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CSHB 526(FIN) AM: "An Act relating to the financing authority, programs, operations, and projects of the Alaska Industrial Development and Export Authority; providing an exemption from the procurement code for certain projects of the authority; and providing for an effective date."

00 CS FOR HOUSE BILL NO. 526(FIN) am                                                                                       
01 "An Act relating to the financing authority, programs, operations, and projects                                         
02 of the Alaska Industrial Development and Export Authority; providing an                                                 
03 exemption from the procurement code for certain projects of the authority; and                                          
04 providing for an effective date."                                                                                       
05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
06    * Section 1.  AS 36.30.850(b) is amended by adding a new paragraph to read:                                          
07   (34) contracts of the Alaska Industrial Development and Export                                                       
08 Authority related to integrated transportation and port facilities owned by the authority.                              
09    * Sec. 2.  AS 44.88.095(g) is amended to read:                                                                       
10  (g)  Without prior legislative approval, the authority may not issue bonds in an                                     
11 amount greater than $10,000,000 to assist in the financing of a development                                             
12 project under AS 44.88.172 - 44.88.177 [, EXCEPT REFUNDING BONDS].                                                     
13    * Sec. 3.  AS 44.88.159(a) is amended to read:                                                                       
14  (a)  The interest rate on a loan participation purchased [FINANCED] from                                            
01 the proceeds of tax-exempt bonds or expected by the authority to be purchased                                         
02 [FINANCED] from the proceeds of tax-exempt bonds is equal to the cost of funds to                                       
03 the authority.  In this subsection "cost of funds" means the true interest cost expressed                               
04 as a rate on tax-exempt bonds of the authority plus an additional percentage as                                         
05 determined by the authority to represent the allocable expenses of operation, costs of                                  
06 issuance, and loan servicing.                                                                                           
07    * Sec. 4.  AS 44.88.159(b) is amended to read:                                                                      
08  (b)  The interest rate on a loan participation purchased [FINANCED] from                                            
09 the proceeds of taxable bonds or expected by the authority to be purchased                                            
10 [FINANCED] from the proceeds of taxable bonds is equal to the cost of funds to the                                      
11 authority.  In this subsection "cost of funds" means the true interest cost expressed as                                
12 a rate on taxable bonds, plus an additional percentage as determined by the authority                                   
13 to represent the allocable expenses of operation, costs of issuance, and loan servicing                                 
14 costs.                                                                                                                  
15    * Sec. 5.  AS 44.88.159(e) is amended to read:                                                                       
16  (e)  The interest rate on a loan participation purchased [FINANCED] directly                                        
17 from the assets of the authority shall be determined under the regulations adopted by                                   
18 the authority under AS 44.88.085(g)(2)(C).                                                                              
19    * Sec. 6.  AS 44.88.205(b) is amended to read:                                                                       
20  (b)  To further ensure effective budgetary decision making by the legislature,                                        
21 the authority shall                                                                                                     
22   (1)  annually review the authority's assets to determine whether assets                                              
23 of the authority exceed an amount required to fulfill the purposes of the authority as                                  
24 defined in this chapter; in making its review, [THE MEMBERS OF] the authority shall                                     
25 determine whether, and to what extent, assets in excess of the amount required to                                       
26 fulfill the purposes of the authority during at least the next fiscal year are available                                
27 without                                                                                                                 
28   (A)  breaching any agreement entered into by the authority;                                                         
29   (B)  materially impairing the operations or financial integrity of                                                  
30 the authority; or                                                                                                       
31   (C)  materially affecting the ability of the authority to fulfill the                                               
01 authority's purposes set out in AS 44.88.070; and                                                                       
02   (2) make available [PRESENT] to the legislature by January 10 of each                                              
03 year a complete accounting of all assets of the authority and a report of the review and                                
04 determination made under (1) of this subsection; the accounting shall be audited by the                                 
05 auditor who conducts the audit required by AS 44.88.200 and must include a full                                         
06 description of all loan interest and principal payments and program receipts, including                                 
07   (A)  loan commitment fees received by or accrued to the                                                             
08 authority during the preceding fiscal year; [,] and                                                                   
09   (B)  all income earned on assets of the authority during that                                                       
10 period.                                                                                                                 
11    * Sec. 7.  AS 44.88.500(a) is amended to read:                                                                       
12  (a)  [THE BUSINESS ASSISTANCE FUND IS ESTABLISHED IN THE                                                              
13 AUTHORITY FROM MONEY IN THE AUTHORITY'S RESERVES DESIGNATED                                                             
14 BY THE AUTHORITY FOR THE PURPOSE.] Subject to the requirements of                                                       
15 AS 44.88.500 - 44.88.599, the authority may [USE MONEY IN THE FUND]                                                     
16   (1)  [TO] guarantee new business assistance loans; and                                                             
17   (2)  [TO] guarantee new business assistance loans made to refinance                                                
18 existing loans.                                                                                                         
19    * Sec. 8.  AS 44.88.530 is amended to read:                                                                          
20  Sec. 44.88.530.  APPLICABILITY OF PROVISIONS.  AS 44.88.535 -                                                         
21 44.88.560 apply to                                                                                                      
22   [(1)]  new loan guarantees and refinancing guarantees under                                                       
23 AS 44.88.500 [AS 44.88.500(a)(1); AND                                                                                  
24   (2)  DEBT REFINANCING GUARANTEES UNDER                                                                               
25 AS 44.88.500(a)(2)].                                                                                                    
26    * Sec. 9.  AS 44.88.535 is amended to read:                                                                          
27  Sec. 44.88.535.  CONDITIONS OF LOAN GUARANTEE.  (a)  The authority                                                    
28 may guarantee a loan under AS 44.88.500 - 44.88.599 if the                                                              
29   (1)  loan                                                                                                            
30   (A)  is commercially reasonable;                                                                                    
31   (B)  contains amortization provisions satisfactory to the                                                           
01 authority;                                                                                                              
02   (C)  is secured by adequate collateral; however, the authority                                                      
03 may waive on a case-by-case basis the requirement of collateral for a loan                                              
04 guarantee of $100,000 [$75,000] or less for which the proposed loan                                                   
05 amortization period does not exceed five years, but the ability to waive the                                            
06 requirement of this subparagraph or the grant of a waiver does not prevent the                                          
07 financial institution that holds the loan guaranteed by the authority from                                              
08 requiring reasonable collateral for the loan;                                                                           
09   (2)  net cash flow from the borrower provides adequate coverage for the                                              
10 debt service on the loan;                                                                                               
11   (3)  term of the loan does not exceed 20 years;                                                                      
12   (4)  loan is originated with and serviced by a state chartered or federally                                          
13 chartered financial institution;                                                                                        
14   (5)  portion of the loan not guaranteed by the authority is held by the                                              
15 originating financial institution or another [FINANCIAL] institution approved by the                                    
16 authority;                                                                                                              
17   (6)  proceeds of the loan will be used [IS MADE] to benefit a business                                        
18 conducted in the [WITH A MAJORITY INTEREST HELD BY] state [RESIDENTS];                                                 
19 and                                                                                                                     
20   (7)  loan guarantee provides a benefit to the borrower.                                                              
21  (b)  The authority may provide a guarantee [FROM THE FUND                                                             
22   (1)]  of 80 percent of a loan [OF $50,000 OR LESS] that qualifies under                                              
23 AS 44.88.500 - 44.88.599.  The [;                                                                                     
24   (2)  FOR UP TO 80 PERCENT OF A LOAN OF MORE THAN                                                                     
25 $50,000 THAT QUALIFIES UNDER AS 44.88.500 - 44.88.599; THE] ratio of the                                                
26 guarantee to the outstanding principal of the loan may not increase over the term of                                    
27 the loan.                                                                                                               
28  (c)  The authority may [NOT] guarantee the payment of interest on the                                                 
29 guaranteed portion of a loan for the time and in the manner established by the                                         
30 authority by regulation.                                                                                               
31    * Sec. 10.  AS 44.88.540 is amended to read:                                                                         
01  Sec. 44.88.540.  LIMITATIONS OF GUARANTEES [FROM THE FUND].                                                           
02 The authority may not issue a total of more than [GUARANTEE]                                                          
03   (1)  [A TOTAL OF MORE THAN] $50,000,000 of loan guarantees                                                         
04 [LOANS];                                                                                                                
05   (2)  [MORE THAN] $25,000,000 of loan guarantees [LOANS] in                                                         
06 which the amount of the loan guarantee exceeds $500,000.                                                                
07    * Sec. 11.  AS 44.88.550(a) is amended to read:                                                                      
08  (a)  The maximum interest rate that may be charged by a financial                                                    
09 institution on a loan guaranteed by the authority is two and three-quarters percentage                                 
10 points above the prime rate.                                                                                            
11    * Sec. 12.  AS 44.88.560 is amended to read:                                                                         
12  Sec. 44.88.560.  POWERS OF THE AUTHORITY.  The authority may                                                          
13   (1)  adopt regulations to implement AS 44.88.500 - 44.88.599;                                                        
14   (2)  establish terms and conditions for loan guarantees and refinancing                                              
15 agreements subject to the requirements of AS 44.88.500 - 44.88.599;                                                     
16   (3)  make and execute contracts and other instruments to implement                                                   
17 AS 44.88.500 - 44.88.599;                                                                                               
18   (4)  charge                                                                                                          
19   (A)  one percent of the amount guaranteed for the service it                                                        
20 provides under AS 44.88.500 - 44.88.599; and                                                                            
21   (B)  any other reasonable fee that the authority may establish by                                                   
22 regulation;                                                                                                             
23   (5)  acquire real or personal property by purchase, transfer, or                                                     
24 foreclosure when the acquisition is necessary to protect the authority's [AN] interest                                
25 [IN THE FUND];                                                                                                          
26   (6)  exercise any other power necessary to implement AS 44.88.500 -                                                  
27 44.88.599; and                                                                                                          
28   (7)  to the extent the authority considers it to be in its best interest to                                          
29 do so, use money [IN THE BUSINESS ASSISTANCE FUND] to pay expenses                                                      
30 relating to the liquidation of collateral securing loans guaranteed by the authority                                  
31 [BUSINESS ASSISTANCE FUND].                                                                                             
01    * Sec. 13.  AS 44.88.900(3) is amended to read:                                                                      
02   (3)  "development project" has the meaning given to "project" in (9)(A)                                             
03 and (D) - (F) [, (D), AND (E)] of this section;                                                                        
04    * Sec. 14.  AS 44.88.900(7) is repealed and reenacted to read:                                                       
05   (7)  "loan participation" means the purchase of a portion of a loan from                                             
06 a financial institution if the financial institution has obtained a commitment from the                                 
07 authority to purchase the portion of that loan before the financial institution has                                     
08 disbursed money as part of the loan to the borrower;                                                                    
09    * Sec. 15.  AS 44.88.900(9) is amended to read:                                                                      
10   (9) "project" means                                                                                                  
11   (A)   a plant or facility used or intended for use in connection                                                    
12 with making, processing, preparing, transporting, or producing in any manner,                                           
13 goods, products, or substances of any kind or nature or in connection with                                              
14 developing or utilizing a natural resource, or extracting, smelting, transporting,                                      
15 converting, assembling, or producing in any manner, minerals, raw materials,                                            
16 chemicals, compounds, alloys, fibers, commodities and materials, products, or                                           
17 substances of any kind or nature;                                                                                       
18   (B)   a plant or facility used or intended for use in connection                                                    
19 with a business enterprise;                                                                                             
20   (C)  commercial activity by a business [SMALL] enterprise;                                                        
21   (D)  a plant or facility demonstrating technological advances of                                                    
22 new methods and procedures and prototype commercial applications for the                                                
23 exploration, development, production, transportation, conversion, and use of                                            
24 energy resources;                                                                                                       
25   (E)  infrastructure for a new tourism destination facility or for                                                   
26 the expansion of a tourism destination facility;                                                                        
27   (F)  a plant or facility, other than a plant or facility described in                                               
28 (D) of this paragraph, for the generation, transmission, development,                                                   
29 transportation, conversion, or use of energy resources;                                                                 
30    * Sec. 16.  AS 44.88.500(b), 44.88.542, 44.88.599(1), and 44.88.900(14) are repealed.                                
31    * Sec. 17.  The following are repealed:                                                                              
01   (1)  Sections 1 and 2, ch. 27, SLA 1993; and                                                                          
02   (2)  Section 4, ch. 162, SLA 1988, as amended by sec. 4, ch. 25, SLA 1991,                                            
03 as amended by sec. 4, ch. 27, SLA 1993.                                                                                 
04    * Sec. 18. (a)  The Alaska Industrial Development and Export Authority (AIDEA) may                                   
05 issue bonds to finance the expansion, improvement, and modification of the existing port                                
06 facilities owned by AIDEA with respect to the DeLong Mountain transportation system and                                 
07 to finance the construction of new facilities to be owned by AIDEA related to the DeLong                                
08 Mountain transportation system, or may  finance these projects by other means available to                              
09 AIDEA.  The principal amount of the bonds and other financing provided by AIDEA may not                                 
10 exceed $85,000,000.                                                                                                     
11  (b)  Subsection (a) of this section constitutes the legislative approval required by                                   
12 AS 44.88.095(g).                                                                                                        
13    * Sec. 19.  (a)  Upon approval of the Alaska Industrial Development and Export Authority                             
14 (AIDEA), AIDEA may acquire the Snettisham hydroelectric project and related assets from                                 
15 the Alaska Power Administration.                                                                                        
16  (b)  AIDEA may issue bonds to finance the acquisition of the Snettisham hydroelectric                                  
17 project and related assets, or may finance the acquisition by other means available to AIDEA.                           
18 The principal amount of the bonds and other financing provided by AIDEA to finance the                                  
19 acquisition of the Snettisham hydroelectric project may not exceed $100,000,000.                                        
20  (c)  To secure bonds issued under (b) of this section, AIDEA may establish a capital                                   
21 reserve fund with respect to those bonds under AS 44.88.105.  If AIDEA establishes a capital                            
22 reserve fund as provided in this subsection, the executive director of AIDEA shall annually,                            
23 no later than January 2 of each year, certify in writing to the governor and the legislature the                        
24 amount, if any, required to restore the capital reserve fund to the capital reserve fund                                
25 requirement as defined in AS 44.88.105(h).  The legislature may appropriate to AIDEA the                                
26 amount so certified by the executive director of AIDEA.  AIDEA shall deposit the amounts                                
27 appropriated under this subsection during a fiscal year in the capital reserve fund.  Nothing                           
28 in this section creates a debt or liability of the state.                                                               
29  (d)  Subsection (b) of this section grants the legislative approval required by                                        
30 AS 44.88.095(g).                                                                                                        
31    * Sec. 20.  This Act takes effect immediately under AS 01.10.070(c).