Legislature(2001 - 2002)

02/27/2002 03:43 PM Senate RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
           HB 241-RAIL AND UTILITY CORRIDOR TO CANADA                                                                       
                                                                                                                              
CHAIRMAN  JOHN TORGERSON  called  the Senate  Resources  Committee                                                            
meeting to  order at 3:43 p.m. and  announced HB 241 to  be up for                                                              
consideration.                                                                                                                  
                                                                                                                                
REPRESENTATIVE JEANETTE  JAMES, sponsor of HB 241,  said she filed                                                              
this legislation  to increase the  size of the  transportation and                                                              
utility  corridor  from 300  to  500  ft.  wide. A  corridor  from                                                              
Fairbanks to Seward has been identified;  this bill would create a                                                              
railroad connection  to the  North American  rail system.  She has                                                              
had a lot of support for this idea  from the Canadians, as well as                                                              
from within the  state. The accelerated interest is  due, in part,                                                              
to Senator  Murkowski's effort to  support a bilateral  commission                                                              
to  do a  feasibility study  at the  federal  level. However,  the                                                              
Canadians  will  have  to do  the  same,  so  while the  U.S.  has                                                              
appropriated  $6 million  for this  three-year  process, no  funds                                                              
have been expended yet.                                                                                                         
                                                                                                                                
HB  241  authorizes  the Alaska  Railroad  Corporation  (ARRC)  to                                                              
survey on  the ground and monument  the corridor. Right  now there                                                              
is great interest in building a gas  pipeline along the same route                                                              
and  she wants  to  be sure  that  neither the  gas  line nor  the                                                              
railroad  exclude the  other  by taking  a  position that  doesn't                                                              
leave  anything  for  the  other.  In  discussions  with  the  gas                                                              
producers,  it  has  become  apparent   that  there  may  be  some                                                              
synergies between the two.                                                                                                      
                                                                                                                                
This  particular   legislation  authorizes  ARRC   to  investigate                                                              
extension of  the railroad  to White  Horse, Yukon Territory.  She                                                              
personally thought this  would be a hand out to  Canada. The other                                                              
issue is  that the White  Pass Railroad  could go to  White Horse,                                                              
but currently it only goes as far  as Carcross. The Canadians have                                                              
indicated to her that if the Alaska  Railroad went to White Horse,                                                              
they would  extend their  schedule  to go there,  too. This  would                                                              
open the  deep-water port  of Skagway to  that part of  Alaska and                                                              
the Yukon.                                                                                                                      
                                                                                                                                
The part of the bill that may be  more controversial provides that                                                              
once ARRC  has received the funds  to do the surveying,  the state                                                              
would transfer the state land within that corridor to ARRC.                                                                     
                                                                                                                                
REPRESENTATIVE JAMES  said that many things have  changed since an                                                              
aerial survey was  done 20 years ago and it may  well be that some                                                              
changes in  the direction  of the  already delineated route  would                                                              
have  to be  made.  NASA did  a  fly-over with  a  high-resolution                                                              
evaluation  of the  whole area  two  years ago  that is  currently                                                              
being  mapped by  the Department  of Natural  Resources (DNR)  and                                                              
will soon be finished.                                                                                                          
                                                                                                                                
In  1994  a route  from  Fairbanks  to the  Seward  Peninsula  was                                                              
authorized that excluded  the requirement in Title  38 to identify                                                              
the use  of the lands.  She reminded  the committee that  ARRC has                                                              
eminent   domain  authority   and  that   it  is   looking  at   a                                                              
transportation  and  utility  corridor  wide  enough  to  possibly                                                              
include fiber  optics or  anything else that  would need to  go in                                                              
the corridor in the future.                                                                                                     
                                                                                                                                
CHAIRMAN TORGERSON said  the first issue he wanted  to discuss was                                                              
on page 2, lines  18 - 22. It gives DNR the  authority to transfer                                                              
the land without  legislative review. He has heard  rumblings that                                                              
[legislators] would  like to see a report when  it's completed and                                                              
then do the final transfer.                                                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES said that  would not necessarily  negatively                                                              
affect the direction she is going in.                                                                                           
                                                                                                                                
CHAIRMAN TORGERSON  said the committee  requested a  legal opinion                                                              
on the reference  to AS 42.40.370, which transfers  all subsurface                                                              
rights,  including  the  surface materials,  mineral  rights,  the                                                              
right to use the timber, etc. to  the corporation, but clearly the                                                              
[legislature]  is not  interested  in giving  the oil  and gas  to                                                              
ARRC. If they happen to build a road,  they don't want to transfer                                                              
it and then  buy the gravel back  either. So, they are  working on                                                              
an equal access issue to where the  state would take care of a lot                                                              
of the right-of-way if needed, but  still achieve the purpose they                                                              
want for ARRC.                                                                                                                  
                                                                                                                                
REPRESENTATIVE  JAMES said she  had no  problem with that  either.                                                              
She  never intended  to  include the  subsurface  rights with  the                                                              
exception of gravel, which ARRC will  need. She had discussed this                                                              
with  ARRC and  they  were working  on  language  about who  would                                                              
manage the gravel while giving the state access to it.                                                                          
                                                                                                                                
CHAIRMAN TORGERSON  next questioned  giving ARRC the  authority to                                                              
own property  in Canada  in the last  sentence in the  bill, which                                                              
says, "the corporation may acquire land or interest in Canada".                                                                 
                                                                                                                                
4:00 p.m.                                                                                                                       
                                                                                                                                
SENATOR  TAYLOR  said  he  was  concerned  that  the  fiber  optic                                                              
contract alone  renders a  significant income  and that  the state                                                              
should manage those revenues.                                                                                                   
                                                                                                                                
REPRESENTATIVE JAMES  said she shares  his concerns and  she would                                                              
not have  sponsored this bill if  she didn't believe that  this is                                                              
going to benefit  Alaska as a whole.  She noted that Alaska  has a                                                              
lot of stranded resources that have  the potential to be developed                                                              
if better connections were available.  It appears to her that, for                                                              
safety  reasons,  wherever  ARRC  has a  right-of-way,  that  land                                                              
should be managed by ARRC.                                                                                                      
                                                                                                                                
SENATOR TAYLOR  expressed concern about  giving ARRC title  to the                                                              
500 ft. width.  He questioned, "Why don't they just  have a right-                                                              
of-way  or easement  for  the  use of  that  portion,  but not  an                                                              
exclusive right-of-way  or easement."  He said that he  would give                                                              
ARRC  the  exclusive  right to  run  the  railroad  on a  100  ft.                                                              
corridor but cautioned, "I wouldn't  give them the exclusive right                                                              
to control all other uses that might be compatible with theirs."                                                                
                                                                                                                                
REPRESENTATIVE JAMES  said currently ARRC has fee  simple title to                                                              
its railroad corridor and she believes  it should all be the same.                                                              
She assumed  that the basic minimum  is 100 ft. for one  track and                                                              
that  they would  need  some double  tracks  and ancillary  things                                                              
along the way. She said she didn't  think the existing corridor is                                                              
going to work for future needs. She added:                                                                                      
                                                                                                                                
     If there is an EIS to do for  the Railroad down there, I                                                                   
     was of the  opinion that we could do the  whole thing at                                                                   
     once  and so  when it  comes to  putting a  transmission                                                                   
     line down, it'll be already done…                                                                                          
                                                                                                                                
She said  she didn't agree  with Senator  Taylor that it  was that                                                              
much of a  problem and in  Fairbanks ARRC is working  with federal                                                              
money  to make  separated grade  crossings over  46 different  at-                                                              
grade crossings. She  noted, "The goal is to have  separated grade                                                              
crossings, not at-grade crossings."                                                                                             
                                                                                                                                
SENATOR LINCOLN commented  the bill provides for "at  least" a 500                                                              
ft. corridor, but  that is just a minimum. She asked  if there was                                                              
a reason to have a minimum and no maximum.                                                                                      
                                                                                                                                
REPRESENTATIVE  JAMES replied there  is a  reason, that  being the                                                              
corridor needs  to be wider  in some  areas to allow  for turning,                                                              
double  tracks  and  other  things a  railroad  needs,  but  those                                                              
locations can't be determined until a survey is done.                                                                           
                                                                                                                                
SENATOR LINCOLN asked what the maximum could be.                                                                                
                                                                                                                                
REPRESENTATIVE JAMES  said she didn't  think they could  know that                                                              
until the  survey is complete.  She reiterated that  nothing would                                                              
happen until  the survey and monuments  were actually done  on the                                                              
ground and people knew what was required and where.                                                                             
                                                                                                                                
SENATOR  ELTON said  the bill proposes  that ARRC  can identify  a                                                              
corridor  (page  2, lines  18  to  23) in  accordance  with  cited                                                              
statutes  and  convey  state  land  within  the  railroad  utility                                                              
corridor. He  asked who will negotiate  if there are  prior claims                                                              
on that land, whether they be mineral claims or farm leases.                                                                    
                                                                                                                                
REPRESENTATIVE JAMES replied that  it is her understanding that if                                                              
DNR were to transfer  any land to anyone for any  reason, it would                                                              
have to identify the existing rights,  whatever they happen to be.                                                              
Generally, if a  piece of property that has existing  rights on it                                                              
is  purchased, you  either make  an agreement  of compensation  or                                                              
provide  satisfaction or  you accept  the land  with the  existing                                                              
rights. She  assumed this  transfer would be  handled in  the same                                                              
way, but it needs to be clearer in the statute.                                                                                 
                                                                                                                                
SENATOR ELTON  said he understood then  that it wouldn't  be up to                                                              
DNR. It would be up to ARRC to extinguish  those previous existing                                                              
rights that  might conflict with  ARRC's use and ARRC  would incur                                                              
any costs associated with extinguishing those rights.                                                                           
                                                                                                                                
REPRESENTATIVE  JAMES responded that  she thought  that is  how it                                                              
would work.                                                                                                                     
                                                                                                                                
SENATOR TAYLOR asked  what was meant by "associated  rail land" on                                                              
line 17 and in several other places.                                                                                            
                                                                                                                                
REPRESENTATIVE JAMES  said she understood  that to mean  sites and                                                              
other kinds of facilities along the  line, including passenger and                                                              
freight stations.                                                                                                               
                                                                                                                                
SENATOR TAYLOR asked if they would be outside the corridor.                                                                     
                                                                                                                                
REPRESENTATIVE  JAMES said  she thought  it would  be part  of the                                                              
corridor.                                                                                                                       
                                                                                                                                
SENATOR  TAYLOR asked  if there  was a  definition of  "associated                                                              
rail land" and whether it could go  beyond the intended 500 ft. He                                                              
wondered if "associated rail land" meant lands beyond 500 ft.                                                                   
                                                                                                                                
REPRESENTATIVE   JAMES  replied   that  they  can't   specifically                                                              
describe what they  need until the legislature  authorizes the on-                                                              
the-ground survey.                                                                                                              
                                                                                                                                
CHAIRMAN  TORGERSON  said  he  thought  that  is  the  reason  the                                                              
legislature wants  to review  the findings. He  said he  would set                                                              
the bill aside  and work with the  sponsor to resolve some  of the                                                              
issues.                                                                                                                         
                                                                                                                                
SENATOR LINCOLN asked if DNR would testify today.                                                                               
                                                                                                                                
MR. BILL BRITT, Gas Pipeline Coordinator,  said that a majority of                                                              
DNR's concerns had already been identified. He explained:                                                                       
                                                                                                                                
     First, there  is likely to  be some overlap  between the                                                                   
     railroad corridor  and the gas pipeline  right-of-way as                                                                   
     has been indicated. Any gas  pipeline right-of-way lands                                                                   
     transfers   the    railroad   would   stake    [indisc.]                                                                   
     authorization, construction,  operation, maintenance and                                                                   
     [indisc.] of  the gas pipeline. The transfer  would also                                                                   
     reduce  the  lease  payment  and  may  also  affect  the                                                                   
     tariff… This is not an abstract  concern, given that the                                                                   
     railroad [indisc.]  about 10  times what the  state does                                                                   
     for fiber optics right-of-way.                                                                                             
                                                                                                                                
Having the  contract returned for  review should be  considered so                                                              
that  other state  interests can  be identified.  The bill  should                                                              
also make conveyance  subject to third party interests,  a concern                                                              
that Senator Elton brought up. The  state's mineral rights need to                                                              
be protected  as well and the  transfer should be made  subject to                                                              
AS 38.05.125.  The bill  does not  protect public  use and  access                                                              
within  and across the  corridor.  At a minimum,  the bill  should                                                              
make the transfer subject to AS 38.05.127,  retaining access along                                                              
navigable waterways.  He suggested the committee might  want to do                                                              
more. The  bill also needs  to clarify  who will bear  the expense                                                              
associated with the  conveyance and there doesn't appear  to be an                                                              
upper limit on the amount of land that can be conveyed.                                                                         
                                                                                                                                
CHAIRMAN TORGERSON  asked him the difference between  AS 38.05.125                                                              
and AS 38.05.035.                                                                                                               
                                                                                                                                
MR. DICK  MYLIUS, Director,  Division of  Mining, Land  and Water,                                                              
Department of Natural Resources (DNR),  answered that AS 38.05.125                                                              
is language  DNR uses when conveying  land out of  state ownership                                                              
while it retains the mineral rights.                                                                                            
                                                                                                                                
CHAIRMAN TORGERSON asked if he agreed  that AS 42.43.070 transfers                                                              
mineral rights.                                                                                                                 
                                                                                                                                
MR. MYLIUS said that is DNR's understanding of it.                                                                              
                                                                                                                                
SENATOR  ELTON noted  that  the only  fiscal  note  in the  packet                                                              
affects  DCED  and  was  written   by  the  staff  to  the  Senate                                                              
Transportation Committee. He thought  DNR should prepare one also.                                                              
                                                                                                                                
SENATOR TAYLOR asked  if ARRC's purpose could not  be just as well                                                              
provided for with  an easement within a declared  utility corridor                                                              
that was retained and owned by the state.                                                                                       
                                                                                                                                
MR. JIM KUBITZ, Alaska Railroad Corporation,  replied that depends                                                              
on what you want  to accomplish. ARRC hopes this  business will be                                                              
profitable or it may need to do other  things on the land until it                                                              
is. He also explained that every  once in a while you have to turn                                                              
a train around and  that can't be done in a 500  ft. corridor. So,                                                              
every fifty miles  or so ARRC will need a bigger  piece of land on                                                              
which to do that.                                                                                                               
                                                                                                                                
SENATOR  TAYLOR asked  if that could  also be  accomplished  by an                                                              
easement.                                                                                                                       
                                                                                                                                
MR. KUBITZ said it could probably  be accomplished by an exclusive                                                              
easement.                                                                                                                       
                                                                                                                                
SENATOR  TAYLOR  said he  wanted  ARRC  to  stay in  the  railroad                                                              
business. He maintained,  "I don't intend to give  you I don't how                                                              
many thousand  acres of land and  resources and mineral  rights so                                                              
you can  go into  the oil drilling  business or  go into  the land                                                              
selling business or the land leasing business…"                                                                                 
                                                                                                                                
MS.  PHYLLIS  JOHNSON,  general counsel  to  the  Alaska  Railroad                                                              
Corporation, added:                                                                                                             
                                                                                                                                
     From  the  Railroad's perspective,  certainly  we  don't                                                                   
     have  to have  full fee  title.  It's an  administrative                                                                   
     convenience  to treat all the  land we're involved  with                                                                   
     the same way,  but we can certainly  differentiate. What                                                                   
     we would  need to be  especially careful about,  though,                                                                   
     is  in crafting or  defining the  language that  creates                                                                   
     this easement  interest, even if we don't  say exclusive                                                                   
     -  because I  know that  raised  a few  eyebrows just  a                                                                   
     second ago  when Jim said exclusive  - we feel  the need                                                                   
     to  be  able to  have  a  very strong  say  about  other                                                                   
     activities.  Again, we get  back to  the safety sort  of                                                                   
     angle of  things. So,  even if we  have an easement,  we                                                                   
     would need to  be careful about how we define  it so the                                                                   
     Railroad can protect both itself  and the public and the                                                                   
     environment and all the interests  there from those kind                                                                   
     of peculiar  railroad hazards  that goes along  with the                                                                   
     kind of  business we're in…You  can call it  an easement                                                                   
     or  a  duck as  long  as  we're able  to  protect  those                                                                   
     important public interests.                                                                                                
                                                                                                                                
CHAIRMAN TORGERSON  asked why the  legislature would want  to give                                                              
ARRC authority to  own land or interest in Canada.  He asked if it                                                              
is an important provision.                                                                                                      
                                                                                                                                
MR.  KUBITZ replied  that  all ARRC  is  after is  to  be able  to                                                              
control its corridor and right-of-way for its own reasons.                                                                      
                                                                                                                                
MS. JOHNSON asked them to envision  the border and the interchange                                                              
with other  rail lines  and other  activities;  ARRC would  need a                                                              
fairly spread out  area to work in there. ARRC  envisions buying a                                                              
little additional land to make it work out right at the border.                                                                 
                                                                                                                                
CHAIRMAN TORGERSON said they would work on language with them.                                                                  
                                                                                                                                
SENATOR TAYLOR  asked if  she could  draft a paragraph  indicating                                                              
what the  essential elements  are of an  easement providing  for a                                                              
priority of use by the railroad, but not an exclusive use.                                                                      
                                                                                                                                
MS. JOHNSON said  she could take a stab at it  and use the Federal                                                              
Transfer  Act as  her guide,  because  that would  cover the  most                                                              
important interests that need to be protected.                                                                                  
                                                                                                                                
CHAIRMAN  TORGERSON said  they would  hold this  bill for  further                                                              
work.                                                                                                                           

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