Legislature(2001 - 2002)

2001-01-12 Senate Journal

Full Journal pdf

2001-01-12                     Senate Journal                      Page 0072
SB 36                                                                                             
SENATE BILL NO. 36 BY THE SENATE RULES COMMITTEE                                                    
BY REQUEST OF THE GOVERNOR, entitled:                                                               
              "An Act relating to international airports revenue                                   
          bonds; and providing for an effective date."                                              
was read the first time and referred to the Transportation and Finance                              
The following fiscal information was published today:                                               
 Fiscal Note No. 1, Department of Revenue                                                           
Governor's transmittal letter dated January 12:                                                     
Dear President Halford:                                                                             
The Alaska International Airports System (AIAS), comprised of the                                   
Ted Stevens Anchorage International Airport and the Fairbanks                                       
International Airport, is a vital and growing part of our economy. The                              
AIAS and the state's major air carriers are now finalizing a new                                    
operating agreement aimed at continued system development.                                          
Included in the agreement are plans for capital improvements to the                                 
system using revenue bonds, which this bill I transmit today would                                  
This bill increases the current cumulative authorization for revenue                                
bonds for international airport capital improvements by $147,900,000                                
-- from $305 million to $452,900,000. This is intended to support                                   
capital improvement programs for fiscal years 2002 and 2003.                                        

2001-01-12                     Senate Journal                      Page 0073
Funding for operations and capital improvements of the two airports is                              
covered by charges for the use of airport facilities, primarily paid by                             
commercial airlines, plus some federal capital grants. The new                                      
operating agreement under negotiation with the participating airlines                               
includes a five-year capital improvement program. The airlines have                                 
requested, and the airport system has agreed, to shift to revenue bond                              
funding rather than the historic method of financing capital                                        
improvements through annual capital charges paid by the airlines.                                   
While repayment of the bonded debt and debt service would still be                                  
covered with charges paid by the airlines, revenue bonds would allow                                
payments to be spread over the useful life of airport projects.                                     
The current bonding authority cap of $305 million has been exhausted.                               
The authority sought in this bill would increase the revenue bond                                   
authorization limit to permit two years of capital improvements to be                               
addressed in a single revenue bond issue, reducing costs related to the                             
debt issuance.                                                                                      
In order to assure timely project development, I urge your prompt and                               
favorable action on this measure.                                                                   
       Tony Knowles