Legislature(2003 - 2004)
2003-05-09 House Journal
Full Journal pdf2003-05-09 House Journal Page 1518 HB 315 HOUSE BILL NO. 315 by the House Rules Committee by request of the Governor, entitled: "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 May 9, 2003, follows: "Dear Speaker Kott: Under the authority of art. III, sec. 18, of the Alaska Constitution, I am transmitting a bill relating to bond funding of capital improvements for the Alaska International Airports System. The bill increases the cumulative authorization for international airports revenue bonds, allowing the sale of up to $76,600,000 in new revenue bonds to support capital improvement programs for FY 04 through FY 06 at the Ted Stevens Anchorage International Airport and Fairbanks International Airport, referred to collectively as the Alaska International Airports System (AIAS), and certain passenger terminal renovation work at the Ted Stevens Anchorage International Airport. Funding for operations and capital improvements of the AIAS is obtained from charges for the use of airport facilities, primarily paid 2003-05-09 House Journal Page 1519 by commercial airlines. The AIAS and the airlines that are signatories to the International Airports System Operating Agreement have agreed to a capital improvement program approved by the signatory airline ratepayers under the operating agreement. Under the operating agreement, effective from September 1, 2001 through June 30, 2006, the AIAS has shifted from cash funding long-term projects in advance through annual capital charges paid by the airlines through rates and fees, to revenue bond funding for most projects. Revenue bond funding allows annual debt service to be paid through airline rates and fees spread over longer periods of time, such as the useful life of airport projects. The bonds are not a general obligation of the state, and the state does not pledge its faith and credit to the payment of the bonds. The issuance of the bonds does not directly or indirectly or contingently obligate the state or any political subdivision thereof to apply money from, or levy or pledge, any form of taxation whatever to the payment of the bonds. Additional bond authorization under AS 37.15.410 was granted in 2001 to implement the capital improvement program for the first two years of the Operating Agreement. Additional bond authorization is now required to finance the continuation of the capital improvement program. AS 37.15.410 currently authorizes the state to issue up to $447,900,000 of revenue bonds to support airport projects. This authority, cumulative since the inception of AS 37.15.410, will be exhausted by June 30, 2003, with outstanding bond principal standing at $368,200,000. The authority sought in this bill would increase the bond authorization limit to finance three more years of capital improvements at both the Ted Stevens Anchorage International Airport and Fairbanks International Airport, as well as completion costs of the redevelopment of Concourse C at the Ted Stevens Anchorage International Airport passenger terminal. By covering these needs in a single new bond issue, the state would be able to reduce costs related to the debt issuance. The Alaska International Airports System is an increasingly vital and growing part of our economic engine. The airports system and the state's major air carriers propose to continue developing our world- class international airports through the implementation of the 2003-05-09 House Journal Page 1520 International Airports Operating Agreement, supported by the issuance of these additional revenue bonds. In order to assure timely project development, I urge your prompt and favorable action on this measure. Sincerely, /s/ Frank H. Murkowski Governor"