Legislature(1995 - 1996)

04/29/1996 09:25 AM House STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
             HOUSE STATE AFFAIRS STANDING COMMITTEE                            
                         April 29, 1996                                        
                           9:25 a.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Jeannette James, Chair                                         
 Representative Scott Ogan, Vice Chair                                         
 Representative Ivan Ivan                                                      
 Representative Brian Porter                                                   
 Representative Joe Green                                                      
 Representative Caren Robinson                                                 
 Representative Ed Willis                                                      
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 None                                                                          
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 HOUSE BILL NO. 136                                                            
                                                                               
 "An Act mandating the sale of the Alaska Railroad; and providing              
 for an effective date."                                                       
                                                                               
      - PASSED CSHB 136(STA) OUT OF COMMITTEE                                  
                                                                               
 CS FOR SENATE CONCURRENT RESOLUTION NO. 23(STA) am                            
                                                                               
 Relating to long range financial planning.                                    
                                                                               
      -  PASSED HCS CSSCR 23(STA) OUT OF COMMITTEE                             
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HB 136                                                               
 SHORT TITLE: ESTABLISH  ALASKA RAILROAD COMMISSION                            
 SPONSOR(S): REPRESENTATIVE(S) MARTIN                                          
                                                                               
 JRN-DATE     JRN-PG               ACTION                                      
 01/30/95       174    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/30/95       174    (H)   TRA, STA, FIN                                     
 04/03/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
 04/10/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
 04/11/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 04/12/96              (H)   FIN AT  1:30 PM HOUSE FINANCE 519                 
 04/12/96      3691    (H)   TRA RPT  CS(TRA) NT 1DP 5NR 1AM                   
 04/12/96      3692    (H)   DP: G.DAVIS                                       
 04/12/96      3692    (H)   NR: WILLIAMS,SANDERS,LONG,JAMES                   
 04/12/96      3692    (H)   NR: MASEK                                         
 04/12/96      3692    (H)   AM: BRICE                                         
 04/12/96      3692    (H)   INDETERMINATE FISCAL NOTE (DCED)                  
 04/12/96      3692    (H)   FISCAL NOTE (LAW)                                 
 04/12/96      3692    (H)   2 ZERO FISCAL NOTES (GOV, DOT)                    
 04/13/96              (H)   FIN AT  1:00 PM HOUSE FINANCE 519                 
 04/16/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 04/18/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 04/23/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 04/25/96              (H)   STA AT  8:00 AM CAPITOL 102                       
 04/27/96              (H)   STA AT 10:00 AM CAPITOL 102                       
 04/29/96              (H)   STA AT  9:00 AM CAPITOL 102                       
                                                                               
 BILL:  SCR 23                                                               
 SHORT TITLE: LONG RANGE FINANCIAL PLANNING                                    
 SPONSOR(S): RULES BY REQUEST OF LONG RANGE FINANCIAL PLAN CMSN                
                                                                               
 JRN-DATE     JRN-PG               ACTION                                      
 01/22/96      2197    (S)   READ THE FIRST TIME - REFERRAL(S)                 
 01/22/96      2197    (S)   STA, JUD, FIN                                     
 02/07/96      2330    (S)   JUD REFERRAL WAIVED                               
 02/07/96      2330    (S)   FIN REFERRAL WAIVED                               
 02/08/96              (S)   STA AT  3:30 PM BUTROVICH RM 205                  
 02/09/96      2345    (S)   STA RPT  CS  3DP 2NR   SAME TITLE                 
 02/09/96      2345    (S)   ZERO FISCAL NOTE (S.STA)                          
 02/09/96      2362    (S)   MOTION TO ADD FIN REFERRAL                        
 02/09/96      2362    (S)   MOTION FAILED Y9 N10 E1                           
 02/12/96              (S)   RLS AT  8:00 AM FAHRENKAMP RM 203                 
 02/12/96      2381    (S)   RULES RPT 3CAL, 2NR     2/12/96                   
 02/12/96      2386    (S)   HELD TO 2/13/96 CALENDAR                          
 02/13/96      2405    (S)   READ THE SECOND TIME                              
 02/13/96      2406    (S)   STA CS ADOPTED Y12 N8                             
 02/13/96      2406    (S)   AM NO  1 DIVIDED   Y12 N8                         
 02/13/96      2407    (S)   AM NO  1 PART 1 FAILED Y8 N12                     
 02/13/96      2408    (S)   AM NO  1 PART 2 ADOPTED Y17 N3                    
 02/13/96      2408    (S)   PASSED Y12 N8  CSSCR 23(STA) AM                   
 02/13/96      2408    (S)   DUNCAN  NOTICE OF RECONSIDERATION                 
 02/14/96      2432    (S)   RECONSIDERATION NOT TAKEN UP                      
 02/14/96      2432    (S)   TRANSMITTED TO (H)                                
 02/15/96      2768    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/15/96      2769    (H)   STATE AFFAIRS, FINANCE                            
 04/29/96              (H)   STA AT  9:00 AM CAPITOL 102                       
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 WALTER J. HICKEL, Former Governor                                             
 1905 Loussac Drive                                                            
 Anchorage, Alaska  99517                                                      
 Telephone:  (907) 248-0013                                                    
 POSITION STATEMENT:  Testified on HB 136                                      
                                                                               
 JOE USIBELLI, JR.                                                             
 1645 Taroka Drive                                                             
 Fairbanks, Alaska  99709                                                      
 Telephone:  (907) 479-5591                                                    
 POSITION STATEMENT:  Testified on HB 136                                      
                                                                               
 JOHNE BINKLEY                                                                 
 Fairbanks, Alaska                                                             
 Telephone:  (907) 479-6006                                                    
 POSITION STATEMENT:  Testified on HB 136                                      
                                                                               
 REPRESENTATIVE TERRY MARTIN                                                   
 Alaska State Legislature                                                      
 Capitol Building, Room 502                                                    
 Juneau, Alaska  99801-1182                                                    
 Telephone:  (907) 465-3783                                                    
 POSITION STATEMENT:  Sponsor of HB 136                                        
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 96-63, SIDE A                                                            
 Number 015                                                                    
                                                                               
 The House State Affairs Committee was called to order by Chair                
 Jeannette James at 9:25 a.m.  Members present at the call to order            
 were Representatives James, Porter and Ivan.  Members absent were             
 Representatives Ogan, Green, Robinson and Willis.                             
                                                                               
 HB 136 - ESTABLISH  ALASKA RAILROAD COMMISSION                              
                                                                               
 CHAIR JEANNETTE JAMES announced the first order of business was HB
 136.  She noted that public testimony had been closed at the                  
 previous hearing, but she would re-open public testimony for the              
 purpose of allowing those individuals to testify who didn't have an           
 opportunity to speak at the previous hearing.  She had a long list            
 of people who had signed up to testify in opposition to HB 136 and            
 she had agreed to read their names into the record.                           
                                                                               
 CHAIR JAMES said the committee would be discussing a committee                
 substitute.  She asked Governor Hickel to present his testimony and           
 confirmed he had received a copy of the committee substitute.                 
                                                                               
 Number 274                                                                    
                                                                               
 GOVERNOR WALTER HICKEL testified from Anchorage that he is a great            
 supporter of the Alaska Railroad.  He said when the Railway Act was           
 passed in 1914, it was a simple Act that authorized the President             
 of the United States to build not to exceed 1,000 miles of railroad           
 for the primary purpose of opening up the country; it didn't have             
 anything to do with profits.  The intention of the railroad in                
 those days is still the intention of it today.  It states that it's           
 basically a governmental operation and has a lot of governmental              
 responsibilities which it still has.  Governor Hickel noted the               
 legislature was going to do this study as to if and when the                  
 railroad should be sold, but he had another thought he wanted to              
 share with the committee; that being expanding the railroad instead           
 of selling it.  He pointed out the vast country in the Arctic and             
 the hundreds of millions of tons of coal which is useless unless              
 there is a way to get it to tidewater.  He suggested extending the            
 railroad to the Red Dog area, the Brooks Range down to the south of           
 Nome to a year-round port.  He believed the study should take into            
 consideration not only the "if and when" but also what can be done            
 to enhance the railroad.  Governor Hickel said the railroad is                
 making money; it is not a drain on the state.  He thought maybe               
 everyone should take a look at this great asset Alaska has.  He               
 invited questions from the committee.                                         
                                                                               
 Number 601                                                                    
                                                                               
 CHAIR JAMES said there were two additional people to testify, but             
 asked Governor Hickel to stand by for questions.                              
                                                                               
 Number 630                                                                    
                                                                               
 JOE USIBELLI, JR., wanted to address a couple of specific points in           
 HB 136.  He said as committee members are aware, the coal that                
 comes from the Usibelli Coal Mine in Healy represents something               
 between 20 and 25 percent of the total transportation revenues the            
 Alaska Railroad receives, which makes them the second largest                 
 customer.  He expressed concern with the provision that specifies             
 that the railroad be operated for 20 years.  Usibelli Coal is 53              
 years old and another 20 years of life isn't all that long.  He is            
 making business plans that extend beyond 20 years and would like              
 some assurance the railroad will be available for transportation              
 for longer than that.  A second area of concern for Mr. Usibelli              
 was the representation of the commission; that is only one member             
 being among the major customers of the railroad.  He felt that                
 major customers should have more representation on the commission.            
 He thought a 5-member committee was a small committee and perhaps             
 should be expanded.  Additionally, he believed the November 1,                
 1996, submittal to the Governor and to the Legislative Budget &               
 Audit Committee was an unattainable goal.  Finally, he expressed              
 concern regarding the mandate that the Alaska Railroad Corporation            
 pay for the evaluation.  Those funds are necessary for the                    
 continued maintenance and up keep of the railroad itself.  The                
 Alaska Railroad has very little access to outside capital and their           
 internal generation of funds are needed for their ongoing                     
 operations.  He said overall, he doesn't necessarily disagree with            
 some sort of assessment of the Alaska Railroad Corporation as far             
 as what the assets mean to the corporation, to the public and to              
 the customers that currently utilize the railroad system.  He would           
 like to see it assessed on that basis first and then decide whether           
 or not it should be sold.  He tended to think it was an asset of              
 the state of Alaska that the state should continue to hold control            
 over for some additional period of time.  He thanked the committee            
 for the opportunity to testify.                                               
                                                                               
 Number 900                                                                    
                                                                               
 CHAIR JAMES thanked Mr. Usibelli for his testimony and asked him to           
 stand by for questions.                                                       
                                                                               
 Number 913                                                                    
                                                                               
 JOHNE BINKLEY testified that it had been almost 100 years ago that            
 his grandfather came to Alaska and began piloting rafts on the                
 upper Yukon River helping the gold rush folks get down the upper              
 stretches of the Yukon River.  Since that time, his family has been           
 involved in the river transportation business in almost all the               
 major rivers of Alaska.  In those early days, Fairbanks was                   
 completely dependent on the large, steam powered paddle-wheelers              
 which hauled freight 1250 river miles which was ice bound in the              
 winter.  There was only about 100 days in which to get all the                
 freight required in the Interior hauled up that river system.  All            
 of that changed in 1923 when the Alaska Railroad was completed and            
 all of a sudden, Fairbanks unlike all the other boom towns of that            
 era, had a year round rail link to the ice free tidewater port of             
 Seward.  That fundamentally changed Fairbanks and distinguished it            
 from many of the other boom towns in the Interior which eventually            
 went bust.  His purpose was not to re-live history, but to simply             
 impress upon the committee how critical that link is - that                   
 transportation corridor from ice free tidewater to the Interior.              
 It's what keeps them going and what was so critical to the                    
 development of the Interior over the years and it's just as                   
 critical today as it was 75 years ago when it was completed.                  
                                                                               
 MR. BINKLEY said he has had the privilege over the last year of               
 serving on the Board of the Directors for the Alaska Railroad.  He            
 and his family have always been in the private sector, but over the           
 last year he's been impressed how well the Alaska Railroad                    
 Corporation is run.  He said it's a good organization, people in              
 the organization are dedicated and look out for the assets of the             
 corporation, it's not run on politics and the board makes sound               
 management decisions.  Since it's not run on politics, occasionally           
 there may be some political toes that are stepped on.  He didn't              
 know if that was the source of this legislation or if there was               
 some political concern that was driving this legislation.  He                 
 noted, however, that is not their primary focus.  The board never             
 loses sight of who their shareholders are; the 600,000 people in              
 Alaska and the board strives to protect their assets.  He said the            
 Alaska Railroad is financially sound, it's never been subsidized by           
 the state general fund, they have a vision for the future and he              
 thought it was an asset that all Alaskans can and should be proud             
 of.                                                                           
                                                                               
 MR. BINKLEY pointed out he has not seen the proposed committee                
 substitute so he didn't know the details of it.  For the concern of           
 Interior constituents, he urged the committee to kill the bill.  If           
 this is such a critical idea, he suggested taking some time to                
 review the issue and allow the public to get involved in the                  
 discussion.  He thanked the committee for the opportunity to                  
 participate.                                                                  
                                                                               
 Number 1223                                                                   
                                                                               
 CHAIR JAMES announced that concluded the list of individuals who              
 had signed up to testify but did not get the opportunity to testify           
 the previous Saturday.  She had a list of people who wished to                
 testify today if time allowed but she had previously closed public            
 testimony.  She read their names for the record:  Lou Dickinson,              
 David Thompson, Ernie Brannon from Palmer, Tom Dow from Seattle,              
 Mayor Lute Cunningham from North Pole, Mayor Jim Hayes from                   
 Fairbanks, Mayor Jim Sampson from the Fairbanks North Star Borough,           
 Frank Chapados former board member of the Alaska Railroad, Dick               
 Knapp, Ron Majors, Susie Keller, Jeff Benz (sp), John Harlow,                 
 Gordon Evans, Randy Jordan, Steve MaHay (sp), Joe Josephson,                  
 Charles Krompacky, Ted Rogers, a delegate from Princess Tours, Tom            
 Tougas of Kenai Fjords, Herb Lange, Paul Ross of Wilder                       
 Construction, R.C. Collin, Frank Withey, Bruce Gough, B.J. Bjorgan,           
 Don Sherwood, Steve VanGoor, Ken Brovold, Stan Bissentte, Phil Todd           
 and Pat Durand.  She asked Representative Martin to comment on the            
 committee substitute and noted that Governor Sheffield was on-line            
 to answer any questions.  Governor Sheffield pointed out that Mayor           
 Don Gillman's name had been omitted from the list of individuals              
 that Chair James read for the record.                                         
                                                                               
 Number 1340                                                                   
                                                                               
 REPRESENTATIVE TERRY MARTIN said he was surprised and almost                  
 overwhelmed by the negativeness of former Senator Binkley and                 
 others who testified.  He noted that he along with the others                 
 addressing the problem were very optimistic about the future of the           
 railroad; no one was trying to get rid of it.  He pointed out the             
 source of the legislation was his commitment 10 years ago when the            
 railroad was purchased from the federal government for $20 million.           
 The railroad was running down and the federal government was no               
 longer able to handle the cost, so the state purchased it and made            
 a 10-year commitment to keep it going.  He remarked he wouldn't               
 mind a 10 million year commitment to keep it going and hoped that             
 people would get more optimistic.  It's the 10-year anniversary of            
 the railroad and that's the reason why he introduced legislation in           
 December 1994.  He noted that some background work had been done              
 and with the 10-year commitment having been fulfilled, he felt they           
 could begin in an orderly way to transfer the land to the state of            
 Alaska that was promised.  His thought was to look at the                     
 possibilities that exist.  He had nothing against the corporation,            
 but he believed that when this was brought out in the light, the              
 public would recognize the tremendous future of the railroad.  He             
 had no problem with users of the railroad joining in the discussion           
 regarding the future of the railroad.  He asked people not to limit           
 the opportunities.                                                            
                                                                               
 Number 1600                                                                   
                                                                               
 CHAIR JAMES noted there were additional individuals who had wished            
 to testify and read the names for the record:  John Harlow was on-            
 line in Seattle, Sean Lambnen (sp), Carol Brown and Kevin Shaffer             
 (sp).                                                                         
                                                                               
 Number 1626                                                                   
                                                                               
 CHAIR JAMES said she would go through the proposed committee                  
 substitute and note the changes that were made from the draft R               
 accepted as a working draft by the committee on Saturday.  She said           
 the title had been changed to read, "To determine whether a sale of           
 the Alaska Railroad is in the best interest of the state" as                  
 opposed to evaluating the sale of the Alaska Railroad.  Also, the             
 language in Section 1 had been changed from, "The Alaska Railroad             
 Commission is established as an agency or under the Legislative               
 Budget & Audit..." to "an agency of the Legislative Branch."  She             
 noted that a whole new paragraph Section 1(b) was added which says            
 specifically that the $250 a day for each member of the commission            
 is only for the public members and if any of the members on the               
 commission are legislators, state employees or railroad employees             
 and are already on a state payroll, they will not get any extra.              
 It also states that public members would be entitled to travel and            
 per diem as is outlined for other commission members by the Board             
 of Commissions.  Those state employees, legislators or employees of           
 the Alaska Railroad would be entitled only to the travel and per              
 diem their employment provides for them.  She pointed out the                 
 language in Section 1(d) had been changed from the payment of the             
 costs for this commission and this evaluation process would be paid           
 from the working capital of the Alaska to read "from the corporate            
 receipts of the Alaska Railroad" which she believed would be a more           
 appropriate designation.  Section 1(e) was added which includes               
 another date of September 1 and November 1 when the Alaska Railroad           
 Commission would submit a report to the Legislative Budget & Audit            
 Committee.  The Legislative Budget & Audit Committee requested they           
 be able to see the progress on September 1 before the "drop dead"             
 date of November 1 when the evaluation process is to be completed.            
 She noted the sections following had been renumbered.                         
                                                                               
 CHAIR JAMES explained the language "or convenient" was deleted in             
 the renumbered Section (f)(1) so it now reads, "(1) identify all              
 assets, real and personal and tangible and intangible, of the                 
 Alaska Railroad corporation and classify those assets as necessary            
 for the operation of the railroad or as other assets of the                   
 corporation;".  In all cases reference in the bill to "the sale of            
 the Alaska Railroad" had been changed to "a sale of the Alaska                
 Railroad".  She believed that was more responsive because otherwise           
 the language sounded like there was a sale in mind.  A new Section            
 (1)(k) was added which reads, "The Alaska Railroad Commission may             
 not expend more than a total of $250,000 to perform the                       
 commission's functions under this section."  Those were the                   
 sideboards that were the subject of discussion in the hearing held            
 the previous Saturday.  She wanted to know exactly how much money             
 was going to be expended because she didn't want to put the                   
 railroad in any kind of position with a huge expenditure that would           
 totally devastate their cash flow.  She asked for comments from the           
 committee on the committee substitute.  She noted that no decision            
 could be made because a quorum was not present, but Representative            
 Ogan was available and had been notified that his presence was                
 necessary to make a decision.                                                 
                                                                               
 Number 1820                                                                   
                                                                               
 REPRESENTATIVE MARTIN said that a number of people had expressed              
 concern about the commission being limited to five members.  He               
 noted that at one time the committee was made up of 15 members but            
 people thought that 15 was too many.  His belief was that any                 
 commission would be open and there would be ample opportunity for             
 anyone wishing to give testimony including all the users, employees           
 and individuals concerned about the future of the Alaska Railroad             
 to express their concerns.  He expressed enthusiasm about the                 
 people of Alaska having an opportunity to see what they have and              
 the future of the Alaska Railroad.  He felt that five members on              
 the commission was more than enough for this short period of time.            
                                                                               
 Number 1900                                                                   
                                                                               
 CHAIR JAMES said Representative Martin's enthusiasm pleased her               
 even though his approach to the issue was totally different than              
 hers.  She noted the legislation states that the commission would             
 hold open meetings, its limits as to what they could do in                    
 executive session and that public testimony would be taken.                   
                                                                               
 CHAIR JAMES said she had just gotten notice that Governor Hickel              
 had to leave.  She thanked him for his testimony.                             
                                                                               
 Number 1930                                                                   
                                                                               
 GOVERNOR HICKEL commented that he liked Representative Martin's               
 idea of letting the public know what the Alaska Railroad is and               
 what a great benefit it is to the state.                                      
                                                                               
 Number 1945                                                                   
                                                                               
 CHAIR JAMES said a lot of the information was available now and she           
 wasn't totally convinced that an organization like this was needed            
 but if this would get the job done, she was willing to let the bill           
 go forward.  She would have felt better if this had been just a               
 dictate to the railroad to do this rather than having a commission            
 put together to do it.  She thought that a lot of the testimony               
 heard by the committee was very valid and she believed there were             
 a number of people in the Interior that were very concerned about             
 the future of the railroad.  She noted that her district is a very            
 industrious district.  For example, MAPCO is one of the biggest               
 users of the Alaska Railroad, Eielson Air Force Base and Usibelli             
 Coal Mine, Princess Tours and Denali Park also are all users of the           
 railroad.  Thus it is not surprising that she is extremely                    
 sensitive about the future of the railroad.  She agreed with                  
 Governor Hickel that the railroad should be expanded.  She believed           
 the railroad was the most environmentally sound way to access the             
 state.                                                                        
                                                                               
 CHAIR JAMES noted for the record that Representatives Green, Ogan,            
 Robinson and Willis had arrived and a quorum was now present.                 
                                                                               
 Number 2049                                                                   
                                                                               
 REPRESENTATIVE PORTER said he was quite happy with the changes                
 reflected in the new committee substitute.  He shared the concerns            
 of not wanting to give the appearance of wanting a bill that would            
 generate the sale of the Alaska Railroad.  He said generally, being           
 of the philosophy that the private sector is quite often in a                 
 better position to have success at business than government, he               
 thought that private ownership of these kinds of assets was                   
 certainly worthy of consideration, but most certainly the idea                
 should not be that we will sell, but rather we are interested in              
 determining whether that sale would be in the best interest of the            
 state because of all the things the committee has heard, not the              
 least of which is the control that we now have with the ownership             
 in expansion.  He said one of the things that is unique about the             
 railroad, among the many, is that it has been a quiet functioning             
 entity that has not been a problem to the legislature, it has not             
 been a drain on the revenues of the state and it has just plugged             
 along improving its position and its service and perhaps now                  
 getting in a position where expansion is a viable consideration for           
 that organization.  All that having been said, he still thought it            
 was worthwhile to take a look but not with any preconceived                   
 notions.                                                                      
                                                                               
 Number 2118                                                                   
                                                                               
 REPRESENTATIVE JOE GREEN said that Representative Porter had summed           
 up his concern and that his first reaction was that this was step             
 one of a few steps to sell the railroad and he has found that is              
 not the case at all.  He felt the evaluation was a worthwhile                 
 process.                                                                      
                                                                               
 Number 2143                                                                   
                                                                               
 REPRESENTATIVE SCOTT OGAN said the proposed committee substitute              
 was a much improved version.  He had expressed concern in the last            
 hearing of this being just another study that would gather more               
 dust on the shelf.  He said he was willing to let this bill go                
 forth because it has set some parameters.  He didn't know how he              
 would vote when this piece of legislation reached the House floor,            
 but he thought their votes on the floor should reflect whether or             
 not they believed the Alaska Railroad should sell.  If they                   
 believed it should sell, they should vote to study it; if they                
 believed it shouldn't be sold, they should vote not to study it               
 because again it will be another government study.                            
                                                                               
 Number 2190                                                                   
                                                                               
 REPRESENTATIVE IVAN IVAN apologized for missing the work session on           
 Saturday, but expressed his appreciation for the hard work done by            
 the committee on the committee substitute.  He thought the                    
 committee substitute would address the concern expressed in much of           
 the testimony that had been given.                                            
                                                                               
 Number 2226                                                                   
                                                                               
 REPRESENTATIVE CAREN ROBINSON said she felt strongly this bill                
 shouldn't move because of the existence of a corporation and                  
 commission that could do the work.  She personally believed the               
 right direction would be a resolution or a letter from both the               
 House and Senate Leadership setting out what should be accomplished           
 instead of passing legislation.  She thought the existing board               
 should do the evaluation instead of setting up another commission             
 that would cost more money.  She shared Representative Ogan's                 
 concern about having just another study instead of having a real              
 decision one way or another.                                                  
                                                                               
 Number 2268                                                                   
                                                                               
 REPRESENTATIVE ED WILLIS concurred with the remarks of                        
 Representative Robinson.  He said he honestly didn't see any reason           
 why there should be a study; he hadn't heard any testimony                    
 indicating the railroad should be sold.  The board of directors and           
 the employees have done a good job; they're headed in the right               
 direction and making a profit.  He said we have a railroad that is            
 well managed with about 550 very dedicated Alaskans working for the           
 railroad who have expressed concerns about their pensions and their           
 lives.  He felt very strongly this was unnecessary and the railroad           
 should be allowed to continue operating as it has been.  He                   
 expressed disappointment that everyone who wanted to testify has              
 not had that opportunity, especially given the new committee                  
 substitute.  He is vehemently opposed to the direction the                    
 committee was going and made a motion to table the whole issue.               
 Representative Green objected to the motion.                                  
                                                                               
 CHAIR JAMES asked for a roll call vote.  Voting in favor of the               
 motion were Representatives Willis and Robinson.  Voting against              
 the motion were Representatives Ogan, Green, Ivan, Porter and                 
 James.  The motion to table was defeated by a vote of 5 to 2.                 
                                                                               
 Number 2400                                                                   
                                                                               
 CHAIR JAMES agreed with many of the comments that had been                    
 expressed.  She noted the committee had heard three hours of                  
 testimony on Saturday and there had been testimony in the                     
 Transportation Committee which was the first committee of referral.           
 She apologized to those individuals who did not get to testify, but           
 public testimony had to be closed at some point.  She agreed this             
 was an important issue to a lot of people and she personally would            
 like to have heard everyone's testimony.  She stated she was                  
 willing to accept a motion to move this bill out of committee with            
 individual recommendations.  She asked Representative Martin for              
 his closing statement.                                                        
                                                                               
 Number 2438                                                                   
                                                                               
 REPRESENTATIVE MARTIN said this railroad is extremely important to            
 the people of Anchorage, also....                                             
                                                                               
 TAPE 96-63, SIDE B                                                            
 Number 001                                                                    
                                                                               
 REPRESENTATIVE MARTIN continued that this legislation has been in             
 the committee process for the last two years.                                 
                                                                               
 Number 012                                                                    
                                                                               
 CHAIR JAMES said this was not the first time and probably not the             
 last time in this legislative session that she would have to vote             
 for the Interior against Anchorage.  She noted the committee had              
 heard from Anchorage legislators who have similar concerns as hers.           
 She didn't think this should be a regional issue, but rather it was           
 a statewide issue.                                                            
                                                                               
 Number 034                                                                    
                                                                               
 REPRESENTATIVE PORTER made a motion to pass CSHB 136, Version W,              
 dated 4/28/96, out of the House State Affairs Committee.                      
 Representative Willis objected.                                               
                                                                               
 CHAIR JAMES requested a roll call vote.                                       
                                                                               
 REPRESENTATIVE OGAN wished to make a statement before he voted.  He           
 said he was going to vote to pass this bill out of committee.  He             
 thought it was an issue that should be settled on the House floor.            
 It was not a motion to sell the railroad; it was simply a motion to           
 look at the options.                                                          
                                                                               
 Number 068                                                                    
                                                                               
 CHAIR JAMES said this issue of whether or not to sell the railroad            
 is not going to go away if we don't pass this bill out or if we do            
 pass this bill out.  It is an issue that must be dealt with and any           
 time there is an issue that is controversial, it must be dealt                
 with.  Whether she agrees that this is necessary or not, there are            
 sufficient numbers of people in the state who want to deal with it            
 and the legislature must deal with it.  She stated there was a                
 motion to move CSHB 136, Version W, out of committee and asked for            
 the roll call vote.                                                           
                                                                               
 Voting in favor of the motion were Representatives Ogan, Green,               
 Ivan, Porter and James.  Voting against the motion were                       
 Representatives Robinson and Willis.                                          
                                                                               
 CHAIR JAMES announced that CSHB 136(STA) had passed out of the                
 House State Affairs Committee.                                                
                                                                               
 CSSCR 23(STA) am - LONG RANGE FINANCIAL PLANNING                            
                                                                               
 Number 195                                                                    
                                                                               
 CHAIR JAMES announced the next item on the agenda was CSSCR 23(STA)           
 amended, which related to long range financial planning and she had           
 a committee substitute, Version K, dated 4/29/96.  She noted the              
 Senate Rules Committee sponsored this legislation at the request of           
 the Long Range Financial Planning Commission.  Chair James said she           
 would explain the committee substitute which she had drafted.  She            
 said the changes from the original bill were made in the Senate               
 State Affairs Committee and passed through the Senate some time               
 ago.  The proposed committee substitute changed the language on               
 page 1, line 9, from a $433 million estimated budget gap in FY 96             
 to an anticipated $313 million.  She continued, "The other                    
 statements that the fiscal gap is projected to grow steadily;                 
 changes in projected revenue and expenditures could use up the                
 constitutional budget reserve by the year 2000 if we don't do                 
 something about it; and the conclusion is that there is no single             
 fiscal tool sufficient to address the fiscal gap and that we have             
 to do several different things; the members of the Long Range                 
 Financial Planning Commission were charged with developing a 3-, 5-           
 and 10-year plan; the permanent fund is a cornerstone of the                  
 state's economic future, as well as it should continue to grow to             
 provide reliable dividends to the general public; that a financial            
 plan adopted by the legislature should contain a combination of               
 spending reductions and new revenue resulting from an expanded                
 economy that will close the gap by fiscal year 2001; whereas the              
 combination of the fiscal policies adopted by the legislature                 
 should put the state on firm fiscal ground and strike a balance               
 between current needs and protection of the permanent fund for                
 future generations; and the Nineteenth State Legislature has                  
 prepared a fiscal plan to close the fiscal gap which incorporates             
 the following:  1) as part of the plan to ensure maximum earnings             
 from the permanent fund, the legislature has deposited $1.1 billion           
 to the fund's principal; 2) significant spending reductions through           
 reasonable and responsible budget cuts; 3) tax levels that are less           
 than those proposed in other plans; and 4) protection for the                 
 permanent fund and constitutional budget reserve fund.  Therefore,            
 be it resolved that we will first reduce the size and scope of                
 state government to decrease the gap between recurring revenue and            
 recurring expenditures; and that in closing the fiscal gap and                
 developing a long range plan the legislature will prioritize                  
 expenses by taking into account our constitutional responsibilities           
 and the needs of our children, the elderly, and our needy citizens;           
 and that further, we will make significant spending reductions                
 through means such as welfare reform, entitlement reform,                     
 privatization of state services, and the institution of procedural            
 changes to state employees' pension, wage, and benefit package; and           
 be it further resolved that the legislature pledges to work with              
 all parties to implement this long range financial plan and meet              
 the needs and desires of the Alaskan people; and be it further                
 resolved that the Nineteenth legislature urges all Alaskans to                
 learn about Alaska's fiscal situation and support actions necessary           
 to close the fiscal gap; and that the legislature thanks all                  
 members of the Long Range Financial Planning Commission for their             
 hard work and efforts to address the state's fiscal future and                
 assist the legislature in addressing the economic challenges we               
 face as a state.  Copies of this resolution shall be sent to the              
 Honorable Tony Knowles, Governor of Alaska and to the members of              
 the Long Range Financial Planning Commission."                                
                                                                               
 CHAIR JAMES noted that no one had signed up to testify.  She asked            
 if there were comments or questions from committee members.                   
                                                                               
 Number 357                                                                    
                                                                               
 REPRESENTATIVE OGAN expressed support for the Resolution but                  
 proposed an amendment on page 2, line 9, to insert "from resource             
 development" after the word "economy".  He said there are some                
 plans that would propose to expand the economy by using the                   
 permanent fund to fund government at current levels or actually               
 expand the current levels of government.  He didn't think the                 
 economy should be expanded by the size of government. Realistically           
 at this time, revenues result from resource development and he                
 thought that should be the priority.                                          
                                                                               
 Number 408                                                                    
                                                                               
 REPRESENTATIVE PORTER offered a friendly amendment to the amendment           
 to insert "from an expanded private sector economy."                          
                                                                               
 Number 420                                                                    
                                                                               
 REPRESENTATIVE OGAN agreed.                                                   
                                                                               
 CHAIR JAMES restated the amendment on page 2, line 9, would insert            
 "private sector" following "expanded".  Hearing no objection,                 
 Amendment 1 was adopted.  She asked if there was further                      
 discussion.                                                                   
                                                                               
 Number 439                                                                    
                                                                               
 REPRESENTATIVE PORTER remarked this was the joint philosophy of the           
 joint caucuses which had been discussed for some time, so it                  
 shouldn't strike anyone as a surprise.  He moved to adopt and pass            
 HCS CSSCR 23, Version K, with individual recommendations out of               
 committee.  Hearing no objection, HCS CSSCR 23(STA) moved from the            
 House State Affairs Committee.                                                
                                                                               
 CHAIR JAMES called an at-ease.                                                
                                                                               
 HB 136 - ESTABLISH  ALASKA RAILROAD COMMISSION                              
                                                                               
 Number 492                                                                    
                                                                               
 REPRESENTATIVE PORTER moved that Chair James prepare an appropriate           
 fiscal note to reflect the new committee substitute for HB 136.               
                                                                               
 CHAIR JAMES said a motion was before the committee to prepare a new           
 fiscal note in the amount of $250,000 for CSHB 136(STA).  Hearing             
 no objection, the motion passed.                                              
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 Number 547                                                                    
                                                                               
 There being no further business to come before the House State                
 Affairs Committee, CHAIR JAMES adjourned the meeting at 10:26 a.m.            
                                                                               
                                                                               

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