CSSB 152(TRA): "An Act relating to municipal transportation systems and to regional transit authorities."

00 CS FOR SENATE BILL NO. 152(TRA) 01 "An Act relating to municipal transportation systems and to regional transit 02 authorities." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 29.35 is amended by adding new sections to read: 05 Article 9A. Regional Transit Authorities. 06 Sec. 29.35.750. Purpose and creation of an authority. (a) The purpose of a 07 regional transit authority is to provide for public transportation within the boundaries 08 of the authority. 09 (b) A regional transit authority may be created in one of the following ways: 10 (1) the governing body of a municipality may, by ordinance, create the 11 authority as a public corporation of the municipality; 12 (2) the governing bodies of two or more municipalities may, by 13 substantially identical ordinances adopted by each of the governing bodies, create the 14 authority as a public corporation of the municipalities.

01 (c) One or more municipalities may join an authority established under (b)(1) 02 or (2) of this section on the adoption of substantially identical ordinances by the 03 governing bodies of each affected municipality. 04 (d) The enabling ordinance by which an authority is established must specify 05 the powers, boundaries, and limitations of the authority. The ordinance may provide 06 that the commissioner of transportation and public facilities, or the commissioner's 07 designee, serves as a member of the board. The ordinance may provide for the 08 selection of a member of the policy board of a metropolitan planning organization 09 formed under 23 U.S.C. 134 to serve on the board. 10 (e) An authority is a body corporate and politic and an instrumentality of the 11 municipality or municipalities creating it but has a separate and independent legal 12 existence. Creation of the authority is an exercise of a municipality's transportation 13 system powers. 14 (f) Nothing in AS 29.35.750 - 29.35.799 prevents a municipality or 15 municipalities from creating or participating in a public corporation, including a 16 regional transit authority, in any form or manner not prohibited by law. However, 17 AS 29.35.750 - 29.35.799 apply only to and may be used only by an authority created 18 under this section. 19 Sec. 29.35.752. Dissolution of an authority; withdrawal from authority. (a) 20 The enabling ordinance creating a regional transit authority must provide for the 21 manner by which the authority may be dissolved. If an authority ceases to exist, its 22 assets shall be distributed to each municipality that was participating in the authority 23 on the day before the date of dissolution, in proportion to the municipality's 24 contribution to the authority, less any outstanding debt or obligation of that 25 municipality to the authority. Any obligation to bondholders then outstanding shall 26 first be satisfied in full. 27 (b) A municipality that is participating in an authority with one or more other 28 municipalities may withdraw from participation without dissolving the authority. The 29 contributions to the authority made by the withdrawing municipality remain the 30 property of the authority, and the municipality remains liable for obligations under any 31 agreement with the authority or other participating municipalities unless the agreement

01 is changed by the contractual parties. A municipality withdraws from participation in 02 an authority by adopting an ordinance repealing the ordinance adopted under 03 AS 29.35.750(b)(2) or (c). 04 (c) Notwithstanding AS 29.26.100, the powers of initiative and referendum 05 may not be used for withdrawing a municipality from participation in an authority 06 with one or more other municipalities. 07 Sec. 29.35.754. Municipal property. (a) A municipality may transfer and 08 otherwise convey or lease real property and improvements to real property to a 09 regional transit authority for use by the authority for the purposes set out in the 10 ordinance adopted under AS 29.35.750(b) or (c). 11 (b) A municipality may transfer and otherwise assign or lease personal 12 property to an authority for use by the authority for the purposes set out in the 13 ordinance adopted under AS 29.35.750(b) or (c). 14 Sec. 29.35.756. Powers and duties. (a) If provided in the enabling ordinance, 15 a regional transit authority may 16 (1) sue and be sued; 17 (2) have a seal and alter it; 18 (3) acquire an interest in a project as necessary or appropriate to 19 provide financing for the project, whether by purchase, gift, or lease; 20 (4) lease to others a project acquired by the authority on the terms and 21 conditions the authority may consider advisable, including provisions for purchase or 22 renewal; 23 (5) sell, by installment sale or otherwise, exchange, donate, convey, or 24 encumber in any manner, by mortgage or by creation of another security interest, real 25 or personal property that it owns or in which it has an interest, including a project, 26 when the authority determines the action is in furtherance of the authority's purposes; 27 (6) accept gifts, grants, or loans, under the terms and conditions 28 imposed under the gift, grant, or loan, and enter into contracts, conveyances, or other 29 transactions with a federal agency or an agency or instrumentality of the state, a 30 municipality, a private organization, or another person; 31 (7) deposit or invest the authority's funds, subject to agreements with

01 bondholders; 02 (8) purchase or insure loans to finance the costs of projects; 03 (9) provide for security within the boundaries of the authority; 04 (10) enter into loan agreements for one or more projects on the terms 05 and conditions the authority considers advisable; 06 (11) acquire, manage, and operate projects the authority considers 07 necessary or appropriate to serve the authority's purposes; 08 (12) assist private lenders to make loans to finance the costs of projects 09 through loan commitments, short-term financing, or otherwise; 10 (13) charge fees or other forms of remuneration for the use or 11 possession of projects under the agreements described in this subsection, other 12 agreements relating to the projects, covenants, or representations made in bond 13 documents relating to the projects, or regulations of the authority relating to the 14 projects; 15 (14) exercise the powers of eminent domain and declaration of taking 16 within its physical boundaries under AS 29.35.030 to acquire land or materials for the 17 purposes of the authority; 18 (15) regulate land use within the boundaries of the authority; 19 (16) defend and indemnify a current or former member of the board, 20 employee, or agent of the authority against all costs, expenses, judgments, and 21 liabilities, including attorney fees, incurred by or imposed on that person in connection 22 with a civil or criminal action in which the person is involved because of the person's 23 affiliation with the authority if the person acted in good faith on behalf of the authority 24 and within the scope of the person's official duties and powers; 25 (17) purchase insurance to protect and hold harmless its employees, 26 agents, and board members from an action, claim, or proceeding arising out of the 27 performance of, purported performance of, or failure to perform in good faith duties 28 for the authority or arising out of employment with the authority and to hold them 29 harmless from expenses connected with the defense, settlement, or monetary 30 judgments from that action, claim, or proceeding; the purchase of insurance is subject 31 to the discretion of the board; insurance purchased under this paragraph is not

01 compensation to the insured person; and 02 (18) protect its assets, services, and employees by purchasing 03 insurance or providing for certain self-insurance retentions. 04 (b) An authority shall maintain casualty, property, business interruption, 05 marine, boiler and machinery, pollution liability, and other insurance in amounts 06 reasonably calculated to cover potential claims against the authority or a municipality 07 for bodily injury, death, or disability, and property damage that arise from or are 08 related to operations and activities of the authority. 09 Sec. 29.35.758. Bonds of a regional transit authority. (a) If authorized by the 10 enabling ordinance, a regional transit authority may borrow money and issue bonds on 11 which the principal and interest are payable 12 (1) exclusively from the income and receipts of, or other money 13 derived from, the project financed with the proceeds of the bonds; 14 (2) exclusively from the income and receipts of, or other money 15 derived from, designated projects or other sources, whether they are financed, insured, 16 or guaranteed in whole or in part with the proceeds of the bonds; or 17 (3) from its income and receipts or a designated part or parts of them. 18 (b) All bonds shall be sold at public or private sale in the manner, for the price 19 or prices, and at the time or times, the authority may determine. Before issuing bonds, 20 an authority shall provide for consideration at least sufficient, in the judgment of the 21 authority, to 22 (1) pay the principal of and interest on the bonds as they become due; 23 (2) create and maintain the reserves for the payment that the authority 24 considers necessary or desirable; and 25 (3) meet all obligations in connection with and all costs necessary to 26 service the bonds, unless the bond agreement provides that the obligations are to be 27 met or costs are to be paid by a party other than the authority. 28 (c) Bonds shall be authorized by resolution of the authority and shall be dated 29 and mature as the resolution may provide, except that a bond may not mature more 30 than 40 years after the date of its issue. Bonds shall bear interest at the rate or rates, be 31 in the denominations, be in the form, either coupon or registered, carry the registration

01 privileges, be executed in the manner, be payable in the medium of payment, at the 02 place or places, and be subject to the terms of redemption that the resolution or a 03 subsequent resolution may provide. 04 (d) All bonds issued under this section, regardless of form or character, are 05 negotiable instruments for all the purposes of AS 45.01 - AS 45.08, AS 45.12, 06 AS 45.14, and AS 45.29 (Uniform Commercial Code). 07 Sec. 29.35.760. Bonds eligible for investment. Bonds issued under 08 AS 29.35.758 are securities in which public officers and public bodies of the state and 09 its political subdivisions, insurance companies, trust companies, banks, investment 10 companies, executors, administrators, trustees, and other fiduciaries may properly and 11 legally invest funds, including capital in their control or belonging to them. The bonds 12 may be deposited with a state or municipal officer of an agency or political 13 subdivision of the state for any purpose for which the deposit of bonds of the state is 14 authorized by law. 15 Sec. 29.35.762. Pledge of revenue; credit. (a) The pledge of revenue of a 16 regional transit authority to the payment of the principal of or interest on bonds or 17 notes of the authority is valid and binding from the time the pledge is made, and the 18 revenue is immediately subject to the lien of the pledge without physical delivery or 19 further act. The lien of a pledge is valid and binding against all parties having claims 20 of any kind against the authority, regardless of whether those parties have notice of the 21 lien of the pledge. 22 (b) The state and municipalities participating in an authority are not liable for 23 the debts of that authority. Bonds issued under AS 29.35.758 are payable solely from 24 the revenue of the authority and do not constitute a 25 (1) debt, liability, or obligation of the state or a municipality; or 26 (2) pledge of the faith and credit of the state or a municipality. 27 (c) An authority may not pledge the credit or the taxing power of the state or 28 its municipalities. A bond issued under AS 29.35.758 must contain on its face a 29 statement that 30 (1) the authority is not obligated to pay it or the interest on it except 31 from the revenue pledged for it; and

01 (2) the faith and credit of the taxing power of the state or of a political 02 subdivision of the state is not pledged to the payment of it. 03 Sec. 29.35.764. Pledges of the state and municipalities. The state and 04 municipalities participating in an authority pledge to and agree with the holders of 05 bonds issued under AS 29.35.758 and with the federal agency, if any, that loans or 06 contributes funds for a project of the authority that the state and the municipalities 07 participating in the authority will not limit or alter the rights and powers vested in the 08 authority by its enabling ordinance or other law so that it is unable to fulfill the terms 09 of a contract made by it with those holders or that federal agency or in any way impair 10 the rights and remedies of those holders or that federal agency until the bonds, 11 together with the interest on them and interest on unpaid installments of interest, and 12 all costs and expenses in connection with an action or proceeding by or on behalf of 13 those holders or that federal agency, are fully met and discharged. An authority may 14 include this pledge and agreement of the state and the municipalities participating in 15 the authority, to the extent that it refers to holders of bonds of the authority, in a 16 contract with those holders and, to the extent that it relates to a federal agency, in a 17 contract with that federal agency. 18 Sec. 29.35.766. Limitation of liability; fidelity bond. (a) Any liability, debt, 19 or judgment incurred by a regional transit authority shall be satisfied exclusively from 20 the assets or revenue of the authority. A creditor or other person does not have a right 21 of action against the state or a municipality participating in an authority because of a 22 debt, obligation, or liability of an authority. 23 (b) A board member or employee of an authority is not subject to personal 24 liability or accountability because of the execution or issuance of bonds under 25 AS 29.35.758. 26 (c) An authority shall obtain a fidelity bond in an amount determined by the 27 board for board members and each executive officer responsible for accounts and 28 finances of that authority. A fidelity bond must be in effect during the entire tenure in 29 office of the bonded person. 30 Sec. 29.35.768. Exemption from taxation. (a) A regional transit authority 31 exercising the powers granted under AS 29.35.750 - 29.35.799 is in all respects for the

01 benefit of the people of the municipalities participating in the authority and the people 02 of the state in general, for their well-being and prosperity, and for the improvement of 03 their social and economic condition. The real and personal property of the authority 04 and its assets, income, and receipts are exempt from all taxes and special assessments 05 of the state or a political subdivision of the state. 06 (b) Bonds issued by the authority under AS 29.35.758 are issued for an 07 essential public and governmental purpose; therefore, the bonds, the interest and 08 income from them, and all fees, charges, funds, revenue, income, and other money 09 pledged or available to pay or secure the payment of the bonds or interest on them are 10 exempt from taxation except for inheritance, transfer, and estate taxes. 11 (c) Notwithstanding the provisions of (a) of this section, an authority and the 12 municipalities participating in the authority may enter into agreements under which 13 the authority agrees to pay the participating municipalities' payments in lieu of taxes 14 and special assessments on real and personal property of the authority that is within 15 the taxing jurisdiction of the municipality. 16 (d) Nothing in this section creates a tax exemption with respect to the interests 17 of a business enterprise or other person, other than the authority, in property, assets, 18 income, or receipts, whether or not financed under AS 29.35.750 - 29.35.799. 19 Sec. 29.35.770. Administration of regional transit authority; board. (a) A 20 regional transit authority shall be governed by a board of directors, which shall 21 exercise the powers of the authority. The enabling ordinance establishing the authority 22 under AS 29.35.750 must specify the number, qualifications, manner of appointment 23 or election, and terms of members of the board. 24 (b) The board shall appoint a chief executive officer of the authority, who 25 serves at the pleasure of the board. The board shall fix the compensation of the chief 26 executive officer. 27 Sec. 29.35.772. Collective bargaining agreements. (a) A collective 28 bargaining agreement for employees of the state or its political subdivisions who are 29 transferred to a regional transit authority remains in effect for the term of the 30 agreement or one year, whichever is longer, and is binding on the authority unless the 31 parties agree to the contrary before the agreement expires. A labor-management

01 negotiation impasse declared after a transfer of employees under this subsection but 02 before the negotiation of a new collective bargaining agreement shall be resolved as 03 provided in the collective bargaining agreement or, if the collective bargaining 04 agreement does not provide for a resolution, as provided in AS 23.40.070 - 23.40.260. 05 (b) Employees of the state or a political subdivision of the state transferred to 06 an authority shall retain, for one year following the date of transfer or for the duration 07 of a collective bargaining agreement transferred under (a) of this section, whichever is 08 greater, all rights of participation in fringe benefit programs available to the employees 09 on the day before the transfer, or in substantially equivalent programs. 10 (c) AS 23.40.070 - 23.40.260 apply to employees of an authority unless all 11 municipalities participating in the authority are exempt under AS 23.40.255(a). 12 Sec. 29.35.774. Bylaws and regulations. (a) The board of directors of a 13 regional transit authority shall adopt bylaws and appropriate regulations consistent 14 with the enabling ordinance to carry out its functions and purposes. 15 (b) The board shall adopt bylaws as soon after the authority is established as 16 possible and may, from time to time, amend those bylaws. The bylaws may contain 17 any provision not in conflict with law for managing the business of the authority and 18 for conducting the affairs of the authority, including provisions relating to 19 (1) the time, place, and manner of calling, conducting, and giving 20 notice of meetings of the board and committees of the board, if any; 21 (2) the compensation of directors, if any; 22 (3) the appointment and authority of committees of the board, if any; 23 (4) the appointment, duties, compensation, and tenure of officers, 24 directors, the chief executive officer, and other employees, if any; 25 (5) procedures for adopting regulations; 26 (6) procedures for adopting bylaws; 27 (7) procedures for making annual reports and financial statements; and 28 (8) other matters for the conduct of business by the board. 29 Sec. 29.35.776. Authority subject to public records and open meetings 30 laws. A regional transit authority is subject to AS 40.25.110 - 40.25.220 and to 31 AS 44.62.310 and 44.62.312.

01 Sec. 29.35.778. Report and audit. (a) Within 90 days following the end of the 02 fiscal year of a regional transit authority, the board of directors shall distribute to the 03 mayor and governing body of each municipality participating in the authority a report 04 describing the operations and financial condition of the authority during the preceding 05 fiscal year. The report may include suggestions for legislation relating to the structure, 06 powers, or duties of the authority or operation of facilities of the authority. The report 07 must itemize the cost of providing each category of service offered by the authority 08 and the income generated by each category. 09 (b) The board shall have the financial records of the authority audited annually 10 by an independent certified public accountant. 11 (c) An authority shall make all of its financial records available for 12 examination to an auditor appointed by a municipality participating in the authority. 13 Sec. 29.35.780. Claims and remedies. (a) The superior court has jurisdiction 14 to hear and determine suits, actions, or proceedings relating to an authority, including 15 suits, actions, or proceedings brought to foreclose or otherwise enforce a mortgage, 16 pledge, assignment, or security interest brought by or for the benefit or security of a 17 holder of the authority's bonds or by a trustee for or other representative of the holders. 18 (b) A holder of bonds or notes or coupons attached to the bonds issued by an 19 authority under AS 29.35.758, and a trustee under a trust agreement or resolution 20 authorizing the issuance of the bonds, except as restricted by a trust agreement or 21 resolution, either at law or in equity, may 22 (1) enforce all rights granted under AS 29.35.750 - 29.35.799, the trust 23 agreement or resolution, or another contract executed by the authority; and 24 (2) compel the performance of all duties of the authority required by 25 AS 29.35.750 - 29.35.799 or the trust agreement or resolution. 26 (c) In judicial and regulatory proceedings by and against an authority, an 27 authority and its board members and employees enjoy the same rights, privileges, and 28 immunities as a municipality and municipal officers. 29 Sec. 29.35.790. Conflicting laws inapplicable. If a provision of AS 29.35.750 30 - 29.35.799 conflicts with another provision of this title, the provision of AS 29.35.750 31 - 29.35.799 prevails.

01 Sec. 29.35.798. Definitions. In AS 29.35.750 - 29.35.799, unless the context 02 otherwise requires, 03 (1) "authority" means a regional transit authority established under 04 AS 29.35.750; 05 (2) "board" means the board of directors of a regional transit authority; 06 (3) "bonds" includes bonds, bond anticipation notes, notes, refunding 07 bonds, or other forms of indebtedness of the authority; 08 (4) "bylaws" means the guidelines adopted by and amended by the 09 board of directors from time to time under AS 29.35.750 - 29.35.799; 10 (5) "costs of projects" means all or any part of the aggregate costs 11 determined by a regional transit authority to be necessary to finance the construction 12 or acquisition of a project, including, without limitation, 13 (A) the cost of acquiring real property; 14 (B) the cost of constructing buildings and improvements; 15 (C) the cost of financing the project, including, without 16 limitation, interest charges before, during, or after construction or acquisition 17 of the project; 18 (D) costs related to determining the feasibility of, planning, 19 design of, or engineering of the project and, to the extent determined necessary 20 by the authority, administrative expenses; 21 (E) the costs of machinery or equipment to be used in the 22 operation or rehabilitation of a transit facility or operation; and 23 (F) all other costs, charges, fees, and expenses that the 24 authority determines necessary to finance the construction or acquisition; 25 (6) "land" or "real property" means any interest in real property, 26 including tidal and submerged land, any right appurtenant to the interest, and, without 27 limitation, interests less than full title, such as easements, uses, leases, and licenses; 28 (7) "project" means a capital project related or incidental to public 29 transportation; 30 (8) "public transportation" means transportation by a conveyance that 31 provides regular and continuing general or special transportation to the public;

01 (9) "regulation" means a standard of general application or the 02 amendment, supplement, revision, or repeal of a standard adopted by a regional transit 03 authority to implement, interpret, or make specific the law enforced or administered 04 by it or to govern its procedure. 05 Sec. 29.35.799. Short title. AS 29.35.750 - 29.35.799 may be cited as the 06 Regional Transit Authority Act. 07 * Sec. 2. AS 29.71.800 is amended by adding a new paragraph to read: 08 (26) "transportation system" means the infrastructure and carriers 09 necessary to provide for public or private transportation of goods and individuals, 10 including ports, marinas, railways, terminals, highways, roads, and trails, as well as 11 motor vehicles, trains, and watercraft.