Legislature(2023 - 2024)BARNES 124
04/18/2024 01:00 PM House TRANSPORTATION
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| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): Alaska's Ports and Harbors | |
| HB395 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HB 395 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE TRANSPORTATION STANDING COMMITTEE
April 18, 2024
1:03 p.m.
MEMBERS PRESENT
Representative Kevin McCabe, Chair
Representative Sarah Vance, Vice Chair
Representative Tom McKay
Representative Craig Johnson
Representative Genevieve Mina
MEMBERS ABSENT
Representative Jesse Sumner
Representative Louise Stutes
OTHER LEGISLATORS PRESENT
Representative Jennie Armstrong
COMMITTEE CALENDAR
PRESENTATION(S): PORT OF HOMER
- HEARD
HOUSE BILL NO. 395
"An Act approving the transfer of land owned by the Alaska
Railroad Corporation to the City of Nenana; and providing for an
effective date."
- MOVED HB 395 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 395
SHORT TITLE: TRANSFER OF RAILROAD PROPERTY
SPONSOR(s): TRANSPORTATION
04/09/24 (H) READ THE FIRST TIME - REFERRALS
04/09/24 (H) TRA
04/18/24 (H) TRA AT 1:00 PM BARNES 124
WITNESS REGISTER
BRYAN HAWKINS, Port Director and Harbormaster
City of Homer
Homer, Alaska
POSITION STATEMENT: Gave a PowerPoint, titled "Alaska's Ports &
Harbors."
RACHEL LORD, Mayor Pro Tempore
Homer City Council
Homer, Alaska
POSITION STATEMENT: Answered questions during the "Alaska's
Ports and Harbors" presentation.
JULIE MORRIS, Staff
Representative Kevin McCabe
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced HB 395 on behalf of
Representative McCabe, prime sponsor.
JOSHUA VERHAGEN, Mayor of Nenana
Nenana, Alaska
POSITION STATEMENT: Gave invited testimony in support of HB
395.
CLINT HALL
Hall Quality Builders, Inc.
Kenai, Alaska
POSITION STATEMENT: Gave invited testimony during the hearing
on HB 395.
MICHAEL WALLERI, Attorney
Nenana Native Association
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition to HB 395.
ROMY CADIENTE, Administrator
Nenana Native Association
Fairbanks, Alaska
POSITION STATEMENT: Testified during the hearing on HB 395.
BRIAN LINDAMOOD, Vice President and Chief Engineer
Alaska Railroad Corporation
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
395.
CHRISTY TERRY, Vice President of Real Estate
Alaska Railroad Corporation
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
395.
ACTION NARRATIVE
1:03:34 PM
CHAIR KEVIN MCCABE called the House Transportation Standing
Committee meeting to order at 1:03 p.m. Representatives McKay,
Vance, Mina, and McCabe were present at the call to order.
Representative C. Johnson arrived as the meeting was in
progress.
^PRESENTATION(S): Alaska's Ports and Harbors
PRESENTATION(S): Alaska's Ports & Harbors
1:04:22 PM
CHAIR MCCABE announced that the first order of business would be
a presentation titled "Alaska's Ports and Harbors".
1:04:42 PM
BRYAN HAWKINS, Port Director and Harbormaster, City of Homer,
gave a PowerPoint, titled "Alaska's Ports & Harbors" [hard copy
included in the committee packet]. He provided a brief
background related to the context of the presentation and
proceeded to slide 2, which displayed a picture of the Homer
Harbor and Kachemak Bay. He summarized the history of the
harbor.
1:07:09 PM
MR. HAWKINS moved to slide 3, which explained the role that the
Port of Homer plays in the development of maritime and other
industries in the Cook Inlet region. He proceeded to slide 4,
titled "Connecting Commerce and Communities, Vessels, that call
Homer Home," and further elaborated on the role that the Port of
Homer plays in serving as a homebase for operations elsewhere in
the Cook Inlet region. He moved to slide 5, which displayed a
picture of the Port of Homer's commercial barge ramp being used
to load construction materials on a barge.
1:10:14 PM
MR. HAWKINS moved to slide 6, which displayed a series of photos
of various marine safety sites around Alaska and highlighted the
Marine Exchange of Alaska (MXAK) operations center in Juneau.
He advanced to slide 7, which showed a map of vessel movements
as tracked by MXAK's operations center in Homer. He explained
that slide 8 emphasized the access that the Port of Homer
provides to 47 nearby communities that are not accessible by
road.
1:14:05 PM
MR. HAWKINS moved to slide 9, titled "Planning for the Future,"
where he explained that the Homer Port Facility is operating
well beyond its original intended capacity and added that the
City of Homer and the United States Army Corp of Engineers
(USACE) began a study on the feasibility of a large-vessel dock
there in March 2023. He continued to slide 10, which showed a
variety of points related to the previously mentioned
feasibility study on the Port of Homer's prospective large
vessel dock. He emphasized the role that USACE plays in working
with the City of Homer in moving forward with public development
projects such as the large vessel dock in Homer.
1:18:08 PM
MR. HAWKINS advanced to slide 12, titled "Alaska is Different!"
The slide provided an explanation of the history of port and
harbor development in Alaska and highlighted the age of and
difference between ports that are served by roads and ports that
are not. He continued to slide 13, which showed a map of Alaska
superimposed over a map of the contiguous United States, as well
as a list of factoids about various ports and harbors in Alaska.
He moved to slide 14, which stressed the low grade of "D" that
the State of Alaska received in its 2017 ports & harbors review
as done by the American Society of Civil Engineers (ASCE).
1:21:35 PM
MR. HAWKINS continued through slides 15 and 16, both of which
gave examples of port modernization projects in Nome, Juneau,
Hoonah, Valdez, and Whittier that were funded in part by USACE.
He continued to slide 17, which used the Port of Alaska as an
example of government and private entities collaborating
successfully to modernize local port infrastructure in a timely
and efficient manner. He moved to slide 18, which highlighted
the improved grade of "C" that the State of Alaska received
during its 2021 ports & harbors review as done by ASCE. He
explained that this improved grade was given to Alaska for a
variety of reasons, two of which being an improved capacity for
tourism and the Nome Deep Draft Arctic Port.
1:24:34 PM
MR. HAWKINS advanced to slide 21, which displayed a map of the
Alaska Marine Highway System's (AMHS's) routes currently
operating throughout the state. He continued on slide 22, which
displayed a map of all marine highway routes currently in
operation in North America. He proceeded to slide 23, which
displayed a map of the new "M-11" marine highway route in
Alaska.
1:26:44 PM
CHAIR MCCABE asked where the M-11 route's Cook Inlet path
terminates.
MR. HAWKINS offered his understanding that the route would
terminate in Anchorage. He concluded the presentation on slide
24, which gave an overview of the role that ports & harbors play
in Alaska's economy and lifestyle. Slide 25 showed contact
information, and Mr. Hawkins encouraged questions from committee
members.
1:31:18 PM
REPRESENTATIVE MCKAY asked about the water depth requirements
and the feasibility of any given requirements for the proposed
Port of Homer expansion project.
MR. HAWKINS responded that the Port of Homer expansion project
is in an already shallow area and would require extensive
dredging.
1:35:17 PM
REPRESENTATIVE MINA asked how USACE measures project demand,
impact to a community, cost to maintain, and environmental
impact of any given project.
MR. HAWKINS responded that the Port of Homer's harbor office
measures demand with its own anecdotal experience as an entity.
1:37:23 PM
RACHEL LORD, Mayor Pro Tempore, Homer City Council, answered
questions during the "Alaska's Ports and Harbors" presentation.
She said that the Homer City Council takes a perspective of
investigation when community concern arises from a proposed
project. The demand for the harbor is clear and the desire for
access for safe moorage is well documented, she explained.
1:39:26 PM
REPRESENTATIVE MINA asked how the timeline of the Port of Homer
project would be affected by any delays in federal funding.
MR. HAWKINS replied that the Project Initiation Document (PID)
is separate from the proposed project itself and does not give
an outline for any sort of federal funding as it relates to the
timeline of the Port of Homer project.
MAYOR LORD added that the City of Homer has demonstrated an
exemplary fiscal prudence in its operations and cited this as
evidence for its continued responsible use of state and federal
grants in the future.
1:42:16 PM
REPRESENTATIVE VANCE said this project has been a priority for
the City of Homer for a while and asked the presenters to speak
to the number of vessels they want to remain in Homer year-
round.
MR. HAWKINS replied that each year, the Port of Homer turns away
a dozen large vessels due to capacity issues alone. It can be
stretched a bit in the spring, he added, and if you look at the
Alaska fleet, many vessels choose to moor elsewhere.
1:45:20 PM
REPRESENTATIVE VANCE asked the presenters to explain the long-
term plan of improvement for all of the Ports in Alaska.
MR. HAWKINS expressed his belief that they are building the next
generation of harbors built for larger vessels. He added that
making room for additional fleet that would leave the state but
would stay here if they had an opportunity would also keep
business in the state.
MAYOR LORD added that the Alaska Association of Harbormasters
and Port Administrators (AAHPA) was working to collectively
problem solve. She provided examples of AAHPA and grant
programs being examples of ways the state can help float all
ships by having a vetted program.
1:50:20 PM
REPRESENTATIVE VANCE asked whether the commission discussed a
port authority for Southcentral Alaska.
MR. HAWKINS replied no.
1:50:50 PM
REPRESENTATIVE MCCABE asked whether the goods for Homer come
through Anchorage.
MR. HAWKINS affirmed the City of Homer had thought about it and
in 2017 did a deep dive about extending port services to include
a dock or build a new one for containerized freight, but it was
ultimately a matter of economics and population.
1:55:00 PM
CHAIR MCCABE thanked the presenters.
HB 395-TRANSFER OF RAILROAD PROPERTY
[Contains discussion of HB 199.]
1:55:54 PM
CHAIR MCCABE announced that the final order of business would be
HB 395, HOUSE BILL NO. 395, "An Act approving the transfer of
land owned by the Alaska Railroad Corporation to the City of
Nenana; and providing for an effective date."
1:56:36 PM
JULIE MORRIS, Staff, Representative Kevin McCabe, Alaska State
Legislature, introduced HB 395 on behalf of Representative
McCabe, prime sponsor. She paraphrased the sponsor statement
[included in the committee packet], which read as follows:
House Bill 395 aims to facilitate the transfer of land
from the Alaska Railroad Corporation to the City of
Nenana. This transfer is significant because the city
has been actively managing this land since 1981,
investing approximately $29 million in infrastructure
over the years.
The location of the land holds strategic importance
for industrial development, given its proximity to the
river system, the Alaska Railroad, the Parks Highway,
and the Nenana Airport, which collectively serve as a
vital transportation hub. By acquiring ownership of
this land, the municipality aims to leverage it for
further economic growth in the region.
The goal for the municipality to own the land under
the infrastructure will further economic growth in the
region, and the city has a development plan that
includes Nenana's Municipal Boat Launch. This boat
launch serves as an access point for many rivers such
as the Tanana, Totatlankia, Teklanika, Tolovana,
Kantishna and the Yukon. The City of Nenana has
invested $300,000 in the boat launch alone and is a
central piece of infrastructure which is located on
the railroad property that will be conveyed under this
legislation.
Overall, HB 395 seeks to empower the City of Nenana to
take ownership of the land it has been managing and
investing in for decades, enabling it to further its
economic development goals and utilize key
infrastructure assets for the benefit of the community
and the region.
1:58:59 PM
MS. MORRIS gave the sectional analysis [included in the
committee packet] for HB 395, which read as follows [original
punctuation provided]:
Section 1 amends the uncodified law of the State of
Alaska by amending a new section that approves the
transfer of real property to the City of Nenana. The
Alaska Railroad corporation is authorized to convey
the convey the interest in the surface estate of
approximately 188 acres of rail land to the City of
Nenana and provides for the legal descriptions of the
property conveyed.
Section 2 provides for an effective date under
AS.01.10.070(c).
1:59:55 PM
CHAIR MCCABE, as prime sponsor of HB 395, explained that the
City of Nenana has first rights of refusal; therefore, the bill
now references the City of Nenana first. He welcomed invited
testimony.
2:00:57 PM
JOSHUA VERHAGEN, Mayor, City of Nenana, gave invited testimony
in support of HB 395. He stated that prior to his involvement,
a former mayor had worked diligently to get this accomplished
and he thanked the Alaska Railroad Corporation (ARRC) for its
willingness to work with Nenana. He provided a history of
Nenana and how it was built as a railroad town, and that the
town had a long history of barging. He noted that Nenana had 13
years left on a lease with ARRC and he expressed the
difficulties in wanting to invest more in property and having to
pay more just to use the infrastructure. There are subleases on
the property as well, and there is significant interest from
other investors, he said, and the investors are anxious for the
City of Nenana to own the land. As for financial matters, he
explained the city had $10.5 million in debt when he took
office, but the debt has since been eliminated by 95 percent.
He stressed that HB 395 could help with the goal of becoming
debt free. He thanked the committee for the opportunity to
testify for the betterment of the community and the region.
2:07:39 PM
REPRESENTATIVE MINA questioned how Nenana had been working on
the purchase since the 1980s and what factors were behind the
delay.
MAYOR VERHAGEN responded that in the 1980s, the city put an
initiative on the ballot to take out a bond, which was supported
by the community. He said he was not sure of all the reasons
why a bill was never put forward, but a factor that may have
come into play was that there was an economic industry that
included the barge, and the revenue was substantial but did not
cover the cost of the lease; therefore, the city fell behind on
payments. He noted hesitation from the community in investing
in land owned by ARRC but offered his understanding that the
community would be more interested if the land were owned by the
city.
2:10:42 PM
CLINT HALL, Hall Quality Builders, Inc., gave invited testimony
during the hearing on HB 395. He provided a professional
background and history of his business' involvement throughout
the state. He noted the limited supply of logs and that in
Nenana, there appears to be a supply of timber and logs;
therefore, the timber supply is an attraction and the railroad
to Seward is as well, so they can get their patented product on
a barge, he stated. He added that barging on the river is also
an attraction related to affordable homes in the community, and
he offered his support of having a facility in Nenana. He
opined that it would create jobs and new companies on the road
system.
2:15:25 PM
CHAIR MCCABE commented that he saw the design of Mr. Hall's
homes and he described them as "fabulous." He added that the
company was well-poised to make a difference in the state.
2:16:07 PM
CHAIR MCCABE opened public testimony on HB 395.
2:16:29 PM
MICHAEL WALLERI, Attorney, Nenana Native Association, testified
in opposition to HB 395. He noted that there were many issues
that should be addressed. He referred to HB 199, which the
tribe would prefer, he said. He mentioned the right of first
refusal, but as the mayor had pointed out, the city is in breach
of its leases and from a legal standpoint, the right of first
refusal is dependent on them complying with the leases but they
are out of compliance. He noted the many reasons why the tribe
thinks it would be a better steward for the lands. Another
concern of the tribe he noted was the contamination on the fuel
docks causing much of the land to be contaminated, which
presents a health risk to the residents. He said the city
neither acknowledges that the contamination exists nor has a
plan to remediate it. He mentioned the various liabilities that
would stem from the clean-up. He stated the Tribe would prefer
cooperation, not litigation, to address the contamination.
2:21:33 PM
MR. WALLERI spoke to old letters of support and reiterated
addressing the contamination issues before discussing
redevelopment. The city has been in a state of decline due to
loss of port tenants and the population has dropped, which is
legally important, he explained, because it does not meet the
criteria to become a first-class city.
2:23:50 PM
CHAIR MCCABE requested that a report on contamination be
forwarded to him.
2:24:25 PM
ROMY CADIENTE, Administrator, Nenana Native Association,
testified during the hearing on HB 395. In relation to the fire
department being disbanded, he explained that the tribe supports
the fire department in salaries, purchases, and notably the
purchase of a new ambulance due to trips back and forth to
Fairbanks. He mentioned the Nenana bridge and that the tribe
has worked with the Department of Transportation and Public
Facilities (DOT&PF) to complete the project and the financial
reports. He stressed that the tribe sought to work with all in
a meaningful, cooperative, respectful way that benefits the
Nenana residents. He summarized accomplishments of projects in
which the Tribe had a part.
2:27:50 PM
CHAIR MCCABE, after ascertaining no one else wished to testify,
closed public testimony on HB 395.
2:28:34 PM
REPRESENTATIVE MINA asked Mayor Verhagen for his response to the
contamination issues and liability to the city and railroad.
MAYOR VERHAGEN replied that he was surprised by the accusations
being made because they have not been accurate in relation to
communication. On the environmental side of things, he said,
the City of Nenana is aware of the contamination which is due to
three fuel sites that were not operated by the city, and one
predated the city's lease. Monitoring is done every year, and
the city receives a report of any changes, he explained, and the
contamination is a concern of the city and would be addressed.
Grants and funds to clean up the issue are being looked into, he
noted, as well as collaboration with the railroad on this
environmental issue.
2:32:13 PM
The committee took an at-ease from 2:32 p.m. to 2:34 p.m.
2:34:01 PM
CHAIR MCCABE invited questions from committee members.
2:34:16 PM
REPRESENTATIVE VANCE inquired about the obligation of the
railroad to begin the conversation.
CHAIR MCCABE imparted that HB 395 would allow the sale of land
but not require it.
2:35:13 PM
BRIAN LINDAMOOD, Vice President and Chief Engineer, Alaska
Railroad Corporation, addressed Representative Vance and
explained that the bill as written is permissive for ARRC to
sell any property and does require a board of affirmative
action. Both the legislature and the ARRC board must approve,
he said.
REPRESENTATIVE VANCE brought up the [first right of refusal] for
the City of Nenana and inquired whether that was under ARRC's
purview.
MR. LINDAMOOD answered that he could not speak for the board on
its preferences. He noted that ARRC has been working with
Nenana for many years to come up with something that works.
REPRESENTATIVE VANCE asked for clarity on who legally has the
first right of refusal.
MR. LINDAMOOD said he did not have the lease in front of him,
but typically, the first right of refusal is in the lease
documents, and he would field the inquiry to Ms. Terry.
2:38:18 PM
REPRESENTATIVE C. JOHNSON said that he believed much of the
revenue generated from the railroad is from real estate
holdings, and he asked what kind of loss of revenue would be
generated and whether it would run afoul of the procurement
code.
MR. LINDAMOOD directed the inquiry to Ms. Terry.
2:39:47 PM
CHRISTY TERRY, Vice President of Real Estate, Alaska Railroad
Corporation, addressed Representative C. Johnson and confirmed
there were no other lands for sale at this time. As for the
procurement code, she said that the decision would rest with the
board.
REPRESENTATIVE C. JOHNSON recollected that there were parcels of
land on Ship Creek and there were attempts to purchase land in
that area, and he asked whether that was up for discussion and
if it could be included in this piece of proposed legislation.
MS. TERRY replied that the land is unique, and the railroad had
significant real estate holdings; therefore, selling land is
something the railroad does not take lightly (indisc. - noise
interference). She said much work would still need to be done.
REPRESENTATIVE C. JOHNSON asked what kind of lost revenue to the
railroad would occur after a sale.
MS. TERRY reiterated that the ARRC had significant real estate
holdings, but it would be something for the board to review and
take the totality into account.
2:44:42 PM
CHAIR MCCABE inquired about an agreement of terms between the
railroad and Nenana and whether that would cure the lease and
allow the city to maintain its first right of refusal.
MS. TERRY responded that there had been discussions, but nothing
had been finalized at this time. She said ARRC's legal team
could better speak to the terms.
2:45:38 PM
REPRESENTATIVE MINA asked for background as to why the railroad
decided not to sell the land after Nenana passed the bond
proposal in the 1980s.
MS CLEMENS replied that she did not know the backstory to why
that happened in the 1980s.
2:46:25 PM
REPRESENTATIVE VANCE moved to report HB 395 out of committee
with individual recommendations and the accompanying fiscal
notes.
2:46:41 PM
REPRESENTATIVE MINA objected.
A roll call vote was taken. Representatives C. Johnson, McKay,
Vance, and McCabe voted in favor of HB 395. Representative Mina
voted against it. Therefore, HB 395 was reported out of the
House Transportation Standing Committee by a vote of 4-1.
2:47:36 PM
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 2:48
p.m.