Legislature(2003 - 2004)
05/09/2004 11:13 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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.