03/21/1994 09:11 AM Senate FIN

  CSSB 148(TRA): An Act  relating to  legislative approval  of                 
                 certain   acts   of   the   Alaska   Railroad                 
                 Corporation; taxation of certain  property of                 
                 the Alaska Railroad  Corporation; members  of                 
                 the board and chief executive officer  of the                 
                 Alaska Railroad Corporation; meetings  of the                 
                 board  of directors  of  the Alaska  Railroad                 
                 Corporation; and providing  for an  effective                 
                 date.                                                         
                                                                               
                 A   teleconference   was   held  and   Robert                 
                 Hatfield,  Jr.,  President   &  CEO,   Alaska                 
                 Railroad Corporation, and Frank  X. Chapados,                 
                 Acting Chairman, Railroad  Corporation Board,                 
                 in  Anchorage,  were  questioned  by  Senator                 
                 Sharp  regarding  the  Ship   Creek  Landings                 
                 Project.  Due  to lack  of time, the  meeting                 
                 was  recessed  and  the   teleconference  was                 
                 scheduled to continue at 5:00 p.m. today.                     
                                                                               
                 The meeting  reconvened at 5:22  p.m. and the                 
                 teleconference  continued.     Mark  LoPatin,                 
                 LoPatin  &   Co.,  in  Detroit,   joined  Mr.                 
                 Hatfield, other Railroad  Board members,  Ms.                 
                 Johnson, and  Mr.  Burns,  at  the  Anchorage                 
                 site.                                                         
                                                                               
  CS FOR SENATE BILL NO. 148(TRA):                                             
                                                                               
       An Act relating to legislative approval of certain acts                 
       of the Alaska Railroad Corporation; taxation of certain                 
       property of the Alaska Railroad Corporation; members of                 
       the board  and chief  executive officer  of the  Alaska                 
       Railroad  Corporation;   meetings  of   the  board   of                 
       directors  of  the  Alaska  Railroad  Corporation;  and                 
       providing for an effective date.                                        
                                                                               
  In answer  to Co-chair Pearce,  Mr. Hatfield said  the Board                 
  position on SB 148 was that Board rule by 17, mimics many of                 
  the more equity participation prohibition that was currently                 
  in this  legislation.   The Board  felt it  was an  improved                 
  document  but  pointed   out  it   was  always  subject   to                 
  interpretation.    The  Board would  prefer  not  having the                 
  legislation,  and felt it  had acted   responsibly  with the                 
  assets of the Corporation, acted in concert with the current                 
  legislation that  existed, and  felt the  Railroad had  been                 
  managed  responsibly  as  far  as  its public  response  and                 
  willingness to work with the general  public.  He offered to                 
  answer questions on these issues.                                            
                                                                               
  Co-chair Frank asked  if the Railroad had developed a policy                 
  on  this  bonding  ability  that  Congress  provided.    Mr.                 
  Hatfield said this was  the first time such a  bonding issue                 
  had come  up and  the Railroad  was asking  for approval  in                 
  order to get a sense of  how the legislature felt about  it.                 
  Co-chair Frank  spoke to  the broad  policy of  this bonding                 
  issue.                                                                       
                                                                               
  Senator Sharp asked for  the rate of return to  the Railroad                 
  in  the  Comfort Inn  project.    JOHN  BURNS,  real  estate                 
  representative, said it would not be  a rate of return since                 
  there was no investment but the market it was tied to was if                 
  it  was on a  straight land  lease.   The income  had nearly                 
  doubled if it would  have been received on an  ordinary land                 
  lease.  He went on to clarify that no cash or utilities were                 
  invested by  the Railroad.   He said  the Railroad was  a 40                 
  percent owner of a 100  percent financed improvement without                 
  a cash investment.   The only thing  he could compare it  to                 
  would be an ordinary land lease.                                             
                                                                               
  Again, in answer to  Senator Sharp, Mr. Burns said  the debt                 
  service  was  being***FIN080AM                                               
   0AASFIN    0321940911                                                       
                                                                               
                                                                               
                             MINUTES                                           
                    SENATE FINANCE COMMITTEE                                   
                         March 23, 1994                                        
                            8:06 a.m.                                          
                                                                               
  TAPES                                                                        
                                                                               
  SFC-94, #49, Side 1 (000-end)                                                
  SFC-94, #49, Side 2 (end-000)                                                
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Senator Drue  Pearce,  Co-chair,  convened  the  meeting  at                 
  approximately 8:06 a.m.                                                      
                                                                               
  PRESENT                                                                      
                                                                               
  In addition to  Co-chair Pearce, Senators Rieger,  Sharp and                 
  Kerttula were present.   Co-chair Frank, Senators  Jacko and                 
  Kelly joined the meeting after it was in progress.                           
                                                                               
  ALSO  ATTENDING:   Senator Fred Zharoff,  sponsor of  SB 92;                 
  Represen-tative Jerry Mackie; Duane Guiley, Director, School                 
  Finance,   Department  of   Education;  Nancy   Bear  Usera,                 
  Commissioner,  Department  of  Administration; Connie  Sipe,                 
  Executive Director, Older Alaskans Commission, Department of                 
  Administration;   Reed   Stoops,    Alaska   Air    Carriers                 
  Association; and Mike Greany,  Director, Legislative Finance                 
  Division; aides to  committee members  and other members  of                 
  the legislature.                                                             
                                                                               
  SUMMARY INFORMATION