Legislature(1999 - 2000)

04/29/1999 01:35 PM Senate TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
           SB 160-ALASKA RAILROAD PASSENGER SURCHARGE                                                                           
CHAIRMAN WARD called the Senate Transportation Committee meeting to                                                             
order at 1:35 p.m. and brought SB 160 before the committee.                                                                     
Number 012                                                                                                                      
MS. LLEWELLYN LUTCHANSKY, Finance Aide to Senator Torgerson, stated                                                             
that SB 160 would put a $5 surcharge on all passengers traveling on                                                             
the Alaska Railroad.  It is one of the tools introduced by Senate                                                               
Finance as part of the legislature's strategy to identify new                                                                   
revenue sources through non-oil industry contributions to the                                                                   
state's General Fund.                                                                                                           
Number 035                                                                                                                      
MR. BILL SHEFFIELD, Former Governor of Alaska and President/ CEO of                                                             
the Alaska Railroad, said the railroad opposes SB 160 and he                                                                    
requested the opportunity to describe how it does business in order                                                             
to explain its opposition.                                                                                                      
A $5 surcharge would create or worsen a number of problems related                                                              
to administrative costs and competitive pricing, and the release of                                                             
proprietary information of its customers.  It would also                                                                        
significantly raise ticket prices for Alaskans using core                                                                       
transportation services, and present a significant disincentive for                                                             
the development of commuter service.                                                                                            
The railroad sells and tracks tickets by segments, not by                                                                       
individual passengers. Re-tooling the system to track by                                                                        
individuals would create an unnecessary administrative cost to                                                                  
manage the surcharge and would do nothing to improve business.  The                                                             
railroad has been developing new markets for its passenger service.                                                             
Tour buses would have an unfair advantage over the same market                                                                  
segments the railroad serves.  The development of a rail station at                                                             
the Anchorage International Airport is part of the overall plan to                                                              
develop a commuter service from Mat-Su Valley through Anchorage to                                                              
Girdwood and the airport.  The rail station will also enable the                                                                
railroad to move cruise ship passengers from Seward and Whittier                                                                
more efficiently to the airport.  A surcharge on every passenger                                                                
wouldn't allow the railroad to do that.  When DOTPF builds the                                                                  
International Airport Minnesota Viaduct, they'll put through a tube                                                             
so the railroad will have a Y coming into the airport from Seward,                                                              
cutting down time.  The track has been straightened out and a lot                                                               
of work has been done on the Seward run.                                                                                        
The railroad can't legally provide ridership numbers without                                                                    
disclosing proprietary information on its major commercial                                                                      
customers, Westours and Princess Tours. Even if the numbers were                                                                
kept confidential, it wouldn't require a great mathematical leap                                                                
for a competitor to figure out what its competition carried on the                                                              
railroad by looking at the total amount included in the General                                                                 
Fund budget from that source.                                                                                                   
A $5 surcharge becomes a 25% increase on the adult fare and a 50%                                                               
increase on the child's fare for the Talkeetna-Hurricane passenger                                                              
service. In Whittier, a $5 surcharge in an individual trip raises                                                               
the round-trip adult fare 100% from $10 to $20.  A book of ten one-                                                             
way tickets for $45 would become $95, with most of the cost                                                                     
attributable to the surcharge. Consumer fares are driven up by the                                                              
cost of providing the service and its relative convenience compared                                                             
to driving.                                                                                                                     
The Alaska Railroad enabling legislation requires that all revenues                                                             
be kept by the railroad for its purposes and there is no provision                                                              
for transfers to the General Fund.  Further, the federal act                                                                    
authorizing the transfer was the basis for inclusion of the                                                                     
railroad revenue provision inserted in the state enabling law.                                                                  
There may be conflicts with federal law.  Also, the bill may                                                                    
violate federal statute 49 USC 11501 which provides that a state                                                                
cannot impose a tax that discriminates against railroads. The                                                                   
proposed tax is discriminatory because there is no similar tax on                                                               
bus, airplane or ferry passengers.                                                                                              
The railroad uses Federal Transit Authority funds for some of its                                                               
capital projects that it was given through the T-21 bill.  There                                                                
may be a conflict. MR SHEFFIELD said, "It's kind of like robbing                                                                
Peter to pay Paul if you tax the railroad which is state-owned."                                                                
MR. SHEFFIELD discussed the railroad's net revenues for capital                                                                 
improvements, and the ways it has improved technology and                                                                       
strengthened assets to provide better service.                                                                                  
Number 248                                                                                                                      
SENATOR PEARCE said she is keenly interested in the Anchorage                                                                   
International Airport rebuild of the domestic passenger terminal.                                                               
She understands that the railroad received money from the federal                                                               
government through the largesse of Senator Stevens, allowing the                                                                
railroad to build the terminal at the airport.  In discussions with                                                             
members of the tourism industry, she has been told that they think                                                              
these dollars ought to be used by the railroad for on-going track                                                               
maintenance and building the railbed.  They are concerned that                                                                  
because of the array of directions cruise ship passengers go, the                                                               
railroad may not have enough tourists using the rail to be able to                                                              
afford overhead and maintenance on the terminal building even                                                                   
though it's cost-free and will be leased from the airport. She                                                                  
asked Mr. Sheffield to share financial information that indicates                                                               
the terminal can be self-supporting.                                                                                            
MR. SHEFFIELD replied that he didn't have the figures before him                                                                
but would follow up with Senator Pearce on it.  The railroad can                                                                
afford to pay the overhead and maintenance of the building.  The                                                                
airport is run by a consortium of airlines that don't want the                                                                  
railroad station to cost them money, and the railroad has assured                                                               
them that it won't.  It will begin its tunnel operation so the                                                                  
airport can go ahead with road work next year. The tunnel with a                                                                
moving sidewalk will move passengers from the parking garages into                                                              
the main atrium of the airport.  The railroad will build and pay                                                                
for the tunnel which will also benefit the airport. The railroad                                                                
will generate enough income from passenger service to handle                                                                    
SENATOR PEARCE asked if the ARR has signed letters of agreement                                                                 
from tour companies to bring people to the airport railroad                                                                     
MR. SHEFFIELD said no, it has agreements this year with some of the                                                             
major cruise ships that will use the Seward turn. Both Princess                                                                 
Tours and Westours have guaranteed a certain number of passengers.                                                              
This year a second train will go to Seward, and a person will have                                                              
about 7 different ways to get to Seward and back to Anchorage, a                                                                
popular option.  The airport terminal won't open until 2002.  Next                                                              
year the railroad will appear in the cruise ship brochures.                                                                     
SENATOR PEARCE said that makes a lot of sense, but she's concerned                                                              
that the railroad would have enough people using the facility at                                                                
the airport terminal.                                                                                                           
MR. SHEFFIELD said the airlines will start checking luggage for the                                                             
cruise ships at Seward this year so that it no longer will go to                                                                
the airport, a big plus for the railroad and the airport. He said                                                               
he doesn't doubt that with more ships, once the railroad is                                                                     
available and competitive on time and dollars, the people will be                                                               
CHAIRMAN WARD asked who the railroad competes with.  MR. SHEFFIELD                                                              
said that with Seward, it's competitive with buses owned by                                                                     
Princess Tours and Holland America Line. There is no written                                                                    
agreement they will quit running the buses.  The railroad would                                                                 
haul two loads of 300 cruise ship passengers each, and the railroad                                                             
station has a holding area on the second floor for 350 people.                                                                  
Certain cruise passengers only go to Seward in order to catch a                                                                 
plane and return home.  The railroad will get 40% of the 1500                                                                   
people on a ship. It will rehab the Seward dock this year as a                                                                  
passenger dock, with a freight dock next door.                                                                                  
Number 390                                                                                                                      
MS. CARRIE WILLIAMS, City Manager of Whittier, stated that the City                                                             
supports SB 160 with one proviso.  While it is appropriate for the                                                              
state to seek other means of raising revenues, in the case of                                                                   
communities such as Whittier that is due to open through the Anton-                                                             
Anderson Tunnel in May 2000, the surcharge would constitute in the                                                              
interim a burden of a 50% tax.  She asked that in these affected                                                                
communities some provision be added to the bill allowing their                                                                  
exemption until June 1, 2000, when road access will be available to                                                             
the local residents.                                                                                                            
SENATOR LINCOLN asked once the tunnel is built and the residents                                                                
have an option, would most people use their own vehicles instead of                                                             
the train.  MS. WILLIAMS said certainly, the Whittier residents are                                                             
not anticipating ever using the shuttle again, parking cars in                                                                  
Portage or on flatcars.  The winter rate currently is about $50                                                                 
round-trip for a vehicle.  There would be no logic in maintaining                                                               
that run when the anticipated toll through the tunnel is $15 round-                                                             
MR. SHEFFIELD commented that it is uncertain what will happen to                                                                
the shuttle when the road opens.   A direct train leaves Anchorage                                                              
every morning and services the day cruises and about 7 day boats in                                                             
Whittier.  Trains would go through the tunnel four times a day with                                                             
passengers in the summertime.                                                                                                   
CHAIRMAN WARD mentioned a draft amendment to the bill, and asked                                                                
the City of Whittier's opinion regarding the transfer of the                                                                    
Whittier dock to the Alaska Railroad. He said it appears to be a                                                                
federally transferred asset to a state-owned asset.                                                                             
Number 469                                                                                                                      
MS. WILLIAMS handed out the amendment and said the City has been in                                                             
contact with the Department of Defense since the tank farm and                                                                  
DeLong Dock were closed down. Whittier needs to support its fishing                                                             
and freight industries.  Since the tunnel ruling and the support of                                                             
the courts, Whittier has anticipated increased fishing in the                                                                   
Sound. The Benedict plant in Anchorage is looking forward to                                                                    
increased product.                                                                                                              
The tidelands under the dock and the dock itself are extremely                                                                  
important assets to be kept in a public purpose.  The city had no                                                               
authority over those lands under the federal ownership.  If it                                                                  
becomes surplused, it would go through the standard federal                                                                     
government procedure,  looking first at the needs of other federal                                                              
Research vessels and private enterprise want to come into Whittier.                                                             
The city has received a proposal to expand the private dock areas                                                               
to support the excursion fleet. Whittier is developing its tax base                                                             
so it can provide government services, as the legislature can no                                                                
longer support it with increased revenue sharing and Safe                                                                       
Communities.  The city sees that it needs to bring these entities                                                               
Under statute the Alaska Railroad is for rail-essential purpose                                                                 
only. MS. WILLIAMS pointed on a map to the Alaska Railroad freight                                                              
yard.  She commented, the waters reach 600 feet right off the                                                                   
breakwater. She referred to a survey map showing the substantial                                                                
tidelands attached to the DeLong Dock.  The property fragments the                                                              
uplands.  All of these issues brought the city to the Department of                                                             
Defense in 1997 to ask that it be considered when the property is                                                               
MS. WILLIAMS said the city thanks the railroad for obtaining the                                                                
ground lease on all the non-rail-essential areas above the rail                                                                 
yard to develop business.  It is a shared revenue and the railroad                                                              
will see profits "as we privatize everything we possibly can, even                                                              
parking and items like that."                                                                                                   
The city decided a permit was needed but couldn't obtain it  from                                                               
the Department of Defense.  This year the Alaska Railroad made an                                                               
offer to go into jointly permitted use in the interim until the                                                                 
property becomes surplused. MS. WILLIAMS believed it was                                                                        
progressing well, not knowing the end result would be a loss of all                                                             
title to tidelands and the dock to the Alaska Railroad under                                                                    
pending draft legislation at the federal level.                                                                                 
CHAIRMAN WARD asked if it would be detrimental for the state if the                                                             
property went to the railroad instead of the city.                                                                              
MS. WILLIAMS said local governments need a preference over lands                                                                
within their boundaries for economic development.  The state                                                                    
directive is to become more self-sufficient, so the city is looking                                                             
at local hire and diversification.  The City of Whittier has 28                                                                 
acres and must support more business development in freight, fish                                                               
and tourism.                                                                                                                    
CHAIRMAN WARD asked if the congressional delegation succeeded in                                                                
transferring the dock to the railroad, would Whittier fishermen  be                                                             
able to supply the new fish processing plant in Anchorage.                                                                      
MS. WILLIAMS said although there have been conversations about                                                                  
joint use, she was not under the impression it would have priority.                                                             
With all the new excursion and tourism operations coming in, the                                                                
city has no city dock facility, only a recreational dock.  A couple                                                             
operators lightered off the dock. The AHTNA development would have                                                              
more excursion ability from the DeLong Dock. She asked how private                                                              
enterprise could compete with capital-free investment of a tax-                                                                 
exempt entity.                                                                                                                  
The amendment by Senator Pearce would give the legislature the                                                                  
oversight to decide where assets could best be utilized. Many                                                                   
municipalities have properties that the federal government may                                                                  
CHAIRMAN WARD asked if any development has been done on the dock.                                                               
MS. WILLIAMS said the federal government has only allowed the                                                                   
emergency response vans on the dock.                                                                                            
SENATOR LINCOLN referred to a letter from Ms. Williams to the                                                                   
Department of Defense (DOD) in August 1998 regarding the dock                                                                   
facilities, and the resolution expressing their desire to obtain                                                                
the property and related tidelands.  She asked their response.                                                                  
MS. WILLIAMS said DOD packaged this with their request at the                                                                   
Alaska level for disposal of that property, sent it to Hawaii and                                                               
then back East.  Beyond that, the city has heard nothing in writing                                                             
until receiving this draft legislation.                                                                                         
TAPE 99-10, SIDE B                                                                                                              
Number 583                                                                                                                      
SENATOR LINCOLN commented it is no surprise, then, to DOD that                                                                  
Whittier wants the dock.                                                                                                        
MS. WILLIAMS said in 1997 when the city was looking at the tank                                                                 
farm and DOD was trying to find a bidder to use it again for fuel,                                                              
the DOD gave her the "heads up."  The city contacted Senator                                                                    
Stevens and he was helpful in defining ownership.  She pointed out                                                              
the railbelt area and the deep water port.                                                                                      
CHAIRMAN WARD asked if she has calculated a dollar amount the city                                                              
would lose if it doesn't get the dock.  MS. WILLIAMS replied the                                                                
revenue from wharfage is nominal to the loss of economic                                                                        
development in support of fishermen.  The standard tariff is not                                                                
part of the issue.  The city collects sales tax from the tenders.                                                               
As the statute is currently written, the Alaska Railroad is                                                                     
technically under no obligation to collect local taxation.  Local                                                               
employment of fishermen is an issue.  The road will be a tremendous                                                             
asset to their ability to get fresh product to the Benedict plant                                                               
in Anchorage.                                                                                                                   
SENATOR PEARCE asked if the only deep water port availability is                                                                
the DeLong Dock and the railroad dock.                                                                                          
MS. WILLIAMS answered yes, that these waters are extremely deep and                                                             
there is literally nowhere to build another dock at the current                                                                 
time. She handed out the HGR Short-term Critical Needs Plan that                                                                
identified the DeLong Dock as the commercial fishing dock.  If                                                                  
cruise ships return, they need to be at the head of the bay in the                                                              
northwest corner "to avoid the 250 buses per ship coming right into                                                             
the middle of our small boat harbor area."                                                                                      
CHAIRMAN WARD invited Mr. Sheffield to join the discussion.                                                                     
Number 537                                                                                                                      
MR. SHEFFIELD said he didn't want to leave the committee with the                                                               
impression the railroad hasn't cooperated with or tried to help the                                                             
City of Whittier.  He led the way on the ARR Board to help                                                                      
Whittier.  He thought it was unfair that the state was going to                                                                 
build a road into Whittier where there isn't a public restroom or                                                               
place to park a car, and no money.  DOTPF, the city and the                                                                     
railroad each put in $50,000 to participate in a master plan of                                                                 
immediate and long-term needs.                                                                                                  
The railroad gave the city a long-term lease on all the land that                                                               
it doesn't use for essential railroad purposes, mainly the                                                                      
intermodal facility for unloading freight.  It's free for the first                                                             
five years, graduating up to a sharing of the profit from the                                                                   
leasing of the land.  Whittier's income is from taxation of                                                                     
improvements and buildings on the land. It was a benevolent lease                                                               
with the railroad providing funds to survey the land into segments                                                              
so the person leasing can pay for the survey of the amount of land                                                              
they lease.                                                                                                                     
The railroad has been working for six months with the Corps of                                                                  
Engineers to get a temporary joint use permit of the DeLong Dock                                                                
for the city and the railroad.  It is not yet resolved. The                                                                     
railroad had entered into a Memorandum of Understanding (MOU) that                                                              
it thought Whittier would agree to, but it did not.  The MOU states                                                             
the railroad would make efforts to get the dock into its ownership                                                              
and apply to DNR to use the tidelands underneath the dock and 20                                                                
feet around it.  All other tidelands on the shoreline would be                                                                  
recommended to go to the City of Whittier. The railroad would also                                                              
work to get the tank farm transferred to the city as early as                                                                   
possible.  Part of it will be used for parking and staging of the                                                               
road operation.  The railroad and the city jointly reserved some                                                                
property that will be worked out as tourism facilities are                                                                      
MR. SHEFFIELD reiterated that the railroad wants the dock.  It has                                                              
the marginal wharf already and the railroad dock where the barges                                                               
come in every 7 days from Prince Rupert and Seattle.  The railroad                                                              
could rehab the DeLong Dock and accommodate fishermen as well as                                                                
day cruise operators.  State Troopers might want to put a boat                                                                  
there at some point, as well as Fish & Game and the Coast Guard.                                                                
The railroad formerly owned the dock, but the Army took it to put                                                               
in the fuel pipeline from Anchorage to Whittier.  The railroad                                                                  
thinks it can work out an agreement with Whittier.                                                                              
Number 442                                                                                                                      
CHAIRMAN WARD asked if the dock were transferred to the City of                                                                 
Whittier, did he think the city would work with the railroad.                                                                   
MR. SHEFFIELD said he didn't know.  It would be in the railroad's                                                               
and the city's best interest to work together if the dock was                                                                   
transferred to the railroad. New businesses and commercial fishing                                                              
boats will come in.  With the road, freight could go out seven days                                                             
a week. The railroad will rehab the railroad dock so that barges                                                                
can pull up alongside it.  Now they go to the marginal wharf. There                                                             
isn't a lot of land available.                                                                                                  
SENATOR LINCOLN agreed there isn't much land and the Alaska                                                                     
Railroad takes up a lot of frontage.  Referring to the unsigned                                                                 
MOU, she asked why Whittier couldn't as easily as the ARR develop                                                               
the dock facility for cruise ships, day cruises, commercial                                                                     
fishing, and fish processing.  She suggested that perhaps it could                                                              
have an agreement with the railroad, and said that parcel would                                                                 
help the economic development process for that small community.                                                                 
MR. SHEFFIELD said it's an intermodal facility important to the                                                                 
railroad's economy.  The railroad went to the bank to borrow funds                                                              
to rehab the dock, which needs expensive repairs.  ARR has the                                                                  
wherewithal while the City may not, at this time.  The railroad is                                                              
trying to get the joint use permit.                                                                                             
SENATOR LINCOLN asked if the railroad has started the dialogue with                                                             
the federal government on the dock transfer.                                                                                    
MR. SHEFFIELD said Congressman Young put in legislation, initially                                                              
unbeknownst to him, to transfer the dock to the Alaska Railroad. He                                                             
received a copy of it only the day before yesterday.  CHAIRMAN WARD                                                             
asked how recently the legislation was introduced, and MR.                                                                      
SHEFFIELD said he didn't know exactly, but within the past 10 days.                                                             
SENATOR PEARCE commented that the railroad already owns every inch                                                              
of deep water where a dock to handle large ships could be built in                                                              
an area that has road access. MR. SHEFFIELD disagreed, saying the                                                               
whole frontage from boat storage to the creek is controlled by the                                                              
city and it has a road. SENATOR PEARCE said it can't be accessed                                                                
because you can't cross railroad property, so it controls access to                                                             
the tidewater.  MR. SHEFFIELD said they gave the road to DOTPF                                                                  
which maintains it.                                                                                                             
MS. WILLIAMS countered the DOTPF has been given those properties to                                                             
extend the road to the north to meet federal highway standards and                                                              
provide a pedestrian path. It's not available, the waters drop off                                                              
extremely deep right there. With airspace withheld, DOTPF would not                                                             
allow roads off this federal highway into the deeper water, even if                                                             
the engineering was there.  The railroad has withheld the rights                                                                
for a spur track to access those lands if the tank farm is removed.                                                             
SENATOR PEARCE said this dock is the only feasible facility for                                                                 
upgrade.  The legislature put a lot of funds into the road to                                                                   
Whittier to open up access to Prince William Sound, and it doesn't                                                              
make sense to invest in access and then have the railroad tie up                                                                
all the water access in Whittier.  She said she didn't hear                                                                     
Governor Sheffield talk about any essential railroad business that                                                              
it can't already do with the land and the dock it presently owns.                                                               
She doesn't support railroad ownership of the last open piece of                                                                
land.  The public has very little control over what the railroad                                                                
MS. WILLIAMS said cruise ships and excursion boats along West Camp                                                              
Road have become an impossibility due to DOTPF federal road                                                                     
standards and airspace requirements, leaving only the head of the                                                               
Number 271                                                                                                                      
SENATOR HALFORD commented that we have two creations operating                                                                  
under charter and law of the State of Alaska who both have                                                                      
legitimate interests and constituencies that the legislature wants                                                              
to serve.  The railroad can afford to give Whittier some land. He                                                               
said he didn't know if he was smart enough to know where that                                                                   
should be or how it should work, but the two entities ought to be                                                               
able to figure it out.                                                                                                          
MS. WILLIAMS pointed out triangular lands on long-term lease with                                                               
a fee split with the railroad,  allowing for development.  That is                                                              
why the city has worked to obtain the joint use permit for the                                                                  
DeLong Dock, and when the draft legislation came from Don Young's                                                               
office, "it was quite a shock."                                                                                                 
SENATOR HALFORD discussed the unsigned MOU that would produce two                                                               
lots, with the railroad as the lead agency, and asked if it was                                                                 
somebody's advocacy point of view and how far from agreement they                                                               
MR. SHEFFIELD replied that he was under the impression that the                                                                 
City Manager had agreed to the MOU and would sell it to her                                                                     
council.  He said that didn't happen because it wasn't presented                                                                
positively to them.                                                                                                             
MS. WILLIAMS said she and the Mayor rejected the MOU at the last                                                                
meeting in February. They felt the compromise was that the railroad                                                             
had the financial means to maintain the physical structure of the                                                               
dock, and the city had adjacent tidelands, so the city would                                                                    
receive the tidelands and the railroad would receive the dock with                                                              
a joint use purpose designation.  The city would lease the                                                                      
tidelands to the owner of the capital improvement.                                                                              
SENATOR HALFORD said unless there is a legislative solution that                                                                
may fly in the face of congressional action, "what we should be                                                                 
doing is locking everybody in a room and saying nobody gets food or                                                             
water until you agree."                                                                                                         
MS. WILLIAMS clarified for Senator Lincoln that the 6.13 acres is                                                               
tidelands and a fraction of filled uplands.                                                                                     
CHAIRMAN WARD asked if the railroad's position is to wait for the                                                               
federal legislation to transfer the dock.                                                                                       
MR. SHEFFIELD said he didn't know if the transfer would happen, but                                                             
he's going  forward with the Corps of Engineers joint use permit so                                                             
the railroad can use the dock this year.  The railroad would still                                                              
do an MOU with the City of Whittier.                                                                                            
SENATOR HALFORD commented that the argument is over the terms of                                                                
the MOU.                                                                                                                        
MS. WILLIAMS said the intent of the federal legislation is total                                                                
ownership of the tidelands, filled tidelands and dock structure                                                                 
itself. Consequently, the city has brought this request for amended                                                             
language to the statute.  It should be an open competitive process                                                              
for assets, and the city has contractors who could operate the                                                                  
SENATOR LINCOLN said in Galena, Ft. Yukon and Ft. Greely the                                                                    
Department of Defense works with the community to surplus its                                                                   
properties.  She was puzzled about where the federal legislation                                                                
came from.                                                                                                                      
TAPE 99-11, SIDE A                                                                                                              
Number 003                                                                                                                      
MR. SHEFFIELD replied his land person has worked for six months                                                                 
with the Corps over the temporary use permit. He was unaware that                                                               
the city asked DOD for the dock transfer.                                                                                       
CHAIRMAN WARD asked for discussion on SB 160.                                                                                   
SENATOR HALFORD said he's reluctant to either amend it or move it.                                                              
He'd like to see the city and the railroad "get together and make                                                               
a deal."                                                                                                                        
CHAIRMAN WARD said the railroad opposes SB 160.                                                                                 
SENATOR LINCOLN said the effective date should be June 1, 2000 to                                                               
exempt the affected communities, not January 1, 2000, to avoid a                                                                
double surcharge when the tunnel opens.  She would want to amend                                                                
the bill.                                                                                                                       
SENATOR HALFORD suggested that amendment, and amending the                                                                      
surcharge to $5 not to exceed 15% of the ticket price in Finance                                                                
Committee.  He said $5 to run the shuttle to Whittier would be too                                                              
high.  He would be willing to move the bill out if that was the                                                                 
wish of the committee, but he repeated that ultimately he would                                                                 
like to see Whittier and the Alaska Railroad work out who gets what                                                             
part of the dock.                                                                                                               
Number 092                                                                                                                      
SENATOR PEARCE said she didn't disagree but she didn't think there                                                              
should be yet another entity receiving federal property without the                                                             
legislature knowing about it, because it creates a long-term                                                                    
liability and it could also create an anti-competitive situation.                                                               
She wouldn't have a problem with the railroad wanting land for                                                                  
essential railroad services, but its lobbyist in D.C. dropped                                                                   
something in a bill that the legislature wouldn't have known about                                                              
without the vigilance of the City of Whittier.  SENATOR PEARCE said                                                             
she is tired of the largesse of the congressional delegation who                                                                
don't plan in conjunction with the state legislature, which now has                                                             
a billion dollar fiscal gap.                                                                                                    
SENATOR PEARCE moved her Amendment D1. The text follows.                                                                        
Page 1, line 1, following "Act":                                                                                                
     Insert "relating to acquisition of federal land or federal                                                                 
property by the Alaska Railroad Corporation;"                                                                                   
Page 1, following line 3:                                                                                                       
     Insert new bill sections to read:                                                                                          
"*Section. 1.  AS 42.40.285 is amended to read:                                                                                 
            Sec. 42.40.285.  Legislative approval required.  Unless                                                             
the legislature approves the action by law, the corporation may not                                                             
                  (1)  exchange, donate, sell, or otherwise convey                                                              
its entire interest in land;                                                                                                    
                 (2)  issue bonds;                                                                                              
                 (3)  extend railroad lines; this paragraph does                                                                
not apply to a spur, industrial, team, switching, or side track;                                                                
                 (4)  lease land for a period in excess of 35 years                                                             
unless the corporation reserves the right to terminate the lease if                                                             
the land is needed for railroad purposes;                                                                                       
                 (5) apply for or accept a grant of federal land or                                                             
federal property within a municipality; before approving an action                                                              
under this paragraph, the legislature must determine that the                                                                   
federal land or federal property is required for essential railroad                                                             
*Sec. 2. AS 42.40.410 is amended to read:                                                                                       
          Sec.42.40.410. Federal land.  Except as provided in                                                                   
AS 42.40.285(5), the [THE] corporation may submit applications on                                                               
its own behalf as an instrumentality of the state for acquisition                                                               
of federal land available under federal law that will enhance the                                                               
essential railroad operations of the corporation if it is available                                                             
under a federal law other than the Alaska Statehood Act of 1958                                                                 
(P.L. 85 - 508, 72 Stat. 339), as amended.  The corporation may                                                                 
receive in its own name conveyances of all interest in federal                                                                  
Page 1, line 4:                                                                                                                 
        Delete "*Section 1."                                                                                                    
        Insert "Sec. 3."                                                                                                        
Renumber the following bill section accordingly.                                                                                
Without objection, the amendment was adopted.  CHAIRMAN WARD asked                                                              
the wish of the committee.                                                                                                      
SENATOR PEARCE moved CSSB 160(TRA) out of committee with individual                                                             
recommendations and accompanying fiscal note. Without objection, it                                                             
was so ordered.                                                                                                                 
SENATOR PEARCE asked Mr. Sheffield if Mr. Zane is lobbying for the                                                              
Alaska Railroad in Washington.  He replied that he is.  She asked                                                               
how he could not have known that Mr. Zane had the amendment put in.                                                             
MR. SHEFFIELD said he was out of town for a few days and  didn't                                                                
know when it was drafted or when Congressman Young would introduce                                                              
it. He did know the railroad was going to ask for it. It looked                                                                 
like a long process to get the dock transferred, and it was                                                                     
advanced to the railroad that legislation might be a solution.                                                                  
Number 154                                                                                                                      
MR. SHEFFIELD stated for the benefit of Senator Halford who wasn't                                                              
present earlier in the hearing that SB 160 would be devastating to                                                              
the railroad for the commuter business it has planned for 2002 or                                                               
2003.  He said the head tax makes it non-competitive, and it's                                                                  
discriminatory and unfair.                                                                                                      

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