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28th Legislature(2013-2014)

Bill Text 28th Legislature


00 Enrolled SB 23                                                                                                          
01 Relating to development project financing by the Alaska Industrial Development and Export                               
02 Authority; relating to the dividends from the Alaska Industrial Development and Export                                  
03 Authority; relating to the meaning of "net income" and "unrestricted net income" for purposes                           
04 of the Alaska Industrial Development and Export Authority; authorizing the Alaska Industrial                            
05 Development and Export Authority to provide financing and issue bonds for a liquefied                                   
06 natural gas production system and natural gas distribution system; and providing for an                                 
07 effective date.                                                                                                         
08                           _______________                                                                               
09    * Section 1. AS 44.88.010(a) is amended to read:                                                                   
10            (a)  The legislature finds, determines, and declares that                                                    
11                 (1)  there exist areas of the state in which seasonal and nonseasonal                                   
12       unemployment exists;                                                                                              
13                 (2)  this unemployment is a serious menace to the health, safety, and                                   
01       general welfare, not only to the people in those areas, but also to the people of the                             
02       entire state;                                                                                                     
03                 (3)  the state lacks the basic manufacturing, industrial, energy, export,                               
04       small business, and business enterprises and the other facilities referred to in this                             
05       subsection necessary to permit adequate development of its natural resources and the                              
06       balanced growth of its economy;                                                                                   
07                 (4)  the establishment and expansion of industrial, manufacturing,                                      
08       energy, export, small business, and business enterprises in the state and the other                               
09       facilities referred to in this subsection are essential to the development of the natural                         
10       resources and the long-term economic growth of the state, and will directly and                                   
11       indirectly alleviate unemployment in the state;                                                                   
12                 (5)  the expansion of export trade is vital to the health and growth of the                             
13       state's economy;                                                                                                  
14                 (6)  many state businesses could benefit from additional financial and                                  
15       technical assistance with respect to the exportation of their products and services;                              
16                 (7)  the Export-Import Bank of the United States has been mandated by                                   
17       the Export-Import Bank Act Amendments of 1983 to provide technical assistance and                                 
18       export financing support to small businesses in cooperation with state export finance                             
19       agencies;                                                                                                         
20                 (8)  Alaska-based exporters can be effectively assisted through the                                     
21       establishment, as part of the Alaska Industrial Development and Export Authority, of                              
22       an export financing program designed to work with the Export-Import Bank of the                                   
23       United States and other federal, state, and private institutions;                                                 
24                 (9)  the achievement of the goal of full employment [,] and of                                          
25       establishment and continuing operation and development of industrial, manufacturing,                              
26       energy, export, small business, and business enterprises in the state will be accelerated                         
27       and facilitated by the creation of an instrumentality of the state with powers to incur                           
28       debt, to own and operate facilities, and to make and insure loans to finance and to                           
29       assist private lenders to make loans to finance the establishment, operation, and                                 
30       development of industrial, manufacturing, energy, export, small business, and business                            
31       enterprises;                                                                                                      
01                 (10)  it is in the public interest to promote the prosperity and general                                
02       welfare of all citizens of the state by                                                                           
03                      (A)  stimulating commercial and industrial growth and                                              
04            expansion by encouraging an increase of private investment by banks,                                         
05            investment houses, insurance companies, and other financial institutions,                                    
06            including pension and retirement funds, to help satisfy the need for economic                                
07            expansion;                                                                                                   
08                      (B)  encouraging the production of raw materials and goods for                                     
09            export, the expansion of exports and raw materials and goods, and the                                        
10            rendering of services abroad by residents of the state through the establishment                             
11            of a program that provides financial assistance in cooperation with federal,                                 
12            state, and private institutions for these purposes in the form provided in this                              
13            chapter;                                                                                                     
14                      (C)  creating the Alaska Industrial Development and Export                                         
15            Authority with the powers necessary to accomplish the objectives stated in this                              
16            paragraph, including the power to issue taxable and tax-exempt bonds, [AND]                              
17            to acquire ownership interests in projects, and to provide development                                   
18            project financing as provided in this chapter;                                                           
19                 (11)  it is in the state's interest to import private capital to create new                             
20       economic activity that [WHICH] would not otherwise take place in the state.                                   
21    * Sec. 2. AS 44.88.070 is amended to read:                                                                         
22            Sec. 44.88.070. Purpose of the authority. The purpose of the authority is to                               
23       promote, develop, and advance the general prosperity and economic welfare of the                                  
24       people of the state [ALASKA], to relieve problems of unemployment, and to create                              
25       additional employment by                                                                                          
26                 (1)  providing various means of financing and means of facilitating the                                 
27       financing, in cooperation with federal, state, and private institutions, of industrial,                           
28       manufacturing, export, small business, and business enterprises and the other facilities                          
29       referred to in AS 44.88.010(a) in the state;                                                                      
30                 (2)  owning and operating or providing development project                                          
31       financing for the enterprises and other facilities described in AS 44.88.172;                                 
01                 (3)  fostering the expansion of exports of [ALASKA] goods, services,                                    
02       and raw materials of the state;                                                                               
03                 (4)  cooperating and acting in conjunction with other organizations,                                    
04       public and private, the objects of which are the promotion and advancement of export                              
05       trade activities in the state;                                                                                    
06                 (5)  establishing a source of funding credit guarantees and insurance,                                  
07       not otherwise available, to support export development;                                                           
08                 (6)  providing and cooperating or participating with federal, state, and                                
09       private institutions to provide actual and potential state [ALASKA] exporters,                                
10       particularly small- and medium-sized exporters, with financial assistance in support of                           
11       export transactions.                                                                                              
12    * Sec. 3. AS 44.88.080 is amended to read:                                                                         
13            Sec. 44.88.080. Powers of the authority. In furtherance of its corporate                                   
14       purposes, the authority has the following powers in addition to its other powers:                                 
15                 (1)  to sue and be sued;                                                                                
16                 (2)  to have a seal and alter it at pleasure;                                                           
17                 (3)  to make and alter bylaws for its organization and internal                                         
18       management;                                                                                                       
19                 (4)  to adopt regulations governing the exercise of its corporate powers;                               
20                 (5)  to acquire an interest in a project as necessary or appropriate to                                 
21       provide financing for the project, whether by purchase, gift, or lease;                                           
22                 (6)  to lease to others a project acquired by it for the rentals and upon                               
23       the terms and conditions the authority may consider advisable, including, without                                 
24       limitation, provisions for options to purchase or renew;                                                          
25                 (7)  to issue bonds and otherwise to incur indebtedness, in accordance                                  
26       with AS 44.88.090, in order to pay the cost of a project or development projects or in                            
27       order to provide money for the authority's purposes under this chapter; the authority                             
28       may also secure payment of the bonds or other indebtedness as provided in this                                    
29       chapter;                                                                                                          
30                 (8)  to sell, by installment sale or otherwise, exchange, donate, convey,                               
31       or encumber, in any manner by mortgage or by creation of any other security interest,                         
01       real or personal property owned by it, or in which it has an interest, including a                                
02       project, when, in the judgment of the authority, the action is in furtherance of its                              
03       corporate purposes;                                                                                               
04                 (9)  to accept gifts, grants, or loans from, and enter into contracts or                                
05       other transactions regarding them [,] with, a federal agency, [OR] an agency or                           
06       instrumentality of the state, a municipality, a private organization, or other source;                        
07                 (10)  to deposit or invest its funds, subject to agreements with                                        
08       bondholders;                                                                                                      
09                 (11)  to enter into contracts or agreements with respect to the exercise                                
10       of any of its powers, and do all things necessary or convenient to carry out its                                  
11       corporate purposes and exercise the powers granted in this chapter;                                               
12                 (12)  to purchase or insure loans to finance the costs of manufacturing,                                
13       industrial, and business enterprise projects;                                                                     
14                 (13)  to enter into loan agreements with respect to one or more projects                                
15       upon the terms and conditions the authority considers advisable;                                                  
16                 (14)  to acquire, manage, and operate projects as the authority considers                               
17       necessary or appropriate to serve a public purpose;                                                               
18                 (15)  to assist private lenders to make loans to finance the costs of                                   
19       projects through loan commitments, short-term financing, or otherwise;                                            
20                 (16)  to accept gifts, grants, or loans from a federal agency, from an                                  
21       agency or instrumentality of the state or of a municipality, or from any other source;                            
22                 (17)  to enter into contracts or other transactions with a federal agency,                              
23       with an agency or instrumentality of the state or of a municipality, or with a private                            
24       organization or other entity consistent with the exercise of any power under this                                 
25       chapter;                                                                                                          
26                 (18)  to facilitate the expansion of a secondary market for the resale of                               
27       federally or commercially insured loans made to finance the costs of projects in the                          
28       state [ALASKA] held by federal and state chartered financial institutions or by the                           
29       Alaska Commercial Fishing and Agriculture Bank;                                                                   
30                 (19)  to charge fees or other forms of remuneration for the use or                                      
31       possession of the projects described in (14) of this section in accordance with the                               
01       agreements described in (11) and (17) of this section, other agreements pertaining to                             
02       the projects, covenants, or representations made in bond documents pertaining to the                              
03       projects, or regulations of the authority pertaining to the projects;                                             
04                 (20)  to participate with government or private industry in programs for                                
05       technical assistance, loans, technology, transfer, or other programs related to the                               
06       exportation of [ALASKA] goods, services, or raw materials of the state with respect                           
07       to its financing activities;                                                                                      
08                 (21)  to provide export finance training for office staff and other                                     
09       individuals involved in export finance assistance, including the training sessions that                           
10       may be provided by the United States Export-Import Bank or other organizations;                                   
11                 (22)  to coordinate to the maximum extent possible its efforts to                                       
12       promote the export of [ALASKA] goods, services, and raw materials of the state with                           
13       programs and goals of the United States Export-Import Bank, the International Trade                               
14       Administration of the United States Department of Commerce, the Foreign Credit                                    
15       Insurance Association, and other private and public programs designed to provide                                  
16       export assistance and export-related financing;                                                                   
17                 (23)  to guarantee loans related to qualified export transactions under                                 
18       regulations adopted by the authority;                                                                             
19                 (24)  to provide financing assistance, in cooperation with federal, state,                              
20       and private institutions, as provided in this chapter for small business enterprises;                             
21                 (25)  to make cooperative agreements with the Department of                                             
22       Transportation and Public Facilities, acting on behalf of the international airports                              
23       revenue fund established under AS 37.15.430, to acquire, equip, operate, maintain,                                
24       construct, or install facilities that will enhance the competitiveness of the international                       
25       airports, including a cooperative agreement to lend amounts from the international                                
26       airports [AIRPORT] revenue fund to finance the development or improvement of                                  
27       utilities serving the airports;                                                                                   
28                 (26)  to screen potential applicants for a new business incentive grant                                 
29       and recommend the award of the grants under AS 45.81.020;                                                         
30                 (27)  to oversee the administration of outstanding grants awarded by the                                
31       Alaska Science and Technology Foundation under former AS 37.17.010 - 37.17.110;                                   
01                 (28)  to oversee the administration of outstanding BIDCO assistance                                     
02       grants and loans made by the Alaska Science and Technology Foundation under                                       
03       former AS 37.17.200 - 37.17.390;                                                                                  
04                 (29)  to guarantee loans made to the Alaska Insurance Guaranty                                          
05       Association (AS 21.80.040), with these guarantees limited to loans necessary to make                              
06       the association financially able to meet cash flow needs up to a maximum outstanding                              
07       principal balance at any time of $30,000,000;                                                                     
08                 (30)  with legislative approval and notwithstanding AS 44.88.060, to                                    
09       purchase from the Alaska Energy Authority as an investment of the revolving fund,                                 
10       loans of the power project fund established under AS 42.45.010;                                                   
11                 (31)  to consider, when exercising the powers listed in this section, the                               
12       interests of local governments affected [IMPACTED] by the authority's activities to                           
13       share in the benefits of these activities, with appropriate consideration of the                                  
14       authority's ability to meet debt obligations, issue new debt, and fulfill the authority's                         
15       purposes;                                                                                                     
16                 (32)  to provide development project financing for all or a portion                                 
17       of the cost of a development project as provided in AS 44.88.172.                                             
18    * Sec. 4. AS 44.88.088(a) is amended to read:                                                                      
19            (a)  The authority shall adopt a policy for payment of a dividend from the                               
20       revolving fund and a dividend from the Alaska Industrial Development and                                      
21       Export Authority sustainable energy transmission and supply development fund                                  
22       (AS 44.88.660) to the state each fiscal year [. THE AMOUNT OF THE DIVIDEND                                    
23       FOR A FISCAL YEAR MAY NOT BE LESS THAN 25 PERCENT NOR MORE                                                        
24       THAN 50 PERCENT OF THE NET INCOME OF THE AUTHORITY FOR THE                                                        
25       BASE FISCAL YEAR. IN NO EVENT, HOWEVER, SHALL THE DIVIDEND FOR                                                    
26       A FISCAL YEAR EXCEED THE TOTAL UNRESTRICTED NET INCOME OF                                                         
27       THE AUTHORITY FOR THE BASE FISCAL YEAR]. The dividends [DIVIDEND]                                             
28       for a fiscal year shall be made available by the authority before the end of that fiscal                          
29       year. The authority shall notify the commissioner of revenue when the dividends                               
30       [DIVIDEND] for a fiscal year are [IS] available for appropriation. The amount of the                      
31       dividend payable from the                                                                                     
01                 (1)  revolving fund for a fiscal year may not be less than 25 percent                               
02       nor more than 50 percent of the net income of the revolving fund for the base                                 
03       fiscal year; however, in no event, may the dividend payable from the revolving                                
04       fund for a fiscal year exceed the total unrestricted net income of the revolving                              
05       fund for the base year;                                                                                       
06                 (2)  Alaska Industrial Development and Export Authority                                             
07       sustainable energy transmission and supply development fund (AS 44.88.660) for                                
08       a fiscal year may not be less than 25 percent nor more than 50 percent of the net                             
09       income of the Alaska Industrial Development and Export Authority sustainable                                  
10       energy transmission and supply development fund for the base fiscal year;                                     
11       however, in no event, shall the dividend payable from the Alaska Industrial                                   
12       Development and Export Authority sustainable energy transmission and supply                                   
13       development fund for a fiscal year exceed the total unrestricted net income of the                            
14       Alaska Industrial Development and Export Authority sustainable energy                                         
15       transmission and supply development fund for the base year.                                                   
16    * Sec. 5. AS 44.88.088(b)(2) is amended to read:                                                                   
17                 (2)  "net income" means the [AUTHORITY'S] change in net position,                                   
18       or the equivalent term under generally accepted accounting principles, of the                                 
19       revolving fund or the change in net position of the Alaska Industrial                                       
20       Development and Export Authority sustainable energy transmission and supply                                   
21       development fund (AS 44.88.660) [ASSETS] as set out in the audited financial                                  
22       statements of the authority for the base fiscal year, excluding amounts attributable to                           
23       intergovernmental transfers, capital contributions, grants, or impairment losses on                               
24       development projects financed under AS 44.88.172;                                                                 
25    * Sec. 6. AS 44.88.088(b)(3) is amended to read:                                                                   
26                 (3)  "unrestricted net income" means the [AUTHORITY'S] unrestricted                                     
27       change in net position, or the equivalent term under generally accepted                                       
28       accounting principles, of the revolving fund or the Alaska Industrial                                       
29       Development and Export Authority sustainable energy transmission and supply                                   
30       development fund (AS 44.88.660) [ASSETS] as set out in the audited financial                                  
31       statements of the authority for the base fiscal year, excluding amounts attributable to                           
01       intergovernmental transfers, capital contributions, grants, or impairment losses on                               
02       development projects financed under AS 44.88.172.                                                                 
03    * Sec. 7. AS 44.88.105(d) is amended to read:                                                                      
04            (d)  The chair [CHAIRMAN] of the authority shall annually, not [NO] later                            
05       than January 2, certify in writing to the governor and the legislature the amount, if                             
06       any, required to restore a capital reserve fund to the capital reserve fund requirement.                          
07       The legislature may appropriate to the authority the amount certified by the chair                            
08       [CHAIRMAN] of the authority. The authority shall deposit the amounts appropriated                                 
09       under this subsection during a fiscal year in the proper capital reserve fund. Nothing in                         
10       this section creates a debt or liability of the state. In this subsection, "capital reserve                       
11       fund" means a capital reserve fund that                                                                           
12                 (1)  is created under this section on or before January 1, 1989;                                        
13                 (2)  secures refunding bonds if the refunding bonds are issued to refund                                
14       bonds that are secured by a capital reserve fund created under this section on or before                          
15       January 1, 1989; [OR]                                                                                             
16                 (3)  secures bonds issued on or after August 11, 1993, for a power                                  
17       transmission intertie; or                                                                                     
18                 (4)  secures bonds issued on or after July 1, 2013, for a qualified                                 
19       energy development project financed under AS 44.88.650 - 44.88.690.                                           
20    * Sec. 8. AS 44.88.172(a) is amended to read:                                                                      
21            (a)  The economic development account is established in the revolving fund.                                  
22       The economic development account consists of money or assets appropriated, loaned,                                
23       or transferred to the authority for deposit in the account and other money or assets                              
24       deposited in the account by the authority. While money is on deposit in the economic                              
25       development account, the money may be used [ONLY] to finance, acquire, manage,                                    
26       and operate development projects that the authority intends to own and operate or to                          
27       provide development project financing for development projects the authority                                  
28       does not intend to own and operate. In this subsection,                                                       
29                 (1)  "operate" includes operation directly by the authority, by an agent                                
30       of the authority, or by a person as determined under an agreement between the                                     
31       authority and other owners of the development project;                                                            
01                 (2)  "own" includes ownership by the authority of all or a percentage of                                
02       a development project or all or a percentage of the shares of a corporation or                                    
03       membership in a limited liability company for which the development project is the                                
04       sole asset of the corporation or limited liability company.                                                       
05    * Sec. 9. AS 44.88.172 is amended by adding a new subsection to read:                                              
06            (d)  The authority shall adopt regulations to implement this section. The                                    
07       regulations may include provisions for the application process, application fees,                                 
08       interest rates, other charges and fees, terms, conditions, security, and other                                    
09       requirements for development projects the authority undertakes or development                                     
10       project financing the authority provides.                                                                         
11    * Sec. 10. AS 44.88.900 is amended by adding a new paragraph to read:                                              
12                 (17)  "development project financing" means money loaned by the                                         
13       authority or a guarantee of a loan, note, debt, or other financial obligation issued by                           
14       the authority to fund or assist in funding a development project the authority does not                           
15       intend to own and operate.                                                                                        
16    * Sec. 11. The uncodified law of the State of Alaska is amended by adding a new section to                         
17 read:                                                                                                                   
18       LEGISLATIVE APPROVAL; FINANCING OF LIQUEFIED NATURAL GAS                                                          
19 PRODUCTION AND DISTRIBUTION FACILITIES. (a) The Alaska Industrial                                                       
20 Development and Export Authority, through the Alaska Industrial Development and Export                                  
21 Authority sustainable energy transmission and supply development fund (AS 44.88.660), may                               
22 provide financing up to a principal amount of $275,000,000 for the development,                                         
23 construction, and installation of, and the start-up costs of operation and maintenance for, a                           
24 liquefied natural gas production plant and system and affiliated infrastructure on the North                            
25 Slope and a natural gas distribution system and affiliated infrastructure in Interior Alaska.                           
26       (b)  As a part of the financing authorized under (a) of this section, the Alaska                                  
27 Industrial Development and Export Authority may issue bonds under AS 44.88.090 that are                                 
28 secured by a capital reserve fund (AS 44.88.105). Notwithstanding AS 44.88.105, in                                      
29 establishing a capital reserve fund for the bonds, the authority is not required to determine that                      
30 the capital reserve fund is necessary to enhance the marketability of the bonds. The authority                          
31 shall manage the capital reserve fund as provided in AS 44.88.105. The principal amount of                              
01 the bonds authorized in this section may not exceed $150,000,000 plus the cost of capitalized                           
02 interest, bond counsel fees, trustee fees, rating fees, financial advisor fees, escrow costs, and                       
03 other bond issuance costs that the authority considers reasonable and appropriate.                                      
04       (c)  Notwithstanding the interest rate requirements of AS 44.88.159, the interest rate                            
05 the authority may charge for financing authorized under (a) of this section provided from the                           
06 Alaska Industrial Development and Export Authority sustainable energy transmission and                                  
07 supply development fund (AS 44.88.660) may not exceed three percent or the current market                               
08 rate for commercial loans at the time the bonds are issued, whichever is less. Notwithstanding                          
09 the interest rate requirements of AS 44.88.159, the interest rate for financing authorized under                        
10 (a) of this section provided from the proceeds of bonds authorized under this section may not                           
11 exceed the interest rate to be paid on the bonds, plus an allowance that the authority                                  
12 establishes for its administrative expenses; however, the allowance for administrative                                  
13 expenses may not exceed 25 basis points. Notwithstanding any contrary provision of law, the                             
14 interest rate limitations of this subsection supersede and replace any other requirements of law                        
15 regarding the interest rates that the authority may charge for the financing authorized under                           
16 (a) of this section.                                                                                                    
17       (d)  The authorization under (a) of this section constitutes legislative approval for the                         
18 authority to exceed the limitations of AS 44.88.690 in providing the financing approved under                           
19 (a) of this section. In providing the financing authorized under (a) of this section, the authority                     
20 may waive any limitations or requirements of its regulations that are otherwise applicable to                           
21 the Alaska Industrial Development and Export Authority sustainable energy transmission and                              
22 supply development fund (AS 44.88.660).                                                                                 
23       (e)  The bonds authorized by this section may not be considered in calculating the                                
24 authority's bonding limitation for a 12-month period under AS 44.88.095(a).                                             
25       (f)  The authorization to issue bonds this section grants expires on June 30, 2018, if the                        
26 authority does not issue bonds before that date. Expiration of the authorization to issue bonds                         
27 does not affect bonds that the authority issues under this section before July 1, 2018.                                 
28       (g)  In this section,                                                                                             
29            (1)  "authority" means the Alaska Industrial Development and Export                                          
30 Authority;                                                                                                              
31            (2)  "financing" means any method or combination of methods of providing                                     
01 funds for a qualified energy development project under AS 44.88.650 - 44.88.690.                                        
02    * Sec. 12. This Act takes effect immediately under AS 01.10.070(c).                                                
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