2006-01-18                     House Journal                      Page 2305
HB 381                                                                                            
HOUSE BILL NO. 381 by the House Rules Committee by request of                                       
the Governor, entitled:                                                                             
                                                                                                    
     "An Act relating to the financing of construction, major                                       
     maintenance, and renovation of facilities for the University of                                
     Alaska; relating to the financing of construction of a correctional                            
     facility; authorizing the commissioner of revenue to sell the right                            
     to receive a portion of the anticipated revenue from a tobacco                                 
     litigation settlement to the Northern Tobacco Securitization                                   
     Corporation, with the proceeds of that sale to finance construction,                           
     major maintenance, and renovation of facilities for the University                             
     of Alaska and to finance the construction of a correctional facility;                          
     providing for the establishment of funds for deposit of those                                  
     proceeds; authorizing the issuance of bonds by the Northern                                    
     Tobacco Securitization Corporation for the purpose of acquiring                                
     the right to receive a portion of anticipated revenue from a tobacco                           
     litigation settlement; and providing for an effective date."                                   
                                                                                                    
was read the first time and referred to the Finance Committee.                                      
                                                                                                    
The following fiscal note(s) apply:                                                                 
                                                                                                    
1.  Zero, Dept. of Administration                                                                   
                                                                                                    
The Governor's transmittal letter dated January 17, 2006, follows:                                  
                                                                                                    
"Dear Speaker Harris:                                                                               
                                                                                                    
Under the authority of art. III, sec. 18, of the Alaska Constitution, I am                          
transmitting a bill relating to the financing of construction, major                                
maintenance, and renovation of facilities for the University of Alaska;                             
relating to the financing of construction of a correctional facility;                               

2006-01-18                     House Journal                      Page 2306
authorizing the commissioner of revenue to sell the right to receive a                              
portion of the anticipated revenue from a tobacco litigation settlement                             
to the Northern Tobacco Securitization Corporation, with the proceeds                               
of that sale to finance construction, major maintenance, and renovation                             
of facilities for the University of Alaska and to finance the                                       
construction of a correctional facility; providing for the establishment                            
of funds for deposit of those proceeds; and authorizing the issuance of                             
bonds by the Northern Tobacco Securitization Corporation for the                                    
purpose of acquiring the right to receive a portion of anticipated                                  
revenue from a tobacco litigation settlement.                                                       
                                                                                                    
This bill is quite similar to previous measures that securitized a total of                         
80 percent of the tobacco Master Settlement Agreement revenue                                       
stream.  See secs. 9 and 10, ch. 130, SLA 2000 and secs. 3 and 4, ch.                               
96, SLA 2001.  This bill would securitize the residual revenue stream                               
that reverts back to the general fund once the outstanding tobacco                                  
bonds authorized by the previous legislation are repaid.  In other                                  
words, that 80 percent of the revenue stream from the settlement of                                 
State of Alaska v. Philip Morris, Incorporated, et al, No. 1JU-97-915                               
CI (Alaska Super. 1997) will remain securitized for a longer period.                                
The bill anticipates that the state will realize at least $89,250,000 in                            
proceeds, with a possibility that additional amounts would be raised.                               
The bill authorizes the proceeds to be spent on certain University of                               
Alaska capital projects, and on a prison in the Matanuska-Susitna                                   
Borough, subject to appropriation for those purposes.                                               
                                                                                                    
I urge your prompt and favorable action on this measure.                                            
                                                                                                    
                                Sincerely yours,                                                    
                                /s/                                                                 
                                Frank H. Murkowski                                                  
                                 Governor"