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