HB 216-TRANSFER OF RAILROAD LAND TO WHITTIER  8:11:43 AM CO-CHAIR MEARS announced that the final order of business would be, "An Act approving the transfer of land owned by the Alaska Railroad Corporation to the City of Whittier; and providing for an effective date." 8:12:09 AM REPRESENTATIVE HOLLAND, as prime sponsor, presented HB 216. He paraphrased the sponsor statement [included in the committee file], which read as follows [original punctuation provided]: HB 216 provides the limited and specific legislative authorization required under AS 42.40.285 for the Alaska Railroad Corporation to convey five identified parcels of railroad land within the City of Whittier to the City, subject to fair market value and existing rights. In November of 2025, the City Council voted to accept the Railroad's proposal to sell three parcels of land, with the option to later acquire two additional parcels. In December, it authorized the city manager to negotiate a final purchase agreement. That same month, the Railroad submitted a conditional letter of intent conveying its agreement with the terms of the transfer. However, current statute prohibits the Railroad from selling or otherwise conveying its interest in land without express approval from the legislature. This bill satisfies that statutory requirement and allows the Railroad and the City to proceed with a negotiated transfer to be approved through their respective governing processes. The parcel descriptions are provided for authorization purposes and allow for reasonable modification to accommodate necessary surveying and platting prior to final conveyance. HB 216 does not establish the terms of sale, require a transfer, or direct how the land must be used. It simply removes the statutory barrier to allow the parties to complete a mutually agreedupon transaction. 8:14:18 AM AYDEN NICHOL, Staff, Representative Ky Holland, Alaska State Legislature, on behalf of Representative Holland, prime sponsor, offered a PowerPoint presentation on HB 216 [included in the committee file], beginning on slide 2, "History: Whittier and the Alaska Railroad," which read as follows [original punctuation provided]: Whittier (pop. 272) connects Anchorage with Prince William Sound shipping and ferry routes, and is a popular cruise destination For most of its history, the Alaska Railroad was the only land route connecting Whittier with the rest of the state, via the the Anton Anderson Tunnel The Alaska Railroad has long benefitted from its significant land holdings within the city limits, which constitute 85% of Whittier's developable land In 1998, the Railroad agreed to lease 250 acres to the City for development MR. NICHOLE continued to slide 3, "From a lease to City ownership," which read as follows [original punctuation provided]: The status of the land under the City's lease discourages investment and prevents the City from bringing in tax revenue from businesses situated on the property. Early in 2024, negotiations began for the transfer of ownership of five parcels of land from the Railroad to the City. In December of 2025, the City Council authorized the City Manager to negotiate a final agreement for three parcels, and the Railroad submitted a conditional letter of intent to proceed with the sale. Legislative approval is a critical element required to allow this deal to proceed: under AS 42.40.285, the Railroad is prohibited from relinquishing land without the authorization of the legislature. 8:16:06 AM MR. NICHOLE continued to slide 4, which showed a map of the Alaska Railroad Corporation (ARRC) Area of Interest (AOI). Slides 5-6 offered a sectional analysis of the bill, which read as follows [original punctuation provided]: Section 1 Authorizes the Railroad to transfer the five parcels to the city for fair market value per AS 42.40.285 Describes the five parcels authorized for transfer Recognizes that further platting and surveying is necessary to complete the exchange, subject to agreement by the parties 5 Ensures that this section meets the requirements for dispensation of land under statutes governing the Railroad Section 2 Establishes an immediate effective date 8:18:08 AM CO-CHAIR MEARS announced that the committee would hear invited testimony on HB 216. 8:18:24 AM MEGHAN CLEMENS, Director of External Affairs, Alaska Railroad Corporation (ARRC), gave invited testimony in support of HB 216. She noted that selling land is not something that the railroad takes lightly. The process requires both legislative approval and approval by the ARRC Board of Directors with the board obligated to find that the land is not necessary for railroad purposes and that the sale would serve the best interest of the state. She explained that ARRC and the City of Whittier have engaged in ongoing discussions over the past two years that culminated in a proposal at the board's direction to sell three parcels of land in the city's core downtown district at fair market value, as required by statute. Following the proposal, ARRC received a conditional letter of intent from the city and last week, the board passed a resolution approving the sales of AOI 1, 2, and 3. She noted that completing the sale of parcels 1-3 would not preclude a potential future sale of parcels 4 and 5. She added that legislative approval of this sale would expedite the process in the future. 8:21:12 AM REPRESENTATIVE PRAX asked whether ARRC has a plan to provide services in Whittier. MS. CLEMENS reminded the committee that to sell the land, it must not be necessary for railroad purposes. The parcels in question have been under joint master agreement with the City of Whittier for a number of years and already been commercially developed for non-railroad purposes under a lease share agreement with the city. Given this situation, parcels 1-3 are not deemed necessary for railroad operational purposes, and it was determined that selling these parcels would be mutually beneficial. REPRESENTATIVE PRAX asked whether an environmental assessment has been conducted, or whether one is needed. MS. CLEMENS said HB 216 strictly authorizes the sale of the land and certainly much more is involved in completing the transaction. The conditional letter of intent provided by the city outlines the full scope of the purchase and sale agreement, as well as the required due diligence. REPRESENTATIVE PRAX opined that the legislature should move this bill forward. 8:25:19 AM CO-CHAIR MEARS asked whether there are any contingencies associated with the sale. MS. CLEMENS answered no, it would be a complete sale of the land to the City of Whittier. 8:26:12 AM JACKIE WILDE, City Manager, City of Whittier, gave invited testimony in support of HB 216. She explained that this sale is almost 40 years in the making because in 1998, the city entered into a master lease with ARRC, which allowed the city to operate the land while paying 40 percent of gross revenues. She noted the need for economic development with the new cruise ship terminal being built and the need for more housing. She added that the city owns very little land, including the Buckner building, which is an abandoned U.S. military building on a large, contaminated site, and the "tank farm" at the head of the bay. She said the bill would be a large first step towards working together for decades to come. 8:29:57 AM REPRESENTATIVE HALL asked whether there are particular economic development projects that the city hopes to pursue. MS. WILDE said the City of Whittier has already drafted a waterfront economic development plan and is looking to develop a master transportation plan with Department of Transportation & Public Facilities (DOT&PF). She reported that Whittier receives over 7,000 visitors per year, which drives the need to build additional storefronts, housing, and economic development. REPRESENTATIVE HALL asked about the timeline for these plans. MS. WILDE said the city has a 30-year capital improvement plan to use this land in the best way possible for the city, state, and railroad. REPRESENTATIVE HALL asked about barriers to these development plans. MS. WILDE said the biggest challenge is that the city doesn't own the land, which makes it hard to apply for federal funding for community block grants. The master lease, she said, while well intended was not a great idea and illustrates the importance of terminating the lease and working with the railroad on this deal. 8:33:12 AM CO-CHAIR MEARS announced that the bill would be held over.