Gov. Tony Knowles sent the Legislature a bill today which would authorize the Alaska Railroad Corp. to issue up to $17 billion in tax-exempt bonds to finance a pipeline.html'>gas pipeline from the North Slope into Canada
The Alaska Railroad bonds would be conduit financing, Knowles said, but "neither the railroad nor the state would own the gasline or be liable for the debt. That responsibility would fall on the private investors that would build, own and operate the gasline."
"Specifically," the governor said, "this bill says that building a gas pipeline is an essential purpose of the state and is critical to the state's health and welfare. And it also recognizes that a necessary and proper function of the Alaska Railroad is the ability to finance such facilities.
"In addition, the bill amends existing law to expand the railroad's powers to issue up to $17 billion in bonds to finance the construction and maintenance of a gas line and related facilities for transporting natural gas from Alaska's North Slope.
"Finally, the bill also authorizes the railroad to negotiate with producers of natural gas on the bond issues," Knowles said.
The railroad's tax-exempt bonding capability is contained in the 1983 Railroad Transfer Act, transferring the Alaska Railroad from federal to state ownership, and was reaffirmed in the Tax Reform Act of 1986, the governor said.
For more details see the upcoming Feb. 17 issue of Petroleum News Alaska.