CSHB 170(ENE): "An Act relating to exempt employees; relating to the powers of the Alaska Energy Authority; relating to the membership of the Alaska Industrial Development and Export Authority; relating to the duties of the Alaska Industrial Development and Export Authority; establishing the Alaska energy independence program and the Alaska energy independence fund in the Alaska Industrial Development and Export Authority; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 170(ENE) 01 "An Act relating to exempt employees; relating to the powers of the Alaska Energy 02 Authority; relating to the membership of the Alaska Industrial Development and Export 03 Authority; relating to the duties of the Alaska Industrial Development and Export 04 Authority; establishing the Alaska energy independence program and the Alaska energy 05 independence fund in the Alaska Industrial Development and Export Authority; and 06 providing for an effective date." 07 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 08 * Section 1. AS 39.25.110 is amended by adding a new paragraph to read: 09 (46) an analyst employed in a professional capacity by the Alaska 10 Energy Authority under AS 44.83.055. 11 * Sec. 2. AS 44.83 is amended by adding a new section to article 1 to read: 12 Sec. 44.83.055. Analyst position. The authority may hire one analyst to assist 13 underserved communities with the technical development of projects and applications
01 for funding from the Alaska energy independence fund and program under 02 AS 44.88.450 - 44.88.456. 03 * Sec. 3. AS 44.88.030(a) is amended to read: 04 (a) The membership of the authority consists of 05 (1) the commissioner of revenue and the commissioner of commerce, 06 community, and economic development; and 07 (2) five public members [APPOINTED BY THE GOVERNOR], each 08 of whom has expertise in private sector business or industry, or both, and possesses 09 demonstrated leadership skills, appointed as follows: 10 (A) one member appointed by the governor; 11 (B) two members appointed by the president of the senate; 12 (C) two members appointed by the speaker of the house of 13 representatives. 14 * Sec. 4. AS 44.88.030(c) is amended to read: 15 (c) Public members of the authority described in (a)(2) of this section serve 16 [AT THE PLEASURE OF THE GOVERNOR] for four-year [TWO-YEAR] terms. A 17 member appointed under (a)(2) of this section may only be removed for cause. 18 * Sec. 5. AS 44.88.030(d) is amended to read: 19 (d) If a vacancy occurs in the membership of the authority, the respective 20 appointing official under (a)(2) of this section [GOVERNOR] shall immediately 21 appoint a member for the unexpired portion of the term. 22 * Sec. 6. AS 44.88.070 is amended to read: 23 Sec. 44.88.070. Purpose of the authority. The purpose of the authority is to 24 promote, develop, and advance the general prosperity and economic welfare of the 25 people of the state, to relieve problems of unemployment, and to create additional 26 employment by 27 (1) providing various means of financing and means of facilitating the 28 financing, in cooperation with federal, state, and private institutions, of industrial, 29 manufacturing, energy, sustainable energy development, export, small business, and 30 business enterprises and the other facilities referred to in AS 44.88.010(a) in the state; 31 (2) owning and operating or providing development project financing
01 for the enterprises and other facilities described in AS 44.88.172; 02 (3) fostering the expansion of exports of goods, services, and raw 03 materials of the state; 04 (4) cooperating and acting in conjunction with other organizations, 05 public and private, the objects of which are the promotion and advancement of export 06 trade activities in the state; 07 (5) establishing a source of funding credit guarantees and insurance, 08 not otherwise available, to support export development; 09 (6) providing and cooperating or participating with federal, state, and 10 private institutions to provide actual and potential state exporters, particularly small- 11 and medium-sized exporters, with financial assistance in support of export 12 transactions. 13 * Sec. 7. AS 44.88.159(a) is amended to read: 14 (a) The interest rate on a loan purchased from the proceeds of tax-exempt 15 bonds secured by the Alaska Industrial Development and Export Authority sustainable 16 energy transmission and supply development fund (AS 44.88.660) under 17 AS 44.88.650 - 44.88.690, [OR] by the Arctic infrastructure development fund 18 (AS 44.88.810) under AS 44.88.800 - 44.88.840, or by the Alaska energy 19 independence fund (AS 44.88.452) under AS 44.88.450 - 44.88.456, or a loan 20 participation purchased from the proceeds of tax-exempt bonds or expected by the 21 authority to be purchased from the proceeds of tax-exempt bonds under AS 44.88.155 22 shall be determined under the regulations adopted by the authority under 23 AS 44.88.085(g)(2)(C) and shall be not less than the cost of funds to the authority. In 24 this subsection, "cost of funds" means the true interest cost expressed as a rate on tax- 25 exempt bonds of the authority plus an additional percentage as determined by the 26 authority to represent the allocable expenses of operation, costs of issuance, and loan 27 servicing costs. 28 * Sec. 8. AS 44.88.159(b) is amended to read: 29 (b) The interest rate on a loan purchased from the proceeds of taxable bonds 30 secured by the Alaska Industrial Development and Export Authority sustainable 31 energy transmission and supply development fund (AS 44.88.660) under
01 AS 44.88.650 - 44.88.690, [OR] by the Arctic infrastructure development fund 02 (AS 44.88.810) under AS 44.88.800 - 44.88.840, or by the Alaska energy 03 independence fund (AS 44.88.452) under AS 44.88.450 - 44.88.456, or a loan 04 participation purchased from the proceeds of taxable bonds under AS 44.88.155 or 05 expected by the authority to be purchased from the proceeds of taxable bonds under 06 AS 44.88.155 shall be determined under the regulations adopted by the authority 07 under AS 44.88.085(g)(2)(C) and shall be not less than the cost of funds to the 08 authority. In this subsection, "cost of funds" means the true interest cost expressed as a 09 rate on taxable bonds, plus an additional percentage as determined by the authority to 10 represent the allocable expenses of operation, costs of issuance, and loan servicing 11 costs. 12 * Sec. 9. AS 44.88.159(g) is amended to read: 13 (g) The authority may, in the regulations adopted by the authority under 14 AS 44.88.085(g)(2)(C), establish a program to pay to borrowers of loan participations 15 determined by the authority to meet sufficient job creation, rural development, Arctic 16 infrastructure development, renewable energy development, sustainable energy 17 development, or other economic development criteria incentive rate rebates of not 18 more than one percent of the interest rate charged on the authority's portion of a loan 19 participation. The following standards apply to the program: 20 (1) the payment of an incentive rate rebate may reduce the interest rate 21 to a rate that is less than the minimum interest rate required under (a), (b), or (e) of this 22 section; 23 (2) the authority may not commit to pay an incentive rate rebate for a 24 proposed loan participation if the total of the amount of the proposed loan 25 participation plus the combined outstanding balance of all loan participations for 26 which the authority has committed to pay incentive rate rebates would exceed five 27 percent of the total of the amount of the proposed loan participation plus the combined 28 outstanding balance of all loan participations of the authority; 29 (3) an incentive rate rebate may not accrue for more than five years 30 after the date the loan participation is purchased; 31 (4) the authority may establish a separate account for the incentive rate
01 rebate program. 02 * Sec. 10. AS 44.88.178 is amended to read: 03 Sec. 44.88.178. Creation of subsidiaries. The authority may create one or 04 more subsidiary corporations for the purpose of acquiring, constructing, owning, 05 operating, or financing a project financed under AS 44.88.172 or one or more 06 subsidiary corporations, limited liability companies, or limited partnerships for 07 the purpose of administering, operating, or expanding the Alaska energy 08 independence program. A subsidiary corporation created under this section may be 09 incorporated under AS 10.20.146 - 10.20.166. Subject to limitations for the use of 10 the economic development account under AS 44.88.172 and the Alaska energy 11 independence fund under AS 44.88.450 - 44.88.456, the [THE] authority may 12 transfer assets of the authority to a subsidiary created under this section. A subsidiary 13 created under this section may borrow money and issue bonds as evidence of that 14 borrowing, and has all the powers of the authority that the authority grants to it. Unless 15 otherwise provided by the authority, the debts, liabilities, and obligations of a 16 subsidiary corporation, limited liability company, or limited partnership created 17 under this section are not the debts, liabilities, or obligations of the authority. 18 * Sec. 11. AS 44.88 is amended by adding new sections to read: 19 Sec. 44.88.450. Alaska energy independence program. (a) The Alaska 20 energy independence program is created in the authority to make loans and provide 21 other forms of financing for sustainable energy development in the state. 22 (b) The Alaska energy independence program advisory board is established 23 and consists of 24 (1) the governor or the governor's designee; and 25 (2) eight members appointed by the governor as follows: 26 (A) one member who represents a 27 (i) tribe; 28 (ii) tribal nonprofit organization or consortium; or 29 (iii) regional housing authority; 30 (B) one member who represents an Alaska Native corporation; 31 (C) one member who represents an Alaska nonprofit
01 corporation specializing in cold climate housing research; 02 (D) one member who has experience in 03 (i) renewable energy; 04 (ii) electric transportation; or 05 (iii) similar sustainable energy development; 06 (E) four members who have experience in 07 (i) finance; 08 (ii) marketing of financial products; 09 (iii) construction science and efficiencies; 10 (iv) renewable energy; 11 (v) electric transportation; or 12 (vi) other sustainable energy development. 13 (c) The advisory board established under (b) of this section shall make 14 recommendations to the authority regarding 15 (1) the design of the Alaska energy independence program; 16 (2) a public education program for the Alaska energy independence 17 program; 18 (3) best practices of funds designed to address sustainable energy 19 development; and 20 (4) other matters intended to increase the use and viability of the 21 Alaska energy independence fund. 22 (d) A member of the advisory board appointed under (b) of this section serves 23 without compensation but is entitled to travel and per diem expenses as provided in 24 AS 39.20.180. 25 Sec. 44.88.452. Alaska energy independence fund. (a) The Alaska energy 26 independence fund is established in the authority. The Alaska energy independence 27 fund is for the uses and purposes of AS 44.88.450 - 44.88.456. 28 (b) The fund consists of appropriations made by the legislature, loans or other 29 assets transferred to the fund by the authority, unrestricted loan repayments, interest, 30 or other income earned on loans, investments, or assets of the fund, and available 31 federal funding.
01 (c) The fund is not an account in the revolving loan fund established in 02 AS 44.88.060. The authority shall account for the fund separately from the revolving 03 fund. The authority may create additional accounts in the Alaska energy independence 04 fund. Subject to agreements made with the holders of the authority's bonds or with 05 other persons, the authority may transfer amounts in an account in the fund to another 06 account in the fund. 07 (d) The authority has custody of the fund and shall be responsible for its 08 management. The authority is the fiduciary of the fund under AS 37.10.071 and may 09 invest amounts in the fund in accordance with an investment policy adopted by the 10 authority. To promote sustainable energy development in the state, the investment 11 policy adopted by the authority may deviate from the prudent investor rule and 12 traditional institutional financing criteria. Notwithstanding AS 37.10.010 - 37.10.050, 13 the authority may make disbursements from the fund in accordance with 14 AS 37.25.050. Notwithstanding AS 37.05.130 and 37.05.140, the authority shall report 15 disbursements from the fund annually in accordance with AS 44.88.205(b)(2). An 16 appropriation made to the fund by the legislature shall be transferred to the authority 17 for deposit in the fund. 18 (e) Nothing in this section creates a dedicated fund. 19 Sec. 44.88.454. Sustainable energy development; powers and duties of the 20 authority. (a) The authority shall consider the energy policies of the state described in 21 AS 44.99.115 in managing the operations of the Alaska energy independence program 22 and fund under AS 44.88.450 - 44.88.456. 23 (b) Subject to the requirements of AS 44.88.450 - 44.88.456, the authority 24 may 25 (1) establish a subsidiary entity subject to the requirements of 26 AS 44.88.178; 27 (2) in consultation with the advisory board established in 28 AS 44.88.450, establish financing programs and products the authority determines 29 necessary to encourage and promote sustainable energy development in the state; 30 (3) invest in eligible sustainable energy development independently or 31 with other investors, including private capital providers;
01 (4) provide capital and fund management to eligible sustainable energy 02 development in the form of 03 (A) senior, mezzanine, and subordinated debt; 04 (B) loan guarantees on third-party financing; 05 (C) credit enhancements, including loan loss reserves and 06 interest rate buy-downs; 07 (D) aggregation and warehousing; 08 (E) equity capital; 09 (F) securitization of financings; 10 (G) financing techniques that make use of loan liquidity; and 11 (H) other financial products or services approved by the 12 authority; 13 (5) make and execute contracts and other instruments to implement 14 AS 44.88.450 - 44.88.456; 15 (6) charge reasonable fees established by the authority in regulation for 16 the products and services the authority provides under AS 44.88.450 - 44.88.456; 17 (7) acquire real or personal property by purchase, transfer, or 18 foreclosure when the acquisition is necessary to protect the authority's interest in a 19 loan or other financial product; 20 (8) subject to AS 36.30.085, enter into lease-purchase agreements; 21 (9) defer principal payments or capitalize interest on loans; 22 (10) provide financing and services to municipal energy improvement 23 assessment programs established in accordance with AS 29.55.100; and 24 (11) exercise other powers necessary to implement AS 44.88.450 - 25 44.88.456. 26 (c) The authority shall adopt regulations to implement AS 44.88.450 - 27 44.88.456, including 28 (1) an application process for acquiring financing under the Alaska 29 energy independence program; 30 (2) qualifications for applicants applying for financing under the 31 Alaska energy independence program;
01 (3) record-keeping requirements for the authority to accumulate and 02 track measurable data related to the Alaska energy independence fund (AS 44.88.452); 03 and 04 (4) fiscal controls for the Alaska energy independence fund 05 (AS 44.88.452). 06 Sec. 44.88.456. Limitations on financing; use as security. (a) Unless the 07 authority has obtained legislative approval, the authority may not use the Alaska 08 energy independence fund established in AS 44.88.452 to make a loan guarantee if the 09 amount of the guarantee exceeds $20,000,000. 10 (b) Financing under AS 44.88.454 is limited to the life of eligible sustainable 11 energy development, and, financing is limited by the estimated useful life of the 12 project. 13 (c) Notwithstanding (a) of this section, the authority may use the Alaska 14 energy independence fund established in AS 44.88.452 as security for a bond 15 guarantee. 16 (d) A guarantee or other security provided by the authority under 17 AS 44.88.450 - 44.88.456 does not constitute a debt, liability, or obligation of the state 18 or a political subdivision of the state. 19 (e) At least 35 percent of active loans and other forms of financing for 20 sustainable energy development made under AS 44.88.450 - 44.88.456 must be made 21 in communities that receive, or that have residents who receive, power cost 22 equalization under AS 42.45.100 - 42.45.150. 23 * Sec. 12. AS 44.88.900 is amended by adding new paragraphs to read: 24 (20) "eligible sustainable energy development" means activity 25 approved by the authority to be consistent with the Alaska energy independence 26 program and for which the authority will issue a loan or other financial product; 27 (21) "sustainable energy development" means 28 (A) renewable energy generation from sources that are 29 continually replenished by nature, including the sun, wind, water, and 30 biological processes; 31 (B) building energy efficiency, including switching from fuel
01 to renewable fuels and electrification; 02 (C) industrial decarbonization; 03 (D) electrical infrastructure incorporating 04 (i) energy storage to support clean or more efficient 05 energy distribution, including remote and non-remote microgrids and 06 smart-grid applications; and 07 (ii) other sustainable technologies including distributed 08 generation, advanced battery, and combined heat and power; 09 (E) greenhouse gas emissions reduction through processes that 10 include regenerative agriculture, reforestation, afforestation, and forestry 11 management; 12 (F) clean transportation, including battery-operated electric 13 vehicles, hydrogen vehicles, plug-in hybrid electric vehicles, and other zero- 14 emissions vehicles for consumers, businesses, government, and public transit; 15 (G) electric vehicle charging and fueling infrastructure for 16 emissions reductions; and 17 (H) other emissions reductions or energy-efficient technologies 18 the authority determines to be consistent with the Alaska energy independence 19 program established under AS 44.88.450. 20 * Sec. 13. The uncodified law of the State of Alaska is amended by adding a new section to 21 read: 22 ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY AND 23 ALASKA ENERGY AUTHORITY; TRANSITION. (a) The terms of members of the Alaska 24 Industrial Development and Export Authority under AS 44.88.030(a)(2), as that statute read 25 before the effective date of this Act, and the Alaska Energy Authority under AS 44.83.030 26 expire on the effective date of this Act. 27 (b) Notwithstanding AS 44.88.030(a), as amended by sec. 3 of this Act, and 28 AS 39.05.055, members of the Alaska Industrial Development and Export Authority under 29 AS 44.88.030(a), as amended by sec. 3 of this Act, and the Alaska Energy Authority under 30 AS 44.83.030, are appointed to initial terms as follows: 31 (1) the member appointed by the governor serves a term that expires
01 February 28, 2023; 02 (2) one of the members appointed by the president of the senate and one of the 03 members appointed by the speaker of the house of representatives serve terms that expire 04 February 28, 2023; 05 (3) one of the members appointed by the president of the senate and one of the 06 members appointed by the speaker of the house of representatives serve terms that expire 07 February 28, 2025. 08 (c) Nothing in this section prevents the appointment of a person whose term expires 09 under (a) of this section to the Alaska Industrial Development and Export Authority if the 10 person meets the qualifications in AS 44.88.030(a), as amended by sec. 3 of this Act. 11 * Sec. 14. This Act takes effect January 1, 2022.