03/05/2003 01:35 PM Senate CRA

             HCR  2-EXTEND ALASKA RAILROAD TO FT. GREELY                                                                    
                                                                                                                                
                                                                                                                                
CHAIR WAGONER asked Mary Jackson to introduce HCR 2.                                                                            
                                                                                                                                
MARY JACKSON,  staff to Senator Wagoner,  advised her explanation                                                               
                                                                                                                                
was directed to  \Q version of HCR 2. The  revisions were made at                                                               
                                                                                                                                
the request of  the department and increase the  viability of the                                                               
                                                                                                                                
railroad  line by  recognizing economic  factors other  than just                                                               
                                                                                                                                
the missile  base. The  first resolution  remained the  same, the                                                               
                                                                                                                                
second added the Stryker Brigade,  the third was new to reference                                                               
the Pogo  Mine, the forth  was new to recognize  the agricultural                                                               
                                                                                                                                
industry, the fifth  was slightly revised, the  sixth seventh and                                                               
                                                                                                                                
eighth  were unchanged.  The  title was  changed  to reflect  the                                                               
                                                                                                                                
changes and to include Delta Junction.                                                                                          
                                                                                                                                
                                                                                                                                
In  response  to  the  Chair's  question  regarding  whether  the                                                               
                                                                                                                                
resolution indicated  authorization for  the project,  the answer                                                               
                                                                                                                                
is no. Statutes are clear  that the railroad must get legislative                                                               
                                                                                                                                
approval  for any  extension of  their lines.  The resolution  is                                                               
                                                                                                                                
straightforward  and asks  the railroad  to  look into  extending                                                               
                                                                                                                                
their lines. If they determine  it is feasible, they would return                                                               
                                                                                                                                
to the Legislature for action.                                                                                                  
                                                                                                                                
                                                                                                                                
CHAIR WAGONER asked for questions.                                                                                              
                                                                                                                                
                                                                                                                                
SENATOR LINCOLN  expressed appreciation for Ms.  Jackson's review                                                               
                                                                                                                                
because she had concerns with the  first draft. She noted she had                                                               
                                                                                                                                
not  heard  from the  railroad  regarding  the CS,  but  previous                                                               
                                                                                                                                
correspondence   indicated   that  additional   maintenance   and                                                               
                                                                                                                                
operation  expense is  a concern.  She thought  that was  still a                                                               
                                                                                                                                
valid concern.                                                                                                                  
                                                                                                                                
                                                                                                                                
CHAIR WAGONER  asked for a motion  to adopt the CS  \Q version as                                                               
                                                                                                                                
the working document.                                                                                                           
                                                                                                                                
                                                                                                                                
SENATOR  ELTON made  a motion  to adopt  the \Q  Utermohle 3/3/03                                                               
                                                                                                                                
version as the working document.  There being no objection it was                                                               
                                                                                                                                
so ordered.                                                                                                                     
                                                                                                                                
                                                                                                                                
SENATOR LINCOLN  said she  had some  question about  the railroad                                                               
                                                                                                                                
support.                                                                                                                        
                                                                                                                                
                                                                                                                                
MS. JACKSON advised the fiscal  note was prepared by the railroad                                                               
                                                                                                                                
and in it they noted there would be additional costs.                                                                           
                                                                                                                                
                                                                                                                                
SENATOR  LINCOLN interpreted  the  analysis section  to mean  the                                                               
                                                                                                                                
fiscal impact is  a concern. She expressed a desire  to hear from                                                               
                                                                                                                                
the railroad.                                                                                                                   
                                                                                                                                
                                                                                                                                
CHAIR WAGONER  said he has  spoken with the railroad  and because                                                               
                                                                                                                                
the fiscal  note is zero he  won't hold the resolution.  The only                                                               
                                                                                                                                
way there would  be a fiscal note is if  the Governor directs the                                                               
                                                                                                                                
Legislature to proceed.                                                                                                         
                                                                                                                                
                                                                                                                                
When the railroad is spending  $32,000 per mile for operation and                                                               
                                                                                                                                
maintenance, a line  extension of 70 miles would  nearly wipe out                                                               
                                                                                                                                
their annual profit.                                                                                                            
                                                                                                                                
                                                                                                                                
GENERAL   PAT   GAMBLE,   President  of   the   Alaska   Railroad                                                               
                                                                                                                                
Corporation,  testified the  railroad views  the resolution  as a                                                               
                                                                                                                                
homework assignment.  As Senator  Lincoln says, they  would begin                                                               
                                                                                                                                
to study  what is  feasible and  available in  the near  and long                                                               
                                                                                                                                
term  to be  able  to generate  the revenue  that  would pay  the                                                               
                                                                                                                                
railroad  operation and  maintenance. If  the Governor  signs the                                                               
                                                                                                                                
resolution, thereby  tasking the  railroad, they would  begin the                                                               
                                                                                                                                
process. To  this point,  they have had  no in  depth discussions                                                               
                                                                                                                                
with  businesses  or the  military  regarding  what the  revenues                                                               
                                                                                                                                
might be or how they might develop over time.                                                                                   
                                                                                                                                
                                                                                                                                
The generic route  has been surveyed several times,  but the next                                                               
                                                                                                                                
step would  be to determine  the corridor  itself. This is  not a                                                               
                                                                                                                                
right of way issue, it's  just determining through which 500 feet                                                               
the route  would be surveyed.  This would allow them  to identify                                                               
                                                                                                                                
the number of bridges and the  type of construction that would be                                                               
                                                                                                                                
needed.  With that  information  they could  project the  capital                                                               
                                                                                                                                
costs for the 70 or 80 mile corridor.                                                                                           
                                                                                                                                
                                                                                                                                
The railroad  is ready and  willing to  undertake the task  if it                                                               
                                                                                                                                
comes from the Governor.                                                                                                        
                                                                                                                                
                                                                                                                                
SENATOR ELTON  directed his attention  to the last  "WHEREAS" and                                                               
                                                                                                                                
asked if the language was  somewhat misleading because they don't                                                               
                                                                                                                                
know whether  or not the  extension is consistent with  the long-                                                               
                                                                                                                                
term goals of the railroad.                                                                                                     
                                                                                                                                
                                                                                                                                
GENERAL GAMBLE said the railroad's  long-term goals, as stated in                                                               
                                                                                                                                
their  mission   statement,  are   the  community   and  economic                                                               
                                                                                                                                
development  responsibilities.  This  is  consistent  with  their                                                               
                                                                                                                                
mission.                                                                                                                        
                                                                                                                                
                                                                                                                                
There was no further testimony.                                                                                                 
                                                                                                                                
                                                                                                                                
CHAIR WAGONER asked for a motion to move the resolution.                                                                        
                                                                                                                                
                                                                                                                                
SENATOR GARY STEVENS  made a motion to move SCS  CSHCR 2 (CRA) \Q                                                               
                                                                                                                                
version from  committee with individual recommendations  and zero                                                               
                                                                                                                                
fiscal note.                                                                                                                    
                                                                                                                                
                                                                                                                                
There being no objection, it was so ordered.