Legislature(2003 - 2004)

05/09/2004 11:13 AM FIN

Audio Topic
* first hearing in first committee of referral
+ 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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