State of Alaska
Fiscal Note
Bill Version: CSHB 268(FIN)
2020 Legislative Session
Fiscal Note Number: 2
(H) Publish Date: 3/18/2020
Identifier: HB268-DOR-TREAS-3-6-2020 Department: Department of Revenue
Title: MUNI BOND BANK: UA, LOAN AND BOND Appropriation: Taxation and Treasury
LIMITS Allocation: Treasury Division
Sponsor: LEBON OMB Component Number: 121
Requester: House Finance
Expenditures/Revenues
Note: Amounts do not include inflation unless otherwise noted below. (Thousands of Dollars)
Included in
FY2021 Governor's
Appropriation FY2021 Out-Year Cost Estimates
Requested Request
OPERATING EXPENDITURES FY 2021 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026
Personal Services
Travel 10.0 10.0 5.0 5.0 5.0 5.0
Services 350.0 350.0 350.0 350.0 350.0 350.0
Commodities
Capital Outlay
Grants & Benefits
Miscellaneous
Total Operating 360.0 0.0 360.0 355.0 355.0 355.0 355.0
Fund Source (Operating Only)
1007 I/A Rcpts (Other) 360.0 360.0 355.0 355.0 355.0 355.0
Total 360.0 0.0 360.0 355.0 355.0 355.0 355.0
Positions
Full-time
Part-time
Temporary
Change in Revenues
None
Total 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Estimated SUPPLEMENTAL (FY2020) cost: 0.0 (separate supplemental appropriation required)
Estimated CAPITAL (FY2021) cost: 0.0 (separate capital appropriation required)
Does the bill create or modify a new fund or account? no
(Supplemental/Capital/New Fund - discuss reasons and fund source(s) in analysis section)
ASSOCIATED REGULATIONS
Does the bill direct, or will the bill result in, regulation changes adopted by your agency? no
If yes, by what date are the regulations to be adopted, amended or repealed?
Why this fiscal note differs from previous version/comments:
Not applicable; Initial version.
Prepared By: Deven Mitchell, Executive Director Phone: (907)465-3750
Division: Alaska Municipal Bond Bank Authority Date: 03/06/2020
Approved By: Brad Ewing, Administrative Services Director Date:
OUT OF 03/06/20
Agency: Office of Management and Budget REPORTED
Printed 3/18/2020 Page 1 of 2 HFC 03/18/2 020
Control Code: exvzE
 CSHB 268(FIN) - Fiscal Note 2
FISCAL NOTE ANALYSIS
STATE OF ALASKA BILL NO. HB 268
2020 LEGISLATIVE SESSION
Analysis
HB268 broadens the Alaska Municipal Bond Bank Authority's (Bond Bank) ability to make loans to the University of Alaska
and to regional health organizations. The Bond Bank is currently limited to lending to the University for power and heat
projects only and the bill will expand that authority to any purpose the University is allowed to borrow. The primary object
is to lower the cost of refinancing outstanding University bonds. The bill also broadens the authority of the Bond Bank to
lend to regional health organizations by eliminating the project financing limit of 49 percent, the project funding limit of
$102,500.0 and increasing the total lending authority from $205,000.0 to $500,000.0. The Bond Bank's participation in
regional health organization loans since the ability to lend to them was created in 2015 has totaled $144,800.0 and
produced savings by reducing borrowing interest rate of over $65,300.0.
To the extent bonds are issued based on this legislation, they are and will be moral obligations of the State of Alaska. In
the event of a default by the University or a regional health organization that participates in this program the State of
Alaska would be asked to provide for that debt service, and if the State failed to act on that request a loss of market
access, impacts on investor confidence and current credit rating would be expected.
The statutes will continue to require that the Commissioner of The Department of Health and Social Services anticipate a
state financial benefit and increase in the regional quality of care for a regional health organization loan request to be
considered by the Bond Bank. This provision generates additional state analysis of any proposed project and recognition of
both financial and health care benefit to Alaska.
The bill creates a new Bond Bank lending limit in the principal amount of not to exceed $500,000.0 to regional health
consortiums.
Bond Bank costs were derived by assuming that approximately $100,000.0 of bonds would be issued based on this
authorization over the course of the next five years. The Bond Bank anticipates incurring travel costs of up to $10.0 in FY
2021 and 2022 as the program awareness increases and project finance meetings are required and then approximately
$5.0 per year thereafter. There will also be a need to travel to meet with rating analysts, potential investors, and finance
team members in the promotion and delivery of the program. Professional services of up to $350.0 will be incurred in FY
2021 through FY 2026 as bond are issued. This amount includes an estimate of $100.0 for a surety policy to meet the
reserve requirement for the anticipated bond issues. The additional services will include fees to bond counsel,
independent registered municipal advisor, rating agencies, preliminary and final official statement production, and
investor presentation forum costs.
All costs incurred associated with the issuance of the bonds will be charged to the regional health organizations and
University of Alaska and paid from the proceeds of the bond issues. If project financings are more rapid than anticipated
or slower, the associated costs will flow to earlier or later years as they are 100 percent driven by bond issuance activity.
(Revised 10/22/19 OMB/LFD) Page 2 of 2
HB268-DOR-TREAS-3-6-2020 Page 2 of 2 Control Code: exvzE


Statutes affected:
HB0268A, AM HB 268, introduced 02/21/2020: 44.85.010, 44.85.085, 37.15.903, 44.85.090, 44.85.180
HB0268B, AM CSHB 268(FIN), introduced 03/18/2020: 44.85.010, 44.85.085, 37.15.903, 44.85.090, 44.85.180