Legislature(2001 - 2002)

04/12/2001 09:13 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 123(TRA)                                                                                                 
"An Act relating to legislative approval for the design and                                                                     
construction  of facilities of the  Alaska Railroad Corporation  and                                                            
railroad line realignment and railroad corridor projects of the                                                                 
Alaska Railroad Corporation."                                                                                                   
SENATOR DRUE  PEARCE, sponsor of SB  123, indicated that  they had a                                                            
work draft before them.                                                                                                         
Senator Leman  moved to adopt the  committee substitute (CS)  for SB
123, 22-LS0522\P, Utermohle, 04/10/01, as a work draft.                                                                         
Co-Chair Kelly asked if there were any objections.                                                                              
There were no objections and Version P was adopted.                                                                             
Senator  Pearce indicated  that Version P  changed dramatically  the                                                            
direction  that she was going  in terms of  approval of projects  on                                                            
the facilities  that the railroad would be building.   She explained                                                            
that  the  CS would  require  the  railroad  corporation  to  obtain                                                            
legislative  approval for  the program of  projects, which  were the                                                            
lists of federally  funded projects required by the  federal transit                                                            
administration  and  the federal  highway  administration.   The  CS                                                            
represented  the  collaborative   effort  between  herself  and  the                                                            
railroad,  which  would  require  approval  for  major construction                                                             
projects  while  excluding   regular  maintenance  projects,   minor                                                            
construction  and  realignment   project  and  projects  outside  of                                                            
communities  that were entirely on  federal lands.  She pointed  out                                                            
that the bill  required the railroad  board of directors  to present                                                            
their program  to the legislature  on the first day of each  regular                                                            
session; that  program would be referred  formerly to the  House and                                                            
Senate  Finance  Committees  for review.    She indicated  that  the                                                            
legislature would be able  to disapprove, by law, the expenditure of                                                            
federal funds  for a project  during the first  60 days of  session.                                                            
She noted  that failure of  the legislature  to disapprove  would be                                                            
recognized as approval  for the expenditure of funds.  She commented                                                            
that  the process  was very  much like  that of  the Local  Boundary                                                            
Senator  Pearce  further stated  that  the  bill was  introduced  in                                                            
response to the  Alaska Railroad Corporation's multi-million  dollar                                                            
rail station  project at  the Ted Stevens  International Airport  in                                                            
Anchorage.   She  pointed  out  that the  railroad  received  direct                                                            
federal appropriations  for that project.  She indicated  that there                                                            
was no  input  or coordination  with the  legislature  prior to  the                                                            
project and,  more importantly, there  was no public review  process                                                            
in Alaska  at any level  before the  project was  begun.  She  noted                                                            
that  the  project   would  impact  a  large  number   of  Anchorage                                                            
residents.    She  said that  there  were  also  concerns  with  the                                                            
feasibility and  economic practicality of the project;  the original                                                            
appropriation  for the terminal was $28 million and  the realignment                                                            
project was expected to  cost $18 million.  She pointed out that the                                                            
market  analysis  did  not  support  spending  $46  million  on  the                                                            
project.    She believed,  in  response  to the  concerns  with  the                                                            
Anchorage  rail station, that  they should  require the railroad  to                                                            
obtain legislative approval for future projects.                                                                                
[Note:  Microphones  inoperable for  Co-Chair Kelly, Senator  Leman,                                                            
Co-Chair Donley, Senator Green and Senator Austerman]                                                                           
Co-Chair Kelly  referred to the CS with a question  [exact statement                                                            
Senator  Pearce pointed  out that  on page  2 of the  CS there  were                                                            
exceptions  that did not apply to  the subsection; those  being that                                                            
the facility  construction  cost  be less  than $5  million and  the                                                            
track  realignment  construction  cost  be less  than  $10  million.                                                            
Therefore, there were exemptions for the smaller projects.                                                                      
Senator Olson understood  where the concerns were toward the current                                                            
projects,  but  if they  looked  at  the long-term  effects  of  the                                                            
increased traffic  through the Anchorage  international airport  how                                                            
were they  going to accommodate  for the increase  in the amount  of                                                            
people traveling nowadays without a rail facility.                                                                              
Senator  Pearce pointed  out  that the  Anchorage  airport  terminal                                                            
project was going  to go forward.  She noted that  Europe did have a                                                            
much better rail system.   Unfortunately, in Anchorage they would be                                                            
held back  because the  track would  only go north  and south.   She                                                            
maintained  that in  the United  States  while the  market  analysis                                                            
spoke about cities where  there was a lot of commuter traffic to and                                                            
from airports  every city  where it had been  successful was  a city                                                            
with  millions  of people.    She  noted that  a  city the  size  of                                                            
Anchorage  would  not  have  the  population   to support   constant                                                            
commuter service.                                                                                                               
Senator  Wilken wondered  what Senator  Pearce's  intent was if  the                                                            
project  construction costs  were larger  than $10  million and  the                                                            
legislature were to disprove it.                                                                                                
Senator Pearce  indicated that the railroad would  have to readdress                                                            
the  project  and the  concerns.    She  did not  believe  that  the                                                            
legislature would turn  down a project unless there was an outcry by                                                            
the people  in the locality of where  the project would take  place.                                                            
She stressed that it would  be very difficult to ask the legislature                                                            
to act within  60 days and reminded the Committee  that the Governor                                                            
could always  veto the  bill.  Therefore,  they  would have  to have                                                            
two-thirds of the legislature  fighting against a project before one                                                            
would actually  be turned down.  She believed that  it was important                                                            
for the  railroad to  be required  to come before  an elected  body,                                                            
like the legislature,  for the purpose  of bringing the people  into                                                            
the process and  assist the railroad in being more  cognizant of the                                                            
Senator Wilken  voiced his  appreciation for  the changes that  were                                                            
made.  He wondered  if on the 58   day the legislature  were to turn                                                            
down a major project  whether the railroad would have  to wait until                                                            
the next session to move forward on the project.                                                                                
Senator Pearce replied, "Yes.  For construction."                                                                               
Senator Wilken  clarified that they  would not have another  look at                                                            
it until the next session.                                                                                                      
Senator Pearce  explained that the  legislature would authorize  the                                                            
use of federal  funds exactly like  they did with the Department  of                                                            
Transportation  and  Public  Facilities  on  building  roads.    She                                                            
predicated  that the minute the railroad  saw enough concern  with a                                                            
project they would be working with the legislature.                                                                             
Co-Chair Kelly [indiscernible].                                                                                                 
Senator Pearce agreed with  Senator Kelly.  She added that in seeing                                                            
the ideas of  the railroad for the  future and their opportunity  to                                                            
receive money from the  federal government it would not surprise her                                                            
to see the railroad  come to the legislature for help  with matching                                                            
funds,  because most  of the federal  programs  do require  matching                                                            
funds.  She pointed  out that the railroad had matched  dollars over                                                            
the  years,  but  if  they were  handed  $100  million  for  a  huge                                                            
realignment  she  did not  see how  they  would come  up  with a  20                                                            
percent match.  She believed  that the legislature would become more                                                            
active in railroad expansion.                                                                                                   
Senator  Green wondered  if the  language  on page 2,  line 4  would                                                            
apply to the Mat-Su Borough.                                                                                                    
Senator Pearce  understood that boroughs count as  communities.  She                                                            
clarified  that if they allocated  state funds  for a federal  match                                                            
than that would be considered approval.                                                                                         
Senator  Green indicated  that she  was not sure  what the  language                                                            
stated exactly, but that  the money was appropriated as leverage for                                                            
federal money.   She wondered if they  would have to wait  an entire                                                            
session for that approval.                                                                                                      
Senator Pearce  referred to  page one of the  bill on the bottom  of                                                            
the page and indicated  that if a project were substantially changed                                                            
then the  railroad would  have to come back  to the legislature  for                                                            
Senator  Green requested  clarification that  the project would  not                                                            
have  been approved.    She pointed  out that  there  were miles  of                                                            
railroad to interconnect  and wondered if those projects  would fall                                                            
under the requirement for additional legislative approval.                                                                      
Senator Pearce  answered probably,  because in  order to get  on the                                                            
federal  list for  projects  they would  have  to come  back to  the                                                            
legislature.  She assumed  that the project would have to go through                                                            
the process  at the federal  level already.   She further  clarified                                                            
that if  a project  wanted to receive  federal  funds then it  would                                                            
have to appear  on the program at  some point and the first  time it                                                            
appeared  there  with  construction  money  would  be the  year  for                                                            
legislative approval.                                                                                                           
Senator  Leman  seemed  to  him that  if  the  legislature  were  to                                                            
disapprove,  by law,  then the  legislature could  also approve,  by                                                            
law,  if there  were a  change  in the  project sometime  after  the                                                            
disapproval.   He clarified that it could be during  the rest of the                                                            
regular session or even  during a special session rather than on the                                                            
first day of  the next session and  the legislature would  not be in                                                            
Senator Pearce  agreed, but  believed that  it could not be  through                                                            
the capital budget process,  rather there would have to be an actual                                                            
law passed.                                                                                                                     
Senator Leman agreed.                                                                                                           
Senator Pearce reiterated  that they could not get to it through the                                                            
Legislative Budget and Audit process.                                                                                           
Senator Leman interpreted it the same way.                                                                                      
Senator  Pearce  noted  that when  they  ran  into problems  at  the                                                            
legislative  level there would be  enough scurrying about  that some                                                            
accommodation would be found before the end of session.                                                                         
Senator  Leman agreed.   He  questioned  whether  the definition  of                                                            
"substantial"  with  regards  to  the  pipeline  ride-of-way   would                                                            
concern them or the railroad.                                                                                                   
Senator Pearce  stated that she was comfortable with  the definition                                                            
of "substantial"  provided by Mr. Utermohle.  She  explained that if                                                            
the railroad had funds  to build to Point Mackenzie and they decided                                                            
to  build   to  Skwentna   instead  that   would  be  considered   a                                                            
"substantial"  change.   On the other  hand, she  noted that  if the                                                            
railroad had  to change a route a  little bit to accommodate  a wolf                                                            
den then that  would not be considered a "substantial"  change.  She                                                            
reminded the Committee  that in federal law if those projects change                                                            
then there would need to be a reauthorization process.                                                                          
Senator  Leman clarified  that  in federal  regulation  there  would                                                            
probably be a definition of "substantial."                                                                                      
Senator Pearce  said that she was not sure if it was  defined or not                                                            
in the federal  regulations.  She did not expect the  railroad to go                                                            
outside  of what they  intended.   She noted that  the railroad  did                                                            
have a lot  of land and it was hard  to say what they might  come up                                                            
with in terms of development.                                                                                                   
Senator Ward commented  that the Alaska railroad was  an interesting                                                            
entity.   He wondered why  they would pass  this legislation  rather                                                            
than putting the railroad under the executive budget act.                                                                       
Senator  Pearce parlayed  that this  would be a  "slap on the  hand"                                                            
whereas that would be a "sledgehammer."                                                                                         
Senator Ward  questioned the  specifics of  it and wondered  if this                                                            
legislation  would impede  the railroad's  ability  to do what  they                                                            
felt was best.                                                                                                                  
Senator Pearce  answered that sure it would impede  their ability to                                                            
some extent, but not much.   She believed that it was something that                                                            
the railroad should  do and she worked with the railroad  to come up                                                            
with something  that they were willing to do.  She  pointed out that                                                            
the  railroad  was an  asset  of the  state  and all  Alaskans  were                                                            
shareholders of  the railroad.  She indicated that  if they want the                                                            
railroad to be  able to act like a business than putting  them under                                                            
the executive budget act  would not be the way to go.  She said that                                                            
she did not feel that the government acted well as a business.                                                                  
JOHN BINKLEY,  Chairman of the Board,  Alaska Railroad Corporation,                                                             
testified via teleconference  from Fairbanks, thanked Senator Pearce                                                            
for  the CS,  Version P,  and  indicated that  it  was a  tremendous                                                            
improvement  to the CS that  came out of  the Senate Transportation                                                             
Committee.    He pointed  out  that  it  was an  effort  on  Senator                                                            
Pearce's  part  out  of frustration   that  she had  felt  with  the                                                            
construction  of  the  project  at  the  Ted Stevens  International                                                             
Airport in Anchorage.   He gave some background from  the railroad's                                                            
point of view on that project.   He explained that the Department of                                                            
Transportation  and  Public  Facilities  approached  them  when  the                                                            
department began the reconstruction  of the terminal at the airport.                                                            
The airport  had dictated  that if the railroad  wanted to  maintain                                                            
their existing  line than they had  to be apart of the project.   He                                                            
said that the intent of  the railroad was to preserve that corridor.                                                            
He urged  that they  tried to  communicate with  the legislature  on                                                            
their  projects  and never  did  get  a huge  reaction  or  negative                                                            
reaction.   He noted that they did  as much as they could  to inform                                                            
the public  about the project.  He  referred to the additional  cost                                                            
of the  rails going  into the airport  and noted  that it was  being                                                            
looked at for  future projects if  there was a tremendous  amount of                                                            
use of those  rails.  He  thought that if  they got to the  point to                                                            
spend additional money  to realign the rail it would be a tremendous                                                            
success.   He said  that  they hoped  there would  be acceptance  of                                                            
commuter  rail in the Anchorage  area and  that they would  increase                                                            
the number of trains going  in and out of the airport.  He commented                                                            
that he would see that as a success if it indeed were to happen.                                                                
Mr. Binkley continued that  two of the key pieces in the legislation                                                            
were  that  it forced  a  close  working  relationship  between  the                                                            
railroad and the Department  of Transportation and Public Facilities                                                            
and secondly, that the  railroad would have autonomy.  He noted that                                                            
the number  one  consideration  was safety  and number  two was  the                                                            
customer.   He  expressed  that where  there  was concern  with  the                                                            
original CS  from the Senate Transportation  Committee with  regards                                                            
to it crossing the line  with regards to the legislature becoming an                                                            
integral part  of the decisions of  the railroad.  He again  thanked                                                            
Senator Pearce for her work on the legislation.                                                                                 
Senator Leman  moved to  report CS SB 123,  22-LS0522\P,  Utermohle,                                                            
4/10/01, from the Committee.                                                                                                    
There was no objection and the bill was reported from Committee.                                                                
AT EASE 9:49 AM/9:51 AM                                                                                                         

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