the fund may 13 be pledged to the payment of bonds of the authority or expended for the purposes of 14 AS 44.88.800 - 44.88.840. The authority has the powers and responsibilities 15 established in AS 37.10.071 with respect to the investment of amounts held in the 16 fund. 17 Sec. 44.88.820. Use of fund balance. Subject to the requirements of 18 AS 44.88.800 - 44.88.840, the authority may use money in the Arctic infrastructure 19 development fund (AS 44.88.810) for Arctic infrastructure development. 20 Sec. 44.88.830. Qualified infrastructure development; powers and duties 21 of the authority. (a) Subject to the limitations of AS 44.88.840, for Arctic 22 infrastructure development the authority may 23 (1) use the Arctic infrastructure development fund (AS 44.88.810) to 24 finance Arctic infrastructure development, insure project obligations, guarantee loans 25 or bonds, and establish reserves; 26 (2) acquire real or personal property by purchase, transfer, or 27 foreclosure when the acquisition is necessary to protect the authority's interest in 28 financing; 29 (3) defer principal payments or capitalize interest on Arctic 30 infrastructure development; 31 (4) subject to AS 36.30.085(e), enter into lease agreements, sales-
01 lease-back agreements, build-operate-transfer and operate-transfer agreements, or any 02 similar project financing agreement for a qualified Arctic infrastructure development; 03 (5) enter into agreements with government entities for the transfer and 04 control of infrastructure, facilities, rights-of-way, and studies; 05 (6) contract for services with a professional advisor, including an 06 attorney, bond counsel, engineer, or other technical expert necessary to fulfill the 07 purposes of the program; and 08 (7) subject to AS 44.88.090, borrow money and issue bonds. 09 (b) The authority shall adopt regulations to implement AS 44.88.800 - 10 44.88.840, including 11 (1) a process for acquiring financing under this section; 12 (2) qualifications for Arctic infrastructure development projects 13 applying for financing under this section; and 14 (3) fiscal controls and accounting procedures for the fund. 15 Sec. 44.88.840. Limitations on financing. (a) Unless the authority has 16 obtained legislative approval by law, the authority may not use the Arctic 17 infrastructure development fund established in AS 44.88.810 to make 18 (1) a loan for more than one-third of the capital cost of an Arctic 19 infrastructure development; or 20 (2) a loan guarantee if the amount of the guarantee exceeds 21 $20,000,000. 22 (b) Financing under AS 44.88.830 is limited to the projected life of the Arctic 23 infrastructure development, which may not be more than 40 years. 24 (c) Notwithstanding (a) of this section, the authority may use the Arctic 25 infrastructure development fund established in AS 44.88.810 as security for a bond 26 guarantee. 27 (d) Notwithstanding (a) of this section, the authority may not provide 28 financing or loans or bond guarantees in an amount less than $7,000,000 for the 29 purchase or repair of a fishing vessel used in a federally managed fishery, the purchase 30 of quota shares or individual fishing quota used in a federally managed fishery in the 31 Arctic, or the construction, improvement, rehabilitation, or expansion of a plant,
01 facility, or equipment used in support of a fishery in the Arctic. 02 * Sec. 11. AS 44.88.900 is amended by adding new paragraphs to read: 03 (18) "Arctic" means the area of the state north of the Arctic Circle, 04 north and west of the boundary formed by the Porcupine, Yukon, and Kuskokwim 05 Rivers, all contiguous seas, including the Arctic Ocean, and the Beaufort, Bering, and 06 Chukchi Seas, and the Aleutian Chain; 07 (19) "Arctic infrastructure development" means 08 (A) the construction, improvement, rehabilitation, or expansion 09 of a facility 10 (i) in the Arctic to aid in development or meet 11 emergency response needs; or 12 (ii) in the state if the construction, improvement, 13 rehabilitation, or expansion supports or furthers the development of a 14 facility in the Arctic; or 15 (B) the purchase or repair of a fishing vessel for use in a 16 federally managed fishery, the purchase of quota shares or individual fishing 17 quota used in a federally managed fishery in the Arctic, or the construction, 18 improvement, rehabilitation, or expansion of a plant, facility, or equipment 19 used in support of a fishery in the Arctic.