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SB 208: "An Act establishing the Alaska Marine and Rail Transportation Authority; relating to ferries and ferry terminals; relating to the Alaska Railroad Corporation; and providing for an effective date."

00SENATE BILL NO. 208 01 "An Act establishing the Alaska Marine and Rail Transportation Authority; 02 relating to ferries and ferry terminals; relating to the Alaska Railroad 03 Corporation; and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. The uncodified law of the State of Alaska is amended by adding a new 06 section to read: 07 PURPOSE. The purpose of this Act is to establish an authority for the operation, 08 management, planning, construction, and maintenance of the marine highway system and the 09 state-owned Alaska Railroad. The authority shall be the exclusive state entity directly 10 associated with the operation, management, planning, construction, and maintenance for the 11 marine highway system and the state-owned Alaska Railroad. 12 * Sec. 2. AS 44 is amended by adding a new chapter to read: 13 Chapter 90. Alaska Marine and Rail Transportation Authority. 14 Article 1. Creation and Organization.

01 Sec. 44.90.010. Alaska Marine and Rail Transportation Authority. (a) 02 The Alaska Marine and Rail Transportation Authority is established. The authority is 03 a public corporation of the state. The authority is an instrumentality of the state in the 04 Department of Transportation and Public Facilities but has a legal existence 05 independent of and separate from the state and has continuing succession until its 06 existence is terminated by law. 07 (b) The authority shall operate the Alaska marine highway system under this 08 chapter and the state-owned Alaska Railroad under AS 42.40 as separate divisions of 09 the authority. 10 (c) The powers of the authority are vested in the board of directors of the 11 authority. 12 (d) The continued operation of the marine highway system as provided in this 13 chapter is an essential government function of the state. 14 Sec. 44.90.020. Directors. (a) The board of directors of the authority consists 15 of seven voting directors appointed by the governor and two ex officio, nonvoting 16 directors. The ex officio directors are the commissioner of transportation and public 17 facilities and the commissioner of community and economic development. Appointed 18 directors must include 19 (1) two residents who have a significant high level of experience in 20 maritime matters in the state; 21 (2) one member who has at least 10 years of experience in railroad 22 management; a person who is not a resident may be appointed under this paragraph; 23 (3) one member who is or has been an executive official of a United 24 States railroad and who is selected in accordance with applicable provisions of 49 25 U.S.C. (Interstate Commerce Act); a person who is not a resident may be appointed 26 under this paragraph; 27 (4) one resident who is a member of a union that represents employees 28 of the Alaska marine highway system; 29 (5) one resident who is a member of a union that represents employees 30 of the Alaska Railroad Corporation; and 31 (6) one public member who is a resident.

01 (b) The appointed directors serve staggered five-year terms and may be 02 removed by the governor only for cause. Each appointed director shall hold office for 03 the term of the director's appointment and until a successor is appointed and qualified. 04 A director is qualified for reappointment. A vacancy in a directorship occurring other 05 than by expiration of term shall be filled in the same manner as the original 06 appointment but only for the unexpired term. 07 (c) The appointed directors shall comply with AS 39.50 (conflict of interest). 08 Each director before entering upon the director's duties shall subscribe to an oath to 09 perform the duties of office faithfully, impartially, and justly to the best of the director's ability. A record of the 10 shall be filed with the Office of the Governor. 11 (d) An appointed director is entitled to compensation at a rate of $350 for each 12 day the director is engaged in actual performance of duties under this chapter. The 13 board of directors of the authority may provide by regulation for compensation for 14 partial days for an appointed director. In addition, an appointed director is entitled to 15 per diem and travel expenses authorized for boards and commissions under 16 AS 39.20.180. 17 Sec. 44.90.030. Officers and quorum. The directors shall elect one of the 18 appointed directors as chair of the board of directors. The directors shall elect a 19 secretary and a treasurer who need not be directors, and the same person may be 20 elected to serve both as secretary and treasurer. Four voting directors constitute a 21 quorum of the board of directors. The board of directors may take action and adopt 22 motions and resolutions at a meeting by the affirmative vote of at least four voting 23 directors. A vacancy in the board of directors of the authority does not impair the 24 right of a quorum to exercise all the powers and perform all the duties of the board. 25 Sec. 44.90.040. Staff. (a) The board of directors shall employ a chief 26 executive officer who serves at the pleasure of the board. The chief executive officer 27 may, with the approval of the board, select and employ additional administrative staff 28 and officers as necessary to administer the operations of the authority under this 29 chapter. 30 (b) The board of directors shall employ a chief operating officer of the Alaska 31 marine highway system who serves at the pleasure of the board. The chief operating

01 officer of the Alaska marine highway system shall supervise the operation, employees, 02 and facilities of the system. 03 (c) All officers and employees of the authority are in the exempt service under 04 AS 39.25.110. This subsection does not apply to officers and employees of the Alaska 05 Railroad Corporation under AS 42.40. 06 (d) In addition to its staff and employees under this chapter, the board of 07 directors may contract for and engage the services of consultants and professional, 08 technical, and financial advisors the authority considers necessary for the purpose of 09 developing information, conducting hearings, studies, investigations, or other 10 proceedings, or otherwise exercising its powers. 11 Sec. 44.90.050. Audit. (a) The board of directors shall have the financial 12 records of the authority audited annually by an independent certified public accountant. 13 The audit must include the review of the financial records of the Alaska Railroad 14 under AS 42.40.270 and of the Alaska marine highway system. 15 (b) The authority shall make all of its financial records available for 16 examination by the legislative auditor or by an auditor appointed by the governor. 17 Article 2. Powers and Duties. 18 Sec. 44.90.110. Powers of authority. (a) In addition to other powers granted 19 in this chapter, the authority may 20 (1) sue and be sued; 21 (2) adopt and alter an official seal; 22 (3) adopt and enforce policies for the conduct of its business and for 23 the use of its services and facilities; 24 (4) maintain offices at a place in the state and at places out of the state 25 that are served by the marine highway system; 26 (5) establish terms and conditions of employment by the authority and 27 conduct or designate a representative to conduct labor negotiations with employees; 28 (6) subject to appropriation by the legislature, acquire, hold, use, and 29 dispose of its income, revenues, funds, and money; 30 (7) acquire, hold, use, lease, rent, construct, and dispose of personal 31 property for its purposes, except that the authority may dispose of a ferry only on

01 approval by the legislature by law; 02 (8) acquire, hold, use, lease, or rent real property and dispose of real 03 property under AS 44.90.210 - 44.90.240; 04 (9) modify scheduled routes after public hearings; 05 (10) do all acts and things necessary, convenient, or desirable to carry 06 out the powers expressly granted or necessarily implied in this chapter. 07 (b) The authority may participate at any stage in any transportation planning 08 process undertaken by the Department of Transportation and Public Facilities that 09 relates to marine or rail transportation. The authority may designate representatives 10 to participate as full members of any transportation planning committee, working 11 group, planning team, rating panel, or similar organization established by the 12 department or required for state participation in federal transportation programs. The 13 department shall include the authority as a full participant in the departmental 14 transportation planning process, including the statewide transportation plan and the 15 statewide transportation improvement program. 16 Sec. 44.90.120. Duties of authority. The authority shall 17 (1) operate, maintain, improve, and extend a system of ferries 18 connecting with the public roads and highways of the state and including the boats, 19 vessels, wharves, docks, approaches, landings, and appurtenances the authority 20 determines necessary or desirable for safe and efficient operation of the ferry system 21 to best serve the public; 22 (2) operate, maintain, improve, and extend the Alaska Railroad under 23 AS 42.40; 24 (3) assist the residents, businesses, and communities of the state in 25 obtaining optimal marine and rail passenger and freight service; 26 (4) schedule vessel sailings to optimize the frequency of service to all 27 ports; 28 (5) encourage and integrate with other public and private carriers to the 29 greatest extent possible to provide ferry service within the state and between Alaska 30 ports and ports outside the state in order to provide optimum service within the state; 31 (6) provide reservation access and marketing information throughout

01 the state; 02 (7) encourage vessel construction, maintenance, and service in the state 03 to the greatest extent possible; 04 (8) employ residents of the state to the greatest extent legally possible; 05 (9) recognize Alaska unions and employee associations to the greatest 06 extent legally possible. 07 Sec. 44.90.130. Use of name authorized. The authority is authorized to 08 operate a ferry system under the name "Alaska Marine Highway System." 09 Sec. 44.90.140. Comprehensive long-range plan. The authority, with the 10 cooperation of the Department of Transportation and Public Facilities, shall prepare a 11 comprehensive long-range plan for the development and improvement of the Alaska 12 marine highway system and the Alaska Railroad. The authority shall revise and update 13 the comprehensive plan at least every five years. The authority shall submit the 14 comprehensive plan and revisions and updates of the plan to the legislature. 15 Article 3. Acquisition and Management of Property. 16 Sec. 44.90.210. Acquisition of land and easements. The authority, as part 17 of the cost of constructing, maintaining, or improving the marine highway system and 18 other facilities of the authority, may acquire by purchase, gift, or exchange land in fee 19 simple or easements that it considers necessary and reasonable for either temporary or 20 permanent public use. By the same means, the authority may obtain material, 21 including clay, gravel, sand, or rock, or the land necessary to obtain the material, 22 including access to it. The authority may acquire the land or materials notwithstanding 23 the fact that title to the land or materials is vested in the state or a department, agency, 24 commission, or institution of the state. 25 Sec. 44.90.220. Authority to purchase property for the purpose of 26 exchange. When the directors of the authority declare that it is in the interest of the 27 state, the authority may acquire by purchase, gift, or exchange privately or publicly 28 owned land or an interest in land for the purpose of exchanging the land for privately 29 or publicly owned land that the authority is authorized by law to acquire for use by the 30 marine highway system or by the authority. 31 Sec. 44.90.230. Disposal of land or rights in land. (a) The authority may

01 vacate land or rights in land acquired for use by the marine highway system or by the 02 authority by executing and filing a deed in the appropriate recording district. Upon 03 vacating, title reverts to the persons, heirs, successors, or assigns in whom it was 04 vested at the time of the taking. 05 (b) The authority may transfer land, other than rail land under AS 44.90.240, 06 not considered necessary for use by the marine highway system, by the authority, or 07 by the Alaska Railroad under AS 42.40 to the Department of Natural Resources for 08 disposal. The proceeds of disposal by the Department of Natural Resources shall be 09 credited to the funds from which the purchase of the land was originally made. 10 Sec. 44.90.240. Management and use of rail land. (a) Notwithstanding 11 AS 44.90.210 - 44.90.230, the authority may lease, subject to (b) of this section, grant 12 easements in or permits for, or otherwise authorize use of portions of rail land acquired 13 by the authority under AS 42.40.350(e). However, the authority may not convey its 14 entire interest in rail land except as provided in (b) of this section. 15 (b) Unless the legislature approves the action by law, the authority may not 16 (1) exchange, donate, sell, or otherwise convey its entire interest in rail 17 land; or 18 (2) lease rail land for a period in excess of 35 years unless the authority 19 reserves the right to terminate the lease if the land is needed for authority purposes. 20 (c) A lease or disposal of rail land approved by the legislature under (b) of this 21 section by the authority to a party other than the state shall be made at fair market 22 value as determined by a qualified appraiser or by competitive bid. 23 (d) The authority may adopt regulations governing land use by parties having 24 interests in or permits for rail land owned by the authority. The power conferred by 25 this section is exercised for the common health, safety, and welfare of the public and 26 may not be limited by the terms and conditions of leases, contracts, or other 27 transactions. 28 (e) Upon request of a municipality or the state, the authority may authorize use 29 of rail land for public purposes. Before authorizing a use under this subsection, the 30 authority shall require the municipality or state to execute an agreement in a form 31 approved by the board to

01 (1) agree to restrictions, limitations, and conditions on the proposed use 02 required by the authority; 03 (2) hold the authority harmless from and indemnify the authority for 04 liability and claims arising from a use authorized under this section, including 05 (A) defending the authority in a cause of action brought against 06 the authority as a result of the use; and 07 (B) indemnifying the authority for the amount of a judgment, 08 including prejudgment and postjudgment interest, rendered against the 09 authority, and for all costs and attorney fees incurred by the authority in 10 settling or defending the claim; and 11 (3) stop the use upon order of the authority if the use interferes with 12 expansion or replacement of authority facilities, creates a safety hazard, or interferes 13 with authority operations. 14 (f) The authority may exchange rail land subject to (b) of this section. The 15 authority is an instrumentality and agency of the state for purposes of exchanging rail 16 land with the United States, municipalities, corporations including corporations formed 17 under 43 U.S.C. 1601 - 1628 (Alaska Native Claims Settlement Act), and individuals. 18 (g) No prescription or statute of limitations runs against the title or interest of 19 the authority to or in rail land directly owned by the authority or under its jurisdiction. 20 Title to or interest in rail land directly owned by the authority or under its jurisdiction 21 may not be acquired by adverse possession or prescription or in any other manner 22 except by conveyance from or formal vacation by the authority. 23 (h) In this section, "rail land" means land conveyed to the authority under 24 AS 42.40.350(e). 25 Article 4. Vessels and Ferry Terminal Facilities. 26 Sec. 44.90.310. Ferry terminal facilities. (a) The authority may construct, 27 purchase, or lease ferry terminal facilities at locations the authority selects for the 28 loading and unloading of passengers and vehicles under their own power, on and off 29 ferries. The authority shall repair and maintain those facilities that it owns. 30 Construction and purchasing under this section are governed by AS 36.30 (State 31 Procurement Code), except as otherwise provided by law.

01 (b) The authority may connect ferry terminal facilities with local highway 02 systems. 03 (c) The authority may adopt regulations governing the use of ferry terminal 04 facilities by the public that the authority considers necessary and proper in the public 05 interest. The authority may charge a fee for the use of ferry terminal facilities, 06 whether the use is under a permit or otherwise, and whether the use is by one or more 07 individuals. 08 Sec. 44.90.320. Naming of vessel or facility. (a) A vessel or facility 09 constructed or acquired by the authority under this chapter must be named by law. 10 (b) A maritime vessel must bear the name of an Alaska glacier. 11 (c) A vessel used principally on the inland waterways of the state must bear 12 the name of an historical vessel that used the rivers of the state. 13 Sec. 44.90.330. Annual report. By the 10th day of each regular legislative 14 session, the board of directors of the authority shall submit to the governor and the 15 legislature a comprehensive report describing the operations, income, and expenditures 16 for the Alaska marine highway system for the preceding fiscal year. 17 Article 5. General Provisions. 18 Sec. 44.90.910. Budget and appropriations. The authority shall submit an 19 annual budget for the Alaska marine highway system, the Alaska Railroad Corporation, 20 and the administrative functions of the authority to the legislature through the governor 21 as provided for state agencies by AS 37.07 (Executive Budget Act). The authority 22 shall expend money appropriated by the legislature as authorized by the legislature. 23 Sec. 44.90.990. Definitions. In this chapter, unless the context requires 24 otherwise, 25 (1) "authority" means the Alaska Marine and Rail Transportation 26 Authority; 27 (2) "ferry" means a vessel used in the common carriage of passengers 28 and vehicles in intrastate, interstate, or international commerce. 29 Sec. 44.90.995. Short title. This chapter may be cited as the Alaska Marine 30 and Rail Transportation Authority Act. 31 * Sec. 3. AS 03.53.010(a) is amended to read:

01 (a) An animal may not be transported into the state aboard a ferry operated by 02 the Alaska Marine and Rail Transportation Authority [DIVISION OF MARINE 03 TRANSPORTATION OF THE DEPARTMENT OF TRANSPORTATION AND 04 PUBLIC FACILITIES] unless the animal's owner, custodian, or attendant possesses 05 a valid health certificate for the animal. This certificate shall accompany the animal 06 or be in the possession of the animal's owner, custodian, or attendant aboard the ferry 07 and shall be presented when requested by an employee of the state ferry system at the 08 time the owner, custodian, or attendant makes arrangements to transport the animal, 09 boards the ferry with the animal, or at any other time. 10 * Sec. 4. AS 19.65.050(b) is amended to read: 11 (b) It is the purpose of AS 19.65.050 - 19.65.100 to 12 (1) enable the Alaska Marine and Rail Transportation Authority 13 [ALASKA MARINE HIGHWAY SYSTEM] to manage and operate the Alaska 14 marine highway system in a manner that will enhance performance and accountability 15 by allowing the system to account for and spend its generated revenue; 16 (2) provide the management tools necessary to efficiently operate the 17 Alaska marine highway system; 18 (3) within constitutional constraints, provide for a predictable funding 19 base for system operations; and 20 (4) provide for predictability and stability in the service level furnished 21 to communities served by the system. 22 * Sec. 5. AS 19.65.050(c) is amended to read: 23 (c) It is the intent of AS 19.65.050 - 19.65.100 to 24 (1) encourage prudent administration through cost management and 25 accurate budgeting by the board of directors [MANAGERS] of the authority 26 [ALASKA MARINE HIGHWAY SYSTEM]; 27 (2) increase revenue from the operation of the system consistent with 28 the public interest, increase service consistent with sound fiscal policy, and assist the 29 prudent management and operation of the system; and 30 (3) achieve stability in the level of service communities can anticipate 31 through accurate planning and scheduling.

01 * Sec. 6. AS 19.65.060 is amended to read: 02 Sec. 19.65.060. Alaska marine highway system fund. (a) There is created, 03 as a special account in the general fund, the Alaska marine highway system fund, into 04 which shall be deposited 05 (1) the gross revenue of the Alaska marine highway system; 06 (2) money that is appropriated to the [ALASKA MARINE HIGHWAY 07 SYSTEM] fund by the legislature in an amount that is consistent from year to year and 08 is the amount necessary, after consideration of gross revenue, to provide stable services 09 to the public consistent with the provisions of AS 19.65.050(b)(4) ; unless otherwise 10 provided by the legislature, appropriations to the fund under this paragraph [, 11 WHICH APPROPRIATIONS] are not one-year appropriations and [THE BALANCES 12 OF WHICH] do not lapse under AS 37.25.010; and 13 (3) any other money that is appropriated to the [ALASKA MARINE 14 HIGHWAY SYSTEM] fund by the legislature ; unless otherwise provided by the 15 legislature, appropriations to the fund under this paragraph [, WHICH 16 APPROPRIATIONS] are not one-year appropriations and [THE BALANCES OF 17 WHICH] do not lapse under AS 37.25.010. 18 (b) Nothing in AS 19.65.050 - 19.65.100 [THIS CHAPTER] exempts money 19 deposited into the [ALASKA MARINE HIGHWAY SYSTEM] fund from the 20 requirements of AS 37.07 (Executive Budget Act) or dedicates that money for a 21 specific purpose. 22 * Sec. 7. AS 19.65.070(a) is amended to read: 23 (a) The authority [ALASKA MARINE HIGHWAY SYSTEM] shall account 24 for and remit to the Department of Revenue in accordance with AS 37.10.050 all gross 25 revenue generated from the operation of the Alaska marine highway system during 26 each fiscal year [ANNUAL OPERATING CYCLE]. The money shall then be 27 deposited in the Alaska marine highway system fund. 28 * Sec. 8. AS 19.65.070(b) is amended to read: 29 (b) The authority [ALASKA MARINE HIGHWAY SYSTEM] shall prepare 30 a written report, not [NO] later than the 10th day of each regular legislative session, 31 regarding the revenues of the Alaska marine highway system [PREVIOUS

01 ANNUAL OPERATING CYCLE] and notify the legislature that the report is available. 02 The report must identify 03 (1) gross revenue generated during the previous fiscal year [ANNUAL 04 OPERATING CYCLE]; 05 (2) gross revenue generated during the current fiscal year [ANNUAL 06 OPERATING CYCLE] and an estimate of gross revenue for the remainder of the 07 current fiscal year [ANNUAL OPERATING CYCLE]; 08 (3) projections of the gross revenue to be generated during the next 09 fiscal year [ANNUAL OPERATING CYCLE]; and 10 (4) the difference between previous gross revenue estimates prepared 11 under this section and the revenues actually generated. 12 * Sec. 9. AS 19.65.080 is amended to read: 13 Sec. 19.65.080. Annual appropriation. (a) Commencing with appropriations 14 for the fiscal year that begins July 1, 1991, on an annual basis and under AS 37.07 15 (Executive Budget Act), the legislature may appropriate amounts from the [ALASKA 16 MARINE HIGHWAY SYSTEM] fund for management and operation of [TO] the 17 Alaska marine highway system. 18 (b) The authority [DEPARTMENT OF TRANSPORTATION AND PUBLIC 19 FACILITIES] may request the legislature to appropriate money from the [ALASKA 20 MARINE HIGHWAY SYSTEM] fund to the authority [MARINE HIGHWAY 21 SYSTEM] for capital improvements to the Alaska marine highway system [,] if 22 (1) the appropriation under (a) of this section has been made; 23 (2) the amount in the fund, without regard to the appropriation under 24 (a) of this section, exceeds the total of gross revenue deposited in the fund and the 25 general fund appropriations under AS 19.65.060(a)(2) by 10 percent; and 26 (3) the amount requested for appropriation under this subsection does 27 not exceed 50 percent of the balance remaining after the appropriation for annual 28 management and operations is made under (a) of this section. 29 (c) The unexpended and unobligated balance of money appropriated from the 30 [ALASKA MARINE HIGHWAY SYSTEM] fund lapses into the [ALASKA MARINE 31 HIGHWAY SYSTEM] fund at the end of the fiscal year for which it was appropriated.

01 * Sec. 10. AS 19.65.100 is amended to read: 02 Sec. 19.65.100. Definitions. In AS 19.65.050 - 19.65.100, 03 (1) "authority" means the Alaska Marine and Rail Transportation 04 Authority ["ANNUAL OPERATING CYCLE" MEANS THE ANNUAL STATE 05 FISCAL YEAR BEGINNING ON JULY 1 AND ENDING AT MIDNIGHT ON THE 06 FOLLOWING JUNE 30]; 07 (2) "fiscal year" has the meaning given in AS 37.07.120; 08 (3) "fund" means the Alaska marine highway system fund; 09 (4) "gross revenue" means all money, except money refunded to ticket 10 holders and others for unused services, that is generated from the operation of the 11 Alaska marine highway system, including that derived from vessel operations and uses 12 of Alaska marine highway system facilities. 13 * Sec. 11. AS 23.40.040 is amended to read: 14 Sec. 23.40.040. Collective bargaining agreement. The Alaska Marine and 15 Rail Transportation Authority [COMMISSIONER OF TRANSPORTATION AND 16 PUBLIC FACILITIES] or an authorized representative, in accordance with 17 AS 23.40.020 - 23.40.030, may negotiate and enter into collective bargaining 18 agreements concerning wages, hours, working conditions, and other employment 19 benefits with the employees of the authority [DIVISION OF MARINE 20 TRANSPORTATION] engaged in operating the Alaska marine highway [STATE 21 FERRY] system as masters or members of the crews of vessels or their bargaining 22 agent. [A COLLECTIVE BARGAINING AGREEMENT IS NOT FINAL WITHOUT 23 THE CONCURRENCE OF THE COMMISSIONER OF TRANSPORTATION AND 24 PUBLIC FACILITIES.] The authority [COMMISSIONER OF TRANSPORTATION 25 AND PUBLIC FACILITIES] may make provision in the collective bargaining 26 agreement for the settlement of labor disputes by arbitration. 27 * Sec. 12. AS 35.10.015(c) is amended to read: 28 (c) In this section, "public facilities" includes vessels owned by the state and 29 operated by the Alaska Marine and Rail Transportation Authority [DIVISION OF 30 MARINE TRANSPORTATION OF THE DEPARTMENT AS A PART OF THE 31 ALASKA MARINE HIGHWAY SYSTEM]. All ferries owned or operated by the

01 state shall be equipped with elevators or other passenger lifting equipment, ramps, or 02 other facilities and devices to ensure that these vessels are accessible to and usable by 03 physically handicapped, aged , or infirm passengers. In this subsection, "accessible to 04 and usable by" means that a physically handicapped, aged , or infirm passenger can 05 board, disembark , and move between decks and about the public areas aboard a state 06 ferry with personal comfort and safety, and with safety to, other passengers and 07 members of the crew. 08 * Sec. 13. AS 35.10.015(d) is amended to read: 09 (d) A [AFTER JUNE 25, 1976, A] ferry may not be constructed, lengthened, 10 completely renovated, or purchased for use or entered into service by the Alaska 11 Marine and Rail Transportation Authority [DIVISION OF MARINE 12 TRANSPORTATION OF THE DEPARTMENT AS A PART OF THE ALASKA 13 MARINE HIGHWAY SYSTEM] that does not include adequate facilities and devices 14 to ensure that the vessel is accessible to and usable by physically handicapped, aged , 15 or infirm passengers. Some staterooms and all restrooms, indoor passageways, outdoor 16 weather decks, and other public areas aboard the vessel shall be so designed and 17 constructed as to permit access and use by physically handicapped, aged , or infirm 18 passengers, including [BUT NOT LIMITED TO] those persons occupying a 19 wheelchair. 20 * Sec. 14. AS 35.27.020(c) is amended to read: 21 (c) At least one percent or, in the case of a rural school facility, at least one- 22 half of one percent of the construction cost of a building or facility approved for construction 23 by the legislature after September 1, 1977, will be reserved for the following purposes: the 24 design, construction, mounting , and administration of works of art in a school, office building, 25 court building, [VESSEL OF THE MARINE HIGHWAY SYSTEM,] or other building or 26 facility that [WHICH] is subject to substantial public use. 27 * Sec. 15. AS 35.27 is amended by adding a new section to read: 28 Sec. 35.27.025. Application to Alaska Marine and Rail Transportation 29 Authority. This chapter applies to the Alaska Marine and Rail Transportation 30 Authority. Compliance with this chapter is the sole responsibility of the authority with 31 respect to the buildings and facilities of the authority, including the Alaska marine

01 highway system. 02 * Sec. 16. AS 35.27.030(1) is amended to read: 03 (1) "building" or "facility" means a permanent improvement constructed 04 by the department or authority ; the term 05 (A) includes, but is not limited to, 06 (i) schools, office buildings, and court buildings; 07 (ii) other buildings that [WHICH] the commissioner 08 determines are designed for substantial public use; 09 (iii) [BOATS AND VESSELS OF THE MARINE 10 HIGHWAY SYSTEM; 11 (iv)] transportation facilities that [WHICH] 12 accommodate traveling passengers; 13 (B) excludes 14 (i) boats and vessels of the Alaska marine highway 15 system; 16 (ii) Alaska Railroad; and 17 (iii) other transportation facilities; 18 * Sec. 17. AS 35.27.030 is amended by adding a new paragraph to read: 19 (4) "authority" means the Alaska Marine and Rail Transportation 20 Authority. 21 * Sec. 18. AS 36.30.015(g) is amended to read: 22 (g) The Alaska Marine and Rail Transportation Authority [DEPARTMENT 23 OF TRANSPORTATION AND PUBLIC FACILITIES] shall adopt regulations to 24 manage the procurement of supplies, services, professional services, and construction 25 for the repair, maintenance, and reconstruction of vessels, docking facilities, and 26 passenger and vehicle transfer facilities of the Alaska marine highway system. The 27 regulations must be based on principles of competitive procurement consistent with this 28 chapter to satisfy the special requirements of the Alaska marine highway system as 29 determined by the Alaska Marine and Rail Transportation Authority 30 [DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES]. 31 * Sec. 19. AS 36.30.850(b)(29) is amended to read:

01 (29) construction of new vessels by the Alaska Marine and Rail 02 Transportation Authority [DEPARTMENT OF TRANSPORTATION AND PUBLIC 03 FACILITIES] for the Alaska marine highway system; 04 * Sec. 20. AS 36.30.990(1) is amended to read: 05 (1) "agency" 06 (A) means a department, institution, board, commission, 07 division, authority, public corporation, the Alaska Pioneers' Home, or other 08 administrative unit of the executive branch of state government; 09 (B) does not include 10 (i) the University of Alaska; 11 (ii) the Alaska Railroad Corporation; 12 (iii) the Alaska Housing Finance Corporation; 13 (iv) a regional Native housing authority created under 14 AS 18.55.996 or a regional electrical authority created under 15 AS 18.57.020; 16 (v) the Alaska Marine and Rail Transportation 17 Authority [DEPARTMENT OF TRANSPORTATION AND PUBLIC 18 FACILITIES], in regard to the repair, maintenance, and reconstruction 19 of vessels, docking facilities, and passenger and vehicle transfer 20 facilities of the Alaska marine highway system; 21 (vi) the Alaska Aerospace Development Corporation; 22 (vii) the Alaska State Pension Investment Board; 23 (viii) the Alaska Seafood Marketing Institute; 24 * Sec. 21. AS 36.90.049(e)(1) is amended to read: 25 (1) "commissioner of the department that operates the marine vessel" 26 includes 27 (A) the president of the University of Alaska with regard to a 28 vessel operated by the university; and 29 (B) the chief operating officer of the Alaska marine highway 30 system with regard to a vessel operated by the Alaska marine highway 31 system;

01 * Sec. 22. AS 37.05.550(a) is amended to read: 02 (a) There is in the general fund the Alaska marine highway system vessel 03 replacement fund. The fund consists of money appropriated to it by the legislature. 04 Money appropriated to the fund does not lapse. The Department of Revenue shall 05 manage the fund. Interest received on money in the fund shall be accounted for 06 separately and may be appropriated into the fund annually. The legislature may 07 appropriate money from the fund to the Alaska Marine and Rail Transportation 08 Authority for refurbishment of existing state ferry vessels, acquisition of additional 09 state ferry vessels, or replacement of retired or outmoded state ferry vessels. 10 * Sec. 23. AS 37.07.120(1) is amended to read: 11 (1) "agency" means a department, officer, institution, board, 12 commission, bureau, division, or other administrative unit forming the state 13 government and includes the Alaska Marine and Rail Transportation Authority, 14 Alaska Railroad Corporation, Alaska Pioneers' Home , and the University of Alaska, 15 but does not include the legislature or the judiciary; 16 * Sec. 24. AS 39.20.310(8) is amended to read: 17 (8) persons employed [BY THE DIVISION OF MARINE 18 TRANSPORTATION] as masters and members of the crews operating the vessels of 19 the Alaska marine highway [STATE FERRY] system who are covered by collective 20 bargaining agreements as provided in AS 23.40.040, except as expressly provided by 21 law; 22 * Sec. 25. AS 39.25.110(11) is amended to read: 23 (11) the officers and employees of the following boards, commissions, 24 and authorities: 25 (A) [REPEALED 26 (B)] Alaska Permanent Fund Corporation; 27 (B) [(C)] Alaska Industrial Development and Export Authority; 28 (C) [(D)] Alaska Commercial Fisheries Entry Commission; 29 (D) [(E)] Alaska Commission on Postsecondary Education; 30 (E) [(F)] Alaska Aerospace Development Corporation; 31 (F) Alaska Marine and Rail Transportation Authority,

01 except as provided under AS 42.40; 02 * Sec. 26. AS 39.30.150(b) is amended to read: 03 (b) Employees of the Alaska Marine and Rail Transportation Authority 04 [DIVISION OF MARINE TRANSPORTATION] included in the public employees' 05 retirement system through the process of collective bargaining under 06 AS 39.35.680(21)(D) may, under the terms of a collective bargaining agreement, utilize 07 contributions made under (a) of this section on their behalf to offset the costs of 08 inclusion in the public employees' retirement system; however, 09 (1) the state is placed under no obligation to continue making 10 contributions under this section if the state resumes participation in the federal social 11 security system; 12 (2) the bargaining agreement must provide a mechanism for satisfying 13 any residual liabilities that might exist if the state resumes participation in the federal 14 social security system; and 15 (3) funds contributed under (a) of this section on behalf of employees 16 who are not covered by maritime union contracts may not be obligated or expended 17 to pay any costs associated with the inclusion of marine transportation employees in 18 the public employees' retirement system. 19 * Sec. 27. AS 39.35.680(21) is amended to read: 20 (21) "member" or "employee" 21 (A) means a person eligible to participate in the system and 22 who is covered by the system; 23 (B) includes 24 (i) an active member; 25 (ii) an inactive member; 26 (iii) a vested member; 27 (iv) a deferred vested member; 28 (v) a non-vested member; 29 (vi) a disabled member; 30 (vii) a retired member; 31 (viii) an elected public officer under AS 39.35.381;

01 (C) does not include 02 (i) former members; 03 (ii) persons compensated on a contractual or fee basis; 04 (iii) casual or emergency workers or nonpermanent 05 employees as defined in AS 39.25.200; 06 (iv) persons covered by the Alaska Teachers' Retirement 07 System except as provided under AS 39.35.131 and 39.35.381, or 08 persons covered by the optional university retirement program; 09 (v) employees of the Alaska Marine and Rail 10 Transportation Authority [DIVISION OF MARINE 11 TRANSPORTATION] engaged in operating the Alaska marine 12 highway [STATE FERRY] system who are covered by a union or 13 group retirement system to which the state makes contributions; 14 (vi) justices of the supreme court or judges of the court 15 of appeals or of the superior or district courts of Alaska; 16 (vii) the administrative director of courts appointed 17 under art. IV, sec. 16 of the state constitution unless the director 18 becomes a member under AS 39.35.158; 19 (viii) members of the elected public officers' retirement 20 system (former AS 39.37); and 21 (ix) contractual employees of the legislative branch of 22 state government under AS 24.10.060(f); 23 (D) may include employees of the Alaska Marine and Rail 24 Transportation Authority [DIVISION OF MARINE TRANSPORTATION] 25 excluded under (C)(v) of this paragraph provided that 26 (i) the State of Alaska formally agrees to their inclusion 27 through the process of collective bargaining; [AND] 28 (ii) no collective bargaining agreement has the effect of 29 obligating contributions made by the state under AS 39.30.150 in the 30 event the state resumes participation in the federal social security 31 system;

01 (iii) this subparagraph does not apply to employees 02 of the Alaska Railroad Corporation under AS 42.40; 03 * Sec. 28. AS 39.50.200(b) is amended by adding a new paragraph to read: 04 (56) Alaska Marine and Rail Transportation Authority (AS 44.90.010). 05 * Sec. 29. AS 39.52.960(2) is amended to read: 06 (2) "agency" means a department, office of the governor, or entity in 07 the executive branch, including but not limited to the University of Alaska, public or 08 quasi-public corporations, boards or commissions, and the Alaska Marine and Rail 09 Transportation Authority and its subsidiary, the Alaska Railroad Corporation; 10 * Sec. 30. AS 39.52.960(4) is amended to read: 11 (4) "board or commission" means a board, commission, authority, or 12 board of directors of a public or quasi-public corporation, established by statute in the 13 executive branch, including the Alaska Marine and Rail Transportation Authority 14 and its subsidiary, the Alaska Railroad, but excluding members of a negotiated 15 regulation making committee under AS 44.62.710 - 44.62.800; 16 * Sec. 31. AS 42.40.010 is amended to read: 17 Sec. 42.40.010. Establishment of the corporation. There is established the 18 Alaska Railroad Corporation. The corporation is a public corporation and is an 19 instrumentality of the state within the Alaska Marine and Rail Transportation 20 Authority [DEPARTMENT OF COMMUNITY AND ECONOMIC 21 DEVELOPMENT]. The corporation has a legal existence independent of and separate 22 from the state and from the Alaska Marine and Rail Transportation Authority . 23 The continued operation of the Alaska Railroad by the corporation as provided in this 24 chapter is considered an essential government function of the state. 25 * Sec. 32. AS 42.40.020 is repealed and reenacted to read: 26 Sec. 42.40.020. Board of directors. (a) The powers of the corporation are 27 vested in the board of directors. 28 (b) The board of directors of the Alaska Marine and Rail Transportation 29 Authority is the board of directors of the Alaska Railroad Corporation. 30 * Sec. 33. AS 42.40.100 is amended to read: 31 Sec. 42.40.100. Management by the board. The board is responsible for the

01 management of the corporation but shall delegate certain powers and duties to the chief 02 operating [EXECUTIVE] officer in accordance with AS 42.40.120. In managing the 03 corporation , the board shall 04 (1) be responsible for the management of the financial and legal 05 obligations of the Alaska Railroad; 06 (2) operate the Alaska Railroad as a common carrier subject to the 07 jurisdiction of the United States Interstate Commerce Commission consistent with 45 08 U.S.C. 1207; 09 (3) generally manage the corporation on a self-sustaining basis; 10 (4) in accordance with AS 37.07, apply to the legislature through the 11 Alaska Marine and Rail Transportation Authority and the governor for an 12 appropriation 13 (A) to fund the operating and capital expenditures of the 14 corporation; and 15 (B) when necessary, [WITH THE CONCURRENCE OF THE 16 GOVERNOR] to be used to provide a particular service that is not otherwise 17 self-sustaining if a subsidy is required to maintain that service; 18 (5) provide for safe, efficient, and economical transportation to meet 19 the overall needs of the state; 20 (6) raise needed capital by issuing bonds of the corporation upon 21 approval by the legislature while ensuring that borrowing by the corporation does not 22 directly or indirectly endanger the state's own borrowing capacity; 23 (7) review all state and other land disposal proposals to aid in planning 24 for future development or expansion of transportation services; 25 (8) ensure that the procurement procedures of the corporation meet 26 accepted railroad industry standards; 27 (9) ensure that the accounting procedures of the corporation meet 28 generally accepted accounting principles consistent with industry standards for 29 comparable railroads. 30 * Sec. 34. AS 42.40.110 is amended to read: 31 Sec. 42.40.110. Executive officers. (a) The board shall appoint the chief

01 operating [EXECUTIVE] officer of the corporation who serves at the pleasure of the 02 board. The board shall fix compensation for the chief operating [EXECUTIVE] 03 officer. 04 (b) The chief operating [EXECUTIVE] officer of the corporation shall appoint 05 and fix the compensation for other executive officers of the corporation . The 06 compensation for an executive officer appointed under this subsection is subject to 07 board approval. 08 * Sec. 35. AS 42.40.120(a) is amended to read: 09 (a) The board shall by rule delegate to the chief operating [EXECUTIVE] 10 officer powers and duties necessary or appropriate for the management of the daily 11 affairs and operations of the corporation. The board may by rule require the exercise 12 of a delegated power or duty to be subject to board approval. 13 * Sec. 36. AS 42.40.120(b) is amended to read: 14 (b) Within 60 days after its first meeting, the board shall delegate the 15 following activities of the corporation to the chief operating [EXECUTIVE] officer 16 or other executive officers designated by the board: 17 (1) leasing subject to AS 42.40.285 and 42.40.350(b) and (d), granting 18 easements in, issuing permits for the use of, or conveying other interests in property 19 that do not constitute a transfer of the corporation's entire interest in land; 20 (2) establishing specific rates, tariffs, divisions, and contract rate 21 agreements; 22 (3) making routine changes in service levels; 23 (4) establishing procurement and accounting procedures for the 24 corporation; and 25 (5) performing procurement activities. 26 * Sec. 37. AS 42.40.350(a) is amended to read: 27 (a) Subject to (e) of this section, the [THE] corporation shall receive from 28 the United States and, in its own name, take title to all rail property transferred under 29 45 U.S.C. 1201 - 1214 (Alaska Railroad Transfer Act of 1982). All land that is 30 transferred to or acquired by the corporation is designated as follows: 31 (1) railroad rights-of-way are railroad utility corridors;

01 (2) land outside railroad utility corridors is rail land. 02 * Sec. 38. AS 42.40.350(c) is amended to read: 03 (c) Rail land necessary for the use, maintenance, or operation of the 04 railroad shall be identified by the corporation. The corporation may lease, subject 05 to AS 42.40.285 and (d) of this section, grant easements in or permits for, or otherwise 06 authorize use of portions of rail land. However, the corporation may not convey its 07 entire interest in rail land except as provided in AS 42.40.285, 42.40.370(d) , [AND] 08 42.40.400 , and under (e) of this section . 09 * Sec. 39. AS 42.40.350(d) is amended to read: 10 (d) A lease or disposal of land approved by the legislature under AS 42.40.285 11 by the corporation to a party other than the state or the Alaska Marine and Rail 12 Transportation Authority shall be made at fair market value as determined by a 13 qualified appraiser or by competitive bid. However, a lease or disposal of land 14 within railroad rights-of-way received by the state under 45 U.S.C. 1201 - 1214 15 shall provide that the state may use the land for transportation, communication, 16 and transmission purposes in perpetuity, though other compatible purposes are 17 allowed. 18 * Sec. 40. AS 42.40.350 is amended by adding a new subsection to read: 19 (e) Notwithstanding (a) and (c) of this section, title to rail land not identified 20 as necessary for use, maintenance, or operation of the railroad under this section shall 21 be conveyed to the Alaska Marine and Rail Transportation Authority. 22 * Sec. 41. AS 42.40.380 is amended to read: 23 Sec. 42.40.380. Use of state land. When emergency conditions require that 24 track or other right-of-way fixtures of the corporation be moved from the existing 25 location and relocated on state land adjacent to or in the vicinity of the existing right- 26 of-way and the chief operating [EXECUTIVE] officer determines that relocation is necessary 27 to maintain safe and adequate rail operations, the corporation may effect the relocation and 28 notify the Department of Natural Resources. The relocation must affect only the amount of 29 state land necessary to adequately restore or continue safe rail operations at a normal level. 30 * Sec. 42. AS 42.40.500 is amended to read: 31 Sec. 42.40.500. Limitation of liability. A liability incurred by the corporation

01 shall be satisfied exclusively from the assets or revenue of the corporation and no 02 creditor or other person has a right of action against the state or the Alaska Marine 03 and Rail Transportation Authority because of a debt, obligation, or liability of the 04 corporation. 05 * Sec. 43. AS 42.40.540 is amended to read: 06 Sec. 42.40.540. Appropriations. The corporation shall [MAY] request, in 07 accordance with AS 37.07, appropriations [THE CONCURRENCE OF THE 08 GOVERNOR, A DIRECT APPROPRIATION OR GRANT] from the legislature to 09 carry [ASSIST IN CARRYING] out the provisions of this chapter. 10 * Sec. 44. AS 42.40.900(a) is amended to read: 11 (a) All claims and lawsuits involving activities of the railroad, including suits 12 in contract, quasi-contract, or tort, shall be brought against the corporation and not 13 against the state or the Alaska Marine and Rail Transportation Authority . 14 * Sec. 45. AS 42.40.920(b) is amended to read: 15 (b) Unless specifically provided otherwise in this chapter, the following laws 16 do not apply to the operations of the corporation: 17 (1) AS 19; 18 (2) AS 30.15; 19 (3) AS 35; 20 (4) AS 36.30, except as specifically provided in that chapter; 21 (5) AS 37.05, except as specifically provided in AS 37.05.210; 22 (6) AS 37.07 , but only for expenditures to satisfy debt service of the 23 corporation ; 24 (7) AS 37.10.010 - 37.10.060; 25 (8) AS 37.10.085; 26 (9) AS 37.20; 27 (10) AS 37.25; 28 (11) AS 38; 29 (12) AS 44.62.010 - 44.62.320. 30 * Sec. 46. AS 42.40.980(7) is amended to read: 31 (7) "executive officer" means the corporation's chief operating

01 [EXECUTIVE] officer, assistant chief operating [EXECUTIVE] officer, assistant to 02 the chief operating [EXECUTIVE] officer, chief of administration, superintendent of 03 transportation, manager of marketing and sales, chief engineer, chief mechanical 04 officer, manager of industrial development and real estate, manager of budget and 05 accounting, manager of planning, manager of personnel, manager of supply and 06 procurement, chief of security, manager of operating rules, manager of data processing, 07 manager of strategy, manager of operations planning, manager of supply, manager of 08 procurement, manager of safety, manager of administrative procedure, chief counsel, 09 or, if so designated by the board, any employee who fulfills these management 10 functions under a different title or who exercises a similar or comparable level of 11 responsibility or supervision; 12 * Sec. 47. AS 44.42.020(a)(1) is amended to read: 13 (1) plan, design, construct, and maintain all state modes of 14 transportation and transportation facilities and all docks, floats, breakwaters, buildings, 15 and similar facilities , except that departmental planning, design, construction, or 16 maintenance of transportation modes or facilities under the jurisdiction of the 17 Alaska Marine and Rail Transportation Authority is subject to direction by the 18 Alaska Marine and Rail Transportation Authority ; 19 * Sec. 48. AS 44.42.020(a)(7) is amended to read: 20 (7) manage, operate, and maintain state transportation facilities and all 21 docks, floats, breakwaters, and buildings, including all state highways, vessels, 22 railroads, pipelines, airports, and aviation facilities , except that the department is not 23 responsible for management or operation of transportation facilities under the 24 jurisdiction of the Alaska Marine and Rail Transportation Authority or for 25 management, operation, or maintenance of vessels or equipment under the 26 jurisdiction of the Alaska Marine and Rail Transportation Authority ; 27 * Sec. 49. AS 44.99.030(a) is amended by adding a new paragraph to read: 28 (15) Alaska Marine and Rail Transportation Authority. 29 * Sec. 50. The uncodified law of the State of Alaska enacted in sec. 1(b), ch. 153, SLA 30 1984, is amended to read: 31 (b) It is the purpose of this Act to

01 (1) create a viable economic entity with the powers and duties 02 necessary to operate and manage the Alaska Railroad pending eventual transfer of the 03 railroad to the private sector for its ownership or operation or both consistent with 04 45 U.S.C. 1201 - 1214 (Alaska Railroad Transfer Act of 1982); 05 (2) provide for the level of transportation service that best satisfies the 06 needs of the people of the state consistent with the other findings and policies of this 07 section; 08 (3) create a public corporation with the powers, duties, and functions 09 needed to operate the Alaska Railroad and manage its rail, industrial, port , and other 10 properties in the best interest of the people of the state by ensuring that the corporation 11 will 12 (A) be [EXCLUSIVELY] responsible for the management of 13 the financial and legal obligations of the Alaska Railroad; 14 (B) operate the railroad as a common carrier subject to the 15 jurisdiction of the United States Interstate Commerce Commission consistent 16 with 45 U.S.C. 1207; 17 (C) have the ability to raise capital by issuing bonds upon 18 approval of the legislature exempt from federal and state taxation and applying 19 for federal money to which the state may be entitled or that may be available; 20 (D) carry out its responsibilities on a self-sustaining basis; 21 (E) provide the best possible combination of types and levels 22 of safe, efficient, and economical transportation to meet the overall needs of 23 the state, supported when necessary by state investment; 24 (F) provide for the prudent operation of the railroad according 25 to sound business management practices; [AND] 26 (G) preserve the integrity of the railroad utility corridor for 27 transportation, communication, and transmission purposes; and 28 (H) be subject to AS 37.07 (Executive Budget Act) and be 29 responsible for the operating and capital expenditures of the corporation 30 in accordance with appropriations made by the legislature; 31 (4) ensure that borrowing by the corporation does not directly or

01 indirectly endanger the state's own borrowing capacity. 02 * Sec. 51. The uncodified law of the State of Alaska is amended by adding a new section 03 to read: 04 TRANSFER OF CERTAIN APPROPRIATIONS, EMPLOYEES, AND ASSETS TO 05 ALASKA MARINE AND RAIL TRANSPORTATION AUTHORITY. (a) Employees of the 06 Department of Transportation and Public Facilities assigned to the management, operation, and 07 maintenance of the Alaska marine highway system on the effective date of this section are 08 transferred to the Alaska Marine and Rail Transportation Authority as state employees of the 09 authority. The commissioner of transportation and public facilities shall determine which 10 employees are transferred to the authority. An employee who is transferred to the authority 11 under this subsection shall continue to participate without interruption in the supplemental 12 employee benefits program under AS 39.30.150 - 39.30.180 and in the public employees' 13 retirement system under AS 39.35 if the employee was a participant in these programs on the 14 day before the employee was transferred to the authority. 15 (b) During the term of a collective bargaining agreement that applies to employees 16 who are transferred to the Alaska Marine and Rail Transportation Authority under this section 17 and that is in effect on the effective date of this section, nothing in this Act terminates or 18 modifies recognition of the exclusive bargaining representative for those employees or that 19 collective bargaining agreement. The Alaska Marine and Rail Transportation Authority shall 20 abide by the collective bargaining agreements that are in effect for employees transferred to 21 the authority on the date of transfer. A collective bargaining agreement covering employees 22 transferred under this Act shall remain in effect for the term of the agreement unless the 23 agreement is renegotiated by the Alaska Marine and Rail Transportation Authority and the 24 exclusive bargaining representative. The legislature finds that the community of interest of 25 shore-based employees of the Alaska marine highway system who are transferred to the 26 Alaska Marine and Rail Transportation Authority under this section is substantially different 27 from the community of interest of the employees of the executive branch in the classified 28 service. Accordingly, the shore-based employees of the Alaska marine highway system who 29 are transferred to the Alaska Marine and Rail Transportation Authority are severed from their 30 recognized collective bargaining units in effect on the effective date of this section on 31 expiration of the collective bargaining agreement in effect on the effective date of this section

01 for their unit. The severed units shall continue as units of the Alaska Marine and Rail 02 Transportation Authority with the exclusive representative in place at the time of the severance 03 until actions under AS 23.40.070 - 23.40.260 (Public Employment Relations Act) change the 04 units or representatives. 05 (c) The unexpended and unobligated balances of operating and capital appropriations 06 for the Department of Transportation and Public Facilities, Alaska marine highway system, 07 shall be transferred to the Alaska Marine and Rail Transportation Authority. 08 (d) The personal property assets and real property assets, including ferries, equipment, 09 buildings, and associated facilities, of the Department of Transportation and Public Facilities, 10 Alaska marine highway system, shall be transferred to the Alaska Marine and Rail 11 Transportation Authority. 12 * Sec. 52. The uncodified law of the State of Alaska is amended by adding a new section 13 to read: 14 INITIAL APPOINTMENT OF MEMBERS OF THE BOARD OF DIRECTORS OF 15 THE ALASKA MARINE AND RAIL TRANSPORTATION AUTHORITY. (a) 16 Notwithstanding AS 44.90.020(b), added by sec. 2 of this Act, and AS 39.05.055, the initially 17 appointed members of the board of directors of the Alaska Marine and Rail Transportation 18 Authority shall be appointed by the governor to terms as follows: one member serves for one 19 year, two members serve for two years, one member serves for three years, one member 20 serves for four years, and two members serve for five years. 21 (b) The governor shall appoint the initial members of the board of directors of the 22 Alaska Marine and Rail Transportation Authority, as provided for under AS 44.90.020(a), 23 added by sec. 2 of this Act, before December 1, 2000. 24 * Sec. 53. The uncodified law of the State of Alaska is amended by adding a new section 25 to read: 26 TITLE TO RAIL LAND. (a) Title to all rail land acquired by the Alaska Railroad 27 Corporation under 45 U.S.C. 1201 - 1214 (Alaska Railroad Transfer Act of 1982) or otherwise 28 acquired by the corporation before the effective date of this section that is subject to 29 AS 42.40.350(e), added by sec. 40 of this Act, is transferred to the Alaska Marine and Rail 30 Transportation Authority on July 1, 2001. The Alaska Marine and Rail Transportation 31 Authority shall take the land subject to valid existing rights in third parties, including agencies

01 of the State of Alaska. 02 (b) The Alaska Marine and Rail Transportation Authority shall provide for the 03 recording of title to the land subject to this section in the name of the authority in the 04 appropriate recording offices. 05 * Sec. 54. The uncodified law of the State of Alaska is amended by adding a new section 06 to read: 07 PREPARATION OF FIRST ANNUAL BUDGET UNDER AS 37.07. The Alaska 08 Railroad Corporation shall prepare its first agency program and financial plan under AS 37.07 09 for consideration by the governor in the development of the governor's recommended 10 operating and capital improvements programs and financial plans that are submitted to the 11 legislature at the next regular session of the legislature that convenes following the effective 12 date of this section. 13 * Sec. 55. AS 19.65.011, 19.65.020, 19.65.030; AS 39.25.110(16); AS 42.40.030, 14 42.40.040, 42.40.050, and 42.40.060 are repealed. 15 * Sec. 56. Sections 1, 23, 43, 45, 50, 52, and 54 of this Act take effect immediately under 16 AS 01.10.070(c). 17 * Sec. 57. Except as provided in sec. 56 of this Act, this Act takes effect January 1, 2001.