Alaska Administrative Code › Title 3 - Commerce, Community, and Economic Development › Part 13 - Alaska Industrial Development and Export Authority › Chapter 101 - Sustainable Energy Transmission and Supply Development Program › 3 AAC 101.190 - Payment of municipal bonds

Current through May 31, 2024
(a) A municipality
				that, pursuant to
				AS
				44.88.680(a)(8), seeks to
				have the authority pay off the principal of and interest on bonds the
				municipality has issued for a public utility must submit a preliminary
				application under
				3 AAC 101.060 and a full application under
				3 AAC 101.070. The authority will consider the
				preliminary application and full application as provided for in
				3 AAC 101.090,
				3 AAC 101.100,
				3 AAC 101.110, and
				3 AAC 101.150. The municipality shall pay the authority
				an application fee of $5,000 for any financing up to $10,000,000, an
				application fee of $10,000 for any financing between $10,000,000 and
				$20,000,000, and an application fee of $20,000 for any financing over
				$20,000,000. The application fee is non-refundable but the municipality may
				apply it against the commitment fee if the authority approves the
				financing.
(b) The authority will
				pay off the bonds of a municipality under
				AS
				44.88.680(a)(8) by calling
				the bonds, if they are callable, or by defeasance. The authority will not
				acquire or negotiate to acquire a municipality's bonds on the secondary
				market.
(c) Unless legislative
				approval is obtained, the authority will not payoff the bonds of a municipality
				under AS
				44.88.680(a)(8) if doing so
				will exceed the capital costs limitation of
				AS
				44.88.690(a)(1).
(d) If the authority approves financing for a
				municipality under
				AS
				44.88.680(a)(8), the
				authority will pay no more than the face amount of the outstanding bonds, plus
				currently accrued interest, to pay off the bonds. If defeasance of the bonds is
				required, and if the amount needed to defease the bonds is in excess of the
				face amount of the outstanding bonds, the municipality must pay the difference.
				A non-refundable commitment fee of one percent of the principal amount of the
				outstanding bonds will be due at the time the municipality accepts the
				authority's commitment letter to pay off the bonds. At the closing of any
				financing the authority provides under this section the provisions of
				3 AAC 101.140(d) and (e) will
				apply.
(e) In paying off or
				defeasing a municipality's bonds, the authority will succeed to all the rights
				of the bond holders or the trustee for the bond holders. Notwithstanding the
				payment or defeasance of the bonds, the authority, in the event of a default by
				the municipality, may take any enforcement action against the municipality, the
				public utility or any security that is or would have been permitted under the
				bonds, the trust indenture for the bonds, any mortgage or security agreement
				relating to the bonds, or the municipality's bond resolution for the
				bonds.
(f) If requested in writing
				by the municipality to do so, the authority will establish an account within
				the SETS fund for the municipality that is equal to the principal amount of the
				payments the municipality has made to the authority for the bonds the authority
				pays off or defeases. The authority will maintain the account for the period of
				time the municipality designates, up to a maximum period of 25 years. The
				municipality may request financing from the authority for a qualified energy
				development up to the positive balance of the municipality's account in the
				SETS fund. A municipality's request for financing out of its account in the
				SETS fund is subject to the application process, review and approval process,
				financing terms, and fees provided for in this chapter. As provided in
				3 AAC 101.110, the authority may approve or reject a
				municipality's application for financing out of the municipality's account in
				the SETS fund.
(g) On July 1 of
				each year, the municipality will owe the authority an annual maintenance fee of
				50 basis points of the unapplied principal amount in the municipality's account
				in the SETS fund. For this purpose, "unapplied principal amount" means the
				positive amount in the municipality's account that has not been committed to
				financing a qualified energy development of the municipality. The authority may
				deduct the annual maintenance fee from the balance of the municipality's
				account in the SETS fund.
(h) A
				municipality may not use its account in the SETS fund for any purpose other
				than financing a qualified energy development under the SETS program as
				approved by the authority. A municipality's account in the SETS fund may not be
				assigned, pledged, or encumbered and any attempted assignment, pledge, or
				encumbrance will be void, not merely voidable. At the expiration of the
				applicable time period for the duration of the account, the account will lapse
				and no further credit will be available to the municipality under the account.
				No payment to the municipality will be made or will be due at the expiration of
				the account.
Even though
					 3 AAC 101.190 was adopted and effective 4/25/2013, it
					 was not published until Register 207, October
					 2013.
Authority:
AS
					 44.88.085
AS 44.88.660
AS 44.88.670
AS
					 44.88.680