SENATE RESOURCES COMMITTEE April 5, 2000 3:20 p.m. MEMBERS PRESENT Senator Rick Halford, Chairman nator Robin Taylor, Vice Chairman Senator Pete Kelly Senator Lyda Green Senator Sean Parnell Senator Georgianna Lincoln MEMBERS ABSENT Senator Jerry Mackie COMMITTEE CALENDAR CS FOR SENATE BILL NO. 235(TRA) "An Act authorizing the exchange of land between the Alaska Railroad Corporation and Eklutna, Inc., between the Alaska Railroad Corporation and the United States Department of the Army and the United States Department of the Air Force, between the Alaska Railroad Corporation and Chugach Alaska Corporation, and between the Alaska Railroad Corporation and the Municipality of Anchorage; authorizing the transfer of land between Alaska Railroad mileposts 133 and 134 from the Alaska Railroad Corporation to certain named individuals; and providing for an effective date." -MOVED CSSB 235(TRA) OUT OF COMMITTEE CS FOR HOUSE BILL NO. 344(FIN) "An Act authorizing a land exchange between the Department of Natural Resources and Alaska Hardrock, Inc.; approving a long-term lease of certain Alaska Railroad Corporation land at Healy; and providing for an effective date." -MOVED CSHB 344(FIN) OUT OF COMMITTEE SENATE CONCURRENT RESOLUTION NO. 3 Relating to the sovereignty of the State of Alaska and the sovereign right of the State of Alaska to manage the natural resources of Alaska. -MOVED SCR 3 OUT OF COMMITTEE PREVIOUS SENATE COMMITTEE ACTION SB 235 - See Transportation minutes dated 3/2/00. HB 344 - No previous action. SCR 3 - No previous action. WITNESS REGISTER Mr. Dale Bondurant 31864 Moonshine Drive Soldotna, AK 99669 POSITION STATEMENT: Supports SCR 3 Ms. Whitney Highland Staff to Senator Leman Alaska State Capitol Juneau, AK 99801 POSITION STATEMENT: Testified for the sponsor of SB 235 Ms. Carol Carroll, Director Division of Support Services Department of Natural Resources 400 Willoughby Ave. Juneau, AK 99801-1724 POSITION STATEMENT: Answered questions regarding HB 344 Mr. Charlie Green Usibelli Coal 100 Cushman St., Suite 210 Fairbanks, AK 99701 POSITION STATEMENT: Answered questions regarding HB 344 Mr. Charlie Boddy Government Relations Usibelli Coal 100 Cushman St. Fairbanks, AK 99701 POSITION STATEMENT: Answered questions regarding HB 344 ACTION NARRATIVE TAPE 00-19, SIDE A Number 001 CHAIRMAN HALFORD called the Senate Resources Committee meeting to order at 3:20 p.m. Present at the call to order were Senators Pete Kelly, Taylor, Green, Parnell, Lincoln and Chairman Halford. The first order of business to come before the committee was SCR 3. SCR 3-SOVEREIGNTY OF THE STATE; RESOURCES SENATOR TAYLOR, sponsor of SCR 3, explained that SCR 3 addresses where Alaska stands in regard to the federal mandate over fish and game management on federal lands in Alaska. At present, the Alaska Department of Fish and Game (ADFG) is negotiating with federal agencies about fish and game management in rivers. Senator Taylor said he believes the ADFG negotiations completely violate the Governor's comment that no Governor should ever barter away the state's sovereign right to manage its lands, waters and resources. The federal government is violating the Tenth Amendment and attempting to treat Alaskans as second class citizens. It is also violating the 14th Amendment and about 11 different provisions of the Alaska Constitution according to two different court cases; the Totemoff case and the McDowell case. SCR 3 tells Congress it has made a mistake and asks it to remove the federal mandate and to support the Governor's efforts to overturn the Katie John case. MR. DALE BONDURANT, representing himself, stated support for SCR 3. He recounted a discussion between Senator Stevens and Mr. Mitchell at a Congressional hearing in 1978 in which Senator Stevens said, It's another thing to give the Secretary of Interior veto rights and on the pretext of saying that subsistence provisions in Alaska law are not adaptable to protect the Alaska Natives and give them the right to give back to the Department of Interior the overriding controls of fish and game on federal lands in Alaska. It violates the intent of the statute that would deny the states the [inaudible] and, in violation of what I consider to be inherent constitutional rights, of the State to equality. We are an equal partner in the Union and we are not to be treated that way. Now, if we want to go into some cooperative management program where the federal government participates in it and if it appoints the joint board that's one thing, but to leave veto powers and the right to preempt the state is wrong. Mr. Mitchell responded, The federal government has an interest out there. They can enforce, and all we do with oversight provision - I can't expect the Senator to respectfully disagree with me - is to force the Secretary of the Interior to do something positive for a change. He's got that last right. Senator Stevens then said, He does not have it today. The [inaudible] Act does not give him the right. He has the right to post an area for hunting but he does not have a right to take away from the state the right to manage hunting. Now, under this bill, he would be entitled again, under the pretext that the state subsistence provision for Natives was not sufficient and to take over the entire management on federal lands, military posts, BLM, park lands, fish and wildlife lands, under the pretext of one incident, he could take back the whole thing. MR. BONDURANT stated it is time for Alaska to stand up and say it has a sovereign right like any other state. There being no one else wishing to testify on SCR 3, SENATOR TAYLOR moved SCR 3 from committee with individual recommendations. There being no objection, the motion carried. SB 235-APPROVING LAND TRANSFERS FOR RAILROAD SENATOR LOREN LEMAN, sponsor of SB 235, explained that the measure deals with land transfers among the Alaska Railroad Corporation (ARRC), the U.S. Army, the U.S. Air Force, the Municipality of Anchorage (MOA), and Eklutna, Inc. He asked Ms. Highland to present the sponsor statement and answer questions. MS. WHITNEY HIGHLAND, an intern to Senator Leman, read the following statement. SB 235 authorizes the ARRC to enter into several land exchange and transfer agreements needed for a track upgrade and realignment project. This bill approves exchanges of railroad land for certain parcels held by five landholders who are the Army, the Air Force, Eklutna, Inc., Chugach Alaska Corporation, and the Municipality of Anchorage (MOA). SB 235 also approves the conveyances of 5.1 acres to certain private landowners in Chugiak who live adjacent to railroad right-of- way. It is federal law that abandoned railroad land will be reverted back to the federal government after 18 years. The federal government would then deed the land out to the adjacent landowners. SB 235 thus accelerates a land transfer that is already required to occur under federal law. The exchanges and transfers will allow the railroad's track realignment project between Anchorage and Wasilla to proceed and will also allow the Department of Transportation and Public Facilities to relocate a portion of the Seward Highway just north of Seward. Upgrading and realigning the track will increase safety and efficiency. A straighter track is safer due to reduced track and equipment wear, consistency in train handling, increased sight distance, and reduced maintenance requirements. Another benefit of this project is that the running time between Anchorage and Wasilla will be decreased from 95 minutes to less than 55 minutes, making commuter service a more viable option. This would also mean a potential reduction in the traffic growth and impact on the Glenn and Parks Highway. Most importantly for the communities neighboring the railroad, this project includes upgrades to vehicle crossings and public access amenities that will enhance safety and access across the tracks. The railroad plans an investment of between $45 and $60 million for its first phase of improvements and these funds will come from federal transportation grants as well as the Alaska Railroad's operating revenues. No general funds will be used for this project. This project is supported by a number of organizations including the Alaska Visitors' Association, the Alaska Chamber of Commerce, Chugiak-Eagle River Chamber of Commerce, Palmer Chamber of Commerce, Wasilla Chamber of Commerce, Anchorage Economic Development Corporation, Matanuska-Susitna Convention and Visitors' Bureau, Anchorage Convention and Visitors' Bureau, and the City of Wasilla. CHAIRMAN HALFORD noted that, being a member of the Transportation Committee, he has reviewed this legislation and therefore has no questions. Number 879 SENATOR LINCOLN asked if anyone else would be testifying on SB 235. CHAIRMAN HALFORD said no one else signed up but that representatives of ARRC are available to answer questions. He noted a House hearing is being held on the same topic. SENATOR LINCOLN asked whether the realignment will have any effect on the Coastal Trail. MS. HIGHLAND responded that Senator Leman is aware of that issue which is very distinct and separate from SB 235. CHAIRMAN HALFORD asked if SB 235 will have no impact on the Coastal Trail. MS. HIGHLAND said that is correct. SENATOR PARNELL moved SB 235 from committee with individual recommendations and accompanying fiscal notes. Without objection, the motion carried. HB 344-HARDROCK LAND EXCHANGE/HEALY RR LEASE CHAIRMAN HALFORD announced that a Senate version of HB 344 has been discussed by the Committee. The House amended HB 344, which was similar to the Senate bill, and added the Alaska Railroad Corporation (ARRC) land in Healy. MS. CAROL CARROLL, Director of the Division of Support Services of the Department of Natural Resources (DNR), explained that the intent of the House amendment is to fix a problem the community of Healy has with leased land. It allows ARRC to extend the lease so that community members can get mortgages on homes on that land. Number 1070 SENATOR GREEN asked if that subdivision is already established. MS. CARROLL said it is. MR. CHARLIE GREEN, representing Usibelli Coal, concurred with Ms. Carroll's statement and explained that the original lease with the ARRC, when it was under federal management, was for 55 years. About 25 years have passed. The subdivision homeowners are buying and building homes on subleased land. Most banks require a minimum 10 year cushion on mortgages on leased land. At this time, two families have moved from the subdivision and are unable to sell their homes because of the duration of the lease. Additionally, a number of houses in the subdivision are available for rent primarily because the owners have been unable to sell them. HB 344 will give legislative approval for an extension of the lease. It does not require language to be placed in statute giving ARRC unilateral approval to terminate the lease. In addition, the owner will not be able to unilaterally terminate the lease, as banks would not give mortgages in that case. The subdivision is in the heart of the community of Healy. It contains about 120 residences, as well as the community center and volunteer fire department. CHAIRMAN HALFORD asked if the benefit of this extension and any value that is accrued will go to the subleasees. MR. GREEN replied that it would certainly be a benefit because subleases could be extended, satisfying requirements of bankers and other lenders. CHAIRMAN HALFORD asked if a profit is being made by anyone in this process. MR. GREEN answered, "No, this is definitely a non-profit enterprise." He explained the ARRC lease held by Usibelli Coal requires that Usibelli sublease to homeowners and commercial businesses that locate within the subdivision. Usibelli is only allowed to recover its original development fees and the rent it pays to ARRC, which is calculated on a per acre basis. From Usibelli's perspective, it is a non-profit project. SENATOR TAYLOR asked why ARRC does not sell the homeowners the land instead of continuing to lease. CHARLIE BODDY, Vice President of Government Relations with Usibelli Coal, explained that Usibelli has been working with the Denali Borough, ARRC, and the homeowners to find a better solution. Usibelli considers CSHB 344(FIN) to be an interim, stop-gap measure to allow people who want to sell and build homes to be freed up from the current problem. The parties involved anticipate that within the next year they will find a way to get that land into private hands. Usibelli got involved in developing the subdivision because it had the equipment needed to lay out the entire subdivision and lay a trunk line. It then moved all of the "folks" out of the Usibelli and Sun Trana mining communities into this new area however it was never Usibelli's intention to be a landlord. With the creation of the Borough, he believes private ownership can be achieved. SENATOR GREEN moved CSHB 344(FIN) from committee with individual recommendations. There being no objection, the motion carried. There being no further business to come before the Committee, CHAIRMAN HALFORD adjourned the meeting at 3:45 p.m.