February 12, 2002 --- Vol. 8, No. 18February 2002

Knowles sends Legislature bill for railroad bond financing of gas pipeline

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 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.

Knowles signs ANWR support bill

Gov. Tony Knowles signed House Bill 334 today, providing $1 million to Arctic Power and $100,000 to the Village of Kaktovik.

"These needed funds will allow Arctic Power to continue its national efforts in support of responsible oil and gas exploration and development in ANWR," Knowles said in a statement. "This is particularly timely as Congress is currently scheduled to begin debating a national energy bill later this week. It also provides $100,000 to help the village of Kaktovik host members of the media and others as they visit the refuge."

The governor's office said the Arctic Power funds were originally included in Knowles' fast-track supplemental budget along with marketing assistance for tourism and wild Alaska salmon. The governor reminded legislators of those requests as he signed the bill providing money to lobby to open the Arctic National Wildlife Refuge.

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