ALASKA STATE LEGISLATURE                                                                                  
            HOUSE TRANSPORTATION STANDING COMMITTEE                                                                           
                         March 16, 2010                                                                                         
                           1:05 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Peggy Wilson, Chair                                                                                              
Representative Craig Johnson, Vice Chair                                                                                        
Representative Kyle Johansen                                                                                                    
Representative Cathy Engstrom Munoz                                                                                             
Representative Tammie Wilson                                                                                                    
Representative Max Gruenberg                                                                                                    
Representative Pete Petersen                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 357                                                                                                              
"An Act relating to the sale of land owned by the Alaska                                                                        
Railroad that is not needed for railroad purposes."                                                                             
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 267                                                                                                              
"An Act relating to travel by snow machine within five miles of                                                                 
the right-of-way of the James Dalton Highway."                                                                                  
                                                                                                                                
     - HEARD & HELD; ASSIGNED TO SUBCOMMITTEE                                                                                   
                                                                                                                                
HOUSE BILL NO. 257                                                                                                              
"An Act relating to prohibiting the use of cellular telephones                                                                  
when driving a motor vehicle; and providing for an effective                                                                    
date."                                                                                                                          
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 357                                                                                                                  
SHORT TITLE: AK RAILROAD CORP. LAND SALES                                                                                       
SPONSOR(s): REPRESENTATIVE(s) STOLTZE                                                                                           
                                                                                                                                
02/19/10       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/19/10       (H)       TRA                                                                                                    
03/16/10       (H)       TRA AT 1:00 PM CAPITOL 17                                                                              
                                                                                                                                
BILL: HB 267                                                                                                                  
SHORT TITLE: SNOW MACHINE USE IN DALTON HWY CORRIDOR                                                                            
SPONSOR(s): REPRESENTATIVE(s) KELLY, NEUMAN                                                                                     
                                                                                                                                
01/08/10       (H)       PREFILE RELEASED 1/8/10                                                                                
01/19/10       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/19/10       (H)       TRA, RES                                                                                               
03/11/10       (H)       TRA AT 1:00 PM CAPITOL 17                                                                              
03/11/10       (H)       Heard & Held                                                                                           
03/11/10       (H)       MINUTE(TRA)                                                                                            
03/16/10       (H)       TRA AT 1:00 PM CAPITOL 17                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
REPRESENTATIVE BILL STOLTZE                                                                                                     
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified as prime sponsor of HB 357.                                                                    
                                                                                                                                
JIM KUBITZ, Vice President                                                                                                      
Real Estate and Facilities                                                                                                      
Alaska Railroad Corporation (ARRC)                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the discussion of HB 357.                                                               
                                                                                                                                
HANK BARTOS, Representative                                                                                                     
Rail Safety and Development Group (RSDG)                                                                                        
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the discussion of HB 357.                                                               
                                                                                                                                
DON LOWELL President                                                                                                            
Alaska Transportation Consultants                                                                                               
Rail Safety and Development Group (RSDG)                                                                                        
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the discussion of HB 357.                                                               
                                                                                                                                
BONNIE WOLDSTAD                                                                                                                 
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the discussion of HB 357.                                                               
                                                                                                                                
DON CALLAHAN, Public Relations Chair, Ice Alaska;                                                                               
Member, Rail Safety and Development Group (RSDG)                                                                                
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the discussion of HB 357.                                                               
                                                                                                                                
RICHARD FAULKNER, President, Steel Fabrication                                                                                  
President, Alaska Railroad Leaseholders Association                                                                             
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 357.                                                                          
                                                                                                                                
PAT GAMBLE, President and CEO                                                                                                   
Alaska Railroad Corporation (ARRC)                                                                                              
Anchorage, Alaska.                                                                                                              
POSITION STATEMENT:  Testified during the discussion of HB 357.                                                               
                                                                                                                                
MARY SIROKY, Legislative Liaison                                                                                                
Office of the Commissioner                                                                                                      
Department of Transportation & Public Facilities (DOT&PF)                                                                       
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified and answered questions during the                                                              
discussion of HB 267.                                                                                                           
                                                                                                                                
BRIAN PERSON, Ph.D., Wildlife Biologist                                                                                         
Department of Wildlife Management                                                                                               
North Slope Borough                                                                                                             
Barrow, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in opposition to HB 267.                                                                       
                                                                                                                                
LISA HUGHES, Legislative Liaison                                                                                                
Northern Alaska Environmental Center                                                                                            
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition to HB 267.                                                                       
                                                                                                                                
REBECCA BENSON                                                                                                                  
Tok, Alaska                                                                                                                     
POSITION STATEMENT:  Testified in opposition to HB 267.                                                                       
                                                                                                                                
ROBERT CAYWOOD                                                                                                                  
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT:  Testified during the discussion of HB 267.                                                               
                                                                                                                                
STEVE FLORY                                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the discussion of HB 267.                                                               
                                                                                                                                
WILLIAM LANG                                                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition to HB 267.                                                                       
                                                                                                                                
P.J. SIMON                                                                                                                      
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition of 267.                                                                          
                                                                                                                                
JUNE RECOFF                                                                                                                     
Wiseman, Alaska                                                                                                                 
POSITION STATEMENT:  Testified in opposition to HB 267.                                                                       
                                                                                                                                
DERRICK MILLER, Staff                                                                                                           
Representative Mike Kelly                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified on behalf of the joint prime                                                                   
sponsor during the discussion of HB 267.                                                                                        
                                                                                                                                
MICHELLE DEVAUL                                                                                                                 
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the discussion of HB 267.                                                               
                                                                                                                                
KENNETH BARBER                                                                                                                  
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT:  Testified in support of HB 267.                                                                          
                                                                                                                                
CODY STRATHE                                                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition to HB 267.                                                                       
                                                                                                                                
CHAD DIESINGER, Manager                                                                                                         
Toolik Field State Institute of Arctic Biology                                                                                  
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition to HB 267.                                                                       
                                                                                                                                
BARRY WHITEHILL                                                                                                                 
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition to HB 267.                                                                       
                                                                                                                                
TAQUILIK HEPA, Director                                                                                                         
Department of Wildlife Management                                                                                               
North Slope Borough (NSB)                                                                                                       
Barrow, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the discussion of HB 267.                                                               
                                                                                                                                
DIRK NICKISH, Owner/Operator                                                                                                    
Coyote Air                                                                                                                      
Coldfoot, Alaska                                                                                                                
POSITION STATEMENT:  Testified in opposition to HB 267.                                                                       
                                                                                                                                
WADE WILLIS                                                                                                                     
POSITION STATEMENT:  Testified during the discussion of HB 267.                                                               
                                                                                                                                
BERNIE HICKER, Wiseman, Alaska                                                                                                  
POSITION STATEMENT:  Testified in opposition to HB 267.                                                                       
                                                                                                                                
WYN MENEFEE, Chief of Operations                                                                                                
Division of Mining, Land, and Water                                                                                             
Department of Natural Resources (DNR)                                                                                           
Anchorage, Alaska-                                                                                                              
POSITION STATEMENT:  Testified during the discussion of HB 267.                                                               
                                                                                                                                
JOY WIEBE                                                                                                                       
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition to HB 267.                                                                       
                                                                                                                                
DANE CROWLEY, Executive Director                                                                                                
Sportsmen for Fish and Wildlife                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the discussion of HB 267.                                                               
                                                                                                                                
CHARLES DERRICK                                                                                                                 
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 267.                                                                          
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:05:43 PM                                                                                                                    
                                                                                                                                
CHAIR  PEGGY  WILSON  called the  House  Transportation  Standing                                                             
Committee  meeting to  order  at 1:05  p.m.   Representatives  P.                                                               
Wilson,  Johnson, Petersen,  and T.  Wilson were  present at  the                                                               
call to  order.  Representatives  Johansen, Gruenberg,  and Munoz                                                               
arrived as the meeting was in progress.                                                                                         
                                                                                                                                
1:06:42 PM                                                                                                                    
                                                                                                                                
              HB 357-AK RAILROAD CORP. LAND SALES                                                                           
                                                                                                                                
CHAIR P. WILSON announced that  the first order of business would                                                               
be  HOUSE BILL  NO. 357,  "An Act  relating to  the sale  of land                                                               
owned  by the  Alaska Railroad  that is  not needed  for railroad                                                               
purposes."                                                                                                                      
                                                                                                                                
1:07:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BILL STOLTZE,  Alaska State  Legislature, related                                                               
that   many   private   businesses  are   frustrated   with   the                                                               
unpredictability  of  the  Alaska Railroad  Corporation's  (ARRC)                                                               
lease  terms   and  the   corporation's  unwillingness   to  make                                                               
investment improvements  to their property.   He said  he thought                                                               
that the  ARRC may need  "a little  bit of help  interfacing with                                                               
the   private   sector   on  these   lease   holdings."      Some                                                               
municipalities  have expressed  interest in  the bill  since they                                                               
embrace  private  sector  activity.    He  paraphrased  from  his                                                               
sponsor statement,  which read  as follows  [original punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
     To  spur  economic  development throughout  the  state,                                                                    
     House Bill  357 adds  a fourth  clause to  the existing                                                                    
     language governing how  the Alaska Railroad Corporation                                                                    
     may dispose  of land.  House Bill  357 will  enable the                                                                    
     railroad to sell land that  is not needed for essential                                                                    
     railroad  purposes.  This bill  does  not  ask for  any                                                                    
     irresponsible  disposal of  land, as  the sale  must be                                                                    
     initiated by the board of  directors on two conditions.                                                                    
     The first condition  is that the land  is not essential                                                                    
     to  railroad operations,  and the  second condition  is                                                                    
     that the sale  is in the best interest of  the state of                                                                    
     Alaska.                                                                                                                    
                                                                                                                                
     As  support has  shown, current  leaseholders are  very                                                                    
     unhappy  with the  inability to  purchase their  leased                                                                    
     properties from  the railroad.  In general  real estate                                                                    
     dealings,  private  purchases   are  made  in  mutually                                                                    
     beneficial  sales.  House  Bill  357  encourages  these                                                                    
     sales after determination by the  board of directors of                                                                    
     the  railroad  looks  at each  sale  with  the  overall                                                                    
     benefit to the  state of Alaska as the  key driver. Not                                                                    
     only  will   the  private  sector  benefit   from  this                                                                    
     addition  to state  law, the  railroad  will also  have                                                                    
     increased  ability to  make  decisions regarding  their                                                                    
     overall real estate portfolio.                                                                                             
                                                                                                                                
     The sale  and relationship of private  and public lands                                                                    
     are  vital  to the  economic  growth  of the  state  of                                                                    
     Alaska.  I ask  for your  consideration and  support of                                                                    
     House Bill  357 to  promote Alaskan growth  through the                                                                    
     diversification of  land ownership, increasing  the tax                                                                    
     base   of  the   state,  and   encouraging  responsible                                                                    
     development of Alaskan land.                                                                                               
                                                                                                                                
1:10:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STOLTZE  characterized the  bill "as  a permissive                                                               
bill."   The committee  may wish  to make changes  to HB  357, he                                                               
stated.                                                                                                                         
                                                                                                                                
1:11:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN asked whether the  land would be sold and                                                               
if proceeds  would go to the  ARRC for further development  or to                                                               
purchase equipment.                                                                                                             
                                                                                                                                
REPRESENTATIVE STOLTZE offered his intent  for the proceeds to be                                                               
retained by the ARRC for its operations.                                                                                        
                                                                                                                                
1:12:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  referred to page  2, lines 1-7  and asked                                                               
whether this  would require  a competitive bid  process or  if he                                                               
could explain the process.                                                                                                      
                                                                                                                                
REPRESENTATIVE  STOLTZE related  his intent  that the  lessee who                                                               
has an investment would have the first right of refusal.                                                                        
                                                                                                                                
1:13:17 PM                                                                                                                    
                                                                                                                                
CHAIR P. WILSON asked whether the  land is state land and if that                                                               
is allowable.                                                                                                                   
                                                                                                                                
REPRESENTATIVE STOLTZE  responded that if any  restrictions exist                                                               
the  bill drafters  did not  flag the  issue during  the drafting                                                               
process.  He offered that this is his best first effort.                                                                        
                                                                                                                                
1:14:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  P.  WILSON  interpreted  that she  did  not  know                                                               
whether it  is allowable to offer  the first right of  refusal to                                                               
leaseholders of state  land.  She suggested  that question should                                                               
be answered by the Department of Law (DOL).                                                                                     
                                                                                                                                
REPRESENTATIVE STOLTZE said he wished  he knew the inner workings                                                               
of the ARRC.   The ARRC's budget is not  subject to state review.                                                               
He stated  that the  ARRC's executive payroll  is not  aligned to                                                               
the ARRC's economic  growth.  He also related his  desire for the                                                               
ARRC to  run more like a  private business in instances  in which                                                               
it  is involved  in the  private sector.   He  remarked that  the                                                               
breadth of  testimony from local  government and a  consortium of                                                               
business  and industry  have  endorsed this  bill.   However,  he                                                               
maintained  that  he did  not  solicit  the letters  in  members'                                                               
packets.   He offered  that these "folks  were yearning  for some                                                               
type of  bill like  this."   Simply by  holding this  hearing the                                                               
committee has  informed the public  that "the private  sector has                                                               
friends" in Juneau who are responsive, he stated.                                                                               
                                                                                                                                
1:16:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE T.  WILSON asked  whether this bill  would include                                                               
easements crossing private property if  the easement is no longer                                                               
in use by the railroad.                                                                                                         
                                                                                                                                
REPRESENTATIVE STOLTZE said  he did not know but  his staff would                                                               
check into it.   He suggested that  many complicated arrangements                                                               
with the ARRC and ownership issues exist.                                                                                       
                                                                                                                                
1:16:41 PM                                                                                                                    
                                                                                                                                
CHAIR P.  WILSON asked whether  the ARRC is selling  land without                                                               
giving its lessees the right of first refusal.                                                                                  
                                                                                                                                
REPRESENTATIVE  STOLTZE offered  that the  ARRC does  not have  a                                                               
consistent  policy  on  leases  or  sales.    The  ARRC  has  had                                                               
inconsistent  policies with  respect to  leases, he  stated.   He                                                               
recalled  last year,  during  the course  of  working on  another                                                               
bill, that the ARRC negotiated new  leases.  He surmised that the                                                               
ARRC reacts  more like a  political organization than  a business                                                               
organization.  He said, "I don't  know that I could say that they                                                               
have a  consistent lease  policy and  therein lies  a lot  of the                                                               
problems.   I don't think  we would  like to have  our individual                                                               
businesses subject to those vagaries."                                                                                          
                                                                                                                                
1:17:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MUNOZ  asked for  the  number  of leases  on  the                                                               
ARRC's non-essential property.                                                                                                  
                                                                                                                                
REPRESENTATIVE  STOLTZE offered  that  currently  the ARRC  holds                                                               
about 350  leases.   He was  not certain how  many of  the leases                                                               
fell into the category of essential property.                                                                                   
                                                                                                                                
CHAIR P. WILSON asked how the ARRC acquired its land.                                                                           
                                                                                                                                
REPRESENTATIVE STOLTZE  offered that  the ARRC acquired  its land                                                               
in  the mid-1980s  as a  result  of the  federal Alaska  Railroad                                                               
Transfer Act  (ARTA) of  1982 and the  subsequent state  act, the                                                               
Alaska Railroad Act.                                                                                                            
                                                                                                                                
1:19:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STOLTZE,  in  response to  Representative  Munoz,                                                               
responded  that  under  the state's  Executive  Budget  Act,  the                                                               
legislature does not have access  to ARRC budget information.  He                                                               
maintained that  numerous members  of the  public can  testify to                                                               
explain  their relationships  and  frustrations  with the  Alaska                                                               
Railroad Corporation.                                                                                                           
                                                                                                                                
1:21:30 PM                                                                                                                    
                                                                                                                                
JIM KUBITZ,  Vice President, Real  Estate and  Facilities, Alaska                                                               
Railroad Corporation  (ARRC), stated that  he has worked  for the                                                               
ARRC  for  twelve  years.     He  provided  a  little  background                                                               
information.  In 1985, the  state purchased the railroad from the                                                               
federal government and  received about 36,000 acres of  land.  He                                                               
described  the land  as about  one-third right-of-way,  where the                                                               
trains  run,  one-third  rail and  operations  yard,    one-third                                                               
"reserve land" or  land that is available to lease.   The ARRC is                                                               
required by  law to  lease its  land for fair  market value.   He                                                               
remarked that  when the  state bought  the railroad,  the federal                                                               
government  was losing  money.    The state  wanted  to give  the                                                               
Alaska Railroad Corporation (ARRC)  an opportunity to succeed and                                                               
live under  its own profits.   Thus, the  land must be  leased at                                                               
fair market value, noting there are a few exceptions.                                                                           
                                                                                                                                
1:23:23 PM                                                                                                                    
                                                                                                                                
MR. KUBITZ explained  that the ARRC does not  always know whether                                                               
it will  need land.  Currently,  projects to expand the  yards in                                                               
Fairbanks, Anchorage, and Whittier  are underway to meet customer                                                               
needs and improve  the dock operations.  Sometimes  the ARRC must                                                               
buy out  tenants to expand its  operations.  He said,  "We do not                                                               
always have a crystal ball  knowing exactly what could be defined                                                               
as essential  railroad land  since it does  move."   For example,                                                               
the Anchorage International Airport  has numerous private tenants                                                               
but does  not sell  its land.   One big  issue that  some tenants                                                               
have had is the requirement that  they must pay property taxes on                                                               
the  leased  land.   In  2004,  the  State Assessor  advised  the                                                               
Municipality of Anchorage  that it must charge  fair market value                                                               
rent for  any leased  land that  is owned  by a  tax-free entity,                                                               
such as  the ARRC.   Thus, for  the first time  in that  area the                                                               
lessees  had to  pay  property tax  for the  land.   The  tenants                                                               
previously  were required  to pay  taxes on  their buildings  and                                                               
improvements,  but the  new requirement  to add  taxes on  leased                                                               
land upset some of the tenants.                                                                                                 
                                                                                                                                
1:25:00 PM                                                                                                                    
                                                                                                                                
CHAIR P. WILSON asked for the duration of the ARRC's leases.                                                                    
                                                                                                                                
MR. KUBITZ  answered that the leases  range from 20 to  40 years.                                                               
Tenants  suddenly had  to pay  property taxes  on leased  land on                                                               
which they had held long-term leases, he stated.                                                                                
                                                                                                                                
REPRESENTATIVE  JOHNSON  asked  who made  the  determination  and                                                               
asked for the statutory background.                                                                                             
                                                                                                                                
MR.   KUBITZ   related  that   the   State   Assessor  made   the                                                               
determination.   He offered to  provide the legal  opinion issued                                                               
by  the Department  of Law  to  the committee.   Ultimately,  the                                                               
state's  Attorney General  required  the lessees  to  pay tax  on                                                               
land.                                                                                                                           
                                                                                                                                
1:25:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MUNOZ asked whether the  assessment is on the land                                                               
that is leased or if the assessment is on all ARRC parcels.                                                                     
                                                                                                                                
MR.  KUBITZ  related  that  the  tenant  leases  are  subject  to                                                               
assessment,  but the  non-leased parcels  are not  assessed.   He                                                               
explained  that the  State Assessor  does have  some flexibility.                                                               
He offered  that a brand new  35-year lease would be  assessed at                                                               
full fair  market value on  the property.   However, if  only two                                                               
years remained  on the lease,  the State Assessor would  charge a                                                               
much reduced rate for the land portion of the lease.                                                                            
                                                                                                                                
1:26:44 PM                                                                                                                    
                                                                                                                                
MR. KUBITZ, in response to  Chair Wilson, explained that the ARRC                                                               
is tax exempt.  He pointed  out that advantages exist for parties                                                               
who  lease  land.   He  explained  that  the  tax cap  cannot  go                                                               
increase more  than 35 percent  each five-year period.   The ARRC                                                               
also has a floor on its leases,  which means the tax rates do not                                                               
decrease.  However,  the ARRC is currently  reviewing its leasing                                                               
policy given the  economy.  He commented that the  ARRC does have                                                               
a public leasing policy.                                                                                                        
                                                                                                                                
1:27:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MUNOZ  related that  other leased property  is not                                                               
charged  property  tax.   She  related  that  if the  leases  are                                                               
comparable to other leases whether  the ARRC takes property taxes                                                               
into account when setting the rate.                                                                                             
                                                                                                                                
MR.  KUBITZ  responded  that  only   the  value  of  property  is                                                               
considered.  Thus, if property is  valued at $1 million, the ARRC                                                               
would charge eight percent rent on  $1 million.  The ARRC is also                                                               
not involved  with improvements and  the appraiser  must appraise                                                               
the land as though it is vacant land.                                                                                           
                                                                                                                                
1:28:37 PM                                                                                                                    
                                                                                                                                
MR.  KUBITZ, in  response to  Chair P.  Wilson, related  that the                                                               
ARRC hires an independent appraiser to determine the land value.                                                                
                                                                                                                                
REPRESENTATIVE MUNOZ  asked whether all  the lease terms  are set                                                               
at eight percent.                                                                                                               
                                                                                                                                
MR. KUBITZ answered that the  interest rate on leases ranges from                                                               
8 percent  to 10 percent,  with 9  percent for waterfront  and 10                                                               
percent for  commercial property.   The bulk  of the  ARRC leases                                                               
are set at  8 percent.  He stated that  the ARRC follows standard                                                               
procedures for setting  its interest rates.   In further response                                                               
to Chair P. Wilson, he responded  that the ARRC has published its                                                               
leasing policies, which  are sometimes adjusted.   He stated that                                                               
currently,  due to  the  downturn  in the  economy,  the ARRC  is                                                               
considering eliminating  the floor,  but traditionally  the lease                                                               
rates have stayed flat.                                                                                                         
                                                                                                                                
1:30:08 PM                                                                                                                    
                                                                                                                                
MR.  KUBITZ stated  that  the ARRC  indemnifies  its tenants  for                                                               
contamination since the  ARRC has been around for 85  years.  The                                                               
ARRC  does not  hold  its tenants  responsible for  contamination                                                               
unless the tenant contaminated the property.                                                                                    
                                                                                                                                
1:30:29 PM                                                                                                                    
                                                                                                                                
MR. KUBITZ,  in response to Representative  Johnson, explained if                                                               
a person were  to purchase ARRC property that it  would depend on                                                               
the  structure  of  the  real  estate  agreement  as  to  whether                                                               
indemnification would be included in  the terms.  He offered that                                                               
any  potential  buyer  should perform  due  diligence,  have  the                                                               
ground tested and if a problem  exists that the party should hold                                                               
discussions to  determine who  will be  responsible.   This would                                                               
all be covered in the sales contract, he stated.                                                                                
                                                                                                                                
1:31:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON  recalled  several years  ago  a  battery                                                               
company went out of business.   He asked Mr. Kubitz to describe a                                                               
similar scenario with respect to the railroad.                                                                                  
                                                                                                                                
MR. KUBITZ recalled the site  mentioned is a Superfund Site under                                                               
control  by  the  Environmental  Protection  Agency  (EPA).    He                                                               
recalled that the site usage  is restricted.  He further recalled                                                               
that this site was capped and  a list of restrictions would apply                                                               
to the property use.  He was  unsure if someone would want to buy                                                               
the  property,  but  he  related   that  if  a  sale  did  occur,                                                               
discussions on contamination  would be part of  the due diligence                                                               
process.                                                                                                                        
                                                                                                                                
1:32:15 PM                                                                                                                    
                                                                                                                                
CHAIR P.  WILSON speculated that  the ARRC  would do its  part to                                                               
protect and inform any potential buyers.                                                                                        
                                                                                                                                
MR. KUBITZ  responded that professionals  would perform  tests to                                                               
determine any contamination.   He said he does not  want to leave                                                               
impression that  all the ARRC property  has environmental issues.                                                               
The  ARRC  is diligent  about  identifying  any issues  with  its                                                               
property,   but  would   not   necessarily   know  about   recent                                                               
environmental issues on  leased land.  He  characterized the ARRC                                                               
as knowledgeable about its property  and advised members that the                                                               
ARRC has a good file on hand for each of its properties.                                                                        
                                                                                                                                
1:33:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON asked  whether  anyone  has reviewed  the                                                               
cost  of   owning  versus  leasing   ARRC  land  given   the  new                                                               
interpretation on property taxes.                                                                                               
                                                                                                                                
MR. KUBITZ  answered that the  ARRC Board has policies  in place.                                                               
He offered  that the  ARRC performed a  market analysis  and that                                                               
eight percent is a standard interest rate for leased property.                                                                  
                                                                                                                                
1:34:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE    JOHNSON   asked    when   the    property   tax                                                               
interpretation was  adopted and  whether the market  analysis was                                                               
performed prior to when the tax policy was adopted.                                                                             
                                                                                                                                
MR. KUBITZ related  that it occurred at about the  same time.  In                                                               
2004, the tax  letter was received from the State  Assessor.  The                                                               
ARRC continually  reviews the market,  he stated.   He maintained                                                               
his  belief that  the market  study was  done at  about the  same                                                               
time.                                                                                                                           
                                                                                                                                
REPRESENTATIVE  JOHNSON  asked  whether   he  could  provide  any                                                               
examples  of  other  communities  or  states  that  charge  eight                                                               
percent interest in addition to the property tax.                                                                               
                                                                                                                                
MR. KUBITZ  related that ARRC  tenants have always paid  taxes on                                                               
their building.   He commented that  the property tax on  land is                                                               
based on  a decreasing rate  scale.   He explained that  the ARRC                                                               
also  requires its  tenants  to follow  local  state and  federal                                                               
laws.                                                                                                                           
                                                                                                                                
1:36:34 PM                                                                                                                    
                                                                                                                                
CHAIR  P.  WILSON asked  whether  the  Municipality of  Anchorage                                                               
(MOA) was  trying to find more  ways to bring in  revenue without                                                               
raising taxes.                                                                                                                  
                                                                                                                                
MR. KUBITZ acknowledged that the MOA has been very successful.                                                                  
                                                                                                                                
1:37:08 PM                                                                                                                    
                                                                                                                                
MR.  KUBITZ, in  response to  Representative Johnson,  reiterated                                                               
that  the  State  Assessor  wrote a  letter  to  Municipality  of                                                               
Anchorage referencing the Department  of Law's legal opinion that                                                               
the MOA had to assess property.                                                                                                 
                                                                                                                                
MR.  KUBITZ, in  response to  Chair P.  Wilson, related  that the                                                               
communities  have the  option on  whether  to assess  taxes.   He                                                               
stated  that  Anchorage  and Fairbanks  assesses  taxes  on  ARRC                                                               
property.                                                                                                                       
                                                                                                                                
1:38:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  T.  WILSON  asked  for  the  percentage  of  ARRC                                                               
property that is currently vacant.                                                                                              
                                                                                                                                
MR.  KUBITZ   explained  that  the   ARRC  owns  one   parcel  of                                                               
approximately 5,000 acres  that does not have tenant.   Thus, one                                                               
of its  largest parcels is  vacant.   He offered his  belief that                                                               
about  20   percent  of  ARRC   property  is  under   lease,  but                                                               
approximately 80 percent  of the revenue from  ARRC's real estate                                                               
is derived from  600 acres in Anchorage at Ship  Creek.  The rest                                                               
of  the leases  are  primarily located  in Fairbanks,  Talkeetna,                                                               
Seward, and Whittier.                                                                                                           
                                                                                                                                
1:39:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE T. WILSON asked if  the ARRC sold property whether                                                               
it would provide more revenue for the ARRC over time.                                                                           
                                                                                                                                
MR. KUBITZ related  that a parcel valued at $1  million leased at                                                               
8  percent would  provide $80,000  in revenue  annually.   If the                                                               
ARRC deposited  $1 million, it  may earn approximately  $20,000 a                                                               
year.  Thus,  selling ARRC's land would represent  a big decrease                                                               
in annual income for the railroad.                                                                                              
                                                                                                                                
1:40:07 PM                                                                                                                    
                                                                                                                                
MR.  KUBITZ,  in response  to  Chair  P. Wilson,  explained  that                                                               
during the  economic downturn the  real estate income  "tides the                                                               
ARRC over".   He stated that the ARRC earns  about $18 million in                                                               
leases and  reinvests it.   He related some investments  are made                                                               
on behalf  of tenants, such  as water and sewer  installation and                                                               
dock enhancements to create efficiencies.                                                                                       
                                                                                                                                
1:41:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  asked of  the 80  percent of  leases, how                                                               
many of the ARRC leases in  Anchorage will expire within the next                                                               
five years.                                                                                                                     
                                                                                                                                
MR. KUBITZ offered  his belief that not many  leases will expire.                                                               
He said that typically most  lessees holding a 30-year lease will                                                               
renegotiate the lease  about ten years out.  He  related that the                                                               
largest ARRC customer is Flint  Hills in Anchorage and the second                                                               
largest customer  is Lynden Transport.   He stated that  the ARRC                                                               
renews its leases on a continual basis.                                                                                         
                                                                                                                                
1:42:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON  asked  whether the  lessees  will  renew                                                               
their leases  closer to  the end  date of the  lease in  order to                                                               
avoid paying higher property taxes.                                                                                             
                                                                                                                                
MR.  KUBITZ said  he was  unsure.   He  characterized the  ARRC's                                                               
customers as sophisticated customers  who renew their leases when                                                               
10  to 15  years remain  on the  lease.   He commented  that most                                                               
leases are renewed.                                                                                                             
                                                                                                                                
1:43:44 PM                                                                                                                    
                                                                                                                                
MR. KUBITZ explained  at times ARRC may need to  let tenants know                                                               
a lease will not be renewed in  the event that the ARRC needs the                                                               
land  for its  railroad  operations.   He  stated  that the  ARRC                                                               
currently  holds 350  active long-term  leases  and 900  permits,                                                               
which are for leases under 5 years in duration.                                                                                 
                                                                                                                                
1:44:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON asked how  disposing ARRC's property would                                                               
affect  the ARRC's  bonding status  and whether  it would  have a                                                               
negative effect.                                                                                                                
                                                                                                                                
MR. KUBITZ answered that selling  ARRC's land probably would have                                                               
a  negative effect.    He  commented that  the  ARRC produces  an                                                               
annual report with audited financial  information.  The ARRC also                                                               
borrows funds  based on lease  revenue income.  For  example, the                                                               
ARRC recently borrowed  $1 million and pledged  its lease revenue                                                               
for loan repayment.   He anticipated that if  suddenly the ARRC's                                                               
portfolio of  leases were  to shrink,  it could  adversely affect                                                               
the interest  rate.  He reiterated  the lease income is  used for                                                               
property improvements,  but sometimes the ARRC  will borrow funds                                                               
to complete necessary project improvements.                                                                                     
                                                                                                                                
1:45:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  asked whether federal funding  would slow                                                               
down projects.                                                                                                                  
                                                                                                                                
MR. KUBITZ offered  that the ARRC receives  some federal railroad                                                               
funds  based  on  a passenger  transportation  formula,  but  the                                                               
federal dollars  are restricted to passenger  transportation.  He                                                               
stated  that  the  ARRC  could  build new  depot  or  buy  a  new                                                               
passenger  car, but  could not  spend the  federal funds  on real                                                               
estate.  He  restated that the federal funding "comes  with a lot                                                               
of strings."                                                                                                                    
                                                                                                                                
1:46:41 PM                                                                                                                    
                                                                                                                                
MR.  KUBITZ stated  that the  ARRC's tenants  have access  to the                                                               
Board of Directors.  The Board has  the final say on leases.  The                                                               
ARRC uses  money to  partner with tenants  to improve  the plant.                                                               
In 2002, the ARRC raised the  ability to lease land from 35 years                                                               
to 55  years.  The  legislature agreed to  the change.   The plan                                                               
has been to ask the legislature  for the ability to increase some                                                               
leases to 95-year leases for  those seeking long-term leases.  He                                                               
offered that land lease payments  are tax deductible.  Thus, many                                                               
tenants  would never  consider  buying their  land.   In  further                                                               
response to Representative Johnson,  he stated that the appraised                                                               
value is the highest amount that the land can be assessed.                                                                      
                                                                                                                                
REPRESENTATIVE JOHNSON related that if  a tenant had 2 years left                                                               
on a 95-year lease, he/she would pay less in property taxes.                                                                    
                                                                                                                                
MR. KUBITZ agreed.                                                                                                              
                                                                                                                                
1:48:46 PM                                                                                                                    
                                                                                                                                
MR. KUBITZ, in response to  Chair P. Wilson, explained the tenant                                                               
typically  will  approach the  ARRC  and  ask to  extend  his/her                                                               
lease.                                                                                                                          
                                                                                                                                
MR.  KUBITZ  related  that  passage  of  HB  357  might  start  a                                                               
speculation  spree because  the land  is state-owned  land.   For                                                               
example a person  could lease land in April, purchase  it in May,                                                               
and then  "flip the land."   He suggested that this  would not in                                                               
the ARRC's  best interest.   He said that  he was unsure  if that                                                               
type of speculation would happen.                                                                                               
                                                                                                                                
1:50:05 PM                                                                                                                    
                                                                                                                                
CHAIR P.  WILSON asked whether  the ARRC's  land is owned  by the                                                               
state.                                                                                                                          
                                                                                                                                
MR. KUBITZ answered  that the ARRC's land is state  land, but the                                                               
land is controlled,  managed, and operated by the ARRC.   He also                                                               
noted that the  ARRC did not receive all of  its federal transfer                                                               
land as of 12  years ago.  The ARRC is currently  down to about 5                                                               
percent of the land remaining to be transferred.                                                                                
                                                                                                                                
CHAIR P.  WILSON inquired  as to whether  the state  allows first                                                               
right of refusal to its tenants on state lands that are leased.                                                                 
                                                                                                                                
MR.  KUBITZ  said  he  did  not know.    He  suggested  that  the                                                               
legislature could pass  a law if it  chose to do so.   He thought                                                               
it might  put "a cloud over  it" to have first  right of refusal.                                                               
He explained that if the state  leased the land and then sold it,                                                               
the public may complain that it  was not aware that the state was                                                               
selling property.  He thought if  the state wanted to receive the                                                               
best  value that  the  ARRC  should simply  sell  the  land.   He                                                               
pointed out  that the  tenants are  protected during  sales since                                                               
the  potential buyer  cannot "kick"  any tenants  off the  leased                                                               
land, but must honor the lease.                                                                                                 
                                                                                                                                
1:52:18 PM                                                                                                                    
                                                                                                                                
MR. KUBITZ,  in response to Representative  Petersen, stated that                                                               
the 5  percent of 36,000 acres  of federal transfer land  has not                                                               
yet been transferred to the state.   He pointed out that the ARRC                                                               
has an  exclusive easement, which is  one step below full  fee on                                                               
the proposed transfer.   He remarked it will be  "nice to get all                                                               
the land" from the federal government.                                                                                          
                                                                                                                                
1:52:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   PETERSEN  asked   whether  the   potential  land                                                               
designated for  transfer is located in  one location or if  it is                                                               
spread out.                                                                                                                     
                                                                                                                                
MR.  KUBITZ offered  that "a  fair amount  of it"  is located  in                                                               
Anchorage.   Much of the  land is located along  the right-of-way                                                               
near  the inlet,  he  stated.   He  related  that some  confusion                                                               
exists since  the 1964  earthquake moved  some of  the land.   He                                                               
characterized  the   land  transfer  process  as   a  complicated                                                               
process, but  pointed out that  the ARRC is working  closely with                                                               
the Bureau  of Land  Management (BLM)  on the  matter.   Once the                                                               
process is finished  and agreed to the agreement will  be sent to                                                               
Washington  D.C. for  signature  and the  ARRC  will receive  the                                                               
land, he related.                                                                                                               
                                                                                                                                
1:53:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PETERSEN  recalled that  5,000 acres of  ARRC land                                                               
is  not  leased  and  asked  whether  this  is  land  that  poses                                                               
difficulties to lease and asked whether the land should be sold.                                                                
                                                                                                                                
MR. KUBITZ  said he did not  think there was any  benefit to sell                                                               
the land not currently leased.   He stated that the land does not                                                               
currently have utilities  available, and the land  is located "50                                                               
miles  from  the  closest  power  pole."   He  commented  that  a                                                               
"section  house" is  located  on  the land  and  the  land has  a                                                               
strategic value to the ARRC.   He remarked that several uses have                                                               
also been considered.                                                                                                           
                                                                                                                                
MR. KUBITZ,  in response  to Chair P.  Wilson, answered  that the                                                               
parcel  does have  road access.   He  reiterated that  the ARRC's                                                               
income stream  could be affected if  the land was sold.   He also                                                               
thought  that changing  any  existing terms  of  the ARRC's  real                                                               
estate  contract  could be  problematic.    He offered  his  best                                                               
professional  advice is  the  ARRC  does not  want  to start  the                                                               
precedent by  selling property.   He stated that the  ARRC income                                                               
is  important and  the ARRC's  real estate  is necessary  for its                                                               
survival.   He also remarked that  100 people were laid  off last                                                               
year.                                                                                                                           
                                                                                                                                
1:55:53 PM                                                                                                                    
                                                                                                                                
MR. KUBITZ,  in response to  Representative T.  Wilson, responded                                                               
that the ARRC does not grant easements.                                                                                         
                                                                                                                                
REPRESENTATIVE  T.   WILSON  asked  whether  the   ARRC  has  any                                                               
mechanism to release easements it no longer needs.                                                                              
                                                                                                                                
MR. KUBITZ  answered that any  land disposal or transfer  of ARRC                                                               
property  must  be  approved  by the  legislature.    In  further                                                               
response to  Representative T. Wilson,  he said he was  unsure if                                                               
this bill would  allow the ARRC to  do so.  In  response to Chair                                                               
Wilson, he  agreed that currently  the ARRC's Board  of Directors                                                               
could decide to  sell land.  If such an  instance arose, the ARRC                                                               
would  ask the  legislature  for approval.    This bill  contains                                                               
special provisions, including that  the person occupying the land                                                               
would have the first right of refusal on the property.                                                                          
                                                                                                                                
1:57:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE T. WILSON  said she thought this  bill allowed the                                                               
ARRC to  sell the  land without  legislative approval,  and asked                                                               
whether the ARRC would still need legislative approval.                                                                         
                                                                                                                                
MR. KUBITZ  agreed that  this is state  land and  the legislature                                                               
would need to approval any sale.                                                                                                
                                                                                                                                
1:57:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON   asked  whether  the  ARRC   shares  any                                                               
facilities with the Alaska Marine Highway System (AMHS).                                                                        
                                                                                                                                
MR. KUBITZ  responded that the  ARRC leases  land to the  AMHS in                                                               
Whittier.                                                                                                                       
                                                                                                                                
MR.  KUBITZ,  in  further  response  to  Representative  Johnson,                                                               
advised that the AMHS could purchase  the land it leases from the                                                               
ARC, but he did not think it would  do so.  He explained that the                                                               
AMHS  pre-paid  a long-term  lease  using  federal funding.    He                                                               
offered his belief that the current lease is a 20-30 year lease.                                                                
                                                                                                                                
1:58:55 PM                                                                                                                    
                                                                                                                                
HANK BARTOS,  Representative, Rail  Safety and  Development Group                                                               
(RSDG), offered his belief that  a duplication of land management                                                               
effort  occurs  in  the  state.    He  suggested  that  the  land                                                               
currently not  used by  ARRC should be  transferred to  DNR since                                                               
that agency  could do a  better job managing  the land.   The DNR                                                               
could transfer any  land as necessary.  The  Fairbanks North Star                                                               
Borough (FNSB) asked  the legislature to transfer  some ARRC land                                                               
not currently  being used  to the FNSB  to improve  the Fairbanks                                                               
community.                                                                                                                      
                                                                                                                                
CHAIR P.  WILSON asked whether the  organization has specifically                                                               
asked the ARRC to transfer the land.                                                                                            
                                                                                                                                
MR. BARTOS stated  that the ARRC has been  approached on numerous                                                               
occasions to  move the ARRC  operations south of town  to relieve                                                               
traffic congestion.   He characterized  working with the  ARRC as                                                               
working with an "800 pound gorilla."                                                                                            
                                                                                                                                
2:01:05 PM                                                                                                                    
                                                                                                                                
CHAIR P. WILSON said she misunderstood Mr. Bartos's issue.                                                                      
                                                                                                                                
MR. BARTOS  explained that  the matter  is actually  two separate                                                               
issues.   In  addition to  relocating the  ARRC rail  yard to  an                                                               
areas south  of Anchorage, the FNSB  would also like the  ARRC to                                                               
transfer land  currently used by  the ice park  to the FNSB.   In                                                               
further response  to Chair P.  Wilson, he agreed that  the parcel                                                               
used by the ice  park is not used for ARRC  operations.  The land                                                               
could be donated, traded, or sold to the FNSB, he said.                                                                         
                                                                                                                                
CHAIR P. WILSON related that  the ARRC must conduct its operation                                                               
as a business.   She would not  like to see the ARRC  come to the                                                               
legislature and request additional operation funding.                                                                           
                                                                                                                                
MR.  BARTOS pointed  out that  the land  actually belongs  to the                                                               
people of  Alaska and  whether the revenue  is derived  from land                                                               
use operations  or is transferred  to DNR  and is managed,  it is                                                               
still state land.   Currently, a duplication of  effort exists on                                                               
land management since DNR and the ARRC both manage state land.                                                                  
                                                                                                                                
CHAIR P. WILSON answered that the  state is not the same category                                                               
of land.                                                                                                                        
                                                                                                                                
MR. BARTOS offered if the ARRC  land was transferred to one state                                                               
entity,  that   the  process  could   be  streamlined   and  more                                                               
efficient.                                                                                                                      
                                                                                                                                
2:03:11 PM                                                                                                                    
                                                                                                                                
DON LOWELL President,  Alaska Transportation Consultants; Member,                                                               
Rail  Safety and  Development Group  (RSDG),  explained that  the                                                               
Alaska  Transportation Consultants  is  a non-profit  group.   He                                                               
stated  that  he supports  the  bill.    Adding to  Mr.  Bartos's                                                               
testimony,  he recommended  that HB  357 be  amended to  transfer                                                               
land that  is not essential  to ARRC operations  to the DNR.   He                                                               
explained that  the DNR is  the agency responsible for  all state                                                               
land.  He offered his belief  that the ARRC does not operate very                                                               
well,  but  the DNR  has  held  the long-term  responsibility  to                                                               
manage state land.                                                                                                              
                                                                                                                                
2:04:57 PM                                                                                                                    
                                                                                                                                
BONNIE  WOLDSTAD stated  that her  comments are  directed to  the                                                               
Eielson  spur line  of  the ARRC.   She  asserted  that the  ARRC                                                               
currently encroaches on 10-12 acres  of her property.  She stated                                                               
that  under the  1914 Homestead  Act, the  United States  allowed                                                               
homesteaders  to  reserve rights  for  the  railroad to  traverse                                                               
property.   In  1946, her  family  applied for  the property  and                                                               
received a U.S.  patented homestead.  She said  that her property                                                               
predates the railroad.   Her ancestor was given 160  acres and in                                                               
1947  the  railroad  was  built.   She  said  that  her  ancestor                                                               
received the  deed for  the entire 160  acres.   Subsequently the                                                               
state  required  the ARRC  under  ARTA,  Section 1203,  including                                                               
language related to valid existing  claims.  She further asserted                                                               
that the patented homestead deed is  a valid claim.  In 1969, her                                                               
family  acquired the  remainder of  the homestead  and has  never                                                               
relinquished  any  property  rights.     She  restated  that  her                                                               
property predates the  railroad.  Thus, her  family has continued                                                               
to assert their property rights.   Under Section 1208 and 1209 of                                                               
the  ARTA,  a  provision  allows the  governor  to  declare  such                                                               
property  as no  longer being  used  and allows  the governor  to                                                               
transfer  that property  to the  property owner.   In  2003, that                                                               
specific  mechanism  was  repealed.   Thus,  property  owners  no                                                               
longer have the  means to receive property  under that provision.                                                               
She related that Section 4200-4400  also provides for a method to                                                               
vacate  easements.   Those  ARTA  provisions  allow the  ARRC  to                                                               
vacate an easement  and allow the state to  acquire the easement.                                                               
Therefore,  since the  state has  the easement  it should  revert                                                               
back to the owner, she stated.                                                                                                  
                                                                                                                                
2:07:50 PM                                                                                                                    
                                                                                                                                
DON CALLAHAN,  Public Relations Chair,  Ice Alaska;  Member, Rail                                                               
Safety and  Development Group (RSDG),  explained that  since 2006                                                               
he  has   participated  in  the   RSDG.    He  offered   that  an                                                               
organization,  Ice  Alaska, presents  the  best  winter event  in                                                               
Fairbanks for  tourists and residents.   Since 2006, he  has been                                                               
working with the RSDG to  relocate the railroad out of Fairbanks.                                                               
He characterized this as a  frustrating experience since the ARRC                                                               
has continuously defeated his  organization's efforts to relocate                                                               
the ARRC.   He  asserted that  this is a  safety issue  since the                                                               
rail  yard is  physically located  in Fairbanks.   As  Chair, Ice                                                               
Alaska, he  has found the ARRC  to be uncooperative.   Ice Alaska                                                               
would like  to trade the  property to  the FNSB for  property the                                                               
ARRC  could use  for  relocation.   He understood  Representative                                                               
Stoltze's frustration with the ARRC  since he is also "thoroughly                                                               
frustrated."    He recalled  working  for  a  year to  obtain  an                                                               
easement from the federal government  when it owned the railroad.                                                               
When the  state took ownership  of the railroad, he  expected the                                                               
ARRC  to be  community  activists  and to  be  supportive of  the                                                               
community's interests.   He suggested if the ARRC  earns money on                                                               
land leases to the detriment  of the community, that something is                                                               
wrong  with  their   business  plan.    The  ARRC   should  be  a                                                               
transportation entity  and not a  land entity.   He said  he also                                                               
did not understand the profit issue.                                                                                            
                                                                                                                                
2:10:52 PM                                                                                                                    
                                                                                                                                
RICHARD  FAULKNER,   President,  Steel   Fabrication;  President,                                                               
Alaska Railroad  Leaseholders Association (ARLA), spoke  in favor                                                               
of  HB 357.   He  said that  the ARRC  land needs  to be  sold to                                                               
private enterprise.  At the present  time only two percent of the                                                               
state's  land is  in private  hands.   The  rest of  the land  is                                                               
either owned by  the state or federal government.   In Anchorage,                                                               
treating the leased property as  fee simple property is derelict,                                                               
he stated.                                                                                                                      
                                                                                                                                
REPRESENTATIVE T. WILSON asked  whether leaseholders are required                                                               
to make any improvements to the land.                                                                                           
                                                                                                                                
MR. FAULKNER  answered yes.   However, he  stated that  after the                                                               
lease takes effect,  people do not want to  make improvements due                                                               
to the ARRC.  He stated that the  ARRC does not pay for water and                                                               
sewer.   He related that  his business sits on  8 to 10  acres in                                                               
Ship Creek  area of Anchorage.   He stated  that he had  a septic                                                               
and well  system, but the ARRC  ran the water line  from the main                                                               
street  to   edge  of  property  and   sent  him  a  bill.     He                                                               
characterized  the issue  with the  ARRC as  more of  an economic                                                               
development  issue   than  any  other  issue.     He  recommended                                                               
transferring   the  ARRC   property  to   private  ownership   so                                                               
individuals can  improve the property  and increase the  tax base                                                               
in Anchorage and the state.                                                                                                     
                                                                                                                                
2:13:45 PM                                                                                                                    
                                                                                                                                
CHAIR P.  WILSON, after first  determining no one else  wished to                                                               
testify, closed public testimony on HB 357.                                                                                     
                                                                                                                                
2:14:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PETERSEN asked  whether Mr.  Kubitz could  answer                                                               
questions about relocating the ARRC in Fairbanks.                                                                               
                                                                                                                                
Mr. Kubitz answered that was not his purview.                                                                                   
                                                                                                                                
CHAIR P.  WILSON inquired as  to whether the ARRC  is considering                                                               
moving its operations in Fairbanks.                                                                                             
                                                                                                                                
PAT    GAMBLE,    President     and    CEO,    Alaska    Railroad                                                               
Corporation,(ARRC) stated  that moving the ARRC  out of Fairbanks                                                               
makes a lot  of sense in the abstract.   Typically, towns grew up                                                               
around  the  tracks  and  many   towns  relocated  the  railroad.                                                               
However,  relocation   is  very   expensive  and  the   ARRC  has                                                               
undertaken with  the RSDG and  the FNSB to  reconsider relocating                                                               
the railroad in  phases from the main part of  town and to bypass                                                               
as much of Fairbanks  as it can.  He stated  that this process is                                                               
actually  a three  phase process  to make  this a  reality.   The                                                               
ARRC's efforts include  North Pole and in an  effort to relocate,                                                               
the  ARRC  has closed  crossings,  some  of  which are  close  to                                                               
schools, in  order to improve  safety.  Some  hazardous materials                                                               
have been hauled out of  residential areas.  He characterized the                                                               
goal to  relocate the railroad  as an excellent and  worthy goal.                                                               
Phase  1 included  two meetings  with the  RSDG.   Currently, the                                                               
ARRC is  working to  scope Phases  2 and  3 of  the project.   He                                                               
anticipated the ARRC would be more aggressive on the project.                                                                   
                                                                                                                                
2:17:15 PM                                                                                                                    
                                                                                                                                
MR. GAMBLE,  in response to  Chair P. Wilson, offered  that quite                                                               
often  "not  cooperating"  is  another   way  of  saying  that  a                                                               
disagreement  exists  over issues.    He  stated that  there  are                                                               
serious issues  to resolve,  but he felt  that more  progress has                                                               
recently been made.  He stated  that the former FNSB Mayor signed                                                               
a memorandum of agreement (MOA)  that codified a process to allow                                                               
the ARRC  to coordinate its  approach.  He assessed  the progress                                                               
to  resolve issues  to  relocate  the ARRC  as  slow, but  steady                                                               
progress since the MOA was signed.                                                                                              
                                                                                                                                
2:18:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON asked  what type  of hazardous  waste the                                                               
ARRC  would find  if it  relocated the  railroad in  Fairbanks to                                                               
south of  Fairbanks  He further  asked if the existing  rail yard                                                               
would need  to be paved,  if the ARRC would  be able to  sell the                                                               
land, and if the rail yard is a contaminated site.                                                                              
                                                                                                                                
MR.  GAMBLE  stated  that  the  Fairbanks  railroad  sits  on  an                                                               
industrial  site.     He   agreed  that   likely  some   kind  of                                                               
contamination is present.  He  recalled a recent survey conducted                                                               
at the  railroad yard  in Ship  Creek in  Anchorage.   He related                                                               
that the  survey cost $6  million, but the  ARRC did "not  find a                                                               
smoking gun."   He explained that  the ARRC would have  to do the                                                               
same  thing  in Fairbanks.    He  said  he  does not  assume  the                                                               
Fairbanks property would  be considered a "real  dirty site," but                                                               
that aspect  would need  to be  dealt with  before the  rail yard                                                               
could be  relocated.  He stated  that currently, the ARRC  is not                                                               
aware of any problem, noting  that the Fairbanks property has not                                                               
been surveyed.                                                                                                                  
                                                                                                                                
[HB 357 was held over.]                                                                                                         
                                                                                                                                
         HB 267-SNOW MACHINE USE IN DALTON HWY CORRIDOR                                                                     
                                                                                                                                
2:19:57 PM                                                                                                                    
                                                                                                                                
CHAIR P. WILSON  announced that the next order  of business would                                                               
be  HOUSE BILL  NO.  267,  "An Act  relating  to  travel by  snow                                                               
machine  within  five miles  of  the  right-of-way of  the  James                                                               
Dalton Highway."                                                                                                                
                                                                                                                                
2:21:47 PM                                                                                                                    
                                                                                                                                
CHAIR P.  WILSON reported  that she  has assigned  a subcommittee                                                               
for HB  267, consisting of Representative  Johnson, Petersen, and                                                               
T.   Wilson,  chaired   by  Representative   T.   Wilson.     The                                                               
subcommittee will report back to full committee, she stated.                                                                    
                                                                                                                                
2:22:37 PM                                                                                                                    
                                                                                                                                
MARY  SIROKY, Legislative  Liaison, Office  of the  Commissioner,                                                               
Department  of  Transportation   &  Public  Facilities  (DOT&PF),                                                               
explained that the  DOT&PF experts on the Dalton  Highway are not                                                               
available today.   She stated that  the DOT&PF is not  opposed to                                                               
access  in  the  Dalton  Highway Corridor,  but  doing  so  would                                                               
present  additional challenges  for the  department.   Opening up                                                               
the  Dalton  Highway  would create  potential  conflicts  between                                                               
commercial truckers who move goods  and services and recreational                                                               
users.   One  area of  conflict  would be  the roadside  pullouts                                                               
since currently  not many  pullouts could  accommodate commercial                                                               
trucks,  DOT&PF vehicles,  and recreational  users.   The  DOT&PF                                                               
requires these pullouts  to use as turnarounds  to move equipment                                                               
between  the maintenance  camps.   She related  the only  pullout                                                               
really large  enough for commercial  trucks, the DOT&PF  use, and                                                               
recreational use is  located at Franklin Bluff on  the north side                                                               
of Atigun  Pass.  In response  to Chair P. Wilson,  she indicated                                                               
her understanding that  access would stop at  Coldfoot.  Franklin                                                               
Bluff  is located  about 50  to 75  miles north  of Atigun  Pass,                                                               
which is about 350 miles north of the Yukon River.                                                                              
                                                                                                                                
2:25:07 PM                                                                                                                    
                                                                                                                                
MS. SIROKY commented  that the DOT&PF will prepare a  map for the                                                               
subcommittee  to  show the  location  and  size of  the  existing                                                               
pullouts.   She highlighted issues  the subcommittee may  wish to                                                               
consider as  it deliberates  on HB  267.   The DOT&PF  uses high-                                                               
speed plows to maintain the Dalton  Highway.  Thus, the DOT&PF is                                                               
concerned  about  anyone  who  may   park  alongside  the  Dalton                                                               
Highway.  The  DOT&PF has a responsibility to plow  the roads and                                                               
the  pullouts and  cannot be  held responsible  for any  vehicles                                                               
that get  "plowed in."   She anticipated the types  of complaints                                                               
the DOT&PF would  likely receive if motorists had  to spend hours                                                               
digging their  vehicle out of snow  berms.  She pointed  out that                                                               
the  only  emergency  responders currently  available  to  assist                                                               
motorists if  an accident  were to  occur is  the DOT&PF  and the                                                               
Alyeska  Pipeline  Service  Company.    She  explained  that  any                                                               
increased  time spent  assisting motorists  would take  time away                                                               
from DOT&PF's road maintenance duties.   Another issue that could                                                               
arise is the need to supply  gasoline to motorists who run out of                                                               
gas.   In fact, the DOT&PF  does not currently have  the means to                                                               
collect money  for fuel, she  stated.   Finally, in the  event of                                                               
construction  for  a natural  gas  pipeline,  the DOT&PF  expects                                                               
traffic to  increase dramatically.  The  anticipated schedule for                                                               
road construction  would be in  the next  three to five  years to                                                               
assist with  gearing up to haul  goods.  She thought  that all of                                                               
these issues could be solved,  although some issues may take some                                                               
time to resolve.                                                                                                                
                                                                                                                                
2:28:00 PM                                                                                                                    
                                                                                                                                
MS.  SIROKY, in  response  to  Representative Johnson,  explained                                                               
that  the DOT&PF  has seven  camps located  about every  60 miles                                                               
along the  Dalton Highway  between Livengood  and Deadhorse.   In                                                               
further response  to Representative  Johnson, she  explained that                                                               
typically  two to  four people  live  at each  camp, including  a                                                               
mechanic and equipment operator.                                                                                                
                                                                                                                                
REPRESENTATIVE  P. WILSON  asked whether  the DOT&PF  would allow                                                               
people to park at the camps.                                                                                                    
                                                                                                                                
MS. SIROKY answered no.  In  further response to Chair P. Wilson,                                                               
she related  that she did not  know whether the camps  are posted                                                               
to  prohibit trespassing.   She  pointed out  that the  DOT&PF is                                                               
responsible  for its  equipment, but  she did  not recall  if the                                                               
camps were  gated.  She  recalled that  the camp at  Chandalar is                                                               
open.                                                                                                                           
                                                                                                                                
2:29:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON asked  if  it would  simplify matters  to                                                               
create  a  corridor  for  parking.   He  asked  if  seven  access                                                               
corridors  were   created  with   parking,  safety,   and  rescue                                                               
capabilities, whether it would solve some of the problems.                                                                      
                                                                                                                                
MS. SIROKY  offered to  consider and  discuss this  solution with                                                               
the DOT&PF personnel to identify  any conflicts.  She thought one                                                               
issue that could arise would be  if too many people wanted to use                                                               
the area.   She suggested  the subcommittee may want  to consider                                                               
limiting the  number of people  who could use the  Dalton Highway                                                               
Corridor.                                                                                                                       
                                                                                                                                
REPRESENTATIVE T.  WILSON asked whether the  campground at Arctic                                                               
Circle could be used.                                                                                                           
                                                                                                                                
MS. SIROKY responded  that the visitor center is not  open in the                                                               
winter so  she speculated that  the campground is  not maintained                                                               
during the  winter.   She noted  that the  campground is  not far                                                               
from Coldfoot, where many resources are available.                                                                              
                                                                                                                                
2:32:05 PM                                                                                                                    
                                                                                                                                
BRIAN PERSON,  Ph.D., Wildlife Biologist, Department  of Wildlife                                                               
Management, North Slope Borough (NSB),  stated the NSB is opposed                                                               
to allowing any  part of the five-mile corridor  along the Dalton                                                               
Highway  for  the   use  of  snowmachines.     This  highway  was                                                               
originally established to allow production  of and service of oil                                                               
and gas facilities.  The Dalton  Highway was closed to public use                                                               
due to  the broad  justifiable concerns  over issues  relating to                                                               
wildlife   harassment,   user   conflicts,   wildlife   violation                                                               
concerns,   pipeline  security   concerns,   search  and   rescue                                                               
responsibility, and  traffic issues.  These  visions were legally                                                               
challenged and  ultimately overturned, but not  without retaining                                                               
some  insights for  the original  plan to  protect the  land, the                                                               
wildlife  resource,  and  the   people  that  traditionally  have                                                               
depended  upon the  use  of  the resources.    This bill  clearly                                                               
disrupts these  protections without any consideration  for fiscal                                                               
impacts to the Alaska State Troopers  and DOT&PF.  He pointed out                                                               
some  misinformation given  during testimony.   He  reported that                                                               
the  Central   Arctic  Caribou  Herd   is  not  over   80,000  in                                                               
population, but is  approximately 67,000.  Further,  there is not                                                               
any evidence  that suggests  the herd  has exceeded  its carrying                                                               
capacity or exhausted  its range or resources.   In fact, passing                                                               
HB 267 would displace caribou  from its winter range, effectively                                                               
restricting its  range.   The Central Arctic  Caribou Herd  is in                                                               
good health,  with over an  80 percent parturition rate  and high                                                               
calf survival.  He offered  that energetic demands of wildlife in                                                               
the winter  and snowmachine harassment  to musk oxen  and caribou                                                               
would be  problems.   He concluded  by stating  that he  has been                                                               
fighting  similar bills  for the  last six  or seven  years.   He                                                               
said, "It's just  frustrating to see the state with  a long chain                                                               
of broken  promises."  He  urged members  not to open  the Dalton                                                               
Highway Corridor.  He suggested  that people have access to these                                                               
lands and  many people  truly enjoy  the Dalton  Highway Corridor                                                               
and the surrounding land.                                                                                                       
                                                                                                                                
2:35:11 PM                                                                                                                    
                                                                                                                                
LISA HUGHES,  Legislative Liaison, Northern  Alaska Environmental                                                               
Center  (NAEC), stated  that the  NAEC does  not support  HB 267.                                                               
She  stated that  the  Dalton Highway  Corridor  has been  closed                                                               
since  the  construction  of  the  Trans-Alaska  Pipeline  System                                                               
(TAPS).   This bill  would violate  a longstanding  commitment to                                                               
protect wildlife  and subsistence  use in the  North Slope.   The                                                               
Dalton  Highway  was  built  for   industrial  purposes  and  not                                                               
recreational use.   The Dalton  Highway supplies the  North Slope                                                               
oil fields, access to the  TAPS, countless mining operations, and                                                               
a  provides  a take-off  point  for  commercial guides  and  tour                                                               
operators.   The road conditions  in the winter also  provide the                                                               
trucking industry with  the best opportunity to  haul heavy loads                                                               
to  Prudhoe Bay.   Increased  traffic  and abandoned  snowmachine                                                               
trailers along  the Dalton  Highway would  pose a  serious hazard                                                               
for industrial truck  traffic.  None of  the industries mentioned                                                               
are  in  favor of  allowing  motorized  recreational use  in  the                                                               
Dalton  Highway Corridor.   She  asked for  an assessment  of the                                                               
fiscal impact  since there  is a complete  lack of  emergency and                                                               
public safety  services in this region.   She stated that  HB 267                                                               
would  require increased  funding  for the  Alaska Department  of                                                               
Fish  &   Game,  Division  of   Wildlife  Conservation   and  law                                                               
enforcement such as the Alaska  State Troopers (AST).  The DOT&PF                                                               
would need  to pave,  build parking  lots, and  create additional                                                               
roadside pullouts.   The Department of Public  Safety (DPS) would                                                               
need additional funds to reinstate  a year-round AST in Coldfoot.                                                               
The Northern  Alaska Environmental  Center urges  the legislature                                                               
to honor its  commitment to protect wildlife  and subsistence, as                                                               
well  as provide  a  safer environment  for  industries and  user                                                               
groups that  use this  area.   She urged members  not to  pass HB                                                               
267.                                                                                                                            
                                                                                                                                
2:37:47 PM                                                                                                                    
                                                                                                                                
REBECCA BENSON stated  that she resides at  Mineral Lake, Alaska.                                                               
She  testified in  opposition to  HB 267.   She  stated that  her                                                               
family has hunted in the region  for many years.  The opportunity                                                               
to hunt in the area  without competing with mechanized hunters is                                                               
unparalleled since  almost all other hunts  allow snowmachine use                                                               
or  other  off-road  vehicles, which  have  resulted  in  shorter                                                               
hunting  periods.   She  predicted  that  if the  Dalton  Highway                                                               
Corridor  is   opened,  that   the  hunting   opportunities  will                                                               
deteriorate.   She predicted  that the  hunts would  resemble the                                                               
Forty-mile and Nelchina hunts, especially  since the bag limit in                                                               
the Dalton Highway  area was recently increased  to five caribou.                                                               
She  related that  the Forty-mile  hunt is  a registration  hunt,                                                               
easily  accessible by  off-road vehicles  (ORV).   The Forty-mile                                                               
hunt is  typically open for  three to four  days.  Last  year the                                                               
harvest quota was  exceeded by a large margin,  which resulted in                                                               
further  restrictions.   She suggested  that  opening the  Dalton                                                               
Highway  Corridor  to  snowmachine  use  would  create  problems.                                                               
Proponents argue that  most of the state is  open to snowmachines                                                               
with little  damage.  However,  this statement ignores  that non-                                                               
motorized hunters are being excluded  from those areas.  The hunt                                                               
off the Dalton Highway is  quite popular among hunters and people                                                               
who ski, walk, snowshoe, canoe or  dogsled in the area.  Some say                                                               
this area is  not available to average Alaskan, but  she said she                                                               
hoped that most Alaskans can still walk five miles.                                                                             
                                                                                                                                
2:39:29 PM                                                                                                                    
                                                                                                                                
ROBERT CAYWOOD  said that he  has hunted off snowmachines  and he                                                               
thinks all Alaskans should be allowed to use area.                                                                              
                                                                                                                                
2:40:01 PM                                                                                                                    
                                                                                                                                
STEVE  FLORY said  he keeps  hearing "not  in my  backyard."   He                                                               
related that a huge expanse is  closed.  While the Dalton Highway                                                               
was  originally intended  for  oil  and gas  use,  the state  has                                                               
expanded and  recreational uses  need to  be spread  out further.                                                               
He  suggested  that  history  changes  and  the  state  needs  to                                                               
recognize the  change, which  may result  in more  facilities and                                                               
more  opportunities for  Alaskans  and non-Alaskans  to use  this                                                               
area.   He said,  "We're talking  about millions  of acres."   He                                                               
suggested that  there is  plenty of room.   He  further suggested                                                               
that  mechanized   and  non-mechanized  uses  are   not  mutually                                                               
exclusive.   People need to  learn to tolerate interests  and the                                                               
state need  to grow  as a state  and should open  up some  of the                                                               
state.                                                                                                                          
                                                                                                                                
2:42:06 PM                                                                                                                    
                                                                                                                                
WILLIAM  LANG  related  that  he has  a  secondary  residence  in                                                               
Wiseman, Alaska.  He testified in  opposition to HB 267.  He said                                                               
there is an  absence of access issues since any  Alaskan can walk                                                               
from the Dalton Highway to the Bering  Sea if they so desire.  He                                                               
agreed  with  prior  testimony  on  the  bill  that  the  caribou                                                               
estimates were overestimated  at the last hearing.   He commented                                                               
that the Alaska  Department of Fish & Game  presented an estimate                                                               
of  67,000 to  the Board  of Game  at its  February meeting.   He                                                               
speculated  that harvest  is underestimated.    Since people  who                                                               
live  north of  the Yukon  River do  not need  to report  caribou                                                               
harvest most  of the harvest is  unreported.  He agreed  with the                                                               
need for  a fiscal note  to provide for  increased infrastructure                                                               
necessary for  HB 267.   He recalled the Chair  mentioning flying                                                               
to Prudhoe  Bay and driving  down the  Dalton Highway.   He asked                                                               
her  to imagine  this trip  without  any AST  stationed north  of                                                               
Fairbanks  and  without  any emergency  medical  services  except                                                               
those provided by Alyeska Pipeline  Service Company.  The current                                                               
emergency services  are intended for the  company's personnel, he                                                               
stated.   He  thought state  funding would  be needed  to provide                                                               
additional  parking areas  and trash  receptacles.   He expressed                                                               
concern  about  snowmachine use  during  years  with little  snow                                                               
cover.   He reminded  people that the  Iron Dog  Snowmachine Race                                                               
had little snow cover this  year, but people participated and are                                                               
motivated to  use their snowmachines  to hunt or race,  even with                                                               
little snow cover.                                                                                                              
                                                                                                                                
2:44:32 PM                                                                                                                    
                                                                                                                                
P.J. SIMON  stated that  safety is paramount.   He  described the                                                               
Dalton  Highway  road  conditions,  including the  scale  of  the                                                               
mountains and  sharp turns that  truckers carrying  large amounts                                                               
of fuel must  make.  He cautioned that trucks  cannot easily stop                                                               
due to  the enormous  weight.  He  stressed the  safety concerns.                                                               
He related  that the Dalton  Highway supplies the  oil production                                                               
with needed supplies.  He  expressed concern over damage to fauna                                                               
and  flora.   He thought  a three  to five  year study  should be                                                               
accomplished  prior to  opening  the Dalton  Highway Corridor  to                                                               
snowmachine use.   He said,  "We count on  oil as Alaskans."   He                                                               
concluded by stating he is firmly opposed to HB 267.                                                                            
                                                                                                                                
2:46:33 PM                                                                                                                    
                                                                                                                                
JUNE RECOFF  stated that she  has lived most  of her life  in the                                                               
Brooks  Range.   She stated  she has  traveled to  faraway places                                                               
like Africa,  but nothing rivals  the Central Brooks Range.   She                                                               
stated   that   opening   the    Dalton   Highway   Corridor   to                                                               
indiscriminate  snowmachine use  at  a time  when  the limit  for                                                               
caribou is  five per person  would constitute a  travesty against                                                               
prudent  stewardship  of  land  and  wildlife.    The  threat  of                                                               
violence  and lack  of enforcement  presents a  very real  issue.                                                               
She expressed concern for the  wildlife resources if snowmachines                                                               
are allowed access  along the Dalton Highway Corridor.   She also                                                               
expressed concern  that local  residents will  be disenfranchised                                                               
since they rely on the wildlife  resources.  She thought the bill                                                               
would  have irreparable  repercussions and  create hardships  for                                                               
future generations.   The land  and animals have  represented and                                                               
been symbolic  of freedom, balance, hope,  serenity, and purpose.                                                               
She stated that she is opposed to HB 267.                                                                                       
                                                                                                                                
2:49:04 PM                                                                                                                    
                                                                                                                                
CHAIR P.  WILSON pointed out that  this bill opens up  the Dalton                                                               
Highway Corridor, but the hunting rules will remain same.                                                                       
                                                                                                                                
REPRESENTATIVE T. WILSON agreed.                                                                                                
                                                                                                                                
2:49:38 PM                                                                                                                    
                                                                                                                                
DERRICK MILLER,  Staff, Representative  Mike Kelly,  Alaska State                                                               
Legislature,  on  behalf  of  the   prime  sponsor,  stated  that                                                               
currently,  regulations  are  in  place for  the  Dalton  Highway                                                               
Corridor Management  Area.  These regulations  prohibit motorized                                                               
use to  transport game,  game material,  hunting material  in and                                                               
out  of the  Dalton Highway  Corridor.   These regulations  would                                                               
still remain  under HB 267.   In response to Chair  P. Wilson, he                                                               
stated that the  Board of Game oversees  hunting regulations, and                                                               
have established regulations to  prohibit the use of snowmachines                                                               
to transport  game, game material, and  game tools in and  out of                                                               
the Dalton Highway Corridor.                                                                                                    
                                                                                                                                
CHAIR   P.  WILSON   restated  that   people  still   cannot  use                                                               
snowmachines to hunt.                                                                                                           
                                                                                                                                
MR. MILLER agreed.                                                                                                              
                                                                                                                                
2:50:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE T. WILSON asked  whether snowmachines can recreate                                                               
by using snowmachines, but cannot use the snowmachines to hunt.                                                                 
                                                                                                                                
CHAIR P.  WILSON recalled  prior testimony.   She said,  "We were                                                               
told that everything  during hunting would be the  same; this was                                                               
just not during hunting.  So that's not a true statement."                                                                      
                                                                                                                                
MR. MILLER agreed that it is not a true statement.                                                                              
                                                                                                                                
CHAIR P. WILSON  related her understanding that  hunting will not                                                               
be the  same.  Currently  hunters cannot use snowmachine  if they                                                               
are  hunting.     If  HB   267  passes,  then  hunters   can  use                                                               
snowmachines.                                                                                                                   
                                                                                                                                
MR. MILLER replied  that this bill does not speak  to any hunting                                                               
regulations.  It  does not touch hunting  regulations or anything                                                               
the Board  of Game oversees.   This bill provides  access through                                                               
the  Dalton Highway  Corridor  via snowmachine.    He said,  "You                                                               
cannot use  your snowmachine to  transport game  in and out.   It                                                               
cannot be used as another tool for hunting."                                                                                    
                                                                                                                                
2:52:20 PM                                                                                                                    
                                                                                                                                
MICHELLE DEVAUL  stated that  she has  been a  tour guide  for 12                                                               
years.  Since  1999, she has been a guide  on the Dalton Highway,                                                               
traveling from  Fairbanks to Deadhorse.   She said she  works for                                                               
second  largest industry,  which is  the visitor  industry.   She                                                               
said she  is passionately  "not supportive"  of HB  267.   She is                                                               
opposed to the  bill because of the overall  negative impact lack                                                               
of infrastructure  and lack  of law enforcement  since an  AST is                                                               
not assigned  to Coldfoot.   She has  often observed  vehicles on                                                               
the road  and is concerned  about increased access to  the Dalton                                                               
Highway.   She  stated that  when she  is on  the Dalton  Highway                                                               
during the summer and winter  she has observed traffic accidents.                                                               
She has even had to take an  injured person to a pump station for                                                               
emergency  treatment.   She  said  that this  area  is an  arctic                                                               
desert with  six inches of  precipitation per year, which  is one                                                               
reason the Prudhoe Bay oilfield  has been restricted and why they                                                               
must use ice roads to traverse  the remote regions.  She reported                                                               
that during the  summer she has not observed any  impact from the                                                               
development in the  region.  She related that during  50s and 60s                                                               
oil  exploration left  cat  tracks from  equipment  use north  of                                                               
Atigun  Pass.    She  disagreed   that  snowmachines  would  have                                                               
decreased impact since  the type of vegetation can  take 50 years                                                               
to grow.  She has observed permanent marks on the landscape.                                                                    
                                                                                                                                
2:55:26 PM                                                                                                                    
                                                                                                                                
KENNETH BARBER stated that he would  like to have an area that is                                                               
accessible to  people.  He  did not think potential  accidents or                                                               
injuries should  be a concern  since accidents  happen throughout                                                               
Alaska.    He said  he  would  like  to  see the  Dalton  Highway                                                               
Corridor open  to more use  than just  snowmachines.  He  said he                                                               
did not see anything wrong with a little scarring.                                                                              
                                                                                                                                
2:56:38 PM                                                                                                                    
                                                                                                                                
CODY STRATHE said that  he is opposed to HB 267.   He stated that                                                               
as  a  graduate  student  at  the University  of  Alaska  he  has                                                               
performed  extensive   archeological  research  in   the  Arctic,                                                               
including Gates  of the  Arctic National  Park which  borders the                                                               
Dalton  Highway Corridor.    He explained  that  the majority  of                                                               
archeological  sites are  not buried,  but are  scattered on  the                                                               
surface  since insufficient  vegetation exists  to rot  and cover                                                               
the remains.   During low snow  years which often occur  north of                                                               
the  Brooks   Range  the  remains   can  be  easily   damaged  by                                                               
snowmachines.   He  thinks there  is a  gross misconception  that                                                               
snowmachines will  not have  an impact  on the  land.   He stated                                                               
that he  owns a snowmachine  and has  observed damage to  his own                                                               
land.   He spent  the last three  years with a  dog sled  team at                                                               
Galbraith Lake, which has huge  windswept areas that snowmachines                                                               
could easily damage  and have a great impact.   He stated that he                                                               
has hunted  caribou in the  area.   He reiterated that  this road                                                               
was  built for  industrial  use  and not  recreational  use.   He                                                               
offered his belief  that the Dalton Highway  Corridor area should                                                               
be managed to protect delicate  ecosystem, coastal resources, and                                                               
subsistence rights that were originally established.                                                                            
                                                                                                                                
2:58:23 PM                                                                                                                    
                                                                                                                                
CHAD DIESINGER,  Manager, Toolik Field State  Institute of Arctic                                                               
Biology, stated  that a  vast number  of research  plots surround                                                               
the station.   He said that  low snow years would  be detrimental                                                               
to the research plots by  snowmachine use; the plots represent 30                                                               
years worth  of research.   A  second major  concern is  that the                                                               
facility has  an Emergency Medical  Technician (EMT),  and during                                                               
the summer  their EMP  provides the  only emergency  response now                                                               
that the Alaska State Trooper  (AST) at Coldfoot has been removed                                                               
from the post.  He expressed  concern that the bill does not have                                                               
a fiscal note to improve  the emergency response capabilities for                                                               
increased traffic.   He  offered to keep  his comments  short but                                                               
related that other comments made  by testifiers as valid comments                                                               
to consider.                                                                                                                    
                                                                                                                                
3:00:22 PM                                                                                                                    
                                                                                                                                
BARRY WHITEHILL  testified that he  is a hunter.   He is  a rifle                                                               
hunter and must  walk, hike, or float to cross  the corridor.  He                                                               
hunts near  the Dalton Highway  since it is relatively  low cost,                                                               
primarily paid by his own sweat.   He finds the landscape free of                                                               
motorized   conveyances  so   the  hunt   is  truly   an  Alaskan                                                               
experience.  He strongly  opposed HB 267.  He said  it is "just a                                                               
foot in  the door" to open  the Dalton Highway up  to allow other                                                               
conveyances  and   change  the  game   laws  to  allow   ORV  and                                                               
snowmachines for hunting.                                                                                                       
                                                                                                                                
3:01:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON pointed  out  that  initially the  Alaska                                                               
Highway was  an industrial  corridor for  use exclusively  by the                                                               
military so it is not unusual to change uses.                                                                                   
                                                                                                                                
3:02:47 PM                                                                                                                    
                                                                                                                                
TAQUILIK  HEPA,  Director,  Department  of  Wildlife  Management,                                                               
North  Slope  Borough  (NSB),  stated  that  she  is  a  lifelong                                                               
Alaskan.  She  expressed concern for the impact HB  267 will have                                                               
on subsistence  users in Game  Management 26, in  particular, for                                                               
residents  of  Anaktuvuk  Pass,   Nuiqsut,  and  Kaktovik.    She                                                               
anticipated a  dramatic increase of  people would use  the Dalton                                                               
Highway and adjacent corridor for  recreational uses with passage                                                               
of HB 267.  The bill  will provide easy access to areas important                                                               
to the  residents of the  North Slope  for subsistence use.   She                                                               
also  anticipated an  increase in  user  conflicts between  sport                                                               
hunters, recreational  users, and  local subsistence users.   She                                                               
outlined  potential  areas  west   of  highway  that  could  have                                                               
devastating  impact  on  the  caribou  harvest  by  residents  of                                                               
Anaktuvuk Pass area.  Residents  live a nomadic lifestyle and are                                                               
heavily dependent  on caribou and  other game.  When  the caribou                                                               
are not  available and the Dall  Sheep and Musk Oxen  are heavily                                                               
regulated, families in the area  will not have sufficient game to                                                               
meet  their  nutritional  needs.   She  also  has  heard  Nuiqsut                                                               
residents  express  concern  about   recreational  users  on  the                                                               
Colville  River area.    She  pointed out  the  intent of  Dalton                                                               
Highway or  the "Haul Road"  is for industrial purposes.   People                                                               
were told the  Dalton Highway use would be  restricted to protect                                                               
subsistence use.                                                                                                                
                                                                                                                                
3:05:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG  asked  her   to  provide  her  written                                                               
testimony.                                                                                                                      
                                                                                                                                
DIRK NICKISH, Owner/Operator, Coyote  Air, stated that the DOT&PF                                                               
camps located along the Dalton  Highway are industrial worksites.                                                               
The DOT&PF  manpower have been  cut due to budget  constraints in                                                               
the  past  few  years  and  they neither  have  manpower  or  the                                                               
equipment to  facilitate rescues.   The  campground is  closed at                                                               
Marion  Creek during  the winter  and as  of July  the U.S.  Park                                                               
Service has made  their Park Ranger posting  a seasonal position.                                                               
As previously  mentioned there is  no longer  an AST in  the area                                                               
and it  may be mid-summer  before one is in  the area.   There is                                                               
not any  garbage disposal service  and the EMS  services provided                                                               
by the Alyeska Pipeline Services  Company are voluntary services.                                                               
As  a small  business owner  along the  Dalton Highway,  he often                                                               
picks  up  trash, helps  facilitate  rescues,  and works  on  law                                                               
enforcement issues with Fairbanks.   He stated that he is opposed                                                               
to HB 267 and opening the  Dalton Highway until the questions are                                                               
answered would be negligent.                                                                                                    
                                                                                                                                
3:08:15 PM                                                                                                                    
                                                                                                                                
WADE  WILLIS  stated  that  hunters  hunt  beyond  the  five-mile                                                               
corridor.   There is not  any long or short-term  management plan                                                               
for  the Northern  Alaska caribou  herd that  migrates along  the                                                               
Dalton  Highway Corridor.   He  anticipated that  it would  bring                                                               
significant impact  to migration  since snowmachine use  would be                                                               
allowed during the  period that caribou are moving  to the spring                                                               
calving  ground and  hunting would  be  allowed in  April on  the                                                               
calving ground.   The impact  will be  tremendous.  The  Board of                                                               
Game just increased the caribou bag  limit to 10 in the Northwest                                                               
section of Game Management Unit  (GMU) 26-B which would allow use                                                               
of snowmachines.  He stated  that this is the traditional hunting                                                               
grounds of  the Nuiqsut residents.   He referred to  the comments                                                               
made at  the Board of  Game meeting.   He related that  no public                                                               
testimony was taken  by the board at the meeting  with respect to                                                               
the  Dalton  Highway,  but  sent  a  letter  supporting  HB  267,                                                               
although no testimony was taken.   He noted that Ben Grussendorf,                                                               
who once served in the  legislature, strongly opposed sending the                                                               
letter.    He  suggested  that  a  stakeholder  group  should  be                                                               
established to  consider opening  up that area  to trapping.   He                                                               
offered his belief that a  reasonable opportunity for subsistence                                                               
should  be   considered.    The  "Haul   Road"  offers  important                                                               
resources to  residents who areas  rely on trapping.   He offered                                                               
to submit comments.                                                                                                             
                                                                                                                                
3:11:02 PM                                                                                                                    
                                                                                                                                
BERNIE  HICKER,  Wiseman,  Alaska,  stated that  he  has  been  a                                                               
resident of  Dalton Highway Corridor for  the past 27 years.   He                                                               
spoke  in opposition  to  HB 267.    His family  runs  a bed  and                                                               
breakfast,  the Arctic  Getaway, which  serves about  400 people,                                                               
including  Alaskans, who  come there  because of  the wilderness.                                                               
They  can step  off the  side of  the road  and be  in wilderness                                                               
without noise.   He thought  it would be a  shame to open  up the                                                               
area for "the  fun of a few"  to "tear this place up."   He hoped                                                               
the  legislature  would keep  the  area  closed to  snowmachines.                                                               
Many photographers come to photograph  animals in close proximity                                                               
to the  road.   It is  a great  opportunity and  the snowmachines                                                               
would  inhibit  the  ability  to  participate  in  that  type  of                                                               
photography.  He urged members to vote no on HB 267.                                                                            
                                                                                                                                
3:12:47 PM                                                                                                                    
                                                                                                                                
WYN MENEFEE, Chief  of Operations, Division of  Mining, Land, and                                                               
Water, Department  of Natural Resources (DNR),  stated that there                                                               
are  overlapping   restrictions  on  snowmachine  in   the  Umiat                                                               
meridian.   He  said that  anywhere  north of  the meridian  line                                                               
requires a permit for snowmachine use.                                                                                          
                                                                                                                                
REPRESENTATIVE  P.  WILSON  asked  Mr. Menefee  to  identify  the                                                               
latitude or longitude of the meridian line.                                                                                     
                                                                                                                                
MR. MENEFEE  answered that the  area is located  above Chandalar,                                                               
in about the  upper third of the Dalton Highway,  although he did                                                               
not know  the exact mileage.   He  related that anywhere  in that                                                               
region  requires a  special-use  designation and  anyone using  a                                                               
vehicle  must obtain  a permit.   He  said snowmachine  use would                                                               
require  a specific  authorization  any  time of  the  year.   In                                                               
further response  to Chair  P. Wilson,  he stated  that currently                                                               
the  DNR  cannot authorize  recreational  use  of a  snowmachine.                                                               
Under the bill, the DNR  could issue permits for snowmachine use.                                                               
Thus, the bill would broaden what the DNR could authorize.                                                                      
                                                                                                                                
CHAIR P. WILSON related that if  HB 267 bill passes the DNR would                                                               
change its procedures.                                                                                                          
                                                                                                                                
MR.  MENEFEE  answered  no,  the  procedures  would  not  change.                                                               
However,  it would  change  what  the DNR  could  authorize.   In                                                               
further  response to  Chair P.  Wilson, he  related that  the DNR                                                               
cannot  currently authorize  permits for  snowmachine use  or for                                                               
hunting.                                                                                                                        
                                                                                                                                
3:16:00 PM                                                                                                                    
                                                                                                                                
JOY WIEBE  stated that she works  as a "haul road"  truck driver.                                                               
She  stated that  she  "runs fuel"  on the  Dalton  Highway.   If                                                               
someone has an  accident and his/her truck runs off  the road the                                                               
truck  will stay  there  until towing  services  can arrive  from                                                               
Fairbanks.  The road barely allows  two trucks to pass and it can                                                               
be  unbelievably icy.   She  thinks that  wolves and  subsistence                                                               
hunters are doing  fine job harvesting the caribou.   She related                                                               
that  the road  is  open  to public,  but  not for  snowmachines.                                                               
People can  cross country ski or  dog mushers can use  the Dalton                                                               
Highway Corridor.   She offered her belief that  the caribou herd                                                               
would  be decimated.    She  related that  pull  outs are  barely                                                               
adequate  and during  storms  are inadequate.    North of  Arctic                                                               
Circle storms  appear suddenly.   "There is absolutely  no rescue                                                               
and in that case would be  recovery," she said.  She concluded by                                                               
stating that she strongly opposes HB 267.                                                                                       
                                                                                                                                
3:18:41 PM                                                                                                                    
                                                                                                                                
MS. WIEBE, in response to  Chair Wilson, suggested that increased                                                               
traffic would  especially impact drivers during  the winter since                                                               
most people  are unfamiliar with  the Dalton Highway and  tend to                                                               
travel right down  the middle of the road.   She related that her                                                               
fuel  truck  weighs between  105,000  to  108,000 pound  and  she                                                               
cannot "stop on  a dime."  She explained that  she slows down for                                                               
cars, but  it also very  difficult to determine the  actual edges                                                               
of  the road.   She  offered her  belief that  only two  outhouse                                                               
facilities are  available on the Dalton  Highway between Coldfoot                                                               
and Deadhorse,  including one at  the shelf  and one at  mile 62.                                                               
She noted  that she has  been afraid to  stop at the  outhouse at                                                               
mile 62 since trash piles up and creates a bear hazard.                                                                         
                                                                                                                                
3:20:37 PM                                                                                                                    
                                                                                                                                
CHAIR P.  WILSON asked  for information on  what would  happen if                                                               
her truck became involved in an accident.                                                                                       
                                                                                                                                
MS. WIEBE  answered that if  her truck  were to hit  someone that                                                               
the  occupants  of the  vehicle  would  not  have any  chance  of                                                               
survival so she would rather go into the ditch herself.                                                                         
                                                                                                                                
3:21:08 PM                                                                                                                    
                                                                                                                                
DANE  CROWLEY,   Executive  Director,  Sportsmen  for   Fish  and                                                               
Wildlife   (SFFW),  stated   that   the  SFFW   is  a   statewide                                                               
organization  represents   several  thousand  Alaskans.     Their                                                               
mission  is to  ensure the  state has  an abundance  of resources                                                               
available  and to  provide access  to the  resources.   He stated                                                               
that  the purpose  of  the  Dalton Highway  Corridor  was to  not                                                               
interfere with  subsistence hunting  by not  allowing snowmachine                                                               
use in  the corridor.  The  assumption has been that  access will                                                               
"wreck  something."    Currently,  the  Dalton  Highway  Corridor                                                               
management is  inconsistent since  some residents  are disallowed                                                               
access.   This  bill  is  not about  hunting,  but would  provide                                                               
access to state lands from a  state highway.  He urged members to                                                               
review the  statute.  He maintained  that this bill is  not about                                                               
hunting but is about access to public land.                                                                                     
                                                                                                                                
3:23:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG  expressed  concern  about  the  public                                                               
safety along the  Dalton Highway Corridor.  He hoped  that as the                                                               
subcommittee  performs it  work that  the lives  and property  of                                                               
residents along the Dalton Highway Corridor will be protected.                                                                  
                                                                                                                                
MR. CROWLEY offered to send in additional comments.                                                                             
                                                                                                                                
3:24:05 PM                                                                                                                    
                                                                                                                                
CHARLES  DERRICK   stated  that  he  previously   worked  on  the                                                               
TransAlaska  pipeline  and  has  traveled most  of  the  pipeline                                                               
length.  He  said he is retired, owns snow  machines, a satellite                                                               
phone and  would like to  be able to  travel in the  early spring                                                               
but cannot currently  do so.  He  said he does not  wish to hunt,                                                               
but would  like to do  some ice fishing  and explore some  of the                                                               
lakes in  the Dalton Highway Corridor.   He spoke in  favor of HB                                                               
267.  He asked what measures  the DOT&PF has taken to improve the                                                               
Dalton Highway,  including adding pullouts.   He related  that he                                                               
heard for  years that insufficient pullouts  and facilities exist                                                               
along the Dalton  Highway.  He did not understand  why DOT&PF has                                                               
not taken any action to make improvements.                                                                                      
                                                                                                                                
[HB 267 was held over.]                                                                                                         
                                                                                                                                
3:27:21 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
meeting was adjourned at 3:27 p.m.