00                            SENATE BILL NO. 125                                                                         
01 "An Act relating to subsidiary corporations of the Alaska Housing Finance                                               
02 Corporation; and establishing the Alaska energy independence fund."                                                     
03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
04    * Section 1.  AS 18.56.010 is amended by adding a new subsection to read:                                          
05 (h)  The legislature finds that permitting the Alaska Housing Finance                                                   
06 Corporation to create a subsidiary to assist in the financing of sustainable energy                                     
07 development serves a public purpose benefitting the people of the state. The Alaska                                     
08 Housing Finance Corporation is empowered to act on behalf of the state and its people                                   
09       in serving this public purpose for the benefit of the general public.                                             
10    * Sec. 2.  AS 18.56.086(a) is amended to read:                                                                     
11 (a)  The corporation may create subsidiary corporations for the purpose of                                              
12 financing or facilitating the financing of school construction, facilities for the                                      
13 University of Alaska, facilities for ports and harbors, the acquisition, development,                                   
14 management, or operation of affordable housing, prepayment of all or a portion of a                                     

01 governmental employer's share of unfunded accrued actuarial liability of retirement                                     
02 systems, sustainable energy development, or other capital projects. A subsidiary                                    
03 corporation created under this section may be incorporated under AS 10.20.146 -                                         
04 10.20.166. The corporation may transfer assets of the corporation to a subsidiary                                       
05 created under this section. A subsidiary created under this section may borrow money                                    
06 and issue bonds as evidence of that borrowing, and has all the powers of the                                            
07 corporation that the corporation grants to it. However, a subsidiary created for the                                    
08 purpose of financing or facilitating the financing of prepayment of a governmental                                      
09 employer's share of unfunded accrued actuarial liability of retirement systems may                                      
10 borrow money and issue bonds only after submitting a proposal to the Legislative                                        
11 Budget and Audit Committee under (b) of this section, if the state bond rating is the                                   
12 equivalent of AA- or better , and subject to AS 37.15.903. Unless otherwise provided                                    
13 by the corporation, the debts, liabilities, and obligations of a subsidiary corporation                                 
14 created under this section are not the debts, liabilities, or obligations of the                                        
15       corporation.                                                                                                      
16    * Sec. 3.  AS 18.56.090(e) is amended to read:                                                                     
17 (e)  In furtherance of its corporate purpose, the corporation may, in cooperation                                       
18       with the Alaska Energy Authority, provide technical assistance to                                                 
19 (1)  municipalities related to residential and commercial building                                                  
20       energy codes and energy efficiency standards; and                                                             
21 (2)  support or establish public, quasi-public, or nonprofit entities                                               
22 that provide financial assistance for sustainable energy development projects in                                    
23       the state, including community and low-income lenders and capital providers.                                  
24    * Sec. 4.  AS 18.56 is amended by adding a new section to article 6 to read:                                       
25 Sec. 18.56.870. Alaska energy independence fund. (a) The Alaska energy                                                
26 independence fund is established in the corporation to carry out the purposes of                                        
27 AS 18.56.010(h) and this section. The Alaska energy independence fund consists of                                       
28 money or assets appropriated or transferred to the corporation, including federal                                       
29 grants, money and assets deposited in the fund by the corporation, unrestricted loan                                    
30 payments, and interest or other income earned on loans, investments, or assets of the                                   
31 fund. The corporation may establish separate accounts in the fund. The corporation                                      

01       shall establish the interest rates, security provisions, and other terms of a loan made                           
02       under this section taking into consideration the corporation's cost of funds and other                            
03       factors the corporation considers appropriate.                                                                    
04            (b)  Money and other assets of the Alaska energy independence fund may be                                    
05       used to                                                                                                           
06                 (1)  make loans for the purpose of financing sustainable energy                                         
07       development in the state;                                                                                         
08                 (2)  secure bonds issued by the corporation to finance the loans                                        
09       described in (1) of this subsection;                                                                              
10 (3)  provide capital, or leverage private capital, for the purpose of                                                   
11       financing sustainable energy development in the state in the form of                                              
12                      (A)  loan guarantees on third-party financing;                                                     
13                      (B)  credit enhancements;                                                                          
14                      (C)  equity capital;                                                                               
15 (D)  indirect funding to public, quasi-public, or nonprofit                                                             
16 entities that provide financial and technical assistance for sustainable energy                                         
17 development at the regional, tribal, or local level, including community and                                            
18            low-income lenders and capital providers; and                                                                
19 (E)  other financial products or services approved by the                                                               
20            corporation in regulation;                                                                                   
21                 (4)  pay the costs of administering the fund; and                                                       
22 (5)  pay the costs of administering and enforcing the terms of loans                                                    
23       made by the corporation from the fund.                                                                            
24 (c)  The corporation shall have custody of the Alaska energy independence                                               
25 fund and shall be responsible for the fund's management. The corporation is the                                         
26 fiduciary of the fund under AS 37.10.071 and may invest amounts in the fund in                                          
27 accordance with an investment policy adopted by the corporation. In order to promote                                    
28 sustainable energy development in the state, the investment policy adopted by the                                       
29 corporation may deviate from the prudent investor rule. Notwithstanding                                                 
30 AS 37.10.010 - 37.10.040, the corporation may make disbursements from the fund in                                       
31 accordance with AS 37.25.050. Notwithstanding AS 37.05.130 and 37.05.140, the                                           

01 corporation shall report disbursements from the fund annually in accordance with                                        
02 generally accepted accounting principles. An appropriation made to the fund by the                                      
03       legislature shall be transferred to the corporation for deposit in the fund.                                      
04 (d)  In addition to other security that may be given with respect to a loan made                                        
05 under this section, the corporation may require a deed of trust on the building that is                                 
06 the subject of the sustainable energy development loan and the real estate on which the                                 
07       building is located.                                                                                              
08 (e)  The corporation may contract with the Alaska Energy Authority to provide                                           
09 technical review, energy infrastructure expertise, or analysis of proposed sustainable                                  
10       energy development loans.                                                                                         
11 (f)  Unless the corporation has obtained legislative approval, the corporation                                          
12 may not use the Alaska energy independence fund to make a loan guarantee if the                                         
13       amount of the guarantee exceeds $20,000,000.                                                                      
14 (g)  In managing the fund, the corporation shall consider the state energy                                              
15 policy described in AS 44.99.115 and shall prioritize sustainable energy development                                    
16 that supports energy efficiency and renewable energy for residential buildings,                                         
17       commercial buildings, and community facilities.                                                                   
18 (h)  The corporation shall administer the Alaska energy independence fund in                                            
19 accordance with regulations adopted by the corporation. The corporation may adopt                                       
20       regulations under AS 18.56.088 to carry out the purposes of this section.                                         
21            (i)  Nothing in this section creates a dedicated fund.                                                       
22    * Sec. 5.  AS 18.56.900 is amended by adding a new paragraph to read:                                              
23                 (3)  "sustainable energy development" means                                                             
24 (A)  renewable energy generation from sources that are                                                                  
25 continually replenished by nature, such as the sun, wind, water, and biological                                         
26            processes;                                                                                                   
27 (B)  building energy efficiency, including fuel switching to                                                            
28            renewable fuels and electrification;                                                                         
29                      (C)  electrical infrastructure incorporating                                                       
30 (i)  energy storage to support clean energy distribution,                                                               
31 including remote and non-remote microgrids and smart-grid                                                               

01                 applications; and                                                                                       
02                           (ii)  other sustainable technologies, including distributed                                   
03                 generation, advanced battery, and combined heat and power;                                              
04                      (D)  clean transportation, including                                                               
05                           (i)  battery electric vehicles, hydrogen vehicles, plug-in                                    
06                 hybrid electric vehicles, and other zero-emissions vehicles for                                         
07                 consumers, businesses, government, and public transit; and                                              
08                           (ii)  electric vehicle charging and fueling infrastructure;                                   
09                      (E)  any other greenhouse gas emissions reduction, energy                                          
10            efficiency, or zero-emission technology approved by the corporation.