Legislature(2001 - 2002)

04/24/2001 01:17 PM TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
SB 123-FEDERALLY FUNDED PROJECTS OF RAILROAD                                                                                  
                                                                                                                                
CHAIR KOHRING announced that the  next order of business would be                                                               
CS FOR SENATE BILL NO. 123(FIN),  "An Act relating to the program                                                               
of federally funded construction  projects of the Alaska Railroad                                                               
Corporation."                                                                                                                   
                                                                                                                                
KRISTY  TIBBLES,  Staff  to Senator  Drue  Pearce,  Alaska  State                                                               
Legislature, came forth  on behalf of Senator  Pearce, sponsor of                                                               
SB 123.  She stated:                                                                                                            
                                                                                                                                
     Senate   Bill   123   requires  the   Alaska   Railroad                                                                    
     Corporation  to obtain  legislative approval  for their                                                                    
     Program  of  Projects, which  is  a  list of  federally                                                                    
     funded projects  required by  the FTA  [Federal Transit                                                                    
     Administration]     and     the     Federal     Highway                                                                    
     Administration.   The committee  substitute for  SB 123                                                                    
     represents  a  collaborative  effort  with  the  Alaska                                                                    
     Railroad   Corporation  [ARRC],   which  will   require                                                                    
     approval  for major  construction  projects that  would                                                                    
     impact   our  communities,   while  excluding   regular                                                                    
     maintenance    projects,    minor   construction    and                                                                    
     realignment   projects,   and   projects   outside   of                                                                    
     communities that are entirely on federal land.                                                                             
                                                                                                                                
     Senate  Bill  123  will  require   the  ARRC  board  of                                                                    
     directors to  present their Program of  Projects to the                                                                    
     legislature on the first day  of every regular session.                                                                    
     The Program of  Projects will then be  referred to both                                                                    
     the  Senate and  House finance  committees for  review,                                                                    
     and the  legislature may disapprove  of any  project by                                                                    
     law during the  first 60 days of the  session.  Failure                                                                    
     of  the legislature  to disapprove  by law  is approval                                                                    
     for the expenditure of the funds.                                                                                          
                                                                                                                                
     Senate  Bill  123 was  introduced  in  response to  the                                                                    
     Alaska Railroad  Corporation's multimillion-dollar rail                                                                    
     station  project  at   the  Ted  Stevens  International                                                                    
     Airport  in Anchorage.   Senator  Pearce believes  that                                                                    
     requiring  the Alaska  Railroad  Corporation to  obtain                                                                    
     legislative  approval for  future projects  will better                                                                    
     ensure that  those Alaskan  residents affected  will be                                                                    
     better informed  and have the opportunity  for a review                                                                    
     process in a timely manner.                                                                                                
                                                                                                                                
Number 2062                                                                                                                     
                                                                                                                                
REPRESENTATIVE  MASEK asked  what changes  had been  made in  the                                                               
[Senate] committee substitute (CS).                                                                                             
                                                                                                                                
MS.  TIBBLES responded  that the  original  version required  the                                                               
Alaska  Railroad Corporation  to pass  a  law in  order to  build                                                               
facilities over  $10 million and  for track  realignment projects                                                               
over a certain  amount.  It has been changed  so that rather than                                                               
[the corporation] passing  the bill to get its  projects done, it                                                               
will present  its projects  to [the  legislature], and  if anyone                                                               
disapproves, [the legislature]  will have to introduce  a bill to                                                               
stop  the project.   She  added that  Senator Pearce  believes it                                                               
will take  an outcry by  the public  to stop a  project; however,                                                               
her intent is to have more public review.                                                                                       
                                                                                                                                
Number 2130                                                                                                                     
                                                                                                                                
JOSEPH  FIELDS,  Fairbanks  Chamber of  Commerce,  Transportation                                                               
Committee,  testified via  teleconference.   He stated  that [the                                                               
Fairbanks Chamber of  Commerce] has been in opposition  to SB 123                                                               
all along.   He said  they have  some concerns about  whether the                                                               
Alaska Railroad  [Corporation] is an independent  organization of                                                               
the state or is an agency.  He stated:                                                                                          
                                                                                                                                
     There's probably  a lot  to be  said about  the concern                                                                    
     the  people  have   over  projects  developing  without                                                                    
     overview by the public, but I  think in ... most of the                                                                    
     cases  we've seen,  including  the  airport project  in                                                                    
     Anchorage,   they've  had   a  substantial   amount  of                                                                    
     information available  for a quite  a long time  in the                                                                    
     public.                                                                                                                    
                                                                                                                                
     The last  several months there  [have] been  many, many                                                                    
     meetings   over  realignment   in  Fairbanks.     We're                                                                    
     concerned  about  that  kind   of  a  project.    We're                                                                    
     concerned about the  timing in this bill,  and how long                                                                    
     it  would  take to  get  support  for federal  funding,                                                                    
     which is available at specific  times and not available                                                                    
     on a scheduled (indisc.) legislature necessarily.                                                                          
                                                                                                                                
     I believe the  railroad has a good  operation, and they                                                                    
     have  responded,  I  think, properly  to  the  concerns                                                                    
     about  public   notice  and  public   information,  and                                                                    
     they're  continuing  to  improve their  position  on  a                                                                    
     regular  basis.   We have  a new  CEO [Chief  Executive                                                                    
     Officer]  of  the  railroad who  has  a  background  in                                                                    
     operations  that  will  be   conducive  to  the  public                                                                    
     knowing  more  about  what's  going on.    So  I  would                                                                    
     strongly urge you  to either vote against  this bill or                                                                    
     in any  way not  to move  it forward.   The  Chamber of                                                                    
     Commerce   transportation   committee   ...   wrote   a                                                                    
     resolution in that regard.                                                                                                 
                                                                                                                                
Number 2195                                                                                                                     
                                                                                                                                
REPRESENTATIVE  KOOKESH asked  Mr.  Fields  whether the  railroad                                                               
receives any state funds for projects.                                                                                          
                                                                                                                                
MR.  FIELDS responded  he  doesn't believe  it  has received  any                                                               
since first becoming  a corporation of the state.   He added that                                                               
he doesn't believe it has any matching funds.                                                                                   
                                                                                                                                
REPRESENTATIVE KOOKESH  said that is  what he understood,  and he                                                               
doesn't  know why  the  legislature  would want  to  bring a  new                                                               
"animal into  our midst when  we barely can manage  those animals                                                               
we have now."  He said he doesn't see why this is a needed Act.                                                                 
                                                                                                                                
Number 2253                                                                                                                     
                                                                                                                                
WENDY LINDSKOOG,  Alaska Railroad Corporation (ARRC),  came forth                                                               
to testify on  SB 123.  She clarified that  ARRC does not receive                                                               
any state funding  for its matching money; it is  all done though                                                               
its internal funds.                                                                                                             
                                                                                                                                
REPRESENTATIVE WILSON  asked Ms. Lindskoog where  the ARRC stands                                                               
on this bill.                                                                                                                   
                                                                                                                                
MS. LINDSKOOG  offered that  if ARRC really  had it's  choice, it                                                               
would not  like to see  the legislation  passed.  She  added that                                                               
Senator Pearce has worked closely  with ARRC on this legislation,                                                               
and at  this point it  is a bill  that ARRC  can live with.   She                                                               
said Senator Pearce  has taken out many of the  concerns in terms                                                               
of   basic  maintenance,   maintenance  facilities,   repairs  of                                                               
bridges, emergency  repairs, rolling stock, signalization,  and a                                                               
number  of   other  crucial  railroad  functions.     With  those                                                               
exempted,  this  bill  really   deals  with  the  "megaprojects":                                                               
facilities  over $5  million and  realignments over  $10 million.                                                               
She noted  that ARRC  would like a  better level  of coordination                                                               
between  the railroad  and the  legislature so  that everyone  is                                                               
better informed.                                                                                                                
                                                                                                                                
Number 2339                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JEANNETTE JAMES,  Alaska State  Legislature, came                                                               
forth and  stated that  she understands why  this bill  is before                                                               
the committee.   She said it is partly because  of the failure of                                                               
the railroad to be as open  as it should be; however, she doesn't                                                               
necessarily believe this legislation fixes  that.  She added that                                                               
the  people she  represents  in Fairbanks  are  opposed to  this.                                                               
Representative  James said  she thinks  it would  be wise  if the                                                               
ARRC made a yearly presentation to  the legislature on what it is                                                               
planning to  do and what  its parameters  are.  The  only problem                                                               
with  this, she  said,  is the  60-day  requirement whereby  [the                                                               
legislature] can say no to the project.                                                                                         
                                                                                                                                
REPRESENTATIVE JAMES asked  when ARRC gets the  permission [to do                                                               
a project].   She said  there was some  indication this may  be a                                                               
deterrent for getting federal money  for different projects.  She                                                               
pointed out that  she agrees that the railroad  has an obligation                                                               
to  keep  the communities  fully  informed;  however, she  thinks                                                               
those decisions  should be made  at the  local level.   She added                                                               
that she  would not want to  wait a whole year  if something came                                                               
up.   She noted that  she has  had several pieces  of legislation                                                               
that authorize  delineation of a  [rail] corridor  from Fairbanks                                                               
to the Seward Peninsula.                                                                                                        
                                                                                                                                
TAPE 01-32, SIDE B                                                                                                              
                                                                                                                                
[A short section was indiscernible due to tape malfunction.]                                                                    
                                                                                                                                
Number 2441                                                                                                                     
                                                                                                                                
CHAIR  KOHRING  remarked  that he  shares  Representative  James'                                                               
sentiments, and is  not sure [the legislature] needs  to rush the                                                               
passage  of this  legislation.    He stated  that  he would  call                                                               
having the  legislature coming  in and  getting involved  in this                                                               
process  "micromanagement."   He  noted that  he  would prefer  a                                                               
recommendation  by  the  legislature  to ARRC  that  it  be  more                                                               
cognizant of the concerns of the public.                                                                                        
                                                                                                                                
REPRESENTATIVE  ANDREW  HALCRO,  Alaska State  Legislature,  came                                                               
forth  and  stated  that  there have  been  several  good  points                                                               
brought up  in the  testimony.   He noted  that [Mr.  Fields] had                                                               
said there has  been a tremendous amount of  information that has                                                               
been available for a while.   Representative Halcro remarked that                                                               
information is good, but to have  the ability to effect change is                                                               
a separate issue.  He  remarked that this project is particularly                                                               
frustrating for him.  He shared:                                                                                                
                                                                                                                                
     I was elected in November of  1998.  The next month, in                                                                    
     December, I  got an invitation to  join former Governor                                                                    
     Sheffield  for lunch  to  talk  about railroad  issues,                                                                    
     because at  that time I  was vice chair of  the [House]                                                                    
     Transportation   Committee  through   our  organization                                                                    
     meeting.                                                                                                                   
                                                                                                                                
     So  I had  lunch with  [former] Governor  Sheffield one                                                                    
     afternoon, and we talked about  a wide range of things,                                                                    
     and  then the  subject  came up  of  this airport  rail                                                                    
     station. ... And I said  to him, ... "Governor, I think                                                                    
     this  is probably  one  of the  worst  ideas I've  ever                                                                    
     heard."  I  said, "I have spent my  entire life working                                                                    
     at the  Anchorage International Airport, ...  and I see                                                                    
     no  reason   why  you  should  spend   $28  million  in                                                                    
     taxpayers' money  building this thing.   It's not going                                                                    
     to  be  used ...  and  it's  going  to take  up  needed                                                                    
     space."                                                                                                                    
                                                                                                                                
     And he  said, "No, no,  no.   8,000 people work  at the                                                                    
     Anchorage  airport;  people  are  going  to  love  this                                                                    
     thing; it's going to be great."                                                                                            
                                                                                                                                
     And I said to him, "OK, so where are you now?"                                                                             
                                                                                                                                
     And he said, "Well, right  now we're in the feasibility                                                                    
     study.   We're going to  get a contract to  create this                                                                    
     feasibility  study,  and then  we're  going  to make  a                                                                    
     determination from there."                                                                                                 
                                                                                                                                
     And I  said, "Governor, if the  feasibility study comes                                                                    
     back and  it shows  that this  is a  questionable value                                                                    
     and will be of questionable use, what is your plan?"                                                                       
                                                                                                                                
     And he said, "Well, we're  going to consider that."  He                                                                    
     certainly didn't tell  me that if the  report came back                                                                    
     and said  that this project would  be underutilized and                                                                    
     not needed ...  it wouldn't be built;  he didn't really                                                                    
     give a commitment.                                                                                                         
                                                                                                                                
Number 2284                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO continued:                                                                                                
                                                                                                                                
     ...  Seven  months later,  in  July  of 1999,  Northern                                                                    
     Economics released  their market  analysis, which  is a                                                                    
     fairly  lengthy  piece  of information.    Part  of  my                                                                    
     discussion  at lunch  with Governor  Sheffield was  his                                                                    
     assertion that 8,000  people work at the  airport.  And                                                                    
     I said,  "You're absolutely right,  Governor:   I'm one                                                                    
     of them.   But I don't  work at the terminal.   So tell                                                                    
     me, if I'm going to take  this train to the airport and                                                                    
     I  get to  the terminal,  how do  I get  to my  office,                                                                    
     which is  about a mile  and a half from  the terminal?"                                                                    
     ...  Well, he didn't have an answer.                                                                                       
                                                                                                                                
     So when the study came  out in July of 1999, certainly,                                                                    
     a  number  of  my  concerns that  I  voiced  to  former                                                                    
     Governor Sheffield  were put  in print.   For instance,                                                                    
     Mr. Chair, a quote here,  "The consultant team does not                                                                    
     think a  study that was done  in 1996 or data  from the                                                                    
     People Mover  justify a  targeted commuter  service for                                                                    
     airport  employees   in  the  near  future.     Airport                                                                    
     employees travel  to and from the  airport at different                                                                    
     times  and live  in  many  different areas,  suggesting                                                                    
     that ridership  on any  commuter line  would be  low at                                                                    
     any given  point in time"  - thus proving  my assertion                                                                    
     at lunch that this wouldn't be used.                                                                                       
                                                                                                                                
Number 2206                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO continued:                                                                                                
                                                                                                                                
     As a  matter of fact,  Mr. Chair, about four  years ago                                                                    
     People  Mover reinstated  service to  the airport,  and                                                                    
     everybody thought it would be  wonderful - the tourists                                                                    
     will use  it, the  employees will use  it.   Well, that                                                                    
     route  in the  Anchorage People  Mover service  has the                                                                    
     lowest  ridership  of any  route  in  the People  Mover                                                                    
     service.   According  to the  report, [it]  proves that                                                                    
     mass transit  is not  conducive to  those that  work at                                                                    
     the airport. ...                                                                                                           
                                                                                                                                
     I  sent  a  two-page  letter addressed  on  my  company                                                                    
     letterhead to  the company that  put out  this proposal                                                                    
     and I gave them my  comments.  I raised many questions,                                                                    
     saying that this market  analysis raises more questions                                                                    
     than  it  gives  you  answers. ...  If  anything,  this                                                                    
     document says that this $28  million project is a waste                                                                    
     of money  and will  not be used.   I  submitted written                                                                    
     comment.    Nothing  happened, [and  the]  project  was                                                                    
     approved and moved forward.                                                                                                
                                                                                                                                
Number 2150                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO continued:                                                                                                
                                                                                                                                
     So we  have now,  underway, a  project that's  going to                                                                    
     build  a  $28  million  facility  at  the  Ted  Stevens                                                                    
     International   Airport  that,   even   by  their   own                                                                    
     admission,  railroad  officials   can't  tell  you  how                                                                    
     they're going to utilize.  A  little over a year ago at                                                                    
     this  very table,  when I  sat where  you sit  now, Mr.                                                                    
     Chair, I had  an overview on this proposal.   And I had                                                                    
     a  representative from  the  railroad  sitting in  this                                                                    
     very chair,  and I looked down  the table at him  and I                                                                    
     said, "Your  report here  says that  by the  year 2004,                                                                    
     80,000 local residents  are going to use  this train to                                                                    
     get to  the airport.   Where are these people  going to                                                                    
     come  from?"   And you  know what  his answer  was, Mr.                                                                    
     Chair?  "I don't know."                                                                                                    
                                                                                                                                
     ... Once again,  his answers shed no more  light on the                                                                    
     feasibility of  this ... project than  this report, and                                                                    
     I think  it highlighted  the frustration that  with the                                                                    
     $28 million  taxpayer project,  the legislature  had no                                                                    
     oversight. ...  My constituents,  this summer,  came to                                                                    
     me  and complained  [and] said,  "Why  are we  building                                                                    
     this?"  You  know what my response was?   "Well, I sent                                                                    
     a pretty  tersely written letter  when they  had public                                                                    
     comment period." ...                                                                                                       
                                                                                                                                
     Certainly,  with our  congressional representation  and                                                                    
     the   money   that's   available   for   transportation                                                                    
     projects, the railroad  is going to have  access to all                                                                    
     kinds of dollars.  In  my community, my district is not                                                                    
     the last  that will  have one  of these  projects built                                                                    
     within  the boundaries.   And  I think  it's completely                                                                    
     fair for  the legislature to  have the ability  to say,                                                                    
     "Wait a minute, ... have you done your homework?"                                                                          
                                                                                                                                
     ... I wrote  a ... piece in the Anchorage  Daily News -                                                                  
     it was  published, actually, on  January 1 this  year -                                                                    
     that  outlined  how I  thought  that  this project  was                                                                    
     poorly conceived  and a waste  of money.   I got  an e-                                                                    
     mail from  a gentleman  who had  just retired  from the                                                                    
     Department of Transportation, who  said that while they                                                                    
     were shuffling this project  through the public process                                                                    
     through the  permitting process, ... he  has never seen                                                                    
     anything like it in his  entire career at [DOT&PF].  He                                                                    
     said there  was no  public input.   He said  this thing                                                                    
     was on the fast track from day one.                                                                                        
                                                                                                                                
Number 2062                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO went on to say:                                                                                           
                                                                                                                                
     Now,  after  ... the  main  focus  of the  project  has                                                                    
     already been  approved and  is proceeding  forward, ...                                                                    
     the railroad  is talking  about realigning  tracks that                                                                    
     approach  the  airport  - to  make  accommodations  for                                                                    
     these  rail cars.   Now,  what you  have is  suddenly a                                                                    
     project that just  at the airport is  expanding to area                                                                    
     neighborhoods,  and the  neighbors themselves  say they                                                                    
     feel that they  don't have any say in the  matter.  And                                                                    
     so  I  think  there  is  a huge  gap  between  ...  the                                                                    
     railroad having  the ability to  proceed on  a project,                                                                    
     ...  because it's  completely  [federally funded],  and                                                                    
     the  mandate that  they have  some kind  of legislative                                                                    
     approval.                                                                                                                  
                                                                                                                                
     ... Certainly,  I think  there's been  a great  deal of                                                                    
     compromise that's  gone on.   And I think the  bill now                                                                    
     allows us  to be  defensive rather than  offensive. ...                                                                    
     I  don't  think  that  this  is  going  to  hinder  the                                                                    
     railroad's ability  to come up  with a list  of capital                                                                    
     improvement  projects and  fund those  projects. ...  I                                                                    
     think that this can work  within the timeframe that the                                                                    
     railroad  needs, and  I don't  think it's  too much  to                                                                    
     ask.                                                                                                                       
                                                                                                                                
Number 1857                                                                                                                     
                                                                                                                                
CHAIR KOHRING remarked that he needs to hear more justifying                                                                    
reasons from the sponsor and those who advocate this                                                                            
legislation.                                                                                                                    
                                                                                                                                
SENATOR DRUE PEARCE, Alaska State Legislature, came forth as                                                                    
sponsor of SB 123.  She stated:                                                                                                 
                                                                                                                                
     Back  when  the  transfer  of  the  railroad  from  the                                                                    
     federal government to the  state government took place,                                                                    
     the  folks in  the legislature  at the  time worked  to                                                                    
     make the railroad  as autonomous as possible.   We have                                                                    
     seen some  good things come of  that.  Those of  us who                                                                    
     have been in the legislature  for a long time have seen                                                                    
     some  things that  perhaps weren't  so great.   I  will                                                                    
     remind you  that this is  an asset that's owned  by all                                                                    
     the people of the state.   Each of you are shareholders                                                                    
     in  the Alaska  Railroad,  ... in  their successes  and                                                                    
     their less stellar moments.                                                                                                
                                                                                                                                
     ...  The railroad  is not  under  the Executive  Budget                                                                    
     Act. ... It is the  most autonomous of the corporations                                                                    
     of  the state.    I personally  believe  that over  the                                                                    
     years the  railroad has used  ... its unique  status to                                                                    
     its advantage. ...  I can't fault them for  that, but I                                                                    
     do know that  at times, over the years,  when it serves                                                                    
     them well  to be state  agencies - i.e., not  having to                                                                    
     pay  property taxes  in the  local communities  and not                                                                    
     having  to  go  through  some of  the  processes  as  a                                                                    
     private entity  would do -  they certainly put  on that                                                                    
     public  hat  and (indisc.)  it  down  the road  of  not                                                                    
     paying taxes.  On the  other hand, when it has behooved                                                                    
     them to  be private entities  - i.e., when  they wanted                                                                    
     to hold their rates and  fees secret and not even share                                                                    
     them with the legislature - they've ridden that horse.                                                                     
                                                                                                                                
     ...  I don't  blame  them for  any of  that,  but I  do                                                                    
     question some of  the decisions that have  been made in                                                                    
     terms  of the  expansion  in buildings  that have  been                                                                    
     done at the railroad.   Over the years, there have been                                                                    
     a number of  audits done [on the]  previous chairman of                                                                    
     the  railroad corporation,  previous presidents  of the                                                                    
     railroad,  previous board  members.   But  we've had  a                                                                    
     number of  times where  the legislature  has questioned                                                                    
     some  the   buildings  [and]   some  of   the  business                                                                    
     practices of the railroad, and  our auditors have found                                                                    
     that,  indeed, we  had good  reason  to question  those                                                                    
     efforts.                                                                                                                   
                                                                                                                                
Number 1702                                                                                                                     
                                                                                                                                
SENATOR PEARCE continued, stating:                                                                                              
                                                                                                                                
     ... Let me come to the  project at hand, that being the                                                                    
     Anchorage  airport project.   We  spent upwards  of $28                                                                    
     million,  with another  perhaps  $18 million  to go  to                                                                    
     elevate the  rail through  my district  to get  to this                                                                    
     terminal -  which at present  isn't going to  attach to                                                                    
     anything  because  the  airport  project  has  its  own                                                                    
     problems - ... without ever  having a single hearing in                                                                    
     the state  of Alaska  where Alaskans could  say whether                                                                    
     or  not they  wanted this  project -  not at  the state                                                                    
     level, not at  the local level.  But  these are federal                                                                    
     dollars.   What the  bill calls  for [is]  the railroad                                                                    
     has to  present to the  federal government each  year a                                                                    
     Program  for  Progress.    It's   much  like  the  STIP                                                                    
     [Statewide  Transportation  Improvement Program]  in  a                                                                    
     lot of respects.                                                                                                           
                                                                                                                                
     We're asking  that that Program of  Progress be brought                                                                    
     to the  legislature each year  so the  federally funded                                                                    
     projects, most of  which have to be matched  ... by the                                                                    
     railroad,  which  is  state  money,  ...  are  approved                                                                    
     unless the legislature actually  takes action by law to                                                                    
     disapprove the  project. ... [Therefore], ...  there is                                                                    
     someplace in the state where  Alaskans who believe that                                                                    
     a project should not go  forward have an opportunity to                                                                    
     an elected body to say so,  if it is a federally funded                                                                    
     project.                                                                                                                   
                                                                                                                                
     I  believe in  the future  that the  railroad may  well                                                                    
     have to come  to the legislature for  matching funds on                                                                    
     some  of their  projects  anyway, because  some of  the                                                                    
     things they're  looking at in  the future are  going to                                                                    
     cost tens  and even hundreds of  millions [of] dollars.                                                                    
     ... They've  been lucky  in that  they've been  able to                                                                    
     match  all of  the  projects out  of  their cash  flow.                                                                    
     That doesn't  mean that's not  state funds.   I believe                                                                    
     that  $26, $28  million  for this  terminal  - with  an                                                                    
     addition [of]  perhaps as much  as $18  [million] taken                                                                    
     out of the revenue stream  - could definitely have been                                                                    
     used  better  in  other  places.     And  I  think  the                                                                    
     legislature   would  have   acted,  frankly,   on  this                                                                    
     terminal project had we had an opportunity.                                                                                
                                                                                                                                
     ...  They got  the  money; then  they  did a  marketing                                                                    
     analysis.   The  marketing analysis,  as Representative                                                                    
     Halcro said, is  full of holes. ... We  would have been                                                                    
     better  off  to  build  a   port  facility  in  one  of                                                                    
     Representative Kookesh's cities than  we are to build a                                                                    
     hole in the ground. ...  I've worked with the railroad.                                                                    
     I'm not  going to sit here  and say that they  like the                                                                    
     bill,  because obviously  they'd rather  continue doing                                                                    
     business as they always have.   On the other hand, they                                                                    
     do admit  that this project was  ill-conceived and that                                                                    
     there  was no  real process  whereby anybody  in Alaska                                                                    
     ever got to say, "We don't want this." ...                                                                                 
                                                                                                                                
Number 1489                                                                                                                     
                                                                                                                                
SENATOR PEARCE continued:                                                                                                       
                                                                                                                                
     This bill does not allow  one person to stop a project,                                                                    
     because you have to pass a  law.  You've got to have 21                                                                    
     [Representatives] on  this side,  11 [Senators]  on our                                                                    
     side,  and [the]  governor  - who  wouldn't  veto it  -                                                                    
     before you  could ever  actually stop  a project.   So,                                                                    
     it's a huge  hurdle to go over, but it  will force them                                                                    
     to come before us.                                                                                                         
                                                                                                                                
     And,  Mr.  Chairman,  in  terms   of  a  memorandum  of                                                                    
     agreement, you  can't really do  one of those  with the                                                                    
     legislature.   And  because we  have two  board members                                                                    
     that   are   appointed   by  the   governor   and   our                                                                    
     commissioners ...  allowed this project to  go forward,                                                                    
     I don't think a memorandum  of agreement would be worth                                                                    
     its weight in anything.                                                                                                    
                                                                                                                                
     Furthermore, I  believe this  is a  public corporation,                                                                    
     and somewhere  along the way their  major projects that                                                                    
     are  using federal  funds  should have  to  come to  an                                                                    
     elected  body for  approval.   This  is  one that  fell                                                                    
     through the cracks.                                                                                                        
                                                                                                                                
REPRESENTATIVE  KOOKESH  remarked  that  he  seems  to  hear  two                                                               
different  stories.   He  said  he thought  the  person from  the                                                               
railroad had said that only  projects above a certain dollar mark                                                               
would come to the legislature,  while Senator Pearce had said all                                                               
the projects would.                                                                                                             
                                                                                                                                
SENATOR PEARCE  responded that  ARRC brings  the program  to [the                                                               
legislature];  it is  a federal  document, but  [the legislature]                                                               
can only approve those over a certain amount.                                                                                   
                                                                                                                                
Number 1375                                                                                                                     
                                                                                                                                
REPRESENTATIVE  MASEK  stated  that she  could  understand  where                                                               
Senator  Pearce is  coming from.    She asked  whether this  bill                                                               
would only  allow the  legislative body to  get involved  if they                                                               
disagreed with the projects.   She said it is not  a bill that is                                                               
meant  to  go  over  every  project, and  there  are  hardly  any                                                               
projects in the past that have had problems.                                                                                    
                                                                                                                                
SENATOR PEARCE  responded that over  the years there have  been a                                                               
number of projects [with problems].                                                                                             
                                                                                                                                
REPRESENTATIVE MASEK remarked that  the legislature has not taken                                                               
action on anything in the past.   This would provide a vehicle to                                                               
do so if there were troubles.   She added that the federal budget                                                               
comes  out in  the  late  fall; therefore,  no  project would  be                                                               
deterred because of the federal  funding mechanism as the bill is                                                               
written.                                                                                                                        
                                                                                                                                
SENATOR PEARCE replied  that this treats these  projects the same                                                               
as [the legislature] treats federal  highway and airport projects                                                               
in the  budget.  She  noted that she  couldn't find a  project in                                                               
[the federal] program where [the  legislature] would have stopped                                                               
construction.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  MASEK stated  that based  on those  comments, she                                                               
thinks  the intent  of this  bill  is something  that is  needed,                                                               
especially with the state's growth.                                                                                             
                                                                                                                                
Number 1167                                                                                                                     
                                                                                                                                
EILEEN  REILLY,   Alaska  Railroad  Corporation,   testified  via                                                               
teleconference.  She stated:                                                                                                    
                                                                                                                                
     This [legislation]  is something the railroad  can live                                                                    
     with,   and  I   think  Senator   Pearce  characterized                                                                    
     correctly  that it  is probably  something we'd  rather                                                                    
     not live with, but we  certainly could.  The exemptions                                                                    
     are really important.  There  are some projects that we                                                                    
     go  into  preliminary  engineering without  having  the                                                                    
     construction dollars  that we  phase in.   When  we see                                                                    
     our federal  funds in October, we  build that following                                                                    
     season.  So  it is important for us, and  it would have                                                                    
     an impact  [to] not [be]  able to go  into construction                                                                    
     until we  have those  construction dollars  approved in                                                                    
     October,   have  the   legislature  go   through  their                                                                    
     process, and wait 60 days.                                                                                                 
                                                                                                                                
REPRESENTATIVE KOOKESH  explained some  of his concerns.   First,                                                               
he doesn't  think either this  legislature or ARRC  needs another                                                               
layer of bureaucracy.  Second,  he is concerned about the federal                                                               
funding.  And third, he  is concerned that [the committee] hasn't                                                               
heard  from the  railroad board;  at the  same time,  however, he                                                               
believes [the  legislature] needs to develop  a relationship with                                                               
ARRC.                                                                                                                           
                                                                                                                                
Number 0995                                                                                                                     
                                                                                                                                
CHAIR KOHRING  concurred with  Representative Kookesh  and stated                                                               
that he thinks  this is an extra layer of  bureaucracy.  He added                                                               
that he  thinks [the  legislature] is rushing  into this,  and is                                                               
"nipping at the  heels" of the Executive Budget  Act, which could                                                               
lead to micromanaging.                                                                                                          
                                                                                                                                
REPRESENTATIVE MASEK  remarked that this  bill does apply  to the                                                               
exemption of ongoing projects.  She  stated that she thinks it is                                                               
good  policy  for  legislative   leaders  to  ensure  these  huge                                                               
projects, which  may have a  big impact  on people in  the state.                                                               
She added  that she doesn't see  this as holding up  any projects                                                               
[for  ARRC].   Rather,  it  is giving  the  legislative body  the                                                               
ability to act upon projects when and if needed.                                                                                
                                                                                                                                
REPRESENTATIVE SCALZI concurred.  He stated that there  is a lack                                                               
of public oversight in a public entity.                                                                                         
                                                                                                                                
Number 0718                                                                                                                     
                                                                                                                                
REPRESENTATIVE  WILSON  moved  to  report CSSB  123(FIN)  out  of                                                               
committee  with individual  recommendations and  the accompanying                                                               
zero fiscal  note.  There  being no objection, CSSB  123(FIN) was                                                               
reported from the House Transportation Standing Committee.                                                                      
                                                                                                                                

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