Legislature(2001 - 2002)
05/05/2001 09:14 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE CS FOR CS FOR HOUSE BILL NO. 244(RES)
"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."
REPRESENTATIVE JEANETTE JAMES testified the bill authorizes the
Denali Borough to identify and survey a right-of-way in an area
between Healy and Denali National Park for the purpose of a
railroad corridor. She remarked the intention is to expand the
right-of-way into the park itself. She informed that this project
"has been around for a long time" and that she has been working on
it for nine years.
Representative James reminded of an authorization given several
years prior for the Department of Natural Resources to convey land
across the 90,000-acre area referred to as Wolf Townships. She
elaborated that within this land, a corridor could be identified
under the provisions of the earlier authorization and granted
through the Alaska Industrial Development and Export Authority
(AIDEA). However, she said this process was unsuccessful for a
variety of reasons and this legislation represented a new plan for
granting authority to the Denali Borough rather than AIDEA.
Representative James explained the process of the Department of
Natural Resources working with the Denali Borough to identify a
corridor and any existing rights and uses within that corridor
after which, a survey could be performed. Once the survey was
completed, she continued, a maximum amount of 3,500 acres of land
would be transferred from the Department of Natural Resources to
the borough.
Representative James pointed out a sunset date of the year 2010
contained in the bill. She stated that if the Denali Borough has
not leased the identified land to a party for the purpose of a
right-of-way into the edge of the park, the land would revert to
state ownership.
Representative James surmised that approximately 1,500 acres would
actually be transferred under this program. She stressed this land
would be considered as part of the Denali Borough's land
entitlement selection. She noted that to date, the borough has only
received about half of its entitlement land.
Representative James noted several local residents are concerned
over this matter and that she has made arrangements to visit the
area on June 3, 2001 to "allay their fears". She assured a public
process would occur as one occurs with any right-of-way issue.
Co-Chair Kelly asked about the increased expenses in FY 05 shown on
the fiscal note.
Representative James ascertained this relates to the original
completion date of 2006 and noted the date has been extended,
through this legislation, to the year 2010. She said it was not her
intention to set an unrealistic deadline.
Senator Austerman assumed it would be necessary to lay new rails
across this corridor.
Representative James affirmed and stated this project would connect
to the Alaska Railroad on one end. She informed that Kantishna
Holdings, Inc. has been negotiating with the Alaska Railroad
Corporation as to where this connection would be located. She
indicated there is a plan to construct a hotel in the community of
Healy to serve passengers traveling along this route. She estimated
the length of the new route at approximately 40 miles to the
boundary of the park.
Senator Ward offered a motion to report the bill from Committee.
It was noted that testimony was not concluded and the motion was
WITHDRAWN without objection.
BOB LOEFFLER, Director, Division of Mining, Land and Water,
Department of Natural Resources testified that access to Denali
National Park could bring significant benefits to the state.
However, he remarked, the department has concerns that this bill
might not achieve those benefits. He listed four concerns on this
point.
Mr. Loeffler spoke to the first concern that the bill conveys a
right-of-way to Kantishna Holdings, Inc. for one-third of the
distance. He warned that without agreement from the United States
National Park Service over control of the remaining two-thirds of
the land, no right-of-way could be established for this or any
other corridor. He explained that if the Denali Borough establishes
an "exclusive use corridor" for a railroad by Kantishna Holdings,
Inc., other opportunities for access to the park would not be
considered. He recommended agreement between "all players" before
the state commits to a specific corridor mechanism and developer.
Mr. Loeffler listed the second concern over public policy that
would essentially provide a legislative land grant to a single
private developer.
Mr. Loeffler stated that the bill thirdly, "unintentionally… may
put the borough in a poor marketing position with a private
developer." He referenced language that stipulates that if the
borough does not grant the land to Kantishna Holdings, Inc. by a
certain date, ownership of the land returns to the state. He
cautioned that this limits the criteria the borough could place on
any agreement with the corporation, because it is known there is a
consequence to the borough if no agreement is reached.
Mr. Loeffler remarked, the final concern that the role of the
Department of Natural Resources is "ambiguous" in the land transfer
process. He noted the legislation requires that the department
review selections made by the borough, but exempts the review from
standards in municipal entitlement law. He stressed that the bill
however, does not remove the department's obligation to determine
that disposal of this land to the borough is in the state's best
interest. He added that numerous other obligations contained in
Title 38 of the Alaska State Statutes governing land disposal, are
also not exempted.
Co-Chair Kelly opined that if the Committee addressed these four
concerns raised by the department, the commissioner would still
oppose the legislation.
Mr. Loeffler commented this was possible.
JEFF KNUTCHNE, resident of Stampede Road, testified via
teleconference from Denali and told of the many visitors to his bed
and breakfast and sled dog tours establishment. He spoke of
concerns with protecting the remote atmosphere of his location and
warned that this project would "ruin" his business. He informed
that the local homeowners association, with 160 landowners
occupying land within the proposed corridor, is in opposition to
the development of the railroad in this area. He stated that this
project has had little input from the people affected the most and
he questioned the public process related to this land disposal,
referring to the way the matter is listed as "old township
concerns" on agendas without mention of the Alaska Railroad
Corporation. He also told of the historical use of the area in
question.
BRUCE LEE, operator of dog sled business, testified via
teleconference from Denali to oppose the bill on three points: how
it would affect him personally, how it impact subsistence and the
financial implications. He told the Committee about his cabin in a
remote area on land that he obtained 26 years ago through the open
entry process but would be taken away from him under this
legislation. He stated that there is little available land for
local residents because the United States Park Service and Native
Corporations own most of the land in the area. He requested that
consideration be given to the use of this land by caribou as a
preferred winter range and he stressed the importance of
subsistence. He did not agree with public lands being given to a
private "non-local, non-borough corporation" that has demonstrated
no history of operating such a large-scale operation. He opined it
is not "sound financial judgment" for the state to place the
borough in this position. He disagreed with the assessment that the
project is favored at a ratio of 15 residents to one, asserting
that he knew of only a few residents who support the proposal.
JOE FIELDS, President, Kantishna Holdings, Inc., testified via
teleconference from Fairbanks that the Committee should be
concerned about the local residents' issues, but that he thought
this legislation addresses them. He stated that the township
consists of 100,000 acres and that this legislation would only
utilize 15,000 acres. He countered earlier arguments asserting that
there has been a public process on this matter for over nine years.
He noted the newly elected Denali Borough Assembly, unanimously
voted to endorse this legislation on April 8, 2001. He stressed
that while the local residents might see trains, these would not be
freight trains, but rather passenger trains carrying tourists.
Also, he said, there would be no road crossings and accompanying
whistles at these crossings.
Mr. Fields qualified that he did not know what impact this corridor
would have on subsistence, but he predicted it would not be much.
He stated he has tried to learn the number of caribou strikes by
train and although he didn't have an amount, the amounts seemed
different than moose strikes and different than areas with greater
snow levels.
Mr. Fields stated that the intent of this effort is for the study
of the corridor to create a northern access to Denali National
Park. He told of an endorsement given in 1994 by a national park
system advisory board. He said consideration has been given to an
additional access route to the southern portion of the park but
that there is no funding in the Statewide Transportation
Improvement Program (STIP) for actual construction of the entire
project for at least six years.
Mr. Fields asserted that the northern access route would create 300
to 900 jobs. He spoke of efforts to receive approval from the
United States Secretary of the Interior for the route, which he
said involves more public process. He then stated this route would
reduce road traffic by 1,300 vehicles annually. He stressed that
this is "good sound development" and is environmentally sound. He
remarked that many people would be able to safely experience the
national park.
Co-Chair Kelly commented, "This is, I think, a pretty exciting
project." He understood that each time such a project is proposed,
some people's lives are impacted and that there is concern about
the extent of these changes. He stated this is a part of living in
a "growing state".
Mr. Fields expressed he is willing to meet with those residents
with concerns and to give them a tour of the proposed area and
detail the impacts. He anticipated the actual location of the
corridor would be south of most of the trails the residents feel
are threatened. He added that it is unlikely the tracks could be
seen from the areas used by the guides. He said he wanted to have
discussions with the community "talking honestly about their issues
and not getting all excited about how they are going to lose their
rights to use the public land for free."
Senator Olson spoke as a small businessman and the need to protect
the ability to earn a living. He asked the previous two witnesses
to describe how this project would adversely affect their business
operations. He wanted to know if they would go out of business.
Mr. Knutchne responded that the business would fail without access
to the remote cabins located across from the proposed corridor. He
detailed the three and five day trips on the state-owned land and
the areas of travel.
Co-Chair Kelly asked why the groups could not cross the railroad
tracks.
Mr. Knutchne asserted that the language in this legislation "could
possibly eliminate" any competing business ventures in the
corridor.
Senator Olson asked Mr. Fields if this is true and that Mr.
Knutchne would have no other way to access the cabins then across
the right-of-way.
Mr. Fields did not think this would be the case. He assumed bridges
and culverts would be built across the rivers and creeks but no
plans were yet made to provide for railroad crossings. He explained
that railroad crossings are possible, but are done at the
traveler's own risk. However, he stressed that there would be no
high-speed trains operating on these tracks and that the proposed
passenger trains are comparatively lightweight. He knew of no
right-of-way or corridor that does not allow crossings. He opined
if the intent is to have sole access to complete wilderness, then
this intent is self-centered and unrealistic.
NANCY BALE, Board Member, Denali Citizens Counsel, 25-year resident
and employee of Denali Borough, testified via teleconference from
Anchorage to contradict the claim that a 15 to one ratio of borough
residents are favor of the project. She anticipated a large turnout
at the next borough assembly meeting of residents against the
railroad access. She stated that there is significant opposition
largely because the residents have no say as to whether or not the
project would occur. Preferable, she said, is a consultated public
process.
Ms. Bale began listing specific concerns over some of the language
in the committee substitute, starting with page 2, line 4, "The
borough, in consultation with Kantishna Holdings, Inc., shall also
identify and select ancillary land necessary to support the
development and operation of a railroad and facilities to support
economic development in conjunction with the railroad development
project." She shared that this is of particular concern to
residents because, although the right-of-way is only 300 feet wide,
there is no stipulation as the size of the ancillary land. She
stressed that this provision contains, "so few controls that rail-
only is not even guaranteed" and that there is the possibility of a
road. She detailed the potential impact on local and subsistence
use of the land.
Ms. Bale next referred to page, 2, lines 7 and 8, "The department
shall review the selections within 90 days after the selections are
made." She asked if the department in question is the Department of
Natural Resources.
Co-Chair Kelly answered this is correct.
Ms. Bale asked if this review process would involve a best-interest
finding, or an in-house "paper review." She remarked that "lip
service" has been given that an environmental impact statement
would be conducted, but stressed that it is not guaranteed in the
bill, nor is a best interest finding.
Ms. Bale continued reading from page 2, line 10, "…the borough
shall survey the land…" and emphasized that it is uncertain how
this would be funded. She pointed out that the borough is already
funding most of its school system and she asked if money would be
taken away from education or if state funds would be appropriated
for a survey.
Ms. Bale spoke to page 2, line 19, "By September, 1, 2010, the
Denali Borough shall lease the land received under this section to
a person for a railroad development project." She wanted to know
how this person would be selected and whether there would be a
competitive bidding process at that time.
Ms. Bale commented that a Denali task force has been cited as
supporting a northern access to the park, but stressed she
disagreed with this claim. To demonstrate, she read from a report
on the issue generated by the task force, "While all task force
members felt strongly that new opportunities to experience the
national park should be provided, a majority felt that the
recommended alternative, primarily on the south side, would in part
meet future demands. The north route is also perceived to be less
cost effective and less consistent with maintaining the primitive
character of Kantishna. The approval of north access in this
document was a minority opinion."
Co-Chair Kelly addressed the witness's question regarding "person",
explaining this is a legal term that could apply to a person or a
corporation. He said that when an individual person is referenced
in statute, the correct language is "individual."
Ms. Bale again asked if the bill allows for a competitive process
in the lease of the right-of-way land.
Representative James responded that the process in requesting a
right-of-way is by application rather then a request by the state
for competitive bids. She noted that in this legislation the reason
"person" is used instead of Kantishna Holdings, Inc. is in the
event that the corporation fails and another party is interested in
the project before the deadline of 2010. She stated there would be
a public process on this issue.
Representative James addressed the funding of the land survey,
saying the funds would probably come from a source other then the
borough if the borough could not afford it. She noted federal funds
could be available, provided state matching funds were
appropriated.
Senator Ward shared his conversation with Denali Borough mayor and
former Alaska Representative, John Gonzales and the assurances
given that the borough is "capable of handling the public process."
Senator Ward shared that the mayor asked that the legislature "have
faith" in the borough to determine its best interest.
Co-Chair Kelly asked Mr. Loeffler if language is contained in the
legislation that protects traditional access across the right-of-
ways.
Mr. Loeffler replied that the bill "indicates" that the corridor
shall protect existing rights. He noted that a Department of
Natural Resources best interest finding would address the matter.
Senator Hoffman asked about the cabins previously discussed.
Mr. Loeffler qualified that it is not guaranteed there would be no
impact but that users of these cabins would have access through the
corridor.
Senator Ward offered a motion to move from Committee SCS CS HB 244
(RES) with $16,800 fiscal note from the Department of Natural
Resources.
Without objection the bill MOVED from Committee.
AT EASE 9:57 AM / 1:20 PM
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