HOUSE BILL NO. 237 An Act relating to international airports revenue bonds; and providing for an effective date. 8:49:08 AM MICHAEL BARTON, COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, explained that HB 237 would amend AS 37.15.410 to increase the cumulative authorization for international airport revenue bonds from the current $524.5 million dollars to $812.5 million dollars. The increase allows the sale of up to $288 million dollars in new international airport revenue bonds to support capital improvement programs for fiscal years 2006 through 2009 at the Ted Stevens Anchorage International Airport and the Fairbanks International Airport. Those two airports together comprise the Alaska International Airport System (AIAS). AS 37.15.410 clarifies the cumulative bond amount authorized since the creation of the international airport revenue-bonding program, including those already fully retired. It does not reflect the dollar amount of outstanding bonds at any given time. 8:50:40 AM Vice-Chair Stoltze asked the position of the Aviation Advisory Board position on the legislation. Commissioner Barton indicated that they had not taken a "formal position" on it. He acknowledged that they had not been officially notified. Vice-Chair Stoltze encouraged the Board to be consulted. 8:51:35 AM Commissioner Barton agreed, acknowledging that the Department consults with them often on projects. Representative Weyhrauch asked how many international airports there are in Alaska. Commissioner Barton replied two that are State owned. 8:52:12 AM Representative Weyhrauch asked if Ketchikan's airport was municipality owned. Commissioner Barton explained that the City of Ketchikan operates the airport but it is owned by the State. The Alaska International System is comprised of the Anchorage and Fairbanks airports; there is a formal agreement with all airlines at those two airports. 8:53:03 AM Representative Weyhrauch noted that the airport in Ketchikan is called the Ketchikan International Airport. Commissioner Barton replied it is called that but is not part of the Alaska International Airport system. He added that Juneau is a municipally owned airport. The formal "trigger" to be considered an international airport is if the airport offers customs and immigration services. 8:53:38 AM Representative Joule asked how revenue bonds are repaid. Commissioner Barton clarified they would be repaid through rates the airlines pay to operate in the Anchorage and Fairbanks airports. Important sources of revenue result form landing fees from either cargo and/or passengers. Eighty percent of that revenue comes from cargo and landing fees. 8:54:22 AM Representative Joule inquired the cost adjustment expected to a passenger's ticket. Commissioner Barton responded that the Department has nothing to do with how the airlines establish their ticket prices. If it were assumed on a 120- passenger level, the cost would be $.72 cents each. Representative Joule voiced concern how the cost of fuel and the landing fees will affect ticketing costs. 8:55:33 AM Co-Chair Meyer asked if ticket prices would be raised to offset some of the proposed costs. Commissioner Barton reiterated that he did not know and reminded members that was a function of the airlines. To pay off all bonds only through the landing fees would make a difference of $.72 cents on each ticket. Co-Chair Meyer thought it could be added to the cost of freight. Commissioner Barton agreed, noting that fuel and labor are the big costs for any airlines. 8:56:30 AM HB 237 was HELD in Committee for further consideration. 8:57:23 AM