Title 37. Public Finance.

Chapter 05. Fiscal Procedures Act.

Article 1. Administration.


Sec. 37.05.010. Bond of commissioner of administration.
The commissioner of administration, before entering upon official duties, shall execute a good and sufficient bond in the sum of $10,000 payable to the state, conditioned upon the faithful performance of duties imposed by law. The premium on each bond shall be paid in the same manner as other expenses of the department.


Sec. 37.05.020. Regulations.
The Department of Administration shall adopt regulations for the performance of its powers or duties, the execution of its business, and its relations to and business with other state agencies.


Sec. 37.05.030. Financial reports and statements. [Repealed, § 19 ch 6 SLA 1998.]
Sec. 37.05.035. Annual state loan reports.
Each state agency that makes or purchases a loan shall prepare an annual report of the aggregate of all loans, by type, made or purchased by the state agency during the preceding fiscal year. The report must include the estimated rate of interest that would have been charged if the loan had been made or purchased at prevailing market rates and must include the difference between the return on the loan that would have been realized under that estimated rate of interest and the return on the loans under the interest rate actually charged. In the absence of a prevailing market rate in the state, the state agency shall use a rate that, in the judgment of the agency, is comparable to a prevailing market rate. The report must also include an analysis of the income groups benefited under the loan programs. By January 30 of each year the state agency shall notify the legislature that the report prepared under this section is available.


Sec. 37.05.040. Legal custody of records.
The commissioner has the legal custody of all records, memoranda, writing, entries, prints, representations, or combinations of them, of any act, transaction, occurrence, or event of the department.


Sec. 37.05.050. Federal funds.
Federal funds received by an agency shall be deposited in the state treasury and disbursed in the same manner as other state money. Federal funds are subject to the fiscal controls imposed by this chapter, except where federal laws or regulations prevent the funds from being deposited, appropriated, allocated, accounted for, or expended as provided by this chapter and other laws not inconsistent with this chapter.


Secs. 37.05.060 — 37.05.120. [Repealed, § 3 ch 188 SLA 1970.]

Article 2. Uniform Accounting.


Sec. 37.05.130. General powers.
The Department of Administration is responsible for all accounts and purchases.


Sec. 37.05.140. Accounting system.
 (a) The Department of Administration shall maintain centralized accounting records that include the general and controlling accounts of the state. The state agencies shall prepare and transmit the documents prescribed by the department and shall submit the reports and statements required in order to carry out this chapter. Statistical or cost accounts related to the control accounts may be maintained by the department or by the agency as determined by the department, after consultation with the head of the agency concerned. Duplicate accounting records may not be maintained, except in the office of the Department of Administration as it directs.

 (b) [Repealed, § 18 ch 9 SLA 1994.]
 (c) [Repealed, § 18 ch 9 SLA 1994.]
 (d) The Department of Administration after consultation with the head of the agency concerned may decide not to maintain all or any part of the accounting records for an agency if the department finds that to do so would result in an appreciable loss of federal grant-in-aid funds to defray the administrative costs of maintaining the records.




Sec. 37.05.142. Accounting for program receipts.
The Department of Administration shall establish and maintain separate accounts by program source for all program receipts that state agencies deposit under AS 37.10.050 or under another statute if the program receipts are exempted by law from the deposit requirements of AS 37.10.050.


Sec. 37.05.144. Appropriations based upon program receipts.
The annual estimated balance in each account maintained under AS 37.05.142 may be used by the legislature to make appropriations to state agencies to administer the programs generating the program receipts, to implement the laws related to the functions generating the program receipts, or to cover costs associated with the collection of the program receipts.


Sec. 37.05.146. Definition of program receipts and non-general fund program receipts.
 (a) In AS 37.05.142 — 37.05.146 and AS 37.07.080, “program receipts” means fees, charges, income earned on assets, and other state money received by a state agency in connection with the performance of its functions. Unless otherwise provided in this section, program receipts are accounted for within, and appropriated from, the general fund of the state.

 (b) The program receipts listed in this subsection are accounted for separately, and appropriations from these program receipts are not made from the unrestricted general fund:
     (1) federal receipts;

     (2) University of Alaska receipts (AS 14.40.491);

     (3) designated program receipts; in this paragraph, “designated program receipts” means money received by the state from a source other than the state or federal government that is restricted to a specific use by the terms of a gift, grant, bequest, or contract;

     (4) receipts of or from the trust established by AS 37.14.400 — 37.14.450, except reimbursements described in AS 37.14.410;

     (5) receipts of the Alaska Fire Standards Council for which a taxpayer is allowed a credit under AS 21.96.075.

 (c) The program receipts of the following are accounted for separately, and appropriations from these program receipts are not made from the unrestricted general fund:
     (1) highway working capital fund (AS 44.68.210);

     (2) [Repealed, § 10 ch 58 SLA 2006.]
     (3) loan funds;

     (4) international airports revenue fund (AS 37.15.430);

     (5) corporate receipts earned or managed by a public corporation of the state;

     (6) fish and game fund (AS 16.05.100);

     (7) school fund (AS 43.50.140);

     (8) training and building fund (AS 23.20.130);

     (9) retirement funds (AS 14.25, AS 22.25, AS 26.05.222, AS 39.35, and former AS 39.37);

     (10) permanent fund (art. IX, sec. 15, Alaska Constitution);

     (11) public school trust fund (AS 37.14.110);

     (12) second injury fund (AS 23.30.040);

     (13) fishermen’s fund (AS 23.35.060);

     (14) FICA administration fund (AS 39.30.050);

     (15) receipts of the employee benefits program established under AS 39.30.150 — 39.30.180;

     (16) receipts of the deferred compensation program established under AS 39.45;

     (17) clean air protection fund (AS 46.14.260);

     (18) receipts of the group insurance programs established under AS 39.30.090;

     (19) mental health trust fund (AS 37.14.031);

     (20) Alaska children’s trust (AS 37.14.200);

     (21) commercial fisheries test fishing operations (AS 16.05.050(a)(14));

     (22) Regulatory Commission of Alaska under AS 42.05, AS 42.06, and AS 42.08;

     (23) Alaska Oil and Gas Conservation Commission under AS 31.05;

     (24) receipts of the Department of Commerce, Community, and Economic Development under AS 08.01.065 and from fines and penalties collected in licensing and disciplinary actions for occupations under AS 08.01.010;

     (25) receipts from the seafood marketing assessment under AS 16.51.120 — 16.51.170, and receipts of the Alaska Seafood Marketing Institute;

     (26) the administrative cost charge under AS 44.33.113 for the state’s role in the federal community development quota program;

     (27) dive fishery management assessment receipts (AS 43.76.150), salmon fishery assessment receipts (AS 43.76.220), and permit buy-back assessment receipts (AS 43.76.300);

     (28) process service fees collected by the Department of Public Safety;

     (29) Alaska Commercial Fisheries Entry Commission under AS 16.05.490, 16.05.530, and AS 16.43;

     (30) receipts of the Alaska Vocational Technical Center;

     (31) Alaska Pioneers’ Home and Alaska Veterans’ Home care and support receipts under AS 47.55.030;

     (32) receipts of the Department of Transportation and Public Facilities from tolls charged for use of the Whittier Tunnel;

     (33) receipts of the Department of Commerce, Community, and Economic Development, division of insurance, from license fees and fees for services;

     (34) receipts of the Department of Commerce, Community, and Economic Development from its functions relating to banking, securities, and corporations;

     (35) receipts of the Department of Corrections from the electronic prisoner monitoring program under AS 33.30.065(d);

     (36) receipts of the Department of Corrections from the operation of community residential centers;

     (37) receipts of the Alaska Police Standards Council;

     (38) receipts of the Department of Public Safety from fees for fire and life safety plan checks under AS 18.70.080(b);

     (39) receipts of the Department of Transportation and Public Facilities from the measurement standards and commercial vehicle enforcement program;

     (40) receipts of the Department of Education and Early Development for teacher certification under AS 14.20.020;

     (41) receipts of the Professional Teaching Practices Commission from professional certification fees;

     (42) receipts of the Department of Health and Social Services, Bureau of Vital Statistics;

     (43) receipts of the Department of Corrections from the inmate telephone system;

     (44) receipts of the Department of Public Safety from the Alaska automated fingerprint system under AS 44.41.025(b);

     (45) receipts of the Department of Administration from the boat registration program under AS 05.25.096;

     (46) state land disposal program (AS 38.04.022);

     (47) shore fisheries development lease program account (AS 38.05.082(f));

     (48) timber receipts account (AS 38.05.110);

     (49) workers’ safety and compensation administration account (AS 23.05.067);

     (50) receipts of fees for recording and related services of the Department of Natural Resources (AS 40.17.030(a)(10), 40.17.070; AS 44.37.025(b), 44.37.027(c); AS 45.29.303(b), 45.29.525, and 45.29.619(b));

     (51) receipts described in AS 46.03.482(b)(1) and (2) received under the commercial passenger vessel environmental compliance program;

     (52) receipts of the Department of Commerce, Community, and Economic Development for fees for business licenses and license endorsements under AS 43.70;

     (53) receipts of fees for certain inspections deposited under AS 05.20.060, AS 18.60.360, 18.60.395, 18.60.800, and AS 18.62.030 in the building safety account created under AS 44.31.025;

     (54) passenger facility charges collected at state-owned and operated airports under Federal Aviation Administration guidelines;

     (55) money received by the Department of Environmental Conservation from the inspection of food under AS 17.20;

     (56) fees and other charges received by the Department of Natural Resources under AS 41.21.026;

     (57) application and renewal fees received by the Department of Public Safety under AS 18.65.400 — 18.65.490 for licenses for security guards and security guard agencies;

     (58) fees received by the Department of Public Safety under AS 18.65.700 — 18.65.790 for the issuance, renewal, and replacement of permits to carry concealed handguns;

     (59) monetary recoveries by the Department of Health and Social Services of Medicaid expenditures from recipients, third parties, and providers under AS 47;

     (60) the state’s share of overpayments collected by the Department of Health and Social Services under AS 47.05.080;

     (61) income received by the Department of Health and Social Services from a state or federal agency for children in foster care under AS 47.14.100;

     (62) fees received by the Department of Health and Social Services under AS 44.29.022 for nursing and planning services provided at health centers;

     (63) fees received by the Department of Health and Social Services under AS 44.29.022 for genetic screening clinics and specialty clinics;

     (64) fees received by the Department of Health and Social Services under AS 18.08.080 for the certification of emergency medical technicians, emergency medical dispatchers, and emergency medical technician instructors;

     (65) fees collected by the Department of Health and Social Services under AS 44.29.022 from the certification of x-ray machines;

     (66) fees collected under AS 44.29.022 by the Department of Health and Social Services under the Alcohol Safety Action Program;

     (67) fees received by the Department of Health and Social Services under AS 47.32;

     (68) charges, rentals, and fees for airport or air navigation facility contracts, leases, and other arrangements under AS 02.15.020 and 02.15.090;

     (69) fees for utility facility permits under AS 02.15.102, encroachment permits under AS 02.15.106, utility right-of-way permits under AS 19.25.010, and utility facility permits under AS 35.10.210;

     (70) recoveries of repair costs for damage to highway fixtures;

     (71) the state’s share of child support collections for reimbursement of the cost of the Alaska temporary assistance program as provided under AS 25.27.120, 25.27.130, and AS 47.27.040;

     (72) vehicle registration fees collected under AS 28.10.421 and other fees and charges collected under AS 28.10.441;

     (73) fees for drivers’ licenses, drivers’ permits, renewals, and driver skills tests collected under AS 28.15.271;

     (74) user fees and other fees collected by the Department of Education and Early Development under AS 14.57.010;

     (75) student tuition and other fees related to schools that are operated by the state and collected under AS 14.07.030;

     (76) receipts of fees for registration and renewal of registration for the sale of business opportunities under AS 45.66.040;

     (77) emission control permit receipts account (AS 46.14.265);

     (78) workers’ compensation benefits guaranty fund (AS 23.30.082);

     (79) receipts of the Department of Environmental Conservation from the registration of pesticides and broadcast chemicals and the licensing of pesticide applicators under AS 44.46.025;

     (80) proceeds from prison employment, including deductions from prisoner wages for the cost of confinement under AS 33.30.201(b) and forfeited wages under AS 33.30.201(e);

     (81) fees collected under AS 18.74.080;

     (82) civil legal services fund under AS 37.05.590;

     (83) donations to the anatomical gift awareness fund under AS 13.50.150;

     (84) crime victim compensation fund (AS 18.67.162);

     (85) gifts, donations, and grants received by the Department of Military and Veterans’ Affairs for the purpose of establishing and maintaining Alaska veterans’ cemeteries under AS 26.10.030 and AS 44.35.035(b);

     (86) fines imposed and collected under AS 12.55.035;

     (87) the vaccine assessment account under AS 18.09.230.

     (88) monetary recoveries under AS 09.58 (Alaska Medical Assistance False Claim and Reporting Act);

     (89) fees collected by the Department of Natural Resources, division of geological and geophysical surveys, under AS 41.08.045.




Sec. 37.05.150. Funds and accounts.
The accounting system shall be in accordance with accepted principles of governmental (fund) accounting and shall include both budgetary and property accounts. The system must provide records showing at all times by funds, accounts, and other pertinent classifications the amounts appropriated, the estimated revenue, actual revenue or receipts, the amounts available for expenditure, the total expenditures, the unliquidated obligations, actual balances on hand, and the unencumbered balances of appropriations for each state agency.


Sec. 37.05.151. [Renumbered as AS 37.05.500.]
Sec. 37.05.152. [Renumbered as AS 37.05.510.]
Sec. 37.05.153. [Renumbered as AS 37.05.520.]
Sec. 37.05.156. [Renumbered as AS 37.05.540.]
Secs. 37.05.157 , 37.05.158. Reserve for capital outlay account; reserve for energy facilities development account. [Repealed, § 62 ch 14 SLA 1987.]
Sec. 37.05.159. Reserve for emergency operating expenses account. [Repealed, § 2 ch 58 SLA 1986.]
Sec. 37.05.160. Property records.
The Department of Administration shall direct the use of inventory records by all state agencies to show all fixed and movable property of the state. The records must be based on a physical inventory and charged with all subsequent purchases and shall be reduced by all property traded in, condemned, or disposed of. The accuracy of the property record shall be verified periodically by actual inspection of the property by the department. The state agencies may be required to take physical inventory of properties annually and at other times as the department directs.


Sec. 37.05.165. Petty cash accounts.
The Department of Administration shall determine the amount of the petty cash accounts needed by each state agency and inspect the petty cash accounts at least once each year to determine that the total plus amounts of receipts for unreplenished disbursements is equal to the fixed sum of cash set aside. Shortages in petty cash accounts are a personal liability of the responsible head of the agency to whom the account is set aside. The department shall adopt necessary regulations governing use and replenishment of petty cash funds.


Sec. 37.05.170. Restrictions on payments and obligations.
Payment may not be made and obligations may not be incurred against a fund unless the Department of Administration certifies that its records disclose that there is a sufficient unencumbered balance available in the fund and that an appropriation or expenditure authorization has been made for the purpose for which it is intended to incur the obligation.


Sec. 37.05.180. Limitation on payment of warrants.
A warrant upon the state treasury may not be paid unless presented at the office of the commissioner of revenue within six months of the date of its issuance. A warrant not presented within that time is presumed abandoned, except where the warrant is for the payment of a permanent fund dividend or a benefit payment or refund under AS 14.25, AS 22.25, AS 26.05, AS 39.30, AS 39.35, former AS 39.37, or AS 39.45. Money held for an abandoned warrant shall be delivered to the custody of the Department of Revenue to be administered as unclaimed property under AS 34.45.


Sec. 37.05.190. Pre-audit of claims.
 (a) The Department of Administration shall examine and audit every receipt, account, bill, claim, refund, and demand on the funds in the state treasury arising from activities carried on by state agencies. It shall determine whether or not the obligation is incurred in accordance with laws and regulations adopted under authority of law, and that the amount is correct and is unpaid.

 (b) The department may not approve for payment an account, bill, claim, refund, or demand on funds in the state treasury unless the claim is ordered by act of the legislature or is contracted against the state by an authorized officer or agent of the state.




Sec. 37.05.200. Pre-audit of receipts.
The Department of Revenue shall transmit to the Department of Administration copies of receipt documents showing all receipts received by the Department of Revenue. The receipt documents shall be audited, examined, and the amounts entered in the proper accounts in the records of the Department of Administration. The Department of Administration may adopt regulations to establish the system for providing current receipt documents.


Sec. 37.05.210. Fiscal reporting and statistics.
 (a) The Department of Administration shall
     (1) file with the governor and with the legislative auditor before December 16 a report of the financial transactions of the preceding fiscal year and of the financial condition of the state as of the end of that year, prepared in accordance with generally accepted accounting principles and audited by the legislative auditor in accordance with generally accepted audit standards, with comments and supplementary data that the Department of Administration considers necessary; this report shall be printed for the information of the legislature and the public;

     (2) compile statistics necessary for the budget and other statistics required by the governor;

     (3) file a travel and compensation report with the legislature by January 31 of each year containing detailed information for the previous calendar year of the salaries, per diem, travel expenses, relocation expenses, and any additional allowances for
          (A) the governor, the lieutenant governor, and the chiefs of staff of the governor and lieutenant governor;

          (B) the president and vice-president of the University of Alaska and the chancellors of the individual campuses of the university;

          (C) the commissioners or other executive heads of the principal departments in the executive branch of state government, and the deputy commissioners and division directors in those departments; and

          (D) the executive heads of public corporations created by law, including the Alaska Railroad Corporation.

 (b) By January 21 of each year, the University of Alaska and each public corporation shall provide the information related to salaries, per diem, travel expenses, relocation expenses, and any additional allowances to the Department of Administration in the form and manner prescribed by the department.




Article 3. Payment for State Purchases.


Sec. 37.05.220. Purchasing agent. [Repealed, § 67 ch 106 SLA 1986. For current provisions see AS 36.30.]
Sec. 37.05.225. [Renumbered as AS 36.30.180.]
Secs. 37.05.230 — 37.05.280. Competitive bids; contracts; leases. [Repealed, § 67 ch 106 SLA 1986. For current provisions, see AS 36.30.]
Sec. 37.05.285. Payment for state purchases.
 (a) Payment for purchases of goods or services provided a state agency shall be made by a required payment date that is
     (1) the date on which payment is due under the terms of a contract; or

     (2) 30 days after receipt of a proper billing for the amount of the payment due, if a date on which payment is due is not established by contract and if the billing contains or is accompanied by documents required by the contract or purchase order.

 (b) If a seller offers a discount from the amount otherwise due for property or services in exchange for payment within a specified period of time, the state agency may make payment in an amount equal to the discounted price only if payment is made within the specified period of time.

 (c) If payment for goods or services purchased by the state is not made on or before a required payment date under (a) of this section, the state shall pay interest on the unpaid balance from the required payment date at the rate of 1.5 percent a month, unless an agreement exists between the seller and the state that establishes a lower rate of interest or precludes the charging of interest. If the interest-bearing period of time is either (1) a fraction of a month or (2) one or more full months plus a fraction of a month, the state agency shall pay the same amount of interest for the fraction of a month as it would pay for a full month.

 (d) This section does not apply
     (1) if the cost of the goods or services purchased exceeds $500,000;

     (2) to payment for specific goods or services in dispute after a seller of goods or services receives notice from the state official responsible for authorizing payment for goods and services that the amount of the invoice or quality of specific goods or services is in dispute and stating the reasons for the dispute; the state agency shall pay for the specific goods or services in dispute within 30 days after resolution of the dispute; or

     (3) to a contract covered by AS 36.90.200 — 36.90.290.

 (e) Interest paid under (c) of this section shall be charged to the budget of the state agency that purchased the goods or services.

 (f) In this section,
     (1) “dispute” means a determination by the state official responsible for authorizing the payments for the purchase of goods or services that the performance or price charged is not in compliance with the terms of the contract or purchase order;

     (2) payment is considered made on the date when the payment is personally delivered to the seller or agent of the seller or on the date the payment is mailed;

     (3) “state agency” has the meaning given in AS 37.05.990 and also includes the legislative and judicial branches.




Article 4. Risk Management.


Sec. 37.05.287. Insurance for state assets.
 (a) The Department of Administration shall obtain or provide, in an amount and in the form that the department determines to be appropriate, casualty, property, and other insurance for protection of state assets and for the operation of state government. The department may provide for insurance coverage, in whole or in part, through a self-insurance program.

 (b) The Department of Administration shall annually review the state insurance program to ensure that, to the extent reasonable, adequate insurance coverage or reserves are maintained to satisfy all reasonably foreseeable claims or judgments for which payment may be due under the state insurance program during the next fiscal year. The department shall annually obtain an independent actuarial assessment of the state insurance program. No later than February 1 of each calendar year, the department shall submit to the presiding officers of each house of the legislature a review of the state insurance program, an independent actuarial assessment, and a certified audit of the state insurance catastrophe reserve account.




Sec. 37.05.289. State insurance catastrophe reserve account.
 (a) There is established in the general fund a state insurance catastrophe reserve account consisting of assets appropriated to it by the legislature, assets allocated to the account by the Department of Administration as provided in this section, and amounts deposited into the account as provided in this section. Assets of the account may be used to obtain insurance, to establish reserves for the self-insurance program, and to satisfy claims or judgments arising under the program. Interest earned on money in the account shall be remitted to the Department of Revenue in accordance with AS 37.10.050.

 (b) The Department of Administration may allocate to the state insurance catastrophe reserve account, from the appropriations to all state agencies for insurance-related purposes, an amount that the commissioner of administration determines to be necessary to provide an adequate insurance program for the operations of state government. Money remaining in the account at the end of a fiscal year is not a one-year appropriation under AS 37.25.010 and does not lapse, except for amounts determined by the commissioner of administration to be unnecessary to maintain this account at an appropriate level and not to exceed $5,000,000. If the amount necessary to satisfy claims or judgments for which payment may be due under the state insurance program in a fiscal year exceeds the unexpended balance of the amounts allocated to the account, the department may charge an additional amount from the unencumbered balance of any appropriation that is determined by the commissioner of administration to be available for lapse at the end of the fiscal year.

 (c) The $5,000,000 cap, set in (b) of this section, on money that may be retained in the state insurance catastrophe reserve account applies only to unobligated money in the account at the end of a fiscal year.

 (d) Amounts received in settlement of insurance claims or as recovery for losses shall be deposited into the state insurance catastrophe reserve account.




Sec. 37.05.290. Purpose of chapter. [Repealed, § 67 ch 106 SLA 1986.]
Sec. 37.05.300. [Renumbered as AS 37.05.900.]
Sec. 37.05.305. [Renumbered as AS 37.05.910.]
Sec. 37.05.310. [Renumbered as AS 37.05.920.]

Article 5. Administration of Grants.


Sec. 37.05.315. Grants to municipalities.
 (a) When an amount is appropriated or allocated as a grant to a municipality, the Department of Commerce, Community, and Economic Development shall promptly notify the municipality of the availability of the grant. When the Department of Commerce, Community, and Economic Development receives an agreement executed by the municipality that provides that the municipality (1) will spend the grant for the purposes specified in the appropriation or allocation; (2) will allow, on request, an audit by the state of the uses made of the grant; and (3) assures that, to the extent consistent with the purpose of the appropriation or allocation, the facilities and services provided with the grant will be available for the use of the general public, the Department of Commerce, Community, and Economic Development shall pay the grant directly to the municipality. The agreement executed by a municipality under this section shall be on a form furnished by the Department of Commerce, Community, and Economic Development and shall be executed within 60 days after the effective date of the appropriation or allocation.

 (b) An appropriation or allocation for a grant to a municipality lapses if substantial, ongoing work on the project has not begun within five years after the effective date of the appropriation or allocation.

 (c) In accepting a grant of money for construction of a public facility, a municipality covenants with the state that it will operate and maintain the facility for the practical life of the facility and that the municipality will not look to the state to operate or maintain the facility or pay for its operation or maintenance. This requirement does not apply to a grant of money for repair or improvement of an existing facility operated or maintained by the state at the time the grant is accepted if the repair or improvement for which the grant is made will not substantially increase the operating or maintenance costs to the state.

 (d) Not less than 20 percent of a grant shall be paid to a municipality within 10 days of the effective date of the agreement under (a) of this section. The remainder of the grant shall be paid either in monthly installments equal to the amount of grant money the municipality expended in the previous month or in a lump sum as determined by the Department of Commerce, Community, and Economic Development.

 (e) The Department of Labor and Workforce Development shall require a municipality awarded a grant for a public works project under (a) of this section to comply with the hiring preferences under AS 36.10.150 — 36.10.175 for employment generated by the grant.




Sec. 37.05.316. Grants to named recipients.
 (a) When an amount is appropriated or allocated to a department as a grant under this section for a named recipient that is not a municipality, the department to which the appropriation or allocation is made shall promptly notify the named recipient of the availability of the grant and request the named recipient to submit a proposal to provide the goods or services specified in the appropriation act for which the appropriation or allocation is made. A grant agreement must be executed within 60 days after the effective date of the appropriation or allocation unless the department determines that an award of the grant would not be in the public interest.

 (b) The Department of Labor and Workforce Development shall require a recipient awarded a grant for a public works project under (a) of this section to comply with the hiring preferences under AS 36.10.150 — 36.10.175 for employment generated by the grant.

 (c) An appropriation or allocation for a grant to a named recipient that is not a municipality lapses if substantial, ongoing work on the project has not begun within five years after the effective date of the appropriation or allocation.




Sec. 37.05.317. Grants to unincorporated communities.
 (a) When an amount is appropriated or allocated as a grant under this section to an unincorporated community, it shall be disbursed as follows:
     (1) Within 45 days after the effective date of the appropriation or allocation, the Department of Commerce, Community, and Economic Development shall notify the governing body of the unincorporated community, if any, that a grant is available.

     (2) The Department of Commerce, Community, and Economic Development shall determine if there is a qualified incorporated entity in the community area that will agree to receive the grant and administer it, subject to terms generally applicable to private grantees. If there is more than one such entity, the Department of Commerce, Community and Economic Development shall select the most qualified and the grant shall be awarded to that incorporated entity for the purposes specified in the appropriation act. However, the Department of Commerce, Community, and Economic Development shall give preference to a nonprofit corporation organized by a community for receipt of the grant.

     (3) If there is no incorporated entity qualified to receive the grant, the Department of Commerce, Community, and Economic Development shall administer the program as specified in the appropriation act directly or through agents or contractors with whom it may contract in the community area.

 (b) The Department of Labor and Workforce Development shall require the qualified incorporated entity awarded a grant or agents or contractors with whom the Department of Commerce, Community, and Economic Development contracts under (a) of this section to comply with the requirements of AS 36.10.150 — 36.10.175 for employment generated by the grant or contract if the grant or contract is for a public works project.

 (c) An appropriation or allocation for a grant to an unincorporated community lapses if substantial, ongoing work on the project has not begun within five years after the effective date of the appropriation or allocation.




Sec. 37.05.318. Further regulations prohibited.
Notwithstanding AS 44.62 (Administrative Procedure Act), AS 37.07 (Executive Budget Act), and other provisions of this chapter, a state agency may not adopt regulations or impose additional requirements or procedures to implement, interpret, make specific, or otherwise carry out the provisions of AS 37.05.315 — 37.05.317 unless required by the federal government for participation in federal programs.


Sec. 37.05.319. [Renumbered as AS 37.05.325.]
Sec. 37.05.320. [Renumbered as AS 37.05.990.]
Sec. 37.05.321. Restriction on use.
A grant or earnings from a grant made under AS 37.05.315 — 37.05.317 may not be used for the purpose of influencing legislative action. In this section “influencing legislative action” means promoting, advocating, supporting, modifying, opposing, or delaying or seeking to do the same with respect to any legislative action but does not include the provision or use of information, statistics, studies, or analyses in written or oral form or format. A grant or earnings from a grant made under AS 37.05.315 — 37.05.317 may not be used for purposes of travel in connection with influencing legislative action unless pursuant to a specific request from a legislator or legislative committee.


Sec. 37.05.325. Definitions for AS 37.05.315 — 37.05.317.
In AS 37.05.315 — 37.05.317, “allocation” and “appropriation” have the meanings given in AS 37.07.120.


Sec. 37.05.330. [Renumbered as AS 37.05.410.]
Sec. 37.05.400. [Renumbered as AS 37.05.990.]
Sec. 37.05.410. [Renumbered as AS 37.05.995.]

Article 6. Special Funds.


Sec. 37.05.500. Special funds.
 (a) The following funds shall be treated for accounting purposes as accounts in the general fund:
     (1) special revolving fund — surplus property (AS 44.68.130(c));

     (2) the vocational rehabilitation small business enterprise revolving fund (AS 23.15.130).

 (b) There shall be created in the general fund for each of the funds designated in (a) of this section a reserve equal to the excess of revenue received by each fund over expenditures made from that fund.




Sec. 37.05.510. Working reserve account.
 (a) There is established in the general fund a working reserve account. The working reserve account consists of amounts appropriated to state agencies for
     (1) cash payment of accrued leave;

     (2) cash payment of terminal leave;

     (3) payment of the employer’s contribution for unemployment benefits of former employees; and

     (4) payment of claims for workers’ compensation and general liability.

 (b) The Department of Administration shall allocate to the working reserve account amounts appropriated to all state agencies for the benefits set out in (a) of this section after the appropriation Act implementing the state operating budget is enacted. The department shall charge the reserve account with all payments for the benefits set out in (a) of this section. If payments for a fiscal year exceed the unexpended balance of appropriations allocated to the account, the department may, except for payments under (a)(4) of this section, pay those benefits by charging the unencumbered balance of any appropriation enacted to finance the payment of employee salaries and benefits that is determined to be available for lapse at the end of the fiscal year.




Sec. 37.05.520. Railbelt energy fund.
There is established in the general fund the Railbelt energy fund. The fund consists of money appropriated to it by the legislature and interest received on money in the fund. The department of revenue shall manage the fund. The legislature may appropriate money from the fund for programs, projects, and other expenditures to assist in meeting Railbelt energy needs, including projects for retrofitting state-owned buildings and facilities for energy conservation.


Sec. 37.05.530. National Petroleum Reserve — Alaska special revenue fund.
 (a) The National Petroleum Reserve — Alaska special revenue fund is established. The fund consists of all money disbursed to the state by the federal government under 42 U.S.C. 6506a(l) and former 42 U.S.C. 6508 (P.L. 96-514) since December 12, 1980, less the amount deposited in the general fund and expended by the state by general fund appropriations before June 9, 1984.

 (b) The commissioner of revenue shall manage the National Petroleum Reserve — Alaska special revenue fund.

 (c) The Department of Commerce, Community, and Economic Development shall adopt regulations under which municipalities impacted by National Petroleum Reserve — Alaska oil and gas development under 42 U.S.C. 6506a or former 42 U.S.C. 6508 may apply for and be eligible to receive grants to alleviate the impact. The department shall give priority in the allocation of grants to municipalities that are experiencing or will experience the most direct or severe impact from oil and gas development under 42 U.S.C. 6506a or former 42 U.S.C. 6508 within the National Petroleum Reserve — Alaska. The department shall fund all meritorious grant applications out of the money appropriated to it each year. Within 10 days after the convening of each regular session of the legislature, the department shall submit to the legislature a list of all municipalities that have received grants, a list of all municipalities determined by the department to be eligible for further grants, a recommendation of the amount of money to be granted for those additional applications, and written justification of each past and potential grant.

 (d) It is the intent of the legislature that each year all of the money in the National Petroleum Reserve — Alaska special revenue fund be made available for appropriation by the legislature to municipalities that demonstrate under (c) of this section present impact, or the need to determine or plan for future impact, from oil and gas development under 42 U.S.C. 6506a or former 42 U.S.C. 6508. It is the intent of the legislature that an initial appropriation be made to the Department of Commerce, Community, and Economic Development to cover anticipated impact grants, and that additional funds be made available through supplemental appropriations if the impact is greater than anticipated and the legislature considers the additional grants proposed by the department to be meritorious.

 (e) A municipality may use the funds received under (d) of this section only for the following activities and services to alleviate the impact of the oil and gas development under 42 U.S.C. 6506a or former 42 U.S.C. 6508 within the National Petroleum Reserve — Alaska:
     (1) planning;

     (2) construction, maintenance, and operation of essential public facilities by the municipality; and

     (3) other necessary public services provided by the municipality.

 (f) Funds appropriated under (d) of this section may not be used for the retirement of municipal debt.

 (g) The provisions of this subsection apply to amounts received by the state under 42 U.S.C. 6506a(l) or former 42 U.S.C. 6508, as follows:
     (1) amounts received and not appropriated for grants to municipalities under (d) of this section shall be deposited at the end of each fiscal year as follows:
          (A) 25 percent of amounts received by the state during that fiscal year under 42 U.S.C. 6506a(l) or former 42 U.S.C. 6508 to the principal of the Alaska permanent fund; and

          (B) .5 percent of amounts received by the state during that fiscal year under 42 U.S.C. 6506a(l) or former 42 U.S.C. 6508 to the public school trust fund (AS 37.14.110);

     (2) if, after making the grants under (d) of this section, the amounts remaining are insufficient to make payment in full of the deposits required by (1)(A) and (B) of this subsection, the deposits shall be allocated pro rata between the fund deposits;

     (3) the amounts remaining after the making of the payment of the deposits in full to the Alaska permanent fund and the public school trust fund under (2) of this subsection may be appropriated
          (A) first, to each of the funds described in (1)(A) and (B) of this subsection to recover amounts not paid to those funds on or after September 1, 2006, because of deficiencies in making the payments required by (2) of this subsection; and

          (B) after appropriations authorized by (A) of this paragraph, to the power cost equalization and rural electric capitalization fund (AS 42.45.100);

     (4) the amounts remaining after any appropriation to the power cost equalization and rural electric capitalization fund shall lapse into the general fund for use by the state for the following facilities and services: planning; construction, maintenance, and operation of essential public facilities; and other necessary public services.

 (h) In making appropriations from the National Petroleum Reserve — Alaska special revenue fund, the legislature shall identify the grants for activities, services, and facilities as capital appropriation items and shall specify the amounts for each item. Notwithstanding other provisions of law and unless expressly provided by the legislature in the appropriation item making the appropriation, an appropriation from the National Petroleum Reserve — Alaska special revenue fund shall, for the purposes of determining the funding sources for the appropriation be treated as though the appropriation takes effect in the fiscal year in which the appropriation passes the legislature. The authorization to expend funds appropriated from the fund shall take effect as otherwise provided by law.




Sec. 37.05.540. Budget reserve fund; appropriation limit.
 (a) There is established as a separate fund in the state treasury the budget reserve fund. The budget reserve fund consists of appropriations to the fund. Money received by the state that is subject to the appropriation limit under (b) of this section and that exceeds that limit, may be appropriated to the budget reserve fund.

 (b) Except for appropriations to the permanent fund or for Alaska permanent fund dividends, appropriations to the budget reserve fund, appropriations of revenue bond proceeds, appropriations required to pay the principal and interest on general obligation bonds, and appropriations of money received from a nonstate source in trust for a specific purpose, including revenue of a public enterprise or public corporation of the state that issues revenue bonds, appropriations from the mental health trust settlement income account (AS 37.14.036), and appropriations made to the mental health trust fund (AS 37.14.031), appropriations from the treasury made in a fiscal year may not exceed appropriations made in the preceding fiscal year by more than five percent plus the change in population and inflation since the beginning of the preceding fiscal year. For purposes of applying this limit an appropriation is considered to be made in the fiscal year in which it is enacted and a reappropriation remains attributed to the fiscal year in which the original appropriation is enacted. The determination of the change in population for purposes of this subsection shall be based on an annual estimate of population by the Department of Labor and Workforce Development. The determination of the change in inflation for purposes of this subsection shall be based on the Consumer Price Index for all urban consumers for Anchorage prepared by the United States Bureau of Labor Statistics. The amount of money received by the state that is subject to the appropriation limit includes the balance in the general fund carried forward from the preceding fiscal year.

 (c) If the legislature determines that the money subject to the appropriation limit received by the state in a fiscal year is less than the maximum permitted to be appropriated under (b) of this section, up to 25 percent of the balance of the budget reserve fund may be appropriated to the general fund.

 (d) The Department of Revenue shall manage and invest assets of the budget reserve fund in the manner set out for the management and investment of the assets of the general fund under AS 37.10.070. Income from investment of the budget reserve fund may be appropriated to the fund each year by law.

 (e) Notwithstanding other provisions of this section, appropriations may be made from the budget reserve fund needed by the governor to meet a disaster. In this subsection, “disaster” has the meaning given in AS 26.23.900.




Sec. 37.05.550. Alaska marine highway system vessel replacement fund.
 (a) There is in the general fund the Alaska marine highway system vessel replacement fund. The fund consists of money appropriated to it by the legislature. Money appropriated to the fund does not lapse. The Department of Revenue shall manage the fund. Interest received on money in the fund shall be accounted for separately and may be appropriated into the fund annually. The legislature may appropriate money from the fund for refurbishment of existing state ferry vessels, acquisition of additional state ferry vessels, or replacement of retired or outmoded state ferry vessels.

 (b) The legislature may appropriate to the fund money received by the state as Alaska marine highway system program receipts or from a settlement or final judicial determination of the Dinkum Sands case (United States v. Alaska) and the North Slope royalty case (State v. Amerada Hess, et al.) and not deposited into the Alaska permanent fund under AS 37.13.010(a)(1) or (2) or into the public school trust fund under AS 37.14.150.

 (c) The Department of Revenue shall prepare a written report, no later than the 10th legislative day of each regular legislative session, regarding the earnings of the Alaska marine highway system vessel replacement fund during the prior fiscal year and projected earnings of the Alaska marine highway system vessel replacement fund for the current fiscal year and the next fiscal year. The Department of Revenue shall notify the legislature that the report is available.




Sec. 37.05.555. University of Alaska building fund.
 (a) The University of Alaska building fund is created as a special account in the general fund. The fund consists of
     (1) payments made to the University of Alaska by a public or private occupant of a covered building under an agreement with the University of Alaska for costs of the occupant’s use and occupancy of building space; and

     (2) appropriations to the fund.

 (b) The legislature may appropriate, annually and under AS 37.07 (Executive Budget Act), amounts from the University of Alaska building fund to the University of Alaska to pay the costs of use, management, operation, maintenance, and depreciation related to space in covered buildings managed under an agreement with the University of Alaska.

 (c) Appropriations to the University of Alaska building fund are not one-year appropriations and do not lapse under AS 37.25.010.

 (d) The unexpended and unobligated balance of an appropriation from the University of Alaska building fund lapses into the University of Alaska building fund at the end of the fiscal year for which it was appropriated.

 (e) Nothing in this section exempts money deposited into the University of Alaska building fund from the requirements of AS 37.07 (Executive Budget Act) or dedicates that money for a specific purpose.

 (f) In this section, “covered building” means a building owned by the University of Alaska and designated by the Board of Regents as a covered building.




Sec. 37.05.560. Educational facilities maintenance and construction fund.
 (a) The educational facilities maintenance and construction fund is established as a separate fund in the general fund. The fund consists of all money appropriated to it.

 (b) The educational facilities maintenance and construction fund shall be invested by the Department of Revenue so as to yield competitive market rates, as provided in AS 37.10.071. Money in the fund may be appropriated
     (1) to finance the design, construction, and maintenance of public school facilities; and

     (2) for maintenance of University of Alaska facilities.

 (c) Appropriations from the education facilities maintenance and construction fund are subject to AS 14.11.008.




Sec. 37.05.565. Alaska capital income fund.
 (a) There is established in the general fund the Alaska capital income fund consisting of money deposited to the fund under AS 37.13.145(d) and of appropriations to the fund. The fund shall be invested by the Department of Revenue to yield competitive market rates as provided in AS 37.10.071. Income earned on money in the fund may be appropriated to the fund.

 (b) Money may be appropriated from the Alaska capital income fund for any public purpose, including to cover annual debt service and reserves for debt service on bonds authorized by state law. Nothing in this subsection creates a dedicated fund.




Sec. 37.05.570. Alaska public building fund.
 (a) There is created as a special account in the general fund the Alaska public building fund into which shall be deposited
     (1) payments made to the Department of Administration by a public or private occupant of a covered building under an agreement with the Department of Administration for costs of the occupant’s use and occupancy of building space; and

     (2) appropriations to the Alaska public building fund.

 (b) Beginning with the appropriations for the fiscal year beginning July 1, 2000, on an annual basis and under AS 37.07 (Executive Budget Act), the legislature may appropriate amounts from the Alaska public building fund to the Department of Administration to pay use, management, operation, maintenance, and depreciation costs related to space of covered buildings managed under an agreement with the Department of Administration.

 (c) Appropriations to the Alaska public building fund are not one-year appropriations and do not lapse under AS 37.25.010.

 (d) The unexpended and unobligated balance of an appropriation from the Alaska public building fund lapses into the Alaska public building fund at the end of the fiscal year for which it was appropriated.

 (e) Nothing in this section exempts money deposited into the Alaska public building fund from the requirements of AS 37.07 (Executive Budget Act) or dedicates that money for a specific purpose.

 (f) In this section, “covered building” means any building owned by the state for which the responsibility for operation, maintenance, and management has been assigned to the Department of Administration.




Sec. 37.05.580. Tobacco use education and cessation fund.
 (a) There is created as a special account in the general fund the tobacco use education and cessation fund into which shall be deposited 20 percent annually of the revenue derived from the settlement of State of Alaska v. Philip Morris, Incorporated, et al, No. 1JU-97-915 CI (Alaska Super. 1997). The purpose of the tobacco use education and cessation fund is to provide a source to finance the comprehensive smoking education, tobacco use prevention, and tobacco control program authorized by AS 44.29.020(a)(14).

 (b) The legislature may make appropriations from the tobacco use education and cessation fund for the comprehensive smoking education, tobacco use prevention, and tobacco control program established under AS 44.29.020(a)(14).

 (c) Nothing in this section creates a dedicated fund.




Sec. 37.05.590. Civil legal services fund.
The civil legal services fund is established as a special account in the general fund. The fund consists of appropriations to it. Annually, the legislature may appropriate to the fund only from amounts deposited into the general fund of the state under AS 09.17.020(j). The legislature may make appropriations from the fund to organizations that provide civil legal services to low-income individuals. Nothing in this section creates a dedicated fund. In this section, “low-income individual” means an individual with an income equal to or less than 125 percent of the most recent federal poverty guidelines for Alaska set by the United States Department of Health and Human Services.


Sec. 37.05.600. Alaska veterans’ cemetery fund.
 (a) There is created as a special account in the general fund the Alaska veterans’ cemetery fund into which shall be deposited appropriations to the Alaska veterans’ cemetery fund.

 (b) Beginning with the appropriations for the fiscal year beginning July 1, 2008, on an annual basis and under AS 37.07 (Executive Budget Act), the legislature may appropriate amounts from the Alaska veterans’ cemetery fund to the Department of Military and Veterans’ Affairs for the construction, operation, and maintenance of the Alaska veterans’ cemeteries established under AS 44.35.035.

 (c) Appropriations to the Alaska veterans’ cemetery fund are not one-year appropriations and do not lapse under AS 37.25.010.

 (d) The unexpended and unobligated balance of an appropriation from the Alaska veterans’ cemetery fund lapses into the Alaska veterans’ cemetery fund at the end of the fiscal year for which it was appropriated.

 (e) Nothing in this section exempts money deposited into the Alaska veterans’ cemetery fund from the requirements of AS 37.07 (Executive Budget Act) or dedicates that money for a specific purpose.




Sec. 37.05.610. Alaska affordable energy fund.
 (a) The Alaska affordable energy fund is created as a special account in the general fund. The fund consists of the amount determined and deposited in the fund under (b) of this section and interest earned on the fund balance. The purpose of the fund is to provide a source from which the legislature may appropriate money to develop infrastructure to deliver energy to areas of the state that are not expected to have or do not have direct access to a North Slope natural gas pipeline.

 (b) The amount to be deposited in (a) of this section is 20 percent of the revenue received from the state’s royalty gas transported in an Alaska liquefied natural gas project that remains after the payment to the Alaska permanent fund under AS 37.13.010.

 (c) The legislature may make appropriations from the Alaska affordable energy fund for the purpose described in (a) of this section.

 (d) Nothing in this section creates a dedicated fund.

 (e) In this section,
     (1) “Alaska liquefied natural gas project” has the meaning given in AS 31.25.390;

     (2) “North Slope natural gas pipeline” has the meaning given in AS 42.06.630.




Article 7. Miscellaneous Provisions.


Sec. 37.05.800. Restriction on use of state money for residential contracting.
 (a) The state may not grant or loan money or purchase a loan for the construction or alteration of a privately-owned residential structure of one to four units unless the grant or loan requires the construction or alteration to be undertaken by a residential contractor with an endorsement issued under AS 08.18. In this subsection, “alteration” means changes that have a value greater than 25 percent of the value of the structure being altered.

 (b) The restriction of (a) of this section does not apply to a state loan or grant or purchase of a loan made for work described in AS 08.18.161 that is exempt from the requirements of AS 08.18.




Article 8. General Provisions.


Sec. 37.05.900. Interpretation of chapter.
This chapter shall be construed as supplemental to all other state laws not in conflict with it. If a section or part of a section of this chapter is in conflict with federal requirements for a program for which federal grant-in-aid funds are available, the section or part to the extent of the conflict is inoperative.


Sec. 37.05.910. Applicability to University of Alaska.
The commissioner of administration may delegate the performance of the functions under this chapter as they relate to the university to the Board of Regents of the University of Alaska and set out the criteria and guidelines which shall be followed. The commissioner shall direct necessary stipulations and exercise monitoring responsibility for conformance through the Board of Regents of the University of Alaska.


Sec. 37.05.920. Fiscal year.
The fiscal year of the state begins on July 1 of each year and ends at midnight on the following June 30. The accounts of the Department of Administration, the Department of Revenue, and all other state officers whose accounts are in any way connected with the treasury shall be kept, and all duties performed with reference to the beginning and ending of the fiscal year.


Sec. 37.05.990. Definitions for chapter.
In this chapter,
     (1) “fiscal year,” “budget year,” “accounting year,” or similar term means a year beginning on July 1 of one calendar year and ending on June 30 of the following calendar year;

     (2) “state agency,” “agency,” “department,” or similar term means a department, office, institution, board, commission, bureau, division, or other administrative unit forming the state government, and includes the Alaska Pioneers’ Home, the Alaska Veterans’ Home, and the University of Alaska.




Sec. 37.05.995. Short title.
This chapter may be cited as the Fiscal Procedures Act.


Chapter 06. Capital Project Matching Grant Programs.

Sec. 37.06.010. Municipal capital project matching grant program.
 (a) The municipal capital project matching grant program is established in the department. Grants to municipalities under this program shall be administered as provided in this section.

 (b) The municipal capital project matching grant fund is established in the department and consists of appropriations to the fund. Appropriations to the fund do not lapse except as provided in (f) of this section. The money in the fund is held by the department in custody under this subsection for each municipality. The department shall establish, for each municipality, an individual grant account within the fund. As provided in this subsection, each fiscal year the department shall allocate, to the individual grant accounts, appropriations to the fund. The department shall credit interest earned on money in an individual grant account to that account. Except as provided in (c) of this section, the amount allocated under this subsection to an individual grant account in a fiscal year is determined by multiplying the total amount appropriated to the fund during that fiscal year by a fraction,
     (1) the numerator of which equals for a municipality with a population
          (A) under 1,000, the amount equal to that population multiplied by 1.5;

          (B) of at least 1,000 but less than 5,000, the amount equal to that population multiplied by 1.4;

          (C) of at least 5,000 but not greater than 10,000, the amount equal to that population multiplied by 1.2;

          (D) of over 10,000, the amount equal to that population; and

     (2) the denominator of which equals the sum of the numerators calculated for all municipalities under (1)(A) — (D) of this subsection.

 (c) A minimum of $25,000 shall be allocated to each municipality’s individual grant account each fiscal year under (b) of this section. The department shall reduce allocations under (b) of this section on a pro rata basis, based upon the population of the municipalities, if necessary to fund the minimum amount for each municipality. If appropriations are not sufficient to fully fund the minimum amount for each municipality, the amount appropriated shall be allocated equally among the municipalities’ individual grant accounts.

 (d) By October 1 of each fiscal year, each municipality shall submit to the governor a prioritized list of capital projects and estimated costs to be financed with money from the municipality’s individual grant account established under (b) of this section. The list must include the amount and source of the local share required by AS 37.06.030. The governor shall include in the capital improvements program presented to the legislature under AS 37.07.060 the projects submitted by each municipality that the governor recommends for funding. If, in the capital improvements program, the governor includes projects in other than the priority order submitted by a municipality, the governor shall provide the legislature with a written statement of the reasons for that action.

 (e) The legislature may make appropriations from a municipality’s individual grant account established under (b) of this section to the municipality for capital projects under this section. Subject to appropriations under this subsection and to the local share requirements of AS 37.06.030, each municipality may draw amounts from its individual grant account for a capital project, in accordance with an appropriation for that project. In accepting a draw, the municipality covenants with the state that it will provide for the operation and maintenance of the capital project for which the draw is used for the practical life of the project, and acknowledges that the state is not responsible for operating or maintaining the capital project or for paying for its operation or maintenance. This requirement does not apply to use of money from a draw for repair or improvement of an existing facility that is operated or maintained by the state at the time that the draw is made if the repair or improvement for which the draw is used will not substantially increase the operating or maintenance costs to the state. No more than 10 percent of the total amount of money from a draw for land acquisition, or planning, design, construction, or repair of a facility may be used for administrative expenses. No more than five percent of the total amount of money from a draw for equipment or equipment repairs may be used for administrative expenses. If a municipality provides grant money from a draw to another recipient, the municipality may not use any of the money from the draw for administrative expenses. The municipality and its agents, contractors, and subcontractors shall comply with the hiring preferences under AS 36.10 in hiring employees to be paid wholly or in part with money from a draw.

 (f) A municipality shall repay to the department money drawn from its individual grant account if substantial, ongoing work on the capital project is not started within five years after the effective date of the appropriation from which the draw is funded. Money repaid shall be deposited into the general fund. Money from an allocation to a municipality’s individual grant account that has not been drawn out by the municipality within five years after the effective date of the appropriation from which the allocation is funded lapses into the general fund.

 (g) For purposes of this section, in calculating the population of a borough, the population of each city in the borough is excluded. The determination of population shall be based on the latest figures of the United States Bureau of the Census or other population data that the Department of Commerce, Community, and Economic Development determines is reliable.

 (h) The provisions of AS 37.05.321 apply to a grant and draws made under this section, and to earnings from the grant and draws.

 (i) Before the department may pay a draw under this section to a municipality, the department shall have evidence acceptable to the department that the municipality
     (1) has a preventive maintenance plan that
          (A) includes a computerized maintenance management program, cardex system, or other formal systematic means of tracking the timing and costs associated with planned and completed maintenance activities, including scheduled preventive maintenance;

          (B) addresses energy management for buildings owned or operated by the municipality;

          (C) includes a regular custodial care program for buildings owned or operated by the municipality;

          (D) includes preventive maintenance training for facility managers and maintenance employees;

          (E) includes renewal and replacement schedules for electrical, mechanical, structural, and other components of facilities owned or operated by the municipality; and

     (2) is adequately adhering to the preventive maintenance plan.

 (j) In this section, unless specified otherwise, “department” means the Department of Commerce, Community, and Economic Development.




Sec. 37.06.020. Unincorporated community capital project matching grant program.
 (a) The unincorporated community capital project matching grant program is established in the department. Grants to unincorporated communities under the program shall be administered as provided in this section.

 (b) The unincorporated community capital project matching grant fund is established in the department and consists of appropriations to the fund. Appropriations to the fund do not lapse except as provided in (h) of this section. The money in the fund is held by the department in custody under this subsection for each unincorporated community eligible for an allocation under this subsection. The department shall establish an individual grant account within the fund for each unincorporated community that was entitled to receive state aid under AS 29.60.855 during the preceding fiscal year. As provided in this subsection, each fiscal year, the department shall allocate, to the individual grant accounts, appropriations to the fund. An unincorporated community is eligible for an allocation in a fiscal year if the community was eligible to receive state aid under AS 29.60.855 during the preceding fiscal year. The department shall credit interest earned on money in an individual grant account to that account. Except as provided in (c) of this section, the amount allocated under this subsection to an individual grant account in a fiscal year is determined by dividing the total amount appropriated to the fund during that fiscal year by the number of unincorporated communities eligible for an allocation during that fiscal year.

 (c) A minimum of $25,000 shall be allocated to each eligible unincorporated community’s grant account each fiscal year under (b) of this section. If appropriations are not sufficient to fully fund the minimum amount for each eligible unincorporated community, the amount appropriated shall be allocated equally among the eligible unincorporated communities.

 (d) The department shall designate, in each eligible unincorporated community, an incorporated nonprofit entity or a Native village council that agrees to receive and spend grant money allocated to the unincorporated community’s individual grant account under (b) of this section. If there is more than one qualified entity in a community, the department shall designate the entity that the department finds most qualified to make draws from that unincorporated community’s individual grant account and spend the money. If there is no qualified incorporated nonprofit entity or Native village council in an unincorporated community that will agree to receive and spend money allocated to the community under (b) of this section, draws may not be made from the unincorporated community’s individual grant account and the amount allocated to the account lapses into the general fund.

 (e) By October 1 of each fiscal year, the incorporated nonprofit entity or Native village council designated by the department under (d) of this section shall submit to the governor a prioritized list of capital projects and estimated costs to be financed with money from the community’s individual grant account established under (b) of this section. The list must include the amount and source of the local share required by AS 37.06.030. The governor shall include in the capital improvements program presented to the legislature under AS 37.07.060 the projects submitted by designated entities under this subsection that the governor recommends for funding. If, in the capital improvements program, the governor includes projects in other than the priority order submitted by a designated entity, the governor shall provide the legislature with a written statement of the reasons for that action.

 (f) The legislature may make appropriations, from an unincorporated community’s individual grant account established under (b) of this section, for the unincorporated community for capital projects under this section. Subject to appropriations under this subsection and to the local share requirements of AS 37.06.030, an entity designated by the department under (d) of this section may draw, on behalf of the unincorporated community, amounts from that community’s individual grant account for a capital project in accordance with an appropriation for that project. In accepting a draw, an entity designated by the department under (d) of this section acknowledges that the state is not responsible for operating or maintaining a capital project for which the draw is used, or for paying for its operation or maintenance. The acknowledgment does not apply to use of money from a draw for repair or improvement of an existing facility that is operated or maintained by the state at the time that the draw is made if the repair or improvement for which the draw is used will not substantially increase the operating or maintenance costs to the state. No more than 10 percent of the total amount of money from a draw for land acquisition, or planning, design, construction, or repair of a facility may be used for administrative expenses. No more than five percent of the total amount of money from a draw for equipment or equipment repairs may be used for administrative expenses. The designated entity and its agents, contractors, and subcontractors shall comply with the hiring preferences under AS 36.10 in hiring employees to be paid wholly or in part with money from a draw.

 (g) An entity designated by the department under (d) of this section that is a Native village council may not draw money from an unincorporated community’s individual grant account unless the council waives immunity from suit for claims arising out of activities of the council related to the draw. A waiver of immunity from suit under this subsection must be on a form provided by the Department of Law. Neither this subsection nor any action taken under it enlarges or diminishes the governmental authority or jurisdiction of a Native village council.

 (h) An entity designated by the department under (d) of this section shall repay to the department money it has drawn from an unincorporated community’s individual grant account if substantial, ongoing work on the project is not started within five years after the effective date of the appropriation from which the draw is funded. Money repaid shall be deposited into the general fund. Money from an allocation to an unincorporated community’s individual grant account that has not been drawn out by a designated entity within five years after the effective date of the appropriation from which the allocation is funded lapses into the general fund.

 (i) The limitations of AS 44.33.745 do not apply to a grant made under this section.

 (j) The provisions of AS 37.05.321 apply to a grant and draws made under this section, and to earnings from the grant and draws.

 (k) Before the department may pay a draw under this section to an entity, the department shall have evidence acceptable to the department that the entity
     (1) has a preventive maintenance plan that
          (A) includes a computerized maintenance management program, cardex system, or other formal systematic means of tracking the timing and costs associated with planned and completed maintenance activities, including scheduled preventive maintenance;

          (B) addresses energy management for public buildings owned or operated by the entity;

          (C) includes a regular custodial care program for public buildings owned or operated by the entity;

          (D) includes preventive maintenance training for managers of public facilities owned or operated by the entity and maintenance employees;

          (E) includes renewal and replacement schedules for electrical, mechanical, structural, and other components of public facilities owned or operated by the entity; and

     (2) is adequately adhering to the preventive maintenance plan.

 (l) In this section, unless specified otherwise, “department” means the Department of Commerce, Community, and Economic Development.




Sec. 37.06.030. Local share requirements.
 (a) For each draw made by a municipality under AS 37.06.010, the municipality shall contribute a local share to the cost of the capital project for which the draw is made. The amount of the local share equals the local share percentage as calculated under (1) of this subsection, divided by the state share percentage as calculated under (2) of this subsection, multiplied by the amount of the draw. For purposes of this subsection,
     (1) the local share percentage is
          (A) 30 percent for a municipality with a population of 5,000 or more;

          (B) for a municipality with a population of 1,000 — 4,999, the greater of
               (i) 15 percent; or

               (ii) the percentage obtained by dividing the amount that would be received by the municipality from a property tax levy of 1/1000th of a mill for each $1,000 of grant funds received by the sum of that first amount plus the amount of the grant or draw, but not more than 30 percent;

          (C) for a municipality with a population of under 1,000, the greater of
               (i) five percent; or

               (ii) the percentage obtained by dividing the amount that would be received by the municipality from a property tax levy of 1/1000th of a mill for each $1,000 of grant funds received by the sum of that first amount plus the amount of the grant or draw, but not more than 30 percent;

     (2) the state share percentage equals one minus the local share percentage;

     (3) the local share to be contributed by a municipality may be satisfied with (A) federal, municipal, or local money; (B) labor, materials, or equipment used directly in the construction of the project, or land, including land transferred by the state to the municipality; the department shall determine the value of a contribution under this subparagraph; (C) money from another nonstate source; (D) money received by the municipality under AS 29.60.850 — 29.60.879; (E) state taxes refunded or reimbursed to the municipality whose use for the purposes of this subsection is not prohibited; (F) allocations of state aid for the costs of school construction debt under AS 14.11.100; and (G) money obtained from the sale or lease of land or other assets transferred by the state to the municipality; except as provided in this paragraph, the local share may not be satisfied with money from, or with the portion of an asset that was obtained with money from, an appropriation, allocation, entitlement, grant, or other payment from the state.

 (b) For each draw made by an entity or council under AS 37.06.020, the incorporated entity or Native village council that makes the draw shall contribute a local share of the cost of the capital project for which the draw is made. The amount of the local share equals the local share percentage as calculated under (1) of this subsection, divided by the state share percentage as calculated under (2) of this subsection, multiplied by the amount of the draw. For purposes of this subsection,
     (1) the local share percentage is five percent;

     (2) the state share percentage equals one minus the local share percentage;

     (3) the local share may be satisfied from (A) federal or local money; (B) labor, materials, or equipment used directly in the construction of the project, or land, including land transferred by the state; the department shall determine the value of a contribution under this subparagraph; (C) money from another nonstate source; (D) money received by the unincorporated community under AS 29.60.850 — 29.60.879; or (E) money obtained from the sale or lease of land or other assets transferred by the state; except as provided in this paragraph, the local share may not be satisfied with money from, or with the portion of an asset that was obtained with money from, an appropriation, allocation, entitlement, grant, or other payment from the state.

 (c) For purposes of (a) of this section, in calculating the population of a borough the population of each city in the borough is excluded. The determination of population shall be based on the latest figures of the United States Bureau of the Census or other population data that the Department of Commerce, Community, and Economic Development determines is reliable.




Sec. 37.06.040. Municipalities organized under federal law.
An entity organized under federal law as an Indian reserve that existed before enactment of 43 U.S.C. 1618(a) and is continued in existence under that subsection is a municipality for purposes of AS 37.06.010 — 37.06.090 and may not receive a grant under AS 37.06.020. In addition to other eligibility requirements applicable to municipalities, to qualify to receive a grant under AS 37.06.010, a municipality organized under federal law as an Indian reserve shall form a community development corporation with authority to determine how the grant money will be used. The corporation’s charter must require that the governing board of the corporation shall be elected at an annual election open to all residents of the municipality who are registered and qualified to vote in state elections. The Department of Commerce, Community, and Economic Development may distribute money for the municipality only to a corporation organized in accordance with this section and only after the corporation has delivered a written waiver of sovereign immunity from legal action by the state to recover all or a portion of the money distributed under AS 37.06.010.


Sec. 37.06.080. Adoption of regulations.
The Department of Commerce, Community, and Economic Development
     (1) may adopt regulations that impose additional requirements or procedures to implement, interpret, make specific, or otherwise carry out the provisions of this chapter;

     (2) shall adopt regulations providing for periodic audits of the use of money for grants under this chapter, including audit of the department’s determination of the value of, and adequacy of the verification of the actual use of, locally funded or contributed labor on projects funded by a grant under this chapter.




Sec. 37.06.090. Definition of “capital project.”
In this chapter, “capital project” means a project with a cost exceeding $10,000 to acquire or improve an asset with an anticipated life exceeding one year and includes land acquisition, construction, repair or structural improvement of a facility, engineering and design for a facility, and acquisition or repair of equipment.


Chapter 07. Executive Budget Act.

Sec. 37.07.010. Statement of policy.
It is the purpose of this chapter to establish a comprehensive system for state program and financial management that furthers the capacity of the governor and legislature to plan and finance the services that they determine the state will provide for its citizens. The system must include procedures for
     (1) the orderly establishment, continuing review, and periodic revision of the program goals and policies of state agencies and financial goals and policies of the state;

     (2) the development, coordination, and review of long-range program and financial plans that will implement established state goals and policies;

     (3) the preparation, coordination, analysis, and enactment of a budget that is organized to focus on the services provided by state agencies and on the cost of those services and that provides for implementation of policies and plans, in the succeeding budget period;

     (4) the evaluation of alternatives to existing policies, plans, and procedures that offer potential for more efficient state services;

     (5) the regular appraisal and reporting of program performance;

     (6) public participation in the development of the annual budget, including opportunity for the public to review and comment upon the plans and programs of the Office of the Governor and all state agencies in the executive branch, the legislature, the judicial system, the University of Alaska, and the public corporations of the state.




Sec. 37.07.014. Responsibilities of the legislature.
 (a) To carry out its legislative power under art. II, sec. 1, Constitution of the State of Alaska, and to promote results-based government, the legislature shall issue a mission statement for each agency and the desired results the agency should achieve. The legislature may issue a separate mission statement for a subunit of an agency. A mission statement and desired results should promote the efficient, measured use of the state’s resources. A mission statement and desired results constitute policy under which an agency shall operate, and, where appropriate, the mission statement may be implemented by statute.

 (b) The legislature shall provide for a budget review function that promotes results-based government. The legislature shall adopt a method of measuring results for each agency, and measurements shall be reported semi-annually by each agency to the legislature. The reports shall be used by the legislature to evaluate whether the mission and desired results for that agency or subunit of the agency are being achieved.

 (c) The legislature shall analyze the comprehensive operating and capital improvements programs and financial plans recommended by the governor.

 (d) To foster results-based government, to carry out the mission statements, and to obtain desired results, the legislature shall authorize the comprehensive operating and capital improvements programs and financial plans. The legislature shall allocate the state’s resources for effective and efficient delivery of public services by
     (1) clearly identifying desired results;

     (2) setting priorities;

     (3) assigning accountability; and

     (4) using methods for measuring, reporting, and evaluating results.

 (e) The legislature shall
     (1) provide for a post-audit function to cover financial transactions, program accomplishment, and compliance with legislative intent;

     (2) adopt or revise the estimate of receipts required to balance the succeeding fiscal year’s budget in order that proposed expenditures do not exceed estimated receipts for that fiscal year;

     (3) adopt, revise, or initiate revenue measures in order to balance the succeeding fiscal year’s budget and the capital improvements section of the budget for the succeeding six years.

 (f) To help fulfill the legislature’s responsibilities under this section and achieve results-based government, each agency shall
     (1) allocate resources to achieve the mission and desired results established by the legislature;

     (2) express desired results established by the legislature and other program results in measurable terms;

     (3) measure progress towards mission statements and desired results established by the legislature and other results;

     (4) promote activities consistent with mission statements and desired results established by the legislature that reduce or avoid future costs;

     (5) plan for the short-term and the long-term using consistent assumptions for major demographic and other trends; and

     (6) require accountability at all levels for meeting program mission statements and desired results established by the legislature.




Sec. 37.07.016. Governor’s use of mission statements.
To carry out the executive power under art. III, sec. 1 and sec. 16, Constitution of the State of Alaska, the governor shall use the mission statements and desired results issued by the legislature as a guide to implement and execute the law. The governor shall assure that each agency complies with the mission statement and achieves the desired results identified by the legislature.


Sec. 37.07.020. Responsibilities of the governor.
 (a) The governor shall prepare a budget for the succeeding fiscal year that must cover all estimated receipts, including all grants, loans, and money received from the federal government and all proposed expenditures of the state government. The budget shall be organized so that the proposed expenditures for each agency are presented separately. The budget must be accompanied by the information required under AS 37.07.050 and by the following separate bills: (1) an appropriation bill authorizing the operating and capital expenditures of the state’s integrated comprehensive mental health program under AS 37.14.003(a); (2) an appropriation bill authorizing state operating expenditures other than those included in the state’s integrated comprehensive mental health program; (3) an appropriation bill authorizing capital expenditures other than those included in the state’s integrated comprehensive mental health program; and (4) a bill or bills covering recommendations, if any, in the budget for new or additional revenue. The budget for the succeeding fiscal year and each of the bills shall become public information on December 15 at which time the governor shall submit copies to the legislature and make copies available to the public. The bills, identical in content to the copies released on December 15, shall be delivered to the rules committee of each house before the fourth legislative day of the next regular session for introduction.

 (b) In addition to the budget and bills submitted under (a) of this section, the governor shall submit a capital improvements program covering the succeeding six fiscal years. The governor shall also submit a fiscal plan with estimates of significant sources and uses of funds for the succeeding 10 fiscal years. The fiscal plan
     (1) must include sufficient details to identify
          (A) significant sources of funds;

          (B) significant uses of funds, including lump sum projections of
               (i) operating expenditures;

               (ii) capital expenditures;

               (iii) debt service expenditures;

               (iv) fund capitalizations;

               (v) appropriations of income of the Alaska permanent fund (art. IX, sec. 15, Constitution of the State of Alaska), if any;

     (2) must balance sources and uses of funds held while providing for essential state services and protecting the economic stability of the state;

     (3) must include projected balances of significant funds held in separate accounts, including the budget reserve fund (art. IX, sec. 17, Constitution of the State of Alaska), the public education fund (AS 14.17.300), and the Alaska capital income fund (AS 37.05.565);

     (4) must set out significant assumptions used in the projections with sufficient detail to enable the legislature to rely on the fiscal plan in understanding, evaluating, and resolving issues of state budgeting, including information that supports major areas of operating increases, such as population demographics that affect the need for particular government services.

 (c) Proposed expenditures may not exceed estimated revenue for the succeeding fiscal year. The expenditures proposed in the six-year capital improvements program may not exceed the estimated revenue and bond authorizations passed and proposed.

 (d) [Repealed, § 35 ch 126 SLA 1994.]
 (e) The budget prepared under (a) of this section must present the proposed operating expenditures for each agency for annual facility operations, annual maintenance and repair, and periodic renewal and replacement for components of public buildings and facilities separately from the other proposed operating expenditures by the agency. Proposed annual appropriations for an agency’s facility operations, maintenance and repair, and renewal and replacement for components of public buildings and facilities contained in an appropriation bill prepared under (a) of this section must be presented separately from appropriations for other proposed operating expenditures by the agency.




Sec. 37.07.030. Responsibilities of the legislature. [Repealed, § 9 ch 27 SLA 1998.]
Sec. 37.07.040. Office of management and budget.
The Alaska office of management and budget shall
     (1) assist the governor in meeting the requirements of AS 37.07.020, including the coordination and analysis of state agency goals and objectives, plans, and budget requests;

     (2) prepare for submission to the governor an annually updated six-year capital improvements program and the proposed capital improvements budget for the coming fiscal year, the latter to include individual project justification with documentation of estimated project cost;

     (3) develop procedures to produce the information needed for effective policy decision making, including procedures to provide for the dissemination of information about plans, programs, and budget requests to be included in the annual budget and opportunity for public review and comment during the period of budget preparation;

     (4) assist state agencies in their statement of goals and objectives to achieve, among other things, the legislature’s mission and desired results, preparation of plans, assessments of the extent to which missions and desired results have been achieved, budget requests, and reporting of program performance; all documents forwarded by the office to a state agency containing instructions for the preparation of program plans and budget requests and the reporting of program performance are public information after the date they are forwarded;

     (5) administer its responsibilities under the program execution provisions of this chapter so that the policy decisions and budget determinations of the governor and the legislature are implemented;

     (6) provide the legislative finance division with the budget information it may request;

     (7) provide the legislative finance division with an advance copy of the governor’s budget workbooks at least seven days before the legislature convenes in a regular session;

     (8) prepare the proposed capital improvements budget for the coming fiscal year evaluating both state and local requests from the standpoint of need, equity, and priorities of the jurisdiction; other factors such as project amounts, population, local financial match, federal funds being used for local match, municipality or unincorporated community acceptance of the facility, and all associated costs of the facility may be considered;

     (9) for each department in the executive branch, report to the legislature by the 45th day of each regular session the amount of money appropriated to the department that is expected to lapse into the general fund at the end of the current fiscal year;

     (10) establish and administer a state agency program performance management system involving planning, performance budgeting, performance measurement, and program evaluation; the office shall ensure that information generated under this system is useful for managing and improving the efficiency and effectiveness of agency operations;

     (11) by January 15, list each lease-purchase agreement entered into by an agency during the immediately preceding fiscal year for the acquisition of equipment or other personal property, together with a description of the property acquired and financial details, including the purchase price, the term for payments, the amount of each payment, and the amount of interest or financing charges paid;

     (12) work with state agencies to develop a standardized methodology to collect and store energy consumption and expense data.




Sec. 37.07.045. Debt affordability analysis.
The Department of Revenue shall prepare a report that includes an inventory of state bonded debt, an estimate of state bonded debt that will be acquired within the next three years, and an evaluation of debt affordability. The report must conform to rating agency requirements for a debt affordability study. By January 31 each year, the report must be provided to the legislature for use in budget planning and made available to the public.


Sec. 37.07.050. Agency program and financial plans; mission statements.
 (a) The agencies shall assure the development of a statewide system of results-based government designed to increase efficiency and effectiveness of state programs and services. Toward that end, each state agency shall, on a semi-annual basis, identify results-based measures that have been used to work toward achievement of the mission statement and desired results issued by the legislature and of other goals of the agency, and set out the results as measured. Each state agency shall also prepare information that shall be compiled and submitted on December 15 each year to the office, the legislature, and the legislative finance division; this information must
     (1) identify the agency mission and desired results established by the legislature;

     (2) identify the goals and objectives the agency will use to achieve the legislature’s mission and desired results;

     (3) set out the results of any user group surveys and, if the results do not agree with the mission and desired results, goals, and objectives, explain why;

     (4) include written, defined methods of measuring results that apply to the responsibilities, products, and services of the agency;

     (5) identify results-based measures that have been used to work toward achievement of the mission statement and desired results issued by the legislature and other goals of the agency and set out the results as measured;

     (6) identify surveys or other methods of gathering user group opinions that have been used by the agency to identify ways to improve its programs;

     (7) identify methods of measuring performance when the mission statement and desired results issued by the legislature involve more than one agency and make recommendations to eliminate duplication of government functions and waste;

     (8) identify ways in which the agency has involved its employees in the development of methods of measuring results, including opportunities for employee representatives to participate in committees established to develop methods of measuring results;

     (9) include the budget requested to carry out the agency’s proposed plans in the succeeding fiscal year, including information reflecting the expenditures during the last fiscal year, the expenditures authorized for the current fiscal year, the expenditures proposed for the succeeding fiscal year, an explanation of the services to be provided, the number of total positions for all persons employed or under contract by the agency for personal services including those rendered for capital improvement projects, the need for the services, the cost of the services, and other information requested by the office;

     (10) include a report of agency receipts during the last fiscal year, an estimate of receipts during the current fiscal year, and an estimate of receipts for the succeeding fiscal year;

     (11) identify legislation required to implement the proposed programs and financial plans;

     (12) include an evaluation of the advantages and disadvantages of specific alternatives to existing or proposed agency activities or administrative methods;

     (13) prioritize the activities of the agency from the most important to the least important.

 (b) The state agency proposals prepared under (a) of this section must describe the relationships of their program services to those of other agencies, of other governments, and of nongovernmental bodies.

 (c) The office shall assist agencies in the preparation of their proposals under (a) of this section. This assistance may include technical assistance, organization of materials, centrally collected accounting, budgeting and personnel information, standards and guidelines formulation, population and other required data, and any other assistance that will help the state agencies produce the information necessary for efficient agency management and effective decision-making by the governor and the legislature.

 (d) If any state agency fails to transmit the program and financial information provided under (a) of this section on the specified date, the office may prepare the information.

 (e) The office shall compile and submit to the governor-elect in any year when a new governor has been elected, not later than November 20, a summary of the program and financial information prepared by state agencies.

 (f) Budget requests for boards and commissions and for those agency programs for the fiscal year following termination under AS 44.66 shall be prepared and submitted. The recommended appropriation request must include
     (1) an identification of the objectives intended for the program and the problem or need that the activities and operations of the board, commission, or program is intended to address;

     (2) an assessment of the degree to which the original objectives of the program have been achieved expressed in terms of performance, effects, or accomplishments of the program and of the program or need that it was intended to address;

     (3) a statement of the performance and accomplishments of the program in each of the last four completed fiscal years and of the costs incurred in the operation of the program;

     (4) a statement of the number and types of persons affected by operation of the program;

     (5) a summary statement, for each of the last three completed fiscal years, of the number of personnel employed in carrying out the program and a summary of the cost of personnel employed under contract in carrying out the program;

     (6) an assessment of the effect of the program on the economy of the state;

     (7) an assessment of the degree to which the overall policies of the program, as expressed in regulations adopted by the agency, board, or commission and its decisions, meet the objectives of the legislature in establishing the program;

     (8) an analysis of the services and performance estimated to be achieved if the life of the agency, board, or commission were to be continued;

     (9) a prioritized list of the activities the agency, board, or commission would be expected to perform if the life of the agency, board, or commission were to be continued, from the most important to the least important.

 (g) All goals and objectives, plans, programs, estimates, budgets, and other documents forwarded to the office of management and budget by a state agency under this section are public information after the date they are forwarded.

 (h) Each agency shall, with participation of its employees, develop methods for measuring agency results. A group or committee established by an agency to develop methods of measuring results shall include a representative of each of the bargaining units that represents employees of the agency.




Sec. 37.07.060. Governor’s recommendation.
 (a) The governor shall formulate the operating and capital budget, capital improvements program, and fiscal plan required to be recommended to the legislature by AS 37.07.020 after considering the state agency proposed program and financial plans prepared in accordance with AS 37.07.050, and other programs and alternatives that the governor considers appropriate. The plans must include the governor’s recommended missions and results, recommended strategies to implement the missions and results, recommended measures for determining whether the missions and desired results are achieved, including an assessment of whether prior year missions and desired results have been achieved, recommended operating program for the succeeding fiscal year, recommended capital improvements program for the succeeding six fiscal years, recommended programs for the upgrading of public buildings and facilities prepared in accordance with AS 35.10.015, and recommended revenue measures to support the programs.

 (b) The governor shall present the proposed comprehensive operating and capital improvements programs, and fiscal plan if it is required under AS 37.07.020(b), in a message to a joint session of the legislature before the fourth legislative day following the convening of the legislature in regular session. The message must be accompanied by an explanatory report that summarizes recommended goals, plans, and appropriations. The report must contain
     (1) the coordinated program goals and objectives that the governor recommends to guide the decisions on the proposed program plans and budget appropriations;

     (2) the governor’s operating program and budget recommendations for the succeeding fiscal year organized by agency as required by AS 37.07.020(a);

     (3) the governor’s capital improvements program and budget recommendations for the succeeding fiscal year and capital improvements program for the succeeding six fiscal years, which must include
          (A) a description of each project, its estimated cost for the year construction is to start and the estimated cost of the project adjusted for inflation over the estimated period of construction, and the source of financing for the project; the project description for a new building or a new facility or for a major addition to a building or facility should include a site plan, preliminary drawings, and architect’s or engineer’s total cost estimate for the project;

          (B) a summary of projects previously authorized and not yet completed;

          (C) a summary, listed by agency, of all previously proposed projects that have been deferred beyond the six years covered by the plan and the year in which construction has been rescheduled to begin;

          (D) a forecast of the debt structure of the state and the various debt ratios over the life of the state’s bonds outstanding, bonds authorized and to be issued, and bond authorizations recommended in the plan;

          (E) a description of additional revenue measures needed to finance the plan in lieu of debt;

          (F) bond election bills to authorize the bonds required to fund the projects scheduled for the first three years of the plan;

          (G) projections of population of the state and its regions and communities;

          (H) economic data and projections necessary for the evaluation of the plan;

     (4) a summary of state receipts in the last fiscal year, a revised estimate for the current fiscal year, and an estimate for the succeeding fiscal year;

     (5) a summary of expenditures during the last fiscal year, those authorized for the current fiscal year, and an estimate for the succeeding fiscal year;

     (6) any additional information that will facilitate understanding of the governor’s proposed programs and financial plans by the legislature and the public.




Sec. 37.07.062. Capital budget.
 (a) Each appropriation bill authorizing capital expenditures required to be submitted to the legislature in AS 37.07.020(a) must be accompanied by documents supporting the expenditures. The documents must list, for each project, the
     (1) project identification number;

     (2) project title;

     (3) source of funding;

     (4) amount expended on the project during the preceding fiscal year, the amount authorized for the current fiscal year, the amount proposed to be expended during the succeeding fiscal year, and the amount proposed to be expended each year until project completion;

     (5) estimated start for construction;

     (6) cost of each subsequent phase with estimated construction start and completion dates, for projects that will be completed in phases; and

     (7) schedule of bond elections pertaining to the appropriation, including elections previously held.

 (b) [Repealed, § 19 ch 61 SLA 2014.]
 (c) [Repealed, § 19 ch 61 SLA 2014.]
 (d) [Repealed, § 19 ch 61 SLA 2014.]




Sec. 37.07.070. Legislative review.
The legislature shall consider the governor’s proposed comprehensive operating and capital improvements programs, and fiscal plan if it is required under AS 37.07.020(b), evaluate alternatives to the plans, make program selections among the various alternatives, and determine, subject to available revenues, the level of funding required to support authorized state services. The presiding officer of each house may refer the fiscal plan to one or more committees. If the fiscal plan is referred, the first committee of referral shall hold at least one hearing on it. The operating and capital budgets of each agency shall be separately reviewed. During each regular session of the legislature, legislative review of the governor’s supplemental appropriation bills and the governor’s budget amendments are governed by the following time limits:
     (1) requests by the governor for supplemental appropriations for state agency operating and capital budgets for the current fiscal year may be introduced by the rules committee only through the 15th legislative day;

     (2) requests by the governor for budget amendments to state agency budgets for the budget fiscal year may be received and reviewed by the finance committees only through the 30th legislative day.




Sec. 37.07.080. Program execution.
 (a) Except as limited by executive decisions of the governor, the mission statements and desired results issued by the legislature, appropriations by the legislature, and other provisions of law, the several state agencies have full authority for administering their program service assignments and are responsible for their proper management.

 (b) Each state agency shall prepare an annual plan for the operation of each of its assigned programs except for programs that are exempted from this requirement by the office. The operations plan shall be prepared in the form and content and be transmitted on the date prescribed by the office.

 (c) The office shall
     (1) review each operations plan to determine that it is consistent with the executive decisions of the governor, the mission statement and desired results issued by the legislature, appropriations by the legislature, and other provisions of law, that it reflects proper planning and efficient management methods, and that appropriations have been made for the legislatively established purpose and will not be exhausted before the end of the fiscal year;

     (2) approve the operations plan if satisfied that it meets the requirements under (1) of this subsection; otherwise, the office shall require revision of the operations plan in whole or in part.

 (d) A state agency may not increase the salaries of its employees, employ additional employees, or expend money or incur obligations except in accordance with law and a properly approved operations plan.

 (e) Transfers or changes between objects of expenditures or between allocations may be made by the head of an agency upon approval of the office. Transfers may not be made between appropriations, including transfers made through the use of a reimbursable service agreement or other agreement, except as provided in an act making the transfers between appropriations. However, a reimbursable service agreement or other agreement may be used to finance the provision of a service if
     (1) the agency that requires the service has, by law, the authority to obtain or provide the service and has an appropriation that may be used for that purpose; and

     (2) the agency that provides the service bills the agency administering the available funds based on
          (A) the actual cost to provide the service; or

          (B) a cost allocation method approved by the office.

 (f) The office shall report quarterly to the governor and the legislature on the operations of each state agency, relating actual accomplishments to those planned and modifying, if necessary, the operations plan of any agency for the balance of the fiscal year.

 (g) The governor may direct the withholding or reduction of appropriations to a state agency at any time during the fiscal year only if the governor determines that the planned expenditures can no longer be made due to factors outside the control of the state which make the expenditure factually impossible.

 (h) The increase of an appropriation item based on additional federal or other program receipts not specifically appropriated by the full legislature may be expended in accordance with the following procedures:
     (1) the governor shall submit a revised program to the Legislative Budget and Audit Committee for review;

     (2) 45 days shall elapse before commencement of expenditures under the revised program unless the Legislative Budget and Audit Committee earlier recommends that the state take part in the federally or otherwise funded activity;

     (3) should the Legislative Budget and Audit Committee recommend within the 45-day period that the state not initiate the additional activity, the governor shall again review the revised program and if the governor determines to authorize the expenditure, the governor shall provide the Legislative Budget and Audit Committee with a statement of the governor’s reasons before commencement of expenditures under the revised program.




Sec. 37.07.090. Performance reporting. [Repealed, § 9 ch 27 SLA 1998.]
Sec. 37.07.100. Proposed supplemental or special appropriations.
The governor from time to time may transmit to the legislature proposed supplemental or special appropriations in accordance with AS 37.07.070 which in the governor’s judgment are necessary. However, if the governor finds that an emergency situation necessitates the proposal of supplemental or special appropriations, the governor may transmit them to the legislature at any time. The governor shall accompany each proposal with a statement of the reasons for it, including the reasons for its omission from the budget.


Sec. 37.07.110. Interpretation of chapter.
This chapter shall be construed as supplemental to all other state laws not in conflict with it. If a section or part of a section of this chapter is in conflict with federal requirements for a program for which federal grant-in-aid funds are available, the section or part, to the extent of the conflict, is inoperative.


Sec. 37.07.120. Definitions.
In this chapter,
     (1) “agency” means a department, officer, institution, board, commission, bureau, division, or other administrative unit forming the state government and includes the Alaska Pioneers’ Home, the Alaska Veterans’ Home, and the University of Alaska, but does not include the legislature or the judiciary;

     (2) “allocation” means an amount set out as a legislative guideline for expenditure by a state agency for a stated purpose within the total amount of an appropriation;

     (3) “appropriation” means a maximum amount available for expenditure by a state agency for a stated purpose set out in an appropriation act;

     (4) “capital projects” and “capital improvements” mean an allocation or appropriation item for an asset with an anticipated life exceeding one year and a cost exceeding $25,000 and include land acquisition, construction, structural improvement, engineering and design for the project, and equipment and repair costs;

     (5) “facility operations” means activities and expenses relating to the day-to-day operations of a building or facility, including utilities, janitorial service, security service, snow removal, and direct supervision of related maintenance activities;

     (6) “fiscal year” means a year beginning on July 1 of one calendar year and ending on June 30 of the following calendar year;

     (7) “maintenance and repair” means the day-to-day scheduled and preventive maintenance effort, including minor repair work, required to keep a building or facility operational and in a continuous state of readiness;

     (8) “object of expenditure” means a line item of expenditure within an allocation or an appropriation;

     (9) “office” means the Alaska office of management and budget established in the Office of the Governor by AS 44.19.141;

     (10) “renewal and replacement” means the scheduled replacement of worn-out major building components and the replacement or retrofitting of obsolete or inefficient building systems in order to maintain or extend the life of a building or facility.




Sec. 37.07.130. Short title.
This chapter may be cited as the Executive Budget Act.


Article 1. Custodians of State Funds.


Chapter 10. Public Funds.

Sec. 37.10.010. Disbursements.
The Department of Administration shall
     (1) disburse money only upon vouchers certified by the department, establishment, or agency concerned, or an officer or employee of it authorized in writing to certify the vouchers;

     (2) make an examination of vouchers necessary to ascertain whether they are in proper form, certified and approved, computed on the basis of the facts certified; and

     (3) be held accountable accordingly.




Sec. 37.10.020. Vouchers to be approved by administrative officer.
A voucher arising from the conduct of an office or administration of the state shall be approved by the administrative officer before reference to the Department of Administration for payment.


Sec. 37.10.030. Responsibility of officer or employee approving or certifying voucher.
 (a) The officer or employee approving or certifying a voucher
     (1) is responsible for the existence and correctness of the facts recited in the certificate or stated on the voucher or its supporting papers and for the legality of the proposed payment under the appropriation or fund involved;

     (2) shall give bond in the form and manner prescribed by AS 39.15 to the state, and approved by the Department of Administration, in an amount fixed by the head of the department, agency, or establishment concerned, under standards prescribed by the Department of Administration; the premium on the bond shall be paid from funds made available for the administrative costs of the department, agency, or establishment concerned; officers already bonded under other provisions of law for the faithful performance of their duties are not required to give additional bond; and

     (3) shall be held accountable for and required to make good to the state the amount of an illegal, improper, or incorrect payment resulting from a false, inaccurate, or misleading certificate made by the officer or employee, or a payment prohibited by law or which does not represent a legal obligation under the appropriation or fund involved.

 (b) In (a) of this section, an approval or certification of a voucher is effective when an authorized person uses a password assigned by the department if the certification or the voucher itself is prepared and recorded by using an electronic accounting device that is a part of the computerized state accounting systems.




Sec. 37.10.040. Enforcement of liability.
The liability of a certifying officer or employee is enforced in the same manner as provided by law with respect to enforcement of the liability of a disbursing and other accountable officer.


Article 2. Charges for State Services; Accounting.


Sec. 37.10.050. Charges by state agencies; collection, accounting, and deposit of state money.
 (a) A state agency may not charge a fee for the provision of state services unless the fee (1) is set or otherwise authorized by statute; and (2) where a regulation is necessary, is set by or provided for in a regulation that meets the standards of AS 44.62.020 and 44.62.030. Unless specifically exempted by statute, a state agency authorized to collect or receive fees, licenses, taxes, or other money belonging to the state shall account for and remit the receipts, less fees to which the collector is entitled by statute or regulation, to the Department of Revenue at least once each month. The commissioner of administration shall separately account under AS 37.05.142 for receipts deposited under this subsection. A fee or other charge that is set by regulation may not exceed the estimated actual costs of the state agency in administering the activity or providing the service unless otherwise provided by the statute under which the regulation is adopted; however, this limitation does not apply to sale or lease of property by a state agency, fees charged by a resource agency for a designated regulatory service as defined in AS 37.10.058, fees adopted by the Department of Natural Resources under AS 41.21.026(f), AS 44.37.025, and 44.37.027, or fees, rents, tolls, and other charges established or levied by the Department of Transportation and Public Facilities for the use of the Knik Arm bridge and appurtenant facilities.

 (b) Money collected for the state shall be deposited by the collector in the nearest bank to the account of the Department of Revenue when the Department of Revenue directs this to be done.

 (c) Except as provided in AS 37.10.052(a), each state agency shall annually review fees collected by the agency. By October 1, each state agency shall submit a report to the office of management and budget regarding existing fee levels set by the agency by regulation and adjustments made to fee levels by the agency during the previous fiscal year, and recommended adjustments in fees set by statute that the agency collects. Each year by December 15, the office of management and budget shall submit a report to the Legislative Budget and Audit Committee summarizing the reports and recommendations and the extent to which the fee adjustments have been incorporated in the governor’s budget. Within five days after the convening of each regular session of the legislature, the committee shall prepare a report on the status of fee regulations and making recommendations for changes in regulations or statutes as appropriate. The committee shall notify the legislature that the report is available.




Sec. 37.10.052. Fees levied by resource agencies for designated regulatory services; negotiated service agreements.
 (a) Each resource agency shall, by regulation, establish a list of fixed fees for standard designated regulatory services that it provides. A fixed fee adopted under this subsection may not exceed the estimated average reasonable direct cost incurred by the resource agency in providing the standard designated regulatory service. The resource agency shall provide an explanation of the basis for the fixed fee. The resource agency shall review the list of fixed fees at least once every four years, identify any changes in the average actual and reasonable direct cost of providing each standard designated regulatory service for which a fixed fee has been established, and, by regulation, adjust the fees accordingly. The agency shall include the results of its review in the report submitted under AS 37.10.050(c).

 (b) In the case of a designated regulatory service for which a resource agency has not established a fixed fee under (a) of this section, a resource agency shall, at the request of the person who will be billed for a designated regulatory service, attempt to reach a negotiated service agreement for provision of that service. A negotiated service agreement that is reached under this subsection is a contract that is enforceable by either party under generally applicable contract remedies provided by law. A negotiated service agreement reached under this subsection may include
     (1) the amount of the fee;

     (2) the structure or methodology by which the fee will be charged;

     (3) deadlines, sequences, or milestones for the provision of the regulatory service; and

     (4) other matters reasonably related to the cost of, or procedures for, the provision of the regulatory service.

 (c) A person requiring more than one regulatory service, at least one of which is a designated regulatory service, for an activity may petition the resource agency that will provide the services or, if more than one resource agency will provide a regulatory service, the office of management and budget to establish a single fee for all regulatory services that are required for that class of activities. The resource agency or office of management and budget, as appropriate, shall grant the petition if it finds that the proposed fee meets the applicable requirements of this subsection and is likely to be used by the resource agency or office of management and budget more than once. If a petition under this subsection is granted, the resource agency or the office of management and budget shall make available to the public information concerning the single fee, including a list of regulatory services to be provided and the amount of the fee. If the resource agency or the office of management and budget denies the petition, the agency or office shall provide to the petitioner a statement setting out the agency’s or office’s reasons for denial. The single fee under this subsection must be
     (1) confined to the distinct economic sector in which the petitioner is or proposes to be engaged;

     (2) where necessary, limited by geography, facility size or capacity, or other relevant factors so as to provide a reasonable assurance that only similarly situated activities, with respect to cost, are included within the fixed fee; and

     (3) based on the estimated average reasonable direct cost of each designated regulatory service required for the activity and the average fee customarily charged for a regulatory service other than a designated regulatory service discounted by the amount of savings that may be achieved by avoiding regulatory overlap and, where applicable, coordinating multi-agency review of the activity to the maximum extent possible.

 (d) Except for fees determined under (a), (b), or (c) of this section or in AS 37.10.056, a fee levied by a resource agency for a designated regulatory service must be based solely on the actual and reasonable direct cost incurred by the resource agency in providing the designated regulatory service to the person on whom that fee is levied, computed on a time-and-expense basis.

 (e) Nothing in this section authorizes or requires a resource agency to charge a fee for a designated regulatory service.

 (f) No action taken by a resource agency or the office of management and budget under (c) of this section is subject to AS 44.62 (Administrative Procedure Act).




Sec. 37.10.054. Invoices for designated regulatory services.
 (a) Unless a negotiated service agreement reached under AS 37.10.052(b) or (c) provides otherwise, a resource agency charging a fee for providing a designated regulatory service other than a standard designated regulatory service for which a fixed fee has been established under AS 37.10.052(a) shall, on a monthly basis, provide the person who will be billed for the service with an invoice for services performed during that month. The invoice must be reasonably convenient to the reader, and reasonably susceptible to audit. The invoice must set out, in time increments of not greater than one-quarter hour for each employee, and separately for each expenditure, the purpose of the time or expenditure in sufficient detail to permit a reasonable person to determine whether the time or cost was an actual and reasonable direct cost.

 (b) If a person believes that an invoice rendered under (a) of this section exceeds the actual and reasonable direct cost of providing the designated regulatory service, the person may, within 30 days after receiving the invoice, request that the resource agency review the invoice. The resource agency shall review the invoice under the standards of this section and issue its final decision on the invoice within 30 days of receipt of a request for review.




Sec. 37.10.056. Petitions to adopt regulations.
A person requiring a designated regulatory service from a resource agency may petition the resource agency under AS 44.62.220 and 44.62.230 to adopt regulations that would establish, for a category of designated regulatory services, a fixed fee that is
     (1) confined to the distinct economic sector in which the petitioner is or proposes to be engaged;

     (2) where necessary, limited by geography, facility size or capacity, or other relevant factors so as to provide a reasonable assurance that only similarly situated regulatory services, with respect to cost, are included within the fixed fee;

     (3) likely to be used by the resource agency more than once; and

     (4) based on the average reasonable direct cost incurred by the agency in providing the designated regulatory service.




Sec. 37.10.058. Definitions.
In AS 37.10.050 — 37.10.058,
     (1) “agency” means a board, commission, or agency in the legislative, judicial, or executive branch, but does not include the University of Alaska or a public corporation;

     (2) “designated regulatory service” means a regulatory service provided under the following regulatory programs:
          (A) control of solid waste facilities under AS 46.03.020(10)(D) and (E);

          (B) regulation of the disposal of waste into waters of the state under AS 46.03.100;

          (C) certification of federal permits or authorizations under 33 U.S.C. 1341 (sec. 401, Clean Water Act);

          (D) any authorization for the use or appropriation of water under AS 46.15;

          (E) administration of emission control permits for the air quality control program under AS 46.14; and

          (F) regulation of pesticides and broadcast chemicals registered under AS 46.03.320(a)(4);

     (3) “direct cost” means the hourly rate of salary and benefits of each agency employee, including clerical staff, directly involved in providing a regulatory service, multiplied by the number of hours spent in performing the service, together with the expenditures for goods or third-party services made in providing that service; “direct cost” does not include
          (A) the costs and salaries of administrative, support, or supervisory personnel who are not directly engaged in providing the service;

          (B) other budgeted overhead expenses, including rent and utilities;

          (C) interagency charges that would not meet the requirements of AS 37.10.052 — 37.10.058 if those charges had been incurred or invoiced by the agency providing the designated regulatory service;

          (D) public consultation costs when the consultation is not required by law;

          (E) costs related to an appeal of permit issuance by a person other than the applicant for that permit;

          (F) expenses that are not reasonably necessary to comply with the law under which the service is provided; or

          (G) travel expenses for inspecting businesses having not more than 20 employees;

     (4) “distinct economic sector” means a commercial or industrial segment, or other category of land or water use, that, because of common operational, environmental, or other factors, tends to require similar designated regulatory services; each of the following is an example of a “distinct economic sector”: (A) oil and gas exploration, development, and production; (B) oil and gas processing and refining; (C) mineral exploration, development, and production; (D) coal exploration, development, and production; (E) commercial fishing; (F) seafood processing; (G) timber harvest; (H) timber processing; and (I) residential development; nothing in this paragraph precludes a resource agency from further subdividing activities listed in (A) — (I) of this paragraph into more appropriate subcategories;

     (5) “fee” means a charge assessed or requested by a state agency for the provision of a service to, the incurring of a burden or cost because of, or the conferring of a benefit upon, a person; “fee” does not include charges assessed or requested by the Department of Natural Resources associated with pipeline right-of-way leases granted under AS 38.35;

     (6) “hourly rate of salary and benefits” means the hourly increment of salary due the state employee under the salary schedule applicable to that employee, multiplied by 149 percent to account for the cost of employment benefits paid by the state to or on behalf of the employee;

     (7) “permit” means a permit, license, certificate, or approval;

     (8) “regulatory service” includes the following services provided by a resource agency:
          (A) an analysis, deliberation, testing, inspection, approval, or other review related to the application for or issuance, modification, extension, or revocation of a permit; and

          (B) an inspection, testing, monitoring, or compliance review undertaken under law or the terms of a permit;

     (9) “resource agency” means the Department of Environmental Conservation, the Department of Fish and Game, and the Department of Natural Resources;

     (10) “standard designated regulatory service” means designated regulatory services for categories of activities that do not generally raise complex or controversial legal, technical, or policy issues.




Sec. 37.10.060. Department of Revenue to deposit money in state treasury.
All fees and receipts received by the Department of Revenue from any source shall be deposited in the state treasury at least once each month, and credited by the department to the proper fund.


Article 3. Investment and Deposit of State Funds.


Sec. 37.10.065. Investment of the Alaska Permanent Fund. [Repealed, § 10 ch 18 SLA 1980. For current law see AS 37.13.]
Sec. 37.10.070. Investment of residual money.
 (a) The commissioner shall invest, as set out in AS 37.10.071, the money in the state treasury above an amount sufficient to meet immediate expenditure needs. In managing the invested assets, the commissioner shall
     (1) consider the status of the assets and liabilities on both a current and a probable future basis;

     (2) determine the appropriate investment objectives;

     (3) establish investment policies to achieve the objectives; and

     (4) act only in regard to the best financial interests of the state.

 (b) The commissioner may invest on the basis of probable total rate of return without regard to the distinction between principal and income and without regard to the generation of income.

 (c) In this section, “commissioner” means the commissioner of revenue.




Sec. 37.10.071. Investment powers and duties.
 (a) In making investments under this section, the fiduciary of a state fund shall
     (1) act as official custodian of cash and investments by securing adequate and safe custodial facilities for them;

     (2) receive all items of cash and investments;

     (3) collect and deposit the principal of and income from owned or acquired investments;

     (4) invest and reinvest the assets in accordance with this section;

     (5) receive and spend appropriations to cover the cost of the exercise of duties under this section;

     (6) exercise the powers of an owner with respect to the assets;

     (7) perform all acts, not prohibited by this section, whether or not expressly authorized, that the fiduciary considers necessary or proper in administering the assets;

     (8) maintain accounting records in accordance with generally accepted accounting principles;

     (9) engage an independent certified public accountant to conduct an annual audit of the financial condition and investment transactions;

     (10) enter into and enforce contracts or agreements considered necessary, convenient, or desirable for the investment purposes of this section; and

     (11) when choosing to acquire or dispose of investments, secure competitive national or international market rates or prices, or the equivalence of those rates or prices in the judgment of the fiduciary.

 (b) Under this section, the fiduciary of a state fund or the fiduciary’s designee may
     (1) delegate investment, custodial, or depository authority on a discretionary or nondiscretionary basis to officers or employees of the state or to independent firms, banks, financial institutions, or trust companies by designation through appointments, contracts, or letters of authority;

     (2) acquire or dispose of investments either directly, indirectly, or through investment pools or trusts, by competitive or negotiated agreements, contracts, or auctions, in public or private markets;

     (3) concentrate or diversify investments as the fiduciary considers appropriate to increase the probable total rate of return or to decrease the overall exposure to potentially adverse market value risks;

     (4) protect the market value or the rate of return of the investments by entering into forward agreements to buy or sell assets at a future date as a hedge against existing held assets or as a precommitment of future cash flows;

     (5) lend assets, under an agreement and for a fee, against deposited collateral of equivalent market value;

     (6) borrow assets on a short-term basis, under an agreement and for a fee, against the deposit of collateral consisting of other assets in order to accommodate temporary cash or investment needs;

     (7) hold investments in bearer or registered form in the name of the state, a fund, or nominees authorized by the fiduciary;

     (8) utilize consultants, advisors, custodians, investment services, and legal counsel for assistance in investment matters on either a continuing or a limited-term basis and with or without compensation;

     (9) declare records to be confidential and exempt from AS 40.25.110 and 40.25.120 if the records contain information that discloses the particulars of the business or the affairs of a private enterprise, investor, borrower, advisor, consultant, counsel, or manager.

 (c) In exercising investment, custodial, or depository powers or duties under this section, the fiduciary of a state fund shall apply the prudent investor rule and exercise the fiduciary duty in the sole financial best interest of the fund entrusted to the fiduciary. Among beneficiaries of a fund, the fiduciaries shall treat beneficiaries with impartiality.

 (d) In exercising investment, custodial, or depository powers or duties under this section, the fiduciary or the fiduciary’s designee is liable for a breach of a duty that is assigned or delegated under this section, or under AS 14.40.255, 14.40.280(c), 14.40.400(b), AS 37.10.070, AS 37.14.110(c), 37.14.160, or 37.14.170. However, the fiduciary or the designee is not liable for a breach of a duty that has been delegated to another person if the delegation is prudent under the applicable standard of prudence set out in statute or if the duty is assigned by law to another person, except to the extent that the fiduciary or designee
     (1) knowingly participates in, or knowingly undertakes to conceal, an act or omission of another person knowing that the act or omission is a breach of that person’s duties under this chapter;

     (2) by failure to comply with this section in the administration of specific responsibilities, enables another person to commit a breach of duty; or

     (3) has knowledge of a breach of duty by another person, unless the fiduciary or designee makes reasonable efforts under the circumstances to remedy the breach.

 (e) The state shall defend and indemnify the fiduciary or an officer or employee of the state against liability under (d) of this section to the extent that the alleged act or omission was performed in good faith and was prudent under the applicable standard of prudence.

 (f) In this section, “fiduciary of a state fund” or “fiduciary” means
     (1) the commissioner of revenue for investments under AS 37.10.070;

     (2) with respect to the Alaska Retirement Management Board, for investments of the collective funds that it manages and administers,
          (A) each trustee who serves on the board of trustees; and

          (B) any other person who exercises control or authority with respect to management or disposition of assets for which the board is responsible or who gives investment advice to the board; or

     (3) the person or body provided by law to manage the investments for investments not subject to AS 37.10.070.




Sec. 37.10.075. Deposit of state funds.
 (a) When the commissioner of revenue determines that there are funds in the state treasury that are not being used for the purposes provided for in AS 37.10.070, they may be deposited in financial institutions. Collateral may be required by the commissioner to secure state deposits provided for under this section.

 (b) The commissioner of revenue may require the banks in which state funds are deposited under a time deposit agreement to pay at least a minimum interest rate to be fixed by the Department of Revenue, and this interest when paid shall be deposited in the general fund or in the other funds that are established by law.

 (c) This section does not prohibit the Department of Revenue from depositing the funds that it considers necessary for the proper conduct of the office in solvent banks outside the state under the terms and conditions provided in this section.

 (d) The Department of Revenue may deposit funds in banks inside or outside the state without requiring those banks in which the funds are deposited to pay interest on the deposits. It is the intention of the legislature that the department may compensate the banks for handling state disbursements in a manner determined by the commissioner of revenue to be in the best interests of the state.

 (e) Banks holding state deposits shall, as a condition of retaining those deposits, submit all information concerning the deposits and other relevant matters that may be requested by the commissioner.




Sec. 37.10.078. Prohibited deposits and investments in certain banks.
The commissioner of revenue may not make investments or deposits with a bank doing business in Alaska that has a general practice of
     (1) charging a fee for handling disbursements issued by the state; or

     (2) refusing to handle disbursements issued by the state.




Secs. 37.10.079 , 37.10.080. Purchase and sale of bonds. [Repealed, § 33 ch 141 SLA 1988.]
Sec. 37.10.085. Financial aid to corporations by state or political subdivision.
 (a) Except as provided in AS 14.40.458, (c) or (d) of this section, or AS 37.10.089, neither the state nor a political subdivision of the state may
     (1) make a subscription to the capital stock of a corporation;

     (2) lend its credit for the use of a corporation; or

     (3) borrow money for the use of a corporation.

 (b) This section does not apply to debt issued by a municipality or a municipal joint insurance arrangement under AS 21.76.120.

 (c) To the extent that the political subdivision is authorized to acquire, own, or operate a public utility, it may exercise that power by acquiring and owning, in a manner consistent with law, all of the capital stock of a corporation that owns or operates a public utility. The political subdivision’s authority with respect to lending its credit and borrowing money for the use of the corporation is the same as if the political subdivision had acquired the assets of the corporation.

 (d) This section does not apply to
     (1) the financial assistance program established under AS 37.17.500 — 37.17.690; or

     (2) investments of the assets of the public employees’ retirement system established under AS 39.35 or the teachers’ retirement system established under AS 14.25, to the extent the investments are made in the stocks, bonds, and other securities of
          (A) a corporation licensed under AS 10.13; or

          (B) a corporation attempting to become licensed under AS 10.13 if the corporation intends to use the proceeds to fulfill the tasks necessary to become licensed under AS 10.13.




Sec. 37.10.087. Loans to bond construction funds.
 (a) (1) When a construction fund or account established to receive the proceeds of state general obligation bonds is temporarily exhausted, the commissioner of administration on recommendation of the state bond committee may temporarily transfer money from the general fund to the bond construction fund or account.

     (2) If the amount of the transfer exceeds 25 percent of the amount authorized for the general obligation bonds, the commissioner of administration shall obtain approval of the transfer from the Legislative Budget and Audit Committee before the transfer.

     (3) If a temporary transfer has already been made from the general fund to the bond construction fund or account, additional transfers may be made, but the total amount of the outstanding transfers not returned to the general fund under (d) of this section may not exceed 25 percent of the amount authorized for the general obligation bonds without approval from the Legislative Budget and Audit Committee.

 (b) Transfers under (a) of this section may be made only when the commissioner of revenue determines and certifies to the state bond committee that there is in the general fund an amount sufficient to meet current cash expenditure needs of the state.

 (c) The amount transferred to a construction fund or account under (a) of this section may not exceed anticipated receipts from the unsold general obligation bonds to be issued and the federal programs receipts estimated to be received for the general obligation bond construction program financed from the construction fund or account.

 (d) Money transferred from the general fund under (a) of this section shall be returned to the general fund within 15 months after the transfer.

 (e) The commissioner of administration shall notify the Legislative Budget and Audit Committee in writing of a transfer of money from the general fund under (a) of this section.




Sec. 37.10.088. Department of Administration authorized to make advances to the University.
 (a) During any fiscal year the Department of Administration may make advances to the University of Alaska against verified receivables from appropriations for grants and contracts from federal or private sources of the university and upon condition that the university reimburse the fund for these advances from funds received by the university from federal or private sources. The advances may not exceed 80 percent of the verified receivables from grants and contracts appropriated from federal or private sources.

 (b) The total of advances in a fiscal year may not exceed 10 percent of the total of grants and contracts from federal and private sources appropriated to the university for that fiscal year. The amounts advanced in a fiscal year shall be repaid in full to the department within 120 days following the close of that fiscal year. If the repayment is not made on a timely basis, the department may withhold amounts due from state fund appropriations for the university.

 (c) The commissioner of administration shall submit a quarterly report of all advances and reimbursements under this section to the Legislative Budget and Audit Committee.

 (d) The department shall establish the procedure for making advances to the university and for securing reimbursement from the university.




Sec. 37.10.089. Loans to the education loan fund; bond purchase agreements and letters of credit.
 (a) If the education loan fund (AS 14.42.210) is unable to fully finance loan demand in a fiscal year, the commissioner may invest in the education loan fund for the purpose of financing education loans under AS 14.43.161 — 14.43.175, 14.43.600 — 14.43.750, and AS 14.44.040. The commissioner shall require the corporation to secure the investment of state money.

 (b) The commissioner may make investments under (a) of this section only when the commissioner determines that market conditions relating to tax-exempt private activity revenue bonds make the issuance of the bonds by the corporation impracticable or uneconomical for the purpose of financing education loans under AS 14.43.161 — 14.43.175, 14.43.600 — 14.43.750, and AS 14.44.040.

 (c) The corporation shall repay money invested under (a) of this section under terms established by the commissioner and agreed to by the corporation. Except as provided in this section, the terms must be consistent with the duties of a fiduciary set out in AS 37.10.071(c).

 (d) Notwithstanding any other provision of this section, the commissioner is authorized to enter into an agreement with the corporation to provide a bond purchase agreement and a letter of credit when market conditions relating to those credit enhancement mechanisms are uneconomical. The commissioner may require the corporation to pay the costs associated with providing credit enhancement and may charge the corporation a fee for this service.

 (e) The commissioner may charge the corporation interest on the investments under (a) of this section. The rate of interest may not exceed the five-year average return on the state’s general fund.

 (f) The commissioner may charge the corporation an annual fee for the services provided under (d) of this section. The annual fee may not exceed 0.15 percent of the average principal outstanding and interest covered by the bond purchase agreement and the letter of credit.

 (g) If a draw on the bond purchase agreement and the letter of credit occurs under this section, the commissioner may charge the corporation an additional annual rate of interest not to exceed three percent on the bonds held under the bond purchase agreement and letter of credit.

 (h) The term of the investment under (a) of this section may not exceed four years and the commitment under (d) of this section may not exceed four years from the commencement of the initial investment, bond purchase agreement, and letter of credit.

 (i) The maximum amount of the investment under (a) of this section may not exceed $100,000,000. The maximum amount of the commitment under (d) of this section may not exceed $106,000,000.

 (j) The commissioner may adopt regulations under AS 44.62 to implement this section.

 (k) In this section,
     (1) “commissioner” means the commissioner of revenue;

     (2) “corporation” means the Alaska Student Loan Corporation created under AS 14.42.100.




Article 4. Recovery of Money or Property Illegally Paid or Diverted.


Sec. 37.10.090. Action by attorney general.
Whenever money, funds, or property of a city, school district, municipal government, or the state are illegally paid or are diverted for an illegal purpose, or paid to a person not authorized by law to receive them, they may be recovered by an action instituted by the attorney general. When it appears to the attorney general that it is more advantageous to begin or conduct the action with additional counsel, the attorney general may choose and authorize additional counsel to bring the suit in the name of the proper party.


Sec. 37.10.100. Costs of action and disposition of amount recovered.
 (a) The necessary and reasonable costs of the suit and of the additional counsel shall be advanced by the state, and a sum recovered in the suit shall be deposited in the state treasury.

 (b) If the sum recovered as described in (a) of this section belongs to a city, school district, or municipal government, the sum shall be transferred to it, less sums advanced by the state in the suit and not already repaid to it. The Department of Administration may disburse to the city, school district, or municipal corporation the sums belonging to it. The disbursements must be based upon vouchers approved by the attorney general.




Article 5. Vocational Education Account.


Sec. 37.10.200. Vocational education account.
 (a) The vocational education account is created in the general fund.

 (b) The account consists of
     (1) appropriations made by the legislature to the account;

     (2) gifts, bequests, and contributions; and

     (3) income and earnings of the account.

 (c) Money in the vocational education account may be appropriated by the legislature to the state and political subdivisions of the state, including regional educational attendance areas and municipal school districts, for vocational education programs and courses approved by the commissioner of labor and workforce development in consultation with the commissioner of education and early development for any other public purpose.

 (d) Nothing in this section dedicates funds for a specific purpose.

 (e) In this section, “vocational education” includes vocational training programs and courses taught at the secondary and postsecondary level of education.




Article 6. Alaska Retirement Management Board.


Sec. 37.10.210. Alaska Retirement Management Board.
 (a) The Alaska Retirement Management Board is established in the Department of Revenue. The board’s primary mission is to serve as the trustee of the assets of the state’s retirement systems, the State of Alaska Supplemental Annuity Plan, and the deferred compensation program for state employees, and the Alaska retiree health care trusts established under AS 39.30.097. Consistent with standards of prudence, the board has the fiduciary obligation to manage and invest these assets in a manner that is sufficient to meet the liabilities and pension obligations of the systems, plan, program, and trusts. The board may, with the approval of the commissioner of revenue and upon agreement with the responsible fiduciary, manage and invest other state funds so long as the activity does not interfere with the board’s primary mission. In making investments, the board shall exercise the powers and duties of a fiduciary of a state fund under AS 37.10.071.

 (b) The Alaska Retirement Management Board consists of nine trustees, as follows:
     (1) two members, consisting of the commissioner of administration and the commissioner of revenue;

     (2) seven trustees appointed by the governor who meet the eligibility requirements for an Alaska permanent fund dividend and who are professionally credentialed or have recognized competence in investment management, finance, banking, economics, accounting, pension administration, or actuarial analysis as follows:
          (A) two trustees who are members of the general public; the trustees appointed under this subparagraph may not hold another state office, position, or employment and may not be members or beneficiaries of a retirement system managed by the board;

          (B) one trustee who is employed as a finance officer for a political subdivision participating in either the public employees’ retirement system or the teachers’ retirement system;

          (C) two trustees who are members of the public employees’ retirement system, selected from a list of four nominees submitted from among the public employees’ retirement system bargaining units;

          (D) two trustees who are members of the teachers’ retirement system selected from a list of four nominees submitted from among the teachers’ retirement system bargaining units;

          (E) the lists of the nominees shall be submitted to the governor under (C) and (D) of this paragraph within the time period specified in regulations adopted under AS 37.10.240(a).

 (c) The trustees, other than the two commissioners, shall serve for staggered terms of four years and may be reappointed to the board.

 (d) The governor may, by written notice to the trustee, remove an appointed trustee for cause. After an appointed trustee receives written notice of removal, the trustee may not participate in board business and may not be counted for purposes of establishing a quorum.

 (e) A vacancy on the board of trustees shall be promptly filled. A person filling a vacancy holds office for the balance of the unexpired term of the person’s predecessor. A vacancy on the board does not impair the authority of a quorum of the board to exercise all the powers and perform all the duties of the board.

 (f) Five trustees constitute a quorum for the transaction of business and the exercise of the powers and duties of the board.

 (g) A trustee may not designate another person to serve on the board in the absence of the trustee.

 (h) The board shall provide annual training to its members on the duties and powers of a fiduciary of a state fund and other training as necessary to keep the members of the board educated about pension management and investment.

 (i) The board shall elect a trustee to serve as chair and a trustee to serve as vice-chair for one-year terms. A trustee may be reelected to serve additional terms as chair or vice-chair.




Sec. 37.10.215. Attorney general.
The attorney general is the legal counsel for the board and shall advise the board and represent it in a legal proceeding.


Sec. 37.10.220. Powers and duties of the board.
 (a) The board shall
     (1) hold regular and special meetings at the call of the chair or of at least five members; meetings are open to the public, and the board shall keep a full record of all its proceedings;

     (2) after reviewing recommendations from the Department of Revenue, adopt investment policies for each of the funds entrusted to the board;

     (3) determine the appropriate investment objectives for the defined benefit plans established under the teachers’ retirement system under AS 14.25 and the public employees’ retirement system under AS 39.35;

     (4) assist in prescribing the policies for the proper operation of the systems and take other actions necessary to carry out the intent and purpose of the systems in accordance with AS 37.10.210 — 37.10.390;

     (5) provide a range of investment options and establish the rules by which participants can direct their investments among those options with respect to accounts established under
          (A) AS 14.25.340 — 14.25.350 (teachers’ retirement system defined contribution individual accounts);

          (B) AS 39.30.150 — 39.30.180 (State of Alaska Supplementary Annuity Plan);

          (C) AS 39.35.730 — 39.35.750 (public employees’ retirement system defined contribution individual accounts); and

          (D) AS 39.45.010 — 39.45.060 (public employees’ deferred compensation program);

     (6) establish the rate of interest that shall be annually credited to each member’s individual contribution account in accordance with AS 14.25.145 and AS 39.35.100 and the rate of interest that shall be annually credited to each member’s account in the health reimbursement arrangement plan under AS 39.30.300 — 39.30.495; the rate of interest shall be adopted on the basis of the probable effective rate of interest on a long-term basis, and the rate may be changed from time to time;

     (7) adopt a contribution surcharge as necessary under AS 39.35.160(c);

     (8) coordinate with the retirement system administrator to have an annual actuarial valuation of each retirement system prepared to determine system assets, accrued liabilities, and funding ratios and to certify to the appropriate budgetary authority of each employer in the system
          (A) an appropriate contribution rate for normal costs; and

          (B) an appropriate contribution rate for liquidating any past service liability; in this subparagraph, the appropriate contribution rate for liquidating the past service liability of the defined benefit retirement plan under AS 14.25.009 — 14.25.220 or the past service liability of the defined benefit retirement plan under AS 39.35.095 — 39.35.680 must be determined by a level percent of pay method based on amortization of the past service liability for a closed term of 25 years;

     (9) review actuarial assumptions prepared and certified by a member of the American Academy of Actuaries and conduct experience analyses of the retirement systems not less than once every four years, except for health cost assumptions, which shall be reviewed annually; the results of all actuarial assumptions prepared under this paragraph shall be reviewed and certified by a second member of the American Academy of Actuaries before presentation to the board;

     (10) contract for an independent audit of the state’s actuary not less than once every four years;

     (11) contract for an independent audit of the state’s performance consultant not less than once every four years;

     (12) obtain an external performance review to evaluate the investment policies of each fund entrusted to the board and report the results of the review to the appropriate fund fiduciary;

     (13) by the first day of each regular legislative session, report to the governor, the legislature, and the individual employers participating in the state’s retirement systems on the financial condition of the systems in regard to
          (A) the valuation of trust fund assets and liabilities;

          (B) current investment policies adopted by the board;

          (C) a summary of assets held in trust listed by the categories of investment;

          (D) the income and expenditures for the previous fiscal year;

          (E) the return projections for the next calendar year;

          (F) one-year, three-year, five-year, and 10-year investment performance for each of the funds entrusted to the board; and

          (G) other statistical data necessary for a proper understanding of the financial status of the systems;

     (14) submit quarterly updates of the investment performance reports to the Legislative Budget and Audit Committee;

     (15) develop an annual operating budget; and

     (16) administer pension forfeitures required under AS 37.10.310 using the procedures of AS 44.62 (Administrative Procedure Act).

 (b) The board may
     (1) employ outside investment advisors to review investment policies;

     (2) enter into an agreement with the fiduciary of another state fund in order to assume the management and investment of those assets;

     (3) contract for other services necessary to execute the board’s powers and duties;

     (4) enter into confidentiality agreements that would exempt records from AS 40.25.110 and 40.25.120 if the records contain information that could affect the value of investment by the board or that could impair the ability of the board to acquire, maintain, or dispose of investments.

 (c) Expenses for the board and the operations of the board shall be paid from the retirement fund.




Sec. 37.10.230. Conflicts of interest.
 (a) Trustees are subject to the provisions of AS 39.50.

 (b) If a trustee acquires, owns, or controls an interest, direct or indirect, in an entity or project in which assets under the control of the board are invested, the trustee shall immediately disclose the interest to the board. The disclosure is a matter of public record and shall be included in the minutes of the board meeting next following the disclosure. The board shall adopt regulations to restrict trustees from having a substantial interest in an entity or project in which assets under the control of the board are invested.




Sec. 37.10.240. Regulations and open meetings.
 (a) The board may adopt regulations to implement AS 37.10.210 — 37.10.390. Regulations adopted by the board are not subject to the Administrative Procedure Act (AS 44.62). The board shall adopt regulations required by AS 36.30.015(f) relating to procurement. The board shall comply with the requirements of AS 44.62.310 — 44.62.319 (Open Meetings Act).

 (b) Notwithstanding (a) of this section, a regulation adopted under AS 37.10.210 — 37.10.390 shall be published in the Alaska Administrative Register and Alaska Administrative Code for informational purposes. A regulation adopted under this section shall conform to the style and format requirements of the drafting manual for administrative regulations that is published under AS 44.62.050.

 (c) At least 30 days before the adoption, amendment, or repeal of a regulation under this chapter, the board shall provide notice of the action that is being considered. The notice must include publication in one or more newspapers of general circulation in each judicial district of the state.

 (d) A regulation adopted under this chapter takes effect 30 days after adoption by the board unless a later effective date is stated in the regulation.

 (e) Notwithstanding the other provisions of this section, a regulation may be adopted, amended, or repealed, effective immediately, as an emergency regulation. For an emergency regulation to be effective the board must find that the immediate adoption, amendment, or repeal of the regulation is necessary. The board shall, within 10 days after adoption of an emergency regulation, give notice of the adoption under (c) of this section. An emergency regulation adopted under this subsection may not remain in effect past the date of the next regular meeting of the board unless the board complies with the procedures set out in this section and adopts the regulation as a permanent regulation.

 (f) In this section, “regulation” has the meaning given in AS 44.62.640(a).




Sec. 37.10.250. Compensation of trustees.
Trustees, other than trustees who are employees of the state, a political subdivision of the state, or a school district or regional educational attendance area in the state, receive an honorarium of $400 for each day spent at a meeting of the board or at a meeting of a subcommittee of the board or at a public meeting as a representative of the board, including a day in which a trustee travels to or from a meeting. Trustees who are state employees are entitled to administrative leave for service as a trustee. Trustees who are employees of a political subdivision of the state or a school district or regional educational attendance area in the state are entitled to leave benefits provided by their employers comparable to those provided to state employees for service as a trustee. Trustees are entitled to per diem and travel expenses authorized for boards and commissions under AS 39.20.180.


Sec. 37.10.260. Staff.
 (a) The Department of Revenue shall provide staff for the board.

 (b) The board may designate a trustee or an officer or employee of the Department of Revenue to be responsible for signing on behalf of the board a deed, contract, or other document that must be executed by or on behalf of the board.




Sec. 37.10.270. Investment advisory council.
 (a) The board may appoint an investment advisory council composed of at least three and not more than five members. Members of the council shall possess experience and expertise in financial investments and management of investment portfolios for public, corporate, or union pension benefit funds, foundations, or endowments.

 (b) Members of the council serve at the pleasure of the board for staggered terms of three years.

 (c) The board shall establish the compensation of members of the council. Members of the council are entitled to per diem and travel expenses authorized for boards and commissions under AS 39.20.180.

 (d) The council shall
     (1) review the investments made by the board;

     (2) make recommendations to the board concerning the board’s investment policies, investment strategy, and investment procedures;

     (3) advise the board on selection of performance consultants and on the form and content of annual reports;

     (4) provide other advice as requested by the board.

 (e) With approval of the board, the council may contract with other state agencies to provide investment advice.




Sec. 37.10.280. Insurance.
The board shall ensure that trusteed assets and its own services are protected. The board may purchase insurance or provide for self-insurance retention in amounts recommended by the commissioner of revenue and approved by the board to cover the acts, including fiduciary acts, errors, and omissions of its board members and agents. Insurance must protect the board and the state from liability to others and from loss of trusteed assets due to the acts or omissions of the trustees.


Sec. 37.10.290. Exemption from taxation.
Except as provided in AS 29.45.030(a) for property acquired through foreclosure or deed in lieu of foreclosure, the board and all properties at any time owned by it, managed by it, or held by it in trust, and the income from those activities, are exempt from all taxes and assessments in the state. All security instruments issued by the board and income from them are exempt from all taxes and assessments in the state, including transfer taxes.


Sec. 37.10.300. Limitations.
The board may not engage in commercial banking activity or private trust activity. The board may not act as a depository or trustee for a private person, association, or corporation. The board may not act as a lender to a private person, association, or corporation of money from any source except state funds under management by the board.


Sec. 37.10.310. Pension forfeiture by public officers convicted of crimes involving corruption.
 (a) A public officer, as defined in AS 39.52.960, a legislator, or a person employed as a legislative director, as that term is defined in AS 24.60.990, who is convicted of a federal or state felony offense of bribery, receiving a bribe, perjury, subornation of perjury, scheme to defraud, fraud, mail fraud, misuse of funds, corruption, or tax evasion may not receive a state pension benefit if the offense was committed on or after July 10, 2007 and was in connection with the person’s official duties.

 (b) Pension benefits and employee contributions that accrue to a person before the date of the person’s commission of the offense described in (a) of this section are not diminished or impaired by that subsection.

 (c) A state pension benefit under (a) of this section does not include
     (1) insurance, voluntary wage reductions, involuntary wage reductions, or supplemental or health benefits under AS 39.30.090 — 39.30.495 or former AS 39.37.145;

     (2) member or employee contributions under AS 14.25.050, 14.25.055, 14.25.075, 14.25.340, 14.25.360(a), AS 22.25.011, AS 39.35.160, 39.35.165(f), 39.35.180, 39.35.730, 39.35.760(a), or former AS 39.37.070.

 (d) In a pension forfeiture matter under this section, the board may award to a spouse, dependent, or former spouse of the person governed by the limitations in (a) of this section some or all of the amount that, but for the forfeiture under (a) of this section, may otherwise be payable. In determining whether to make an award under this subsection, the board shall consider the totality of circumstances, including
     (1) the role, if any, of the person’s spouse, dependent, or former spouse in connection with the illegal conduct for which the person was convicted; and

     (2) the degree of knowledge, if any, possessed by the person’s spouse, dependent, or former spouse in connection with the illegal conduct for which the person was convicted.




Sec. 37.10.390. Definitions.
In AS 37.10.210 — 37.10.390, unless the context otherwise requires,
     (1) “board” means the board of trustees of the Alaska Retirement Management Board;

     (2) “fund” means the fund or funds composed of the assets of each of the retirement systems administered and managed by the board;

     (3) “recognized competence” means a minimum of 10 years’ professional experience working or teaching in the field of investment management, finance, banking, economics, accounting, pension administration, or actuarial analysis;

     (4) “retirement systems” or “systems” means the teachers’ retirement system, the judicial retirement system, the Alaska National Guard and Alaska Naval Militia retirement system, the public employees’ retirement system, the State of Alaska Teachers’ and Public Employees’ Retiree Health Reimbursement Arrangement Plan, and the elected public officers’ retirement system under former AS 39.37.




Article 7. Constitutional Budget Reserve Fund.


Sec. 37.10.410. “Administrative proceedings involving taxes” defined.
 (a) The following money received by the state is considered to be received as a result of the termination of an administrative proceeding for purposes of applying art. IX, sec. 17(a), Constitution of the State of Alaska:
     (1) past due taxes that are received by the state for each tax year for which a request for an informal conference under AS 43.05.240 is made to the Department of Revenue, together with penalties and interest on the taxes;

     (2) past due taxes that are received by the state after a request for a formal hearing under AS 43.05.241 is made to the Department of Revenue, together with penalties and interest on the taxes.

 (b) Money received by the state under the following conditions is not considered to be received as the result of the termination of an administrative proceeding for purposes of applying art. IX, sec. 17(a), Constitution of the State of Alaska:
     (1) taxes that are not due at the time the request for the proceeding was made under AS 43.05.240, 43.05.241, or 43.05.242;

     (2) taxes set out in a return not audited by the Department of Revenue at the date of collection; or

     (3) taxes collected for a tax year for which the taxpayer did not give notice of appeal of an assessment made by the Department of Revenue.




Sec. 37.10.420. “Money available for appropriation” defined.
 (a) For purposes of applying art. IX, sec. 17(b), Constitution of the State of Alaska,
     (1) “the amount available for appropriation” or “funds available for appropriation” means
          (A) the unrestricted revenue accruing to the general fund during the fiscal year;

          (B) general fund program receipts as defined in AS 37.05.146;

          (C) the unreserved, undesignated general fund balance carried forward from the preceding fiscal year that is not subject to the repayment obligation imposed by art. IX, sec. 17(d), Constitution of the State of Alaska; and

          (D) the balance in the statutory budget reserve fund established in AS 37.05.540;

     (2) “the amount appropriated for the previous fiscal year” means the amount appropriated from the
          (A) constitutional budget reserve fund under the authority granted in art. IX, sec. 17, Constitution of the State of Alaska; and

          (B) same revenue sources used to calculate the money available for appropriation for the current fiscal year; and

     (3) “the amount of appropriations made in the previous calendar year for the previous fiscal year” means appropriations made from sources identified in (2) of this subsection for a fiscal year that were enacted during the calendar year that ends on December 31 of that same fiscal year.

 (b) If the amount appropriated from the budget reserve fund has not been repaid under art. IX, sec. 17(d), Constitution of the State of Alaska, the Department of Administration shall transfer to the budget reserve fund the amount of money comprising the unreserved, undesignated general fund balance to be carried forward as of June 30 of the fiscal year, or as much of it as is necessary to complete the repayment. The transfer shall be made on or before December 16 of the following fiscal year.

 (c) In this section, “unrestricted revenue accruing to the general fund” or “unreserved, undesignated general fund balance carried forward” is money not restricted by law to a specific use that accrues to the general fund according to accepted principles of governmental or fund accounting adopted for the state accounting system established under AS 37.05.150 in effect on July 1, 1990.

 (d) An appropriation under art. IX, sec. 17(b), Constitution of the State of Alaska, requires an affirmative vote of the majority of the members of each house of the legislature. An appropriation under art. IX, sec. 17(c) requires an affirmative vote of three-fourths of the members of each house of the legislature.




Sec. 37.10.430. Management of the budget reserve fund.
 (a) The Department of Revenue may transfer management responsibility over all or a portion of the budget reserve fund (art. IX, sec. 17, Constitution of the State of Alaska) to the Alaska Permanent Fund Corporation.

 (b) By March 15 of each year, the Department of Revenue shall, after consulting with the Alaska Permanent Fund Corporation, prepare a report setting out the balance in the budget reserve fund (art. IX, sec. 17, Constitution of the State of Alaska) on January 1 and on December 31 of the previous calendar year. The report shall state the nominal, real, and realized return on the budget reserve fund compared to the nominal, real, and realized return on the permanent fund and the general fund during the previous calendar year.

 (c) A special subaccount is established in the budget reserve fund (art. IX, sec. 17, Constitution of the State of Alaska). Money in the subaccount shall be invested to yield higher returns than might be feasible to obtain with other money in the budget reserve fund. In establishing or modifying the investment policy for the subaccount in the constitutional budget reserve fund, the commissioner of revenue shall assume that those funds will not be needed for at least five years. Income earned on money in the subaccount shall be retained in the subaccount by the department.




Chapter 11. Renewable Resources Funds.

[Repealed, § 16 ch 161 SLA 1984.]

Chapter 12. Alaska Resources Corporation.

[Repealed, §§ 17, 18 ch. 161 SLA 1984.]

Article 1. Alaska Permanent Fund.


Chapter 13. Alaska Permanent Fund and Corporation.

Sec. 37.13.010. Alaska permanent fund.
 (a) Under art. IX, sec. 15, of the state constitution, there is established as a separate fund the Alaska permanent fund. The Alaska permanent fund consists of
     (1) 25 percent of all mineral lease rentals, royalties, royalty sale proceeds, net profit shares under AS 38.05.180(f) and (g), and federal mineral revenue sharing payments received by the state from mineral leases issued on or before December 1, 1979, and 25 percent of all bonuses received by the state from mineral leases issued on or before February 15, 1980;

     (2) 50 percent of all mineral lease rentals, royalties, royalty sale proceeds, net profit shares under AS 38.05.180(f) and (g), and federal mineral revenue sharing payments received by the state from mineral leases issued after December 1, 1979, and 50 percent of all bonuses received by the state from mineral leases issued after February 15, 1980; and

     (3) any other money appropriated to or otherwise allocated by law or former law to the Alaska permanent fund.

 (b) Payments due the Alaska permanent fund under (a) of this section shall be made to the fund within three banking days after the day the amount due to the fund reaches at least $3,000,000 and at least once each month.

 (c) The Alaska permanent fund shall be managed by the Alaska Permanent Fund Corporation established in this chapter.




Sec. 37.13.020. Findings.
The people of the state, by constitutional amendment, have required the placement of at least 25 percent of all mineral lease rentals, royalties, royalty sale proceeds, and federal mineral revenue sharing payments and bonuses received by the state into a permanent fund. The legislature finds with respect to the fund that
     (1) the fund should provide a means of conserving a portion of the state’s revenue from mineral resources to benefit all generations of Alaskans;

     (2) the fund’s goal should be to maintain safety of principal while maximizing total return;

     (3) the fund should be used as a savings device managed to allow the maximum use of disposable income from the fund for purposes designated by law.




Sec. 37.13.030. Purpose.
It is the purpose of AS 37.13.010 — 37.13.190 to provide a mechanism for the management and investment of those fund assets by the Alaska Permanent Fund Corporation in a manner consistent with the findings in AS 37.13.020.


Sec. 37.13.040. Alaska Permanent Fund Corporation.
There is established the Alaska Permanent Fund Corporation. The corporation is a public corporation and government instrumentality in the Department of Revenue managed by the board of trustees. The purpose of the corporation is to manage and invest the assets of the permanent fund and other funds designated by law in accordance with AS 37.13.010 — 37.13.190.


Sec. 37.13.050. Composition and qualifications of board of trustees.
 (a) The Board of Trustees of the Alaska Permanent Fund Corporation consists of six members appointed by the governor. Two of the members must be heads of principal departments of state government, one of whom shall be the commissioner of revenue. Four members shall be appointed by the governor from the public and may not hold any other state or federal office, position or employment, either elective or appointive, except as a member of the armed forces of either the United States or of this state.

 (b) The four public members of the board must have recognized competence and wide experience in finance, investments, or other business management-related fields.

 (c) The board shall annually elect a chairman from among its members.




Sec. 37.13.060. Term of office.
The public members of the board shall be appointed for terms of four years, and they may be reappointed. The terms of the public members shall be staggered so that no more than one term of a public member expires each year.


Sec. 37.13.070. Removal and vacancies.
 (a) The governor may remove a public member of the board from office only for cause. A removal by the governor must be in writing and must state the reason for the removal. A member who is removed by the governor may not participate in board business and may not be counted for purposes of establishing a quorum after the member receives written notice of removal from the governor.

 (b) A vacancy on the board shall be promptly filled by appointment by the governor. An appointee to a vacancy shall hold office for the balance of the term for which the appointee’s predecessor on the board was appointed.

 (c) A vacancy on the board does not impair the authority of a quorum of the board to exercise all the powers and perform all the duties of the board.




Sec. 37.13.080. Quorum and voting.
Four members of the board constitute a quorum for the transaction of business and the exercise of the powers and duties of the board. Action may be taken only upon affirmative vote of a majority of the full membership of the board.


Sec. 37.13.090. Compensation of board members.
Public members of the board receive an honorarium of $400 for each day spent at a meeting of the board or at a meeting of a subcommittee of the board or at a public meeting as a representative of the board. Members of the board are entitled to per diem and travel allowances as provided by law for members of state boards and commissions.


Sec. 37.13.100. Corporation staff.
The board may employ and determine the salary of an executive director. The executive director may, with the approval of the board, select and employ additional staff as necessary. An employee of the corporation, including the executive director, may not be a member of the board. The executive director and the other employees of the board are in the exempt service under AS 39.25.


Sec. 37.13.110. Conflicts of interest.
 (a) Members of the board, the executive director, and investment officers of the corporation are subject to the provisions of AS 39.50.

 (b) If a member of the board or an employee of the corporation acquires, owns, or controls an interest, direct or indirect, in an entity or project in which fund assets are invested, the member shall immediately disclose the interest to the board. The disclosure is a matter of public record and shall be included in the minutes of the board meeting next following the disclosure.




Sec. 37.13.120. Investment responsibilities.
 (a) The board shall adopt regulations specifically designating the types of income-producing investments eligible for investment of fund assets. When adopting regulations authorized by this section or managing and investing fund assets, the prudent-investor rule shall be applied by the corporation. The prudent-investor rule as applied to investment activity of the fund means that the corporation shall exercise the judgment and care under the circumstances then prevailing that an institutional investor of ordinary prudence, discretion, and intelligence exercises in the designation and management of large investments entrusted to it, not in regard to speculation, but in regard to the permanent disposition of funds, considering preservation of the purchasing power of the fund over time while maximizing the expected total return from both income and the appreciation of capital.

 (b) The corporation may not borrow money or guarantee from principal of the fund the obligations of others, except as provided in this subsection. With respect to investments of the fund, the corporation may, either directly or through an entity in which the investment is made, borrow money if the borrowing is nonrecourse to the corporation and the fund.

 (c) The board shall maintain a reasonable diversification among investments unless, under the circumstances, it is clearly prudent not to do so. The board shall invest the assets of the fund in in-state investments to the extent that in-state investments are available and if the in-state investments
     (1) have a risk level and expected return comparable to alternate investment opportunities; and

     (2) are eligible for investment of fund assets under (a) of this section.

 (d) The corporation may enter into and enforce all contracts necessary, convenient, or desirable for managing the fund’s assets and corporate operations, including contracts for future delivery to implement asset allocation strategies or to hedge an existing equivalent ownership position in an investment.

 (e) Before adoption of a regulation under (a) of this section, the regulation, in electronic format, shall be provided to the Legislative Budget and Audit Committee for review and comment. The board shall submit investment reports to the committee at least quarterly.




Sec. 37.13.130. Gains and losses. [Repealed, § 13 ch 81 SLA 1982.]
Sec. 37.13.140. Income.
Net income of the fund includes income of the earnings reserve account established under AS 37.13.145. Net income of the fund shall be computed annually as of the last day of the fiscal year in accordance with generally accepted accounting principles, excluding any unrealized gains or losses. Income available for distribution equals 21 percent of the net income of the fund for the last five fiscal years, including the fiscal year just ended, but may not exceed net income of the fund for the fiscal year just ended plus the balance in the earnings reserve account described in AS 37.13.145.


Sec. 37.13.145. Disposition of income.
 (a) The earnings reserve account is established as a separate account in the fund. Income from the fund shall be deposited by the corporation into the account as soon as it is received. Money in the account shall be invested in investments authorized under AS 37.13.120.

 (b) At the end of each fiscal year, the corporation shall transfer from the earnings reserve account to the dividend fund established under AS 43.23.045, 50 percent of the income available for distribution under AS 37.13.140.

 (c) After the transfer under (b) of this section, the corporation shall transfer from the earnings reserve account to the principal of the fund an amount sufficient to offset the effect of inflation on principal of the fund during that fiscal year. However, none of the amount transferred shall be applied to increase the value of that portion of the principal attributed to the settlement of State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior Court, First Judicial District) on July 1, 2004. The corporation shall calculate the amount to transfer to the principal under this subsection by
     (1) computing the average of the monthly United States Consumer Price Index for all urban consumers for each of the two previous calendar years;

     (2) computing the percentage change between the first and second calendar year average; and

     (3) applying that rate to the value of the principal of the fund on the last day of the fiscal year just ended, including that portion of the principal attributed to the settlement of State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior Court, First Judicial District).

 (d) Notwithstanding (b) of this section, income earned on money awarded in or received as a result of State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior Court, First Judicial District), including settlement, summary judgment, or adjustment to a royalty-in-kind contract that is tied to the outcome of this case, or interest earned on the money, or on the earnings of the money shall be treated in the same manner as other income of the Alaska permanent fund, except that it is not available for distribution to the dividend fund or for transfers to the principal under (c) of this section, and shall be annually deposited into the Alaska capital income fund (AS 37.05.565).




Sec. 37.13.150. Corporation budget.
The revenue generated by the fund’s investments must be identified as the source of the operating budget of the corporation in the state’s operating budget under AS 37.07 (Executive Budget Act). The unexpended balance of the corporation’s annual operating budget does not lapse at the end of the fiscal year but shall be treated as income under AS 37.13.140.


Sec. 37.13.160. Audits.
The Legislative Budget and Audit Committee may provide for an annual post audit and annual operational and performance evaluations of the fund’s investments and investment programs.


Sec. 37.13.170. Reports and publications.
By September 30 of each year, the board shall publish a report of the fund for distribution to the governor and the public. The board shall notify the legislature that the report is available. The report shall be written in easily understandable language. The report must include financial statements audited by independent outside auditors, a statement of the amount of money received by the fund from each investment during the period covered, a statement of investments of the fund including an appraisal at market value, a description of fund investment activity during the period covered by the report, a comparison of the fund performance with the intended goals contained in AS 37.13.020, an examination of the effect of the investment criteria of this chapter on the fund portfolio with recommendations of any needed changes, and any other information the board believes would be of interest to the governor, the legislature, and the public. The annual income statement and balance sheet of the fund shall be published in at least one newspaper in each judicial district. The income statement and balance sheet for the two fiscal years preceding the publication of the election pamphlet under AS 15.58 shall be included in that pamphlet.


Sec. 37.13.180. Tax exemption.
The corporation and the fund are exempt from all taxes and assessments in the state. All security instruments issued by the corporation or the fund, their transfer, and their income are exempt from all taxes and assessments in the state.


Sec. 37.13.190. Political activities.
The resources of the corporation or the fund may not be used to finance or influence political activities.


Sec. 37.13.200. Public access to information.
Information in the possession of the corporation is a public record, except that information that discloses the particulars of the business or affairs of a private enterprise or investor is confidential and is not a public record. Confidential information may be disclosed only for the purposes of an official law enforcement investigation or when its production is required in a court proceeding. These restrictions do not prohibit the publication of statistics presented in a manner that prevents the identification of particular reports, items, persons, or enterprises.


Sec. 37.13.205. Regulations. [Repealed, § 3 ch 46 SLA 2005.]
Sec. 37.13.206. Regulations.
 (a) The board may adopt regulations to carry out the purposes of this chapter and shall adopt regulations under AS 37.13.120(a). The provisions of AS 44.62 (Administrative Procedure Act) regarding the adoption of regulations do not apply to regulations of the corporation.

 (b) The board may adopt regulations under this section by motion, by resolution, or in any other manner permitted by the bylaws of the corporation.

 (c) Except as provided in (f) of this section, at least 15 days before the adoption, amendment, or repeal of a regulation, the corporation shall give public notice of the proposed action by
     (1) publishing the notice in a newspaper of general circulation or trade or industry publication that the corporation prescribes;

     (2) posting the notice on the Alaska Online Public Notice System;

     (3) furnishing the notice, by electronic format, to all legislators; and

     (4) providing a copy of the notice to every person who has filed a request for notice of proposed regulation with the corporation.

 (d) The public notice must include a statement of the time, place, and nature of the proceedings for the adoption, amendment, or repeal of the regulation and an informative summary of the subject of the proposed action.

 (e) On the date and at the time and place designated in the notice, the corporation shall give each interested person or the person’s authorized representative, or both, the opportunity to present statements, arguments, or contentions in writing, with or without opportunity to present them orally. The board may accept material presented by any form of communication and shall consider all factual, substantive, and other relevant matter presented to it before adopting, amending, or repealing a regulation. A regulation adopted, amended, or repealed by the board may vary from the informative summary specified in (d) of this section if the subject of the action taken on the regulation remains the same and if the original notice of the proposed action was written so as to ensure that members of the public are reasonably notified of the subject of the proposed action in order for members of the public to determine whether their interests could be affected by the board’s proposed action on that subject.

 (f) A regulation or order of repeal of a regulation under this section may be made as an emergency regulation if, in the order of adoption, the board states the facts constituting the emergency and makes a finding that the adoption of the regulation or repeal is necessary for the immediate preservation of the orderly operation of the corporation. The requirements of (c) — (e) of this section do not apply to the initial adoption of an emergency regulation or repeal under this subsection; however, upon adoption of an emergency regulation or repeal under this subsection, the corporation shall, within 10 days after that adoption, comply with the notice procedures specified in (c) — (e) of this section. An emergency regulation or repeal adopted under this subsection does not remain in effect for more than 120 days unless, before the expiration of that period, the corporation complies with the procedures specified in (c) — (e) of this section.

 (g) A regulation adopted under this section takes effect immediately upon its adoption by the board or at another time specified in the order of adoption. The regulation shall be submitted to the lieutenant governor for publication in the Alaska Administrative Code and Register. Within 45 days after adoption of a regulation under this section, the corporation shall provide a copy of the adopted regulation to the chair of the Administrative Regulation Review Committee (AS 24.20.400).




Sec. 37.13.210. [Renumbered as AS 37.13.900.]

Article 2. Management of Other Assets.


Sec. 37.13.300. Corporation to manage certain assets of the mental health trust.
 (a) The corporation shall manage the mental health trust fund.

 (b) The corporation shall
     (1) hold and invest the mental health trust fund subject to AS 37.13.120;

     (2) at least quarterly, prepare, publish, and distribute to the Board of Trustees of the Alaska Mental Health Trust Authority a financial report showing investment revenue and expenditures, including the allocation of the cash assets of the mental health trust fund among investments;

     (3) annually prepare, publish, and distribute to the Board of Trustees of the Alaska Mental Health Trust Authority financial statements prepared in accordance with generally accepted accounting principles consistently applied, and an audit report prepared by a certified public accountant;

     (4) periodically advise the Board of Trustees of the Alaska Mental Health Trust Authority when revisions to long-range investment policy, including asset allocation changes, are contemplated, and provide an opportunity for consultation and comment on the changes before they are implemented; and

     (5) transfer to the mental health trust settlement income account the net income available for distribution attributable to the mental health trust fund at the end of each fiscal year.

 (c) Net income from the mental health trust fund may not be included in the computation of net income available for distribution under AS 37.13.140.




Article 3. General Provisions.


Sec. 37.13.900. Definitions.
In this chapter,
     (1) “board” means the Board of Trustees of the Alaska Permanent Fund Corporation;

     (2) “corporation” means the Alaska Permanent Fund Corporation;

     (3) “fund” means the Alaska permanent fund established under art. IX, sec. 15, Constitution of the State of Alaska.




Article 1. Mental Health Trust.


Chapter 14. Special Funds.

Sec. 37.14.001. Mental health trust.
In carrying out its trust obligations under the Mental Health Enabling Act of 1956, the state acts through the governor, the legislature, and the Alaska Mental Health Trust Authority (AS 47.30.011).


Sec. 37.14.003. Responsibilities of the governor.
 (a) At the time the governor submits the report under AS 37.07.060(b), the governor shall submit to the legislature a separate appropriation bill limited to appropriations for the state’s integrated comprehensive mental health program.

 (b) If the appropriations in the bill submitted by the governor under (a) of this section differ from those proposed by the authority, the bill must be accompanied by a report explaining the reasons for the differences between the proposed appropriations in the governor’s bill and the authority’s recommendations for expenditures from the general fund for the state’s integrated comprehensive mental health program.

 (c) If the governor vetoes all or a part of an appropriation for the integrated comprehensive mental health program, the governor’s veto message must explain the vetoes in light of the authority’s recommendations for expenditures from the general fund for the state’s integrated comprehensive mental health program.




Sec. 37.14.005. Responsibilities of the legislature.
 (a) The legislature shall annually pass and transmit to the governor a bill making appropriations of money for the state’s integrated comprehensive mental health program.

 (b) The legislature shall make appropriations for the state’s integrated comprehensive mental health program in a separate appropriation bill limited to appropriations for the state’s integrated comprehensive mental health program.

 (c) If the appropriations in the bill passed by the legislature differ from those proposed by the authority, the bill must be accompanied by a report explaining the reasons for the differences between the appropriations in the bill and the authority’s recommendations for expenditures from the general fund for the state’s integrated comprehensive mental health program.




Sec. 37.14.007. Authority as trustee.
 (a) The Alaska Mental Health Trust Authority, established by AS 47.30.011, is the trustee of the trust established under the Alaska Mental Health Enabling Act of 1956, P.L. 84-830, 70 Stat. 709.

 (b) In exercising the powers, duties, and responsibilities as trustee, the authority is under a duty to the public and the trust beneficiaries to
     (1) administer the trust consistent with AS 37.14.009 in the interest of the beneficiaries;

     (2) keep and render clear and accurate accounts with respect to the administration of the trust;

     (3) make public and available complete and accurate information as to the nature and amount of the trust property;

     (4) exercise a high degree of care in administering the trust;

     (5) take reasonable steps to take and keep control of the trust property;

     (6) use care and skill to preserve the trust property;

     (7) take reasonable steps to realize on claims that are held in trust;

     (8) defend against actions that may result in a loss to the trust estate, unless under all the circumstances, considering the other duties owed to the trust, it is reasonable not to make the defense;

     (9) separately account for trust property;

     (10) ensure that trust property is designated as property of the trust;

     (11) use care and skill to make the trust property productive; however, nothing in this paragraph shall prevent the state from using trust property directly or indirectly, by contractual stipulation or otherwise, as a component of the state’s mental health trust program; and

     (12) deal impartially with the different trust beneficiaries as provided in AS 47.30.056.




Sec. 37.14.009. Trust management.
 (a) The Alaska Mental Health Trust Authority
     (1) has a fiduciary obligation to ensure that the assets of the trust are managed consistent with the requirements of the Alaska Mental Health Enabling Act, P.L. 84-830, 70 Stat. 709 (1956);

     (2) shall contract with the Department of Natural Resources to manage the land assets of the trust; the contract must provide for the recording of at least one conveyance to the authority by quitclaim deed of mental health trust land in each recording district in the state in which mental health trust land is located; a conveyance to the authority is exempt from the platting and surveying requirements of AS 38.04.045(b) and municipal ordinances adopted under AS 29.40; when the Department of Natural Resources manages land assets of the trust under a contract entered into under this paragraph, the department shall
          (A) manage in conformity with AS 38.05.801;

          (B) consult with the authority before adopting regulations under AS 38.05.801(c);

          (C) provide notice to, and consult with, the authority regarding all proposed actions subject to public notice under AS 38.05.945 before giving that public notice;

          (D) annually provide the authority with a report including
               (i) a description of all land management activities undertaken under this section during the prior year;

               (ii) an accounting of all income and proceeds generated from mental health trust land;

               (iii) an explanation of the manner in which the income and proceeds were allocated between the mental health trust fund and the mental health trust settlement income account; and

          (E) obtain the approval of the authority before exchanging mental health trust land under AS 38.05.801(b)(2); and

     (3) shall contract with Alaska Permanent Fund Corporation for management of the mental health trust fund.

 (b) [Repealed, § 39 ch 5 FSSLA 1994.]




Sec. 37.14.010. Mental health fund established. [Repealed, § 13 ch 48 SLA 1987.]
Sec. 37.14.011. Mental health trust income account. [Repealed, § 12 ch 1 SSSLA 1994.]
Sec. 37.14.013. Mental health trust income and proceeds account. [Repealed, § 49 ch 5 FSSLA 1994; § 9 ch 1 SSSLA 1994.]
Sec. 37.14.020. Mental Health Fund Advisory Board created. [Repealed, § 13 ch 48 SLA 1987.]
Sec. 37.14.021. Utilization of the mental health trust income account. [Repealed, § 39 ch 5 FSSLA 1994.]
Sec. 37.14.023. Utilization of the mental health trust income and proceeds account. [Repealed, § 49 ch 5 FSSLA 1994; § 9 ch 1 SSSLA 1994.]
Sec. 37.14.030. Powers and duties of board. [Repealed, § 13 ch 48 SLA 1987.]
Sec. 37.14.031. Trust fund established.
 (a) The mental health trust fund is established as a separate fund of the Alaska Mental Health Trust Authority.

 (b) The fund consists of the cash assets of the principal of the trust, and includes
     (1) money appropriated to the fund;

     (2) the proceeds of sale or other disposals of mental health trust land, and the fees, charges, income earned, royalty proceeds, and other money received from the management of mental health trust land attributable to principal; and

     (3) gifts, bequests, and contributions from other sources.

 (c) The net income of the fund shall be determined by the Alaska Permanent Fund Corporation in the same manner the corporation determines the net income of the Alaska permanent fund under AS 37.13.140.

 (d) The authority shall adopt regulations providing for the determination of amounts attributable to principal under (b)(2) of this section. The regulations must provide for the allocation between principal and income of money received from the management of mental health trust land, and the manner of allocation must be in the long-term best interest of the trust and its beneficiaries.




Sec. 37.14.033. Management of trust fund.
The mental health trust fund shall be managed by the Alaska Permanent Fund Corporation under AS 37.13.300.


Sec. 37.14.035. Trust fund utilization.
 (a) The cash principal of the mental health trust fund shall be retained perpetually in the fund for investment by the Alaska Permanent Fund Corporation, as specified in AS 37.13.300.

 (b) The net income of the fund shall be transferred by the corporation to the mental health trust settlement income account at the end of each fiscal year.

 (c) The net income of the fund may only be utilized by the Alaska Mental Health Trust Authority for the purposes listed in AS 37.14.041.




Sec. 37.14.036. Trust settlement income account established.
 (a) The mental health trust settlement income account is established as a separate account of the Alaska Mental Health Trust Authority. The mental health trust settlement income account consists of
     (1) fees, charges, income earned on assets, and other money received by the trust that is not attributable to the principal of the trust under AS 37.14.031(d); and

     (2) money deposited in the account in accordance with appropriations or allocations made by law.

 (b) The authority may establish subaccounts within the mental health trust settlement income account.

 (c) [Repealed, § 39 ch 5 FSSLA 1994.]




Sec. 37.14.039. Trust settlement income account administration.
 (a) The mental health trust settlement income account shall be administered by the Alaska Mental Health Trust Authority.

 (b) If the authority determines that there is a surplus of money in the account above the amount sufficient to meet current and projected cash expenditure needs of the authority, the surplus shall be invested by the authority as provided in AS 37.10.071 for the making of investments by the fiduciary of a state fund. Income earned on investments made under this subsection may be retained by the authority and expended under AS 37.14.041.




Sec. 37.14.040. Fund utilization. [Repealed, § 13 ch 48 SLA 1987.]
Sec. 37.14.041. Use of trust settlement income account.
 (a) Money in the mental health trust settlement income account may only be used for the following purposes:
     (1) the awarding of grants and contracts in fulfillment of the authority’s purpose to ensure an integrated comprehensive mental health program for the state;

     (2) obtaining private and federal grants for a purpose described in (1) of this subsection;

     (3) soliciting gifts, bequests, and contributions for a purpose described in (1) of this subsection;

     (4) reimbursement to
          (A) the Alaska Permanent Fund Corporation for the costs of managing the principal of the mental health trust fund; and

          (B) the Department of Natural Resources for the cost of managing mental health trust land;

     (5) offsetting the effect of inflation on the value of the principal of the mental health trust fund; and

     (6) subject to AS 37.07 (Executive Budget Act), meeting the necessary administrative expenses of the authority that are required for it to properly discharge its responsibilities.

 (b) If money in the mental health trust settlement income account is not needed to meet the necessary expenses of the state’s integrated comprehensive mental health program, the authority shall transfer the money to the unrestricted general fund for expenditure through legislative appropriation for other public purposes.




Sec. 37.14.045. Limitation on grants and contracts paid for from mental health trust settlement income account.
 (a) The authority may award grants and contracts that are paid for from money in the mental health trust settlement income account only in furtherance of its purpose to ensure an integrated comprehensive mental health program.

 (b) In awarding grants and contracts that are paid for from money in the mental health trust settlement income account, the authority shall consider proposals only from applicants submitting a detailed proposal in the form prescribed by the authority.

 (c) The authority may not award a grant or contract that is to be paid for from money in the mental health trust settlement income account unless the authority makes written findings explaining that
     (1) the grant or contract awarded will further the authority’s purpose to ensure an integrated comprehensive mental health program;

     (2) the applicant has submitted an adequate plan for project implementation, including both financial feasibility and project effectiveness;

     (3) the applicant has demonstrated that sufficient expertise is available to accomplish the objectives of the proposed program or project; and

     (4) the applicant has identified operating, maintenance, and other costs associated with the project, including those ancillary to the project, and future obligations associated with the project.

 (d) The authority may establish other requirements for the award of grants and contracts under this section to ensure an integrated comprehensive mental health program.

 (e) The authority shall award grants and contracts that are paid for from money in the mental health trust settlement income account in amounts that
     (1) are appropriate to the conditions of the applicant and the proposed program or project; and

     (2) will make the most effective use of the funds in the mental health trust settlement income account that are available for expenditure.




Sec. 37.14.050. Contributions. [Repealed, § 13 ch 48 SLA 1987.]
Sec. 37.14.099. Definitions.
In AS 37.14.001 — 37.14.099,
     (1) “authority” means the Alaska Mental Health Trust Authority established under AS 47.30.011;

     (2) “board” means the board of trustees of the authority;

     (3) “enabling Act” means the Alaska Mental Health Enabling Act of 1956, P.L. 84-830, 70 Stat. 709.




Article 2. Public School Trust Fund.


Sec. 37.14.110. Public school trust fund established.
 (a) There is established as a separate endowment trust fund the public school trust fund.

 (b) The principal of the fund established in (a) of this section consists of
     (1) the balance of the public school permanent fund on July 1, 1978; and

     (2) sums transferred under AS 37.14.150.

 (c) The commissioner of revenue shall determine the net income of the fund in accordance with investment accounting principles and in a manner that preserves the distinction between principal and income and that excludes capital gains or losses realized on principal. The principal of the fund and the capital gains or losses realized on principal shall be perpetually retained in the fund for investment purposes.




Sec. 37.14.120. Public School Fund Advisory Board created.
 (a) There is created in the Department of Revenue the Public School Fund Advisory Board composed of the commissioner of education and early development, three members elected by the Board of Education and Early Development from among its membership, and the commissioner of revenue.

 (b) The board created in (a) of this section shall elect a chairman from the membership of the board. Members serve without compensation but are entitled to per diem and travel expenses authorized by law for other boards.




Sec. 37.14.130. Powers and duties of board.
The board created in AS 37.14.120 has the following powers and duties:
     (1) to hold regular meetings and special meetings considered necessary; and

     (2) to have prepared an annual accounting of the principal and income of the fund established in AS 37.14.110.




Sec. 37.14.140. Utilization of income.
The net income of the fund may not be appropriated for a purpose other than the support of the state public school program. The commissioner of revenue shall invest realized net income that has not been appropriated or that has been appropriated but not expended until the income is appropriated and expended.


Sec. 37.14.150. Contributions.
During each fiscal year the commissioner of revenue shall transfer to the fund created in AS 37.14.110 a sum equal to one-half of one percent of the total receipts derived from the management of state land, including amounts paid to the state as proceeds of sale or annual rent of surface rights, mineral lease rentals, royalties, royalty sale proceeds, and federal mineral revenue-sharing payments or bonuses.


Sec. 37.14.160. Duties of the commissioner of revenue.
The commissioner of revenue is the treasurer of the trust fund created in AS 37.14.110 and shall
     (1) in carrying out investment duties under this section, exercise the same powers and duties established for the Alaska Retirement Management Board in AS 37.10.220;

     (2) deposit the principal and income from investments in separate principal and income accounts for the fund;

     (3) invest and maintain accounting records that distinguish between the principal and income of the fund;

     (4) provide reports to the board established under AS 37.14.120 on the condition and investment performance of the fund.




Sec. 37.14.170. Investments.
The commissioner of revenue is the fiduciary of the trust fund and shall invest the fund to provide increasing net income over long-term periods to the fund’s income beneficiaries. The commissioner may invest the money in the fund on the basis of probable total rate of return to promote the long-term generation of income. In managing the trust fund, the commissioner shall
     (1) consider the status of the fund’s capital and the income generated on both a current and a probable future basis;

     (2) determine the appropriate investment objectives;

     (3) establish investment policies to achieve the objectives; and

     (4) act only in regard to the financial interests of the fund’s beneficiaries.




Article 3. Alaska Children’s Trust.


Sec. 37.14.200. Alaska children’s trust established.
 (a) The Alaska children’s trust is established as a separate endowment trust of the state.

 (b) The trust consists of
     (1) legislative appropriations to the trust;

     (2) donations to the trust; and

     (3) income earned on investments of trust assets appropriated by the legislature to the trust.

 (c) The commissioner of revenue shall manage the trust as an endowment, with the goal that the purchasing power of the trust will not diminish over time without regard to additional contributions that may be made to the trust. The commissioner shall invest the assets of the trust in a manner likely to yield at least a five percent real rate of return over time. The commissioner may comingle the assets of the trust with other public funds for purposes of investment.

 (d) In carrying out the investment duties under AS 37.14.200 — 37.14.270, the commissioner of revenue has the powers and duties set out in AS 37.10.071. The commissioner shall provide reports to the board on the condition and investment performance of the trust.

 (e) As soon as is practicable after July 1 of each year, the commissioner of revenue shall determine the average of the market values of the trust on June 30 for the immediately preceding three fiscal years. The commissioner shall identify five percent of that amount as available for appropriation to the grant account from which the board may award grants under AS 37.14.230. The commissioner shall also report as available for appropriation a total of amounts previously identified as available for appropriation to the grant account that have not been appropriated.

 (f) The legislature may appropriate from the principal of the trust up to $150,000 each year for the administrative expenses of the board relating to AS 37.14.200 — 37.14.270. The legislature may also appropriate from the principal of the trust expenses related to the commissioner of revenue’s management of trust assets.

 (g) Nothing in this section creates a dedicated fund.




Sec. 37.14.205. Alaska children’s trust grant account.
 (a) The Alaska children’s trust grant account is established as an account in the general fund. The legislature may appropriate funds to the grant account from
     (1) the trust account in the amount described in AS 37.14.200(e);

     (2) program receipts from special request Alaska children’s trust plates under AS 28.10.421(d)(14);

     (3) program receipts from birth certificates under AS 18.50.225;

     (4) program receipts from certificates of marriage under AS 18.50.272;

     (5) private restricted-use donations; and

     (6) any other source.

 (b) The board may use money in the grant account for the following purposes and without further appropriation:
     (1) to make grants under AS 37.14.230;

     (2) to obtain private and federal grants for the trust and the grant account;

     (3) to solicit contributions, gifts, and bequests for the trust and the grant account;

     (4) to expend private restricted-use donations in conformity with the donor’s restrictions.




Sec. 37.14.210. Powers and duties of the commissioner of revenue. [Repealed, § 14 ch 115 SLA 2010.]
Sec. 37.14.220. Administration of the trust.
The trust shall be administered by the Alaska Children’s Trust Board.


Sec. 37.14.225. Trust board established.
The Alaska Children’s Trust Board is established in the Office of the Governor. The board is composed of
     (1) the governor or a designee of the governor;

     (2) the commissioner of health and social services or the commissioner’s designee;

     (3) the commissioner of education and early development or the commissioner’s designee; and

     (4) four public members appointed by the governor who have experience and expertise in
          (A) children’s or prevention programs, including child abuse and neglect prevention programs; or

          (B) private sector finance.




Sec. 37.14.230. Powers and duties of the board.
 (a) The board shall
     (1) hold regular and special meetings it considers necessary; the board may hold meetings by teleconference;

     (2) award grants from the grant account to community-based programs that the board finds will aid in the prevention of child abuse and neglect;

     (3) monitor approved programs for compliance with AS 37.14.200 — 37.14.270 and specified grant conditions;

     (4) maintain records for all donations to the trust and the grant account; the records must reflect the amount of the donation, the date of the donation, the donor’s intent, if any, with respect to how the donation is to be used, the account into which the donation was deposited, and the manner in which the donation was expended;

     (5) apply for and use funds from the grant account to obtain private and federal grants for the prevention of child abuse and neglect;

     (6) solicit contributions, gifts, and bequests to the trust and the grant account;

     (7) keep electronic recordings of each meeting of the board to be made available on request;

     (8) submit to the governor and make available to the legislature by February 1 each year a report describing
          (A) the child abuse and neglect prevention services that were provided by the programs to which the board awarded grants; and

          (B) the annual level of contributions, income, and expenses of the trust and the grant account;

     (9) make arrangements with the commissioner or a financial depository to manage private restricted-use donations that are not fully expended and account for any interest earned on the donations.

 (b) The board may enter into joint arrangements with a private nonprofit entity or entities for the purpose of making grants and fundraising for the support of child abuse and neglect prevention programs. In entering into a joint arrangement, the board may not delegate its duties or authority under AS 37.14.200 — 37.14.270.




Sec. 37.14.240. Fund utilization. [Repealed, § 14 ch 115 SLA 2010.]
Sec. 37.14.245. Regulations.
 (a) The board may adopt regulations to implement AS 37.14.200 — 37.14.270. Regulations adopted by the board are not subject to AS 44.62 (Administrative Procedure Act). The board shall comply with the requirements of AS 44.62.310 and 44.62.312.

 (b) Notwithstanding (a) of this section, a regulation adopted under AS 37.14.200 — 37.14.270 shall be published in the Alaska Administrative Register and Alaska Administrative Code for informational purposes. A regulation adopted under this section shall conform to the style and format requirements of the drafting manual for administrative regulations that is published under AS 44.62.050.

 (c) At least 30 days before the adoption, amendment, or repeal of a regulation under this section, the board shall provide notice of the action that is being considered. The notice must include publication in a newspaper of general circulation in the state.

 (d) A regulation adopted under this section takes effect 30 days after adoption by the board unless a later effective date is stated in the regulation.

 (e) Notwithstanding the other provisions of this section, a regulation may be adopted, amended, or repealed, effective immediately, as an emergency regulation. For an emergency regulation to be effective, the board must find that the immediate adoption, amendment, or repeal of the regulation is necessary. The board shall, within 10 days after adoption of an emergency regulation, give notice of the adoption under (c) of this section. An emergency regulation adopted under this subsection may not remain in effect past the date of the next regular meeting of the board unless the board complies with the procedures set out in this section and adopts the regulation as a permanent regulation.

 (f) In this section, “regulation” has the meaning given in AS 44.62.640(a).




Secs. 37.14.250 — 37.14.260. Grants; eligibility for grants. [Repealed, § 14 ch 115 SLA 2010.]
Sec. 37.14.270. Definitions.
In AS 37.14.200 — 37.14.270, unless the context otherwise requires,
     (1) “board” means the Alaska Children’s Trust Board;

     (2) “grant account” means the Alaska children’s trust grant account established in AS 37.14.205;

     (3) “private restricted-use donation” means a donation related to the prevention of child abuse and neglect where a donor specifies in writing that the donation be used for any purpose other than to be placed in the corpus of the trust and invested with trust assets;

     (4) “trust” means the Alaska children’s trust established in AS 37.14.200.




Article 4. Investment Loss Trust Fund.


Sec. 37.14.300. Investment loss trust fund.
 (a) There is established as a separate fund in the state treasury the investment loss trust fund. The trust fund consists of money appropriated to it by the legislature. The Department of Revenue is the custodian of the trust fund and shall invest the trust fund in accordance with AS 37.10.071. Subject to appropriation, the amount earned on money in the trust fund shall be retained in the trust fund. The trust fund shall be held in trust for the benefit of participants in the supplemental annuity plan established under AS 39.30.150 — 39.30.180 and for other purposes authorized by this section, subject to the conditions set out in this section.

 (b) The Department of Administration shall spend money from the trust fund as necessary to
     (1) hold participants in the plan and annuity holders harmless from a loss on investments in guaranteed investment and annuity contracts issued by Executive Life Insurance Company of California;

     (2) pursue a right to recover amounts from persons who may have unlawfully caused or contributed to the loss on investments; and

     (3) protect the interest of participants in the plan and annuity holders during proceedings to conserve or liquidate the assets of Executive Life Insurance Company of California.

 (c) If the plan or an annuity holder does not incur a loss on investments, or, if after compensating the plan and annuity holders for the loss on investments, a balance remains in the trust fund, the trust fund created in (a) of this section is terminated and the balance of the trust fund lapses pro rata into the funds from which the appropriations to the trust fund were made. The state is subrogated to a right of claim held by participants in the plan and annuity holders to the extent of amounts spent from the trust fund.

 (d) In this section,
     (1) “annuity holder” means
          (A) a plan participant who elects to receive an annuity contract acquired by the Department of Administration and issued by Executive Life Insurance Company of California; and

          (B) members of the Unlicensed Vessel Personnel Annuity Retirement Plan who receive an annuity contract acquired by the Department of Administration and issued by Executive Life Insurance Company of California;

     (2) “loss on investments” means
          (A) the difference between the principal amount plus accrued interest earned through May 3, 1991, on the guaranteed investment contracts issued by Executive Life Insurance Company of California, according to the terms of the contracts, and a lesser amount received by the plan upon maturity, sale, or other termination of the contracts; plus

          (B) accrued earnings on the amount described in (A) of this subsection, beginning May 4, 1991, and continuing until the earlier of a participant’s benefit commencement date or the maturity, sale, or other termination of the contracts, at a rate equal to the rate, less one percent to be used for the purposes of (b)(2) — (3) of this section, earned each month on the investment loss trust fund; or

          (C) any unpaid annuity amounts due to annuity holders under an annuity contract issued by Executive Life Insurance Company of California;

     (3) “plan” means the supplemental annuity plan established under AS 39.30.150 — 39.30.180;

     (4) “trust fund” means the investment loss trust fund established under this section.




Article 5. Exxon Valdez Oil Spill Trust.


Sec. 37.14.400. Trust recognized.
The trust established under the Memorandum of Agreement and Consent Decree entered into by the United States and the state in settlement of claims to money received for injury, loss, or destruction of the natural resources affected by the March 24, 1989, Exxon Valdez oil spill, and approved by the United States District Court on August 28, 1991, is recognized. It shall be managed as provided in the Memorandum of Agreement and Consent Decree that established it.


Sec. 37.14.405. Appropriations required.
 (a) Notwithstanding any other provision of law, a state agency may not expend money received from the trust unless the expenditure is in accordance with an appropriation made by law.

 (b) Appropriations made to satisfy the requirement of (a) of this section may be made by general appropriations of program receipts conditioned on compliance with the program review provisions of AS 37.07.080(h).

 (c) The provisions of (b) of this section do not apply to amounts paid as reimbursements to the state, as authorized by the Memorandum of Agreement and Consent Decree establishing the trust, for expenses that are
     (1) related to the Exxon Valdez oil spill; and

     (2) incurred by the state on or before December 31, 1992.




Sec. 37.14.410. Reimbursed expenditures.
 (a) Amounts received by the state as reimbursement for expenses related to the Exxon Valdez oil spill incurred by the state on or before December 31, 1992, shall be deposited in the general fund and, except as required under (b) of this section, may not be credited to an oil and hazardous substance release mitigation account under AS 46.04.010 or to an account established in AS 46.08.020 or 46.08.025.

 (b) A percentage of each payment deposited in the general fund under (a) of this section shall be credited to the prevention account established in AS 46.08.010(a)(1). That percentage is determined by dividing
     (1) the amount of the expenses for which the state may be reimbursed under (a) of this section that were paid from the oil and hazardous substance release response fund established under AS 46.08.010, by

     (2) the total amount of expenses for which the state may be reimbursed under (a) of this section.




Sec. 37.14.415. Budget and reports.
The state trustees shall
     (1) submit to the governor and the legislature by December 15 of each year a report setting out, for each object or purpose of expenditure, the amounts approved for expenditure from the trust during the preceding fiscal year and the amounts actually expended during the preceding fiscal year;

     (2) prepare and submit, under AS 37.07 (Executive Budget Act), a budget for the next fiscal year setting out, for each object or purpose of expenditure, the trustees’ estimate of the amounts that are, during the next fiscal year, to be funded by the trust and expended by state agencies; and

     (3) prepare and submit to the legislature at the same time the budget for state agency expenditures is submitted under (2) of this section, a proposal setting out, for each object or purpose of expenditure, the trustees’ estimate of the amounts that are to be funded by the trust in the next fiscal year and that are not included in the budget submitted under (2) of this section.




Sec. 37.14.420. Payments to persons other than governments.
The state trustees may not agree to an expenditure of money from the trust to a person or entity other than an agency of the state or federal government unless the expenditure is for administrative expenses of the trust and is consistent with the competitive principles of AS 36.30 (State Procurement Code). This section does not prevent an agency receiving trust money from expending the money in accordance with procurement or other law applicable to that agency.


Sec. 37.14.425. Public records.
For purposes of AS 40.25.120, records of the trust in the custody of or subject to the control of state officers and agencies are public records.


Sec. 37.14.430. Applicability of open meetings law.
 (a) The provisions of AS 44.62.310 — 44.62.319 (Open Meetings Act) apply to a meeting related to the trust in which
     (1) one or more of the state trustees and one or more of the federal trustees participate, except to the extent that applicable federal law conflicts with AS 44.62.310 or 44.62.312, in which case the applicable federal law governs; or

     (2) two or more of the state trustees, but none of the federal trustees, participate.

 (b) Notwithstanding (a) of this section, the provisions of AS 44.62.310 — 44.62.319 (Open Meetings Act) do not apply to a discussion between the trustees outside of a formal meeting about matters related to the trust if, during the discussion, no decision is made and none of the trustees agrees to vote in a particular way.

 (c) The state trustees may discuss the establishment of an official common state position regarding the trust in executive session under AS 44.62.310(b) and (c)(1).

 (d) For the purposes of this section,
     (1) a person to whom a state trustee has delegated any of the trustee’s authority related to the trust is considered a state trustee; and

     (2) a person to whom a federal trustee has delegated any of the trustee’s authority related to the trust is considered a federal trustee.




Sec. 37.14.450. Definitions.
In AS 37.14.400 — 37.14.450,
     (1) “federal trustee” means a person appointed by the President of the United States to serve as a co-trustee of the trust;

     (2) “state trustee” means a state officer designated by the governor to serve as a co-trustee of the trust;

     (3) “trust” means the trust established for natural resource damage recoveries under the Memorandum of Agreement and Consent Decree entered into by the United States and the state in settlement of claims to money received by the state and federal governments for injury, loss, or destruction to the natural resources affected by the March 24, 1989, Exxon Valdez oil spill, and approved by the court on August 28, 1991.




Article 6. Alaska Heritage Endowment Fund.


Sec. 37.14.500. Alaska heritage endowment fund established.
The Alaska heritage endowment fund is established as a separate endowment trust fund of the state. The principal of the fund consists of
     (1) legislative appropriations to the fund; and

     (2) gifts, bequests, and contributions of cash or other assets made by a person who has specified their placement in the fund principal.




Sec. 37.14.510. Net income account.
 (a) The net income account is established in the Alaska heritage endowment fund. The net income account of the fund consists of
     (1) money and other assets given by persons to the fund whose placement in the principal of the fund is not required by AS 37.14.500(2); and

     (2) amounts earned on the investment of gifts, bequests, and contributions of cash or other assets whose placement in the principal of the fund is required under AS 37.14.500(2).

 (b) The legislature may appropriate from the net income account to the principal of the fund under AS 37.14.500(1).

 (c) The net income of the fund shall be determined by the commissioner of revenue in accordance with investment accounting principles and in a manner that preserves the distinction between principal and income.

 (d) Unless otherwise provided by the act making an appropriation under (b) of this section, an amount appropriated to the net income account under (b) of this section does not lapse.




Sec. 37.14.520. Powers and duties of the commissioner of revenue.
The commissioner of revenue is the treasurer of the fund and has the power and duty to
     (1) act as official custodian of the cash and investments belonging to the fund by securing adequate and safe custodial facilities;

     (2) receive all items of cash and investments belonging to the fund;

     (3) collect the principal and income from investments owned or acquired by the fund and deposit the amounts in separate principal and income accounts for the fund;

     (4) invest and reinvest the assets of the fund as provided in this section and as provided for the investment of funds under AS 37.14.170;

     (5) exercise the powers of an owner with respect to the assets of the fund;

     (6) maintain accounting records of the fund in accordance with investment accounting principles and with distinction between the principal and income accounts of the fund;

     (7) engage an independent firm of certified public accountants to annually audit the financial condition of the fund’s investments and investment transactions;

     (8) enter into and enforce contracts or agreements considered necessary for the investment purposes of the fund;

     (9) report to the commission the condition and investment performance of the fund;

     (10) do all acts, whether or not expressly authorized, that the commissioner of revenue considers necessary or proper in administering the assets of the fund.




Sec. 37.14.530. Use of fund.
 (a) The principal of the fund and any capital gains or losses realized on the principal shall be retained perpetually in the fund for investment as specified in AS 37.14.520.

 (b) The net income account of the fund may be appropriated for the following purposes:
     (1) reimbursement to the Department of Revenue for the costs of establishing and managing the fund;

     (2) the administrative expenses of the Museum Collection Advisory Committee relating to acquisitions from the fund, as determined by the legislature;

     (3) acquisitions authorized by AS 14.57.100 — 14.57.199; and

     (4) reimbursement of other costs of administration of the fund.

 (c) The balance remaining in the net income account that, at the end of the fiscal year, has not been appropriated, or that has been appropriated but not expended, shall be invested until appropriated or expended.




Sec. 37.14.540. Definition.
In AS 37.14.500 — 37.14.540, “fund” means the Alaska heritage endowment fund established by AS 37.14.500.


Article 7. Arctic Winter Games Team Alaska Trust.


Sec. 37.14.600. Arctic Winter Games Team Alaska trust fund established.
 (a) The Arctic Winter Games Team Alaska trust fund is established as a separate endowment trust of the state consisting of
     (1) appropriations to the trust;

     (2) donations to the trust; and

     (3) income earned on investments of trust assets.

 (b) The commissioner of revenue shall manage the trust as an endowment, with the goal of ensuring that the purchasing power of the trust will not diminish over time without regard to additional contributions that may be made to the trust.

 (c) Nothing in this section creates a dedicated fund.




Sec. 37.14.610. Duties of the commissioner.
The commissioner of revenue has the power and duty to
     (1) act as official custodian of the cash and investments belonging to the Arctic Winter Games Team Alaska trust by securing adequate and safe custodial facilities;

     (2) exercise the same powers and duties as those established for the Alaska Retirement Management Board in AS 37.10.220;

     (3) invest the assets of the trust in a manner likely to yield at least five percent real rate of return over time;

     (4) maintain accounting records of the trust in accordance with investment accounting principles;

     (5) enter into and enforce contracts or agreements considered necessary for the investment purposes of the trust;

     (6) report annually to the board of directors of the Arctic Winter Games Team Alaska the condition and performance of the trust;

     (7) monitor use of trust money by the Arctic Winter Games Team Alaska; and

     (8) do all acts that the commissioner of revenue considers necessary or proper in administering the assets of the trust.




Sec. 37.14.620. Transfers from the trust fund.
 (a) As soon as practicable after July 1 of each year, the commissioner of revenue shall determine the average month-end market value of the Arctic Winter Games Team Alaska trust fund for the immediately preceding three fiscal years. Five percent of that amount shall be identified by the commissioner as available for appropriation to the Department of Revenue for
     (1) costs to the department of administering the trust; and

     (2) transfers to Arctic Winter Games Team Alaska, a nonprofit corporation, in amounts requested by the corporation for purposes authorized in AS 37.14.630.

 (b) As soon as practicable after July 1 of each fiscal year that the Arctic Winter Games are held in the state, the commissioner of revenue shall determine whether more money may be made available to support the state’s participation in the games from the Arctic Winter Games Team Alaska trust fund than the amount determined under (a) of this section. The determination of the amount of additional money available shall be based on consideration of AS 37.14.600(b) and any amounts identified during prior fiscal years as available for appropriation under (a) of this section that were never transferred from the trust fund. The additional amount shall be identified by the commissioner and is available for appropriation to the Department of Revenue for transfers to Arctic Winter Games Team Alaska.




Sec. 37.14.630. Use of trust money.
The board of directors of the Arctic Winter Games Team Alaska may use money transferred from the Arctic Winter Games Team Alaska trust fund only for
     (1) equipment, uniforms, travel, and food and lodging for Arctic Winter Games Team Alaska athletes, coaches, staff, and directors;

     (2) staging tryouts for Arctic Winter Games Team Alaska in events;

     (3) costs of athletic skill clinics;

     (4) grants to youth sports organizations for equipment;

     (5) providing for cultural performers and exhibitions to accompany the Arctic Winter Games Team Alaska sports delegation;

     (6) costs incurred by the Arctic Winter Games Host Society for expenses associated with holding the Arctic Winter Games in the state; and

     (7) administrative expenses related solely to the state’s participation in the Arctic Winter Games.




Article 8. Alaska Veterans’ Memorial Endowment Fund.


Sec. 37.14.700. Alaska veterans’ memorial endowment fund established.
 (a) The Alaska veterans’ memorial endowment fund is established as a separate endowment trust fund of the state. The fund consists of
     (1) appropriations to the fund;

     (2) donations to the fund; and

     (3) income earned on investments of fund assets.

 (b) The commissioner of revenue shall manage the fund as an endowment, with the goal that the purchasing power of the fund will not diminish over time without regard to additional contributions that may be made to the fund. The commissioner shall invest the assets of the fund in a manner likely to yield at least a five percent real rate of return over time.

 (c) Nothing in this section creates a dedicated fund.




Sec. 37.14.720. Powers and duties of the commissioner of revenue.
In carrying out the investment duties under AS 37.14.700 — 37.14.740, the commissioner of revenue has the powers and duties set out in AS 37.10.071. The commissioner shall provide reports to the adjutant general of the Department of Military and Veterans’ Affairs on the condition and investment performance of the fund.


Sec. 37.14.730. Use of fund.
 (a) As soon as practicable after July 1 of each year, the commissioner of revenue shall determine the average month-end market value of the fund for the immediately preceding three fiscal years. The commissioner shall identify five percent of that amount as available for appropriation by the legislature for uses described in (b) of this section.

 (b) Appropriations of the amount identified in (a) of this section may be used for the following purposes:
     (1) grants for the maintenance, repair, replacement, and enhancement of, or addition to, veterans’ memorials or monuments to the military;

     (2) grants for the development and construction of new veterans’ memorials or monuments to the military if the adjutant general determines that the purposes set out in (1) of this subsection have been met in a fiscal year;

     (3) reimbursement of the costs of establishment, management, and administration of the fund.

 (c) After consultation with appropriate veterans’ organizations, the adjutant general of the Department of Military and Veterans’ Affairs shall administer the grant program and award grants from the money appropriated from the fund. The adjutant general may adopt regulations under AS 44.62 (Administrative Procedure Act) to establish procedures and standards to administer the grant program and for the award of grants. The standards may include requirements for recipients to match grant awards, if appropriate.




Sec. 37.14.740. Definition.
In AS 37.14.700 — 37.14.740, “fund” means the Alaska veterans’ memorial endowment fund established in AS 37.14.700.


Article 9. Alaska Higher Education Investment Fund.


Sec. 37.14.750. Alaska higher education investment fund established.
 (a) The Alaska higher education investment fund is established in the general fund for the purpose of making grants awarded under AS 14.43.400 — 14.43.420 by appropriation to the account established under AS 14.43.915(a) and of making scholarship payments to qualified postsecondary institutions for students under AS 14.43.810 — 14.43.849 by appropriation to the account established under AS 14.43.915(b). Money in the fund does not lapse. The fund consists of
     (1) money appropriated to the fund;

     (2) income earned on investment of fund assets;

     (3) donations to the fund; and

     (4) money redeposited under AS 14.43.915(c).

 (b) The legislature may appropriate any amount to the fund established in (a) of this section. Nothing in this section creates a dedicated fund.

 (c) As soon as is practicable after July 1 of each year, the commissioner of revenue shall determine the market value of the fund established in this section on June 30 for the immediately preceding fiscal year. The commissioner shall identify seven percent of that amount as available for appropriation as follows:
     (1) one-third for the grant account established under AS 14.43.915(a), from which the Alaska Commission on Postsecondary Education may award grants; and

     (2) two-thirds for the scholarship account established under AS 14.43.915(b), from which the Alaska Commission on Postsecondary Education may award scholarships.

 (d) In this section, unless the context requires otherwise, “fund” means the Alaska higher education investment fund established in (a) of this section.




Article 10. Mine Reclamation Trust Fund.


Sec. 37.14.800. Mine reclamation trust fund established.
 (a) The mine reclamation trust fund is established as a separate trust fund of the state. The principal and earnings of the fund shall be held by the state for the purpose of protecting the public interest in reclaiming mine sites in the state. The fund is composed of the mine reclamation trust fund income account and the mine reclamation trust fund operating account.

 (b) The mine reclamation trust fund income account consists of payments and deposits made by miners to satisfy the miners’ reclamation bonding or financial assurance obligation under AS 27.19.040 or AS 27.21.160 and earnings on the income account. The mine reclamation trust fund operating account consists of appropriations by the legislature of the annual balance of the mine reclamation trust fund income account and any earnings on those appropriations while in the operating account.

 (c) Before payments are accepted into the mine reclamation trust fund income account for a particular mining operation, the commissioner of natural resources and the miner may execute a memorandum of understanding that outlines a schedule of expected payments into the trust fund and the relationship of the payments and accumulated earnings in the trust fund to reclamation obligations of the miner under AS 27.19.040 or AS 27.21.160. The memorandum of understanding may also address expected use of the fund under AS 37.14.820. If the memorandum of understanding addresses investment of the fund with respect to payments made by the miner, the commissioner of revenue must also sign the memorandum.

 (d) Nothing in this section creates a dedicated fund.




Sec. 37.14.810. Powers and duties of the commissioner of revenue.
The commissioner of revenue is a fiduciary to the fund. The commissioner shall manage both the mine reclamation trust fund income account and the mine reclamation trust fund operating account and shall invest their assets in accordance with AS 37.10.071.


Sec. 37.14.820. Use of the mine reclamation trust fund operating account.
 (a) The commissioner of natural resources may make expenditures from the mine reclamation trust fund operating account for the following purposes:
     (1) reclamation of mining operations for which a payment or deposit has been made into the fund;

     (2) maintenance of dams and other permanent features related to a mining operation;

     (3) monitoring of site stability and water quality related to a mining operation;

     (4) control and treatment of acid rock drainage and other leachate related to a mining operation;

     (5) protection and treatment of surface water and groundwater related to a mining operation;

     (6) long-term site management of a mining operation;

     (7) refunds to miners of the deposits to the fund upon satisfactory completion of reclamation tasks as determined by the Department of Natural Resources.

 (b) Subject to appropriation, the mine reclamation trust fund operating account may be used to pay the expenses incurred by the commissioner of revenue in managing the fund and administrative expenses incurred by the Department of Natural Resources in administering the fund and programs under AS 27.19 and AS 27.21.

 (c) The Department of Natural Resources may not spend money deposited in the fund for one mining operation at another mining operation.

 (d) In accordance with AS 37.14.800(b), and except as provided in (b) of this section, earnings on the mine reclamation trust fund operating account are added to that account and are available for expenditure without further appropriation.




Sec. 37.14.830. Regulations.
The commissioner of natural resources may adopt regulations necessary to carry out the purposes of AS 37.14.800 and 37.14.820 — 37.14.840.


Sec. 37.14.840. Definition.
Unless the context otherwise requires, in AS 37.14.800 — 37.14.840, “fund” means the mine reclamation trust fund established in AS 37.14.800.


Article 1. State Bonding Act.


Chapter 15. Bonding.

Sec. 37.15.010. Full faith and credit for general obligation bonds.
The full faith, credit, and resources of the state are hereby pledged to the payment of the principal of and interest and redemption premium, if any, on all general obligation bonds of the state authorized pursuant to art. IX, § 8 of the constitution.


Sec. 37.15.011. Alaska debt retirement fund.
 (a) The Alaska debt retirement fund is established as a separate fund in the general fund. The fund consists of all money appropriated to it.

 (b) The Alaska debt retirement fund shall be invested by the Department of Revenue so as to yield competitive market rates, as provided in AS 37.10.071. Money in the fund may be appropriated
     (1) for the purposes set out in AS 37.15.012;

     (2) to reimburse municipalities for obligations authorized under AS 14.11.100;

     (3) to finance the acquisition of state facilities through lease-purchase agreements; and

     (4) if an unobligated balance remains, to finance the design and construction of capital projects.




Sec. 37.15.012. Continuing debt service appropriation.
The amounts required annually to pay the principal, interest, and redemption premium on all issued and outstanding general obligation bonds of the state are appropriated each fiscal year from the Alaska debt retirement fund to the state bond committee to make all required payments of principal, interest, and redemption premium. If the balance of the Alaska debt retirement fund is insufficient to fully pay these amounts, the necessary additional amounts are appropriated from the general fund to the state bond committee to make all required payments of principal, interest, and redemption premium.


Sec. 37.15.015. Notice before election.
 (a) Before a general or special election in which a bond issue is offered for ratification, the state bond committee shall publish a notice of existing state bonded indebtedness at least once a week for three consecutive weeks in a newspaper of general circulation in each of the four judicial districts of the state. The first notice shall be published at least 20 days before the date of the election. A notice must contain
     (1) the current total bonded indebtedness of the state;

     (2) the cost of the debt service on the current indebtedness;

     (3) the projected amount of state general obligation debt principal that could be issued and paid for from the Alaska debt retirement fund;

     (4) the estimated debt service requirements for the bond issue offered for ratification; and

     (5) whether the bond issue offered for ratification will be repaid with amounts from the Alaska debt retirement fund.

 (b) Neither the failure to publish the notice of existing state bonded indebtedness nor a defect in the publication affects the validity of the bond issue offered for ratification or of a general or special election in which a bond issue is offered for ratification.




Sec. 37.15.020. Manner and amounts of sale.
The state bond committee shall sell the bonds of each authorization in the amounts or series and at the times which it finds are for the best interests of the state and its inhabitants.


Sec. 37.15.030. Interest rate and maturity.
Each issue or series of bonds must bear interest at an effective rate over the life of the bonds not to exceed 11 percent a year or that rate of interest that is 110 percent of the rate of the Bond Buyer Index of 20 Municipal Bond Average Yields for the week previous to the date of sale of the bonds, whichever is higher. The bonds must mature in not more than 30 years from date of issue, unless a longer period is specifically authorized by statute.


Sec. 37.15.040. Sale of bonds.
Before selling an issue or series of bonds, the state bond committee shall give notice inviting sealed bids in a manner that it may prescribe. If satisfactory bids are received, the bonds offered for sale shall be awarded to the highest responsible bidder. If the state bond committee determines that the bids received are not satisfactory as to price or responsibility of the bidders, it may reject all bids received.


Sec. 37.15.050. Redemption.
The state bond committee may determine whether the bonds are subject to redemption before their fixed maturities and may fix the premium for and all other terms of the redemption. A bond is not subject to redemption before its fixed maturity date unless the right to so redeem the bond is expressly mentioned on the face of the bond.


Sec. 37.15.060. Form and registration of bonds.
An issue or series of bonds may be issued in coupon form payable to bearer or in fully registered form, and bonds in coupon form may be made registrable as to principal or principal and interest, as determined by the state bond committee.


Sec. 37.15.070. Place of payment.
The state bond committee may fix the place or places of payment of the principal, interest and redemption premium, if any.


Sec. 37.15.080. Signatures and seal.
 (a) Each bond shall be signed on behalf of the state by the governor and attested by the lieutenant governor, which signatures may be facsimile signatures. The seal of the state shall be impressed, imprinted or otherwise reproduced on each bond. Each interest coupon attached to the bond shall be signed by the facsimile signatures of the governor and lieutenant governor. If an officer whose signature appears on the bonds or coupons ceases to be an officer before delivery of the bonds, the signature is, nevertheless, valid and sufficient for all purposes, as if the officer had remained in office until delivery.

 (b) A signature required on a bond issued by a political subdivision of the state may be a facsimile signature.




Sec. 37.15.090. Terms and conditions.
Each issue or series of bonds shall be issued under and subject to the terms, conditions, and covenants providing for the payment of the principal and the interest and other terms, conditions, covenants, and protective provisions safeguarding the payment as found reasonably necessary by the state bond committee for the most advantageous sale. The terms, conditions, and covenants may include the setting aside and maintaining of certain reserves to secure the payment of principal and interest.


Sec. 37.15.100. Trustee.
If the state bond committee finds it necessary to accomplish the most advantageous sale of the bonds, the committee shall select a trustee for the owners and holders of the bonds or for the safeguarding and disbursement of the proceeds of the sale of the bonds for the use and purpose for which issued, and shall fix the rights, duties, powers, and obligations of the trustee.


Sec. 37.15.110. Creation and membership of state bond committee.
There is created a committee known as the “state bond committee,” the members of which are the commissioner of commerce, community, and economic development, the commissioner of administration, and the commissioner of revenue. If a member of the committee is absent or otherwise unable to act, the member’s designee in the department shall act as a member of the committee in the member’s place.


Sec. 37.15.120. Regulations.
The state bond committee may adopt regulations for the performance of its duties and may designate by resolution one of its members to perform any act necessary to effectuate its duties not required by statute to be performed by the state bond committee in meeting or by resolution, or by another officer of the state.


Sec. 37.15.130. Officers, records, and proceedings.
The commissioner of commerce, community, and economic development is the chairman of the state bond committee and the commissioner of revenue is the secretary. A majority of the members of the committee constitute a quorum. The committee shall keep a full, complete, and permanent record of its proceedings. All records and correspondence of the committee shall be kept in the office of the commissioner of revenue.


Sec. 37.15.140. Duties of state bond committee.
The state bond committee shall adopt the resolution and prepare the documents necessary for the issuance, sale, and delivery of bonds.


Sec. 37.15.150. Committee may employ special services.
If the state bond committee considers it necessary and advisable, it may procure architectural or engineering, fiscal agent or municipal investment, legal and other expert or specialized services at reasonable and customary fees to assist it in accomplishing the most advantageous sale of the bonds. The fees may be paid from the proceeds of the sale or advanced from the contingency fund in the office of the governor or otherwise.


Sec. 37.15.155. Prohibited bidding on bonds and anticipation notes.
 (a) A person who provides financial programming or marketing assistance to the state bond committee in connection with the issuance or sale of general obligation bonds, revenue bonds, or bond anticipation notes of the state may not bid on the bonds.

 (b) The sale of general obligation bonds, revenue bonds, or bond anticipation notes of the state to a person who is prohibited from bidding on the bonds or notes under (a) of this section is against public policy and the sale is void.

 (c) In this section “person” means an individual, firm, agent, factor, intermediary, partnership, corporation, association, bond house, stockbroker, or bond broker.




Sec. 37.15.160. Contents of resolution.
The resolution adopted by the state bond committee must
     (1) fix the principal amount, denominations, date, maturities, place of payment, terms, right of redemption if any, form, conditions, and covenants of the bonds;

     (2) fix the date of sale and the form of the notice of sale; and

     (3) provide if the notice is to be published elsewhere in addition to the publication required by AS 37.15.040.




Sec. 37.15.170. State bond committee to certify annual principal, interest, and reserve requirements.
 (a) Before December 1 of each year after bonds are issued, the state bond committee shall certify to the commissioner of administration the amount needed for the following calendar year to meet principal, interest, and reserve requirements on all bonds or issues or series of bonds then outstanding, including reimbursements authorized under AS 14.11.100.

 (b) The commissioner of administration shall set aside these amounts or make the necessary provisions for the setting aside of these amounts so that there will be sufficient money to pay the principal and interest on the due date and to meet reserve requirements.

 (c) Before December 1 of each year, the state bond committee shall report to the governor the current fund balance in the Alaska debt retirement fund. The report must contain an estimate of the amount of state general obligation debt principal that could be issued and paid for from the fund. The state bond committee shall notify the legislature that the report is available.




Sec. 37.15.180. Remedies of bondholders.
The owner and holder of each bond or the trustee may by appropriate proceeding require and compel the transfer and payment of money as directed by this chapter.


Sec. 37.15.190. Negotiability.
General obligation bonds of the state and the coupons attached to the bonds are negotiable instruments.


Sec. 37.15.200. Bonds as legal investments.
General obligation bonds of the state are legal investments for all state funds, or for funds under state control, and for all funds of a political subdivision of the state.


Sec. 37.15.210. Refunding bonds.
 (a) All or a part of the general obligation bonds of the state, or all or a part of each outstanding issue or series of bonds, may be refunded at or before maturity by the issuance of general obligation refunding bonds of the state if, in the opinion of the state bond committee, refunding is advantageous to and in the best interest of the state and its inhabitants. Money set aside as reserve to secure the payment of the principal and interest of bonds being refunded may be used to pay the principal and interest on these bonds or may be retained by the state to secure the payment of the principal and interest on the refunding bonds to be issued.

 (b) Refunding bonds and the coupons attached to them are negotiable instruments. The effective rate of interest over the life of refunding bonds may not exceed 11 percent a year or that rate of interest that is 110 percent of the rate of the Bond Buyer Index of 20 Municipal Bond Average Yields for the week previous to the date of sale of bonds, whichever is higher, and the amount of premium that is paid to effect the redemption of outstanding bonds may not be considered in determining the effective rate of interest.

 (c) Refunding bonds may be exchanged for the bonds being refunded or refunding bonds may be sold in the manner and at the prices that the state bond committee determines to be for the best interest of the state and its inhabitants either at public or private sale.

 (d) The issuance of refunding bonds need not be authorized by the qualified voters of the state. The state bond committee shall adopt the resolution and prepare the documents necessary for the issuance, exchange or sale, and delivery of refunding bonds. The provisions of this chapter relating to the terms, conditions, covenants, issuance, and sale of general obligation bonds of the state apply to refunding bonds except as otherwise specifically provided in this section.




Sec. 37.15.215. Official statements.
To the extent practicable the official statements and other documentation issued in connection with an offering of state or local government securities must comply with the guidelines of the Municipal Finance Officers Association or other nationally recognized guidelines.


Sec. 37.15.220. Short title.
AS 37.15.010 — 37.15.220 may be cited as the State Bonding Act.


Article 2. Toll Bridge Revenue Bonds.


Sec. 37.15.225. Bond authorization.
 (a) For purposes of financing a portion of the costs of the Knik Arm bridge and appurtenant facilities or other toll bridges as the legislature may designate, including the costs of bond issuance, the issuance and sale of bonds of the state by the committee is authorized as provided in AS 37.15.225 — 37.15.290. The net proceeds of the sale of the bonds remaining after payment of costs of issuance, capitalized interest, if any, and making deposits to the bond reserve fund under AS 37.15.260, shall be transferred to the Knik Arm construction fund established in AS 37.15.230 or may be held by a trustee to be disbursed to pay the costs of a toll bridge under the terms and conditions set out in a trust agreement. Accrued interest paid on the bonds shall be paid into the bond redemption fund.

 (b) Prior to the issuance of bonds authorized under (a) of this section, the committee shall send notice of the issuance to the legislature.

 (c) The total unpaid principal amount of bonds, including refunding bonds, but excluding refunded bonds, is limited as provided in AS 37.15.235. The bonds do not constitute a general obligation of the state. Authorization by the voters of the state or the legislature is not required.

 (d) The committee may enter into agreements with other state agencies as necessary or convenient to implement AS 37.15.225 — 37.15.290.

 (e) The committee may contract for the services of underwriters, paying agents, trustees, bond printers, rating agencies, bond insurance, credit enhancement providers, accountants, financial advisors, and bond counsel, and other services as are necessary to accomplish the bond issuance and sale.

 (f) The state may not issue bonds under (a) of this section for financing the Knik Arm bridge and appurtenant facilities until the Federal Highway Administration, United States Department of Transportation, has approved a loan to the state of at least 30 percent of the total project cost for construction of the Knik Arm bridge and appurtenant facilities under 23 U.S.C. 601 — 609 (Transportation Infrastructure Finance and Innovation Act of 1998).




Sec. 37.15.230. Knik Arm construction fund.
 (a) The Knik Arm construction fund is established in the general fund to receive the proceeds of the sale of bonds issued under AS 37.15.225, and other state or federal money that is appropriated for the same purpose for which the bonds are issued. The Department of Transportation and Public Facilities shall use money in the construction fund to pay the cost of acquiring, constructing, and equipping the Knik Arm bridge and appurtenant facilities. To the extent allowed by the bond resolution, money in the construction fund may also be used for the payment of interest on the bonds during the time of construction. Money in the construction fund may be transferred to the bond redemption fund, as permitted by the bond resolution.

 (b) The bond resolution may provide for the investment of money in the construction fund as the committee determines. The interest earned on the investment of money in the fund shall be retained in the fund.




Sec. 37.15.235. Toll bridge revenue bond limit.
The total unpaid principal amount of revenue bonds issued under AS 37.15.225 — 37.15.290, including refunding bonds but excluding refunded bonds, may not exceed $300,000,000.


Sec. 37.15.240. Toll bridge revenue fund.
 (a) The toll bridge revenue fund is established as a separate fund of the state. The revenue fund consists of all revenue, fees, charges, and rentals received by the state, by contract with the authority or otherwise, from the ownership or operation of toll bridges and facilities and improvements used in connection with the toll bridges and facilities. Contracts or other agreements with the authority may establish priorities for the payment of operation and maintenance costs of the authority. The money in the revenue fund may be used only
     (1) to pay or secure payment of the principal of and interest on bonds;

     (2) to redeem bonds before their fixed maturities;

     (3) to pay indebtedness to the Federal Highway Administration, United States Department of Transportation; and

     (4) subject to appropriation by the legislature, for any other purpose for which federal funds may be obligated by the state under 23 U.S.C. 129(a).

 (b) The investment of money in the revenue fund may be made in the manner that the committee or the committee’s delegated representative may determine. The interest earned on or any profits derived from the sale of this investment shall be deposited in and become a part of the revenue fund.

 (c) All references to the toll bridge revenue fund in this section include special accounts within the toll bridge revenue fund that may be created by resolution or trust agreement to secure the payment of particular bonds.




Sec. 37.15.245. Toll bridge revenue bond redemption fund.
 (a) The toll bridge revenue bond redemption fund is established as a special fund of the state. The bond redemption fund is a trust fund for paying and securing the payment of the principal of and interest and redemption premium, if any, on the bonds and shall be at all times completely segregated and set apart from all other funds of the state. The bond redemption fund shall be drawn on only for the purpose of paying the principal of and interest and redemption premium, if any, on the bonds, together with related trustee fees, if any.

 (b) Money in the bond redemption fund may be invested in the same manner and on the same conditions as permitted for investment of money belonging to the state or held in the treasury under AS 37.10.070; however, the committee may agree with the bondholders to further limit these investments. Earnings on investments must be retained in the bond redemption fund or a designated account in the bond redemption fund.

 (c) All references to the bond redemption fund in this section include special accounts in the bond redemption fund that may be created by resolution or first agreement to secure the payment of particular bonds.




Sec. 37.15.250. Bond terms.
 (a) The bonds may be issued and sold at public or negotiated sale in the manner, in the amounts or series, and at the time or times that the committee or the committee’s delegated representative determines. The bonds, or each series of them, shall be sold at the price and on the terms, conditions, and covenants set by the committee or the committee’s delegated representative after considering market conditions. Interest rates may be fixed or variable.

 (b) The bonds mature at the time or times fixed by the committee or the committee’s delegated representative. The bonds may be subject to redemption before their fixed maturities, as determined by the committee or the committee’s delegated representative, with or without a premium or premiums. The bonds may be in denominations determined by the committee or the committee’s delegated representative; may be issued in fully or partially registered form; must be payable as to principal and interest at the place or places determined by the committee; must be signed on behalf of the state in the manner provided by the committee; and must be issued under and subject to the terms, conditions, covenants, and protective features safeguarding payment of the bonds and relating to the funding of projects as found necessary by the committee or the committee’s delegated representative.

 (c) If the committee or the committee’s delegated representative finds it reasonably necessary, the committee or the committee’s delegated representative may select a trustee or trustees for the holders of the bonds, or any series of them, for the safeguarding and disbursement of any of the money in the bond redemption fund, or for duties with respect to the enforcement, authentication, delivery, payment, and registration of the bonds as the committee may determine. The committee or the committee’s delegated representative shall fix the rights, duties, powers, and obligations of the trustee or trustees.

 (d) In its determination of all matters and questions relating to the issuance and sale of the bonds and the fixing of their maturities, terms, conditions, and covenants as provided in (a) — (c) of this section, the decisions of the committee shall be reasonably necessary for the best interests of the state and accomplish the most advantageous sale of the bonds. Decisions of the committee, as expressed in a bond resolution, are final and conclusively considered to comply with the requirements of AS 37.15.225 — 37.15.290.




Sec. 37.15.255. Bond resolution.
The committee shall authorize the issuance of bonds by adopting a resolution and shall prepare all other documents and proceedings necessary for the issuance, sale, and delivery of the bonds or any part or series of them. The bond resolution may fix or the committee’s delegated representative, subject to parameters set by the committee, may fix the principal amount, denominations, date, maturities, manner of sale, place or places of payment, rights of redemption, if any, terms, form, conditions, and covenants of the bonds or each series of bonds.


Sec. 37.15.260. Bond reserve fund.
 (a) The resolution authorizing the issuance of the bonds under AS 37.15.225 — 37.15.290 may provide for the establishment and maintenance of a special fund called the toll bridge revenue bond reserve fund in which there shall be deposited or transferred
     (1) all money appropriated by the legislature for the purpose of the fund including appropriations in accordance with (g) of this section; and

     (2) all proceeds of bonds required to be deposited in the fund by terms of the bond resolution or a trust agreement with respect to the proceeds of bonds.

 (b) Subject to (h) of this section, money in the reserve fund shall be held and applied solely to the payment of the interest on and principal of bonds authorized under AS 37.15.225 — 37.15.290 as the interest and principal become due and payable to the retirement of bonds. Money may not be withdrawn if a withdrawal would reduce the amount in the reserve fund to an amount less than the required debt service reserve except for payment of interest then due and payable on bonds and the principal of bonds then maturing and payable and for the retirement of bonds in accordance with the terms of the bond resolution or trust agreement and for which payment is not then available.

 (c) Money in the reserve fund in excess of the required debt service reserve as defined in (b) of this section, whether because of investment or otherwise, may be withdrawn at any time or may be transferred to the bond redemption fund subject to (h) of this section.

 (d) Money in the reserve fund may be invested in the same manner and on the same conditions as permitted for investment of funds belonging to the state or held in the treasury under AS 37.10.070; however, the committee or the committee’s delegated representative may agree with the bondholders to further limit these investments.

 (e) For purposes of valuation, investments in the reserve fund shall be valued at par or, if purchased at less than par, at cost, unless otherwise provided by resolution of the committee. Valuation on a particular date shall include the amount of interest then earned or accrued to that date on the money or investments in the reserve fund.

 (f) Notwithstanding any other provision of AS 37.15.225 — 37.15.290, bonds may not be issued under a trust agreement, indenture, or bond resolution unless there is in the reserve fund the required debt service reserve for all bonds then issued under a trust agreement, indenture, or bond resolution and outstanding and for the bonds to be issued; however, the committee may satisfy this requirement by depositing as much of the proceeds of the bonds to be issued, on their issuance, as is needed to meet the required debt service reserve. The committee may, at any time, issue bonds or notes for the purpose of increasing the amount in the reserve fund to the required debt service reserve, or to meet whatever higher or additional reserve that may be fixed by a bond resolution or trust agreement with respect to the fund.

 (g) To ensure the required debt service reserve is maintained in the reserve fund, the legislature may appropriate annually for deposit in the fund the sum, certified by the commissioner of revenue to the governor and to the legislature, that is necessary to restore the fund to an amount equal to the required debt service reserve. The commissioner of revenue annually, before January 30, shall make and deliver to the governor and to the legislature a certificate stating the sum required to restore the fund to that amount, and the certified sum may be appropriated during the then current state fiscal year. Nothing in this subsection creates a debt or liability of the state.

 (h) All amounts received because of money appropriated to the reserve fund shall be held and applied in accordance with (b) of this section.

 (i) All references to the reserve fund in this section include special accounts within the reserve fund that may be created by resolution or trust agreement to secure the payment of particular bonds.

 (j) The commissioner of revenue may, subject to appropriation, lend surplus money in the general fund for deposit to an account in the reserve fund in an amount equal to the required debt service reserve. The loans shall be made on the terms and conditions that may be agreed on by the commissioner of revenue and the trustee, including, without limitation, terms and conditions providing that the loans need not be repaid until the obligations of the state secured and to be secured by the account in the reserve fund are no longer outstanding.

 (k) In this section, “required debt service reserve” means, on the date of computation, the amount required to be on deposit in the reserve fund as provided by resolution of the committee.




Sec. 37.15.265. Enforcement by bond owner.
The holder of any bonds or the trustee for the holders of the bonds or any series of them, may, by appropriate proceedings in the superior court, compel the transfer, setting aside, and payment of money and the enforcement of all of the terms, conditions, and covenants as required and provided for in AS 37.15.225 — 37.15.290 and in the bond resolution or trust agreement.


Sec. 37.15.270. Amounts required for payments.
The committee shall, before June 30 of each year or from time to time within the year, as appropriate, commencing with the year in which the bonds are issued, certify to the commissioners of revenue and administration the amounts required in the current fiscal year and the next ensuing fiscal year by the bond resolution or resolutions or trust agreements to be paid out of toll bridge revenue or capitalized amounts into the bond redemption fund and to be paid into and maintained in any reserve fund or account or other fund or account created by the bond resolution or resolutions. The committee shall also certify to the commissioners the last date or dates on which payments may be made.


Sec. 37.15.275. Refunding.
 (a) The committee may refund the bonds or any part of the bonds at or before their maturity or redemption dates by issuing refunding revenue bonds of the state if the committee determines the refunding to be advantageous to and in the best interest of the state.

 (b) The issuance of refunding bonds need not be authorized by the voters of the state or by an act of the legislature. The committee shall adopt the resolution or resolutions and prepare all other documents and proceedings necessary for the issuance, exchange or sale, and delivery of the refunding bonds. All provisions of AS 37.15.225 — 37.15.290 applicable to revenue bonds are applicable to the refunding bonds and to the issuance, sale, or exchange of the refunding bonds, except as otherwise provided in this section.

 (c) The committee may issue refunding bonds in a principal amount sufficient to provide money for the advance or current refunding of all bonds to be refunded and interest on the refunded bonds and to pay the costs of issuance and administration of the refunding bonds. These expenses also include the difference in amount between the par value of the refunding bonds and any amount less than par for which the refunding bonds are sold; the premium, if any, necessary to be paid in order to call or retire the outstanding bonds and the interest accruing on them to the date of the call or retirement; and other costs. The committee is authorized to incur the expenses.

 (d) The committee or the committee’s delegated representative may contract with a refunding trustee to hold the proceeds of refunding bonds in trust until the proceeds, together with earnings on the proceeds, are applied to pay the principal of, premium, if any, and interest on the bonds to be refunded. Until the refunding bond proceeds are applied, the proceeds may be invested in direct obligations of, or obligations guaranteed by, the United States or an agency or corporation of the United States whose obligations constitute direct obligations of, or obligations guaranteed by, the United States.




Sec. 37.15.280. Bonds as legal investments.
The bonds are legal investments for all banks, trust companies, savings banks, savings and loan associations, and other persons carrying on a banking business, all insurance companies and other persons carrying on an insurance business, and all executors, administrators, trustees, and other fiduciaries. The bonds may be accepted as security for deposits of all money of the state and its political subdivisions.


Sec. 37.15.285. Statutory construction.
AS 37.15.225 — 37.15.290 shall be liberally construed in order to carry out the purposes for which they were enacted.


Sec. 37.15.290. Definitions.
In AS 37.15.225 — 37.15.290,
     (1) “authority” means
          (A) the Knik Arm Bridge and Toll Authority established in AS 19.75.021 with respect to the Knik Arm bridge and its appurtenant facilities; or

          (B) an authority established by the legislature for any other toll bridge project;

     (2) “bond redemption fund” means the toll bridge revenue bond redemption fund established in AS 37.15.245;

     (3) “bond resolution” means a resolution adopted by the committee under AS 37.15.255 to authorize the issuance of bonds;

     (4) “bonds” means the toll bridge revenue bonds authorized in AS 37.15.225 — 37.15.290;

     (5) “committee” means the state bond committee created in AS 37.15.110, or any other committee, body, department, or officer of the state that succeeds to the rights, powers, duties, and obligations of the state bond committee by law;

     (6) “costs of issuance and administration” means all costs associated with issuance and administration of toll bridge revenue bonds and refunding bonds, including costs of bond printing, official statements, financial advisors, travel costs, rating agencies, bond insurance, letters and lines of credit for credit enhancement, underwriters, legal services, paying agents, bond registrars, bond and escrow trustees, arbitrage rebate, and all other costs, including administrative costs, both direct and indirect;

     (7) “reserve fund” means the toll bridge revenue bond reserve fund authorized in AS 37.15.260;

     (8) “revenue fund” means the toll bridge revenue fund established in AS 37.15.240.




Article 3. Bond Anticipation Notes.


Sec. 37.15.300. Borrowing in anticipation of sale of bonds permitted.
When the state bond committee considers it in the best interests of the state, it may borrow money in anticipation of the sale of general obligation and revenue bonds if money to be derived from the sale of the bonds has been appropriated by the legislature and
     (1) in the case of revenue bonds, the bonds to be sold have been authorized by law; or

     (2) in the case of general obligation bonds, the bonds to be sold have been
          (A) authorized by law and ratified by a majority vote of the qualified voters of the state who vote on the question; or

          (B) authorized by law for the purpose of meeting natural disasters, repelling invasion, suppressing insurrection, or defending the state in war.




Sec. 37.15.310. Issuance of notes.
The state bond committee shall issue notes for the amounts borrowed with a maturity date not to exceed one year from the date of issue. All the notes are payable at a fixed place, on or before a fixed time, or at a fixed time, from the proceeds of the sale of bonds, in anticipation of which the original note or notes were issued, unless the bonds have not been sold by the maturity date of the notes. Interest on the notes is payable at a fixed place, on or before a fixed time, out of appropriations made for the payment of interest on general obligation notes or bonds of the state.


Sec. 37.15.320. Issuance of new notes. [Repealed, § 3 ch 41 SLA 1967.]
Sec. 37.15.330. Repayment of notes.
Every note shall be payable from the proceeds of the next succeeding sale of bonds or from the proceeds of the sale of new bond anticipation notes.


Sec. 37.15.340. Security for repayment of general obligation bonds.
Notes issued in anticipation of the sale of general obligation bonds and the interest thereon are secured by the full faith, credit, and resources of the state.


Sec. 37.15.350. Security for repayment of revenue bonds.
Notes issued in anticipation of the sale of revenue bonds and the interest thereon are secured in the same manner as are the revenue bonds in anticipation of which the notes are issued.


Sec. 37.15.360. Limitation on issuance of notes.
The total amount of such notes issued and outstanding shall at no time exceed the total amount of bonds authorized to be issued.


Sec. 37.15.370. Use of proceeds from sale of notes.
The proceeds from the sale of the notes shall be used only for the purposes for which the proceeds from the sale of bonds may be used or to meet payment of outstanding bond anticipation notes.


Sec. 37.15.380. Sale of notes.
Notes issued under this chapter shall be sold by the state bond committee in the manner and at the price or prices as it shall determine, at either public or private sale; however, a note sold under this chapter may not be sold for less than par and accrued interest or at an interest rate exceeding 11 percent a year or that rate of interest that is 110 percent of the rate of Bond Buyer Index of 20 Municipal Bond Average Yields for the week previous to the date of sale of the notes, whichever is higher.


Sec. 37.15.390. Execution of notes.
Notes for money borrowed in anticipation of receipts from the sale of bonds shall be signed by the governor and countersigned by the lieutenant governor. The governor’s and lieutenant governor’s signatures may be facsimile signatures.


Article 4. International Airports Revenue Bonds.


Sec. 37.15.410. Bond authorization.
For the purpose of providing part or all of the money to be used, with or without any grants or other money that may become available, the issuance and sale of revenue bonds of the state in a total principal sum not to exceed $812,500,000 is authorized to acquire, equip, construct, and install the additions, improvements, extensions, and facilities authorized in AS 37.15.510. The principal of and interest on these bonds shall be paid out of and secured by the gross revenue derived by the state from the ownership, lease, use, and operation of the airports, and of all the facilities of them, and out of any other money that may be appropriated for the purpose, excepting only proceeds of any customer facility charge, and unless otherwise contractually required any customer facility maintenance charge, set by the commissioner of transportation and public facilities under AS 02.15.090.


Sec. 37.15.415. Continuing revenue bond debt service appropriation.
The amounts required annually to pay the principal, interest, and redemption premium on all issued and outstanding international airports revenue bonds of the state are appropriated each fiscal year from the international airports revenue fund to the state bond committee to make all required payments of principal, interest, and redemption premium.


Sec. 37.15.420. International airports construction fund.
 (a) There is established the “International Airports Construction Fund,” into which shall be paid the proceeds of the sale of the bonds (except any accrued interest paid on them, which shall be paid into the bond redemption fund) and grant or other money that is legally provided for the same purposes for which the bonds are authorized. The money in the construction fund shall be used to pay the costs of acquiring, equipping, constructing, and installing additions and improvements to and extensions of and facilities for the airports and costs incidental thereto, including costs of the authorization, issuance, and sale of the bonds. To the extent provided in the bond resolution, money in the construction fund may also be used for the payment of interest on the bonds during the period of actual construction, and for a further period, not exceeding one year after the period of construction, that may be provided in the bond resolution. Money in the construction fund may also be transferred to the bond redemption fund, to the extent provided in the bond resolution, to establish a reserve for the payment of the principal of and interest on the bonds.

 (b) The bond resolution may provide for the investment of money in the construction fund in a manner that the committee may determine. The interest earned upon or any profits derived from the sale of this investment shall be deposited in and become a part of the construction fund.

 (c) By January 1 of each year, the commissioner of transportation and public facilities shall submit to the legislature an annual spending plan that contains information regarding the planned expenditure of money from the construction fund during the next fiscal year and information on certain expenditures made during the previous fiscal year. The spending plan must include
     (1) the total amount of money to be spent from the construction fund;

     (2) a description of the work to be performed on airport facilities that will be financed with money from the construction fund;

     (3) the amount from the construction fund that will be spent under contracts with the private sector and a description of the goods or services to be provided to the state under each of the contracts;

     (4) the amounts that the state will spend from the construction fund for purposes other than contract payments and a description of each of those purposes, including financing costs, administrative and other overhead costs, and contingencies;

     (5) the amounts spent during the previous fiscal year for cost overruns on projects financed in whole or part with money from the construction fund and the sources of money used for those cost overruns;

     (6) identification of time delays that occurred during the previous fiscal year on projects financed in whole or part with money from the construction fund and amounts spent as a result of the delays.




Sec. 37.15.430. International airports revenue fund.
 (a) There is established an enterprise fund known as the “International Airports Revenue Fund,” into which shall be paid all revenue, fees, charges, and rentals derived by the state from the ownership, lease, use, and operation of the airports and all of the facilities and improvements of them and facilities and improvements used in connection with them, excepting only proceeds of any customer facility charge, and unless otherwise contractually required any customer facility maintenance charge, set by the commissioner of transportation and public facilities under AS 02.15.090. The revenue, charges, fees, and rentals may not include the proceeds of any state tax or license. The money in the revenue fund may only be used for the purpose of
     (1) paying or securing the payment of the principal of and interest on the bonds and of and on any other revenue bonds issued by authorization of the legislature to provide money to acquire, equip, construct, and install additions and improvements to, and extensions of and facilities for, the airports, and to be payable out of the revenue fund;

     (2) paying the normal and necessary costs of maintaining and operating the airports and all of the improvements and facilities of them;

     (3) paying the costs of renewals, replacements, and extraordinary repairs to the airports and all of the improvements and facilities of them;

     (4) redeeming before their fixed maturities any and all revenue bonds issued for the purposes of the airports;

     (5) providing money to acquire, construct, and install necessary additions and improvements to and extensions of and facilities for the airports and all of their facilities; and

     (6) providing money to pay any and all other costs relating to the ownership, use, and operation of the airports.

 (b) The investment of money in the revenue fund may be made in the manner that the committee may determine. The interest earned upon or any profits derived from the sale of this investment shall be deposited in and become a part of the revenue fund.

 (c) For proceeds of a customer facility charge set by the commissioner of transportation and public facilities under AS 02.15.090 but required to be collected from customers by occupants or users of, or persons under contract to occupy or use, all or a portion of a facility that is or will be acquired, constructed, equipped, installed, or improved for state ownership with the proceeds of indebtedness incurred other than by the state on behalf of the Department of Transportation and Public Facilities,
     (1) the Department of Transportation and Public Facilities shall by regulation or contract require that the proceeds of the customer facility charge be remitted directly to a trustee or another third party designated to receive the proceeds and to use the proceeds as provided under AS 02.15.090(h); and

     (2) the proceeds are not revenue of the state securing any indebtedness other than the indebtedness described in AS 02.15.090(h).

 (d) For proceeds of a customer facility maintenance charge set by the commissioner of transportation and public facilities under AS 02.15.090 but required to be collected from customers by occupants or users of, or persons under contract to occupy or use, all or a portion of a facility that is or will be acquired, constructed, equipped, installed, or improved with proceeds of indebtedness incurred other than by the state on behalf of the Department of Transportation and Public Facilities,
     (1) the Department of Transportation and Public Facilities shall by regulation or contract require that the proceeds of the customer facility maintenance charge be remitted directly to a trustee or another third party designated to receive the proceeds and to pay some or all of the costs, fees, and expenses as determined by the commissioner of transportation and public facilities under AS 02.15.090(i); and

     (2) the proceeds are not, unless otherwise contractually required, revenue of the state securing any indebtedness.




Sec. 37.15.440. International airports revenue bond redemption fund.
There is another special fund of the state, known as the “International Airports Revenue Bond Redemption Fund,” which is a trust fund for paying and securing the payment of the principal of and interest and redemption premium, if any, on the bonds and which shall be at all times completely segregated and set apart from all other funds of the state. The committee, on behalf of the state, shall obligate and bind the state to set aside and pay into the bond redemption fund any part or parts of, or all of, or a fixed proportion of, or a fixed amount of the money in the revenue fund sufficient to pay the principal of and interest and redemption premium, if any, on the bonds as the payments become due and, if it considers it necessary, to set aside and maintain reserves for this purpose. The bond redemption fund shall be drawn upon for the purpose of paying the principal of and interest and redemption premium, if any, on the bonds, and the bonds do not constitute a general obligation of the state.


Sec. 37.15.450. Bond terms.
 (a) The bonds may be sold at public or private sale in the manner, in the amounts or series, and at the time or times that the committee determines. However, the bonds, or each series of them, shall be sold at such a price so that the effective interest rate over the life of the bonds does not exceed 11 percent per year or that rate of interest that is 125 percent of the rate of the Bond Buyer Index of 20 Municipal Bond Average Yields for the week previous to the date of sale of the bonds, whichever is higher. Interest shall be payable annually or semiannually.

 (b) The bonds mature at the time or times fixed by the committee. The bonds may be subject to redemption before their fixed maturities as determined by the committee and with a premium or premiums fixed by the committee, but a bond is not subject to redemption before its fixed maturity date unless the right so to redeem that bond is expressly mentioned on the face of the bond. The bonds may be in denominations determined by the committee; may be issued in coupon form or in fully registered form, and may be registrable as to principal or both principal and interest, all under regulations and conditions that the committee shall provide; shall be payable as to principal and interest at such place or places as may be determined by the committee; shall be signed on behalf of the state by the governor and shall be attested by the lieutenant governor, both of which signatures may be facsimile signatures; shall have the seal of the state impressed, printed, or lithographed on them, and each of the interest coupons attached to them shall be signed by the facsimile signatures of these officials; shall be issued under and subject to such terms, conditions, and covenants providing for the payment of the principal of them and interest on them and such other terms, conditions, covenants, and protective features safeguarding this payment and relating to the maintenance, operation, and improvement of the airports as found necessary by the committee, which covenants may include a provision requiring the setting aside and maintenance of certain reserves to secure the payment of this principal and interest. The committee may provide that any additional bonds authorized after June 27, 1972 by the legislature to be payable out of the same source or sources as the bonds authorized as of that date may later be issued on a parity with the bonds authorized as of that date upon compliance with any conditions which the committee may prescribe.

 (c) If found reasonably necessary, the committee may select a trustee or trustees for the holders of the bonds or any series of them, for the safeguarding and disbursement of any of the money in any of the funds created by AS 37.15.420, 37.15.430, and 37.15.440, or for duties with respect to the authentication, delivery, and registration of the bonds as the committee may determine, and shall fix the rights, duties, powers, and obligations of the trustee or trustees.

 (d) In its determination of all of the matters and questions relating to the issuance and sale of the bonds and the fixing of the maturities, terms, conditions, and covenants of them as provided in (a), (b), and (c) of this section, the decisions of the committee shall be those found to be reasonably necessary for the best interests of the state and its inhabitants, and those that will accomplish the most advantageous sale of the bonds, with due regard, however, to necessary or normal costs of maintenance and operation, renewals, and replacements of and repairs to the airports and to all improvements to them and facilities of them owned, used, operated, or leased in connection with them, the future growth and expansion of the airports and all of such facilities, and the possibility of additional revenue bond financing for airports purposes. Any such decisions of the committee, as expressed in any bond resolution, are final and conclusive when any bonds have been issued pursuant to the bond resolution.

 (e) A bond resolution may provide that the bonds issued must contain a recital that they are issued under AS 37.15.410 — 37.15.550, and a bond containing this recital shall be conclusively considered to be valid and to have been issued in conformity with AS 37.15.410 — 37.15.550.

 (f) The validity of the authorization and issuance of bonds is not affected by any proceedings for the acquisition or construction of the additions, improvements, extensions, or facilities for which the bonds have been issued or by any contracts in connection with the acquisition or construction.




Sec. 37.15.460. Bond resolution.
The committee shall adopt the bond resolution and prepare all other documents and proceedings necessary for the issuance, sale, and delivery of the bonds or any part or series of them. The bond resolution must fix the principal amount, denomination, date, maturities, place or places of payment, rights of redemption, if any, terms, form, conditions, and covenants of the bonds or each series of them. The committee shall also determine and provide for the date and manner of sale of the bonds, and shall provide whether the notice of sale is to be published elsewhere in addition to the publication required by AS 37.15.450.


Sec. 37.15.470. Enforcement by holder.
The holder of any bonds or the trustee for the holders of the bonds or any series of them may, by appropriate proceedings in the courts of record of the state, require and compel the transfer, setting aside, and payment of money and the enforcement of all of the terms, conditions, and covenants as required and provided in AS 37.15.410 — 37.15.550 and in the bond resolution.


Sec. 37.15.480. Amounts required for payments.
The committee shall, before December 31 of each year, commencing with the year in which the bonds are issued, certify to the commissioners of revenue and transportation and public facilities the amounts required in the next ensuing calendar year by the bond resolution or resolutions to be paid out of the revenue fund into the bond redemption fund and to be paid into and maintained in any reserve fund or account or any other fund or account created by the bond resolution or resolutions, and shall also certify to the commissioners the last date or dates upon which payments may be made.


Sec. 37.15.490. Bond negotiability.
The bonds and the coupons attached to them are fully negotiable instruments under the laws of the state.


Sec. 37.15.500. Airport charges.
As provided in AS 02.15.090(a), the commissioner of transportation and public facilities shall fix and collect the fees, charges, and rentals derived by the state from the ownership, lease, use, and operation of the airports and all of the facilities and improvements that will provide revenue sufficient to comply with all of the covenants of the bond resolution.


Sec. 37.15.510. State improvements to airports.
The state is authorized to acquire, equip, construct, and install additions and improvements to and extensions of the airports, facilities for the landing, parking, loading, storing, repairing, safety, and utility of aircraft at the airports and passenger, freight, and terminal facilities, including safety equipment and devices at the airports, found to be necessary by the commissioner of transportation and public facilities.


Sec. 37.15.520. Refunding.
 (a) The bonds or any part of them may be refunded at or before their maturity by the issuance of refunding revenue bonds of the state if in the opinion of the committee refunding is advantageous to and in the best interests of the state and its inhabitants.

 (b) The issuance of refunding bonds need not be authorized by an Act of the legislature, and the committee shall adopt the resolution or resolutions and prepare all other documents and proceedings necessary for the issuance, exchange, or sale, and delivery of such bonds. All provisions of AS 37.15.410 — 37.15.550 applicable to revenue bonds are applicable to the refunding bonds and to the issuance, sale, or exchange of them, except as otherwise provided in this section.

 (c) Refunding bonds may be issued in a principal amount sufficient to provide funds for the payment of all bonds to be refunded by them, and, in addition, for the payment of all expenses incident to the calling, retiring, or paying of the outstanding bonds, and the issuance of the refunding bonds. These expenses include the difference in amount between the par value of the refunding bonds and any amount less than par for which the refunding bonds are sold, any amount necessary to be made available for the payment of interest upon the refunding bonds from the date of sale of them to the date of payment of the bonds to be refunded or to the date upon which the bonds to be refunded will be paid pursuant to the call of them or agreement with the holders of them, and the premium, if any, necessary to be paid in order to call or retire the outstanding bonds and the interest accruing on them to the date of the call or retirement.




Sec. 37.15.530. Bonds as legal investments.
The bonds are legal investments for all banks, trust companies, savings banks, savings and loan associations, and other persons carrying on a banking business, all insurance companies and other persons carrying on an insurance business, and all executors, administrators, trustees, and other fiduciaries. The bonds may be accepted as security for deposits of all funds of the state and its political subdivisions.


Sec. 37.15.540. Statutory construction.
AS 37.15.410 — 37.15.550 shall be liberally construed in order to carry out the purposes for which they were enacted, and all existing laws in conflict with any of these sections are superseded insofar as necessary to accomplish the purposes of and carry out the provisions of these sections.


Sec. 37.15.550. Definitions.
In AS 37.15.410 — 37.15.550, unless the context otherwise requires,
     (1) “airports” means the international airports owned and operated by the state and located at or near the cities of Anchorage and Fairbanks;

     (2) “bond redemption fund” means the International Airports Revenue Bond Redemption Fund created by AS 37.15.440, including any accounts that are created in that fund after June 27, 1972;

     (3) “bond resolution” means the resolution or resolutions authorizing the issuance of bonds, adopted by the committee under AS 37.15.460;

     (4) “bonds” means the international airports revenue bonds authorized by AS 37.15.410 — 37.15.550;

     (5) “commissioner of revenue” means the principal executive officer of the Department of Revenue of the state as provided in AS 44.25.010, or a successor;

     (6) “commissioner of transportation and public facilities” means the principal executive officer of the Department of Transportation and Public Facilities of the state as provided in AS 44.42.010, or a successor;

     (7) “committee” means the state bond committee created by AS 37.15.110, or any other committee, body, department, or officer of the state which or who succeeds to the rights, powers, duties, and obligations of the state bond committee by lawful Act of the legislature;

     (8) “construction fund” means the International Airports Construction Fund created by AS 37.15.420;

     (9) “revenue fund” means the International Airports Revenue Fund created by AS 37.15.430.




Article 5. Alaska Clean Water Fund and Drinking Water Fund Bonds.


Sec. 37.15.560. Bond authorization.
 (a) For purposes of providing part of the money to be used to provide financial assistance to municipalities and other qualified entities under AS 46.03.032 and 46.03.036, including the costs of bond issuance and administration, the issuance and sale of revenue bonds of the state is authorized subject to (b) of this section. The bonds are to be issued by the state bond committee, as provided in AS 37.15.560 — 37.15.605, as part of the Alaska clean water fund and the Alaska drinking water fund revolving loan fund programs (AS 46.03.032 and 46.03.036), public enterprises of the state. The net proceeds of the sale of the bonds remaining after any payment of costs of issuance and administration shall be paid into the Alaska clean water fund or the Alaska drinking water fund, as appropriate. Accrued interest paid on the bonds shall be paid into the Alaska clean water fund or the Alaska drinking water fund for transfer to the Alaska clean water fund revenue bond redemption fund or the Alaska drinking water fund revenue bond redemption fund (AS 37.15.565), as appropriate.

 (b) The state bond committee may not issue more than $15,000,000 in revenue bonds under AS 37.15.560 — 37.15.605 during a fiscal year for each revolving loan fund program referred to in (a) of this section, excluding refunding bonds. The total unpaid principal amount of revenue bonds, including refunding bonds, but excluding refunded bonds, issued under AS 37.15.560 — 37.15.605 may not exceed $150,000,000 for each program.

 (c) The bonds do not constitute a general obligation of the state. Authorization by the voters of the state or the legislature is not required.

 (d) The state bond committee may enter into agreements with other state agencies as necessary or convenient to implement AS 37.15.560 — 37.15.605.

 (e) The state bond committee may contract for the services of underwriters, paying agents, trustees, bond printers, rating agencies, bond insurance, credit enhancement providers, accountants, financial advisors, and bond counsel, and other services as are necessary to accomplish the bond issuance and sale.




Sec. 37.15.565. Bond redemption funds.
 (a) There are established special funds of the state, known as the “Alaska clean water fund revenue bond redemption fund ” and the “Alaska drinking water fund revenue bond redemption fund,” which are trust funds for paying and securing the payment of the principal of and interest and redemption premium, if any, on the bonds and which shall be at all times completely segregated and set apart from all other funds of the state. The committee, on behalf of the state, may obligate and bind the state to set aside and pay into the bond redemption funds, on a monthly or other periodic basis, any part or parts of, or all of, or a fixed proportion of, or a fixed amount of the money in the Alaska clean water fund (AS 46.03.032) or the Alaska drinking water fund (AS 46.03.036) sufficient to pay the principal of and interest and redemption premium, if any, on the bonds and, if it considers it necessary, to set aside and maintain reserves for this purpose. The bond redemption funds shall be drawn upon only for the purpose of paying the principal of and interest and redemption premium, if any, on the bonds, together with related trustee fees, if any.

 (b) Money in the bond redemption funds may be invested in the same manner and on the same conditions as permitted for investment of money belonging to the state or held in the treasury under AS 37.10.070; however, the committee may agree with the bondholders to further limit these investments. Earnings on investments must be retained in the bond redemption funds.

 (c) Separate accounts may be created in the bond redemption funds for the purposes of paying and securing the bonds. The accounts may be combined for purposes of investment and for financial support to achieve the purposes of AS 37.15.570(c).




Sec. 37.15.570. Bond terms.
 (a) The bonds may be issued and sold at public or negotiated sale in the manner, in the amounts or series, and at the time or times that the committee determines. The bonds, or each series of them, shall be sold at the price and upon the terms, conditions, and covenants set by the committee after considering market conditions. Interest rates may be fixed or variable.

 (b) The bonds mature at the time or times fixed by the committee. The bonds may be subject to redemption before their fixed maturities, as determined by the committee, with or without a premium or premiums. The bonds may be in denominations determined by the committee; may be issued in fully or partially registered form; must be payable as to principal and interest at the place or places determined by the committee; must be signed on behalf of the state in the manner provided by the committee; must be issued under and subject to the terms, conditions, covenants, and protective features safeguarding payment of the bonds and relating to the funding of projects as found necessary by the committee, including covenants requiring the setting aside and maintenance of certain reserves to secure the payment of principal and interest, all under regulations and conditions of the committee.

 (c) The committee may pledge to the payment of the principal of and interest on bonds issued by the committee part or all of the legally available money or other assets on hand in the Alaska clean water fund (AS 46.03.032) or the Alaska drinking water fund (AS 46.03.036); part or all of the revenue of the Alaska clean water fund or the Alaska drinking water fund, including federal capitalization grants, the proceeds of loan repayments, and interest on money in the funds; the proceeds of the sale of bonds; and money on hand in the bond redemption funds. Revenue of the Alaska clean water fund or the Alaska drinking water fund, if so pledged, must be paid into the Alaska clean water fund or the Alaska drinking water fund, as appropriate. The committee may provide for the issuance of additional bonds, secured by a pledge of such money and revenue, ranking junior to, senior to, or on a parity with, outstanding bonds, upon conditions prescribed in the bond resolution. A pledge of loan repayments securing bonds may be made applicable to specific loans from the Alaska clean water fund or the Alaska drinking water fund, or, on a pooled basis, to all loan repayments received.

 (d) If the committee finds it reasonably necessary, the committee may select a trustee or trustees for the holders of the bonds, or any series of them, for the safeguarding and disbursement of any of the money in the bond redemption funds created by AS 37.15.565, or for duties with respect to the enforcement, authentication, delivery, payment, and registration of the bonds as the committee may determine. The committee shall fix the rights, duties, powers, and obligations of the trustee or trustees.

 (e) In its determination of all matters and questions relating to the issuance and sale of the bonds and the fixing of their maturities, terms, conditions, and covenants as provided in (a) — (d) of this section, the decisions of the committee shall be those that are reasonably necessary for the best interests of the state and its inhabitants and that will accomplish the most advantageous sale of the bonds, with due regard, however, for the continued funding under AS 46.03.032 and AS 46.03.036 of the categories of projects identified in AS 46.03.032(d) and 46.03.036(b). Decisions of the committee, as expressed in a bond resolution, are final and are conclusively considered to comply with the requirements of AS 37.15.560 — 37.15.605, AS 46.03.032, and 46.03.036.

 (f) A bond resolution may provide that the bonds issued must contain a recital that they are issued under AS 37.15.560 — 37.15.605 and under AS 46.03.032 or 46.03.036, as appropriate, and a bond containing this recital is conclusively considered to be valid and to have been issued in conformity with AS 37.15.560 — 37.15.605 and with AS 46.03.032 or 46.03.036, as appropriate.




Sec. 37.15.573. Bond resolution.
The committee shall authorize the issuance of bonds by adopting a resolution and shall prepare all other documents and proceedings necessary for the issuance, sale, and delivery of the bonds or any part or series of them. The bond resolution must fix the principal amount, denominations, date, maturities, manner of sale, place or places of payment, rights of redemption, if any, terms, form, conditions, and covenants of the bonds or each series of them. A bond resolution may state terms, conditions, amounts, and other limitations on loans to be made from the Alaska clean water fund (AS 46.03.032) or the Alaska drinking water fund (AS 46.03.036), as appropriate, from the relevant bond proceeds.


Sec. 37.15.575. State aid intercept.
If a municipality is in default on the payment of principal or interest on a loan from the Alaska clean water fund (AS 46.03.032) or the Alaska drinking water fund (AS 46.03.036), the committee may provide written notice of default to any state agency that is the custodian of money that is payable to the municipality. If the committee determines to provide notice, a separate written notice shall be given in each instance of default. Notwithstanding any other provision of law, at any time after receipt of written notice of default, the agency head shall withhold payment of the money from the municipality. The agency head shall pay over the withheld money to the committee for deposit in the Alaska clean water fund or the Alaska drinking water fund, as appropriate, for the purpose of paying or securing the principal and interest on the loan.


Sec. 37.15.580. Pledge of the state.
The state pledges to and agrees with the holders of bonds issued by the committee under AS 37.15.560 — 37.15.605 and under AS 46.03.032 or 46.03.036, as appropriate, that the state will not limit or alter the rights and powers vested in the committee by AS 37.15.560 — 37.15.605 and by AS 46.03.032 or 46.03.036, as appropriate, to fulfill the terms of any contract made by the committee with the holders, or in any way impair the rights and remedies of the holders until the principal amount of the bonds, together with the interest on them with interest on unpaid installments of interest, are fully met and discharged. The committee may include this pledge and agreement of the state in a contract with the holders.


Sec. 37.15.583. Enforcement by bond owner.
 (a) The owner or owners of not less than 10 percent of the aggregate principal amount of any series or issue of bonds or the trustee for the owners of the bonds or any series of them may, by appropriate proceedings in state court, require and compel the transfer, setting aside, and payment of money and the enforcement of all of the terms, conditions, and covenants as required and provided in AS 37.15.560 — 37.15.605, AS 46.03.032 or 46.03.036, as appropriate, and the bond resolution.

 (b) A proceeding under (a) of this section may be commenced and conducted only in the Superior Court for the State of Alaska, First Judicial District at Juneau.




Sec. 37.15.585. Amounts required for payments.
The committee shall, before June 30 of each year or from time to time within the year, as appropriate, commencing with the year in which the bonds are issued, certify to the commissioners of revenue and environmental conservation the amounts required in the current fiscal year and the next ensuing fiscal year by the bond resolution or resolutions to be paid out of the Alaska clean water fund or the Alaska drinking water fund into the appropriate bond redemption fund and to be paid into and maintained in any reserve fund or account or other fund or account created by the bond resolution or resolutions, and shall also certify to the commissioners the last date or dates upon which payments may be made.


Sec. 37.15.587. Purposes and sufficiency of revenue.
The proceeds of bonds may be used for the purposes described in AS 46.03.032 or 46.03.036, as appropriate. Bonds may not be issued unless the committee first finds that revenue to be derived from repayment of loans from the Alaska clean water fund or the Alaska drinking water fund, as appropriate, will be sufficient, together with other available money, to comply with all covenants of the bond resolutions.


Sec. 37.15.590. Refunding.
 (a) The committee may refund the bonds or any part of them at or before their maturities or redemption dates by the issuance of refunding revenue bonds of the state if, in the opinion of the committee, refunding is advantageous to and in the best interest of the state and its inhabitants.

 (b) The issuance of refunding bonds need not be authorized by the voters of the state or by an act of the legislature. The committee shall adopt the resolution or resolutions and prepare all other documents and proceedings necessary for the issuance, exchange or sale, and delivery of the refunding bonds. All provisions of AS 37.15.560 — 37.15.605 and of AS 46.03.032 and 46.03.036, as appropriate, applicable to revenue bonds are applicable to the refunding bonds and to the issuance, sale, or exchange of them, except as otherwise provided in this section.

 (c) Refunding bonds may be issued in a principal amount sufficient to provide money for the advance or current refunding of all bonds to be refunded and interest on the refunded bonds and, in addition, for the payment of all costs of issuance and administration of the refunding bonds. These expenses also include the difference in amount between the par value of the refunding bonds and any amount less than par for which the refunding bonds are sold; the premium, if any, necessary to be paid in order to call or retire the outstanding bonds and the interest accruing on them to date of the call or retirement; and other such costs. The committee is authorized to incur such expenses.

 (d) The committee may contract with a refunding trustee to hold the proceeds of refunding bonds in trust until the proceeds, together with earnings on the proceeds, are applied to pay the principal of, premium, if any, and interest on the bonds to be refunded. Until the refunding bond proceeds are applied, the proceeds may be invested in direct obligations of, or obligations guaranteed by, the United States or an agency or corporation of the United States whose obligations constitute direct obligations of, or obligations guaranteed by the United States.




Sec. 37.15.595. Bonds as legal investments.
The bonds are legal investments for all banks, trust companies, savings banks, savings and loan associations, and other persons carrying on a banking business, all insurance companies and other persons carrying on an insurance business, and all executors, administrators, trustees, and other fiduciaries. The bonds may be accepted as security for deposits of all money of the state and its political subdivisions.


Sec. 37.15.600. Statutory construction.
AS 37.15.560 — 37.15.605 shall be liberally construed in order to carry out the purposes for which they were enacted.


Sec. 37.15.603. Regulations.
The committee may adopt regulations necessary to implement the provisions of AS 37.15.560 — 37.15.605.


Sec. 37.15.605. Definitions.
In AS 37.15.560 — 37.15.605,
     (1) “bond redemption funds ” means the Alaska clean water fund revenue bond redemption fund and the Alaska drinking water fund revenue bond redemption fund established in AS 37.15.565, as applicable;

     (2) “bond resolution” means the resolution or resolutions adopted by the committee under AS 37.15.573 authorizing the issuance of bonds;

     (3) “bonds” means the Alaska clean water fund revenue bonds or the Alaska drinking water fund revenue bonds authorized in AS 37.15.560 — 37.15.605, as applicable;

     (4) “commissioner of environmental conservation” means the principal executive officer the Department of Environmental Conservation as provided in AS 44.46.010, or a successor;

     (5) “commissioner of revenue” means the principal executive officer of the Department of Revenue as provided in AS 44.25.010, or a successor;

     (6) “committee” means the state bond committee created in AS 37.15.110 or any other committee, body, department, or officer of the state that succeeds to the rights, powers, duties, and obligations of the state bond committee by lawful act of the legislature;

     (7) “costs of issuance and administration” means all costs associated with issuance and administration of Alaska clean water fund revenue bonds or the Alaska drinking water fund revenue bonds, as applicable, and refunding bonds, including costs of bond printing, official statements, financial advisors, travel costs, rating agencies, bond insurance, letters and lines of credit for credit enhancement, underwriters, legal services, paying agents, bonds registrars, bond and escrow trustees, arbitrage rebate, and all other costs, including administrative costs, both direct and indirect.




Article 6. Toll Facilities Revenue Bonds.


Sec. 37.15.610. Bond authorization.
For the purpose of providing part or all of the money to be used, with or without any grants or other money that may become available, the issuance and sale of revenue bonds of the state in the total principal sum of not to exceed $500,000,000 is authorized to acquire, construct, equip, and install the additions, improvements, extensions, and facilities authorized in AS 37.15.720 and 37.15.730. The principal of and interest on these bonds are paid out of and secured by the gross revenue derived by the state from the ownership, use, and operation of the toll facilities, and out of any other revenue or money that the state legislature may provide exclusive of any state tax or license. Bonds may not be issued to assist in the acquisition, financing, or operation of projects without prior approval from the legislature.


Sec. 37.15.620. Construction fund.
 (a) The toll facilities construction fund is established for deposit of proceeds of the sale of the bonds authorized by AS 37.15.610 and any grant or other money that is legally provided for the same purposes for which the bonds are authorized except for any accrued interest paid on the bonds by the purchaser. The money in the construction fund is used to pay the cost of acquiring, constructing, and equipping facilities authorized in AS 37.15.720 and 37.15.730 and costs incidental to those activities, including costs of the authorization, issuance, and sale of the bonds. To the extent allowed in the bond resolution, money in the construction fund may also be used for the payment of interest on the bonds during the time of actual construction, and for any additional time, not exceeding one year after construction is completed. Money in the construction fund may also be transferred to the bond redemption fund, as permitted by the bond resolution, to establish a reserve for the payment of the principal and interest on the bonds.

 (b) The bond resolution may provide for the investment of money in the construction fund as the committee determines. The interest earned upon or any profit derived from the sale of the investment is deposited in the construction fund.




Sec. 37.15.630. Revenue fund.
 (a) The toll facilities revenue fund is established and shall be set apart from all other money of the state. The toll facilities revenue fund is a trust fund for the purposes under AS 37.15.610 — 37.15.760, where all revenue, fees, tolls, charges, and rentals are deposited that are derived by the state from the ownership, lease, use, and operation of the facilities authorized by AS 37.15.720 and 37.15.730. The revenue, fees, tolls, charges, and rentals may not include the proceeds of any state tax or license. The money in the revenue fund may only be used to
     (1) pay or secure the payment of the principal of and interest on the toll facilities bonds and principal of and interest on any other revenue bonds issued by authorization of the legislature to provide money to acquire, construct, and equip facilities authorized by AS 37.15.720 and 37.15.730 and to be payable out of the revenue fund;

     (2) pay the normal and necessary costs of maintaining and operating the facilities acquired, constructed, or equipped under AS 37.15.610 — 37.15.760;

     (3) pay the costs of renewals, replacements, and extraordinary repairs to facilities acquired, constructed, or equipped under AS 37.15.610 — 37.15.760;

     (4) redeem before their fixed maturities any and all revenue bonds issued for the purpose of acquiring, constructing, and equipping facilities authorized by AS 37.15.720 and 37.15.730;

     (5) provide money to acquire, construct, and equip necessary additions and improvements to facilities authorized by AS 37.15.720 and 37.15.730; and

     (6) provide money to pay any and all other costs relating to the ownership, use, and operation of the facilities.

 (b) The investment of money in the revenue fund may be made as the committee determines. The interest earned upon or any profits derived from the sale of an investment under this subsection shall be deposited in the revenue fund.




Sec. 37.15.640. Bond redemption fund.
The toll facilities revenue bond redemption fund is established for deposit in trust of money for paying and securing the payment of principal of and interest and redemption premium, if any, on bonds and is set apart from all other money of the state. The committee, on behalf of the state, shall obligate the state to set aside and pay into the bond redemption fund from the revenue fund an amount of money sufficient to pay the principal of and interest and redemption premium, if any, on the bonds as the payments become due and, if the committee considers it necessary, to set aside and maintain a reserve for this purpose. The bond redemption fund is drawn upon for the purpose of paying the principal of and interest and redemption premium, if any, on the bonds, and the bonds do not constitute a general obligation of the state.


Sec. 37.15.650. Bond terms.
 (a) The toll facilities bonds are sold in the amounts or series and at the time as determined by the committee. Before selling a series of bonds, the committee shall give notice inviting sealed bids. If satisfactory bids are received, the bonds offered for sale are awarded to the highest responsible bidder. If the committee determines that a bid received is not satisfactory as to price or responsibility of the bidder, the committee may reject the bid received. Bonds, or a series of bonds, may not be sold if the effective interest rate over the life of the bonds exceeds 11 percent per year or that rate of interest that is 125 percent of the rate of the Bond Buyer Index of 20 Municipal Bond Average Yields for the week previous to the date of sale of the bonds, whichever is higher. Interest is payable annually or semiannually.

 (b) The bonds mature at the time fixed by the committee. The bonds may be subject to redemption before their fixed maturities as determined by the committee and with the premium fixed by the committee, but a bond may not be subject to redemption before its fixed maturity date unless the right to redeem that bond is expressly mentioned on the face of the bond. The bonds
     (1) may be in denominations determined by the committee;

     (2) may be issued in coupon form or in fully registered form, and may be registrable as to principal or both principal and interest, all under regulations and conditions the committee provides;

     (3) are payable as to principal and interest at the place determined by the committee;

     (4) shall be signed on behalf of the state by the governor and shall be attested to by the lieutenant governor, both of which signatures may be facsimile signatures, and each of the interest coupons attached to them shall be signed by the facsimile signatures of these officials;

     (5) shall have the seal of the state impressed, printed, or lithographed on them; and

     (6) shall be issued under and subject to the terms, conditions, and covenants providing for the payment of the principal of and interest on the bonds and the other terms, conditions, covenants, and protective features safeguarding this payment and relating to the maintenance, operation, and improvement of the toll facilities as found necessary by the committee, which covenants may include a provision requiring the setting aside and maintenance of certain reserves to secure the payment of the principal and interest.

 (c) If found reasonably necessary, the committee may select a trustee or trustees for the holders of the bonds or any series of the bonds, for the safeguarding and disbursement of any of the money in any of the funds created by AS 37.15.620, 37.15.630, and 37.15.640, or for the duties for authentication, delivery, and registration of the bonds as the committee may determine. The committee shall also fix the rights, duties, powers, and obligations of the trustee or trustees.

 (d) In the committee’s determination of all of the matters and questions relating to the issuance and sale of the bonds and the fixing of the maturities, terms, conditions, and covenants of the bonds as provided in (a) — (c) of this section, the decisions of the committee shall be those found to be reasonably necessary for the best interests of the state and its inhabitants, and those that will accomplish the most advantageous sale of the bonds, with due regard, however, (1) to necessary or normal costs of maintenance and operation; (2) to renewals and replacements of and repairs to the toll facilities; (3) to all improvements to toll facilities and property of toll facilities owned, used, operated, or leased in connection with toll facilities; and (4) to the future growth and expansion of all of the facilities and the possibility of additional revenue bond financing for toll facilities purposes. A decision of the committee, as expressed in any bond resolution, is final when any bonds have been issued under the bond resolution.

 (e) A bond resolution may provide that the bonds issued contain a recital that they are issued under AS 37.15.610 — 37.15.760, and any bonds containing this recital are conclusively considered to be valid and to have been issued in conformity with AS 37.15.610 — 37.15.760.

 (f) The validity of the authorization and issuance of bonds is not affected by any proceeding for the acquisition or construction of the additions, improvements, or facilities for which the bonds have been issued or by any contract in connection with the acquisition or construction.




Sec. 37.15.660. Bond resolution.
The committee is authorized and directed to adopt the bond resolution and prepare all other documents and proceedings necessary for the issuance, sale, and delivery of the bonds or any part or series of them. The bond resolution shall fix the principal amount, denomination, date, maturities, place or places of payment, rights of redemption, if any, terms, form, conditions, and covenants of the bonds or each series of them. The committee shall also determine and provide for the date and manner of sale of the bonds, and shall provide whether the notice of sale is to be published elsewhere in addition to the publication required by AS 37.15.650.


Sec. 37.15.670. Enforcement by holder.
The holder of any bonds or the trustee for the holders of the bonds or any series of them, may, by appropriate proceedings in the courts of record of the state, compel the transfer, setting aside, and payment of money and the enforcement of all of the terms, conditions, and covenants as required and provided in AS 37.15.610 — 37.15.760 and in the bond resolution.


Sec. 37.15.680. Amounts required for payments.
The committee shall, before December 31 of each year, commencing with the year in which the bonds are issued, certify to the commissioner of revenue and the commissioner of transportation and public facilities the amounts required in the next ensuing calendar year by a bond resolution to be paid out of the revenue fund into the bond redemption fund and to be paid into and maintained in any reserve fund or account or any other fund or account created by a bond resolution. The committee shall also certify to the commissioners the last date upon which payments may be made.


Sec. 37.15.690. Bond negotiability.
The bonds and the coupons attached to them are fully negotiable instruments under the laws of the state.


Sec. 37.15.700. Refunding.
 (a) The bonds or any part of them may be refunded at or before their maturity by the issuance of refunding revenue bonds of the state if in the opinion of the committee refunding is advantageous to and in the best interest of the state and its inhabitants.

 (b) The issuance of refunding bonds need not be authorized by an act of the legislature, and the committee shall adopt the resolution and prepare all other documents and proceedings necessary for the issuance, exchange or sale, and delivery of the bonds. All provisions of AS 37.15.610 — 37.15.760 applicable to revenue bonds are applicable to the refunding bonds and to the issuance, sale, or exchange of the bonds, except as otherwise provided in this section.

 (c) Refunding bonds may be issued in a principal amount sufficient to provide money for the payment of all bonds to be refunded by them, and, in addition, for the payment of all expenses incident to the calling, retiring, or paying of the outstanding bonds, and the issuance of the refunding bonds. These expenses include the difference in amount between the par value of the refunding bonds and any amount less than par for which the refunding bonds are sold, any amount necessary to be made available for the payment of interest on the refunding bonds from the date of sale of them to the date of payment of the bonds to be refunded or to the date upon which the bonds to be refunded will be paid under the call of the bonds or agreement with the holders of them, and the premium, if any, necessary to be paid in order to call or retire the outstanding bonds and the interest accruing on the outstanding bonds to the date of the call or retirement.




Sec. 37.15.710. Bonds as legal investments.
Toll facilities bonds are legal investments for all banks, trust companies, savings banks, savings and loan associations, and other persons carrying on a banking business, all insurance companies and other persons carrying on an insurance business, and all executors, administrators, trustees, and other fiduciaries. The bonds may be accepted as security for deposits of all money of the state and its political subdivisions.


Sec. 37.15.720. State toll facilities.
The state is authorized to acquire, construct, equip, and maintain toll bridges, tunnels, highways, roads, crossings, and causeways found to be necessary by the commissioner of transportation and public facilities.


Sec. 37.15.730. Review of toll facility projects.
A toll facility may be financed under AS 37.15.610 — 37.15.760 if the following conditions are met for that toll facility:
     (1) the department submits to the governor and the legislature a feasibility study that finds that the toll facility is financially feasible and able to produce revenue adequate to repay the bonds with which it is financed;

     (2) if financing in addition to revenue bonds is required to finance the toll facility, the department submits to the governor and legislature a finance plan that includes an estimate of the total cost of the toll facility and a description of the sources of money that will be used to finance the total cost of the toll facility; and

     (3) the office of management and budget reviews the feasibility study and the finance plan, if required, and reports its findings and recommendations to the governor and legislature not later than 90 days after the study and plan are received by the office.




Sec. 37.15.740. Toll facility charges.
The commissioner of transportation and public facilities shall fix and collect the fees, charges, tolls, and rentals derived by the state from the ownership, lease, use, and operation of the facilities authorized by AS 37.15.720 and 37.15.730 and improvements of the facilities as will provide revenue sufficient to comply with all of the covenants of the bond resolution.


Sec. 37.15.750. Statutory construction.
AS 37.15.610 — 37.15.760 shall be liberally construed in order to carry out the purposes for which the provisions were enacted, and all existing laws in conflict with AS 37.15.610 — 37.15.760 are superseded as necessary to accomplish the purposes of AS 37.15.610 — 37.15.760.


Sec. 37.15.760. Definitions.
In AS 37.15.610 — 37.15.760, unless the context requires otherwise,
     (1) “bond redemption fund” means the toll facilities revenue bond redemption fund created by AS 37.15.640, including any accounts that are created in that fund after October 4, 1984;

     (2) “bond resolution” means the resolution authorizing the issuance of bonds, adopted by the committee under AS 37.15.660;

     (3) “bonds” means the toll facilities revenue bonds authorized by AS 37.15.610 — 37.15.760;

     (4) “committee” means the state bond committee created by AS 37.15.110, or any other committee, body, department, or officer of the state that or who succeeds to the rights, powers, duties, and obligations of the state bond committee by act of the legislature;

     (5) “construction fund” means the toll facilities construction fund created by AS 37.15.620;

     (6) “revenue fund” means the toll facilities revenue fund created by AS 37.15.630;

     (7) “toll facilities” means highways, roads, bridges, tunnels, crossings, and causeways upon which tolls, charges, rentals, or other user fees are placed by the commissioner of transportation and public facilities.




Article 7. Sport Fishing Facility Revenue Bonds.


Sec. 37.15.765. Bond authorization.
 (a) For purposes of providing the money to be used to construct and renovate sport fishing facilities under AS 16.05.092, including the costs of bond issuance and administration, the issuance and sale of revenue bonds of the state is authorized, subject to (b) of this section. The bonds are to be issued by the state bond committee, as provided in AS 37.15.765 — 37.15.799, as part of the sport fisheries rehabilitation, enhancement, and development program under AS 16.05.092, a public enterprise of the state. The net proceeds of the sale of the bonds remaining after payment of costs of issuance and administration and making deposits to the bond reserve account described in AS 37.15.770(b) shall be paid into the Alaska sport fishing construction account of the fish and game fund. The bond proceeds shall be segregated and accounted for separately. Accrued interest paid on the bonds shall be deposited in the bond redemption fund established under AS 37.15.770.

 (b) The state bond committee may not issue more than $69,000,000 in revenue bonds, excluding refunding bonds issued under AS 37.15.790.

 (c) The bonds do not constitute a general obligation of the state. Authorization for the bonds by the voters of the state or the legislature is not required.

 (d) The state bond committee may enter into agreements with other state agencies as necessary or convenient to implement AS 37.15.765 — 37.15.799.

 (e) The state bond committee may contract for the services of underwriters, paying agents, trustees, bond printers, rating agencies, bond insurance, credit enhancement providers, accountants, financial advisors, and bond counsel, and other services as are necessary to accomplish the bond issuance and sale.




Sec. 37.15.770. Bond redemption fund established.
 (a) There is established a special fund of the state, known as the Alaska fish and game revenue bond redemption fund, which is a trust fund for paying and securing the payment of the principal of and interest and redemption premium, if any, on the bonds and which shall be, at all times, completely segregated and set apart from all other funds of the state. The committee, on behalf of the state, may obligate and bind the state to set aside and pay into the bond redemption fund, on a monthly or other periodic basis, as a first priority, money in the Alaska sport fish enterprise account and, as a subordinate priority, other money legally available in the fish and game fund, sufficient to pay the principal of and interest and redemption premium, if any, on the bonds. The bond redemption fund may be drawn upon only for the purpose of paying the principal of and interest and redemption premium, if any, on the bonds, together with related trustee fees, if any.

 (b) The committee may provide in the bond resolution for the creation of a bond reserve account within the redemption fund to further secure the repayment of principal of and interest on the bonds. Amounts deposited in the reserve account shall be derived from bond proceeds or other money legally available from state sources.

 (c) Money in the bond redemption fund may be invested in the same manner and on the same conditions as permitted for investment of money belonging to the state or held in the treasury under AS 37.10.070; however, the committee may agree with the bondholders to further limit these investments. Earnings on investments must be retained in the bond redemption fund.




Sec. 37.15.773. Bond terms.
 (a) The bonds may be issued and sold at public or negotiated sale in the manner, in the amounts or series, and at the time or times that the committee determines. The bonds, or each series of them, shall be sold at the price and upon the terms, conditions, and covenants set by the committee after considering market conditions. Interest rates may be fixed or variable.

 (b) The bonds mature at the time or times fixed by the committee. The bonds may be subject to redemption before their fixed maturities, in the manner and under the conditions established by the committee, with or without a premium or premiums. The bonds may be in denominations determined by the committee and may be issued in fully or partially registered form. The bonds must be
     (1) payable as to principal and interest at the place or places determined by the committee;

     (2) signed on behalf of the state in the manner provided by the committee;

     (3) issued under and subject to the terms, conditions, covenants, and protective features safeguarding payment of the bonds and relating to the funding of projects as found necessary by the committee, including covenants requiring the setting aside and maintenance of certain reserves to secure the payment of principal and interest, all under regulations and conditions of the committee.

 (c) The committee may pledge to the payment of the principal of and interest on bonds issued by the committee part or all of the legally available money or other assets on hand in the Alaska sport fishing enterprise account and, on a subordinate lien basis, other legally available money in the fish and game fund; the proceeds of the sale of bonds; and money on hand in the bond redemption fund. Revenue of the Alaska sport fishing enterprise account and fish and game fund if so pledged, must be paid into the bond redemption fund, as appropriate.

 (d) If the committee finds it reasonably necessary, the committee may select a trustee or trustees for the holders of the bonds, for the safeguarding and disbursement of any of the money in the bond redemption fund created by AS 37.15.770, or for duties with respect to the enforcement, authentication, delivery, payment, and registration of the bonds as the committee may determine. The committee shall fix the rights, duties, powers, and obligations of the trustee or trustees.

 (e) In its determination of all matters and questions relating to the issuance and sale of the bonds and the fixing of their maturities, terms, conditions, and covenants as provided in (a) — (d) of this section, the decisions of the committee shall be those that are reasonably necessary for the best interests of the state and its inhabitants and that will accomplish the most advantageous sale of the bonds. Decisions of the committee, as expressed in a bond resolution, are final and are conclusively considered to comply with the requirements of state law.

 (f) A bond resolution may provide that the bonds issued must contain a recital that they are issued under AS 37.15.765 — 37.15.799, and a bond containing this recital is conclusively considered to be valid and to have been issued in conformity with AS 37.15.765 — 37.15.799.




Sec. 37.15.777. Bond resolution.
The committee shall authorize the issuance of bonds by adopting a resolution and shall prepare all other documents and proceedings necessary for the issuance, sale, and delivery of the bonds or any part or series of them. The bond resolution may provide for delegation of authority to establish the final terms of the bonds, including the terms identified in AS 37.15.773, upon reasonable conditions established by the committee.


Sec. 37.15.780. Pledge of the state.
The state pledges to and agrees with the holders of bonds issued by the committee under AS 37.15.765 — 37.15.799 that the state will not limit or alter the rights and powers vested in the committee by AS 37.15.765 — 37.15.799 to fulfill the terms of any contract made by the committee with the holders or in any way impair the rights and remedies of the holders until the principal amount of the bonds, together with the interest on them with interest on unpaid installments of interest, are fully met and discharged. The committee may include this pledge and agreement of the state in a contract with the holders.


Sec. 37.15.783. Amounts required for payments.
The committee shall, before June 30 of each year or from time to time within the year, as appropriate, beginning with the year in which the bonds are issued, certify to the commissioner of revenue and the commissioner of fish and game the amounts required in the current fiscal year and the next ensuing fiscal year by the bond resolution or resolutions to be paid out of the Alaska sport fishing enterprise account into the bond redemption fund and to be paid into and maintained in any reserve fund or account or other fund or account created by the bond resolution or resolutions, and shall also certify to the commissioners the last date or dates upon which payments may be made.


Sec. 37.15.787. Purposes and sufficiency of revenue.
The proceeds of bonds may be used for the purposes described in AS 16.05.092. Bonds may not be issued unless the committee first finds that revenue to be derived from revenue dedicated to the Alaska sport fishing enterprise account will be sufficient, together with other available money, to comply with all covenants of the bond resolutions.


Sec. 37.15.790. Refunding.
 (a) The committee may refund the bonds or any part of them at or before their maturities or redemption dates by the issuance of refunding revenue bonds of the state if, in the opinion of the committee, refunding is advantageous to and in the best interest of the state and its inhabitants.

 (b) The issuance of refunding bonds need not be authorized by the voters of the state or by an act of the legislature. The committee shall adopt the resolution or resolutions and prepare all other documents and proceedings necessary for the issuance, exchange or sale, and delivery of the refunding bonds. All provisions of AS 37.15.765 — 37.15.799 applicable to revenue bonds are applicable to the refunding bonds and to the issuance, sale, or exchange of refunding bonds, except as otherwise provided in this section.

 (c) Refunding bonds may be issued in a principal amount sufficient to provide money for the advance or current refunding of all bonds to be refunded and interest on the refunded bonds and, in addition, for the payment of all costs of issuance and administration of the refunding bonds. These expenses also include the difference in amount between the par value of the refunding bonds and any amount less than par for which the refunding bonds are sold; the premium, if any, necessary to be paid in order to call or retire the outstanding bonds and the interest accruing on them to date of the call or retirement; and other such costs. The committee is authorized to incur such expenses.

 (d) The committee may contract with a refunding trustee to hold the proceeds of refunding bonds in trust until the proceeds, together with earnings on the proceeds, are applied to pay the principal of, premium, if any, and interest on the bonds to be refunded. Until the refunding bond proceeds are applied, the proceeds may be invested in direct obligations of, or obligations guaranteed by, the United States or an agency or corporation of the United States whose obligations constitute direct obligations of, or obligations guaranteed by, the United States.




Sec. 37.15.793. Bonds as legal investments.
The bonds are legal investments for all banks, trust companies, savings banks, savings and loan associations, and other persons carrying on a banking business, all insurance companies and other persons carrying on an insurance business, and all executors, administrators, trustees, and other fiduciaries. The bonds may be accepted as security for deposits of all money of the state and its political subdivisions.


Sec. 37.15.799. Definitions.
In AS 37.15.765 — 37.15.799,
     (1) “Alaska sport fishing construction account” means the Alaska sport fishing construction account established in the fish and game fund under AS 16.05.130(f);

     (2) “Alaska sport fishing enterprise account” means the Alaska sport fishing enterprise account established in the fish and game fund under AS 16.05.130(e);

     (3) “bond redemption fund” means the Alaska fish and game revenue bond redemption fund established in AS 37.15.770;

     (4) “bond resolution” means the resolution or resolutions adopted by the committee under AS 37.15.777 authorizing the issuance of bonds;

     (5) “bonds” means the revenue bonds authorized in AS 37.15.765 — 37.15.799;

     (6) “commissioner of fish and game” means the principal executive officer of the Department of Fish and Game as provided in AS 44.39.010, or a successor;

     (7) “commissioner of revenue” means the principal executive officer of the Department of Revenue as provided in AS 44.25.010, or a successor;

     (8) “committee” means the state bond committee created in AS 37.15.110 or any other committee, body, department, or officer of the state that succeeds to the rights, powers, duties, and obligations of the state bond committee by lawful act of the legislature;

     (9) “costs of issuance and administration” means all costs associated with issuance and administration of Alaska sport fishing facility revenue bonds, and refunding bonds, including costs of bond printing, official statements, financial advisors, travel costs, rating agencies, bond insurance, letters and lines of credit for credit enhancement, underwriters, legal services, paying agents, bonds registrars, bond and escrow trustees, arbitrage rebate, and all other costs, including administrative costs, both direct and indirect.




Article 8. Private Activity Bonds.


Sec. 37.15.800. Tax-exempt bonds and tax credits.
 (a) As authorized under 26 U.S.C. 146(e), the state bond committee shall allocate the private activity bond volume limit for the state. Each year at least 25 percent of the limit shall be allocated to municipalities. If the committee determines that a portion of the limit allocated to municipalities will not be used by a municipality during that year, the committee may reallocate that portion.

 (b) The committee may make a carry-forward election under 26 U.S.C. 146(f) with respect to all or a portion of the private activity bond volume limit, including allocations that lapse under (c) or (d) of this section.

 (c) An amount allocated under (a) of this section lapses on December 30 of the year in which the allocation was made unless
     (1) the entity that received the allocation uses it before that date; or

     (2) the amount allocated is the subject of a carry-forward election under 26 U.S.C. 146(f).

 (d) The committee may adopt regulations relating to the lapsing of amounts under (c) of this section. Regulations adopted under this subsection may establish times when allocated amounts will lapse in addition to the time provided in (c) of this section.

 (e) The committee shall allocate tax credit limits and tax-exempt bond limits for the state in accordance with requirements imposed by federal law in connection with the tax credits and tax-exempt bonds. This subsection does not apply to low-income housing tax credits, qualified veterans’ mortgage bonds under applicable provisions of 26 U.S.C. (Internal Revenue Code), or private activity bonds.

 (f) In this section,
     (1) “private activity bond” means a bond described in 26 U.S.C. 141;

     (2) “private activity bond volume limit” means the maximum amount of private activity bonds that may be issued under 26 U.S.C. 146 during a calendar year in the state by all issuers, including the state, municipalities in the state, and public corporations that are agencies of either the state or a municipality in the state.




Article 9. Pension Obligation Bonds.


Sec. 37.15.900. Bond authorization.
 (a) For purposes of financing prepayment of all or a portion of a governmental employer’s share of unfunded accrued actuarial liability of retirement systems, including the costs of issuance and administration, the issuance and sale of bonds of the state by the committee is authorized as provided in this section and AS 37.15.903 — 37.15.955, but only if the state bond rating is the equivalent of AA- or better. The net proceeds of the sale of the bonds remaining after payment of costs of issuance and administration shall be transferred to the commissioner of administration for the account of the governmental employer whose share of unfunded accrued actuarial liability is to be prepaid for application to that liability. Accrued interest paid on the bonds shall be paid into the pension obligation bond redemption fund.

 (b) The total unpaid principal amount of bonds, including refunding bonds, but excluding refunded bonds, is limited as provided in AS 37.15.903. The bonds do not constitute a general obligation of the state. Authorization by the voters of the state or the legislature is not required.

 (c) The committee may enter into agreements with other state agencies as necessary or convenient to implement this section and AS 37.15.903 — 37.15.955.

 (d) The committee may contract for the services of underwriters, paying agents, trustees, bond printers, rating agencies, bond insurance, credit enhancement providers, accountants, financial advisors, and bond counsel, and for other services as are necessary to accomplish the bond issuance and sale.




Sec. 37.15.903. Pension obligation bond limit.
The total unpaid principal amount of bonds, including refunding bonds, but excluding refunded bonds, issued by all state entities added together, for the purposes of financing prepayment of all or a portion of a governmental employer’s share of unfunded accrued liability of retirement systems, may not exceed $5,000,000,000.


Sec. 37.15.905. Bond redemption fund.
 (a) There is established a special fund of the state, known as the pension obligation bond redemption fund, which is a trust fund for paying and securing the payment of the principal of and interest and redemption premium, if any, on the bonds, and which shall be at all times completely segregated and set apart from all other funds of the state. The bond redemption fund shall be drawn on only for the purpose of paying the principal of and interest and redemption premium, if any, on the bonds, together with related trustee fees, if any.

 (b) Money in the bond redemption fund may be invested in the same manner and on the same conditions as permitted for investing of money belonging to the state or held in the treasury under AS 37.10.070; however, the committee may agree with the bondholders to further limit these investments. Earnings on investments must be retained in the bond redemption fund.

 (c) Separate accounts may be created in the bond redemption fund for the purposes of paying and securing the bonds. The accounts may be combined for purposes of investment and for financial support to achieve the purposes of AS 37.15.910(c).




Sec. 37.15.910. Bond terms.
 (a) The bonds may be issued and sold at public or negotiated sale in the manner, in the amounts or series, and at the time or times that the committee determines. The bonds, or each series of them, shall be sold at the price and on the terms, conditions, and covenants set by the committee after considering market conditions. Interest rates may be fixed or variable.

 (b) The bonds mature at the time or times fixed by the committee. The bonds may be subject to redemption before their fixed maturities, as determined by the committee, with or without a premium or premiums. The bonds may be in denominations determined by the committee; may be issued in fully or partially registered form; must be payable as to principal and interest at the place or places determined by the committee; must be signed on behalf of the state in the manner provided by the committee; and must be issued under and subject to the terms, conditions, covenants, and protective features safeguarding payment of the bonds as found necessary by the committee.

 (c) If the committee finds it reasonably necessary, the committee may select a trustee or trustees for the holders of the bonds, or any series of them, for the safeguarding and disbursement of any of the money in the bond redemption fund or for duties with respect to the enforcement, authentication, delivery, payment, and registration of the bonds as the committee may determine. The committee shall fix the rights, duties, powers, and obligations of the trustee or trustees.

 (d) In its determination of all matters and questions relating to the issuance and sale of the bonds and the fixing of their maturities, terms, conditions, and covenants as provided in (a) of this section, the decisions of the committee shall be those that are reasonably necessary for the best interests of the state and its inhabitants and that will accomplish the most advantageous sale of the bonds. Decisions of the committee, as expressed in a bond resolution, are final and are conclusively considered to comply with the requirements of AS 37.15.900 — 37.15.955.




Sec. 37.15.915. Bond resolution.
The committee shall authorize the issuance of bonds by adopting a resolution and shall prepare all other documents and proceedings necessary for the issuance, sale, and delivery of the bonds or any part or series of them. The bond resolution must fix the principal amount, denominations, date, maturities, manner of sale, place or places of payment, rights of redemption, if any, terms, form, conditions, and covenants of the bonds or each series of them.


Sec. 37.15.920. Enforcement by bond owner.
 (a) The owner or owners of not less than 10 percent of the aggregate principal amount of any series or issue of bonds or the trustee for the owners of the bonds or any series of them may, by appropriate proceedings in state court, require and compel the transfer, setting aside, and payment of money and the enforcement of all of the terms, conditions, and covenants as required and provided in AS 37.15.900 — 37.15.955, as appropriate, and the bond resolution.

 (b) A proceeding under (a) of this section may be commenced and conducted only in the Superior Court for the State of Alaska, First Judicial District at Juneau.




Sec. 37.15.925. Amounts required for payments.
The committee shall, before June 30 of each year or from time to time within the year, as appropriate, commencing with the year in which the bonds are issued, certify to the commissioner of revenue and the commissioner of administration the amounts required in the current fiscal year and the next ensuing fiscal year by the bond resolution or resolutions to be paid from the general fund into the bond redemption fund and to be paid into and maintained in any reserve fund or account or other fund or account created by the bond resolution or resolutions, and shall also certify to the commissioners the last date or dates on which payments may be made.


Sec. 37.15.930. Purposes and sufficiency of revenue.
The proceeds of bonds may be used for the purposes described in AS 37.15.900(a), as appropriate. Bonds may not be issued unless the committee first finds that the actuarially assumed rate of return on the funds managed by the Alaska Retirement Management Board is projected to exceed the true interest cost to be paid on the bonds by at least 1.5 percent annually.


Sec. 37.15.935. Refunding.
 (a) The committee may refund the bonds or any part of them at or before their maturities or redemption dates by the issuance of refunding bonds of the state if the state bond rating is the equivalent of AA- or better and if, in the opinion of the committee, refunding is advantageous to and in the best interest of the state and its inhabitants.

 (b) The issuance of refunding bonds need not be authorized by the voters of the state or by an act of the legislature. The committee shall adopt the resolution or resolutions and prepare all other documents and proceedings necessary for the issuance, exchange or sale, and delivery of the refunding bonds. All provisions of AS 37.15.900 — 37.15.955 are applicable to the refunding bonds and to the issuance, sale, or exchange of them, except as otherwise provided in this section.

 (c) Refunding bonds may be issued in a principal amount sufficient to provide money for the advance or current refunding of all bonds to be refunded and interest on the refunded bonds and, in addition, for the payment of all costs of issuance and administration of the refunding bonds. These expenses also include the difference in amount between the par value of the refunding bonds and any amount less than par for which the refunding bonds are sold; the premium, if any, necessary to be paid to call or retire the outstanding bonds and the interest accruing on them to the date of the call or retirement; and other of these costs. The committee is authorized to incur expenses to carry out this section.

 (d) The committee may contract with a refunding trustee to hold the proceeds of refunding bonds in trust until the proceeds, together with earnings on the proceeds, are applied to pay the principal of, premium, if any, and interest on the bonds to be refunded. Until the refunding bond proceeds are applied, the proceeds may be invested in direct obligations of, or obligations guaranteed by, the United States or an agency or corporation of the United States whose obligations constitute direct obligations of, or obligations guaranteed by, the United States.




Sec. 37.15.940. Bonds as legal investments.
The bonds are legal investments for all banks, trust companies, savings banks, savings and loan associations, and other persons carrying on a banking business, all insurance companies and other persons carrying on an insurance business, and all executors, administrators, trustees, and other fiduciaries. The bonds may be accepted as security for deposits of all money of the state and its political subdivisions.


Sec. 37.15.945. Statutory construction.
AS 37.15.900 — 37.15.955 shall be liberally construed to carry out the purposes for which they were enacted.


Sec. 37.15.950. Regulations.
The committee may adopt regulations necessary to implement the provisions of AS 37.15.900 — 37.15.955.


Sec. 37.15.955. Definitions.
In AS 37.15.900 — 37.15.955,
     (1) “bond redemption fund” means the pension obligation bond redemption fund established in AS 37.15.905;

     (2) “bond resolution” means a resolution or resolutions adopted by the committee under AS 37.15.915 authorizing the issuance of bonds;

     (3) “bonds” means the pension obligation bonds authorized in AS 37.15.900 — 37.15.955;

     (4) “committee” means the state bond committee created in AS 37.15.110 or any other committee, body, department, or officer of the state that succeeds to the rights, powers, duties, and obligations of the state bond committee by law;

     (5) “costs of issuance and administration” means all costs associated with issuance and administration of pension obligation bonds and refunding bonds, including costs of bond printing, official statements, financial advisors, travel costs, rating agencies, bond insurance, letters and lines of credit for credit enhancement, underwriters, legal services, paying agents, bond registrars, bond and escrow trustees, arbitrage rebate, and all other costs, including administrative costs, both direct and indirect.




Chapter 16. Alaska Pension Obligation Bond Corporation.

Sec. 37.16.010. Alaska Pension Obligation Bond Corporation.
There is established the Alaska Pension Obligation Bond Corporation. The corporation is a public corporation and government instrumentality in the Department of Revenue managed by a board of directors. The purpose of the corporation is to finance prepayment of all or a portion of a governmental employer’s share of unfunded accrued actuarial liability of retirement systems.


Sec. 37.16.020. Board of directors.
The directors of the corporation are the commissioner of commerce, community, and economic development, the commissioner of administration, and the commissioner of revenue. If a director is absent or otherwise unable to act, the director’s designee in the department shall act as a director of the corporation in the director’s place.


Sec. 37.16.030. Bond authorization.
 (a) For purposes of financing prepayment of all or a portion of a governmental employer’s share of unfunded accrued actuarial liability of retirement systems, including the costs of issuance and administration, the issuance and sale of bonds by the corporation is authorized as provided in this section and AS 37.16.040 — 37.16.900, but only if the state bond rating is the equivalent of AA- or better. The net proceeds of the sale of the bonds remaining after payment of costs of issuance and administration shall be transferred to the commissioner of administration for the account of the governmental employer whose share of unfunded accrued actuarial liability is to be prepaid for application to that liability. Accrued interest paid on the bonds shall be paid into the reserve fund.

 (b) The total unpaid principal amount of bonds, including refunding bonds, but excluding refunded bonds, is limited as provided in AS 37.15.903. The bonds do not constitute a general obligation of the state. Authorization by the voters of the state or the legislature is not required.

 (c) The corporation may enter into agreements with other state agencies as necessary or convenient to implement this section and AS 37.16.040 — 37.16.900.

 (d) The corporation may contract for the services of underwriters, paying agents, trustees, bond printers, rating agencies, bond insurance, credit enhancement providers, accountants, financial advisors, and bond counsel, and other services as are necessary to accomplish the bond issuance and sale.




Sec. 37.16.040. Reserve fund.
 (a) The corporation may establish and maintain a special fund called the Alaska Pension Obligation Bond Corporation reserve fund in which there shall be deposited or transferred
     (1) all money appropriated by the legislature for the purpose of the fund in accordance with the provisions of (g) of this section;

     (2) all proceeds of bonds required to be deposited in the fund by terms of a contract between the corporation and its bondholders or a resolution of the corporation with respect to the proceeds of bonds;

     (3) all other money appropriated by the legislature to the reserve fund; and

     (4) any other money or funds of the corporation that it decides to deposit in the fund.

 (b) Subject to the provisions of (h) of this section, money in the reserve fund shall be held and applied solely to the payment of the interest on and principal of bonds of the corporation as the interest and principal become due and payable to the retirement of bonds, or to the payment or prepayment of a portion of the participating governmental employer’s share of the accrued actuarial liabilities of retirement systems. Money may not be withdrawn if a withdrawal would reduce the amount in the reserve fund to an amount less than the required debt service reserve except for payment of interest then due and payable on bonds and the principal of bonds then maturing and payable and for the retirement of bonds in accordance with the terms of a contract between the corporation and its bondholders and for which payments of other money of the corporation is not then available.

 (c) Money in the reserve fund in excess of the required debt service reserve as defined in (b) of this section, whether because of investment or otherwise, may be withdrawn at any time by the corporation to pay or prepay a portion of a participating governmental employer’s share of the accrued actuarial liabilities of retirement systems or transferred to another fund or account of the corporation subject to the provision of (h) of this section.

 (d) Money in the reserve fund may be invested in the same manner and on the same conditions as permitted for investment of funds belonging to the state or held in the treasury under AS 37.10.070; however, the corporation may agree with the bondholders to further limit these investments.

 (e) For purposes of valuation, investments in the reserve fund shall be valued at par or, if purchased at less than par, at cost unless otherwise provided by resolution of the corporation. Valuation on a particular date shall include the amount of interest then earned or accrued to that date on the money or investments in the reserve fund.

 (f) Notwithstanding any other provision of this chapter, bonds may not be issued by the corporation unless there is in the reserve fund the required debt service reserve for all bonds then issued and outstanding and for the bonds to be issued; however, the corporation may satisfy this requirement by depositing as much of the proceeds of the bonds to be issued, on their issuance, as is needed to meet the required debt service reserve. The corporation may at any time issue its bonds or notes for the purpose of increasing the amount in the reserve fund to the required debt service reserve, or to meet whatever higher or additional reserve that may be fixed by the corporation with respect to the fund.

 (g) To assure the maintenance of the required debt service reserve in the reserve fund, the legislature may appropriate annually to the corporation for deposit in the fund the sum, certified by the chair of the corporation to the governor and to the legislature, that is necessary to restore the fund to an amount equal to the required debt service reserve. The chair annually, before January 30, shall make and deliver to the governor and to the legislature a certificate stating the sum required to restore the fund to that amount, and the certified sum may be appropriated and paid to the corporation during the then current state fiscal year. Nothing in this subsection creates a debt or liability of the state.

 (h) All amounts received because of money appropriated to the reserve fund shall be held and applied in accordance with (b) of this section.

 (i) All references to the reserve fund in this section include special accounts within the reserve fund that may be created by the corporation to secure the payment of particular bonds.

 (j) The commissioner of revenue may, subject to appropriation, lend surplus money in the general fund to the corporation for deposit to any account in the reserve fund in an amount equal to the required debt service reserve. The loans shall be made on the terms and conditions that may be agreed on by the commissioner of revenue and the corporation, including, without limitation, terms and conditions providing that the loans need not be repaid until the obligations of the corporation secured and to be secured by the account in the reserve fund are no longer outstanding.

 (k) In this section, “required debt service reserve” means, on the date of computation, the amount required to be on deposit in the reserve fund as provided by resolution of the corporation.




Sec. 37.16.050. Bond terms.
 (a) The bonds may be issued and sold at public or negotiated sale in the manner, in the amounts or series, and at the time or times that the corporation determines the bonds, or each series of them, shall be sold at the price and on the terms, conditions, and covenants set by the corporation after considering market conditions. Interest rates may be fixed or variable.

 (b) The bonds mature at the time or times fixed by the corporation. The bonds may be subject to redemption before their fixed maturities, as determined by the corporation, with or without a premium or premiums. The bonds may be in denominations determined by the corporation; may be issued in fully or partially registered form; must be payable as to principal and interest at the place or places determined by the corporation; must be signed in the manner provided by the corporation; and must be issued under and subject to the terms, conditions, covenants, and protective features safeguarding payment of the bonds as found necessary by the corporation.

 (c) If the corporation finds it reasonably necessary, the corporation may select a trustee or trustees for the holders of the bonds, or any series of them, for the safeguarding and disbursement of any of the money in the bond reserve fund or for duties with respect to the enforcement, authentication, delivery, payment, and registration of the bonds as the corporation may determine. The corporation shall fix the rights, duties, powers, and obligations of the trustee or trustees.

 (d) In its determination of all matters and questions relating to the issuance and sale of the bonds and the fixing of their maturities, terms, conditions, and covenants as provided in (a) of this section, the decisions of the corporation shall be those that are reasonably necessary for the best interests of the state and its inhabitants and that will accomplish the most advantageous sale of the bonds. Decisions of the corporation, as expressed in a bond resolution, are final and are conclusively considered to comply with the requirements of this chapter.




Sec. 37.16.060. Bond resolution.
The corporation shall authorize the issuance of bonds by adopting a resolution and shall prepare all other documents and proceedings necessary for the issuance, sale, and delivery of the bonds or any part or series of them. The bond resolution must fix the principal amount, denominations, date, maturities, manner of sale, place or places of payment, rights of redemption, if any, terms, form, conditions, and covenants of the bonds or each series of them.


Sec. 37.16.070. Enforcement by bond owner.
 (a) The owner or owners of not less than 10 percent of the aggregate principal amount of any series or issue of bonds or the trustee for the owners of the bonds or any series of them may, by appropriate proceedings in state court, require and compel the transfer, setting aside, and payment of money and the enforcement of all of the terms, conditions, and covenants as required and provided in this chapter, as appropriate, and the bond resolution.

 (b) A proceeding under (a) of this section may be commenced and conducted only in the Superior Court for the State of Alaska, First Judicial District at Juneau.




Sec. 37.16.080. Purposes and sufficiency of revenue.
The proceeds of bonds may be used for the purposes described in AS 37.16.030(a), as appropriate. Bonds may not be issued unless the corporation first finds that the actuarially assumed rate of return on the funds managed by the Alaska Retirement Management Board is projected to exceed the true interest cost to be paid on the bonds by at least 1.5 percent annually.


Sec. 37.16.090. Refunding.
 (a) The corporation may refund the bonds or any part of them at or before their maturities or redemption dates by the issuance of refunding bonds of the corporation if the state bond rating is the equivalent of AA- or better and if, in the opinion of the corporation, refunding is advantageous to and in the best interest of the state and its inhabitants.

 (b) The issuance of refunding bonds need not be authorized by the voters of the state or by an act of the legislature. The corporation shall adopt the resolution or resolutions and prepare all other documents and proceedings necessary for the issuance, exchange or sale, and delivery of the refunding bonds. All provisions of this chapter are applicable to the refunding bonds and to the issuance, sale, or exchange of them, except as otherwise provided in this section.

 (c) Refunding bonds may be issued in a principal amount sufficient to provide money for the advance or current refunding of all bonds to be refunded and interest on the refunded bonds and, in addition, for the payment of all costs of issuance and administration of the refunding bonds. These expenses also include the difference in amount between the par value of the refunding bonds and any amount less than par for which the refunding bonds are sold; the premium, if any, necessary to be paid to call or retire the outstanding bonds and the interest accruing on them to the date of the call or retirement; and other of these costs. The corporation is authorized to incur expenses to carry out this section.

 (d) The corporation may contract with a refunding trustee to hold the proceeds of refunding bonds in trust until the proceeds, together with earnings on the proceeds, are applied to pay the principal of premium, if any, and interest on the bonds to be refunded. Until the refunding bond proceeds are applied, the proceeds may be invested in direct obligations of, or obligations guaranteed by, the United States or an agency or corporation of the United States whose obligations constitute direct obligations of, or obligations guaranteed by, the United States.




Sec. 37.16.100. Bonds as legal investments.
The bonds are legal investments for all banks, trust companies, savings banks, savings and loan associations, and other persons carrying on a banking business, all insurance companies and other persons carrying on an insurance business, and all executors, administrators, trustees, and other fiduciaries. The bonds may be accepted as security for deposits of all money of the state and its political subdivisions.


Sec. 37.16.110. Debt service repayment contracts.
The corporation shall enter into contracts with governmental employers for the purpose of recouping amounts paid as debt service on bonds issued by the corporation for the benefit of governmental employers. The corporation may pledge the revenue of the contracts as security for the bonds issued by the corporation.


Sec. 37.16.800. Statutory construction.
This chapter shall be liberally construed to carry out the purposes for which it was enacted.


Sec. 37.16.810. Regulations.
The corporation may adopt regulations necessary to implement the provisions of this chapter.


Sec. 37.16.900. Definitions.
In this chapter,
     (1) “bond resolution” means the resolution or resolutions adopted by the corporation under AS 37.16.060 authorizing the issuance of bonds;

     (2) “bonds” means the pension obligation bonds authorized in this chapter;

     (3) “corporation” means the Alaska Pension Obligation Bond Corporation created in AS 37.16.010;

     (4) “costs of issuance and administration” means all costs associated with issuance and administration of pension obligation bonds and refunding bonds, including costs of bond printing, official statements, financial advisors, travel costs, rating agencies, bond insurance, letters and lines of credit for credit enhancement, underwriters, legal services, paying agents, bonds registrars, bond and escrow trustees, arbitrage rebate, and all other costs, including administrative costs, both direct and indirect;

     (5) “reserve fund” means the Alaska Pension Obligation Bond Corporation reserve fund established in AS 37.16.040.




Chapter 17. Alaska BIDCO Assistance Program.

Secs. 37.17.010 — 37.17.110. Alaska Science and Technology Foundation. [Repealed, § 8 ch 2 SLA 2004.]
Secs. 37.17.200 — 37.17.390. BIDCO Assistance Program. [Repealed, § 8 ch 2 SLA 2004.]
Secs. 37.17.400 — 37.17.430. Science and engineering research; science education. [Repealed, § 8 ch 2 SLA 2004.]
Sec. 37.17.440. International trade and business endowment. [Repealed, § 8 ch 2 SLA 2004.]
Sec. 37.17.500. Purposes of Alaska BIDCO assistance program.
The purposes of AS 37.17.500 — 37.17.690 include
     (1) administering the Alaska BIDCO assistance program related to loans and other financial assistance made or provided under AS 37.17.500 — 37.17.690;

     (2) assisting in the formation and capitalization of one or more BIDCOs that have a highly qualified management team and a good business plan, and that are designed to operate in a profit-oriented, market-disciplined manner, with excellent prospects for long-term financial success and viability;

     (3) promoting economic development by providing a new source of risk capital and management assistance for businesses, especially small- and medium-sized businesses, in geographic areas throughout the state, including businesses in rural areas and distressed areas, and including minority-owned businesses;

     (4) using state resources to attract other capital resources; and

     (5) promoting the successful operation of BIDCOs.




Sec. 37.17.510. Alaska BIDCO fund.
The Alaska BIDCO fund is established in the general fund. The fund consists of appropriations made to the fund by the legislature and repayments of loans made under AS 37.17.500 — 37.17.690. The fund is administered by the department under AS 37.17.500 — 37.17.690.


Sec. 37.17.520. Use of money in Alaska BIDCO fund.
 (a) From the money in the Alaska BIDCO fund, the department may make loans or other financial assistance, as authorized under AS 37.17.520 — 37.17.690, to assist in the formation, capitalization, and operation of corporations that are licensed under AS 10.13.

 (b) The department may not authorize new financial assistance under AS 37.17.500 — 37.17.690 without the approval of the legislature.




Sec. 37.17.530. BIDCO capitalization loans.
Subject to AS 37.17.520(b), a BIDCO capitalization loan for the initial capitalization of a BIDCO shall be made under the terms and conditions that the department determines to be appropriate and that are consistent with AS 37.17.500 — 37.17.690.


Sec. 37.17.540. Loan commitment conditions.
 (a) When issuing a commitment to make a BIDCO capitalization loan, the department shall make the loan closing contingent on
     (1) the BIDCO’s receiving a license under AS 10.13, which may occur simultaneously with the loan closing;

     (2) the BIDCO’s satisfying the capitalization requirements of AS 37.17.550; and

     (3) other conditions that the department may impose.

 (b) The department may not issue a loan commitment under this section unless the department determines that the prospective BIDCO satisfies high quality evaluation standards as determined by the department. The evaluation standards must include the following findings:
     (1) the loan is likely to substantially promote the purposes of AS 37.17.500 — 37.17.690;

     (2) the BIDCO’s prospective management team is highly qualified to manage the BIDCO;

     (3) the BIDCO’s business plan is a good business plan that, together with the management team, promotes confidence in the prospects for the long-term financial success and viability of the BIDCO; and

     (4) if the department issues a loan commitment to the BIDCO, it is probable that the BIDCO will be able to satisfy the capitalization requirements of AS 37.17.550.




Sec. 37.17.550. Initial capitalization of BIDCO.
 (a) Subject to AS 37.17.520(b), the initial capitalization of a BIDCO to which the department makes a BIDCO capitalization loan must include
     (1) at least $500,000 in equity investment in the BIDCO, in addition to any organization costs paid for or owed by the BIDCO;

     (2) the BIDCO capitalization loan; and

     (3) additional capital in an amount required by the department and on terms and conditions acceptable to the department; the additional capital may be in the form of debt, grants, equity investment in addition to the minimum equity investment requirement of $500,000 under (1) of this subsection, or a combination of debt, grants, and the equity investment.

 (b) The minimum equity investment under (a)(1) of this section must be fully received by the BIDCO before or at closing of the BIDCO capitalization loan. The BIDCO capitalization loan shall be fully disbursed to the BIDCO at closing. The additional capital shall also be fully disbursed at closing; however, if the department is satisfied that there is a firm commitment for the additional capital on terms acceptable to the department, that the source for the additional capital will deliver on the firm commitment, and that the documents evidencing the additional capital have been executed and include terms acceptable to the department, the additional capital may be disbursed to the BIDCO on a phased-in basis on terms acceptable to the department.




Sec. 37.17.560. Subordination of BIDCO capitalization loan.
A BIDCO capitalization loan may be subordinated to the additional capital required under AS 37.17.550(a)(3).


Sec. 37.17.570. BIDCO capitalization loan repayment and interest.
 (a) A BIDCO capitalization loan must be structured so that the full amount of the principal is due in a lump sum at the end of the loan term.

 (b) Interest on a BIDCO capitalization loan accrues during the loan term and is due at the end of the loan term.




Sec. 37.17.580. BIDCO capitalization loan credits.
 (a) A BIDCO capitalization loan must include a formula that allows the BIDCO to earn credits to reduce the interest and principal owed on the loan. The formula shall be based on increasing jobs and sales in some or all of the businesses financed by the BIDCO and on sustaining the increases. To the extent the department determines appropriate, the department may also provide credits in situations where the BIDCO clearly demonstrates to the department that jobs would have been lost if the BIDCO had not provided financing assistance.

 (b) The department shall establish procedures and guidelines for the certification by the department of credits earned by a BIDCO under this section, including the circumstances under which the department may deny the credits. Within the guidelines, the specific decisions regarding the granting or denial of the credits are left to the discretion of the department.




Sec. 37.17.590. Implementation of BIDCO capitalization loan program.
 (a) The department shall implement the program for making BIDCO capitalization loans under AS 37.17.500 — 37.17.690 in a manner designed to encourage financing assistance by BIDCOs to businesses throughout the state. Through the use of one or more formulas designed under AS 37.17.580, the department shall provide special incentives to encourage the financing of businesses located in distressed areas, including distressed rural areas, and the financing of minority-owned businesses. In this subsection,
     (1) “member of a minority” includes a person who is black, Hispanic, or Alaska Native;

     (2) “minority-owned business” means a business that is owned, controlled, and operated by an individual who is a member of a minority and in which more than 50 percent of the net profit or loss attributable to the business accrues to a member of a minority.

 (b) When determining under (a) of this section whether an area is distressed or how distressed an area is, the department may use, individually or in combination, factors that may include unemployment, poverty, lack of access to the state highway system, lack of access to a marine transportation system, or other factors the department determines to be appropriate.




Sec. 37.17.600. Terms of BIDCO capitalization loans.
When determining the amount or range of amount for a BIDCO capitalization loan, the term to maturity of the loan, the interest rate for the loan, the additional capital requirements for the loan, and the formula for earning credits under the loan, the department shall consider the following objectives:
     (1) that the BIDCO will have adequate capitalization to support a highly qualified management team, to implement a business plan that, when combined with the management team, will promote confidence in the prospects of the BIDCO for long-term financial success and viability, and to otherwise promote the purposes of AS 37.17.500 — 37.17.690;

     (2) that the additional capital requirement is in an amount that encourages the BIDCO to raise as much capital as feasible from sources other than the BIDCO capitalization loan, without unduly hindering the ability of the BIDCO to become operational;

     (3) that the formula for earning credits under AS 37.17.580, combined with the other terms and conditions of the loan, will be designed so that, with a reasonable performance by the BIDCO, the BIDCO will be able to earn sufficient credits to reduce the amount of principal and interest owed on the loan to zero by or before the end of the loan term; and

     (4) that the formula for earning credits under AS 37.17.580, combined with the other terms and conditions of the loan, is sufficiently challenging that the special incentives provided by the credits allowed under AS 37.17.580 remain in effect for the longest feasible time during the loan term as is consistent with meeting the other objectives identified in this section.




Sec. 37.17.610. Access to meetings and information.
While a BIDCO loan is outstanding and the obligations of the BIDCO to the department remain undischarged, the BIDCO shall allow the department to have a representative present at all meetings of the BIDCO’s board of directors and of the BIDCO’s shareholders, to receive all notices and information sent to the board of directors or the shareholders, to have the same access to information about the BIDCO as the directors have and as the shareholders have, and to receive additional reports or information from the BIDCO that the department reasonably requests.


Sec. 37.17.620. BIDCO operation limitation.
While a BIDCO loan is outstanding and the obligations of the BIDCO to the department remain undischarged, the BIDCO may not provide financing assistance to businesses located outside the state. If a business assisted by the BIDCO has multi-state or multi-national operations, the location of the business is where the largest economic benefit of the financing assistance transaction made by the BIDCO to the business is likely to occur.


Sec. 37.17.630. Surrender of BIDCO license.
While a BIDCO loan is outstanding and the obligations of the BIDCO to the department are not discharged, the BIDCO may not surrender its license under AS 10.13 without the written consent of the department.


Sec. 37.17.640. Closing assistance.
If determined by the department to be advisable, the department may use money in the Alaska BIDCO fund to provide assistance to a person to complete the tasks necessary for the person to achieve a closing on a BIDCO capitalization loan. The department may provide the assistance on the terms and conditions that the department determines appropriate.


Sec. 37.17.650. Confidentiality.
In order to promote the purposes of AS 37.17.500 — 37.17.690, the department may establish policies under which it will keep confidential proprietary information submitted to the department by an applicant for a loan or other financial assistance under AS 37.17.500 — 37.17.690 and by a BIDCO that has received a loan or other financial assistance under AS 37.17.500 — 37.17.690. The information that is determined to be confidential under this section is not a public record under AS 40.25.110 — 40.25.220.


Sec. 37.17.660. Subsequent loans.
Subject to the provisions of AS 37.17.520(b), if the department determines that a BIDCO, after receiving a BIDCO capitalization loan, has performed well financially and in promoting the purposes of AS 37.17.500 — 37.17.690, and if more than four years have elapsed since the loan was made, the department may make an additional loan to the BIDCO, on the terms and conditions that the department considers appropriate.


Sec. 37.17.690. Definitions.
In AS 37.17.500 — 37.17.690,
     (1) “additional capital” means the additional capital required under AS 37.17.550(a)(3);

     (2) “BIDCO” means a corporation licensed under AS 10.13;

     (3) “BIDCO capitalization loan” means a loan made under AS 37.17.530 for the initial capitalization of a BIDCO;

     (4) “BIDCO loan” means a BIDCO capitalization loan or a subsequent loan made under AS 37.17.660;

     (5) “department” means the Department of Commerce, Community, and Economic Development.




Chapter 20. Acceptance of Federal Funds.

Sec. 37.20.010. Acceptance of federal grants and transfers of property.
The governor is authorized to accept on behalf of the state all federal grants and transfers of property of an emergency, transitional, or omnibus nature upon conditions imposed by the federal government.


Sec. 37.20.020. Federal Transitional Grants Account. [Repealed, § 12 ch 42 SLA 1997.]
Sec. 37.20.030. Jurisdiction of accepted property.
 (a) All chattels accepted under the provisions of AS 37.20.010 are subject to the jurisdiction of the Department of Administration for distribution to the appropriate department.

 (b) All land accepted under the provisions of AS 37.20.010 is subject to the jurisdiction of the Department of Natural Resources.

 (c) All public buildings accepted under the provisions of AS 37.20.010 are subject to the jurisdiction of the Department of Transportation and Public Facilities.




Sec. 37.20.040. Alaska Native Fund. [Repealed, § 64 ch 14 SLA 1987.]

Chapter 23. Investment Pools for Public Entities.

Sec. 37.23.010. Investment pool participation.
 (a) Subject to this chapter, a public entity may enter into an agreement with other public entities to form and manage an investment pool under which funds of the participating public entities are administered and invested jointly. A public entity, by itself or with other public entities, may form a nonprofit corporation for the purpose of managing an investment pool.

 (b) A public entity participating in an investment pool or a nonprofit corporation formed under (a) of this section may spend money reasonably necessary for the management of the pool, including the employment of staff. Income from investments of the pool may be used for management costs.

 (c) The registration requirements of AS 45.55 do not apply to an investment pool formed under this chapter or to participating public entities with respect to activities of the pool.




Sec. 37.23.020. Authorized investments.
An investment pool may invest only in securities that have a final maturity date within 13 months after the date of purchase, except that floating rate securities with a final maturity date that is longer than 13 months may be purchased if they are subject to at least an annual reset. Investments may only include
     (1) obligations of the United States and of an agency or instrumentality of the United States;

     (2) repurchase and reverse repurchase agreements secured by the Treasury of the United States and obligations of an agency or instrumentality of the United States;

     (3) certificates of deposit, bankers acceptances, and other similar obligations of a bank domiciled in the United States that has
          (A) outstanding debt rated A or higher by at least one of the nationally recognized rating services, including dollar-denominated obligations issued by a United States branch of a foreign bank if the debt of the parent is rated A or higher; and

          (B) a combined capital and surplus aggregating at least $500,000,000;

     (4) commercial paper and other short-term taxable instruments that, at the time of investment, maintain the highest rating by at least two nationally recognized rating services;

     (5) obligations of a corporation domiciled in the United States or obligations of a municipality that are taxable under federal law if the obligations are rated A or higher by at least two nationally recognized rating services at the time of investment;

     (6) certificates of deposit that are issued by a state or federally chartered financial institution that is a commercial or mutual bank, savings and loan association, or credit union and if the institution’s accounts are insured through the appropriate federal insuring agency of the United States, regardless of whether the institution meets the requirements of (3) of this section;

     (7) money market funds in which the securities of the fund consist of obligations listed in this section and otherwise meet the requirements of this chapter;

     (8) other cash equivalent investments with a maturity date of one year or less after date of the investment that are of similar quality to those listed in (1) — (7) of this section, are rated A or higher by at least one of the nationally recognized rating services, and are approved by the public entities participating in that investment pool.




Sec. 37.23.030. Collateralization.
Investment in certificates of deposit under AS 37.23.020(6) and the entire amount of principal and interest payable upon maturity of the certificates must be collateralized by a combination of securities that are marked to market at least monthly and have maturity dates that do not exceed five years. Only the following securities may serve as collateral:
     (1) obligations of the United States with a maturity date of five years or less after the date of the pool’s investment transaction, and with a market value of at least 102 percent;

     (2) securities in United States agencies or instrumentalities that are actively traded, other than mortgage pass-through securities, with a maturity date of
          (A) one year or less after the date of the pool’s investment transaction, and with a market value of at least 103 percent;

          (B) more than one year and less than five years after the date of the pool’s investment transaction, and with a market value of at least 107 percent;

     (3) mortgage pass-through securities issued by the Government National Mortgage Association with a market value of at least 120 percent;

     (4) obligations of the state or its political subdivisions secured by the full faith, credit, and taxing power of the state or its political subdivisions, rated A or higher by at least one of the nationally recognized rating services, with a maturity date of
          (A) one year or less after the date of the pool’s investment transaction, and with a market value of at least 102 percent;

          (B) more than one and less than five years after the date of the pool’s investment transaction, and with a market value of at least 107 percent.




Sec. 37.23.035. Securities lending.
Securities held by an investment pool may be loaned if the securities are fully collateralized and the collateral is, for safekeeping, in the possession of a person who is independent of the borrowers. The collateral must meet institutional and prudent investor standards. All pool proceeds from securities lending must inure to the benefit of investment pool participants.


Sec. 37.23.040. Portfolio restrictions.
The portfolio of an investment pool under this chapter may not contain
     (1) more than five percent of total investments in securities of one issuer unless the securities are an obligation of or guaranteed by the United States; or

     (2) transactions in futures, options, derivative securities, or short sales.




Sec. 37.23.050. Investment management.
The public entities participating in an investment pool under this chapter shall provide for management of investments in the pool by contracting for investment management and related services with
     (1) a securities broker-dealer registered under AS 45.55.030 and under 15 U.S.C. 78o (Securities Exchange Act of 1934);

     (2) a state investment adviser registered under AS 45.55.030 or a federal covered adviser that has made a notice filing under AS 45.55.040(h);

     (3) the Department of Revenue; or

     (4) a financial institution that is a state or federally chartered commercial or mutual bank, savings and loan association, or credit union if the institution’s accounts are insured through the appropriate federal insuring agency of the United States and if the institution has trust powers under state or federal law.




Sec. 37.23.060. Investment responsibilities.
The management and investment of assets by investment pools shall be done with the care, skill, prudence, and diligence under the circumstances then prevailing that an institutional investor would use in the conduct of an enterprise of a like character and with like aims.


Sec. 37.23.070. Reports; disclosure statement.
 (a) The manager of an investment pool shall provide to the participating public entities a monthly report on the allocation of income of investments of the pool and describing activities of the pool. At least annually, the manager of an investment pool shall provide a disclosure statement on the management and operation of the pool to each public entity participating in the pool. The disclosure statement must include a copy of the annual audit required under AS 37.23.080.

 (b) A public entity participating in an investment pool that is an organization composed of political subdivisions of the state shall promptly provide a copy of each report or statement received under (a) of this section to its members who are participating in the investment pool.

 (c) The manager of an investment pool shall provide to a prospective participant in the pool copies of monthly reports prepared under (a) of this section for the past year, and a copy of the most recent disclosure statement prepared under (a) of this section.




Sec. 37.23.080. Annual audit.
By September 30 of each year, the manager of an investment pool shall submit to the participating public entities an audit of the pool’s investments as of June 30 of that year. The audit must be performed by a certified public accountant licensed under AS 08.04 who is not
     (1) an employee of a public entity participating in the investment pool; or

     (2) a contractor or an employee of a contractor who performed investment services for the investment pool.




Sec. 37.23.090. Limitation of liability.
The state, except when providing investment management and related services under AS 37.23.050(3), and participating public entities are not liable for any acts or omissions of an investment manager with whom the participating entities have contracted for investment management and related services under AS 37.23.050.


Sec. 37.23.900. Definition of “public entity.”
In this chapter, “public entity” means a political subdivision of the state, including a municipality and its subdivisions, a school district, a regional educational attendance area, or an organization composed of political subdivisions of the state.


Chapter 25. Appropriations.

Sec. 37.25.010. Unexpended balances of one-year appropriations.
 (a) The unexpended balance of a one-year appropriation authorized in an appropriation bill lapses on June 30 of the fiscal year for which appropriated. However, a valid obligation (encumbrance) existing on June 30 is automatically reappropriated for the fiscal year beginning on the succeeding July 1 if it is recorded with the Department of Administration by August 31 of the succeeding fiscal year.

 (b) A valid approved claim arising from a prior year for which the appropriation has lapsed shall be paid from the current year’s appropriations if this claim does not exceed the balance lapsed.

 (c) University receipts received on or before June 30 of a fiscal year in excess of the amount expended for that year may be expended in the succeeding fiscal year if an appropriation of university receipts has been made for the succeeding fiscal year. The amount of university receipts expended in a fiscal year may not exceed the amount of university receipts appropriated for that year.

 (d) The University of Alaska shall, in the report required under AS 14.40.190(a), report the amount of university receipts received in one year and expended in the succeeding fiscal year.

 (e) In this section, “university receipts” has the meaning given in AS 14.40.491.




Sec. 37.25.020. Unexpended balances of appropriation for capital projects.
An appropriation made for a capital project is valid for the life of the project, and the unexpended balance shall be carried forward to subsequent fiscal years if substantial, ongoing work on the project has begun within five years after the effective date of the appropriation. Between July 1 and August 31 of each fiscal year, a statement supporting the amount of the unexpended balance required to complete the projects for which the initial appropriation was made and the amount that may be lapsed shall be recorded with the Department of Administration. The office of management and budget, in coordination with the Department of Administration, shall deliver to the house and senate finance committees a report of unexpended balances of appropriations for capital projects not later than the 15th day of each regular session of the legislature.


Sec. 37.25.030. Appropriations for projects of the Alaska energy center. [Repealed, § 65 ch 14 SLA 1987.]
Sec. 37.25.040. [Renumbered as AS 37.05.530.]
Sec. 37.25.050. Methods of disbursement.
 (a) Except as provided in (b) of this section, unless federal law requires otherwise, a state agency may not disburse money unless the disbursement is made
     (1) by an electronic funds transfer to an account in a financial institution; or

     (2) from an account established by the state agency by contract with a financial institution under which a person uses an electronic payment card issued by the financial institution to access the money.

 (b) A state agency is not required to use the disbursement methods described in (a) of the section if
     (1) another state law or federal law requires that disbursement be made by another disbursement method;

     (2) use of the disbursement methods would cause substantial hardship to the recipient of the disbursement;

     (3) not more than five disbursements will be made to a recipient, or, on average, to each recipient entitled to disbursement under the program for which the disbursements are made;

     (4) a vendor or grantee elects not to be paid by the disbursement methods;

     (5) the disbursement is to a state employee and
          (A) is the only disbursement that the state agency will make to the employee for the employment; or

          (B) it is in the best interests of the state agency or the employee to use another disbursement method to pay the employee; or

     (6) use of another disbursement method is in the best interests of the state agency.

 (c) The commissioner of administration shall adopt regulations to implement (b) of this section.

 (d) A state agency is not liable to pay a fee imposed by a recipient’s financial institution for a disbursement made under (a) of this section.

 (e) In this section,
     (1) “disbursement” includes wages and other employment benefits;

     (2) “state agency” means a department, institution, board, commission, division, authority, public corporation, committee, or other administrative unit of the executive branch of state government, including the University of Alaska.




Chapter 30. Local Government Bonding.

Secs. 37.30.010 — 37.30.090. Anticipatory borrowing. [Repealed, § 1 ch 118 SLA 1972.]
Sec. 37.30.100. Prohibited bidding on bonds.
 (a) A person who provides financial programming or marketing assistance to a political subdivision of the state, whether home rule or otherwise, in connection with the issuance or sale of general obligation bonds, revenue bonds, or bond anticipation notes of the political subdivision may not bid on the bonds or notes if offered at public sale, or negotiate for their purchase if sold at private sale.

 (b) The sale of general obligation, revenue bonds, or bond anticipation notes of a political subdivision to a person prohibited from bidding on, or negotiating for the sale of bonds or notes under (a) of this section is against public policy and the sale is void.

 (c) In this section “person” means an individual, firm, agent, factor, intermediary, partnership, corporation, association, bond house, stockbroker, or bond broker.




Chapter 35. Alaska Paperwork Reduction and Simplification Act.

[Repealed, § 67 ch 59 SLA 1982.]

Title 38. Public Land.