2001-01-16                     House Journal                      Page 0097
HB 64                                                                                             
HOUSE BILL NO. 64 by the House Rules Committee by request of                                        
the Governor, entitled:                                                                             

2001-01-16                     House Journal                      Page 0098
     "An Act relating to international airports revenue bonds; and                                  
     providing for an effective date."                                                              
                                                                                                    
was read the first time and referred to the Transportation and Finance                              
Committees.                                                                                         
                                                                                                    
The following fiscal note(s) apply:                                                                 
                                                                                                    
1.  Fiscal, Dept. of Revenue                                                                        
                                                                                                    
The Governor's transmittal letter dated January 12, 2001, appears                                   
below:                                                                                              
                                                                                                    
"Dear Speaker Porter:                                                                               
                                                                                                    
The Alaska International Airports System (AIAS), comprised of the                                   
Ted Stevens Anchorage International Airport and the Fairbanks                                       
International Airport, is a vital and growing part of our economy.  The                             
AIAS and the state's major air carriers are now finalizing a new                                    
operating agreement aimed at continued system development.                                          
Included in the agreement are plans for capital improvements to the                                 
system using revenue bonds, which this bill I transmit today would                                  
authorize.                                                                                          
                                                                                                    
This bill increases the current cumulative authorization for revenue                                
bonds for international airport capital improvements by  $147,900,000                               
-- from $305 million to $452,900,000.  This is intended to support                                  
capital improvement programs for fiscal years 2002 and 2003.                                        
                                                                                                    
Funding for operations and capital improvements of the two airports is                              
covered by charges for the use of airport facilities, primarily paid by                             
commercial airlines, plus some federal capital grants.  The new                                     
operating agreement under negotiation with the participating airlines                               
includes a five-year capital improvement program.  The airlines have                                
requested, and the airport system has agreed, to shift to revenue bond                              
funding rather than the historic method of financing capital                                        
improvements through annual capital charges paid by the airlines.                                   
While repayment of the bonded debt and debt service would still be                                  
covered with charges paid by the airlines, revenue bonds would allow                                
payments to be spread over the useful life of airport projects.                                     

2001-01-16                     House Journal                      Page 0099
The current bonding authority cap of $305 million has been exhausted.                               
The authority sought in this bill would increase the revenue bond                                   
authorization limit to permit two years of capital improvements to be                               
addressed in a single revenue bond issue, reducing costs related to the                             
debt issuance.                                                                                      
                                                                                                    
In order to assure timely project development, I urge your prompt and                               
favorable action on this measure.                                                                   
                                                                                                    
                                Sincerely,                                                         
                                /s/                                                                 
                                Tony Knowles                                                        
                                Governor"