2000-01-26                     Senate Journal                      Page 2079
SB 223                                                                       
SENATE BILL NO. 223 BY THE SENATE RULES COMMITTEE                              
BY REQUEST OF THE GOVERNOR, entitled:                                          
                                                                               
An Act providing for and relating to the issuance                             
of state guaranteed transportation revenue                                     
anticipation bonds for the purpose of paying the cost                          
of transportation projects that qualify for federal                            
highway aid and the allocation of those bond                                   
proceeds; and providing for an effective date.                                 
                                                                               
was read the first time and referred to the Transportation and                 
Finance Committees.                                                            
                                                                               
Fiscal note published today from Department of Revenue. Zero fiscal            
note published today from Department of Transportation and Public              
Facilities.                                                                    
                                                                               
Governors transmittal letter dated January 24:                                 
                                                                               
Dear President Pearce:                                                         
                                                                               
Today I am transmitting a bill that would authorize the issuance of            
$350,000,000 in transportation revenue anticipation bonds to finance           
the accelerated construction of several transportation projects                
throughout the state.                                                          
                                                                               
In recent years Alaskas allocation of federal highway funds has                
dramatically increased to approximately $350 million annually.                 
Despite an aggressive six-year state transportation plan that addresses        
continued improvements to the states highways, marine                          
transportation, local roads and trails throughout the state, many              
important transportation needs remain unaddressed. We must do all              
we can -- as soon as we can -- to keep up with those critical needs.           
Now, thanks to an innovative federal program, we have an                       
opportunity to build our transportation infrastructure statewide in the        
near future, rather than the long-term.                                        
                                                                               

2000-01-26                     Senate Journal                      Page 2080
SB 223                                                                       
The projects to be financed with bond proceeds would all qualify for           
federal highway aid. Because of this qualification, future federal             
highway aid can be used to pay most of the principal and interest              
that will be due on the bonds. It might also be possible to use                
interest earned on bond proceeds to satisfy federal requirements for           
state match money.                                                             
                                                                               
The advantage of this method of financing is to allow the state to             
obtain enough money to begin construction of these vital projects              
now without having to wait for federal highway aid in the future.              
The projects set out in the bill -- from Southeast Alaska to                   
Anchorage to Fairbanks to Kotzebue -- address pressing                         
transportation needs that cannot be funded with federal dollars over           
the next 10 years or more. Using this approach can also save money             
by avoiding inflationary costs that would accrue to each project if            
left for future construction.                                                  
                                                                               
The bonds would be secured by a state guarantee to bondholders.                
The guarantee will afford the bonds the states favorable credit rating         
and will make them a readily marketable security to potential                  
investors. The guarantee is provided by using the authorization                
process for general obligation bonds. This process requires approval           
of the bill by the legislature and ratification by the voters at the next      
general election.                                                              
                                                                               
I urge your prompt and favorable action on this innovative approach            
to accelerate important transportation projects.                               
                                                                               
					Sincerely,                                                                
					/s/                                                                       
					Tony Knowles                                                              
					Governor