Legislature(2001 - 2002)
01/31/2002 01:35 PM Senate TRA
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 209-LEGISLATIVE APPROVAL OF RAILROAD LEASES
SENATOR LEMAN, sponsor of SSSB 209, said he represented District
G in the Senate, which includes the reserve area. The
legislation was precipitated by of desires to lease some railroad
property. The existing 35-year lease is insufficient to get long
term financing for larger projects. This bill extends the length
of time that the railroad can lease lands within 4 terminal
reserves at Anchorage, Fairbanks, Seward and Healy from the
current 35 years to 55 years.
He explained it would help cultivate economic development. There
are projects that are being proposed that will make commercial
and residential property more valuable. The scenario where the
railroad could step in and take away leased property after 35
years is unlikely but it is of sufficient risk that long-term
lenders are not comfortable with it.
Anchorage Neighborhood Housing is working on development of a 20-
unit senior housing complex on railroad property in Government
Hill. The legislature was involved in part of the funding of
that project and this is a continuation. Housing would be
developed using Housing Urban Development (HUD) Senior Housing
Funds but HUD requires a 50-year lease period.
This bill will promote economic development and job opportunities
with greater flexibility. He said it was supported by a number
of people and organizations and he was not aware of any
opposition. The Municipality of Anchorage supported it and he
believed there were support groups in Fairbanks and elsewhere.
He commended it to the committee and asked for their positive
action.
CHAIRMAN COWDERY asked if on page 1 line 7, the word "sell" would
restrict a buyer from coming in and buying the railroad at a
later time.
SENATOR LEMAN answered that the intent of the legislation was not
to affect any ability to sell or deal with transfer of the
railroad. It would likely enhance the value of the railroad's
sale price if it were to be sold. He said that was existing
language, which the bill did not change.
SENATOR TAYLOR asked why the legislation restricted the period
within which the railroad might lease its land to only those
terminal reserve areas found in Anchorage, Fairbanks, Seward or
Healy.
SENATOR LEMAN answered that was considered originally but they
concluded to remove some of the challenges along the way or limit
some of the possible objections to those areas where there has
been expressed interest in some major long-term finance projects.
He said someone from the railroad that had dealt with some of the
negotiations was available to speak as to why the restriction but
it was part of the compromise to get this through.
WENDY LINDSKOOG said it would be great if they could have the 55-
year lease potential on all of their reserve lands. There were
reserve lands that had not been targeted by large commercial
development but someday they might be and then the railroad would
be before the legislature asking again to extend to 55 years.
She explained that their right-of-way land is limited to an 18-
year lease due to the Federal Transfer Act.
SENATOR TAYLOR said it was a good investment policy to go from a
restriction of 35 years to a restriction of 55 years. He didn't
think anybody objected to that especially with financing modes
the way they are today. He asked her if she was aware of any
specific opposition or group that would oppose that.
MS. LINDSKOOG answered no adding that Representative Rokeberg
expressed the same opinion for including all reserve lands.
SENATOR TAYLOR moved they amend by deleting lines 13, 14 on page
1 and lines 1, 2, 3 and the word "paragraph" on line 4, page 2
and delete the numeral 3 and insert the numeral 5 on line 4, page
2. It would then read (line 5 page 1) Legislative approval
required. (line 12 page 1)(4) lease land for a period in excess
of 55 years unless the corporation reserves the right to
terminate the lease. He said it was existing law. Changing the
number 35 to 55 would grant the railroad the right to go for 55
years on all of its lands.
JIM KUBITS, Alaska Railroad Corporation, said Bill Hupprich,
their associate counselor, was listening and reviewing the
amendment. He thought Ms. Lindskoog characterized their feeling
that it would be desirable to include all the land. He thought
Senator Taylor's motion appeared to be very appropriate and
accurate.
SENATOR ELTON said he did not have a problem with what they were
trying to get to but it seemed to him they were not just changing
the term of the lease but were striking the words "terminal
reserve".
SENATOR TAYLOR said it was.
SENATOR WARD asked him to read it again.
SENATOR TAYLOR read, starting on line 12, "(4) lease land for a
period in excess of 55 years." This covered all their land both
the land inside a terminal reserve and the land that is outside a
terminal reserve.
SENATOR ELTON said they were not only extending the period of
time they were extending the land over which they can give a
lease over 55 years to all their land, corridor land also.
MS. LINDSKOOG said that within their corridor they are limited to
18 years.
SENATOR TAYLOR said that was what they called right-of-way lands.
They were limited to 18 years because of federal conveyance
language.
BILL HUPPRICH, Alaska Railroad Corporation, said the amendment
language was perfect.
SENATOR TAYLOR said the question from Senator Elton was a very
good one. Would that allow the railroad to lease right-of-way
lands for up to 55 years.
MR. HUPPRICH said their current policy was they do not lease any
of the right-of-way land. They periodically issue permit
agreements, which are license agreements. They are terminable at
will for particular types of uses within the right-of-way.
According to the Federal Transfer Act if they were not to use
their right-of-way for railroad purposes for a period in excess
of 18 years that land could revert back to the federal
government.
CHAIRMAN COWDERY called for any objection to the motion. There
being no objection, the amendment passed.
SENATOR LEMAN asked if the bill would need a title change.
SENATOR TAYLOR said he did not think so but he would have title
people check before it went to Resources. He moved the bill with
individual recommendations from committee as amended.
CHAIRMAN COWDERY asked for any objections. There being no
objection, the motion passed. The meeting was adjourned at 3:05
p.m.
| Document Name | Date/Time | Subjects |
|---|