Legislature(2003 - 2004)
05/07/2003 09:01 AM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 31(RES)
"An Act relating to a transportation corridor for extension of
the Alaska Railroad to Canada and to extension of the Alaska
Railroad to connect with the North American railroad system."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken informed that this legislation "would authorize the
Alaska Railroad Corporation to delineate a transportation and
utility corridor from the Eielson Air Force Base near Fairbanks to
the Alaska/Canada border." In addition, he noted that authorization
would be provided to the Alaska Railroad to investigate an
extension of the Railroad from the border to connect with the North
American railway system. He specified that CS SB 31 (RES), Version
23-LS0336\U is before the Committee.
RICHARD SCHMITZ, Staff to the bill's sponsor, Senator John Cowdery,
reviewed the history of the Railroad and professed that "the dream"
of connecting the Alaska Railroad to the rest of the North American
rail system has existed since the 1870s. He stated that, while the
majority of the bill addresses the extension of the railway system
to the Canadian border, the bill would additionally allow the
Alaska Railroad to investigate a rail connection to, for instance,
Fort Nelson in British Columbia, Canada which would enable the
Railroad to connect to the rest to the North American rail system.
Mr. Schmitz informed that, as the bill progressed through the
various legislative committees, language "was added to strengthen
and qualify the bill to make certain that no natural gas pipeline
or other use" of the delineated corridor would impact "Senator
Cowdery's vision" of the bill. He specified that the transportation
of materials on the extended rail line would allow the proposed gas
pipeline to be more easily and less expensively constructed. He
stated that the Alaska Railroad, the Department of Natural
Resources, representatives of the oil and gas industry,
representatives of Governor Murkowski's Administration, and Senator
Cowdery have worked together to develop bill language that would
accomplish the goal of the bill. He referred the Committee to a
Sectional Analysis of CS SB 31 (RES) that has been provided by
Senator Cowdery [copy on file] that further defines the bill.
Co-Chair Wilken concluded that the bill would provide for a 500-
foot corridor would be identified to run from the Eielson Air Force
Base to the Canadian border. This corridor, he clarified, would be
controlled by the Department of Natural Resources until such time
as the Railroad begins to construct a railbed on a dedicated 200-
foot swath within the 500-foot corridor. He stated that the
question is whether the Alaska Railroad should be granted title to
that 200-foot swath.
Mr. Schmitz concurred.
Co-chair Wilken reiterated that the primary issue before the
Committee is whether or not to grant the Alaska Railroad title to
the 200-foot corridor. He asked the Committee to voice other
concerns that might result from the legislation.
Senator Taylor stated that the legislation contains numerous issues
such as the railroad funding mechanisms and Railroad sales to third
parties. He asked that the term "railroad land" be further defined
as the "language is very genetic." He furthered that, in addition
to the 200-foot swath in the corridor, a 200-foot right-of-way
might be required for areas around all selected railroad land
including terminals, stations, maintenance yards, and switchyards.
He specified that the railroad land issue is his biggest concern.
He continued that the question is whether the State wishes to
control access to the 500-foot right-of-way in order to consider
its usage for such things as a fiber optic cable corridor. He
voiced opposition to awarding a fee-simple title.
Senator Bunde stated that while numerous separate discussions have
addressed the issue of selling State land, this legislation "gives
away" State land, albeit to the Alaska Railroad. He characterized
the Railroad as "a quasi-State agency," rather than a State agency
because he asserted that the State does not receive any dividends
from it. He pointed out that "unless things have changed
substantially recently," the money that the Alaska Railroad has
made from its land holdings has allowed the Railroad to loose money
in its "rolling stock operations by running lost leaders" in order
to unfairly compete with private enterprise.
Co-chair Wilken stated that this concern would be addressed.
PHYLLIS JOHNSON, Vice President and General Counsel, Alaska
Railroad Corporation, Department of Community and Economic
Development, testified via teleconference from an offnet site in
Anchorage to address Senator Taylor's concerns.
Co-Chair Wilken interjected to inform that Senator Taylor has
suggested changes to Version "U" to address his concerns. He asked
that Ms. Johnson provide an opinion to those changes as they are
presented.
Ms. Johnson agreed. However, she reiterated that the bill was
cooperatively developed by the aforementioned entities.
Co-chair Wilken pointed out that discussions with the bill's
sponsor would occur prior to changing the legislation and
developing a new committee substitute.
Senator Taylor communicated that while he "very strongly supports"
the extension of the Railroad, regrettably, he has concerns that
the Alaska Railroad's "push" is to get land on which to construct a
railway but in order to also control "its use for other purposes."
He stated that during other committees' discussions on this
legislation, numerous questions arose about future uses of the
corridor, such as who would control the land were "a pipeline to go
down it, are fiber optics a concern," and who would control such
things as subsurface mineral rights to the land were other
considerations beyond building a railroad on the land identified.
Other concerns, he voiced include whether to grant the Railroad the
right of way to the land for free.
Senator Taylor opined that were the Alaska Railroad a State agency
and thereby abiding by such things as the State procurement code,
his concern would be limited. However, he declared that, "they are
not a State agency," and their independent actions "shock and
surprise [the Legislature] by discovering that railroad terminals
and tracks are being built places." Furthermore, he attested that
"the only profit" the Alaska Railroad is making "is off their
land." He stated that the Railroad "should operate as a railroad
rather than a real estate operation."
Senator Taylor reviewed that his drafting changes to the bill [copy
on file] include; foremost, language specifying that rather than
granting the Alaska Railroad right-of-way to the land, the language
should specify that the Department of Natural Resources would lease
the land to the Alaska Railroad Corporation. Furthermore, he
specified that land selection and obligation provisions should be
included, as well as language specifying that were a gas pipeline
to use the corridor, "it would be within the province of the
Department and the State of Alaska."
Senator Taylor continued that clarifying language should be
inserted in Section 1, subsection (c)(2) on page 3, line 1 to
specify that the Department of Natural Resources shall "retain
unfettered discretion regarding the use of these lands," rather
than being "subservient to the railroad on all land use within the
corridor" as "the land is developed and conveyance sought." He
stated that these changes "would be a plus to the State's interest"
as opposed to being "the only State interest remaining." He stated
that the proposed language would read as follows.
(2) the department shall continue to manage the land
reserved under (1) if this subsection; the department shall
retain unfettered discretion regarding the use of these lands,
but will consult with the corporation before disposing of an
interest in land within the transportation corridor and
associated rail land; the department may condition
authorization for activities on the reserved land to encourage
the corporation to construct the railroad or other specific
railroad uses identified for the land;
Co-Chair Wilken clarified that Senator Taylor's suggestions apply
to the Version "U" committee substitute.
Senator Taylor reiterated that all references to the word "land" in
Version "U" beginning with Section 1, subsection (e)(2) on page 4
should be changed to read "right-of-way or easements" in order to
retain the State's interest in the land as opposed to conveying the
land to the Alaska Railroad Corporation. Furthermore, he advised
that Section 1, subsections (e)(3), (4), and (5) that read as
follows, should be deleted.
(3) the Department of Natural Resources shall assign
any existing contracts within that segment of the
transportation corridor and associated rail land to the
corporation; the corporation may thereafter retain the revenue
from the conveyed land; the department shall prorate revenue
from contracts affecting both conveyed and un-conveyed land;
(4) the remaining state land in a segment of the
transportation corridor in which the corporation has received
a conveyance under this section shall be managed by the
Department of Natural Resources as a transportation corridor
unless the department determines the land is no longer needed
for that purpose; and
(5) the remaining segments of the transportation
corridor in which the corporation has not completed
construction and any associated state land designated as rail
land shall continue to be managed by the Department of Natural
Resources as a transportation corridor and associated rail
land under (c) and (d) of this section.
Furthermore, Senator Taylor advised that language in Section 1,
subsection (g) beginning on line 12, page 5 be omitted as "this is
a totally different standard than is currently in effect" on any of
the State's highways. He stated that "the inclusion of this
language has no purpose in this legislation whatsoever" as actions
by the Railroad for such things as a spill are currently
categorized as "negligence." This language reads as follows.
Neither the corporation nor the state is liable for claims
arising from public use of the transportation corridor and
associated rail land, except to the extent the claims arise
from the gross negligence of the state, the corporation, their
employees, or their contractors, respectively.
In addition, Senator Taylor suggested that Section 1, subsection
(j) on page 6, beginning on line 5 should be deleted as this
language is not required "if the Department has already retained
the land" and is only granting easements or right-of-ways in the
corridor. This language reads as follows.
(j) The Department of Natural Resources shall retain the
classifications and reservations of land identified for use as
a proposed utility corridor and railroad right-of-way under
former AS 19.02.122 until the corporation informs the
department in writing that the land is not needed by the
corporation for a utility corridor. If, under (a) of this
section, the corporation includes land identified under former
AS 19.05.122 as part of the proposed transportation corridor,
the department shall manage that land under provisions of this
section.
Senator Taylor voiced the desire to assist the Alaska Railroad in
its endeavor to extend the rail line; and he attested that he has
personally met with Canadians to further that end. He opined that
the Canadians also support this effort. However, he professed that
he could not support a fee simple conveyance of the land to the
Alaska Railroad, as it could be detrimental to furthering other
State projects in the corridor.
Co-Chair Wilken asked Ms. Johnson to review Senator Taylor's
suggestions. Additionally, he voiced that the proposed changes
should be discussed with the bill's sponsor. Furthermore, he asked
Railroad's representative whether a delay in action on this
legislation would be acceptable.
JOHN BINKLEY, Chairman of the Board, Alaska Railroad Corporation,
Department of Community and Economic Development responded that
addressing the issue further would be acceptable. He commented that
Senator Taylor presents "some compelling arguments and
observations." Furthermore, he suggested that because the land
belongs to the State, the Department of Natural Resources rather
than the Railroad should conduct the delineation work on the
transportation corridor in order to avoid a perceived conflict of
interest.
Senator Taylor opined that the Alaska Railroad has "a monopoly" on
the knowledge regarding how to lie out a transportation corridor
for a rail line because of the longevity and institutional
knowledge of the Alaska Railroad leadership. Therefore, he favored
the Alaska Railroad maintaining the lead authority in the endeavor.
Mr. Binkley informed the Committee that the prior year's Alaska
Railroad net income was nine million dollars, with five million
dollars resulting from real estate operations and four million
resulting from railroad operations. He stated that it is a
misconception to say that Railroad operations are unprofitable, and
he stated that every year, with the exception of one, the Railroad
operations "have made money."
Senator Taylor clarified that he is "not totally married to the
idea that the Alaska Railroad should receive no land out of this,"
but rather that the arrangement should be less extensive. He stated
that the focus of the discussion should address how to further the
building of the railroad as opposed to dwelling on how much land
would be divvied out to various entities.
Ms. Johnson voiced support of Mr. Binkley's comments. Additionally,
she agreed that further clarifying language would be beneficial as
she noted that it is understood that the remaining land within the
500-foot corridor could be used for other purposes. She corrected
that the 200-foot Alaska Railroad corridor would not require any
additional buffer zone; however, she verified that additional
terminal and maintenance land would be required.
Co-Chair Wilken voiced that Senator Taylor's suggestions would be
used to develop another committee substitute.
Senator B. Stevens asked the reason that Senator Taylor suggests
deleting language in Sec. 1, subsection (j) on page six of the
bill.
Senator Taylor stated that the suggestion was made based on the
termination that the State would be retaining the right to the
land. He stated that he would provide further analysis to the
Committee.
Co-Chair Wilken ordered the bill HELD in Committee in order to
develop a new committee substitute.
SFC 03 # 81, Side A 06:56 PM
| Document Name | Date/Time | Subjects |
|---|