SB 125: "An Act relating to subsidiary corporations of the Alaska Housing Finance Corporation; and establishing the Alaska energy independence fund."

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.