Legislature(2001 - 2002)

04/17/2001 01:20 PM TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 244-RIGHT-OF-WAY TO DENALI BOR. FOR RR/UTIL.                                                                               
CHAIR  KOHRING announced  the  next order  of  business would  be                                                               
HOUSE BILL NO. 244, "An Act relating  to a grant of state land to                                                               
the  Denali Borough  for a  railroad and  utility corridor  and a                                                               
railroad development project; repealing  provisions relating to a                                                               
grant  of a  right-of-way  of  land for  a  railroad and  utility                                                               
corridor  to   the  Alaska  Industrial  Development   and  Export                                                               
Authority; and providing for an effective date."                                                                                
Number 0658                                                                                                                     
An at-ease was  called at 1:28 p.m.  The  meeting was called back                                                               
to order at 1:31 p.m.                                                                                                           
Number 0674                                                                                                                     
RICHARD  SCHMITZ,   Staff  to  Representative   Jeannette  James,                                                               
sponsor of  HB 244, provided background  on the bill.   He stated                                                               
that in 1998, HB 386 was  signed into law.  This authorized AIDEA                                                               
[Alaska Industrial  Development and  Export Authority]  to engage                                                               
in a number  of activities.  One was to  allow AIDEA to establish                                                               
a transportation  corridor on the  north end of  Denali [National                                                               
Park].  He  referred to the maps given to  committee members, and                                                               
said  it shows  the proposed  corridor  going from  Healy to  the                                                               
border  of [Denali]  park.  This project  was  approved and  non-                                                               
controversial, he said.                                                                                                         
MR.  SCHMITZ stated  that under  HB 386,  Kantishna Holdings  was                                                               
authorized to finance and complete  the project.  However, HB 386                                                               
did not require AIDEA to act  on these provisions, so no land was                                                               
transferred for access.  He said the intent of HB  244 is for the                                                               
Denali Borough  to replace the  AIDEA part  of HB 386,  to survey                                                               
and develop the [transportation] corridor.                                                                                      
Number 0836                                                                                                                     
REPRESENTATIVE  KOOKESH asked  why AIDEA  did not  follow through                                                               
with the provisions in HB 366.                                                                                                  
Number 0861                                                                                                                     
REPRESENTATIVE JEANNETTE JAMES, sponsor  of HB 244, remarked that                                                               
AIDEA was  authorized to do  the bonding  for this project.   She                                                               
suggested that AIDEA never followed  through because no one asked                                                               
them to.   She also said that Kantishna Holdings,  Inc., were not                                                               
interested in  "obligating themselves to  the bonding to  do this                                                               
because  they have  other funds  available ...  that wouldn't  be                                                               
bonding funds."   Although AIDEA  is authorized to do this in the                                                               
bill, it  didn't necessarily say "you  must do this."   As far as                                                               
she is concerned, the land had never been given to them.                                                                        
REPRESENTATIVE KOOKESH wondered if  the Denali Borough intends to                                                               
bond for this project.                                                                                                          
REPRESENTATIVE  JAMES   replied  that  the  applicant,   such  as                                                               
Kantishna Holdings, Inc., who wants  to put in the railroad would                                                               
use private funds.                                                                                                              
Number 0982                                                                                                                     
JOSEPH   FIELDS,   Kantishna   Holdings,  Inc.,   testified   via                                                               
teleconference  that they  are proponents  for a  northern access                                                               
railroad into  Wonder Lake.   He  noted that  Kantishna Holdings,                                                               
Inc.  has  been  involved  in  this for  a  while  and  has  been                                                               
supported  by the  legislature  as well  as  cities and  boroughs                                                               
along projected  rail development areas.   He mentioned  that the                                                               
committee  packets contain  copies of  resolutions that  say this                                                               
northern access would help  provide long-term resource protection                                                               
in Denali  National Park and  better access for  Alaska citizens.                                                               
He sated that he was  pleased that Representative James put forth                                                               
this  concept  that would  enable  economic  development to  take                                                               
place in  the Denali  Borough.   He pointed  out that  since this                                                               
part  of the  state is  not involved  in the  gas line,  national                                                               
missile defense, fisheries, or timber  harvest, this project is a                                                               
"vital piece" of  economic development.  He referred  to a letter                                                               
from the Denali  Borough [April 12, 2001] and  indicated that the                                                               
fully borough support this bill.                                                                                                
Number 1064                                                                                                                     
CHAIR KOHRING  asked how this  bill would be a  "good enhancement                                                               
of economic development."                                                                                                       
MR. FIELDS  said, "Infrastructure in  the visitor industry."   He                                                               
went on  to say that  Alaska has many  natural wonders but  it is                                                               
short on  infrastructure, especially north  of the range.   "Our"                                                               
particular niche  is looking at the  independent traveler, "folks                                                               
that can  come into the  bottom part of  the state or  the middle                                                               
part of  the state up  here and  travel on the  railroad corridor                                                               
independently  to  the  various  sites,  from  Girdwood,  Seward,                                                               
Hatcher Pass,  Big Lake, ...  Willow and  Nenana."  So,  "we" are                                                               
looking into land tours around  this piece of infrastructure that                                                               
would go  into Denali National  Park.  He said,  "Private capital                                                               
... builds  the public infrastructure."   He mentioned  that this                                                               
project would  provide 350-900 jobs,  a very important  factor in                                                               
Alaska,  especially because  there  are not  many  projects.   It                                                               
would also result  in private development due  to private capital                                                               
being placed on public lands.                                                                                                   
Number 1167                                                                                                                     
REPRESENTATIVE  KOOKESH   asked  for  information   on  Kantishna                                                               
Holdings, Inc.                                                                                                                  
MR. FIELDS explained that Kantishna  Holdings, Inc., is a private                                                               
corporation established  in Alaska, made up  of stockholders that                                                               
live  in the  Fairbanks and  Anchorage areas.   It  is a  holding                                                               
company  designed  to  develop  this  project.    He  said  "our"                                                               
intention  is  to  place between  $230-$260  million  during  the                                                               
development  of  this  project.     This  would  be  a  long-term                                                               
investment in  the infrastructure  of Alaska.   He said  that was                                                               
all the  information he could  provide since he is  talking about                                                               
private corporate information.   However, he noted  that "we" are                                                               
a local corporation of Alaskans, with no outside interest.                                                                      
Number 1218                                                                                                                     
REPRESENTATIVE  KOOKESH remarked  that  he appreciates  Kantishna                                                               
Holdings,  Inc., being  a private  corporation, but  "you're here                                                               
asking for some state land," he said.                                                                                           
MR.  FIELD clarified  that Kantishna  Holdings,  Inc., is  asking                                                               
that state land  be transferred to the  Denali Borough; Kantishna                                                               
Holdings,  Inc.,  would  not  receive   ownership  of  the  land.                                                               
However, they  would be able  to utilize the land  for proposals,                                                               
including from  the North  Denali Access Study  of 1995,  and the                                                               
Denali Task  Force of 1994.   He  alluded that the  project would                                                               
take place  along the Parks Highway.   "That's a 300  foot right-                                                               
of-way," he said.   And "that's what this would  end up going off                                                               
the edge of the park in actual land,"  he added.  It would not be                                                               
that whole area [of the map in the committee packet].                                                                           
REPRESENTATIVE KOOKESH  wondered what effect [HB  244] would have                                                               
on  the [Denali]  Borough's entitlement  for organization  of its                                                               
landholdings under the state.                                                                                                   
MR. FIELD  commented that  there is a  "long, complex  history on                                                               
the different elements,"  like in any borough.   However, in this                                                               
situation,  a separate  piece of  land  is being  proposed for  a                                                               
specific  purpose,  and  not  a generalized  borough.    And  his                                                               
understanding is  that it  wouldn't be  part of  "their selection                                                               
rights for the  borough."  However, he noted that  he didn't know                                                               
their standards  or how much  land they  have to select,  if any.                                                               
He also noted that it has a "drop dead" date of 2006.                                                                           
Number 1344                                                                                                                     
REPRESENTATIVE KAPSNER asked how  this bill would impact wildlife                                                               
and park activities such as recreating, hunting, and trapping.                                                                  
MR.  FIELDS replied  that this  bill deals  with state  land, not                                                               
Denali [National] Park.   However, "we" talked to a  lot of folks                                                               
here and they "aren't sure that  people would say that they don't                                                               
want  to see  a  train going  through their  hunting  area."   He                                                               
remarked that there  is limited wildlife in that area  as well as                                                               
in  [Denali  National]  Park:  it's  not  what  "they"  call  the                                                               
"Serengeti of  the North."   He wondered if  a 300 foot  right of                                                               
way  would have  a tremendous  impact.   He  stated that  bridges                                                               
would  be used  to  cross  streams, and  they  would  have to  be                                                               
constructed  in the  proper fashions.    He noted  that there  is                                                               
wildlife "up and down the north and south on the river system."                                                                 
MR.  FIELDS said  there would  be opportunities  to see  wildlife                                                               
while on  the trains,  but he  does not  know how  [the railroad]                                                               
would impact hunting.  He believes  there is a very low number of                                                               
hunters  and  trappers  in the  Denali  National  Park  property.                                                               
Furthermore,  this  location  is  too  far  west  and  south  for                                                               
connecting  with areas  that people  trap out  of such  as [Lake]                                                               
Minchumina or  McGrath Therefore, he  does not think  there would                                                               
be any  major impact on  dogmushers, skiers, or  snowmachiners in                                                               
that area.   He  also said  that these  people would  probably be                                                               
using  the Stampede  trail, the  majority  of which  is north  of                                                               
where this land is described.   He noted that the description [of                                                               
this  project] was  changed to  move a  mile away  from the  park                                                               
border on the north side.                                                                                                       
Number 1433                                                                                                                     
CHAIR KOHRING  inquired about the  environmental impacts  of this                                                               
project.   He mentioned that after  talking to the sponsor  of HB
244, his impression  was that this project would be  a benefit to                                                               
the  environment because  it would  take pressure  away from  the                                                               
existing access  and all the  people that are "flooding  into the                                                               
park" via the road.                                                                                                             
Number 1452                                                                                                                     
REPRESENTATIVE JAMES  pointed out  the existing  road on  the map                                                               
that goes through  [Denali National] Park and  goes to Kantishna.                                                               
Most of the  year, only buses and inholders,  who have permission                                                               
to  use the  road, use  it.   She said  it is  a very  narrow and                                                               
dangerous  road.    She  also   noted  that  the  road  is  "near                                                               
capacity," and that  one-third of the people that  come to Denali                                                               
[National] Park  are not allowed  on that road because  a limited                                                               
number of people can  be on it.  She remarked  that her belief is                                                               
that anyone  who wants to  come to  a national park  like Denali,                                                               
which is absolutely beautiful, should be able to.                                                                               
REPRESENTATIVE JAMES stated that she  was in favor of a railroad,                                                               
not a  road.  She  noted that this  bill would be  competing with                                                               
others who  would rather have a  road.  There have  been problems                                                               
in  this area  with people  camping out  and leaving  "junk," and                                                               
thus  there  have  been  conflicts   with  bears  and  so  forth.                                                               
Furthermore, there have been problems  with those who work in the                                                               
tourist industry  here.  These  people don't seem to  make enough                                                               
money to pay  for a place to  live, so they "live  in the bushes"                                                               
in the summertime.                                                                                                              
REPRESENTATIVE JAMES  pointed out that a  road [allows] continual                                                               
access  for  everyone,  including   trailers,  trucks,  and  cars                                                               
camping  along the  way, leaving  "their junk  and stuff  around,                                                               
which I  think is embarrassing  and very expensive  to maintain."                                                               
Therefore, a  train that has  controlled access would  enable all                                                               
people,  "whether disabled  or not,  old  or young"  to view  the                                                               
park,  which would  be a  great experience.   She  mentioned that                                                               
someday she  would like  to see  train access in  and out  of the                                                               
park  by making  a complete  circle (not  where the  current road                                                               
is).   She said  having a train  is the  environmentally friendly                                                               
way to do it.                                                                                                                   
REPRESENTATIVE JAMES  indicated that one  of the ways  to control                                                               
the "love  the park  to death"  is to put  in a  train.   A train                                                               
would  enable  more people  to  come  in  and  out of  the  park.                                                               
Furthermore,  a   train  would  also  be   "environmentally  more                                                               
friendly and  not so devastating to  the park area, which  is one                                                               
of our prize areas," she  added.  Representative James noted that                                                               
she is enthused  and passionate about this  project after working                                                               
on it for nine years.                                                                                                           
Number 1622                                                                                                                     
MR. FIELDS referred  to the issue of environmental  impact on the                                                               
park and  said that the park  is restricted to 10,512  vehicles a                                                               
year.   He stated that  a 1994 study  estimated that up  to 1,300                                                               
park administrative  vehicles could be  removed if there  was new                                                               
northern access  [to the park].   This could translate  into 1300                                                               
or  more buses  or people  being  able to  get into  the park  as                                                               
opposed to administrative vehicles.   He noted that Alfred Runte,                                                               
author,   Our  National   Parks,  and   one  of   the  preeminent                                                             
environmentalists in the nation,  is very enthusiastic about this                                                               
project, and  even toured [Denali  National] Park with "us."   He                                                               
said he  spoke to David  Brower, Sierra Club  [Executive Director                                                               
1952-1969], a couple  of years before his death,  and although he                                                               
wouldn't give  an "outright endorsement of  a railroad anywhere,"                                                               
he  did mention  that the  failure  of Yosemite  was because  the                                                               
railroad was taken out  in 1941.  So, there are  a good number of                                                               
"solid,  rational,   environmentalists"  who  are  going   to  be                                                               
supportive  of rail  access.   He  also said,  "We  think we  can                                                               
accommodate the  desires of the  visiting public and the  need to                                                               
protect the environment as well. "                                                                                              
REPRESENTATIVE  WILSON  described  a  trip  she  took  to  Denali                                                               
National  Park  about seven  years  before.    She said  she  was                                                               
"totally amazed"  that there was only  one way in and  out of the                                                               
park.  She remarked that  this [railroad] would be wonderful, and                                                               
would give  people a  "better advantage  to be  able to  see what                                                               
they  need to  see,"  and more  people  could do  it.   So,  it's                                                               
"something we need to do," she said.                                                                                            
Number 1737                                                                                                                     
JOAN   FRANKEVICH,  Regional   Staff,  Alaska   Regional  Office,                                                               
National  Parks Conservation  Association  (NPCA), testified  via                                                               
     We  are  a  non-profit   dedicated  to  protecting  and                                                                    
     enhancing  U.S. National  Park System  for present  and                                                                    
     future generations.   We have  over 450,000  members of                                                                    
     which  1,000 live  in  Alaska.   NPCA  has opposed  the                                                                    
     North Denali  route since  it was  first opposed.   And                                                                    
     specifically  we  oppose this  bill,  HB  244, for  the                                                                    
     following reasons.                                                                                                         
     Allowing the  Denali Borough to  select state  land for                                                                    
     railroad   right-of-way   development  projects   seems                                                                    
     extremely  inappropriate.     The  Denali  Borough  was                                                                    
     incorporated in 1990 and  authorized with the following                                                                    
     powers.   They're authorized with  taxation, education,                                                                    
     planning and  zoning.  They  do not have ...  the legal                                                                    
     authority  to acquire,  construct,  or maintain  public                                                                    
     roads.    Officially,   the  Denali  Borough  (indisc.)                                                                    
     itself  that it  provides few  government services  and                                                                    
     does  virtually no  (indisc.) planning  or  zoning.   A                                                                    
     borough with no road  powers and minimal planning seems                                                                    
     a  highly  unusual  choice  to   be  receiving  such  a                                                                    
     (indisc.) of state  land.  And all the  more so unusual                                                                    
     in  that this  land has  previously been  off-limits to                                                                    
     the boroughs down in their selection.                                                                                      
     It's  unclear  as  to  why its  (indisc.)  to  a  local                                                                    
     government, and  we also think that  the borough should                                                                    
     ... before they get this grant,  if they do get it, ...                                                                    
     develop  a land  use  plan and  a economic  feasibility                                                                    
     study on  demonstrating the  (indisc.) of  this project                                                                    
     before the state releases the land to the borough.                                                                         
     My second  point is that  even more unusual in  this is                                                                    
     the borough is  simply a shell and HB  244 is (indisc.)                                                                    
     allowing  a  private  business to  select  state  land.                                                                    
     This bill provides  (indisc.) through private business.                                                                    
     There's  no competition.   There's  no public  process.                                                                    
     To  us,  this really  feels  like  favoritism and  poor                                                                    
     public policy.   ...  [It seems like]  the most unusual                                                                    
     way for  a land  selection to  be conducted.  It raises                                                                    
     legal and ethical questions.                                                                                               
     Furthermore,  this   will  be  the   third  opportunity                                                                    
     Kantishna  Holdings has  had  to  establish a  railroad                                                                    
     right of  way.  ...  Eight years  of time and  yet they                                                                    
     have failed  to do so.   In  1993, they were  granted a                                                                    
     five-year conditional  use permit from  DNR [Department                                                                    
     of Natural  Resources] to allow to  make a right-of-way                                                                    
     recognizant  for this  railroad.   They never  followed                                                                    
     up.  They  never did so.  In 1998,  HB 386, again, gave                                                                    
     Kantishna  Holdings  the  opportunity  to  establish  a                                                                    
     right-of-way.   This  time in  association with  AIDEA,                                                                    
     and again no  action was taken.  And  so (indisc.) what                                                                    
     has changed to  let the state think that  now they will                                                                    
     follow  through on  this  and that  they  now have  the                                                                    
     capability to do it.                                                                                                       
     A third point  is that we feel this  is very premature.                                                                    
     Granting  land to  develop a  railroad project  at this                                                                    
     time,   things   could   (indisc.)     [U.S.]   Senator                                                                    
     Murkowski's  appropriation   study,  [and]   the  North                                                                    
     Denali Access,  ... a railroad  for a road,  seems like                                                                    
     they should  be considered  together or ...it  needs to                                                                    
     be  decided which  project before  we  go forward  with                                                                    
     this  particular project  as its  written here  in this                                                                    
     Also,   this  project   is   completely  dependent   on                                                                    
     extending this  railroad through the National  Park and                                                                    
     at  this  point,  that  seems  highly  unlikely.    The                                                                    
     National  Park Service  opposes it.   ...[And]  there's                                                                    
     much controversy against this project.  ....                                                                               
     If this bill  does pass, we would  suggest a amendment,                                                                    
     ... we  would suggest that  if a railroad  project does                                                                    
     not go  forward by a  specified date, than  [the] 3,500                                                                    
     acres be  returned back  to the state  and it  does not                                                                    
     remain that borough  land.  It's a return  from all the                                                                    
     land that they used not  to select a 300 foot right-of-                                                                    
     way and  (indisc.) development, with a  300 foot right-                                                                    
     of-way  and  (indisc.)   and  relate  development  land                                                                    
     remain in the borough the way I read....                                                                                   
     It  was  mentioned  earlier   that  this  will  relieve                                                                    
     pressure on [the] current park  road.  NPCA agrees that                                                                    
     there needs to  be work done ... to  relive pressure on                                                                    
     that  road.   But we  don't  feel this  is the  answer.                                                                    
     This railroad  will begin  just 17  miles north  of the                                                                    
     existing park road, and ends  in the same place.  There                                                                    
     seems  little sense  in  that  when other  alternatives                                                                    
     such as Fast Denali are being worked on as well.                                                                           
     Contrary  to what  was said  earlier,  we believe  this                                                                    
     will  actually put  more  pressure on  the  road.   The                                                                    
     primary attraction  for visitors  to come to  Denali is                                                                    
     viewing   wildlife.      And   the   wildlife   viewing                                                                    
     opportunities  from  a  road or  railroad  in  a  north                                                                    
     access  are  very  limited.    There  is  not  as  much                                                                    
     wildlife  there  in  the summer.    It's  an  important                                                                    
     winter area for  caribou.  ...  Plus a  lot of the area                                                                    
     is  trees so  visibility is  not the  same as  the park                                                                    
     road.  So getting people  out to Kantishna Wonder Lake,                                                                    
     I think, would  just put more pressure  on the existing                                                                    
     park road  to come back  to [the] current park  road to                                                                    
     view wildlife,  because they will  not be  satisfied in                                                                    
     that respect on the railroad journey.                                                                                      
     To  conclude,   we  just   think  it's   important  the                                                                    
     legislature  realize that  the  northern  route in  the                                                                    
     Denali   National  Park   is  a   highly  controversial                                                                    
     project.   It will be  closely scrutinized.   The major                                                                    
     national  group,  (indisc.)    for  common  sense  [is]                                                                    
     currently  listed  as  one of  the  ten  worst  highway                                                                    
     projects  in   America.  This  project   entails  major                                                                    
     development  within one  of  the  most famous  national                                                                    
     parks in the  world.  It would be  the largest proposed                                                                    
     capital   development  project   in  the   entire  U.S.                                                                    
     National Parks System.   Getting state land  to a local                                                                    
     government that has no road  power it has the (indisc.)                                                                    
     planning and zoning and to  a single source contract to                                                                    
     a  private   business  seems  preposterous.     We  are                                                                    
     (indisc.)  HB 244.  Thank you very much.                                                                                   
Number 2021                                                                                                                     
REPRESENTATIVE   SCALZI   asked   for  clarification   that   Ms.                                                               
Frankevich disagrees  with Representative James'  contention that                                                               
a railroad  would be  a more efficient  way of  transporting more                                                               
people into the  park, in a "sound and clean  matter" rather than                                                               
expanding the highway.                                                                                                          
MS. FRANKEVICH inquired as to what highway he was talking about.                                                                
REPRESENTATIVE  SCALZI  said  the  road that  currently  goes  to                                                               
Wonder Lake.                                                                                                                    
MS. FRANKEVICH  remarked that [NPCA]  does not  propose expanding                                                               
this  road either,  since it  has  not reached  capacity at  this                                                               
point.  She  said that very few people are  turned away, although                                                               
someday that will probably happen.   She said, "getting people to                                                               
the same place by a less  attractive means, we see no benefit for                                                               
REPRESENTATIVE  SCALZI  wondered if  she  had  a solution  for  a                                                               
better means for  the elder population, [and] people  who want to                                                               
visit the park, or if she thought more people should not come.                                                                  
MS. FRANKEVICH replied, "Of course  more people should be there."                                                               
And as far  as the elderly population, they are  well-served by a                                                               
bus system  that currently  goes to a  variety of  locations, she                                                               
said.  She  also mentioned that there  are handicapped accessible                                                               
buses that travel the road everyday.   She noted that most of the                                                               
park's visitors are elderly.                                                                                                    
MS. FRANKEVICH pointed  out that additional facilities  such as a                                                               
learning center  and visitor center  are in the  planning process                                                               
to be  built at the park  entrance.  More trails  and campgrounds                                                               
are  also  being built  to  increase  capacity and  provide  more                                                               
options to  use other areas  of the park.   She also  stated that                                                               
there  have been  ideas  to build  an area  south  of Denali,  up                                                               
Petersville Road and  along the Parks Highway as  well.  National                                                               
Parks   Conservation   Association    supports   all   of   these                                                               
developments, she noted.                                                                                                        
REPRESENTATIVE SCALZI reiterated his  question of whether she saw                                                               
any  benefit to  getting more  people into  the park  in a  sound                                                               
matter.  He also asked if  her alternative was to get other areas                                                               
in the park utilized.                                                                                                           
MS. FRANKEVICH  said yes, "We think  it makes much more  sense to                                                               
expand on the  south side of Denali where more  of the population                                                               
lives and  where the  population comes from  than an  area that's                                                               
already served by the Park Road."                                                                                               
Number 2117                                                                                                                     
REPRESENTATIVE  JAMES   referred  to  Ms.   Frankevich's  earlier                                                               
comments.   Regarding  Denali Borough  powers,  the borough  only                                                               
needs planning  and zoning  powers to  transfer this  land, which                                                               
would  then be  available  for  lease.   So,  even though  Denali                                                               
Borough does not have road power,  it does not make a difference.                                                               
She stated  that in  regard to animals,  there are  animals, just                                                               
different kinds.   She  suggested that the  railroad be  open for                                                               
winter tourism,  when there  are a  lot of  animals in  the area.                                                               
Skiers could  also be  taken in.   She went  on to  say, "There's                                                               
just lots  of things  that this  train could do  on a  year round                                                               
basis to be able  to have access to the park  that is better than                                                               
the access  we have  for people  today."   She remarked  that she                                                               
understands  the  concerns  on  this issue  since  she  has  been                                                               
listening to it for a long time.                                                                                                
Number 2182                                                                                                                     
MR. FIELDS  commented that that  the Denali Task Force  1994 came                                                               
up with the South Side Denali  Plan, which takes place outside of                                                               
the park.  However,  "it was in the process."   He also said that                                                               
the National Park System Advisory  Board put a resolution forward                                                               
calling for the  creation of a northern railroad  route to Wonder                                                               
Lake,  which  is  what  is  being proposed  in  this  bill.    He                                                               
mentioned that this project is  not park service development.  He                                                               
referred  to budgetary  concerns and  said that  although private                                                               
capital  going  into  the  park,   the  overall  control  of  the                                                               
(indisc.) would be retained by the park.                                                                                        
MR. FIELDS  stated that the  biggest issue  is how to  offset the                                                               
500,000 people who come to the  park entrance.  He indicated that                                                               
"we" see  ways of helping  the park this  time of year  by taking                                                               
equipment to  the far end  [of the  park] and letting  them [park                                                               
employees]  come  back via  the  road.    He mentioned  that  the                                                               
railroad might  enable the park to  open a few days  earlier.  He                                                               
went on to say:                                                                                                                 
     But  for management  of  the park,  and  access of  NPS                                                                    
     [National Park  Service] employees  and access  for the                                                                    
     inholders,  we don't  propose that  there should  be no                                                                    
     other access  for the  inholders.   In fact,  I've told                                                                    
     both of  them that we  would support their  position of                                                                    
     having a  right to use  the road  as well as  the rail.                                                                    
     But  I think  from  a business  standpoint, they'd  all                                                                    
     benefit from a rail in there.                                                                                              
Number 2253                                                                                                                     
MS.  FRANKEVICH referred  to Representative  James' comments  and                                                               
said she did not mean to  say because Denali Borough did not have                                                               
road powers  that they  would not  be able to  do this,  since it                                                               
would  fall   under  their   planning  and   zoning  authorities.                                                               
However, it seems  appropriate and "hard to believe  that with so                                                               
little experience"  in roads  that they  could accomplish  such a                                                               
large project successfully.                                                                                                     
MR.  FIELDS  commented that  "they"  have  a group  comprised  of                                                               
former DOT&PF [Department of  Transportation & Public Facilities]                                                               
employees of  the highest "range"  working on this project.   So,                                                               
he thinks that  "they" [Denali Borough] are going to  be in "good                                                               
hands and  have a good critical  view of everything that  goes on                                                               
before they allow anything to happen.   They're not going to take                                                               
any chances with their hometown."                                                                                               
Number 2299                                                                                                                     
CHAIR KOHRING noted that there was written testimony in the                                                                     
committee packets from Linda Pagenelli (ph) of Healy.                                                                           
Number 2313                                                                                                                     
DICK MYLIUS, Resource Assessment & Development, Division of                                                                     
Mining, Land and Water, Department of Natural Resources (DNR),                                                                  
testified via teleconference:                                                                                                   
     This bill  requires DNR to  transfer by September  1 of                                                                    
     this year  approximately 46,000 acres of  state land to                                                                    
     the  Denali  Borough  for  a  future  railroad  towards                                                                    
     Kantishna. In  order to  reach Kantishna,  the railroad                                                                    
     will  need  [to]  continue west  across  National  Park                                                                    
     land.    The  borough and  private  Kantishna  holdings                                                                    
     would  then  work to  identify  and  survey a  railroad                                                                    
     route across  this land and  then in 2006,  the borough                                                                    
     conveys the  excess land back  to the  state, estimated                                                                    
     to be  about 42,500  acres and  the borough  would keep                                                                    
     3,500 acres.                                                                                                               
     DNR  recommends  that  a  more  efficient  and  equally                                                                    
     approach  would  be  for   the  borough  and  Kantishna                                                                    
     Holdings  corporation to  first identify  the corridor,                                                                    
     then ask  DNR to  transfer the land  or even  to simply                                                                    
     apply  for  a  right-of-way.     The  current  proposal                                                                    
     requires DNR to convey to  the borough a large block of                                                                    
     land only  to have the  borough convey most of  it back                                                                    
     in five  years.   This results  in unnecessary  work at                                                                    
     the expense of both the sate and the borough.                                                                              
     In  addition, because  the railroad  route is  unknown,                                                                    
     the route  could include  land outside  of the  area in                                                                    
     the  bill.    For  example, portions  of  the  existing                                                                    
     Stampede  Trail which  is probably  built along  one of                                                                    
     the easiest  ways to get to  this chunk of land  is not                                                                    
     included in  the land that  closed for transfer  to the                                                                    
     borough.   In addition,  the National Park  Service has                                                                    
     invited  the state  to participate  in a  comprehensive                                                                    
     study  as noticed  by access  issues and  alternatives,                                                                    
     because much  the route of  this railroad  crosses Park                                                                    
     Service  land.   This  railroad  can't  be built  until                                                                    
     there's  Park Service  concurrence with  the (indisc.).                                                                    
     Until  the  efforts  to  study  north  side  access  is                                                                    
     completed  ...  (indisc.)   designate  and  transfer  a                                                                    
     railroad   corridor  to   the  borough   and  Kantishna                                                                    
     DNR  has four  specific concerns  regarding this  bill.                                                                    
     Some of  these could be dealt  with through amendments.                                                                    
     The  first  one  is  that  the  bill  causes  confusion                                                                    
     regarding  how  DNR  should  treat  existing  municipal                                                                    
     selections   (indisc.)  by   the   borough  under   its                                                                    
     municipal entitlement under Alaska  Statute 29.65.  The                                                                    
     legislation  actually could  preclude the  borough from                                                                    
     receiving  some  of  this land  under  its  entitlement                                                                    
     because   the  bill   limits  the   borough's  eventual                                                                    
     ownership  from  this   3,000-3,500  acres,  where  the                                                                    
     borough   has  under   its  previous   selections,  has                                                                    
     selected  more than  3,500 acres.   We  do not  believe                                                                    
     that this is the  legislature's intent or the sponsor's                                                                    
     intent.  But it is not  clear in the bill.  Further, it                                                                    
     is unclear  whether or not  the 3,500  acres ultimately                                                                    
     conveyed  to  the borough  is  supposed  to be  charged                                                                    
     against the borough's remaining existing entitlement.                                                                      
     My second concern is that  since DNR assumes that since                                                                    
     the bill directs  DNR to take action and  gives us only                                                                    
     two  months to  transfer the  land, I  believe that  it                                                                    
     isn't  the intent  of  the sponsor  that  DNR would  be                                                                    
     excluded  or   exempted  from  the   state's  (indisc.)                                                                    
     finding requirement.  However, we'd  like to be able to                                                                    
     make  this   clear  so  that  DNR   is[n't]  explicitly                                                                    
     excluded from  the requirements  of AS  [38.05.035] and                                                                    
     [38.04.065] simply  because ...   we've got  two months                                                                    
     ... to transfer the land.                                                                                                  
     We  can't  (indisc.)  public  decision-making  process.                                                                    
     ...   We'd like the  legislature to make that  clear in                                                                    
     the bill.  It is  also unclear what property rights the                                                                    
     bill  or the  borough would  grant against  it being  a                                                                    
     holding  corporation.    ...    Once  the  corridor  is                                                                    
     identified,  the  implication  in   the  bill  is  that                                                                    
     Kantishna Holdings, Incorporated,  would have the right                                                                    
     to build a railroad within  the corridor.  DNR believes                                                                    
     that the  legislation must ensure that  the citizens of                                                                    
     the  state receive  some  compensation  for granting  a                                                                    
     private  exclusive  (indisc.)  thousands  of  acres  of                                                                    
     state land.                                                                                                                
     Finally, our fourth  concern is that the  bill needs to                                                                    
     clarify how  DNR should deal  with the  existing hours,                                                                    
     (indisc.)  which follows  the Stampede  Trial.   Is the                                                                    
     intent that  this will  be conveyed  to the  borough or                                                                    
     excluded?  Current Alaska Statute  [does] not allow DNR                                                                    
     to transport RS  (indisc.) to the borough.  We can only                                                                    
     transfer them  to DOT.   Finally,  DNR has  submitted a                                                                    
     fiscal note  on this  bill.  We  would need  funding in                                                                    
     order to identify and reserve  existing rights that are                                                                    
     on the (indisc.).   We would need to  do public notice.                                                                    
     We  would  need  to  do  title  check  (indisc.).    In                                                                    
     addition,  you'll notice  on our  fiscal  note that  we                                                                    
     have funding requested in 2006,  which is when the land                                                                    
     would be returned  to the state.  And at  that point we                                                                    
     would also  (indisc.) to do  ... research to  make sure                                                                    
     the  borough hasn't  created any  third party  interest                                                                    
     and that  we could take them  back.  We'd also  need to                                                                    
     do an  environmental audit  to make  sure the  land was                                                                    
     still in  the condition it was  when we gave it  to the                                                                    
     borough.    The  state isn't  receiving  any  liability                                                                    
     (indisc.) along with the land.   ...  That concludes my                                                                    
     testimony and I'm available for any questions.                                                                             
TAPE 01-28 SIDE B                                                                                                               
Number 2506                                                                                                                     
REPRESENTATIVE  JAMES  stated  that  since  "we"  have  to  start                                                               
somewhere,  "we thought  it  best  to start  with  state land  as                                                               
opposed to  park land."   She mentioned U.S.  Senator Murkowski's                                                               
interest in  this issue, and  that he  has been working  with the                                                               
National Park Service on it.   She noted that the markings on the                                                               
map are not necessarily where the  railroad would go, and that in                                                               
order for  it to be built,  many "things" would have  to be done.                                                               
The  federal government  has appropriated  $1.2 million  to do  a                                                               
study for  this project.   She referred to Mr.  Field's testimony                                                               
and  said  he talked  about  Don  Lowell  (ph), a  former  DOT&PF                                                               
engineer,  who has  been hired  by the  Denali Borough  to be  an                                                               
advisor  on this  project.   She said  SB 3  includes a  $300,000                                                               
appropriation that  the state will  match, "on that  money that's                                                               
been sitting" there for about four years.                                                                                       
REPRESENTATIVE JAMES  remarked that most  of the pictures  of Mt.                                                               
Denali [Mt.  McKinley] that one  sees, such as a  Sydney Lawrence                                                               
painting, shows  the mountain from  Wonder Lake.  She  noted that                                                               
areas such  as Talkeetna and  Ferry also have beautiful  views of                                                               
Mt. Denali.   She said, "we  would expect that they  would have a                                                               
pretty controlled access to that area."   She went on to say that                                                               
a hotel and  visitor's center would probably be  built along with                                                               
the  railroad,  as  a  way  of  getting  customers  there.    She                                                               
concurred with earlier testimony that  much work would need to be                                                               
done in order for this project to be complete.                                                                                  
REPRESENTATIVE  JAMES  declared  that  she is  still  opposed  to                                                               
putting more roads into the  parks, even though many people would                                                               
rather have  one, "because they like  to drive their cars."   She                                                               
believes that  there should  be some  controlled access  into the                                                               
parks, which the railroad would do.   She reiterated that she has                                                               
been  working on  these ideas  for  nine years,  and nothing  has                                                               
happened. She noted that people  in the Denali Borough would hire                                                               
people who can do the job.                                                                                                      
REPRESENTATIVE  JAMES  referred  to  Mr.  Mylius'  testimony  and                                                               
expressed agreement  with the  suggestion that  if a  railroad is                                                               
never built  after land is set  aside for one, there  should be a                                                               
date  in which  the land  goes back  to the  state. However,  she                                                               
disagrees with DNR that money needs  to be given to the state for                                                               
the disposition of  land.  She remarked that  people having money                                                               
and jobs  is what  benefits Alaskans.   She went  on to  say that                                                               
Alaska's long-term  plan would probably include  statewide income                                                               
taxes in which  the state would get money from  jobs created from                                                               
this issue to create services for everyone.                                                                                     
REPRESENTATIVE JAMES stated  that the train would  run on natural                                                               
liquid gas, which is a very clean  fuel.  She also noted that the                                                               
train would  not be a speed  train, it would be  a tourist train.                                                               
She mentioned that  there are many types of  excursion trains and                                                               
that  British  Columbia  has  ones   that  go  through  "all  the                                                               
beautiful areas in short periods  of time, charging lots of money                                                               
for  riding on  this train,"  and having  the train  trip be  the                                                               
destination.    This  bill  provides the  opportunity  to  put  a                                                               
facility like this  in Denali National Park, which  is the "pride                                                               
of all  of Alaska  and all of  North America."   She said  that a                                                               
park like this has to be  accessible to everyone who wants to see                                                               
it.    And  this  project  opens this  "door"  in  a  "clean  and                                                               
environmentally sound way."                                                                                                     
REPRESENTATIVE JAMES commented that last  year while working on a                                                               
re-write  for the  250,000 acres  for the  university, which  the                                                               
governor vetoed last  year, one of the prime  parcels included in                                                               
that  list  of  land  was  a  90,000  acre  parcel,  named  "Wolf                                                               
Township."  This  would "kill" the access or  railroad going into                                                               
the park.   She said  this is "on hold."   She remarked  that she                                                               
isn't  aware of  what the  disposition of  the township  would be                                                               
once we  take this out there,  since there are mixed  feelings in                                                               
the Denali  Borough about  this issue.   She mentioned  that many                                                               
people  have  cabins  out  there  and that  it's  a  hunting  and                                                               
recreation area.   She said, "If you live by  any state land, you                                                               
hear people  say they don't  want anybody  else to have  it, they                                                               
want to  have it for  their own and  that's what the  people feel                                                               
like  about  this   Wolf  Township.    She   said,  Alaska  needs                                                               
development and  "sometimes it just  takes local  people grabbing                                                               
the bull by the horn."                                                                                                          
Number 2131                                                                                                                     
REPRESENTATIVE KOOKESH  commented that  he is  uncomfortable with                                                               
taking  46,000 acres  when only  3,500 acres  are needed  for the                                                               
actual  right-of-way.   He  asked  if  the [Denali]  Borough  was                                                               
initially entitled  to 3,500 acres,  how a 46,000  entitlement is                                                               
REPRESENTATIVE  JAMES   indicated  that   she  would   like  [the                                                               
entitlement]  to be  done by  DNR,  but they  won't be  involved.                                                               
However,  Denali  Borough has  agreed  to  do  it, along  with  a                                                               
$20,000 fiscal note, which is reasonable.   She noted that if DNR                                                               
did it, the  fiscal note would have been much  larger.  She asked                                                               
Mr.  Mylius  how many  of  the  entitlements Denali  Borough  has                                                               
MR.  MYLIUS   replied  that  the   Denali  Borough   received  an                                                               
entitlement of  more than  49,000 acres based  on the  formula in                                                               
state statute.   To date,  20,000 acres have been  transferred to                                                               
Denali Borough, and the remaining  29,000 acres is still pending.                                                               
It requires  DNR to go through  an amendment of its  (indisc.) in                                                               
order to get those lands to the borough.                                                                                        
REPRESENTATIVE JAMES  commented that  in this particular  case, a                                                               
"large parcel" is temporarily going  back to Denali Borough until                                                               
2006.   All  but  3,500  acres will  be  transferred  back.   She                                                               
indicated that  she did not  know the  details of this,  and that                                                               
the Denali Borough would have to answer.                                                                                        
Number 1965                                                                                                                     
CHAIR KOHRING asked if it  was still Representative James' intent                                                               
to provide a sponsor statement for this bill.                                                                                   
REPRESENTATIVE  JAMES  stated that  she  does  not think  one  is                                                               
needed, however  she wants to include  a date that land  would be                                                               
transferred back to the state if  the project is not completed by                                                               
the deadline.   She indicated  that she  also wanted to  find out                                                               
more  information on  the  3,500 acres  that  the Denali  Borough                                                               
would  receive.     She  noted   that  she  could   provide  this                                                               
information in a sponsor statement at the next meeting.                                                                         
Number 1895                                                                                                                     
CHAIR  KOHRING announced  that HB  244 would  be held  over until                                                               

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