Enrolled SB 46: Relating to the Alaska Municipal Bond Bank Authority; authorizing the Alaska Municipal Bond Bank Authority to issue bonds or notes for a regional health organization or joint action agency; and providing for an effective date.
00Enrolled SB 46 01 Relating to the Alaska Municipal Bond Bank Authority; authorizing the Alaska Municipal 02 Bond Bank Authority to issue bonds or notes for a regional health organization or joint action 03 agency; and providing for an effective date. 04 _______________ 05 * Section 1. AS 44.85.005 is amended to read: 06 Sec. 44.85.005. Legislative findings. The legislature finds that 07 (1) the rapid growth of municipalities in the state and the incorporation 08 of new municipalities has created a demand for capital improvements that can only be 09 met by these municipalities borrowing money through the issuance of bonds or notes; 10 (2) many of these municipalities, although creditworthy, either have 11 not issued bonds or notes or have little outstanding debt; 12 (3) the cost of borrowed money to these municipalities is or may be 13 unnecessarily high due to lack of investor familiarity with the municipalities; 14 (4) other municipalities in the state pay unnecessarily high borrowing
01 costs because of the distance of the state from capital markets or may find borrowing 02 difficult or impossible because of temporary economic dislocation due to loss of 03 employment or prospective loss of employment; 04 (5) the University of Alaska has limited debt capacity and may pay 05 higher interest rates because of lower credit ratings; 06 (6) many municipalities provide for or partner with nonprofit 07 organizations to provide for delivery of health care; 08 (7) nonprofit regional health organizations deliver services in 09 many locations where municipal partners are unavailable; 10 (8) joint action agencies require financial assistance for public 11 utility projects, including hydroelectric power projects, that benefit 12 municipalities. 13 * Sec. 2. AS 44.85.010(a) is amended to read: 14 (a) It is the policy of the state to 15 (1) foster and promote by all reasonable means the provision of 16 adequate capital markets and facilities for borrowing money by municipalities in the 17 state to finance capital improvements or for other authorized purposes, to assist these 18 municipalities in fulfilling their capital needs and requirements by use of borrowed 19 money within statutory interest rate or cost of borrowing limitations, to the greatest 20 extent possible to reduce costs of borrowed money to taxpayers and residents of the 21 state, and equally to encourage continued investor interest in the purchase of bonds or 22 notes of municipalities as sound and preferred securities for investment; 23 (2) encourage municipalities to continue their independent 24 undertakings and financing of capital improvements and other authorized purposes 25 and to assist them by making capital funds available at reduced interest costs for 26 orderly financing of capital improvements and other purposes especially during 27 periods of restricted credit or money supply, particularly for those municipalities not 28 otherwise able to borrow for capital needs; 29 (3) assist municipalities to provide for adequate insurance coverage by 30 authorizing the Alaska Municipal Bond Bank Authority to issue negotiable or 31 nonnegotiable revenue bonds, notes, or certificates of participation either directly or
01 through an entity it may create for the purpose of providing a self-insurance program 02 for municipalities or municipal joint insurance arrangements organized under 03 AS 21.76; 04 (4) assist governmental employers to prepay all or a portion of their 05 share of unfunded accrued actuarial liabilities of retirement systems in an effort to 06 reduce their costs of satisfying their contractual obligations to provide retirement and 07 other benefits to public employees through the issuance of bonds, notes, commercial 08 paper, or other obligations by the bond bank authority or by a subsidiary corporation 09 created by the bond bank authority under AS 44.85.085, but only if the state bond 10 rating is the equivalent of AA- or better; this assistance is limited as provided in 11 AS 37.15.903; 12 (5) assist the University of Alaska to provide heating or energy 13 projects by providing capital funds through loans that minimize costs and the effects 14 on the debt capacity of the University of Alaska; 15 (6) assist regional health organizations to provide health care 16 facilities by providing capital funds through loans that minimize costs and the 17 effects on the debt capacity of regional health organizations when the 18 commissioner of health and social services anticipates a state financial benefit 19 and an increase in regional quality of care; 20 (7) assist joint action agencies in providing public utilities, 21 including hydroelectric power projects, through loans and bonds that minimize 22 costs and the effects on the debt capacity of public utilities and joint action 23 agencies. 24 * Sec. 3. AS 44.85.080 is amended to read: 25 Sec. 44.85.080. Powers of bond bank authority. The bond bank authority 26 may 27 (1) sue and be sued; 28 (2) adopt and alter an official seal; 29 (3) make and enforce bylaws and regulations for the conduct of its 30 business and for the use of its services and facilities; 31 (4) maintain an office at any place in the state;
01 (5) acquire, hold, use, and dispose of its income, revenues, funds, and 02 money; 03 (6) acquire, rent, lease, hold, use, and dispose of other personal 04 property for its purposes; 05 (7) subject to AS 44.85.100(b), borrow money and issue its negotiable 06 bonds or notes and provide for and secure their payment, provide for the rights of their 07 holders, and purchase, hold, and dispose of any of its bonds or notes; 08 (8) fix and revise from time to time and charge and collect fees and 09 charges for the use of its services or facilities; 10 (9) accept gifts or grants from the United States, or from any 11 governmental unit or person, firm, or corporation, carry out the terms or provisions or 12 make agreements with respect to the gifts or grants, and do all things necessary, 13 useful, desirable, or convenient in connection with procuring, accepting, or disposing 14 of the gifts or grants; 15 (10) do anything authorized by this chapter, through its officers, 16 agents, or employees or by contracts with a person; 17 (11) make, enter into, and enforce all contracts necessary, convenient, 18 or desirable for the purposes of the bond bank authority or pertaining to a loan [TO A 19 POLITICAL SUBDIVISION], a purchase or sale of municipal bonds or other 20 investments, or the performance of its duties and execution of any of its powers under 21 this chapter; 22 (12) purchase or hold municipal bonds at prices and in a manner the 23 bond bank authority considers advisable, and sell municipal bonds acquired or held by 24 it at prices without relation to cost and in a manner the bond bank authority considers 25 advisable; 26 (13) invest funds or money of the bond bank authority not required at 27 the time of investment for loans or [LOAN TO POLITICAL SUBDIVISIONS] for 28 the purchase of municipal bonds, in the same manner as permitted for investment of 29 funds belonging to the state, except as otherwise provided in this chapter; 30 (14) prescribe the form of application or procedure required [OF A 31 POLITICAL SUBDIVISION] for a loan or purchase of its municipal bonds, fix the
01 terms and conditions of the loan or purchase, and enter into agreements [WITH 02 POLITICAL SUBDIVISIONS] with respect to loans or purchases; 03 (15) render services [TO A POLITICAL SUBDIVISION] in 04 connection with a public or private sale of its municipal bonds, including advisory and 05 other services, and charge for services rendered; 06 (16) charge for its costs and services in review or consideration of a 07 proposed loan [TO A POLITICAL SUBDIVISION] or purchase by the bond bank 08 authority of municipal bonds [OF THE POLITICAL SUBDIVISION], whether or not 09 the loan is made or the municipal bonds purchased; 10 (17) fix and establish terms and provisions with respect to a purchase 11 of municipal bonds by the bond bank authority, including date and maturities of the 12 bonds, provisions as to redemption or payment before maturity, and any other matters 13 that in connection with the purchase are necessary, desirable, or advisable in the 14 judgment of the bond bank authority; 15 (18) procure insurance against any losses in connection with its 16 property, operations, or assets in amounts and from insurers as it considers desirable; 17 (19) to the extent permitted under its contracts with the holders of 18 bonds or notes of the bond bank authority, consent to modification of the rate of 19 interest, time and payment of installment of principal or interest, security or any other 20 term of a bond or note, contract or agreement of any kind to which the bond bank 21 authority is a party; 22 (20) by regulation, create a new entity or new entities for the purpose 23 of issuing negotiable or nonnegotiable revenue bonds, notes, or certificates of 24 participation to finance a self-insurance program for municipalities or municipal joint 25 insurance arrangements organized under AS 21.76 or to provide assistance to 26 governmental employers under AS 44.85.085(a); the powers, duties, and membership 27 of the new entity or entities shall be limited to the powers, duties, and membership of 28 the authority and stated in the regulation; the new entity or entities shall each be a 29 public corporation and an instrumentality of the state with the same legal existence 30 and continuing succession as the bond bank authority; and 31 (21) do all acts and things necessary, convenient, or desirable to carry
01 out the powers expressly granted or necessarily implied in this chapter. 02 * Sec. 4. AS 44.85.090 is amended to read: 03 Sec. 44.85.090. Limitations. Under this chapter, the bond bank authority may 04 not 05 (1) make loans of money to a person, firm, or corporation except 06 [OTHER THAN A MUNICIPALITY OR THE UNIVERSITY OF ALASKA OR 07 PURCHASE SECURITIES ISSUED BY A PERSON, OTHER THAN A 08 MUNICIPALITY EXCEPT FOR INVESTMENT] as provided in this chapter; 09 (2) emit bills of credit, accept deposits of money for time or demand 10 deposit, administer trusts, or engage in any form or manner in, or in the conduct of, a 11 private or commercial banking business, or act as a savings bank or savings and loan 12 association; 13 (3) be or constitute a bank or trust company within the jurisdiction or 14 under the control of a regulatory or supervisory board or department of the state, or the 15 Comptroller of the Currency of the United States, or the Department of the Treasury, 16 or Federal Reserve Board of the United States; [OR] 17 (4) be or constitute a bank, banker, or dealer in securities within the 18 meaning of or subject to the provisions of securities, securities exchange, or securities 19 dealers law, of the United States or of this state or of another state; or 20 (5) issue bonds or notes to a regional health organization unless 21 (A) the bond bank authority finances not more than 49 22 percent of a project; 23 (B) the remaining costs of a project are secured or delivered 24 to the bond bank authority before the bond bank authority provides 25 financing under (A) of this paragraph; and 26 (C) the bonds or notes do not exceed $102,500,000 for a 27 single project. 28 * Sec. 5. AS 44.85.170(b) is amended to read: 29 (b) Notwithstanding any other provision of law, to the extent that any 30 department or agency of the state is the custodian of money payable to a political 31 subdivision [MUNICIPALITY], at any time after written notice to the department or
01 agency head from the bond bank authority that the political subdivision 02 [MUNICIPALITY] is in default on the payment of principal or interest on municipal 03 bonds then held or owned by the bond bank authority, or amounts due under an 04 agreement between the bond bank authority and a political subdivision 05 [MUNICIPALITY] or a municipal joint insurance arrangement organized under 06 AS 21.76, the department or agency shall withhold the payment of that money from 07 that political subdivision [MUNICIPALITY] and pay over the money to the bond 08 bank authority for the purpose of paying principal of and interest on the bonds or debt. 09 The notice shall be given in each instance of default. 10 * Sec. 6. AS 44.85.180(d) is amended to read: 11 (d) In deciding to purchase municipal bonds [OF A MUNICIPALITY], the 12 bond bank authority shall give preference to the entities [MUNICIPALITIES] referred 13 to in AS 44.85.005. In addition, the following, listed in order of preference, are 14 preferred purposes of the municipal bonds that may be considered by the bond bank 15 authority for purchase: schools, waste water treatment facilities, fire protection and 16 public safety facilities, public health facilities, and public transportation facilities. 17 * Sec. 7. AS 44.85.180(e) is amended to read: 18 (e) Notwithstanding (a), (b), and (c) of this section, the bond bank authority 19 may issue its bonds or notes 20 (1) in principal amounts not to exceed $87,500,000 for the purpose of 21 making loans to the University of Alaska; and 22 (2) in principal amounts not to exceed $205,000,000 at any one 23 time for the purpose of making loans to a regional health organization; this 24 paragraph does not apply to bonds or notes issued to fund or refund bonds or 25 notes. 26 * Sec. 8. AS 44.85.410(4) is amended to read: 27 (4) "municipal bond" means a bond or note or evidence of debt that 28 constitutes 29 (A) a general obligation bond that is a direct and general 30 obligation of a political subdivision of the state, all the taxable property within 31 which is subject to taxation to pay the bond, note, or evidence of debt, and the
01 interest without limitation, as to rate or amount generally to the extent 02 permitted by law or to avoid a default as provided for second class cities under 03 AS 29.45.590; 04 (B) a revenue bond issued by a municipality, the University of 05 Alaska, a regional health organization, a joint action agency formed under 06 AS 42.45.310, a solid waste management authority, or a port authority that 07 pledges the revenue of a revenue-producing capital improvement and that is 08 payable solely from the revenue of the revenue-producing capital 09 improvement; 10 (C) a general obligation bond or revenue bond combined or 11 additionally secured; 12 (D) a bond of a borough issued as a general obligation of a 13 service area under AS 29.47.440 or former AS 29.58.340; or 14 (E) an obligation of a municipality secured only by 15 (i) special assessments on benefited property; 16 (ii) tax increments and a letter of credit or equal 17 security; or 18 (iii) a lease; 19 * Sec. 9. AS 44.85.410 is amended by adding a new paragraph to read: 20 (9) "regional health organization" has the meaning given in 21 AS 18.28.100. 22 * Sec. 10. This Act takes effect immediately under AS 01.10.070(c).