CS FOR HOUSE BILL NO. 357(FIN) "An Act relating to the sale of land owned by the Alaska Railroad that is not necessary for railroad purposes." REPRESENTATIVE BILL STOLTZ, SPONSOR, explained the reason behind needing the legislation. The bill allows the railroad to sell property to current leaseholders. He referred to written testimony in the members' packets. He stressed that since the bill was brought forth there has been more openness on the railroad's part toward selling of land. The railroad president has indicated a willingness to do business. The lease holding proceeds would be replaced the earnings of any land that may be sold. 10:38:05 AM Representative Stoltz spoke of respect for the railroad. He suggested that the state needs a better relationship with the railroad. He concluded that this legislation is one small piece of that effort. 10:40:01 AM Senator Thomas brought up the definition of "non- essential", noting that about 50 percent of the railroad's income is from leased property. He spoke of issues in his district regarding the release of property. He questioned various examples of what might be considered non-essential applications. Representative Stoltz did not have a definition of essential. He said the relationship is based on good faith and trust. He suggested that the bill opens the door to economic development. He did not want to imply that the 350 lease holders should expect their leases turned into available property. Instead, the legislation should allow the business communities and small communities to have an opportunity to engage in a discussion of lease sales. 10:43:10 AM Co-Chair Hoffman asked if this bill requires the railroad to follow the Executive Budget Act. Representative Stoltz thought that the issue was worthy of future discussion. Senator Olson asked if the sponsor was opposed to an amendment that would include the Executive Budget Act. Representative Stoltz thought debate on issues was good. Co-Chair Stedman commented on the negative process of high jacking bills by one committee over the other. Co-Chair Stoltze added that he respects the committee process. 10:45:13 AM Senator Olson inquired about lack of good faith in past disagreements with the railroad. Representative Stoltz replied that the bill does not address that concern. Senator Olson asked if the sales mentioned in the bill are those that were in previous disputes. Representative Stoltz stated that the bill is advisory and does not intend to involve on-going disputes. 10:47:03 AM Co-Chair Stedman noted a zero fiscal note from the Department of Commerce, Community, and Economic Development and a Letter of Intent. JOHN BINKLEY, CHAIRMAN, ALASKA RAILROAD CORPORATION, explained that the lease of lands carries the railroad through the low financial points. He recalled the history of when the state purchased the railroad from the federal government in 1985, the legislature chose to keep the real estate holdings, about 35,000 acres, to provide income for the people of Alaska. He stressed that the legislation is for the people who own the railroad. He emphasized that the bill allows the railroad to sell land to leaseholders after bringing it before the legislature. He thanked the sponsor for the legislation because it has spotlighted an aspect of the railroad, the leaseholders. 10:51:00 AM Co-Chair Stedman asked if Mr. Binkley supports the bill. Mr. Binkley reported being neutral on the bill. Co-Chair Stedman requested that Mr. Binkley submit any suggested changes to his office. MARK STEARNS, ALASKA WOOD MOLDING, ANCHORAGE (via teleconference), testified in support of the bill. He said he was a leaseholder and he thought the railroad should be able to spend the proceeds of the land sales. He thought the legislation would benefit both the leaseholders and the railroad. 10:53:31 AM PETER MACSEY, STEEL FAB, ANCHORAGE (via teleconference), related the tax structure on his property, lease held land for sixty years. He pointed out that he pays property tax for his leased land, as if he owned it. He listed four bills, HB 171, HB 173, SB 142, and SB 165 that authorize transfer of railroad land. He observed that when it's in public interest, it's no big deal; when it's in private interest, it's a big deal. Co-Chair Stedman stated that a lot of the communities around the state charge property tax for land that is leased. MEAD TREADWELL, ANCHORAGE (via teleconference), as a leaseholder, thanked the sponsor for the legislation. He thought his property was non-essential to the railroad and he expressed appreciation for a process to buy it. He agreed with Mr. Binkley that real estate revenues are important to the railroad. 10:57:14 AM TOM FAVERO, FAIRBANKS (via teleconference), spoke as a leaseholder in support of the bill. JOHN REEVES, FAIRBANKS (via teleconference), spoke in favor of the legislation so that he could own and make improvements to his property. HB 357 was heard and HELD in Committee for further consideration.