Legislature(2007 - 2008)SENATE FINANCE 532

04/17/2007 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Scheduled But Not Heard
Scheduled But Not Heard
Moved HB 168 Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved CSSB 89(FIN) Out of Committee
     HOUSE BILL NO. 168                                                                                                         
     "An  Act  authorizing  two exchanges  of  land  between  the                                                               
     Alaska   Railroad   Corporation   and  the   Department   of                                                               
     Transportation and  Public Facilities; and providing  for an                                                               
     effective date."                                                                                                           
This was  the first hearing for  this bill in the  Senate Finance                                                               
Co-Chair  Stedman  pointed   out  that  this  is   the  House  of                                                               
Representatives  companion   bill  for  SB   137,  which   is  in                                                               
Committee, but has not been heard.                                                                                              
DAVID SCOTT, Staff to Representative  Kyle Johansen, Chair, House                                                               
Transportation which sponsors this  bill, read from the sponsor's                                                               
statement as follows.                                                                                                           
     House  Bill   168  would   authorize  the   Alaska  Railroad                                                               
     Corporation (ARRC)  to exchange  approximately ten  acres of                                                               
     land  with  the  Department  of  Transportation  and  Public                                                               
     Facilities (DOTPF)  to accommodate  two DOTPF  projects. The                                                               
     Parks Highway  Improvement project in Wasilla  and the Heavy                                                               
     Aircraft Cargo Apron project  at the Fairbanks International                                                               
     Airport both require an adjustment  to the Alaska Railroad's                                                               
     track and right-of-way lands.  This legislation ensures that                                                               
     all the appropriate  titles to property can be  in place for                                                               
     both of these important DOTPF projects.                                                                                    
     The   Alaska  Railroad   Corporation  Act,   Alaska  Statute                                                               
     42.40.285,  requires Legislative  approval for  the ARRC  to                                                               
     "exchange,  donate,  sell  or otherwise  convey  its  entire                                                               
     interest in land".                                                                                                         
Mr.  Scott noted  that  this  bill was  reviewed  by three  House                                                               
Committees. Its  Senate companion bill,  SB 137, was  reviewed by                                                               
the Senate Transportation Committee.                                                                                            
9:17:19 AM                                                                                                                    
MARY SIROKY,  Special Assistant  to the  Commissioner, Department                                                               
of Transportation  and Public Facilities,  identified this  as an                                                               
important bill  to the  Department. Receipt  of these  fee simple                                                               
titles  would satisfy  the projects'  fund sources,  specifically                                                               
federal agencies.                                                                                                               
9:18:28 AM                                                                                                                    
Senator  Thomas   understood  that  the  land   in  question  had                                                               
originally been owned by the State.  The State had conveyed it to                                                               
the Railroad.                                                                                                                   
Ms. Siroky affirmed.                                                                                                            
9:18:51 AM                                                                                                                    
WENDY  LINDSKOOG, Assistant  Vice  President, Corporate  Affairs,                                                               
Alaska  Railroad Corporation,  Department of  Commerce, Community                                                               
and Economic  Development, specified that this  legislation would                                                               
"clean up" matters of title as these projects move forward.                                                                     
Co-Chair Stedman  considered the action  proposed in the  bill "a                                                               
fairly straight  forward land exchange"  that would clean  up the                                                               
land titles.                                                                                                                    
Co-Chair  Hoffman  asked  how  the   expense  of  relocating  the                                                               
railroad tracks would be addressed.                                                                                             
9:19:52 AM                                                                                                                    
Ms. Siroky  pointed out that  the Parks Highway  track relocation                                                               
project had already been completed.                                                                                             
Co-Chair  Hoffman thus  asked  why the  title  transfer for  that                                                               
project was being requested.                                                                                                    
Ms.  Siroky  communicated  that when  the  Department  began  the                                                               
construction process,  "it entered into lease  arrangements" with                                                               
the ARRC. This legislation would allow  the State "to get the fee                                                               
simple title where it's available for the land".                                                                                
Co-Chair  Hoffman  questioned the  reason  for  pursuing a  title                                                               
transfer  since  "the lease  arrangement  had  been adequate"  to                                                               
allow for the track relocation.                                                                                                 
Ms.  Siroky expressed  that "it  is  always in  the State's  best                                                               
interest to  have fee simple  title wherever possible so  that we                                                               
don't have to go back" and  renegotiate a lease. In this case, it                                                               
would be difficult  to move the highway and the  railroad back to                                                               
its  original  location  in the  event  the  lease  renegotiation                                                               
Co-Chair Hoffman asked the cost of the lease.                                                                                   
Ms. Siroky  did not have  that information and deferred  to other                                                               
Department   of  Transportation   and  Public   Facilities  (DOT)                                                               
9:21:31 AM                                                                                                                    
FRAN ZIMMERMAN, Central Region,  Department of Transportation and                                                               
Public Facilities,  testified via  teleconference from  an offnet                                                               
location.  One of  the conditions  of the  temporary construction                                                               
permit that permitted  the Parks Highway project  to commence was                                                               
that the State  would initiate the process to  acquire the title.                                                               
She also noted that the  project was supported by federal highway                                                               
In response  to a question  from Co-Chair Hoffman,  Ms. Zimmerman                                                               
explained that  moving the railroad  tracks had been  an integral                                                               
component of the Parks Highway project.                                                                                         
Co-Chair Hoffman again  asked the State's cost  for the right-of-                                                               
way lease with ARRC.                                                                                                            
Ms. Zimmerman did not have  the exact information but assured the                                                               
Committee it was a "nominal fee".                                                                                               
9:22:49 AM                                                                                                                    
JOHN BENNETT, Right-of-Way Chief,  Northern Region, Department of                                                               
Transportation    and    Public   Facilities,    testified    via                                                               
teleconference from an offnet location  to speak to the Fairbanks                                                               
Heavy   Cargo  Apron   Relocation  project.   The  right-of-entry                                                               
contract the State  signed with ARRC allowed  DOT's contractor to                                                               
enter   ARRC's  railroad   right-of-way  "and   relocate  it   in                                                               
anticipation that we will eventually transfer title".                                                                           
Mr.  Bennett  informed the  Committee  that  this title  transfer                                                               
process  had begun  the previous  year; however,  the Legislature                                                               
adjourned before  the action could  be addressed.  That situation                                                               
prompted  the   Department  to  enter  into   the  right-of-entry                                                               
agreement with ARRC.                                                                                                            
Mr.  Bennett   communicated  that  because  the   acreages  being                                                               
transferred were considered to be  of equal value, no exchange of                                                               
money  would be  required. He  also noted  that federal  aviation                                                               
funding would provide for the cost of relocating the rail track.                                                                
Co-Chair Hoffman  asked whether the  land was valued in  terms of                                                               
acreage or dollar amount.                                                                                                       
Mr. Bennett  specified that the  acreages were equal,  and, since                                                               
the parcels were  in close proximity to each  other, an appraisal                                                               
was  not  deemed necessary.  The  values  of  the land  would  be                                                               
9:24:31 AM                                                                                                                    
In  response to  a question  from Co-Chair  Stedman, Mr.  Bennett                                                               
affirmed the lands had not been appraised.                                                                                      
Co-Chair Stedman  asked whether  not conducting an  appraisal was                                                               
standard  operating  procedure  in Department  right-of-way  land                                                               
Mr.  Bennett  responded  in the  negative.  When  properties  are                                                               
geographically  distant,  an  appraisal  would  be  conducted  as                                                               
different  values would  be expected.  However, that  is not  the                                                               
case with the lands in question.                                                                                                
9:25:21 AM                                                                                                                    
PHYLISS   JOHNSON,  Vice   President,  General   Counsel,  Alaska                                                               
Railroad,   Department  of   Commerce,  Community   and  Economic                                                               
Development testified via teleconference  from an offnet location                                                               
and advised she was available to answer questions.                                                                              
Co-Chair Stedman asked whether she,  as a representative of ARRC,                                                               
deemed  the value  of these  properties  to be  equal, and  thus,                                                               
would not warrant an appraisal.                                                                                                 
Ms. Johnson expressed  that ARRC "is getting  equivalent value in                                                               
the  sense  of  having  an  operating  route  covering  the  same                                                               
stretch"  from one  point to  another. Therefore,  even were  the                                                               
acreage or  the value to  vary slightly, ARRC would  consider the                                                               
transfer "status quo" in that ARRC  would be able to move traffic                                                               
in a similar fashion as before.                                                                                                 
9:26:22 AM                                                                                                                    
Co-Chair Stedman, observing that neither  of two ARRC land issues                                                               
being  considered by  the Legislature  have had  appraisals done,                                                               
asked whether this was the norm for ARRC.                                                                                       
Ms. Johnson  specified that both issues  concerned exchanges. The                                                               
land in  this bill would  be transferred to another  State entity                                                               
and thus,  the land would not  "be leaving the umbrella  of State                                                               
ownership".  In   addition,  the  land  parcels   were  in  close                                                               
proximity  to  each  other  and   would  be  "operationally  very                                                               
Ms. Johnson  considered ARRC's other  land issue to be  a "unique                                                               
land transfer …  it stands on its own two  feet for other reasons                                                               
other  than  an  appraised  value". The  president  of  ARRC  has                                                               
expanded  on the  circumstances  involved in  that land  transfer                                                               
issue several times before the Legislature.                                                                                     
9:27:38 AM                                                                                                                    
Co-Chair Stedman asked whether ARRC's  decision not to have these                                                               
parcels of  land appraised  was an  anomaly or  regular operating                                                               
Ms.  Johnson  advised  that  an appraisal  is  conducted  in  the                                                               
majority   of   ARRC's   land   transactions,   including   lease                                                               
Ms. Johnson noted that an  appraisal would have been conducted on                                                               
the land  identified in this  bill were the transactions  to have                                                               
involved a private  party rather than a State  entity. Thus, this                                                               
situation is an anomaly.                                                                                                        
9:28:43 AM                                                                                                                    
Co-Chair Hoffman  moved to  report the  bill from  Committee with                                                               
individual recommendations and accompanying fiscal notes.                                                                       
There being no objection, the  HB 168 was REPORTED from Committee                                                               
with  previous  zero  fiscal  note  #1  from  the  Department  of                                                               
Commerce, Community  and Economic  Development and  previous zero                                                               
fiscal note #2  from the Department of  Transportation and Public                                                               
AT EASE 9:29:24 AM \ 9:30:09 AM                                                                                             

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