2001-02-26                     Senate Journal                      Page 0503
SB 118                                                                                            
SENATE BILL NO. 118 BY THE SENATE RULES COMMITTEE                                                   
BY REQUEST OF THE GOVERNOR, entitled:                                                               
                                                                                                    
          "An Act relating to the issuance of certificates of                                       
          participation to finance deferred maintenance and                                         
          construction projects for certain public harbor                                           
          facilities; giving notice of and approving the entry                                      
          into, and the issuance of certificates of participation                                   
          in, lease- financing agreements for those public                                          
          harbor facility projects; repealing a provision relating                                  
          to the financing of construction and renovation of                                        
          facilities for certain ports and harbors; and providing                                   
          for an effective date."                                                                   
                                                                                                    

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was read the first time and referred to the Transportation, Judiciary,                              
and Finance Committees.                                                                             
                                                                                                    
The following fiscal information was published today:                                               
 Fiscal Note No. 1, Department of Revenue                                                           
                                                                                                    
Governor's transmittal letter dated February 22:                                                    
                                                                                                    
Dear President Halford:                                                                             
                                                                                                    
The Department of Transportation and Public Facilities has a long-                                  
term goal of bringing state-owned harbor facilities up to suitable                                  
standard and divesting ownership to the municipalities that operate                                 
them. Once deferred maintenance needs are addressed, the                                            
municipalities can support operation and maintenance of these                                       
valuable facilities through moorage and other fees. In recent years                                 
when transferring harbor ownership to the municipalities, the state has                             
provided grant money as well to address deferred maintenance needs.                                 
This bill I transmit today would continue the policy, but leverages                                 
state general funds through issuance of certificates of participation.                              
From the municipalities' perspective, this is essentially the same as a                             
grant program.                                                                                      
                                                                                                    
Certificates of participation (COPs) are an accepted form of financing                              
that the state has used for many capital projects with high credit                                  
ratings -- just one notch below the state's general obligation rating.                              
Pooling the group of harbor transfers in this bill into one bond sale                               
also adds efficiency.                                                                               
                                                                                                    
The bill identifies the marine motor fuel tax as the likely source of                               
appropriations to retire the certificates. The bill also authorizes                                 
payments for the harbor facilities projects to be made from any other                               
valid revenue source, subject to appropriation.                                                     
                                                                                                    
The bill repeals AS 29.60.700 passed by the Legislature last year,                                  
which required municipalities to pass general obligation bonds for                                  
harbor upgrades and transfers with the state reimbursing the cost of                                
bond payments after a two-year delay. All of the affected                                           
municipalities found that plan to be burdensome and ultimately                                      
unworkable and city councils or local assemblies in seven of nine                                   

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municipalities passed resolutions opposing the bonding provisions.                                  
The financing method in this bill is acceptable to the municipalities                               
and will, therefore, achieve the state's goal of upgrading and                                      
transferring ownership of locally operated harbor facilities.                                       
                                                                                                    
I urge your prompt and favorable action on this measure.                                            
                                                                                                    
       Sincerely,                                                                                   
       /s/                                                                                          
       Tony Knowles                                                                                 
       Governor