(a) Subject to AS 44.85.100(b), the bond bank authority may issue its bonds or notes in principal amounts that it considers necessary to provide funds for any purposes under this chapter, including

(1) the purchase of municipal bonds;

(2) the making of loans through the purchase of municipal bonds, notes, or certificates of participation secured by an agreement between the bond bank authority and a municipality or a municipal joint insurance arrangement organized under AS 21.76;

(3) the payment, funding, or refunding of the principal of, or interest or redemption premiums on, bonds or notes issued by it whether the bonds or notes or interest to be funded or refunded have or have not become due;

(4) the establishment or increase of reserves to secure or to pay bonds or notes or interest on bonds or notes and all other costs or expenses of the bond bank authority incident to and necessary or convenient to carry out its corporate purposes and powers;

(5) assisting governmental employers to prepay all or a portion of their share of the unfunded accrued actuarial liabilities of retirement systems, with security as the bond bank authority considers reasonable; however, to carry out this paragraph, bonds and other obligations may only be issued after submitting a proposal to the Legislative Budget and Audit Committee under (f) of this section and if the state bond rating is the equivalent of AA- or better; bonds issued under this paragraph are subject to AS 37.15.903.

(b) Except as otherwise provided in this chapter or by the bond bank authority, every issue of bonds or notes shall be general obligations payable out of the revenues or funds of the bond bank authority, subject only to agreements with the holders of particular bonds or notes pledging a particular revenue or fund. Bonds or notes may be additionally secured by a pledge of a grant or contributions from the United States or the state or a political subdivision or a person, firm, or corporation, or a pledge of income or revenues, funds or money of the bond bank authority from any source whatsoever.

(c) Notwithstanding the provisions of (a) and (b) of this section, the total amount of bond bank authority bonds and notes outstanding at any one time may not exceed $1,500,000,000. This subsection does not apply to

(1) bonds or notes issued to fund or refund bonds or notes;

(2) bonds, notes, commercial paper, and other obligations issued under AS 44.85.086 or (a)(5) of this section.

(d) In deciding to purchase municipal bonds, the bond bank authority shall give preference to the entities referred to in AS 44.85.005. In addition, the following, listed in order of preference, are preferred purposes of the municipal bonds that may be considered by the bond bank authority for purchase: schools, waste water treatment facilities, fire protection and public safety facilities, public health facilities, and public transportation facilities.

(e) Notwithstanding (a), (b), and (c) of this section, the bond bank authority may issue its bonds or notes

(1) in principal amounts not to exceed $87,500,000 for the purpose of making loans to the University of Alaska; and

(2) in principal amounts not to exceed $205,000,000 at any one time for the purpose of making loans to a regional health organization; this paragraph does not apply to bonds or notes issued to fund or refund bonds or notes.

(f) Before the issuance of bonds or other obligations under this section, the bond bank authority shall submit a proposal to the Legislative Budget and Audit Committee for review, and 45 days shall elapse before bonds or other obligations are issued, unless the Legislative Budget and Audit Committee earlier recommends that the bond bank authority proceed with the issuance. Should the Legislative Budget and Audit Committee recommend within the 45-day period that the bond bank authority not proceed with the issuance of bonds or other obligations, the bond bank authority shall again review the proposal, and, if the bond bank authority decides to issue the bonds or other obligations, the bond bank authority shall provide the Legislative Budget and Audit Committee with a statement of the bond bank authority's reasons for doing so before issuance under this section.