Legislature(1995 - 1996)

04/03/1996 02:22 PM TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
            HOUSE TRANSPORTATION STANDING COMMITTEE                            
                         April 3, 1996                                         
                           2:22 p.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Gary Davis, Chairman                                           
 Representative Jeanette James                                                 
 Representative Tom Brice                                                      
 Representative Jerry Sanders                                                  
 Representative Bill Williams                                                  
 Representative Don Long                                                       
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 Representative Beverly Masek, Vice Chair                                      
                                                                               
 OTHER HOUSE MEMBERS PRESENT                                                   
                                                                               
 Representative Norman Rokeberg                                                
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 HOUSE BILL NO. 543                                                            
 "An Act establishing a preference when entering into state airport            
 land leases."                                                                 
                                                                               
      - MOVED CSHB 543 (TRA) FROM COMMITTEE                                    
                                                                               
 HOUSE BILL NO. 518                                                            
 "An Act exempting certain persons engaged in selling or servicing             
 certain vehicles from overtime wage requirements."                            
                                                                               
      - MOVED HB 518 FROM COMMITTEE                                            
                                                                               
 CS FOR SENATE BILL NO. 274(TRA) am                                            
 "An Act relating to the noise levels of airports and sport shooting           
 facilities."                                                                  
                                                                               
      - MOVED HCS CSSB 274 (TRA) FROM COMMITTEE                                
                                                                               
 *HOUSE JOINT RESOLUTION NO. 65                                                
 Relating to proposed Federal Aviation Administration regulations              
 establishing crew member flight time limitations.                             
                                                                               
      - MOVED FROM COMMITTEE                                                   
                                                                               
 *HOUSE BILL NO. 136                                                           
 "An Act mandating the sale of the Alaska Railroad; and providing              
 for an effective date."                                                       
      - HEARD AND HELD                                                         
                                                                               
 (* First public hearing)                                                      
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HB 543                                                               
 SHORT TITLE: STATE AIRPORT LAND LEASE PREFERENCE                              
 SPONSOR(S): TRANSPORTATION                                                    
                                                                               
 JRN-DATE     JRN-PG            ACTION                                         
 03/14/96      3149    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/14/96      3149    (H)   TRANSPORTATION                                    
 03/20/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
 03/20/96              (H)   MINUTE(TRA)                                       
 03/27/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
 04/03/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
                                                                               
 BILL:  HB 518                                                               
 SHORT TITLE: OVERTIME COMP FOR VEHICLE SALES PEOPLE                           
 SPONSOR(S): LABOR & COMMERCE                                                  
                                                                               
 JRN-DATE     JRN-PG            ACTION                                         
 02/15/96      2776    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/15/96      2776    (H)   TRANSPORTATION, LABOR & COMMERCE                  
 02/28/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
 02/28/96              (H)   MINUTE(TRA)                                       
 03/20/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
 04/03/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
                                                                               
 BILL:  SB 274                                                               
 SHORT TITLE: NOISE AT AIRPORTS & SPORT SHOOTING RANGES                        
 SPONSOR(S): SENATOR(S) HALFORD,Sharp,Green                                    
                                                                               
 JRN-DATE     JRN-PG            ACTION                                         
 02/09/96      2347    (S)   READ THE FIRST TIME - REFERRAL(S)                 
 02/09/96      2347    (S)   TRANSPORTATION                                    
 02/27/96              (S)   TRA AT  1:30 PM BUTROVICH ROOM 205                
 02/27/96              (S)   MINUTE(TRA)                                       
 02/28/96      2566    (S)   TRA RPT  CS  1DP 2NR      SAME TITLE              
 02/28/96      2566    (S)   ZERO FISCAL NOTES (LAW, DOT)                      
 03/06/96              (S)   RLS AT 12:45 PM FAHRENKAMP RM 203                 
 03/06/96              (S)   MINUTE(RLS)                                       
 03/12/96      2710    (S)   RULES TO CALENDAR  3/12/96                        
 03/12/96      2715    (S)   READ THE SECOND TIME                              
 03/12/96      2715    (S)   TRA  CS ADOPTED UNAN CONSENT                      
 03/12/96      2715    (S)   ADVANCED TO THIRD READING UNAN CONSENT            
 03/12/96      2715    (S)   READ THE THIRD TIME  CSSB 274(TRA)                
 03/12/96      2716    (S)   PASSED Y17 N1 E2                                  
 03/12/96      2716    (S)   DUNCAN  NOTICE OF RECONSIDERATION                 
 03/14/96      2747    (S)   RECON TAKEN UP - IN THIRD READING                 
 03/14/96      2747    (S)   RETURN TO SECOND FOR AM 1  UNAN CONSENT           
 03/14/96      2747    (S)   AM NO  1     ADOPTED UNAN CONSENT                 
 03/14/96      2747    (S)   AUTOMATICALLY IN THIRD READING                    
 03/14/96      2748    (S)   PASSED ON RECONSIDERATION Y15 N3 E2               
 03/14/96      2749    (S)   TRANSMITTED TO (H)                                
 03/18/96      3171    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/18/96      3171    (H)   TRANSPORTATION, FINANCE                           
 04/03/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
                                                                               
 BILL:  HJR 65                                                               
 SHORT TITLE: OPPOSING PROPOSED FAA REGULATIONS                                
 SPONSOR(S): TRANSPORTATION                                                    
                                                                               
 JRN-DATE     JRN-PG            ACTION                                         
 04/02/96      3558    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 04/02/96      3559    (H)   TRANSPORTATION                                    
 04/03/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
                                                                               
 BILL:  HB 136                                                               
 SHORT TITLE: MANDATE SALE OF ALASKA RAILROAD                                  
 SPONSOR(S): REPRESENTATIVE(S) MARTIN                                          
                                                                               
 JRN-DATE     JRN-PG            ACTION                                         
 01/30/95       174    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/30/95       174    (H)   TRA, STA, FIN                                     
 04/03/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 KURT PARKAN, Deputy Commissioner                                              
 Office of the Commissioner                                                    
 Department of Transportation and Public Facilities                            
 3132 Channel Drive                                                            
 Juneau, Alaska  99801-7898                                                    
 Telephone:  (907) 465-6977                                                    
 POSITION STATEMENT:  Testified on CSHB 543                                    
                                                                               
 KELLY HUBER, Legislative Aide                                                 
           for Senator Halford                                                 
 Alaska State Legislature                                                      
 State Capitol, Room 508                                                       
 Juneau, AK  99801                                                             
 Telephone: (907) 465-4958                                                     
 POSITION STATEMENT:  Testified on CSSB 274 (TRA) am                           
                                                                               
 TOM ANDERSON, Legislative Aide                                                
      for Representative Martin                                                
 Alaska State Legislature                                                      
 State Capitol, Room 502                                                       
 Juneau, AK  99801                                                             
 Telephone: (907) 465-3783                                                     
 POSITION STATEMENT:  Testified on HB 136                                      
                                                                               
 FRANK DILLON, Executive Director                                              
 Alaska Trucking Association                                                   
 3443 Minnesota Drive                                                          
 Anchorage, Alaska  99501                                                      
 Telephone:  (907) 276-1149                                                    
 POSITION STATEMENT:  Testified on HB 136                                      
                                                                               
 BOB HATFIELD, Chief Executive Officer                                         
 Alaska Railroad Corporation                                                   
 P.O. Box 107500                                                               
 Anchorage, Alaska  99501-7500                                                 
 Telephone:  (907) 265-2403                                                    
 POSITION STATEMENT:  Testified on HB 136                                      
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 96-15, SIDE A                                                            
 Number 000                                                                    
                                                                               
 The House Transportation Standing Committee was called to order by            
 Chairman Gary Davis at 2:22 p.m.  Members present at the call to              
 order were Representatives G. Davis, James, Brice, Long, and                  
 Williams.  This meeting was teleconferenced to Anchorage, Fairbanks           
 and Seward.  A quorum was present.                                            
                                                                               
 CHAIRMAN GARY DAVIS announced that the agenda was HB 543, HB 518,             
 CSSB 274 (TRA) am, HJR 65 and HB 136.                                         
 HB 543 - STATE AIRPORT LAND LEASE PREFERENCE                                
                                                                               
 Number 0045                                                                   
                                                                               
 CHAIRMAN GARY DAVIS announced the first item on the agenda was HB             
 543, an act establishing a preference when entering into state                
 airport land leases and referred to the new committee substitute.             
                                                                               
 REPRESENTATIVE JEANETTE JAMES made a motion to adopt CSHB 543                 
 (TRA), version 9-LS1769\F, dated April 3, 1996.  Hearing no                   
 objections CSHB 543 (TRA) was now before the House Standing                   
 Committee on Transportation.                                                  
                                                                               
 Number 0095                                                                   
                                                                               
 CHAIRMAN GARY DAVIS said CSHB 543 (TRA) was a draft put together in           
 conjunction with involved parties and the Department of                       
 Transportation and Public Facilities (DOT/PF).  He said the                   
 language in the title has been narrowly defined so that it                    
 addresses specific concerns and will not leave itself open to                 
 revisions.  He said the findings section has been left into CSHB              
 543 (TRA) to protect it from any constitutional question regarding            
 preferential rights on land leases.                                           
                                                                               
 Number 0192                                                                   
                                                                               
 CHAIRMAN GARY DAVIS said the changes in Section 2 address concerns            
 by involved parties.  He said the changes in Section 3 involve the            
 elimination of terms which might have a legal basis, with the                 
 insertion of simple language.  He said the language now reads,                
 "right and option to make the first offer on a new lease for an               
 extended term within a reasonable period of time".  He said there             
 was lengthy discussion to make sure the time frames within that               
 process were delineated and Section 3 (d) does this, "under (c) of            
 this section, the department shall make the offer not less than 180           
 days before the expiration of the existing lease, and the holder of           
 the existing lease shall respond to the department's offer not less           
 than 90 days before the expiration of the existing lease."  In this           
 subsection, lease does not include a holdover lease.  He said a               
 holdover lease will probably not have 180 or even 90 days left in             
 the lease.  He said the provisions apply in a holdover lease but              
 the timing does not.  Holdover leases are available for the lessee            
 to have the right and option to make the first offer on a new lease           
 for that same land.                                                           
                                                                               
 Number 0346                                                                   
                                                                               
 CHAIRMAN GARY DAVIS said Section 3 (e) addresses the improvements             
 made to the land and said there might be some discussion on this              
 section.  He said (e) addresses the situation where someone is                
 interested in financing a facility on the land, and said DOT/PF can           
 address this situation by regulation.                                         
                                                                               
 Number 0389                                                                   
                                                                               
 CHAIRMAN GARY DAVIS said the key thing, in CSHB 342 (TRA), is to              
 make its application constitutional and to make sure that DOT/PF is           
 in agreement to prevent the bill from being vetoed.                           
                                                                               
 Number 0426                                                                   
                                                                               
 KURT PARKAN, Deputy Commissioner, Office of the Commissioner,                 
 Department of Transportation and Public Facilities, said the DOT/PF           
 supports legislation that will give existing tenants the right and            
 opportunity to get a new lease without going through the anxiety of           
 entering a competitive situation.  He said DOT/PF was directed by             
 the Governor to work with the legislature to address this issue and           
 said CSHB 342 (TRA) does a good job in meeting that common goal.              
 He said the DOT/PF has a problem with Section 3 (e), the discussion           
 on the disposition of improvements.  He said the DOT/PF cannot say            
 that they support that language and said they have provided some              
 suggested language the DOT/PF could support if the committee feels            
 there needs to be some reference to the improvements in the bill.             
 He said the problem with the current language, in CSHB 543 (TRA),             
 is that it removes flexibility for the state to manage the public             
 land and the DOT/PF feel that it would "tie the hands" of the state           
 in looking at the needs of the community, the needs of the airport            
 users and the need of the state as a whole.                                   
                                                                               
 Number 0594                                                                   
                                                                               
 CHAIRMAN GARY DAVIS said the submitted language was located in the            
 committee packet.                                                             
                                                                               
 Number 0641                                                                   
                                                                               
 REPRESENTATIVE NORMAN ROKEBERG, "what the provisions of subsection            
 (e) provide for is the disposition of revisionary interests in the            
 leaseholds.  There's been a lot of difficulties I understand that             
 in the past about this because they have either been omitted or               
 there hasn't been arms length bargaining in the past about this               
 reversionary interests.  So, this section, which I approve of in              
 part, is that it does provide that the disposition of these                   
 improvements at the expiration or termination of a lease would                
 remain with the leaseholder except for the limited circumstances              
 found in lines 27 through 30.  However, one thing I think that has            
 been omitted, although we have had some testimony in past meetings            
 on this is that if there is a clear, bargained for situation                  
 between the state as lessor and the tenants as lessees, that                  
 expressly provides for the reversionary interest of the improvement           
 to vest back into the state of Alaska.  I don't think we should               
 frustrate that statutorily and hopefully that would overcome any              
 problems that the department would have with this clause."                    
                                                                               
 REPRESENTATIVE ROKEBERG proposed an amendment to Section 3 (e),               
 language on page three, line 27, after "lessee" adding, "except               
 when expressly bargained for by agreement."  "So, the sentence in             
 essence, by paraphrasing read, that the ownerships of the                     
 improvements would be retained by the tenant except or by when they           
 constructed them by successor and interest or other assignees,                
 except when they are expressly bargained for by agreement.  You               
 could actually bargain for by agreement.  As a matter of                      
 construction you can even put it also down, however in limited                
 circumstances clearly defined by regulations, you could add it down           
 there too because these are exceptions that speak to the state's              
 interest."                                                                    
                                                                               
 Number 0800                                                                   
                                                                               
 MR. PARKAN said he did not see how that language would change                 
 things for the state as it doesn't provide the state with the                 
 flexibility in determining the disposition of improvements at the             
 end of a lease.  He questioned what the language, "acquire                    
 ownership by financing improvements" meant.  He said DOT/PF does              
 not really finance improvements.                                              
                                                                               
 Number 0832                                                                   
                                                                               
 REPRESENTATIVE JAMES asked for clarification on the problem with              
 Section 3 (e).                                                                
                                                                               
 Number 0844                                                                   
                                                                               
 MR. PARKAN said existing regulations, that have been in place for             
 many years, have three options for disposition of improvements at             
 the end of the lease term including the reversion of improvements             
 to the state, improvements may be removed or the improvements may             
 be sold to the subsequent lessee.  He said the language, under                
 Section 3 (e), would change that and make it nearly impossible for            
 the improvements to revert to the state.                                      
                                                                               
 Number 0895                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG said his proposed amendment would give the            
 state the ability to bargain for that right in the lease.  He said            
 the use of bargaining means something, and said there is not the              
 right to bargain at the airports because of their semi-monopoly               
 status.                                                                       
                                                                               
 Number 0941                                                                   
                                                                               
 REPRESENTATIVE JAMES said the language suggested by the DOT/PF                
 clearly states the intent more clearly than his proposed amendment.           
                                                                               
 Number 0952                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG said the suggested language by the DOT/PF             
 is similar to other language that was included in other drafts of             
 CSHB 543 (TRA) which he had devised.  "That language is really                
 duplicative of language I had provided when I had a construct which           
 provided for the reversionary interest in existing leases and then            
 said future leases had to speak to a disposition and that is all              
 that clause does.  That clause merely states that any future leases           
 would have a clause or provision for the disposition of any                   
 improvements, that is all it means."                                          
                                                                               
 Number 0990                                                                   
                                                                               
 REPRESENTATIVE JAMES said she understood that, but it seemed to her           
 that the disposition of the improvements at the end of the lease is           
 the issue.  Currently, according to regulation, the state has all             
 the options and if the state is to have options it should clearly             
 state what those options are.  She said the proposed language                 
 offered by the department would provide that information.                     
                                                                               
 Number 1025                                                                   
                                                                               
 CHAIRMAN GARY DAVIS said there was some ambiguity in the language             
 provided, "may acquire ownership by financing improvements."                  
                                                                               
 Number 1038                                                                   
                                                                               
 REPRESENTATIVE DON LONG said one of the suggested language reads              
 that we need provisions for disposition of improvements and the               
 other suggested language already has provisions lined in the lease.           
                                                                               
                                                                               
 Number 1068                                                                   
                                                                               
 CHAIRMAN GARY DAVIS said in the CSHB 543 (TRA) it is more detailed            
 with the amendment proposed by Representative Rokeberg which adds             
 some of the language by the departments.  He said this is currently           
 the only section of contention in CSHB 543 (TRA).  He said he                 
 wanted to move this bill out today and felt it would have a better            
 position on the floor if the department's suggested language was              
 incorporated into CSHB 543 (TRA).                                             
                                                                               
 Number 1108                                                                   
                                                                               
 REPRESENTATIVE JAMES made a motion to delete the existing Section             
 3 (e), lines 24 through 30, and insert the language provided by the           
 DOT/PF as reads, "All leases must include a provision that provides           
 for the disposition of any improvements made to the land, at the              
 expiration, termination or cancellation of the lease."   Hearing no           
 objection, Amendment 1 was adopted to CSHB 543 (TRA) by the House             
 Standing Committee on Transportation.                                         
                                                                               
 CHAIRMAN GARY DAVIS said there would most likely be additional                
 "tweaks" to CSHB 543 (TRA) before it went to the floor with the               
 assistance and cooperation of the DOT/PF.                                     
                                                                               
 Number 1204                                                                   
                                                                               
 REPRESENTATIVE BILL WILLIAMS made a motion to move CSHB 543 (TRA),            
 as amended, with zero fiscal note, and individual recommendations.            
 Hearing no objections CSHB 543 (TRA) was moved from the House                 
 Standing Committee on Transportation.                                         
 HB 518 - OVERTIME COMP FOR VEHICLE SALES PEOPLE                             
                                                                               
 Number 1291                                                                   
                                                                               
 CHAIRMAN GARY DAVIS announced the next item on the agenda was HB              
 518, an act exempting certain persons engaged in selling or                   
 servicing certain vehicles from overtime wage requirements.  He               
 said this bill was heard last week and said, in discussions with              
 the Department of Labor and the prime sponsor, that since the prime           
 sponsor is the next committee of referral, concerns could be                  
 addressed there.                                                              
                                                                               
 Number 1291                                                                   
 REPRESENTATIVE WILLIAMS made a motion to move HB 518 with zero                
 fiscal note and individual recommendations.  Hearing no objection             
 HB 518 was moved from the House Standing Committee on                         
 Transportation.                                                               
 SB 274 - NOISE AT AIRPORTS & SPORT SHOOTING RANGES                          
                                                                               
 Number 1524                                                                   
                                                                               
 CHAIRMAN GARY DAVIS announced that the next item on the agenda was            
 CSSB 274(TRA) am an act relating to the noise levels of airports              
 and sport shooting facilities.                                                
                                                                               
 KELLY HUBER, Legislative Aide for Senator Halford, said that CSSB             
 274 (TRA) am is a straightforward piece of legislation which was              
 introduced to provide private airports and sport shooting ranges              
 protection from lawsuits if the legal action arises out of the                
 noise level from normal operations.  She said CSSB 274 (TRA) am               
 addresses situations which have occurred in the lower 48 states               
 where new homes were built outside of town, near an airport or a              
 sport shooting range, and then people who moved into their homes              
 didn't care for the noise level and filed lawsuits regarding the              
 noise level.  She said CSSB 274 (TRA) am protects sport shooting              
 ranges and private airports from noise related lawsuits.                      
                                                                               
 Number 1385                                                                   
                                                                               
 MS. HUBER said CSSB 274 (TRA) is endorsed by the National Rifle               
 Association (NRA), Alaska Air Carrier's Association, the Outdoor              
 Council and the Airmen's Association.                                         
                                                                               
 Number 1400                                                                   
                                                                               
 MS. HUBER referred to Amendment 1 which the sponsor has asked the             
 committee to consider.  She said this amendment is a clean-up                 
 amendment.  She said, on the floor of the Senate, the word                    
 "private" was defined.  She said after this action, Legislative               
 Legal came back and said the language should be cleaned up and put            
 in their "legalize."  She said now it would read, "private means an           
 airport privately owned or operated" with the deletion of, "by a              
 private individual."  She said the amendment takes out "home rule"            
 and deleting, "or unincorporated city or borough" which is not an             
 appropriate way to place this in a definition.  She repeated that             
 the language in the proposed amendment was strictly clean-up                  
 language.                                                                     
                                                                               
 Representative Sanders joined the committee meeting at 2:45 p.m.              
 Number 1475                                                                   
                                                                               
 REPRESENTATIVE JAMES made a motion to adopt Amendment 1 to CSSB 274           
 (TRA) am.  Hearing no objections, Amendment 1 was incorporated into           
 CSSB 274 (TRA) am by the House Standing Committee on                          
 Transportation.                                                               
                                                                               
 Number 1497                                                                   
                                                                               
 REPRESENTATIVE JAMES made a motion to move CSSB 274 (TRA) am, as              
 amended, with attached fiscal notes and individual recommendations.           
 Hearing no objections HCS CSSB 274 (TRA) was moved from the House             
 Standing Committee on Transportation.                                         
 HJR 65 - OPPOSING PROPOSED FAA REGULATIONS                                  
                                                                               
 Number 1524                                                                   
                                                                               
 CHAIRMAN GARY DAVIS announced that the next item on the agenda was            
 HJR 65, relating to proposed Federal Aviation Administration                  
 regulations establishing crew member flight time limitations.  He             
 said this issue was brought to his attention by several people and            
 read the sponsor statement into the record, "The Federal Aviation             
 Administration (FAA) is proposing to implement regulations which              
 would limit the number of hours air taxi pilots would be allowed to           
 fly in a month.                                                               
                                                                               
 Research indicates that most air taxi operators in Alaska utilize             
 their pilots in excess of this proposed limit on a regular basis.             
 As can be seen in the whereas clauses of the resolution, these                
 regulations will have a drastic impact on air taxi operations in              
 Alaska.                                                                       
                                                                               
 These businesses are operating safely and this requirement would be           
 over restrictive and costly.  In essence, these regulations will be           
 detrimental to the livelihood of Alaska pilots and air taxi                   
 business owners alike."                                                       
                                                                               
 Number 1573                                                                   
                                                                               
 CHAIRMAN GARY DAVIS said the proposed regulations are included in             
 the committee packet and the amount of hours would be restricted to           
 100 hours in a calendar month.  He said currently pilots are flying           
 in excess of this amount, with some pilots flying 180 to 200 hours            
 a month.  He said this limitation is being proposed as a safety               
 measure, but other places in the nation do not have the same summer           
 season with the long daylight hours and the excess volume of                  
 seasonal business.                                                            
                                                                               
 Number 1626                                                                   
                                                                               
 REPRESENTATIVE TOM BRICE asked if there was a current limitation on           
 how many hours someone can fly.  A discussion ensued about this               
 question.                                                                     
                                                                               
 CHAIRMAN GARY DAVIS said pilots, currently, were acting within the            
 law.  He said this issue is being fought at the national level by             
 Senator Stevens who is trying to make an exception with the state             
 of Alaska.                                                                    
                                                                               
 Number 1754                                                                   
                                                                               
 REPRESENTATIVE BRICE asked if it was appropriate to name specific             
 private, non-profit associations within HJR 65.  He said he would             
 not hold up this resolution to get that addressed as it can be                
 addressed before the floor.                                                   
                                                                               
 CHAIRMAN GARY DAVIS said upon checking with the legal department,             
 the did not have a problem with the inclusion of those specific               
 organizations.  He said he would verify that question again before            
 it came up to the floor.                                                      
                                                                               
 Number 1831                                                                   
                                                                               
 REPRESENTATIVE BRICE said he might want to add language which would           
 depict the uniqueness of Alaskan geography.  He made a motion to              
 move HJR 65 with individual recommendations.  Hearing no objections           
 HJR was moved from the House Standing Committee on Transportation.            
 HB 136 - MANDATE SALE OF ALASKA RAILROAD                                    
                                                                               
 Number 1853                                                                   
                                                                               
 CHAIRMAN GARY DAVIS announced the next item on the agenda, HB 136,            
 an act mandating the sale of the Alaska Railroad; and providing for           
 an effective date.                                                            
                                                                               
 TOM ANDERSON, Legislative Aide for Representative Martin, referred            
 to a work draft which changes the proposed dates within the                   
 legislation.  He said HB 136 attempts to privatize the Alaska                 
 Railroad by asking the Governor to request proposals to purchase              
 the Alaska Railroad and its assets, asks the Governor to evaluate             
 the proposals over a certain amount of time, and then asks the                
 Governor to contract for an appraisal and the amounts of the                  
 appraisals shall be presented to the legislature.  He said HB 136             
 requests that the progress be updated, and upon completion of sale            
 of the railroad, it asks the Governor to dissolve the Alaska                  
 Railroad Corporation.                                                         
                                                                               
 Number 1929                                                                   
                                                                               
 MR. ANDERSON referred to fiscal notes located in the committee                
 packet.  He said the affected departments have not give any                   
 indication of a cost and failed to provide a fiscal note.                     
                                                                               
 Number 1963                                                                   
 CHAIRMAN GARY DAVIS requested a copy of the committee substitute              
 which changes the dates, included in CSHB 136, one year forward.              
                                                                               
 Number 2097                                                                   
                                                                               
 FRANK DILLON, Executive Director, Alaska Trucking Association, was            
 next to testify.  He said he supported CSHB 136 and that the                  
 trucking industry would like to see the Alaska Railroad privatized.           
 He said the trucking industry does not often, directly, compete               
 with the railroad.  He said the trucking industry is the third                
 largest user, or customer, of the railroad services.  He said there           
 is a lot of freight in Alaska and that makes sense to transport by            
 railroad.                                                                     
                                                                               
 Number 2137                                                                   
                                                                               
 MR. DILLON said there are occasions when it is impossible or                  
 awkward for the trucking industry to use the railroad because it is           
 a quasi-public entity.  He cited an example where the Alaska                  
 railroad trucks are going around the municipality of Anchorage and            
 pulling trailers, which belong to private vendors, with state                 
 exempt license plates.  He said that although this is a small                 
 example and the railroad does not have a lot of tractors in their             
 fleet, this appears to be an example where the Alaska Railroad                
 works "both sides of the street."                                             
                                                                               
 Number 2155                                                                   
                                                                               
 MR. DILLON said, if the component from real estate is taken out of            
 the Alaska Railroad, his organization is not sure that there is               
 much of value to sell.  He said the transportation features that              
 the Alaska Railroad provides is bulk hauling of fuel and coal                 
 hauling.  He said there are questions about what will happen with             
 the fuel haul and the efficacy of the coal haul.  He said, other              
 than that, the general freight, with the exception of a few heavy             
 items, could be picked up by less than 200 more trucks.  He                   
 encouraged information on whether or not the Alaska Railroad is               
 sellable and questioned that if it is too expensive to sell there             
 might not be any value in doing so.  He said, in conclusion, he               
 supported CSHB 136.                                                           
                                                                               
 Number 2201                                                                   
                                                                               
 BOB HATFIELD, Chief Executive Officer, Alaska Railroad Corporation,           
 said he was available for questions, but had no prepared testimony            
 to give.                                                                      
                                                                               
 Number 2207                                                                   
                                                                               
 CHAIRMAN GARY DAVIS asked if the state had a legal obligation to              
 offer the Alaska Railroad up for sale.                                        
                                                                               
 Number 2221                                                                   
                                                                               
 MR. HATFIELD said he was not aware that there was a legal                     
 obligation to offer the Alaska Railroad up for sale.  He said the             
 statute contemplates the sale of the railroad, but there is no                
 longer a requirement that the state or the railroad offer itself up           
 for sale.                                                                     
                                                                               
 Number 2249                                                                   
                                                                               
 CHAIRMAN GARY DAVIS clarified that CSHB 136 has the legislature               
 asking the Governor to attempt to sell the Alaska Railroad in a               
 time specific manner.  He asked what the criteria was to determine            
 whether the offer was being made by a viable company and whether              
 the offer was of an adequate amount.                                          
                                                                               
 Number 2282                                                                   
                                                                               
 MR. ANDERSON said Representative Martin's intention was to have the           
 Governor direct this determination to either the Department of                
 Administration or the Department of Commerce and Economic                     
 Development to establish the criteria.  He said Representative                
 Martin felt that it would be premature to establish the criteria at           
 this point without departmental input.                                        
                                                                               
 Number 2301                                                                   
                                                                               
 CHAIRMAN GARY DAVIS referred to page one, line ten, and read, "by             
 January 1, 1999, the Governor shall enter into an agreement to sell           
 the Alaska Railroad to the most responsive offer."                            
                                                                               
 Number 2308                                                                   
                                                                               
 MR. ANDERSON said this statement was with the assumption that a               
 viable offer comes in and added that this language could be                   
 changed.                                                                      
                                                                               
 CHAIRMAN GARY DAVIS said this would be an area that he would                  
 question and said there are two other committees of referral.                 
                                                                               
 Number 2322                                                                   
                                                                               
 REPRESENTATIVE JAMES said she supported a sale of the Alaska                  
 Railroad, but expressed concern as to how this sale is                        
 accomplished.  She referred to testimony by Montana Rail Link heard           
 in the Joint Senate and House Transportation Committee meeting in             
 March of 1996.  She said Montana Rail Link was a viable purchaser             
 for the Alaska Railroad and was interested in buying the Alaska               
 Railroad, but said they might not be interested with the limited              
 amount of track.                                                              
                                                                               
 REPRESENTATIVE JAMES said she sympathized with the concerns of Mr.            
 Dillon.  She said to have a successful railroad operating in this             
 state it must be private.  She said, for the areas where the Alaska           
 Railroad operates, it could provide a big tax base if it was                  
 privatized.  She said her biggest concern is that whoever buys the            
 railroad should really want to run the railroad and not just sell             
 it off.  She questioned whether having a mandate that the railroad            
 be sold by a certain time was something that should be changed.               
                                                                               
 Number 2392                                                                   
                                                                               
 REPRESENTATIVE JAMES said the employees of the Alaska Railroad                
 might be prospective buyers and cited their merits.  She said the             
 Alaska Railroad has been doing quite well despite the restrictions            
 they were given such as a broken rails and ties, fixed amount of              
 money to use for operations with a limited ability to receive                 
 funding to improve the trains such as buying lighter cars to haul             
 more coal.  She said, despite all these issues, the Alaska Railroad           
 has done quite well and yet she felt the state has been waiting for           
 an opportune time to sell the railroad.                                       
                                                                               
 Number 2449                                                                   
                                                                               
 REPRESENTATIVE JAMES said she believes that the Alaska Railroad can           
 access the resources throughout the state.                                    
                                                                               
 TAPE 96-15, SIDE B                                                            
 Number 0000                                                                   
                                                                               
 REPRESENTATIVE JAMES said with a railroad you don't have to worry             
 about conflicts, providing emergency services, having services                
 along the road for people or police protection.  She said the                 
 railroad, in this state, has great potential.  She said the buyer             
 of the Alaska Railroad needs to be someone who is interested in               
 making the railroad more than what it is today.  She said Montana             
 Rail Link is interested in connecting railroads around the nation             
 and are interested in connecting Alaska's rail to Canada.  She said           
 Montana Rail Link indicated that if they were given any indication            
 that they could buy the Alaska Railroad, they would come up with              
 their own appraisal and determination as to whether or not this was           
 a good investment.  She indicated that she is not convinced that              
 the state needs to spend the money to do an appraisal.                        
                                                                               
 Number 0060                                                                   
                                                                               
 REPRESENTATIVE JAMES said whatever is put into statute needs to be            
 thought about very carefully and the Governor must be told that               
 there is an obligation of what needs to be done.  She said the                
 reason why no one responded to Montana Rail Link was that the                 
 Governor is not interested in selling the railroad.  She said it is           
 the Governor's responsibility to put that railroad system into                
 private ownership if at all possible and any inquiries ought to be            
 seriously considered.                                                         
 Number 0102                                                                   
                                                                               
 REPRESENTATIVE JAMES said Montana Rail Link is a company that is              
 allowing people in the areas that they serve to have cheaper                  
 transportation.  She said they are a company operating all over the           
 lower 48 states and in other countries.  She concluded that she is            
 not pleased with CSHB 136 and said she was not willing to move this           
 bill out of committee until she had an opportunity to change things           
 in this bill.                                                                 
                                                                               
 Number 0126                                                                   
                                                                               
 CHAIRMAN GARY DAVIS said he agreed with most things that she said.            
 He said he was surprised that Representative Martin, in his                   
 legislation, gives the Governor complete control to sell the Alaska           
 Railroad without legislative oversight.  He said if someone is                
 interested in buying the railroad, then they will do the appraisal            
 of the lands.  He said if an offer is given, the company should               
 know that their offer will be given the greatest amount of                    
 consideration and said CSHB 136 can be strengthened in this regard.           
 He said this is an issue currently under debate because of Montana            
 Rail Link and said he agreed with Representative James as to what             
 the procedure was in existence if a company wants to make an offer            
 to buy the railroad.                                                          
                                                                               
 Number 0192                                                                   
                                                                               
 MR. ANDERSON said Representative Martin is willing to work with               
 anyone to change CSHB 136.  He said CSHB 136 is a chance to push              
 this issue forward.  He said, upon talking with the Federal                   
 Railroad Administration, the present trend is for Class A or Class            
 1 Railroads, which would have a revenue of over $100 million, to              
 purchase smaller railroads.  He said there are 12 of these types of           
 Class A railroads, but added that Montana Rail Link is not one of             
 those.  He said that now is the time to sell the Alaska Railroad              
 and said that perhaps the Administration is not the entity to                 
 dictate or put the parameters around this sale.                               
                                                                               
 Number 0224                                                                   
                                                                               
 REPRESENTATIVE JAMES said, in her support of rail as a means of               
 future surface transportation, that trucking and rail                         
 transportation are not in an adverse competition with each other.             
 She said the more rail activity, the more truck activity you have.            
 She expressed concern for the future when you put more trucks on              
 the highway system as it becomes dangerous and expensive.                     
                                                                               
 Number 0286                                                                   
                                                                               
 REPRESENTATIVE BRICE said there is language in CSHB 136 which says            
 that the buyers of the Alaska Railroad will continue to operate,              
 but there is nothing in CSHB 136 to prevent the buyers from pulling           
 rail or taking the rolling stock out of the state and this is of              
 concern to him.  He said nothing is specified where the state will            
 receive the amount of money it has spent in connection with the               
 railroad and asked when the "state" is defined whether it included            
 the Railroad Corporation or whether it was state general funds.  He           
 asked that the state get a fair market price for the railroad as              
 well as protecting employees of the Alaska Railroad.                          
                                                                               
 Number 0354                                                                   
                                                                               
 MR. ANDERSON said, "that is in statute, Mr. Chairman."  The statute           
 says that the Governor may provide for the sale or lease and that             
 it can be assured that the railroad will continue to operate after            
 the sale or lease and that under the terms of the sale or lease a             
 proper amount of money will be received in connection for the whole           
 railroad.                                                                     
                                                                               
 CHAIRMAN GARY DAVIS said the committee will work as a whole to                
 bring about changes in the language of CSHB 136, rather than                  
 putting this issue into a subcommittee.                                       
 ADJOURNMENT                                                                   
                                                                               
 As there was no further business to come before the House                     
 Transportation Standing Committee, Chairman Gary Davis adjourned              
 the meeting at 3:20 p.m.                                                      
                                                                               

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