Legislature(2001 - 2002)
05/08/2002 03:14 PM Senate JUD
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 271-MARINE AND RAIL TRANSPORTATION AUTHORITY
CHAIRMAN COWDERY informed members that the Senate Transportation
Committee held several hearings on SB 271 and amended it to
remove the Alaska Railroad Corporation (ARRC). He pointed out the
amendment did not get incorporated into the current version.
CHAIRMAN TAYLOR informed members that is why the committee has a
work draft before it, labeled Utermohle 4/19/02 (Version C). He
asked for a motion to adopt that work draft in lieu of the
original bill.
SENATOR COWDERY so moved.
CHAIRMAN TAYLOR announced that without objection, Version C was
adopted as the working draft of the committee. He then asked
Senator Ward to testify.
SENATOR JERRY WARD, sponsor of SB 271, told members that Version
C creates an Alaska Marine Highway Authority with all of the
powers of an authority. A companion piece of legislation, SJR 32,
addresses the fact that the authority will operate on dedicated
funds. The authority is modeled after many other authorities in
the "Lower 48." The authority will be given 500,000 acres of
state land. He believes the Alaska Marine Highway System (AMHS)
has not been on the same footing as the Alaska Railroad
Corporation, which would be have operated at a loss for the last
eight years without a land base. When the AMHS was formed in
1963, it did not receive a land base. After several attempts to
fund the AMHS through endowments and various sources, the funds
have been depleted so that agency now receives a decreasing
amount of general fund monies each year.
SENATOR WARD drew members' attention to a letter from
Commissioner Pat Pourchot of the Department of Natural Resources,
who said that giving 500,000 acres to the authority will divert a
significant revenue stream out of the general fund. Senator Ward
submitted that if a half-million acres was generating a
significant revenue stream, this legislation would not be
necessary. The state has 103 million acres of land that are not
being developed; if the Alaska Railroad Corporation had that
land, everybody would be working for it. He asked members to
consider passage of this legislation to remove 500,000 acres of
state land from state control and put it into an authority so
that the AMHS can eventually become self-sufficient. He added
that the AMHS will not become self-sufficient from day one; it
will still need general funds or CBR funds. He said he believes
the AMHS is every bit if not more important than the Alaska
Railroad. Senator Ward informed members that SB 271 is very
similar to legislation introduced in the past by former Senator
Lloyd Jones and Chairman Taylor, except that SB 271 gives a land
base to the authority.
SENATOR THERRIAULT asked if the land would be located around AMHS
operations as the railroad land is located along the railroad
corridor.
SENATOR WARD clarified that ARRC's land base is not located
around the railroad corridor. Some of the land was transferred in
1983 upon the sale of the railroad, but about 40,000 acres is
also available that has nothing to do with the operation of the
railroad. He said he does not care where the state land is
located because there is no Alaska land that is not valuable. He
said he hopes it is land that could be logged right away so that
the AMHS could begin to supplement its operations.
SENATOR COWDERY asked if a high percentage of ARRC's profits come
from its landholdings rather than from hauling freight.
SENATOR WARD said that is the way it should be because when the
railroad was built across the Lower 48, it was given every other
section of land to supplement the operation of the railroad. He
stated:
Even though they're not under the Executive Budget Act,
that $10 to $11 million per year - that generates the
$5 to $6 million worth of profit that they show every
year on their books. Without that they would be here
asking for a general fund draw, such as we have now put
the position of the Marine Highway having to do. It
just seems logical to me if it's good enough for the
railroad, it's good enough for the Marine Highway
System.
SENATOR ELLIS asked if the Southeast Conference opposes SB 271.
SENATOR WARD said he believes that is correct and that they want
to leave it as a "line-item agency." He said that is why he
referred to Commissioner Pourchot's letter. The flaw in the
system is that the 103 million acres owned by the state is not
generating any revenue, which is why the commissioner's statement
is incorrect.
SENATOR ELLIS asked why the Southeast Conference is opposed to
the bill.
CHAIRMAN TAYLOR clarified the Southeast Conference has indicated
it will be putting a group together to study the concepts of an
authority and to see what other states have done. The Conference
was not sure if SB 271 is the best design. At times in the past,
it has strongly supported an authority without a land grant.
SENATOR WARD added the Conference said it does not want to go
against the Administration's opposition at this time.
CHAIRMAN TAYLOR took public testimony.
MS. CAROL CARROLL, Department of Natural Resources, said DNR
opposes SB 271 for the following reasons that focus on Section
25, which provides 500,000 acres to the fund.
· State land should be managed for the benefit of all Alaskans
and the legislature should appropriate revenue from state
lands rather than appropriate the land itself. DNR currently
manages state land to benefit all Alaskans and makes quite a
bit of money doing so. While the state owns more than 100
million acres, DNR has a limited amount of land that can
generate revenue. Most of that land has oil and gas
deposits.
· Transferring land from DNR management to other state
agencies does not necessarily lead to increased revenue
production to the state. Most of the ability to generate
revenue from state land is a function of either world
markets for resources, the price of oil or minerals, or
having the staff needed to make land available for sale or
lease.
· Simply transferring land from DNR to the fund will not alone
generate more revenue. The bill will be expensive to
implement. Any potential increase in the revenue must be
weighed against the significant costs required to identify
and transfer large acreage from the land from one agency to
another and the long term costs to establish another state
land management agency that duplicates DNR. The agency will
duplicate DNR's functions. The land transfers will cost over
$15 million with most of that cost being for land surveys
required to transfer land from DNR to the authority.
· SB 271 will further complicate land ownership in Alaska
making resource development and public access more
difficult. It would also compound the difficulty in
resolving the current school grant lands litigation or in
providing additional lands to the University of Alaska as
the fund will no doubt select lands that will be most
suitable for a legal settlement if the state is required to
transfer land to the University or to reconstitute the
school trust or land trust.
MS. CARROLL said a staff person from the Division of Lands was
available via teleconference to answer specific questions.
CHAIRMAN TAYLOR asked if DNR actively opposed the conveyance of
250,000 acres of state land to the University of Alaska.
MS. CARROLL said that is correct.
CHAIRMAN TAYLOR asked if DNR also actively opposed the conveyance
of lands to Alaska's schools and that litigation on that action
is pending.
MS. CARROLL said she does not know that DNR actively disagreed
with the transfer of the land under the public school land. She
said she believes DNR is currently undergoing a process to value
that land.
CHAIRMAN TAYLOR responded:
In fact it was the Department of Natural Resources
that, back about 25 years ago, that stole all the land
away from the Mental Health Trust and we got sued over
that one and that cost us - it could have cost us
several billions of dollars. In fact what did we do to
solve the mental health litigation? We gave them land
back, didn't we? And it was land that was given back
very reluctantly, I might add, by the Department of
Natural Resources who had done such a poor job of
managing it that there were not funds available off of
that management - giving away lands, selling lands,
locking lands up into parks that were designed to be
forests and to provide revenue. Sadly it was your
department again that put us in that position and we
ended up with 3500 families in this state who had
purchased land and built houses on it only to find out
that it was mental health land that had been conveyed
by the Department of Natural Resources in violation of
the Mental Health Trust. All of those things are
historical things that I think you and I both agree on
were probably not the best decisions made in land
management by the Department of Natural Resources so
when I hear your comment that the Department of Natural
Resources must manage for all of the people in the
state, I have a hard time conceiving that anybody in
their right mind would ever turn over any land to the
Department of Natural Resources to manage in light of
the track record over there. But that's only a comment
on my part.
CHAIRMAN TAYLOR then thanked Ms. Carroll for coming forward and
said he was not sure that he favored giving an authority 500,000
acres because although he can't imagine a group that could manage
it worse than the department, an authority might come close. He
then asked Mr. Doll to testify.
MR. BOB DOLL, Regional Director for the Southeast Region of the
Department of Transportation and Public Facilities (DOTPF),
informed members that DOTPF does not support SB 271 for several
reasons. First, there is the uncertainty associated with the sale
of the land and the amount of revenue it would produce. Second,
SB 271 creates a separate authority to perform the function now
being performed by the department.
TAPE 02-27, SIDE B
MR. DOLL said that would be a regressive step regarding the
system's ability to respond to public concerns and to general
operations. Third, it creates an anomalous position for the
marine highway authority with regard to approaching the topic of
federal funding for transportation projects in the state. If
DOTPF has no responsibility for operating the system and the
results obtained, its ability to make an appeal for and gain
approval of expenditure of federal funds for transportation on
marine highway topics would be impaired. Finally, SB 271 requires
a constitutional amendment to set up the fund, which will require
a great deal of effort for an administrative change that is
within the capability of both the executive and legislative
branches of government.
There being no further questions or testimony, SENATOR COWDERY
moved CSSB 271(TRA) from committee with its accompanying fiscal
note and individual recommendations.
SENATOR ELLIS objected.
The motion to move CSSB 271(TRA) from committee carried with
Senators Cowdery, Therriault and Taylor voting in favor, and
Senator Ellis voting against.
| Document Name | Date/Time | Subjects |
|---|