Legislature(1995 - 1996)
04/16/1996 08:07 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 136 - MANDATE SALE OF ALASKA RAILROAD The first order of business to come before the House State Affairs Committee was CSHB 136(TRA) (9-LS0438/G). CHAIR JEANNETTE JAMES called on Representative Terry Martin, sponsor of HB 136, to present the bill to the committee members. Number 0149 REPRESENTATIVE TERRY MARTIN explained his intention to sponsor HB 136 was to determine what the state had. The railroad was now a hot subject, it had received a few offers to buy it. Therefore, everyone was wondering what should be done with it. He explained, according to an audit, there were hundreds of thousands of acres involved. He cited Girdwood, Whittier, Seward, half of downtown Fairbanks and Anchorage as areas where there was land involved. The state had completed its commitment to the federal government to keep it running for 10 years. He agreed the state did a fabulous job allowing it to run independently. However, the reason it was able to run on its own was because of the land. The land had been subsidizing it to keep it running. He reiterated, "let's see what we have." He suggested starting by transferring the land from the federal government to the state government. He did not care who received the land for the state, but an orderly transfer was necessary. He said the railroad corporation had already started transferring some select property but there was no way to know for sure. He reiterated the land and the railroad belonged to the state. It was time to see what the state had, and outline an orderly process in the event the state wanted to sell the land. Number 0357 REPRESENTATIVE BRIAN PORTER asked Representative Martin what this bill provided to the state? Number 0365 REPRESENTATIVE MARTIN replied right now it was open. The bill stated it would complete the commitment to sell the railroad as promised in 1982. He explained, historically, many felt the state would get stuck with "a goose that wouldn't fly." The federal government was willing to buy it for $100 million. The state did not want to buy it for that much money, however. The offer was followed by debate. Finally, the state bought it for $20 million. He reiterated it was time again to look at what the state had. Number 0470 CHAIR JAMES explained HB 136 was waived from the House State Affairs Committee last week. However, there was impetus in both the House and the Senate to move forward with a mandatory sale of the railroad. She informed the committee members there was a committee substitute now being drafted of which would be presented later. There would not be any action taken on the bill today. Number 0578 REPRESENTATIVE MARTIN explained his staff was working close with the Senate so they knew better than anybody the status of the bills in both chambers. Number 0635 REPRESENTATIVE MARTIN further said he hoped that the two major programs could be pushed through the House. He reiterated it was important to determine what the state had. The House Budget and Audit Committee had the capability to determine what the state had so that the state could sell what it wanted. Number 0692 CHAIR JAMES said she understood the concerns of Representative Martin. She was concerned, however, about returning the land back to the state. She was more interested in having the land developed. Furthermore, she was also more interested in a bigger railroad, not a smaller railroad. Therefore, land acquisitions were necessary. It appeared that some of the land Representative Martin mentioned would have good trading stock value. Therefore, selling the land was premature. Number 0784 REPRESENTATIVE MARTIN replied Senator Bennett from Fairbanks was the last person to study the value of the land surrounding the railroad. He looked at expanding the railroad east from Fairbanks to Dawson. It was time to resurrect those reports to see what the state had. Number 0827 CHAIR JAMES replied in 1993 legislation was passed that authorized $10,000 to identify the cost of securing private interest for the land. She suggested checking the status of that money. REPRESENTATIVE MARTIN said the state could save money by researching what had been done before. The state was almost at the point of being beyond the point of research, action was the next step. CHAIR JAMES called on the first witness via teleconference in Anchorage, Jeff Cook. Number 0887 JEFF COOK, Vice President, MAPCO Alaska Petroleum Inc., explained his company was the largest customer of the Alaska Railroad Corporation. He cited the company leased over 350 rail anchor cars to move oil. In 1995 the company paid more than $23 million to the Alaska Railroad Corporation. MAPCO was very concerned about the sale of the railroad in view of the long-term contracts of which about 12 years remain. MAPCO had an excellent relationship and strategic alliance with it. Furthermore, MAPCO was very happy with the service it had received. MAPCO felt the bill was moving too fast. He suggested an interim committee or task force to look at the issue further and to include the major customers, such as MAPCO, as a participant. Number 1051 REPRESENTATIVE PORTER asked Mr. Cook, if a piece of legislation included the procedure that he just described, would he support moving the bill forward? Number 1063 MR. COOK replied "yes." He would support a bill that included the approach he indicated. CHAIR JAMES called on the first witness in Juneau, David Thompson. Number 1083 DAVID THOMPSON, Conductor, Alaska Railroad Corporation, said he was here today representing conductors and engineers of the Alaska Railroad Corporation. They were concerned because the bill did not address how the railroad would operate in the future. Furthermore, when the railroad went from federal ownership to state ownership, many employees remained in the federal retirement system. He suggested looking into that issue further before another transfer of owners. He said this would affect 186 employees. He reiterated there were many issues that had not been addressed in the bill. It took four years for the first transfer, therefore, more time was needed to look at the issues further. Number 1169 REPRESENTATIVE CAREN ROBINSON asked Mr. Thompson, if his group had also considered a task force approach, and if so, who would he recommend be a part of that task force? Number 1190 MR. THOMPSON replied they had not discussed the formation of a task force. He suggested including union representation as part of the task force. Number 1218 REPRESENTATIVE GREEN asked what was the time schedule for the joint task force? CHAIR JAMES responded the issues of how big, the members, the time frame, and the goals still needed to be addressed. REPRESENTATIVE GREEN wondered if it would happen before the end of session. CHAIR JAMES replied the committee substitute that addressed this would be here by Thursday, April 18, 1996. Furthermore, she was opposed to any fast track sale of the Alaska Railroad Corporation. She did not want to give away state assets. As a legislator she was responsible to maximize whatever the state had, and to protect the employees of the railroad.
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