04/12/1993 09:20 AM Senate FIN

                                                                               
  SENATE BILL NO. 148                                                          
                                                                               
       An Act relating to the Alaska Railroad Corporation; and                 
       providing for an effective date.                                        
                                                                               
  Co-chair  Pearce directed  that  SB 148  be  brought on  for                 
  discussion and  referenced a  draft CSSB  148 (Finance)  (8-                 
  LS0583\X, Utermohle  4/12/93).   Co-chair  Frank  MOVED  for                 
  adoption of CSSB  148 (Finance) as  a working document.   No                 
  objection  having  been  raised,  CSSB  148  (Finance)   was                 
  ADOPTED.                                                                     
                                                                               
  DAVID  SKIDMORE,  aide   to  Senator   Frank,  came   before                 
  committee.   He explained  that the  adopted Senate  Finance                 
  Committee   version  makes  seven   changes  in  the  Senate                 
  Transportation version:                                                      
                                                                               
       1.   Deletes provisions relating to  municipal property                 
                                                                               
                                                                               
            taxation.                                                          
                                                                               
       2.   Combines   both   qualifications    for   railroad                 
  experience          into one  director.  One  member of  the                 
                      board   must   have  either   ten  years                 
                      railroad management  experience or  have                 
                      been  an  executive director  of  a U.S.                 
                      railroad.                                                
                                                                               
       3.   Creates  a   requirement  for   a  director   that                 
  represents the           current executive management of the                 
                           Alaska Railroad.                                    
                                                                               
       4.   Provides that the next opening  on the board shall                 
  be                                                                           
            filled by a director who  has the outside railroad                 
            experience called for in No. 2, above.                             
                                                                               
       5.   Specifies  that  meetings   of  the  board   where                 
  official       corporate  action  is to  be  taken shall  be                 
                 teleconferenced.                                              
                                                                               
       6.   Clarifies  the  definition  of  "nontransportation                 
  activity."          The  new  definition  excludes  activity                 
                      occurring  before  or subsequent  to the                 
                      transportation  of  people  or  personal                 
                      property by the railroad.                                
                                                                               
       7.   Provides for  participation in  the regional  land                 
  fill at        Nenana.                                                       
                                                                               
  Co-chair Pearce pointed to  the fact that up until  the time                 
  Mr. Turpin  left the railroad  and Mr. Hatfield  became CEO,                 
  the  railroad  had  a  board  member with  outside  railroad                 
  experience.   It  was  not expected  that the  director with                 
  outside  experience  would also  end  up as  chief executive                 
  officer of the railroad.                                                     
                                                                               
  Co-chair Pearce  further spoke  to an  inequity in  original                 
  railroad  law in that  labor has a  seat on  the board while                 
  management does not.   Mr. Hatfield is presently the  CEO, a                 
  board member, and the outside  expert.  Co-chair Pearce said                 
  she had no  problem giving management  a seat on the  board,                 
  but she said that that representative should not also be the                 
  outside expert.  The proposed bill  provides a seat for both                 
  management  and  a  director with  outside  expertise.   The                 
  reality  of  that is  that  an  existing board  member  (Mr.                 
  Lindsey or Mr. Lounsbury) will have  to leave the board this                 
  fall  and  be  replaced  with  a  new  member  with  outside                 
  experience.                                                                  
                                                                               
  Senator Kerttula  voiced need for legislation  providing for                 
  legislative confirmation of board members.                                   
                                                                               
                                                                               
  Mr. Skidmore explained that the  railroad reviewed the draft                 
  Senate Finance version  of the  bill and expressed  approval                 
  with   the    exception   of    the   new    definition   of                 
  "nontransportation activity."   Railroad concern relates  to                 
  the following subsections within Sec. 9:                                     
                                                                               
            (B) an activity occurring before, or subsequent to                 
  the transportation  of people  or personal  property by  the                 
  railroad; or                                                                 
                                                                               
            (C) an activity not                                                
                                                                               
                 (iii) conducted by  the railroad on  the date                 
  of                                                                           
            transfer to the state.                                             
                                                                               
  The  corporation  is  concerned  that  instances  may  arise                 
  involving  an activity conducted by the railroad on the date                 
  of transfer which  also occurred  before, or subsequent  to,                 
  the transportation  of people  or personal  property.   That                 
  activity would conflict with new bill language.                              
                                                                               
  At the  request of Co-chair Frank, MARK HICKEY, lobbyist for                 
  the Alaska Railroad Corporation, came before committee.  Co-                 
  chair Frank asked what  activities conducted at the  time of                 
  transfer might be prohibited by subsection (B), above.   Mr.                 
  Hickey pointed to  the freight  house and drayage  operation                 
  the railroad  has historically  conducted as  an example  of                 
  conflict between  language in subsections  (B) and (C).   He                 
  further noted  that  railroad warehousing  of freight  could                 
  also conflict.                                                               
                                                                               
  Co-chair Frank noted intent to curtail extension of railroad                 
  activities beyond those related to  transportation.  He then                 
  asked  if the  railroad  was involved  in  hotel or  lodging                 
  operations prior to transfer to the  state.  Mr. Hickey said                 
  that  railroad  operation of  the  Healy Hotel  predates the                 
  transfer.                                                                    
                                                                               
  Mr. Hickey next commented on definitions provided to a  work                 
  session of the Senate Transportation Committee.  The drafter                 
  at that time, did not include  language relating to a value-                 
  added  component.   Mr.  Hickey  reiterated  that  different                 
  interpretations of the  foregoing language could occur.   He                 
  suggested that he be allowed to work with staff to structure                 
  the language to better define  legislative intent.  Co-chair                 
  Pearce directed that  SB 148 be  HELD in committee for  that                 
  purpose.                                                                     
                                                                               
  ANNOUNCEMENT                                                                 
                                                                               
  Co-chair Pearce noted  that SB  45 (MISC.  LAWS RELATING  TO                 
  MINORS),  held   from  Saturday's  meeting,   would  be   on                 
  tomorrow's schedule.                                                         
                                                                               
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting was adjourned at approximately 11:15 a.m.