SSHB 12 - RAIL/UTILITY EASEMENT TO AK-CANADA BORDER CHAIR MASEK announced the next order of business was Sponsor Substitute for House Bill 12, "An Act relating to an easement for the extension of the Alaska Railroad to the Alaska-Canada border." Number 1300 REPRESENTATIVE JEANETTE JAMES, Alaska State Legislature, read the following sponsor statement into the record: Why is this bill necessary? Many of you were around here when I did this for establishing or authorizing a corridor from Fairbanks to the Seward Peninsula, and at that time we already had an identified corridor between Eielson Air Force Base and the Canadian Border which was deleted in 1995. In 1982, a corridor was delineated by statute connecting Alaska's existing railroad with the Canadian border. In 1994, I sponsored and passed HB 184 authorizing $10,000 for a study determining the cost of acquiring the right-of-way within that corridor. In 1995, the Department of Transportation (DOT) reached a cost estimate of $6,363,000 to acquire the right-of-way. Of the $10,000 appropriated by HB 184 for this study, a total of $7,876 was expended. On May 5, 1996, the 1982 application to the Bureau of Land Management (BLM) was withdrawn by order of DOT due to "lack of interest," in spite of my 1994 legislation which certainly indicated a continuing interest. This was the purpose of my 1994 legislation, to keep that alive, but it didn't work. In 1999, SSHB 12 re-authorizes delineation of the corridor, subject to legislative appropriation. Thus this bill carries no fiscal impact. It merely re-authorizes and updates the 1982 statute. I might insert here that the delineation of the corridor that was done in 1982 was a basic delineation by aircraft identifying a center line from Eielson to the Canadian border. No surveys and no other exercises, except the estimate of how much it would cost to acquire the right-of-way within it, have been done. Both the Canadian and Russian governments, as well as our own, are increasingly interested in a United States-Asia link via rail through Alaska. SSHB 12 allows eventual funding from any source, private or governmental, and I want the authorization on the books now so we aren't scrambling for it when or if project funds become available. Advantages to Alaska are obvious: resource development, tourism, job opportunities for ALL areas of Alaska, with controlled access and without the expensive maintenance problems of other modes of transportation. Number 1445 REPRESENTATIVE JAMES reiterated that she has been a long-standing advocate for rail access as surface transportation to connect our resources in the state of Alaska. She argued that rail access is more environmentally friendly. She added that controlled rail access does not carry with it the problems that highways and roads do, such as the need for emergency services, state troopers and garbage pick up. REPRESENTATIVE JAMES pointed out that she has removed the "Eielson Air Force Base to the Canadian border" inference in this bill, because it is her belief that the corridor should be in the best route available. She reported on meeting in Anchorage with interested individuals from the Yukon Territory, and they agreed to meet again this spring in Whitehorse. They defined some of the economic benefits to include: entering into lease agreements with coal fields, increased tourism, and tapping into the approximately 2500 tankers per year that Mapco alone sends into the Yukon Territory. Number 1575 REPRESENTATIVE JAMES added that there may be some federal funding available if public support was raised; however, there is a current zero fiscal note. She clarified that the additions to the zero fiscal note estimate what the cost would be to actually delineate this corridor, and any appropriation for that figure would have to be set in a separate bill or through the budget process. She reiterated that SSHB 12 does not ask for this money, but simply asks that the bill be on the record. She believes that a long-term fiscal note of the implications of this rail access would be very positive for the state of Alaska. Number 1641 REPRESENTATIVE COWDERY asked who the primary land owners would be for such a corridor. REPRESENTATIVE JAMES explained that would be determined once the location of the route was established; however, she would assume that there would be a mix of state land, Native-owned land, BLM land, and a small amount of privately-owned land. She anticipates negotiations of land trades for those who may not want to sell outright. REPRESENTATIVE COWDERY inquired as to the width of the corridor. REPRESENTATIVE JAMES clarified that the bill provides for 500 feet of a right-of-way transportation corridor, and the railway corridor would be within that 500 feet. The old bill, she stipulated, had a right-of-way of 300 feet. REPRESENTATIVE COWDERY related that his experience in the construction field has led him to believe certain areas containing steep hills might require additional right-of-way width; however, he emphasized that special construction easements could be obtained. REPRESENTATIVE JAMES added that identification of material sites would also be asked for along the way. Number 1760 REPRESENTATIVE COWDERY asked if the 1995 figure of $6,363,000 was determined by a DOT/PF estimate. REPRESENTATIVE JAMES confirmed that, and further explained that the figure was reached by using the value of the existing ownership within the identified corridor. CHAIR MASEK wondered about the $3.2 million figure mentioned as a 1982 estimate. She inquired as to whether or not that figure would be greatly increased now that it is 1999. REPRESENTATIVE JAMES examined the various costs mentioned throughout this process. One of the costs, she explained, was to identify the corridor. After that time, the ownership value of the land needs to be determined, which would require additional survey costs. She emphasized, however, that the actual distance in Alaska is relatively short compared to the distance required from the Canadian border to connect with British Columbia (BC) Railway. In 1982, BC Railway began the process by laying rail towards Alaska. It would need to be determined, she added, if the old plans and existing rail can still be used. This can be done at a later date, however, when the state legislature is ready to appropriate either state, private, federal or international funds. Number 1880 REPRESENTATIVE HUDSON questioned whether or not the sponsor substitute for HB 12 was ever officially adopted. REPRESENTATIVE JAMES clarified that the sponsor substitute had been read across and was the bill before the committee. Number 1905 REPRESENTATIVE ANDREW HALCRO asked, "With all the federal dollars that now seem to be coming into the state -- I know that the railroad just received $28 million for an airport project they are aiming to do -- what is the likelihood of this coming to fruition in the next ten years?" REPRESENTATIVE JAMES informed the committee that she had asked United States Senator Ted Stevens that same question "a couple of months ago," and he indicated that public support would be a key factor. She noted that there is more interest in this now, especially in the rural communities, than when she first began talking about this project. Number 1970 REPRESENTATIVE KEMPLEN inquired if the legislature has ever passed a resolution asking the United States Congress to provide funding for expansion of the Alaska Railroad eastward to Canada as a matter of national interest. REPRESENTATIVE JAMES replied that this had not been the case since the 1982 legislation; however, she could not comment on dates previous to that time. She reiterated that there are a lot more supporters on this issue now, and it was her belief that such a resolution might be a worthwhile effort within the next two years. REPRESENTATIVE KEMPLEN commented that a resolution asking Congress to appropriate money for the right-of-way and for construction would be a good way of showing public support for this initiative. REPRESENTATIVE JAMES emphasized that this would all have to be done in conjunction with the Canadians. Drafting the language of such a resolution might be premature until there is an enthusiastic partnership on both sides of the border; however, the committee was again reminded of the April meeting in Whitehorse. REPRESENTATIVE KEMPLEN called attention to the fact that Congress did appropriate funding for the "Alcan Highway"; consequently, there is precedent for that type of initiative. REPRESENTATIVE JAMES agreed that the such a partnership would be possible. Number 2110 RUSSELL BOWDRE testified via teleconference from Delta Junction. He said, "I would just like to state for the record that I do not know anybody in our area who would be opposed to this railroad. If there is anyone, I have not talked to them or heard anything from them. I think you would receive unanimous support all the way from Tok to Fairbanks and in this area. Anything that would could do to help you and encourage this, I would like very much for you to let us know. We would be glad to volunteer our time and effort to give you a hand." Number 2165 LAUREL BARGER-SHEEN, Department of Economic Development, City of Delta Junction, testified via teleconference in favor of SSHB 12. She read the following written testimony into the record: For those of you considering this bill, please allow this letter/statement to represent the interest and desire of the residents of the Delta region to encourage the expansion of the Alaska Railroad in an effort to expand the opportunities for Alaskans and further ratify NAFTA [North American Free Trade Agreement]. This action would open Alaska to unprecedented growth and bring us closer to our member nation. It would allow citizens of the Lower 48 to enjoy a part of their country they may have never seen before due to the increased accessibility a rail line would offer. Our community is at the juncture of two of Alaska's major highways (the "Alcan" and the Richardson) and the base of the Alaska Range. The natural beauty and vastness of the area is unique; one we would like to share with other Alaskans and visitors. The railroad offers an environmentally friendly alternative to the growth Alaska will experience. It promotes responsible development of the area and has the potential to impact every aspect of life in Alaska positively. Successful development of Alaska's resources can only be achieved with an investment in her infrastructure, this type of infrastructure. This rail corridor is needed to open a "gateway to the Interior" to support the new "gold rush" and other natural resource industries, as well as providing opportunities for our Canadian neighbors. Give Alaskans the opportunity to compete in a world market. Help us build this line. MS. BARGER-SHEEN went on to ask a question regarding the preliminary site survey conducted in 1982. She wondered if the committee had considered this survey in their deliberations. Number 2248 REPRESENTATIVE JAMES agreed that there would be some benefit to having that survey; however, there are potential changes in land or ownership that would have be taken into consideration. This survey can be used, she stated, but may not represent the only way to go. MS. BARGER-SHEEN informed the committee of their attempts to go forward with a private partnership through Mr. Bill Sheffield at the Alaska Railroad Corporation. She volunteered any information she might have or dedicating any time needed to get this project moved forward. She recommended that Mr. Sheffield be invited to the Whitehorse meeting. REPRESENTATIVE JAMES assured her that Mr. Sheffield is on the list to be invited. DENNIS POSHARD, Legislative Liaison/Special Assistant, Office of the Commissioner, Department of Transportation and Public Facilities (DOT/PF), testified regarding the fiscal note for SSHB 12. The bill carries a zero fiscal note, he explained, because it is subject to appropriation. It was the intent to give a good cost estimate what SSHB 12 would ask the DOT/PF to do in order to delineate a corridor; however, the estimates are based on the 1982 study with no major route changes. There is a high probability, he noted, that there will be some necessary route changes due to land status modifications. Number 2388 FORMER GOVERNOR BILL SHEFFIELD, President and CEO, Alaska Railroad Corporation, testified via teleconference from Anchorage on SSHB 12. He emphasized that, even though we are at the end of the twentieth century, Alaska is still a growing frontier that requires foresight of the "big picture" to set the stage for long-term growth. It is his opinion that this bill is a good example of that, and that now is the time to "draw the straightest and best line to the Canadian border" before there are a lot of impediments. Knowing the right-of-way is in place, he added, might spur development by people who also want to be a part of that growth. In addition, potential missile defense systems sites, as well as current and future mine locations, would also benefit from this railroad. Tape 99-04, Side B Number 0028 GOVERNOR SHEFFIELD referred to a map showing the existing rail line of British Columbia (BC) Railway "going up as far as Chipmunk, which is above Fort St. James, and about halfway to Dease Lake." He estimated that it was approximately 400 miles from Fairbanks to Whitehorse, and a little less than that to the Canadian border. The viability would be enhanced, he added, if the Canadians extended their line at the same time. He agreed that the project would cost a lot of money, but reiterated that this would be a concern for a future day. He emphasized that the important thing would be to get the right-of-way set out at this time. He updated the committee on current Alaska Railroad Corporation right-of-way projects in other parts of the state that demonstrated their resolve to look toward the future. GOVERNOR SHEFFIELD disclosed that the British Columbia Railway has lost about 40 percent of its coal tonnage in 1998 for export to Japan, and their contract comes up for contract re-negotiation in April of 1999. The Japanese, he reported, want to lower price concessions for the Canadians, and any future coal contract for Alaska would probably be at a much lower price as well. Number 0162 GOVERNOR SHEFFIELD indicated that rail line construction is estimated to be about $2.75 million per mile. By multiplying this by 500 miles, a fairly good total estimate could be made. However, he continued, the first step would be to outline the route, and work with British Columbia Railway and the governments of British Columbia and the Yukon to acquire the right-of-way. If cooperation is achieved and it makes sense to build it, the funding could be found at that time. Number 0209 CHAIR MASEK asked if the House Transportation Standing Committee could be provided with a copy of the map that was previously referred to. JAMES B. BLASINGAME, Vice President of Corporate Affairs, Alaska Railroad Corporation, previously introduced by Governor Sheffield via teleconference, responded that the map was an older map they received from the British Columbia Railway System, and that he would be happy to forward a copy to the committee. GOVERNOR SHEFFIELD added that there is money in the federal budget to do a transportation study administered by DOT/PF from Fairbanks to the Arctic, as well as to look at a rail line from Chitina to Cordova, and a rail line into McKinley. REPRESENTATIVE HALCRO noted that the original estimate for the cost of right-of-way in 1982 was $3.2 million, and 13 years later it had doubled to $6.3 million. He expressed concern that the figure might be well over $10 million in the next five or six years. He asked if any effort was being made to apply federal funds to procure right-of-way in the next year or two. GOVERNOR SHEFFIELD indicated that the money received has to be applied to the specific items it was appropriated for; however, the state of Alaska could apply specifically for additional funding through the DOT/PF. Number 0446 REPRESENTATIVE JERRY SANDERS wondered if the 500 miles previously quoted as costing $2.75 million per mile were all located in Alaska. GOVERNOR SHEFFIELD estimated that approximately one-third to a little less than half of those miles would be in the Yukon. CHAIR MASEK thanked Governor Sheffield, and returned to Mr. Poshard from the DOT/PF to continue his testimony. Number 0500 REPRESENTATIVE HUDSON asked Mr. Poshard if the DOT/PF's Division of Statewide Planning was currently working on advancing these kind of long-range plans. MR. POSHARD assured the committee that the DOT/PF is currently working on long-range plans, but not specifically related to the railroad. They have mainly undertaken regional plans in six regions throughout the state which look at which form(s) of transportation would be the most effective in each region. Number 0600 REPRESENTATIVE COWDERY wondered if the railroad has acquired any additional right-of-ways since 1983. MR. POSHARD referred the question to the Alaska Railroad Corporation. ERNIE PIPER, Alaska Railroad Corporation, provided testimony on behalf of Governor Sheffield and Mr. Blasingame, who were unable to remain on teleconference. He stated that the lines being worked on currently will require some right-of-way changes, but there has not been any new right-of-way acquired. REPRESENTATIVE COWDERY wondered if any expansion was being planned to Western Alaska. MR. PIPER said no. He indicated that United States Senator Frank Murkowski was very interested in that; however, such a project would require a lot of movement across federal lands. REPRESENTATIVE COWDERY noted that the Wishbone Hill area in the Matanuska Valley has the potential for some high-grade coal. He stated that there used to be a corridor in that area, but he believed some of the right-of-way was currently in the Matanuska River. He asked if there were any plans to develop it and how wide it is. MR. PIPER stated that the right-of-way was still there, and assured Representative Cowdery that he would inform him of the width of the corridor and any further information regarding it. Number 0755 CHAIR MASEK questioned why the DOT/PF closed their application in 1996. MR. POSHARD reported that the DOT/PF received a phone call from the BLM asking if they were serious about acquiring the land. Since there was no appropriation on the books from either the federal or the state government, the staff made the decision to allow BLM to take those applications off the table and close the files. REPRESENTATIVE HALCRO pointed out that this type of an easement would fall into a long-range transportation plan. MR. POSHARD agreed that this is the type of thing the DOT/PF will be looking at; however, he emphasized that they never owned or acquired any of that property at that time. It was his belief that the individual who made the decision to close the files felt that it was unlikely the railroad was to be constructed any time soon. He added that, given the circumstances, the same decision might not have been made today. Number 0885 MR. BOWDRE from Delta Junction asked a follow-up question. He wondered how much research had been done in talking to the different entities that would benefit from this railroad to see what their potential use would be. He cited various examples of organizations that he felt should be contacted. REPRESENTATIVE JAMES replied that there were no actual paper tallies; however, they are actively involved in the talking stages. She reported that she had spoken to the transportation committee chair at the Fairbanks Chamber of Commerce that morning, and reminded everyone that the April meeting in Whitehorse would include many of these individuals. The Delta Junction and Tok Chambers of Commerce, she added, would also be invited to the Whitehorse meeting. Number 1024 CHAIR MASEK asked for further testimony. Hearing none, she asked if there were any motions from the committee to entertain. REPRESENTATIVE HALCRO made a motion to move SSHB 12 out of committee with individual recommendations and the attached zero fiscal note(s), and asked unanimous consent. There being no objection, SSHB 12 has been moved from House Transportation Standing Committee.