Legislature(2003 - 2004)
2003-01-31 Senate Journal
Full Journal pdf2003-01-31 Senate Journal Page 0088 SB 51 SENATE BILL NO. 51 BY THE SENATE RULES COMMITTEE BY REQUEST OF THE GOVERNOR, entitled: "An Act relating to revenue bonds issued by the Alaska Municipal Bond Bank Authority and the total amount of bonds and notes outstanding of that authority; and providing for an effective date." was read the first time and referred to the Community and Regional Affairs and Finance Committees. The following fiscal information was published today: Fiscal Note No. 1, zero, Department of Revenue Governor's transmittal letter dated January 30: Dear President Therriault: Under the authority of art. III, sec. 18, of the Alaska Constitution, I am transmitting a bill relating to revenue bonds issued by the Alaska Municipal Bond Bank Authority and the total amount of bonds and notes outstanding of that authority. The Alaska Municipal Bond Bank Authority (AMBBA) was created in 1975 to assist Alaskan municipalities issue bonds for local projects. The AMBBA is able to realize savings for municipalities by pooling bonds in large numbers and obtaining lower interest rates that result in reduced costs for bond issuance, and often better terms overall, that would not be obtainable by municipalities on their own. The purpose of this bill is to raise the limit on the amount of revenue bonds that the AMBBA may issue in any one fiscal year and to raise the limit on the total outstanding bond debt the AMBBA may carry at any one time. These limits have not been raised by the legislature since 1983 and 1984, respectively. An increase in the annual bonding cap under AS 44.85.100(b) from $50,000,000 to $75,000,000, would enable the AMBBA to act on the 2003-01-31 Senate Journal Page 0089 applications it has already received from municipalities this fiscal year. Current fiscal year applications exceed $56,000,000. Further, an increase in the cap on the total outstanding bonds and notes from $300,000,000 to $500,000,000 under AS 44.85.180(c), would enable AMBBA to issue the bonds and notes already applied for as well as those that are anticipated, which may exceed $70,000,000. Reaching the annual fiscal year limit or the outstanding limits would prevent municipalities from proceeding with projects or prevent municipalities from using the financially more attractive debt terms that could be made available if the bonds are issued by AMBBA. An increase in the amount of the AMBBA's indebtedness limit will not have a fiscal impact on the state's general fund. Debt of the AMBBA is not a direct liability of the state. Additionally, municipalities that use the AMBBA to issue bonds pay all of the debt service on the bonds. And the AMBBA has sufficient reserve capacity to continue financing capital projects up to the requested $500,000,000 cap. Finally, in order to accommodate current fiscal year applications received by the AMBBA, an immediate effective date is included in the bill. I urge your prompt and favorable action on this measure. Sincerely Yours, /s/ Frank H. Murkowski Governor