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28th Legislature(2013-2014)

Bill Text 28th Legislature


00 Enrolled SB 218                                                                                                         
01 Relating to financing; relating to the Alaska Municipal Bond Bank Authority; authorizing the                            
02 University of Alaska to issue bonds to finance the design, construction, acquisition, and                               
03 equipping costs of the University of Alaska Fairbanks heat and power plant; authorizing the                             
04 University of Alaska to borrow money from the Alaska Municipal Bond Bank Authority to                                   
05 finance the design, construction, acquisition, and equipping costs of the University of Alaska                          
06 Fairbanks heat and power plant; and providing for an effective date.                                                    
07                           _______________                                                                               
08    * Section 1. AS 44.85.005 is amended to read:                                                                      
09            Sec. 44.85.005. Legislative findings. The legislature finds that                                           
10                 (1)  the rapid growth of municipalities in the state and the incorporation                              
11       of new municipalities has created a demand for capital improvements that can only be                              
12       met by these municipalities borrowing money through the issuance of bonds or notes;                               
01                 (2)  many of these municipalities, although creditworthy, either have                                   
02       not issued bonds or notes or have little outstanding debt;                                                        
03                 (3)  the cost of borrowed money to these municipalities is or may be                                    
04       unnecessarily high due to lack of investor familiarity with the municipalities;                                   
05                 (4)  other municipalities in the state pay unnecessarily high borrowing                                 
06       costs because of the distance of the state from capital markets or may find borrowing                             
07       difficult or impossible because of temporary economic dislocation due to loss of                                  
08       employment or prospective loss of employment;                                                                 
09                 (5)  the University of Alaska has limited debt capacity and may pay                                 
10       higher interest rates because of lower credit ratings.                                                        
11    * Sec. 2. AS 44.85.010(a) is amended to read:                                                                      
12            (a)  It is the policy of the state to                                                                        
13                 (1)  foster and promote by all reasonable means the provision of                                        
14       adequate capital markets and facilities for borrowing money by municipalities in the                              
15       state to finance capital improvements or for other authorized purposes, to assist these                           
16       municipalities in fulfilling their capital needs and requirements by use of borrowed                              
17       money within statutory interest rate or cost of borrowing limitations, to the greatest                            
18       extent possible to reduce costs of borrowed money to taxpayers and residents of the                               
19       state, and equally to encourage continued investor interest in the purchase of bonds or                           
20       notes of municipalities as sound and preferred securities for investment;                                         
21                 (2)  encourage municipalities to continue their independent                                             
22       undertakings and financing of capital improvements and other authorized purposes                                  
23       and to assist them by making capital funds available at reduced interest costs for                                
24       orderly financing of capital improvements and other purposes especially during                                    
25       periods of restricted credit or money supply, particularly for those municipalities not                           
26       otherwise able to borrow for capital needs;                                                                       
27                 (3)  assist municipalities to provide for adequate insurance coverage by                                
28       authorizing the Alaska Municipal Bond Bank Authority to issue negotiable or                                       
29       nonnegotiable revenue bonds, notes, or certificates of participation either directly or                           
30       through an entity it may create for the purpose of providing a self-insurance program                             
31       for municipalities or municipal joint insurance arrangements organized under                                      
01       AS 21.76;                                                                                                         
02                 (4)  assist governmental employers to prepay all or a portion of their                                  
03       share of unfunded accrued actuarial liabilities of retirement systems in an effort to                             
04       reduce their costs of satisfying their contractual obligations to provide retirement and                          
05       other benefits to public employees through the issuance of bonds, notes, commercial                               
06       paper, or other obligations by the bond bank authority or by a subsidiary corporation                             
07       created by the bond bank authority under AS 44.85.085, but only if the state bond                                 
08       rating is the equivalent of AA- or better; this assistance is limited as provided in                              
09       AS 37.15.903;                                                                                                 
10                 (5)  assist the University of Alaska to provide heating or energy                                   
11       projects by providing capital funds through loans that minimize costs and the                                 
12       effects on the debt capacity of the University of Alaska.                                                     
13    * Sec. 3. AS 44.85.090 is amended to read:                                                                         
14            Sec. 44.85.090. Limitations. Under this chapter, the bond bank authority may                           
15       not                                                                                                               
16                 (1)  make loans of money to a person, firm, or corporation other than a                                 
17       municipality or the University of Alaska or purchase securities issued by a person,                           
18       other than a municipality except for investment as provided in this chapter;                                      
19                 (2)  emit bills of credit, accept deposits of money for time or demand                                  
20       deposit, administer trusts, or engage in any form or manner in, or in the conduct of, a                           
21       private or commercial banking business, or act as a savings bank or savings and loan                              
22       association;                                                                                                      
23                 (3)  be or constitute a bank or trust company within the jurisdiction or                                
24       under the control of a regulatory or supervisory board or department of the state, or the                         
25       Comptroller of the Currency of the United States, or the Department of the Treasury,                              
26       or Federal Reserve Board of the United States; or                                                                 
27                 (4)  be or constitute a bank, banker, or dealer in securities within the                                
28       meaning of or subject to the provisions of securities, securities exchange, or securities                         
29       dealers law, of the United States or of this state or of another state.                                           
30    * Sec. 4. AS 44.85.100(b) is amended to read:                                                                      
31            (b)  The bond bank authority shall include in the report required by (a) of this                             
01       section an estimate of the amount of revenue bonds of the bond bank authority to be                               
02       issued during the fiscal year following the fiscal year in which the report is submitted.                         
03       Other than refunding bonds and other than bonds, notes, commercial paper, or other                                
04       obligations issued under AS 44.85.086, [AND] 44.85.180(a)(5), and 44.85.180(e), the                       
05       bond bank authority may not issue revenue bonds in excess of $75,000,000 during any                               
06       fiscal year beginning after June 30, 1981, unless the legislature, by law, approves the                           
07       estimate required by this subsection for that fiscal year.                                                        
08    * Sec. 5. AS 44.85.180(c) is amended to read:                                                                      
09            (c)  Notwithstanding the provisions of (a) and (b) of this section, the total                                
10       amount of bond bank authority bonds and notes outstanding at any one time may not                                 
11       exceed $1,500,000,000 [$1,000,000,000]. This subsection does not apply to                                     
12                 (1)  bonds or notes issued to fund or refund bonds or notes;                                            
13                 (2)  bonds, notes, commercial paper, and other obligations issued under                                 
14       AS 44.85.086 or (a)(5) of this section.                                                                           
15    * Sec. 6. AS 44.85.180 is amended by adding a new subsection to read:                                              
16            (e)  Notwithstanding (a), (b), and (c) of this section, the bond bank authority                              
17       may issue its bonds or notes in principal amounts not to exceed $87,500,000 for the                               
18       purpose of making loans to the University of Alaska.                                                              
19    * Sec. 7. AS 44.85.410(4) is amended to read:                                                                      
20                 (4)  "municipal bond" means a bond or note or evidence of debt that                                     
21       constitutes                                                                                                       
22                      (A)  a general obligation bond that is a direct and general                                        
23            obligation of a political subdivision of the state, all the taxable property within                          
24            which is subject to taxation to pay the bond, note, or evidence of debt, and the                             
25            interest without limitation, as to rate or amount generally to the extent                                    
26            permitted by law or to avoid a default as provided for second class cities under                             
27            AS 29.45.590;                                                                                                
28                      (B)  a revenue bond issued by a municipality, the University of                                
29            Alaska, a solid waste management authority, or a port authority that pledges                             
30            the revenue of a revenue-producing capital improvement and that is payable                                   
31            solely from the revenue of the revenue-producing capital improvement;                                        
01                      (C)  a general obligation bond or revenue bond combined or                                         
02            additionally secured;                                                                                        
03                      (D)  a bond of a borough issued as a general obligation of a                                       
04            service area under AS 29.47.440 or former AS 29.58.340; or                                                   
05                      (E)  an obligation of a municipality secured only by                                               
06                           (i)  special assessments on benefited property;                                               
07                           (ii)  tax increments and a letter of credit or equal                                          
08                 security; or                                                                                            
09                           (iii)  a lease;                                                                               
10    * Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to                          
11 read:                                                                                                                   
12       LEGISLATIVE APPROVAL; BOND AUTHORIZATION FOR UNIVERSITY OF                                                        
13 ALASKA FAIRBANKS HEAT AND POWER PLANT. (a) The University of Alaska may                                                 
14 issue revenue bonds under AS 14.40.254 and use the proceeds of the revenue bonds to pay for                             
15 the design, construction, acquisition, and equipping, including reserves for debt service and                           
16 capitalized interest and costs of issuance, of a new heat and power plant facility in Fairbanks.                        
17       (b)  Regarding the project described in (a) of this section, notice is given under                                
18 AS 14.40.253 that                                                                                                       
19            (1)  the anticipated annual payment amount is $5,600,000;                                                    
20            (2)  the anticipated financing is $70,000,000;                                                               
21            (3)  the total construction, acquisition, and other costs of the project are                                 
22 $245,000,000.                                                                                                           
23       (c)  This section grants the legislative approval of the project required by                                      
24 AS 14.40.253.                                                                                                           
25    * Sec. 9. The uncodified law of the State of Alaska is amended by adding a new section to                          
26 read:                                                                                                                   
27       LEGISLATIVE APPROVAL; LOAN AUTHORIZATION FOR UNIVERSITY OF                                                        
28 ALASKA FAIRBANKS HEAT AND POWER PLANT. (a) The University of Alaska may                                                 
29 borrow money, not to exceed $87,500,000, under AS 14.40.040(a)(5) by issuing revenue                                    
30 bonds and entering into a loan agreement with the Alaska Municipal Bond Bank Authority to                               
31 pay for the design, construction, acquisition, and equipping of a new heat and power plant                              
01 facility in Fairbanks.                                                                                                  
02       (b)  Regarding the project described in (a) of this section, notice is given under                                
03 AS 14.40.253 that                                                                                                       
04            (1)  the anticipated annual payment amount is $7,000,000;                                                    
05            (2)  the anticipated financing is $87,500,000;                                                               
06            (3)  the total construction, acquisition, and other costs of the project are                                 
07 $245,000,000.                                                                                                           
08       (c)  This section grants the legislative approval of the project required by                                      
09 AS 14.40.253.                                                                                                           
10    * Sec. 10. This Act takes effect immediately under AS 01.10.070(c).                                                
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