2018-11-07                     Senate Journal                      Page 3241
SB 97                                                                                                                         
Message dated September 28 was received stating:                                                                                
                                                                                                                                
Dear President Kelly:                                                                                                           
                                                                                                                                
Under the authority of article II, section 17, of the Alaska Constitution,                                                      
I have let the following bill become law without signature:                                                                     
                                                                                                                                
                  HOUSE CS FOR SENATE BILL NO. 97(FIN) am H                                                                    
         "An Act relating to pension obligation bonds."                                                                         
                                                                                                                                
                            Chapter 109, SLA 2018                                                                              
                         [Effective Date: 12/26/18]                                                                            
                                                                                                                                
Although I understand the necessary role of the Legislature in setting                                                          
limits on the issuance of pension bonds, I am concerned that the                                                                
approach taken in HCS SB 97(FIN) am H adds unnecessary steps to                                                                 
the bond issuance process and unnecessarily restricts the pension                                                               
obligation bond limit. Neither of these legislative changes are needed,                                                         
and they may hinder responsible and timely pension obligation bond                                                              
issuance in the future.                                                                                                         
                                                                                                                                
Responsible management of the State’s unfunded pension obligations                                                              
is necessary to assure the State’s fiscal future and to meet our                                                                
obligations to system beneficiaries. In 2008, the Legislature, through                                                          
enactment of statutes allowing the issuance of pension obligation                                                               
bonds, recognized that pension obligation bonds were one means to                                                               
address and pay down unfunded pension obligations. Accordingly, the                                                             
Legislature set up a rigorous structure to assure careful consideration                                                         
of pension obligation bonds. However, with the changes in this bill, I                                                          
am concerned that the process will be unduly hampered at no benefit                                                             
to the state.                                                                                                                   
                                                                                                                                
First, this bill will require the Alaska Housing Finance Corporation                                                            
(through a subsidiary), the Alaska Pension Obligation Bond                                                                      
Corporation, the State bond committee, and the Alaska Municipal                                                                 
Bond Bank Authority, to submit a pension bond proposal to the                                                                   
Legislative Budget and Audit Committee for a 45-day period of                                                                   
review.