Legislature(2003 - 2004)
05/09/2004 11:13 AM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 395(FIN) am
An Act authorizing the Alaska Railroad Corporation to
extend its rail line to Fort Greeley, Alaska, and
relating to that extension; authorizing the corporation
to issue bonds to finance the cost of the extension and
necessary facilities and equipment; relating to the
Railroad Planning, Platting, and Land Use Regulation
Task Force; and providing for an effective date.
ZACK WARWICK, STAFF, SENATOR GENE THERRIAULT, stated that SB
395 contains two provisions relating to the Alaska Railroad
Corporation and its role as a State transportation and
economic development agent.
SB 395 authorizes the Railroad to issue up to $500 mil1ion
dollars in tax-free revenue bonds to pay for extending a
rail line to Delta Junction and Ft. Greeley. The proposal
would have the bonds secured through federal funds from the
United States Department of Defense. Depending upon
negotiations with the Department, the Railroad could issue
the bonds as early as 2005.
Mr. Warwick noted that SB 395 also addresses a recent Alaska
Supreme Court decision that has called into question the
Railroad's exemption from local planning and zoning
ordinances provided in AS 42.40. The decision jeopardizes a
mode of operation that has been in place since the Railroad
was transferred to the State, 18 years ago. The bill
creates a task force to provide recommendations to the
Legislature in 2005 on whether and to what extent municipal
planning, platting and land use regu1ations should apply to
interests in land owned by the Alaska Railroad. The Alaska
Railroad Corporation is both an interstate common carrier
and an instrumentality of the State of A1aska. Its mission
is to provide transportation services to residents,
businesses, visitors and military installations in the
State, and foster and promote long term economic growth and
development, particularly of the State's land and natural
resources. The Railroad's ability to operate safely,
efficiently and effectively is due in great part to the
singular nature of the corridor. The Railroad's current
track alignment passes through 13 recognized municipal
governments between Seward and the North Pole.
Without protection, local communities could separately
dictate planning and zoning restrictions that would
negatively impact the Railroad's ability to offer safe,
efficient, economical and reliable service to its freight
and passenger customers. Restrictions would increase the
cost of operations, impact train movements, customer
schedules, contract commitments, and the amount of business
the Railroad could accommodate each year due to decreased or
varied hours of operation. In situations where the Railroad
and a municipality are in agreement on a planning and zoning
issue, an individual or environmental group could file a
lawsuit seeking to overturn the municipality's decision,
which could further delay a project.
Mr. Warwick concluded that there are other adverse impacts
that could arise if the Railroad was subject to local
planning and zoning. Inconsistent regulation would decrease
the value of the State's considerable investment in
purchasing the Railroad. It could unreasonably delay and
add significant cost to the Railroad's efforts to improve
the transportation infrastructure of the State through
upgrades of existing track and facilities.
While federal law protects interstate commerce from some of
restrictions, the issue after the Supreme Court decision
invites litigation, which is not only costly to the Railroad
and municipalities, but could result in inconsistent
holdings among various jurisdictions. Mr. Warwick claimed
that the Railroad is an essential part of the State's
transportation network and serves an important State mission
and that the State should be the entity that controls the
Railroad's use land, not the 13 Railbelt municipalities and
boroughs.
Representative Foster pointed out that the earlier bill had
previously received some "no" votes, resulting from the
Percentage of Market Value (POMV) vote. He asked if new
rules were being established.
Co-Chair Harris MOVED to report CS SB 396 (FIN)am out of
Committee with individual recommendations and with the
accompanying fiscal note. Representative Foster OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Chenault, Hawker, Meyer, Williams, Harris
OPPOSED: Stoltze, Foster
Representative Moses, Representative Croft, Representative
Joule and Representative Fate were not present for the vote.
The MOTION FAILED (5-2).
Representative Hawker interjected that the proposed
legislation was a revenue bond and that it would not affect
the general fund.
SB 395 was HELD in Committee.
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