"An Act relating to charges paid or collected by users or occupants of an airport facility owned or controlled by the state. "

In 2001, the legislature passed Chapter 99 SLA 2001 relating to airport revenue bonds and customer facility charges. That bill allowed customer facility charges (CFCs) to be remitted directly to a bond trustee, not be considered revenue of the state, and utilized to pay the principal of, interest on, and any other cost of debt service on the bond indebtedness. These bonds are used for airport facility improvements.

During negotiations with the state regarding the use of CFCs for improvement of airport facilities, issues were identified in Chapter 99 SLA 2001 that required clarification. Senate Bill 92 clarifies and expands the utilization of a customer facility charge. It adds "or other third party" to who may receive the proceeds of CFCs. It also expands the types of indebtedness that can be paid. The CFC proceeds are not revenue of the state because they secure indebtedness that is managed by a trustee or another third party. Because no state credit is pledged to support the bonds, it is not considered revenue of the state. The bond is a private initiative and ensures that the bond trustee or other third party, not the state, will take custody of the funds.

Senate Bill 92 adds a customer facility maintenance charge. These charges differ from CFCs because they are not debt related. They are collected to pay for the maintenance and operation of the facility. This will prevent the facility from becoming an operational liability to the state. SB 92 also ensures that a major repair fund is maintained through deposits into the "International Airport Revenue Fund." This will be important when the state takes sole custody of the facility in 30 years. An increase in the airport operating budget will not be required because the cost of maintenance will be paid using the related customer facility maintenance charge.

SB 92 ensures the CFC and customer facility maintenance charge will be set by the Alaska Department of Transportation & Public Facilities through a public hearing process. Consumers purchasing goods and services at retail locations located on airport property pay the fees.

Airports require frequent capital improvements and maintenance to provide safe, reliable transportation. The most common projects where CFC funds are utilized are car rental facilities. Dallas-Fort Worth and Denver are two examples out of many where CFCs have been successfully used to build these facilities.

Senate Bill 92 implements a valuable private market tool to construct improvements to Alaska airports without the expenditure of public funds. This will improve the amenities provided to the traveling public.

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