2000-01-26                     House Journal                      Page 2007
HB 319                                                                       
HOUSE BILL NO. 319 by the House Rules Committee by request of                  
the Governor, entitled:                                                        
                                                                               
"An Act providing for and relating to the issuance of state                   
guaranteed transportation revenue anticipation bonds for the                   
purpose of paying the cost of transportation projects that qualify             
for federal highway aid and the allocation of those bond proceeds;             
and providing for an effective date."                                          
                                                                               
was read the first time and referred to the Transportation and Finance         
Committees.                                                                    
                                                                               
                                                                               
The following fiscal notes apply:                                              
                                                                               
Fiscal note, Dept. of Revenue, 1/26/00                                         
Zero fiscal note, Dept. of Transportation & Public Facilities, 1/26/00         
                                                                               
                                                                               
The Governor's transmittal letter dated January 24, 2000, appears              
below:                                                                         
                                                                               
"Dear Speaker Porter:                                                          
                                                                               
Today I am transmitting a bill that would authorize the issuance of            
$350,000,000 in transportation revenue anticipation bonds to finance           
the accelerated construction of several transportation projects                
throughout the state.                                                          
                                                                               
In recent years Alaskas allocation of federal highway funds has                
dramatically increased to approximately $350 million annually.                 
Despite an aggressive six-year state transportation plan that addresses        
continued improvements to the states highways, marine transportation,          
local roads and trails throughout the state, many important                    
transportation needs remain unaddressed.  We must do all we can -- as          

2000-01-26                     House Journal                      Page 2008
HB 319                                                                       
soon as we can -- to keep up with those critical needs.  Now, thanks           
to an innovative federal program, we have an opportunity to build our          
transportation infrastructure statewide in the near future, rather than the    
long-term.                                                                     
                                                                               
                                                                               
The projects to be financed with bond proceeds would all qualify for           
federal highway aid.  Because of this qualification, future federal            
highway aid can be used to pay most of the principal and interest that         
will be due on the bonds.  It might also be possible to use interest           
earned on bond proceeds to satisfy federal requirements for state match        
money.                                                                         
                                                                               
                                                                               
The advantage of this method of financing is to allow the state to             
obtain enough money to begin construction of these vital projects now          
without having to wait for federal highway aid in the future.  The             
projects set out in the bill -- from Southeast Alaska to Anchorage to          
Fairbanks to Kotzebue -- address pressing transportation needs that            
cannot be funded with federal dollars over the next 10 years or more.          
Using this approach can also save money by avoiding inflationary               
costs that would accrue to each project if left for future construction.       
                                                                               
                                                                               
The bonds would be secured by a state guarantee to bondholders.  The           
guarantee will afford the bonds the state's favorable credit rating and        
will make them a readily marketable security to potential investors.           
The guarantee is provided by using the authorization process for               
general obligation bonds.  This process requires approval of the bill by       
the legislature and ratification by the voters at the next general             
election.                                                                      
                                                                               
                                                                               
I urge your prompt and favorable action on this innovative approach            
to accelerate important transportation projects.                               
                                                                               
							Sincerely,                                                              
							/s/                                                                     
							Tony Knowles                                                            
							Governor"