Legislature(1997 - 1998)

03/04/1998 01:15 PM House TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
      HOUSE TRANSPORTATION STANDING COMMITTEE                                  
                   March 4, 1998                                               
                     1:15 p.m.                                                 
                                                                               
                                                                               
MEMBERS PRESENT                                                                
                                                                               
Representative William K. (Bill) Williams, Chairman                            
Representative Beverly Masek, Vice Chair                                       
Representative John Cowdery                                                    
Representative Bill Hudson                                                     
Representative Jerry Sanders                                                   
Representative Kim Elton                                                       
                                                                               
MEMBERS ABSENT                                                                 
                                                                               
Representative Albert Kookesh                                                  
                                                                               
COMMITTEE CALENDAR                                                             
                                                                               
*HOUSE BILL 412                                                                
"An Act providing for the transfer of certain land to the City of              
Whittier; and providing for an effective date."                                
                                                                               
     - HEARD AND HELD                                                          
                                                                               
HOUSE BILL 227                                                                 
"An Act relating to the Alaska Capital Improvement Project                     
Authority; relating to the powers and duties of the Department of              
Transportation and Public Facilities; and providing for an                     
effective date."                                                               
                                                                               
     - HEARD AND HELD                                                          
                                                                               
(* First public hearing)                                                       
                                                                               
PREVIOUS ACTION                                                                
                                                                               
BILL: HB 412                                                                   
SHORT TITLE: TRANSFER RAILROAD LAND TO WHITTIER                                
SPONSOR(S): REPRESENTATIVES(S) COWDERY, Sanders, Ryan, Ivan,                   
Hudson, Foster, Martin                                                         
                                                                               
Jrn-Date    Jrn-Page           Action                                          
 2/16/98      2331     (H)  READ THE FIRST TIME - REFERRAL(S)                  
 2/16/98      2331     (H)  TRANSPORTATION, FINANCE                            
 2/20/98      2391     (H)  COSPONSOR(S): SANDERS, RYAN, IVAN,                 
 2/20/98      2391     (H)  HUDSON                                             
 2/23/98      2409     (H)  COSPONSOR(S): FOSTER, MARTIN                       
 3/04/98               (H)  TRA AT  1:00 PM CAPITOL 17                         
                                                                               
BILL: HB 227                                                                   
SHORT TITLE: CAPITAL IMPROVEMENT PROJECT AUTHORITY                             
SPONSOR(S): REPRESENTATIVES(S) PHILLIPS, Cowdery                               
                                                                               
Jrn-Date    Jrn-Page           Action                                          
 4/03/97       923     (H)  READ THE FIRST TIME - REFERRAL(S)                  
 4/03/97       923     (H)  TRANSPORTATION                                     
 4/21/97               (H)  TRA AT  1:45 PM CAPITOL 17                         
 4/21/97               (H)  MINUTE(TRA)                                        
 2/09/98               (H)  TRA AT  1:00 PM CAPITOL 17                         
 2/09/98               (H)  MINUTE(TRA)                                        
 3/02/98               (H)  TRA AT  1:00 PM CAPITOL 17                         
 3/02/98               (H)  MINUTE(STA)                                        
 3/04/98               (H)  TRA AT  1:00 PM CAPITOL 17                         
                                                                               
WITNESS REGISTER                                                               
                                                                               
DENNIS POSHARD, Legislative Liaison                                            
Office of the Commissioner                                                     
Department of Transportation and                                               
  Public Facilities                                                            
3132 Channel Drive                                                             
Juneau, Alaska  99801                                                          
Telephone:  (907) 465-3904                                                     
POSITION STATEMENT:  Testified on HB 412.                                      
                                                                               
JERRY GEORGE, Chief Design and Construction                                    
Division of Engineering and Operations                                         
Department of Transportation and                                               
  Public Facilities                                                            
4111 Aviation Avenue                                                           
Anchorage, Alaska  99502                                                       
Telephone:  (907) 269-0410                                                     
POSITION STATEMENT:  Testified on HB 412.                                      
                                                                               
REPRESENTATIVE GENE KUBINA                                                     
Alaska State Legislature                                                       
Capital Building, Room 404                                                     
Juneau, Alaska  99801                                                          
Telephone:  (907) 465-4859                                                     
POSITION STATEMENT:  Testified in support of HB 412.                           
                                                                               
CARRIE WILLIAMS, City Manager                                                  
City of Whittier                                                               
P.O. Box 608                                                                   
Whittier, Alaska  99693                                                        
Telephone:  (907)2337                                                          
POSITION STATEMENT:  Testified in support of HB 412.                           
                                                                               
JOHNE BINKLEY, Chairman                                                        
Board of Directors                                                             
Alaska Railroad Corporation                                                    
C/o Alaska Riverways, Incorporated                                             
1975 Discovery Drive                                                           
Fairbanks, Alaska 99709                                                        
Telephone:  (907) 479-6673                                                     
POSITION STATEMENT:  Testified in opposition HB 412                            
                                                                               
BILL COUMBE, Mayor                                                             
City of Whittier                                                               
P.O. Box  608                                                                  
Whittier, Alaska  99693                                                        
Telephone:  (907) 472-2337                                                     
POSITION STATEMENT:  Testified in support of HB 412.                           
                                                                               
JOE GRAY, Council Member                                                       
  and Zoning Committee Member                                                  
City of Whittier                                                               
P.O. Box 613                                                                   
Whittier, Alaska  99693                                                        
Telephone:  (907) 472-2431                                                     
POSITION STATEMENT:  Testified in support of HB 412.                           
                                                                               
MARCO PIGNALBERI, Legislative Assistant                                        
  to Representative Cowdery                                                    
Alaska State Legislature                                                       
Capitol Building, Room 416                                                     
Juneau, Alaska  99801                                                          
Telephone:  (907) 465-3879                                                     
POSITION STATEMENT:  Presented HB 227.                                         
                                                                               
PETE ECKLUND, Legislative Assistant                                            
  to Representative Williams                                                   
Alaska State Legislature                                                       
Capitol Building, Room 424                                                     
Juneau, Alaska  99801                                                          
Telephone:  (907) 465-3424                                                     
POSITION STATEMENT:  Testified in support of HB 227.                           
                                                                               
STEVE MORENO, Administrator                                                    
Alaska Division                                                                
Federal Highway Administration                                                 
P.O. Box 21468                                                                 
Juneau, Alaska 99802                                                           
Telephone:  (907) 586-7180                                                     
POSITION STATEMENT:  Testified on HB 227.                                      
                                                                               
ACTION NARRATIVE                                                               
                                                                               
TAPE 98-11, SIDE A                                                             
Number 0001                                                                    
                                                                               
CHAIRMAN WILLIAM K. (BILL) WILLIAMS called the House Transportation            
Standing Committee meeting to order at 1:15 p.m.  Members present              
at the call to order were Representatives Williams, Cowdery,                   
Sanders, and Elton.  Representatives Hudson and Masek arrived at               
1:17 and 1:18 p.m. respectively.                                               
                                                                               
HB 412 - TRANSFER RAILROAD LAND TO WHITTIER                                    
                                                                               
CHAIRMAN WILLIAMS announced HB 412, "An Act providing for the                  
transfer of certain land to the City of Whittier; and providing for            
an effective date," before the committee.  He said he intends                  
holding HB 412 in committee for further review.                                
                                                                               
Number 0010                                                                    
                                                                               
REPRESENTATIVE JOHN COWDERY presented HB 412.  He said "The                    
railroad is about meeting the transportation needs of the state.               
The State of Alaska acquired the Alaska Railroad from the federal              
government because we deemed it necessary to maintain an (indisc.)             
rail transportation system that would otherwise be shut down by the            
federal government.  It has come to pass that the vast real estate             
holdings of the railroad are proven to be more of a money-maker for            
them than the operation of the railroad.  This wasn't the case                 
under the federal ownership because they didn't operate the                    
railroad to maximize profit.  Now, as a State-owned corporation,               
they are mandated to maximize profit.  In the process of maximizing            
income from the real estate holdings is a large part of what they              
do.  In as much as the railroad owns land in every community along             
the railbelt, the instances of conflict between (indisc.) land use             
and the railroad is increasing."                                               
                                                                               
REPRESENTATIVE COWDERY continued, "Whittier is in the extreme case             
of the ratio of railroad land because the ratio of the railroad                
land to the city is so great.  The City of Whittier cannot carry               
out its government functions if it can't control its land.  By                 
virtue of its land holdings in Whittier that railroad dictates land            
use patterns to the city instead of vice versa, the railroad that's            
in fact assuming the powers of local government, this was not                  
intended when the state of Alaska bought the railroad because we               
wanted to preserve our rail transportation system."                            
                                                                               
REPRESENTATIVE COWDERY concluded, "The Railroad Corporation has                
progressed from a transportation function to a real estate and                 
transportation function too, now a local government.  It is the                
Legislature's responsibility to restore balance among the railroad             
and the City of Whittier."                                                     
                                                                               
CHAIRMAN WILLIAMS stated for the record that Representatives Masek,            
Hudson and Kubina are present.                                                 
                                                                               
DENNIS POSHARD, Legislative Liaison, Office of the Commissioner,               
Department of Transportation and Public Facilities came before the             
committee, he mentioned Dave Eberle and Jerry George of Central                
Region, DOT/PF, are on line in Anchorage.  He said Mr. George is               
prepared to give an overview of the Whittier Access Project.                   
                                                                               
Number 0052                                                                    
                                                                               
JERRY GEORGE, Chief Design and Construction, Division of                       
Engineering and Operations, Department of Transportation and Public            
Facilities, testified via teleconference.  He noted he has been the            
project manager for the Whittier Access Project since its                      
conception.  The original railroad improvement was built during the            
Second World War as a rail improvement.  Since that time, there has            
been over 19 studies in the intermediate 50 years to convert the               
railroad to the joint rail, automobile, transportation corridor                
(indisc.) paving over the tracks in the tunnel.  He stated they are            
looking for alternate routes out of Whittier.  Those 19 studies                
indicated a growing need over a very long period of time for                   
improved access to Prince William Sound and to the Port of                     
Whittier.                                                                      
                                                                               
MR. GEORGE explained the current study began in 1993.  Due to an               
Environmental Impact Statement, that process took DOT/PF three                 
years to complete, it was a rather exhaustive study, not only the              
economic and social impacts but also the environmental impacts of              
the project.  For example, by the year 2020 they anticipate there              
will be million-four visitors to the Port of Whittier in form of               
tourists, recreation, business, residents transiting the tunnel.               
He indicated that mandated DOT/PF to look at what those social and             
economic impacts would be, where the infrastructure development                
funding would come from, and issues like that were dealt with                  
extensively.                                                                   
                                                                               
Number 0077                                                                    
                                                                               
MR. GEORGE mentioned one of the issues that came up with, of course            
was, how would the city would develop land use planning issues.  He            
stated, "That was something that we could not deal within the EIS              
(Environmental Impact Statement) with the federal funding that was             
funding the EIS so the railroad, DOT, and the City of Whittier                 
secured other funds other than the EIS and retained the (indisc.)              
which is the International Resort Development Planning                         
Organization.  They develop major projects like the Fishermen's                
Wharf in San Francisco, major ski resorts like Vale and are very               
successful in planning and developing these destination resorts.               
They helped develop a land use plan for Whittier and as part of                
that, also looked at how the funding for that infrastructure                   
development would come to pass.  That was all developed in parallel            
with the EIS incorporation with the City of Whittier, the (Alaska)             
Railroad and DOT/PF."                                                          
                                                                               
MR. GEORGE continued, "In 1996 we finally got a record to the                  
decision on the EIS and properly defended it through the Ninth                 
Circuit Court and successfully defended it.  After the EIS was                 
completed, we completed the designs of the Portage segment which               
was now under construction.  And the segment that goes from Portage            
Visitor's Center, across Portage Creek through a short tunnel and              
on into Bear Valley where there will be a staging area to (indisc.)            
the vehicles up for one-way passage through the converted railroad             
tunnel.  That project is scheduled for completion this fall, and               
the road and two bridges will be passable for the contractor that              
the (indisc.--noise) tunnel.  That tunnel contractor is presently              
advertised and we should be selecting the contractor for that                  
project by the end of this month.  The tunnel conversion will be               
done by a designed-built contractor and is scheduled to be complete            
by April of 2000."                                                             
                                                                               
MR. GEORGE concluded that DOT/PF will be looking at a variety of               
issues both in terms of short-term needs, the immediate-needs of               
the city as well as developing planning for long-term.                         
                                                                               
Number 0115                                                                    
                                                                               
REPRESENTATIVE COWDERY asked how many cars will utilize this on a              
daily basis.                                                                   
                                                                               
MR. GEORGE replied there will be a mixture of vehicles, there will             
be approximately 8,000 vehicles a day depending on how the cruise              
ship business develops, how much of that is captured by the                    
railroad versus how much is captured by the busses.  He said that's            
projected out to occur by the year 2020.                                       
                                                                               
REPRESENTATIVE COWDERY asked how many parking spaces would have to             
be made.                                                                       
                                                                               
Number 0136                                                                    
                                                                               
MR. GEORGE replied that was developed as part of the intra plan,               
the plan that was adopted by the City of Whittier as the land use              
plan did provide parking for the number of vehicles that was                   
anticipated for the year 2020.  He said he doesn't know what that              
number is.                                                                     
                                                                               
REPRESENTATIVE COWDERY asked are the present parking facilities in             
Whittier are adequate.                                                         
                                                                               
MR. GEORGE replied no.                                                         
                                                                               
REPRESENTATIVE COWDERY asked if the restrooms and power hookups for            
RV's (recreational vehicles ) are adequate for the year 2000 and               
2020, or is it going to take major improvements.                               
                                                                               
MR. GEORGE responded they identified those needs were in the EIS so            
it's clear to everybody what the projected needs for parking, for              
toilets, for (indisc.) space, the impact on the school system.  All            
of those kinds of impacts were quantified in some detail in the EIS            
so that everybody knows what is available there today and what the             
needs would be for the future.  He noted the infrastructure is not             
in place today to handle that influx of people.                                
                                                                               
REPRESENTATIVE COWDERY asked how many visitors are anticipate in               
the year 2000.                                                                 
                                                                               
MR. GEORGE said, "We're arranging for 800 vehicles of our capacity             
and anticipation with the cruise ships will be coming back and that            
the day cruisers and those types of operations will take advantage             
of the new road as quickly as possible.  It's difficult for us to              
predict until we see what the industry is going to do to react to              
this project.  I think that they are, now that the law suites are              
over, believe that the project is real and are now beginning to                
share their plans with us.  And that's rather a new wrinkle here is            
getting everybody to share those plans with us.  We anticipate that            
it will probably be 600,000 probably within the first summer."                 
                                                                               
Number 0164                                                                    
                                                                               
REPRESENTATIVE BILL HUDSON asked are there plans for further                   
development of small boat facilities.                                          
                                                                               
MR. GEORGE replied DOT/PF has no current plans for the expansion of            
the small boat harbor in Whittier or for the development of Shotgun            
Cove.  However, the City of Whittier and the Corps of Engineers                
have been working on those projects.                                           
                                                                               
Number 0173                                                                    
                                                                               
REPRESENTATIVE GENE KUBINA asked if DOT/PF has met their                       
commitments that they have given the City of Whittier while this               
project was in the planning stages.  Is the department planning to             
do everything that they have committed to do?                                  
                                                                               
MR. GEORGE replied DOT/PF has gone above and beyond the call of                
duty in helping the City of Whittier on this project.  They have               
asked that information by the citizens be included in the EIS, and             
they've held numerous public meetings in Whittier which was highly             
complimented by the citizens of Whittier.  The citizens were also              
pleased with the environmental document, with the work that Intra              
did in coming up with the infrastructure and land use plans.  He               
said he believes the city may be frustrated in areas where DOT/PF              
is not in the position to help - DOT/PF is not in the police                   
business, the fire business, or school business.  However, DOT/PF              
was able to identify those needs clearly in the EIS so that they               
can plan for them.                                                             
                                                                               
MR. GEORGE concluded, "We have to be very careful because we're                
using federal highway dollars for this project so we're constrained            
on how we can use those funds and what we can do for the city with             
those funds."                                                                  
                                                                               
Number 0204                                                                    
                                                                               
CARRIE WILLIAMS, City Manager, City of Whittier, came before the               
committee.  She said the city, its councilmen and public have                  
supported the road access since its conception, they've been                   
involved in the comments and impact issues.  Now it's become a                 
reality, however, the city is not in a position without help to                
handle these impacts.  She pointed out they have sought after ways             
to attain lands for parking lots and restrooms because they                    
currently have 100 parking spaces and one public restroom.  There              
are three volunteer EMTs (emergency medical technicians), one of               
which is herself, trying to deal with the visitors that they have              
now of 177,000 a year.  She said they are contacted daily by                   
individuals wishing to come in on a privatized basis to develop the            
infra-structural needs.                                                        
                                                                               
MS. WILLIAMS mentioned the 1994 study that made large assumptions              
that the railroad service would be gone from the area.  She said,              
if you review this document, they have turned Whittier into a                  
parking lot with a single rail ability.  She noted they support the            
railroad's presence in Whittier, they anticipate doubling freight              
traffic in the next few years and hopefully providing passenger                
service to cruise ships, should they return.  So it's a valuable               
service to Whittier.                                                           
                                                                               
MS. WILLIAMS stated Whittier is looking at providing the other                 
services.  She said, "We have one gas pump, we need to provide                 
areas for motor homes, we need to provide public information fee-              
free areas.  Those of you who are familiar with Whittier are aware             
that there are two boat ramps, constantly now lined up, our                    
kayakers are launching within that harbor. ... We have applied for             
and received some of our tidelands, and the balance of the                     
tidelands is currently under application."  She said the BLM                   
(Bureau Land Management) lease in the Dog Lake area would make an              
ideal parking lot, a RV facility, and possibly even an additional              
harbor area.  However, they are unable to access that land because             
they are landlocked.  They can't get in by road and cannot get to              
the waterfront in the current situation.  She stated, when they                
come through, 800 capacity per hour, or 400 an hour, they will come            
through the tunnel on a two-lane road and thusly need those areas              
at the head of the bay and diverse throughout the city.                        
                                                                               
Number 0236                                                                    
                                                                               
MS. WILLIAMS said, "We currently have no water, sewer or streets,              
a sight protection, all our wells set on railroad property and can             
be deposed in one year.  Our sewer system, primary treatment,                  
(indisc.) main and much of the main service lines are on railroad              
property, can be deposed in 90 days.  Our streets, we have none,               
once you leave, what you see is the red encompassed area (on the               
map), we are in a trespass state and on very little general funding            
are plowing those roads at risk to ourselves and to the railroad               
properties.  It is all owned and controlled by the Alaska                      
Railroad."                                                                     
                                                                               
MS. WILLIAMS said they were losing their road last fall to erosion             
at Whittier Creek.                                                             
                                                                               
CHAIRMAN WILLIAMS asked Ms. Williams to point that area out on the             
map.                                                                           
                                                                               
MS. WILLIAMS explained the Department of Defense, who has ceased               
operations, still maintains the permit.  She said they did                     
everything they could to address this problem and the State                    
Department of Emergency Service did come out.  She indicated, when             
inquiring of the railroad for assistance, the response was that                
they are railroad and did not care about the road situation unless             
it affected the railroad operations of the operational tracks.                 
After three months the railroad did volunteer to bring in the                  
riprap, machinery and manpower to put a temporary fix on that.  She            
added that it will face them again this spring.                                
                                                                               
MS. WILLIAMS said the city council was very responsive for years,              
they have negotiated for licenses, permits, leases, anything to                
move forward.  She referred to a document that lists specific                  
items.  She stated the only one that they even come close on is a              
possible water-sewer-storm-sewer license and there is not                      
clarification to this point whether that will even protect their               
wells.                                                                         
                                                                               
MS. WILLIAMS mentioned the city didn't ask for any land that would             
interfere with any transportation functions what so ever.  They                
simply want to be able to get this process moving and are not                  
asking for funding from the state to address any of these issues.              
She said they believe they can solve these problems through                    
privatization.                                                                 
                                                                               
MS. WILLIAMS concluded, "I just built a home and it took me a year,            
these people need to build a city to provide for a million and a               
half visitors a year and 5,000 cars.  And we want to do this in a              
responsible manner.  There are many with the concern of the impact             
on the (Prince William) ..., but it's no where to take a road.  We             
want to keep those vehicles there and keep Whittier able to support            
that."                                                                         
                                                                               
Number 0268                                                                    
                                                                               
REPRESENTATIVE COWDERY indicated, if they came to a resolution, the            
bill wouldn't be needed.  He mentioned over $200,000 was spent in              
attorney fees for negotiations in a city of 260.                               
                                                                               
MS. WILLIAMS replied yes.                                                      
                                                                               
REPRESENTATIVE COWDERY mentioned assurances were made that a                   
resolution was supposed to be made last week.  He asked Ms.                    
Williams what she got for spending $200,000 in attorney fees to                
negotiate a settlement.                                                        
                                                                               
MS. WILLIAMS replied the $200,000 is strictly over a period of the             
last three years.  She said the progress is slow and painstaking,              
she and the council have negotiated and worked on simple things                
over the last year or so, such as a RV park which they haven't been            
able to get resolution on.  What they have is a dedication of                  
DOT/PF and railroad funds to address immediate and long-term                   
impacts.  Ms. Williams said they were given hopes and promises,                
immediate and swift and positive resolution to specific problems.              
She indicated nothing has essentially moved at all.                            
                                                                               
REPRESENTATIVE COWDERY asked, can you tax the railroad for their               
property.                                                                      
                                                                               
MS. WILLIAMS responded no.                                                     
                                                                               
REPRESENTATIVE COWDERY asked if the city has any leverage to                   
negotiate with the railroad.                                                   
                                                                               
MS. WILLIAMS replied no, she doesn't know what it would be.  She               
said they are not liable under the state statute to even collect               
the city's sales tax.  Railroad improvements and properties are                
fully tax exempt so there are no revenues, although there is great             
responsibility.                                                                
                                                                               
REPRESENTATIVE COWDERY asked someone to point out the land that the            
city would like to acquire.                                                    
                                                                               
Number 0300                                                                    
                                                                               
MS. WILLIAMS pointed out the watershed area that runs up the hill              
to the front of the glacier and comes down Whittier Creek, and                 
taking in the road.  She noted there has been talk of trying to                
relocate them because there is such small land mass, but as we know            
that's an expense and a long-term project in seeking a secondary               
water source.                                                                  
                                                                               
REPRESENTATIVE COWDERY asked does the city currently maintain that             
road.                                                                          
                                                                               
MS. WILLIAMS replied yes.                                                      
                                                                               
REPRESENTATIVE COWDERY asked does the railroad maintains any of it.            
                                                                               
MS. WILLIAMS responded no, it is not a railroad obligation.  If                
there is a true blizzard situation, they all help each other.                  
                                                                               
MS. WILLIAMS reported the city currently leases the small boat                 
harbor upland, a portion above the whited area (on the map) is                 
currently under a long-term lease from the railroad and they would             
like to acquire that.  The city has asked for ownership of the                 
harbor to be transferred from DOT/PF and they will be going out for            
bonding to expand that harbor when they find the design that will              
accommodate that.  The other area that they are interested in is               
the non-rail essential area by the airport.                                    
                                                                               
MS. WILLIAMS pointed out they would like to provide a fee-free                 
visitors area at McNeil Creek.  She said the Parks and Recreation              
Division has a plan for a public information area.                             
                                                                               
MS. WILLIAMS noted, in looking at the Alaska Railroad's leasing                
pattern, the city realized this was not going to be rail-developed             
in the near future because of a long-term obligation lease that                
just went in here cutting off access - there's a big building going            
in there facilitating fiber optics cable.  And that road of course             
belongs to the railroad and the city maintains that to the end of              
the bay.                                                                       
                                                                               
MS. WILLIAMS explained they are away from rail operations and want             
to provide for the economic growth, possibly alternate housing, RV             
parking, basic essential services.  She indicated there is private             
money wanting to come to Whittier.  One of the most important                  
pieces for livability is the Whittier Manor.  She said, "Our sewer             
system sits southwest of that on railroad property.  We would ask              
that that come to the city.  Almost more importantly, these people             
live in a military - a former housing unit that needs desperate                
repair and because they do not have those properties, cannot even              
obtain funding to get rid of the asbestos and address it.  They                
should be transferred that property for a buck so they can develop             
it."                                                                           
                                                                               
Number 0335                                                                    
                                                                               
REPRESENTATIVE COWDERY said if this bill passed, or you come to                
some agreement with the railroad, who would pay for the survey.                
                                                                               
MS. WILLIAMS replied she believes that would be the City of                    
Whittier's responsibility.                                                     
                                                                               
REPRESENTATIVE KUBINA asked what is the city's tax base.  How much             
are you able to raise in taxes to run the city with what you're                
currently able to tax?                                                         
                                                                               
MS. WILLIAMS replied the tax base is nine million dollars and they             
have a five mil, it's taking into account everything within the                
city, real and personal property.  They are also able to tax boats.            
                                                                               
Number 0347                                                                    
                                                                               
REPRESENTATIVE KIM ELTON referred to page 3, lines 6 through 12.               
He said it refers to a perpetual easement that would be retained,              
and an exclusive-use easement.  He asked would those provisions                
impede the city at some point from selling the land to private                 
parties and therefore getting that land that the city receives on              
the tax rules.                                                                 
                                                                               
MS. WILLIAMS replied the perpetual easement in this would be in                
regard to the rail that parallels the road right-of-way going out              
to the tunnel.  She explained the DOT/PF plan calls for a seaward              
expansion of that road in the future, although not designed at this            
point.  As the city grows, it will need to cross this.  She said               
one of her larger concerns is pedestrian safe crossing.  Those                 
things are workable with the railroad.  So, an easement left for               
that rail right-of-way, she thinks protects the Alaska Railroad                
from future municipal direction that may violate the intent of the             
statute to maintain transportation service.  And if they are going             
to increase freight, they need to have those lands protected.  Ms.             
Williams indicated the community would prefer to see the cruise                
industry come in with the railroad.                                            
                                                                               
REPRESENTATIVE ELTON said, if he understands it correctly, these               
easements make sense and wouldn't get in the way of transferring               
lands.                                                                         
                                                                               
MS. WILLIAMS replied she doesn't believe they would because they               
need those protections and respects their right to have those.                 
                                                                               
Number 0372                                                                    
                                                                               
CHAIRMAN WILLIAMS announced HB 412 will be held in the House State             
Affairs Committee, possibly Monday.                                            
                                                                               
REPRESENTATIVE HUDSON said there appears to be a reluctance of                 
providing this transfer from the railroad.  He asked what is the               
railroad's official position.                                                  
                                                                               
CHAIRMAN WILLIAMS announced people from the railroad will be                   
testifying.                                                                    
                                                                               
MS. WILLIAMS responded that she doesn't want to speak on behalf of             
the railroad.  She indicated the reason stated to the City of                  
Whittier is that it is against railroad policy to give up title to             
land.                                                                          
                                                                               
Number 0384                                                                    
                                                                               
JOHNE BINKLEY, Chairman, Board of Directors, Alaska Railroad                   
Corporation, testified in opposition to HB 412 via teleconference.             
He said he currently serves on the Board of Directors of the Alaska            
Railroad and has since the spring of 1996, and more recently as                
Chairman of the Board of the Alaska Railroad Corporation since                 
September 1997.                                                                
                                                                               
MR. BINKLEY pointed out the position paper that was prepared by the            
management of the Alaska Railroad that pertains to their position              
on HB 412.  He also mentioned three management officials of the                
Alaska Railroad are available to answer questions and provide                  
information.                                                                   
                                                                               
CHAIRMAN WILLIAMS noted the committee does not have the statement.             
                                                                               
MR. BINKLEY said it was relayed to Juneau.  He said he would                   
outline what their position is and will comment on prior testimony.            
                                                                               
TAPE 98-11, SIDE B                                                             
Number 0001                                                                    
                                                                               
MR. BINKLEY continued, "...the Department of the Army to choose                
Whittier as a port and to construct the tunnel necessary to provide            
additional ice-free port to a railhead in addition to Seward and               
that was accomplished during World War II.  In the 1960's the                  
Alaska Railroad initiated rail-barge service from Prince Rupert,               
British Columbia, and also from Seattle into Whittier.  Whittier               
was really an ideal location for the transit of railcars on barges             
from the Pacific Northwest up to Alaska. ... That really is our                
rail-link to the Lower 48.  Railcars that are loaded and hauled by             
rail up to Seattle and Prince Rupert, that freight stays right on              
those actual railcars - those actual railcars roll right on barges,            
... and it's a very efficient rail-link between the Lower 48 and               
Alaska.  During the 60's, when Whittier ceased to (indis.) an Army             
post, the city really began to evolve at that point as a community.            
The State of Alaska, during that time, recognized the needs to                 
provide better access to the newly formed community and they                   
actually contracted with the Alaska Railroad, then owned by the                
federal government, to provide shuttle service for the people of               
Whittier between Portage and Whittier.  At that time the State of              
Alaska paid to the federal government, through the Alaska Railroad,            
about $900,000 to provide that service.  When the Alaska Railroad              
was purchased by the State of Alaska in 1985, then of course that              
subsidy was terminated and the Alaska Railroad absorbed those costs            
to provide that shuttle service to the people of Whittier."                    
                                                                               
MR. BINKLEY stated the State of Alaska, as Mr. George mentioned,               
has recognized the need for better access, not only for the people             
of Whittier to a vast number of people in Southcentral Alaska to               
utilize the Prince William Sound area for recreational and                     
commercial purposes.  And that of course began the work on the                 
tunnel which should be completed in the year 2000.                             
                                                                               
MR. BINKLEY said since the time that the state seriously began                 
looking at constructing the tunnel, up through the recent court                
decision that allowed it to continue on, the railroad has made                 
numerous efforts to assist the City of Whittier.  He indicated the             
state has been lacking in not looking at what the impacts are going            
to be on the community on Whittier, the state should help Whittier             
prepare for those impacts that are going to be inevitable as that              
tunnel is completed.                                                           
                                                                               
Number 0040                                                                    
                                                                               
MR. BINKLEY mentioned a few examples that have been ongoing and                
some that the Alaska Railroad has concluded.  In 1996 the Alaska               
Railroad agreed to a longstanding tidelands dispute that was                   
between the railroad and the Alaska Department of Natural                      
Resources.  That agreement directly benefited the city by making               
tidelands available for conveyance from the State of Alaska to the             
city.  He said they stepped forward in 1996 and initiated the talks            
and got them concluded so the City of Whittier could have title to             
those tidelands.  Mr. Binkley also noted they worked closely with              
the City of Whittier to provide a lease for the small boat harbor              
area for expansion and commercial development that really                      
recognized the city's needs and made railroad land available for               
far less than fair market value to the city to accommodate those               
needs.  He mentioned he was personally involved in that and noted              
the railroad was very sincere in their efforts to reach an                     
agreement with the City of Whittier to give them every benefit in              
terms of profiting from the operation of the small boat harbor and             
providing public amenities through parking, restroom facilities,               
movement for city equipment in terms of running the small boat                 
harbor.                                                                        
                                                                               
MR. BINKLEY reported they recently finalized an agreement with the             
city for lands that are occupied by various basic utilities, it's              
a long-term 35-year contract with no annual fee, and renewable up              
to 35 years to really allow the city control of the community's                
utility infrastructure.  Mr. Binkley said he thinks it's important             
that the city maintain control over those utilities, as was pointed            
out by Ms. Williams, and they have done that through a long-term               
contract.  He mentioned they recognize Whittier's geographical                 
situation and the city's lack of funds.  The utility systems                   
themselves, were previously inherited from the federal government,             
were donated to the city a number of years ago.  A roadway                     
agreement, similar in structure to the utility agreement is next up            
for finalization and is very close to being finalized right now.               
                                                                               
Number 0071                                                                    
                                                                               
MR. BINKLEY stated, "Some time ago the Alaska Railroad committed to            
donating $35,000 to the city on a matching basis for a land-use                
plan and infrastructure plan to meet the needs that will arise -               
obviously when the road opens and the people and cars flood into               
the community.  Recognizing that, Whittier itself has no funds to              
contribute to the effort, we increased our commitment to $50,000               
and persuaded the State DOT/PF, as Mr. George pointed out, to                  
donate another $50,000 from DOT/PF to help the city plan for those             
effects, when the tunnel opens.  The meeting that was referred to              
last Wednesday was the first meeting of that group to start on the             
planning process for the Department of Transportation. ... Hoping              
that all these other issues would be solved, but I think the real              
intent of that was simply to start the planning process for the                
needs of the community of Whittier.  Mr. George also pointed out               
the study that the Alaska Railroad participated in with the firm               
Intra - that talked about land-use planning.  Within the next week             
a contract should be in place facilitate some of the planning                  
documents that will be necessary to be drawn up.  And within three             
months we expect to have a short and long-term projects that are               
identified with time lines and with the scope of work necessary."              
                                                                               
MR. BINKLEY further explained a number of these may require some               
time to develop funding sources, both federal and other parties                
that can participate in the funding of these projects.  He noted               
they have entered into an agreement with the City of Whittier to               
build the Viking Harbor, utilizing Corps of Engineers funding, $1.5            
million from the Corps of Engineers, approximately $187,000 from               
the city, and between $2,000,000 and $3,000,000 from the Alaska                
Railroad.  For their participation, the city will receive one-third            
of the gross revenue from the harbor with a guaranteed minimum                 
floor of one dollar per passenger that crosses the dock.  He noted             
the bulk of the money and the risk involved in constructing that               
project will come from the Alaska Railroad.  He also mentioned                 
there is another proposal for another small boat harbor in the                 
Whittier area that really has called into question the overall                 
economics of the project, so they are currently reviewing that and             
anticipate that will go forward.                                               
                                                                               
Number 0105                                                                    
                                                                               
MR. BINKLEY said they have also committed to leasing other lands to            
the city at far less than fair market rates, such as an area near              
the airport and for the RV camper park that is in the core of the              
city that was referred to earlier.  The Alaska Railroad has also               
approached the federal government for financial assistance in                  
building a pedestrian crossing over the road and the railroad                  
tracks in the core city area.  He pointed out a major impediment               
for pedestrian traffic will be the rail-yard which lies between the            
core of the City of Whittier and the waterfront.  Mr. Binkley said             
they are trying to work with the federal government for financial              
assistance in constructing those improvements and are fairly                   
confident that they will be successful in that regard as well.                 
                                                                               
MR. BINKLEY clarified the Alaska Railroad did provide, on short                
notice and at no cost to the City of Whittier, approximately 500               
tons of riffraff to help the city stabilize the road into town at              
Whittier Creek last year.  He mentioned the railroad has also                  
provided special rates for passenger shuttles, removed scrap from              
the city, and cleaned up the rail line between Portage and                     
Whittier.  The railroad also contributes approximately $24,000                 
annually to help fund the Whittier Police Department.                          
                                                                               
Number 0132                                                                    
                                                                               
MR. BINKLEY referred to Ms. Williams testimony regarding the                   
thirteen areas the need to be worked on between the City of                    
Whittier and the Alaska Railroad in which she indicated that only              
one of those had been completed to their satisfaction.  Mr. Binkley            
stated he met with the city manager and the mayor two weeks ago, on            
February 18, and that was the first time he saw that list.  He said            
his recollection, they could agree that at least seven of those                
were either completed or substantially complete to the satisfaction            
of the City of Whittier.                                                       
                                                                               
Mr. Binkley mentioned any future projects the railroad will be                 
working on, for example if the cruise ships hopefully come back to             
Whittier, the Alaska Railroad will need to repair and upgrade the              
dock facilities at the passenger access.  He said that takes a                 
tremendous amount of capital, all of which are done at the                     
railroad's expense, they are not subject to the general fund or                
expenditures by the State of Alaska.  The real estate revenues that            
they generate help provide for some of those capital upgrades that             
they are able to accomplish to improve the area in order to                    
increase the commerce coming into the community.                               
                                                                               
MR. BINKLEY stated the Alaska Railroad is not taxed on its real                
property in the community, however, the real value to the City of              
Whittier will be when private sector development takes place,                  
development on that raw land is what drives your tax base.  Mr.                
Binkley said Ms. Williams testified that every day she has private             
sector developers who were coming into her office asking about her             
to lease land.  He said he asked Ms. Williams to please send those             
people to the Alaska Railroad so that they can work with them to               
develop those lands.  He mentioned he also asked for a list but was            
not provided one person who had actually contacted her.                        
                                                                               
MR. BINKLEY said the Alaska Railroad has worked closely with the               
City of Whittier and that they are open, willing and ready to lease            
any piece of property to help develop the infrastructure in                    
Whittier and to help increase the tax base on which the community              
can operate.  The real estate revenues within the Alaska Railroad              
have allowed them to finance their own improvements and                        
infrastructure.  He reiterated that the income from the real estate            
has kept the railroad going over some very lean years.  He noted               
the ratio between upgrading revenues and real estate revenues has              
shifted to where they are about equal between operating revenues               
and real estate revenues.  It used to be the real estate that                  
carried the railroad.  It's not any longer.  He stated the real                
estate allows them the ability to go out and finance the heavy                 
capital cost that it takes to develop their properties in Whittier.            
                                                                               
Number 0196                                                                    
                                                                               
MR. BINKLEY noted there are some technical problems with the bill              
which deal with the original Alaska Railroad Corporation Act, the              
utility corridors that were provided for in that Act.  There are               
also technical concerns in the present structure of HB 412                     
regarding the liability of some of those lands - when they were                
transferred from the federal government to the Alaska Railroad and             
what happens in the course of transferring those lands onto the                
City of Whittier.  He urged the committee to take the time to look             
at some of the real technical problems with this legislation and               
will work with the railroad's legal council in trying to straighten            
out some of those problems.                                                    
                                                                               
MR. BINKLEY stated they feel that the Alaska Railroad has made                 
every effort to be responsive to the city's needs, although                    
admittedly the relationship between the parties in past years has              
been adversarial at times.  He said he thinks the current                      
management of the railroad has demonstrated a real change in the               
attitude of railroaders in dealing with the city.  Mr. Binkley                 
reiterated that the items he's listed indicate that some progress              
has been made, they still feel they have a lot more to do.  He                 
stressed that the railroad needs to conclude those negotiations to             
solve those problems so that we can have a healthy viable community            
that provides services when the tunnel is open.  Mr. Binkley                   
stated, "I think we can accomplish these things to the benefit of              
the City of Whittier and the benefit of the Alaska Railroad, we can            
all win in this situation, we're committed to do it and we're going            
to go forward and hopefully this bill won't be necessary to make               
that happen."                                                                  
                                                                               
CHAIRMAN WILLIAMS said he didn't want to get into a debated but                
there have been a lot of accusations made on both sides.  He                   
mentioned he does remember the adversary role that the railroad was            
taking a few years back and feels that it's still there.                       
                                                                               
                                                                               
Number 0225                                                                    
                                                                               
MS. WILLIAMS said she would like to give the current and correct               
status of the list provided by the railroad.  She indicated there              
is not in place at this time the 35-year water sewer - storm sewer             
agreement, the $35,000 and $50,000 are planning monies of DOT/PF               
and the railroad and a lot of discussion was held on what could be             
done in the wharf area, the Viking Harbor situation is not going to            
become a feasible situation, the fish pond project - the city is               
unable to sign the 28-page document because of the various as                  
sundry items in it.  She said, as of this moment, none of the 15               
items have come to fruition, and when they speak of the $24,000                
donation to Public Safety, that's erroneous, that is a service                 
contract for the police department to patrol private railroad                  
property at the wharf.  The riprap brought in, they were rearing               
their own lands.                                                               
                                                                               
MS. WILLIAMS said she doesn't understand the $260,000 of lost                  
revenue in 1997 that they show for real estate holdings.  She said             
the key point is that all of the discussion is centered around as              
what the city sees as a real estate development or a real estate               
developer might speak, not an industry that was developed by the               
State and statutorily protected for rail service transportation and            
passenger.  The lands that do belong to the state and are                      
legislatively controlled need to stay inside that statute that                 
tells them to provide our transportation.                                      
                                                                               
CHAIRMAN WILLIAMS asked if there is anyone on teleconference who               
can't participate on Monday that would like to testify at this                 
time.                                                                          
                                                                               
MS. WILLIAMS mentioned Mayor Bill Coumbe, and members of the public            
are on teleconference in Whittier.                                             
                                                                               
Number 0274                                                                    
                                                                               
REPRESENTATIVE HUDSON referred to the Alaska Railroad's position               
statement, page 5.  He asked Mr. Binkley to provide information on             
other right-of-ways which would tightly constrain the railroad's               
operations if HB 412 were to pass to make comparisons and explain              
the railroad's proposed changes that the railroad would like to                
make over time in conjunction with mutual agreement with the city              
and the potential revenue generations for the railroad of $1.9                 
million.                                                                       
                                                                               
REPRESENTATIVE KUBINA pointed out, in the previous administration,             
the City of Whittier had a sales tax to raise money, however the               
railroad said you can't sell a round-trip ticket so you couldn't               
tax the round-trip, you could only sell a one-way ticket.  He said,            
if you were a city official you could feel the frustration there.              
He also mentioned the city tried to put a head tax on the cruise               
ships, the cruise ships responded, fine, we're going to Seward.  He            
noted Bill Sheffield, as Chairman of the Alaska Railroad Board,                
they have been talking a lot more and explain things a lot better.             
He said Mr. Binkley has helped that out even more so.  He mentioned            
to the 28 page lease agreement - no wonder they spent $200,000, the            
tideland issue - we did solve that issue, fighting for easements               
for their utilities and the roads and not have a guarantee that the            
road's going to be there 90 days from now - that doesn't make                  
sense.  He indicated getting these lists, which he requested, is a             
step in the right direction.                                                   
                                                                               
CHAIRMAN WILLIAMS announced he would like to have testimony by                 
people who are not employed by either the state, railroad or the               
city, with exception of the mayor.                                             
                                                                               
Number 0319                                                                    
                                                                               
BILL COUMBE, Mayor, City of Whittier, testified in support of HB
412 via teleconference.  He said the bottom line is money, the                 
railroad by statute is required is to make the best use of their               
resources to make the railroad work, we understand that.  And their            
intent, clearly in Whittier is to maximize their profits and their             
real estate it helps the railroad get through the lean times.  He              
said, "It's not a personal thing, I think they're fine people and              
I understand their doing the job the best way they can.  What we're            
trying to do, is we're trying to build a community that we can be              
proud of.  It isn't our business, we don't want to see our town                
turn into concrete and asphalt in every direction, we would like to            
see some green (indisc.) areas, maybe a city park where kids could             
play without paying a fee to the Alaska Railroad to improve it.                
We'd like to see some recreational buildings built on land that we             
don't now own so that we could in the long, dark, cold winters have            
some sort of a (indisc.) social environment,  Maybe a swimming pool            
so our kids that are always at the waterfront can learn to swim.               
So it isn't just (indisc.) and I think it's important to understand            
what some of our motivation is in that regard."                                
                                                                               
Number 0333                                                                    
                                                                               
JOE GRAY, Council Member, and Planning and Zoning Committee Member,            
City of Whittier testified in support of HB 412 via teleconference.            
He said he is one of the few people who live in the Whittier Manor             
Building which is on railroad property.  He said it is true,                   
although he has a long-term lease, with the road coming in much of             
that property is being sold to people who have cash or are                     
typically from out of town because they can't get financing on                 
leased property.  He said that's rather frustrating.  Mr. Gray said            
he hasn't seen the special rates offered to the citizens of                    
Whittier.                                                                      
                                                                               
Number 0363                                                                    
                                                                               
CHAIRMAN WILLIAMS announced HB 412 will be held over until Monday.             
                                                                               
HB 227 - CAPITAL IMPROVEMENT PROJECT AUTHORITY                                 
                                                                               
Number 0367                                                                    
                                                                               
CHAIRMAN WILLIAMS announced HB 227, "An Act relating to the Alaska             
Capital Improvement Project Authority; relating to the powers and              
duties of the Department of Transportation and Public Facilities;              
and providing for an effective date," sponsored by Speaker Gail                
Phillips is before the committee.  He said the committee has heard             
this bill several times and indicated he would like to move HB 227             
today.                                                                         
                                                                               
Number 0376                                                                    
                                                                               
REPRESENTATIVE HUDSON said he would like to hear from the Office of            
Management and Budget, as well as the department while they're                 
here.                                                                          
                                                                               
CHAIRMAN WILLIAMS noted he would first like to hear from the                   
sponsor who is currently attending another meeting.  Chairman                  
Williams called for an at-ease at 2:50 p.m.                                    
                                                                               
CHAIRMAN WILLIAMS called the meeting back to order at 2:51 p.m.  He            
asked Mr. Pignalberi to tell the committee what has transpired.                
                                                                               
Number 400                                                                     
                                                                               
MARCO PIGNALBERI, Legislative Assistant to Representative Cowdery,             
Alaska State Legislature, brought the committee members up-do-date             
on the changes made.  He referred to Version LS0789\F, Utermohle,              
2/27/98, page 6, lines 24 through 27.  He said the drafter was                 
asked to make that sentence easier to understand.                              
                                                                               
TAPE 98-12, SIDE A                                                             
Number 0001                                                                    
                                                                               
MR. PIGNALBERI continued, "...that leaves this committee.  In                  
addition, Mr. Chairman, I mentioned to the committee that on page              
5 of the bill, on line 14, the words 'construction season,' at the             
end of line 14, it had been suggested to us by the FAA (Federal                
Aviation Administration) that we change construction season to                 
'fiscal year.'  And Representative Elton was kind enough to point              
out that splitting the fiscal year splits the construction season,             
it could be problematical so we discussed this matter with people              
at DOT/PF and with Federal Highways, and amongst staff, and the                
drafter of the bill and decided that -- I tried to reach Mr.                   
Simpson, I believe is on line now to let him know that we would not            
be recommending that as a change, and prefer to leave construction             
season as it is."                                                              
                                                                               
MR. PIGNALBERI referred to page 2, line 15, the section of the bill            
that has the findings and the intent of the legislature.  He said              
the subparagraph is added at the suggestion of Mr. Simpson, FAA.               
It reads the authority will:                                                   
                                                                               
     (4) Evaluate and prioritize projects with a method that is                
     consistent with criteria required by the Federal Aviation                 
     Administration, the Federal Highway Administration and other              
     funding sources.                                                          
                                                                               
MR. PIGNALBERI asked that be incorporated as an amendment also.                
                                                                               
CHAIRMAN WILLIAMS referred to the amendments as F.1 and F.2.                   
                                                                               
Number 0026                                                                    
                                                                               
REPRESENTATIVE HUDSON made a motion to move proposed Amendment F.1,            
Utermohle, 3/3/98 and asked for unanimous consent.                             
                                                                               
     Page 4, line 1:                                                           
                                                                               
     Delete "facilities"                                                       
     Insert "facility procurement"                                             
                                                                               
     Page 16, line 24:                                                         
                                                                               
     Delete "its"                                                              
     Insert "the commissioner's [ITS]"                                         
                                                                               
     Page 16, lines 26 - 28:                                                   
                                                                               
     Delete "approval and for submission of the findings, plans,               
     and recommendations, as approved, to the governor and to the              
     appropriate state agency to facilitate the development of                 
     agency capital improvement budget requests."                              
                                                                               
     Insert "approval [GOVERNOR AND TO THE APPROPRIATE STATE AGENCY            
     TO FACILITATE THE DEVELOPMENT OF AGENCY CAPITAL IMPROVEMENT               
     BUDGET REQUESTS]."                                                        
                                                                               
Number 0028                                                                    
                                                                               
REPRESENTATIVE ELTON objected.  He said, I've gotten to the first              
two things that this amendment accomplishes, and so far I would                
describe them as technical amendments.  I would like to have that              
confirmed by the maker of the amendment."  He also asked the third             
component, beginning on line 7, be explained.                                  
                                                                               
MR. PIGNALBERI asked if he was asking for an explanation of lines              
8 through 13 means.                                                            
                                                                               
REPRESENTATIVE ELTON replied yes, what that change through the                 
amendment accomplishes.                                                        
                                                                               
MR. PIGNALBERI referred back to Version F, Utermohle, 2/27/98, page            
16, subsection 6, lines 24 through 28.  He said, "The reason why               
this sentence was so convoluted is because it was trying to do, in             
one section of the bill - this section having to do with what the              
commissioner shall do, it was also trying to say what the authority            
shall do in the section that says what the commissioner shall do,              
and so it resulted in a very convoluted sentence."  Mr. Pignalberi             
explained the drafter had to put part of the language in different             
sections of the bill.  He said, "The gist of it is that the                    
approval and submission of findings, plans, and recommendations, is            
being done by the commissioner in this section."                               
                                                                               
PETE ECKLUND, Legislative Assistant to Representative Williams,                
Alaska State Legislature, explained the amendment cleans up                    
confusing sentences in Version F, line 24, subsection (6), the                 
commissioner is going to:                                                      
                                                                               
     submit his findings, plans and recommendations to the                     
     authority for their review, revision and approval.                        
                                                                               
PETE ECKLUND reiterated that they took a convoluted sentence and               
tried to clarify it.  It is saying that "the commissioner is going             
to submit his findings, plans, and recommendations to the authority            
for their review, revision and approval."  He then referred to                 
Version F, 2/27/98, page 4, lines 14 and 15 of Version F:                      
                                                                               
     the authority shall be submitted to the governor for inclusion            
     in the state capital projects budget and to the legislature.              
                                                                               
Number 0062                                                                    
                                                                               
REPRESENTATIVE ELTON for clarification stated the commissioner                 
submits to the authority and the authority submits to the governor.            
                                                                               
PETE ECKLUND replied for the findings, plans and recommendations in            
this section is correct.                                                       
                                                                               
REPRESENTATIVE ELTON withdrew his objection.                                   
                                                                               
Number 0067                                                                    
                                                                               
CHAIRMAN WILLIAMS asked if there was any other objections.  There              
being none, Amendment F.1 was adopted.                                         
                                                                               
Number 0070                                                                    
                                                                               
CHAIRMAN WILLIAMS referred to proposed Amendment F.2, page 2, line             
15.                                                                            
                                                                               
     (4) Evaluate and prioritize projects with a method that is                
     consistent with criteria required by the Federal Aviation                 
     Administration, the Federal Highway Administration and other              
     funding sources.                                                          
                                                                               
REPRESENTATIVE HUDSON made a motion to adopt Amendment F.2 and                 
asked for unanimous consent.                                                   
                                                                               
CHAIRMAN WILLIAMS asked if there were objections, there being none,            
Amendment F.2 was unanimously adopted.                                         
                                                                               
CHAIRMAN WILLIAMS asked Mr. Pignalberi if he would like to discuss             
the fiscal notes that he signed a few minutes ago.                             
                                                                               
Number 0081                                                                    
                                                                               
MR. PIGNALBERI explained the fiscal notes simply takes the amount              
of money that is in the FY 99 budget, for statewide planning BRU               
(Budget Review Unit), and moves it under a new BRU called the                  
"Alaska Capital Improvement Project Authority."  He said the                   
organization chart, the (indisc.) from the budget, gives a more                
vivid picture of what is paid for by the money, basically this is              
the statewide planning BRU - and the DOT/PF that would, under this             
bill, would simply be transferred to the authority.                            
                                                                               
REPRESENTATIVE ELTON said he was expecting to see a fiscal note                
from the department and indicated this seems to be a little bit                
unusual.  He asked if the department has had a chance to review the            
fiscal note that was prepared today for this transfer.                         
                                                                               
CHAIRMAN WILLIAMS mentioned they will hear from the department.                
                                                                               
MR. PIGNALBERI added that they went over the approach to our fiscal            
note with the department last evening and even made some                       
suggestions that they correct theirs now that they understand how              
it works.  He said, "But the department cannot admit how this bill             
works because they simply don't like it, and they're not going to              
prepare a fiscal note to reflect how it really works. ... There was            
a statement put on the record at our last meeting that this                    
authority would be federally funds ineligible and we checked with              
both the Federal Highway Administration and the Federal Aviation               
Administration, both of them I believe have representatives on-                
line. ... Basically the Federal Department of Transportation is                
mandated to work with whatever setup the various states come up                
with.  And among the 50 states, there are a variety of planning                
organizations and authorities that are eligible for federal funds              
of which this will just be one.  They are concerned that there be              
no redundant overhead expense and redundant activities so they                 
wouldn't have to pay for the same thing twice.  And that obviously             
is not the case because we're simply taking an existing BRU and                
putting it under the new authority and there is no redundancy in               
that.  So, the information that was put on the record, was based I             
believe on an honest misunderstanding of the intent of the bill but            
we need to have that corrected."                                               
                                                                               
Number 0114                                                                    
                                                                               
REPRESENTATIVE HUDSON said this not only transfers the money, but              
it also transfers all the positions out of DOT/PF into the new BRU.            
He asked if it stipulates where these positions will be located if             
we approve this.                                                               
                                                                               
MR. PIGNALBERI replied no, there's no reason why they can't remain             
where there are.  He said he supposed something would be worked out            
with the department rather than putting them in a separate                     
building.                                                                      
                                                                               
REPRESENTATIVE HUDSON stated there wouldn't be any major transfer              
of positions to new offices or setting up a new quasi-agency with              
all of these positions.  He said he assumed that all the positions             
remain the same.                                                               
                                                                               
MR. PIGNALBERI replied, "It's my own vision and I can't speak for              
the sponsors of the bill directly in this because they have                    
probably their unique vision on their mind, but I think we're                  
roughly on track with minor differences that the authority would               
probably have an administrative office in Anchorage and that they              
would have some minimal administrative support there.  But in terms            
of actually moving all of these positions you see on the                       
organizational chart out of Juneau, I don't think - that's not                 
contemplated."                                                                 
                                                                               
Number 0128                                                                    
                                                                               
REPRESENTATIVE HUDSON said he would not support it if it positions             
were moved out of Juneau because he believes the interrelationship             
between the planning and the development side, and the operational             
side is a very important element.  He indicated he does see value              
in the bill of establishing continuity within the planning                     
mechanism, but he doesn't want this thing to become a hindrance or             
a harm to the department and the rest of its functions.  He                    
reiterated that he is not about to vote to move this out of                    
committee until there are very good assurances.                                
                                                                               
MR. PIGNALBERI stated he is sure that the sponsors recognize and               
desire the authority to be an independent body for the purpose of              
making the selections and doing the rating so that it's external               
and there is more accountability that it's an external check on the            
DOT/PF, recognizing that they absolutely must have a continued                 
working relationship at the staff level - with other people in                 
DOT/PF and that's been a given in the whole process.                           
                                                                               
REPRESENTATIVE ELTON said that he's not sure that he's was                     
reassured.  He said it sounds like we're still "putting lipstick on            
the hog" and we don't know where these positions are going to be               
(indisc.--laughter).  He referred to the organizational chart and              
asked who hires these people.  Representative Elton stated, "If                
we're taking these positions, my assumption is that they would                 
report to the director that's hired by the authority."                         
                                                                               
MR. PIGNALBERI responded that's right, the chairman of the                     
authority.                                                                     
                                                                               
REPRESENTATIVE ELTON continued, "This director gets the positions,             
but I would imagine would have the authority to fill them with                 
whomever he or she wants.  They get the positions, they don't                  
necessarily get the people.  So this director could say, 'well, I              
don't want this planner..."                                                    
                                                                               
MR. PIGNALBERI interjected, they are state employees still.                    
                                                                               
Number 0151                                                                    
                                                                               
REPRESENTATIVE ELTON remarked they are.  He said he is assuming the            
director is going to have the hiring authority on whom they want               
reporting to them.  He asked if the director is mandated to keep               
the people that they're getting, or is he only getting the PCN'S               
(Position Control Numbers).                                                    
                                                                               
MR. PIGNALBERI responded there is no mandate in the bill for the               
director or the authority to keep anyone as an employee.  He said              
he didn't know if there was much choice in the matter and didn't               
know why the desire would be there.  He added these positions are              
classified.                                                                    
                                                                               
Number 0157                                                                    
                                                                               
REPRESENTATIVE ELTON asked, are we assuming that the director is               
going to be a range 26.                                                        
                                                                               
MR. PIGNALBERI replied yes - whatever it is now.                               
                                                                               
CHAIRMAN WILLIAMS said it doesn't look like he's going to be able              
to get this bill out of here today, so it will be held over until              
Monday.  Chairman Williams asked Mr. Moreno to come forward since              
he will not be available to testify on Monday.                                 
                                                                               
Number 0169                                                                    
                                                                               
STEVE MORENO, Administrator, Alaska Division, Federal Highway                  
Administration, said his purpose in being here is to register some             
concerns he has about the wording that's in the bill and noted FHA             
is neutral on the proposal.                                                    
                                                                               
MR. MORENO stressed that he is concerned with HB 227 because there             
are words that could get us in trouble here.  He said he knows                 
we're talking about a situation in which you have a director who               
reports to the authority, and the bill as it's written, also has a             
commissioner in there as well.  He noted, because he hasn't seen               
the organizational chart, he doesn't know who's in charge of DOT/PF            
in that sense.  Mr. Moreno stated, "My relationship is one with                
typically, and it is in all states, with either the commissioner or            
the secretary of transportation, depending on what the state is.               
So now I see we now have a director and we have a commissioner, so             
who's in charge, I don't know.  So I would have a concern about                
that, whom am I supposed to deal with as an organization."                     
                                                                               
MR. MORENO also noted there were words that were previously in the             
bill that the authority would review, revise as appropriate and                
approve capital improvement projects - budgets, and programs, and              
projects, and those kinds of words.  Mr. Moreno told the committee             
his concern is whether or not the authority would insert or delete             
projects or programs of projects from the Statewide Transportation             
Improvement Program document, which is a federally required item.              
He said those words appear to still be in here.  There was an                  
attempt to put other words in.  He referred to page 8 of Version F,            
lines 11 through 15:                                                           
                                                                               
     The authority may make amendments to an approved program that             
     affects projects for construction or maintenance of highways              
     approved by the Federal Highway Administration only if the                
     amendments are adopted in accordance with the program review,             
     revision, and approval process established by the authority.              
                                                                               
MR. MORENO asked is that the same process that the balance that                
DOT/PF uses, or is that a new process that just the authority uses.            
Do we have two processes now, or one?  He stated it's not clear to             
him.                                                                           
                                                                               
MR. MORENO concluded those are basically his concerns.  He said                
they're similar to what he had earlier, it was whether or not the              
authority, or the authority's staff, in this case would substitute             
their judgement for all the processes that came into play to get to            
the final list of projects.                                                    
                                                                               
MR. ECKLUND said, "We did include language in the bill that talks              
about the authority maximizing the use of federal funds and not                
doing anything to make our program federally ineligible.  The                  
amendment process he was talking about on page 8, we envision the              
authority working with the federal government to come up with an               
amendment process that meets both the federal requirements and that            
the State can live with.  We don't envision the authority just card            
blanche changing things and making projects federally ineligible.              
We've included language to try to make that clear."                            
                                                                               
Number 0206                                                                    
                                                                               
MR. MORENO gave a specific example, he said, "If the authority put             
in a project in year one of the document and said, all right this              
is now the DOT/PF's highest priority - we the authority stick it in            
there.  Our first reaction would be that that was not an eligible              
project.  What would have to happen is that project would have to              
go back through the entire process again, the STIP (Statewide                  
Transportation Improvement Program) process, and if it was in                  
Anchorage, the AMATS (Anchorage Metropolitan Area Transportation               
Study) process, and be ranked according to the standard procedure              
that the department uses.  So I don't know how long that takes,                
whether that's a full legislative season so that it's not until                
year two that the thing actually becomes eligible for federal aid.             
Again, it's going to depend on what this modification process is."             
                                                                               
MR. ECKLUND explained some of the problems we had in drafting is,              
a lot of these things that he's talking about are policies, they're            
not in statute now, they're not in regulation now, and so we had to            
give the authority some guidance - not to break federal law, to                
apply with federal law, but also given the latitude to come up with            
their own policies with the federal government to address these                
issues.  Because it's not in statute now, it's not in regulation               
now, it's hard to put into a bill.  We tried to craft it to give               
them some leeway, but also make sure that they would follow federal            
requirements and not make our program ineligible.                              
                                                                               
MR. MORENO mentioned the last time he was here there was a comment             
made to the effect that we haven't built any new roads for a long              
time in Alaska.  He referred to two national charts, federal fiscal            
1992 to 1996.  Mr. Moreno said, "If you look at it in terms of the             
number of miles that are under construction in any given fiscal                
year, for the five-year period that I just mentioned, only about 3             
percent, that's this little dark slice of the pie here, only about             
3 percent of the roadways that are under construction are new                  
roadways on new alignment.  Alternatively, if you look at that and             
say, well forget about the mileage, let's look at out of eight                 
billion dollars a year that's under construction, nationally, how              
much of that is new roadway.  That number for those same years is              
in the range of 13 to 17 percent.  So again, it's a relatively                 
small piece of the pie, the rest of it is going toward system                  
preservation and capacity improvements."                                       
                                                                               
Number 0229                                                                    
                                                                               
REPRESENTATIVE BEVERLY MASEK stated for the record that she is                 
concerned and would like answers regarding questions Mr. Moreno                
asked - who is in charge since we didn't put in the commissioners              
and address his comment regarding page 8 as well.                              
                                                                               
Number 0234                                                                    
                                                                               
REPRESENTATIVE JERRY SANDERS commented, "With this, you're                     
referring to a mature road system which we don't have here in                  
Alaska."                                                                       
                                                                               
REPRESENTATIVE COWDERY said, "Down town Anchorage don't need more              
streets or more roads, there's no new roads down there, but                    
certainly some new roads in rural Alaska.  And Alaska is maybe more            
unique than the others."                                                       
                                                                               
CHAIRMAN WILLIAMS announced HB 227 will be held over until Monday.             
                                                                               
ADJOURNMENT                                                                    
                                                                               
Number 0239                                                                    
                                                                               
CHAIRMAN WILLIAMS adjourned the House Transportation Standing                  
Committee at 3:17 p.m.                                                         

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