Legislature(2005 - 2006)CAPITOL 124

04/20/2006 09:00 AM COMMUNITY & REGIONAL AFFAIRS


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Time Change --
+= SB 265 BONDS OF BOND BANK AUTHORITY TELECONFERENCED
Moved Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 299 MUNICIPAL PROPERTY TAX EXEMPTION TELECONFERENCED
Moved CSHB 299(CRA) Out of Committee
+= HB 429 RESTORE DCRA AND DCED TELECONFERENCED
Moved Out of Committee
SB 265-BONDS OF BOND BANK AUTHORITY                                                                                           
                                                                                                                                
CO-CHAIR OLSON announced  that the first order  of business would                                                               
be SENATE  BILL NO. 265, "An  Act increasing the total  amount of                                                               
bonds and  notes that  the Alaska  Municipal Bond  Bank Authority                                                               
may have outstanding; and providing for an effective date."                                                                     
                                                                                                                                
KIM  CARNOT,   Staff  to  Senator  Bert   Stedman,  Alaska  State                                                               
Legislature, explained  that SB  265 seeks  to increase  the bond                                                               
authority of the Alaska Municipal  Bond Bank (Bond Bank) from its                                                               
current statutory cap of $500 million  to $750 million.  The Bond                                                               
Bank's authority was last increased  in 2003 from $300 million to                                                               
$500 million.   She further  explained that the  Alaska Municipal                                                               
Bond Bank  helps municipalities  by lowering the  borrowing costs                                                               
for  the participants.   The  aforementioned  is accomplished  by                                                               
pooling bond issues, creating economies  of scale, and leveraging                                                               
the borrowing  power and credit  worthiness of the state.   Since                                                               
its inception  in 1975, it  has helped Alaska  communities secure                                                               
over  $800  million  in  financing  for  public  works  projects.                                                               
During that same  time, the Bond Bank has  returned $26.9 million                                                               
in excess earnings  to the state.  This year,  the Bond Bank will                                                               
return  a $652,000  dividend  to  the citizens  of  Alaska.   She                                                               
informed the committee  that last year the Bond  Bank issued $123                                                               
million in bonds  to Alaska communities and  through that process                                                               
saved those  communities $16.7 million  in issuance  and interest                                                               
costs.   For example, Bond Bank  funds have been used  for school                                                               
construction,   harbor   improvements,    hospitals,   and   road                                                               
construction in  various communities  in the  state.   Ms. Carnot                                                               
concluded by  relating that the  Bond Bank has  approximately $80                                                               
million  in   pending  applications  and  only   $50  million  in                                                               
borrowing  capacity.   Therefore, without  the proposed  increase                                                               
"we" will not be able to take advantage of the program.                                                                         
                                                                                                                                
9:06:07 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NEUMAN turned  attention to  the analysis  on the                                                               
fiscal note and  asked whether the funds from the  Bond Bank come                                                               
from the general fund.                                                                                                          
                                                                                                                                
9:06:40 AM                                                                                                                    
                                                                                                                                
THOMAS  BOUTIN,  Deputy   Commissioner,  Department  of  Revenue,                                                               
replied no, the funds come  from bond proceeds and bond earnings.                                                               
He  pointed out  that  the  Alaska Municipal  Bond  Bank has  one                                                               
employee who is also the state  debt manager.  Most of the costs,                                                               
he specified, of the Bond  Bank are issuance costs, bond counsel,                                                               
financial advisor, occasion trustee, and printing costs.                                                                        
                                                                                                                                
9:07:08 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  THOMAS moved  to report  SB 265  out of  committee with                                                               
individual  recommendations and  the  accompanying fiscal  notes.                                                               
Hearing no objections, SB 265  moved from the House Community and                                                               
Regional Affairs Standing Committee.                                                                                            
                                                                                                                                
9:08:01 AM                                                                                                                    
                                                                                                                                

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