ALASKA STATE LEGISLATURE  SENATE TRANSPORTATION STANDING COMMITTEE  May 15, 2025 1:40 p.m. MEMBERS PRESENT Senator Jesse Bjorkman, Chair Senator Löki Tobin, Vice Chair Senator Jesse Kiehl Senator Bert Stedman Senator Mike Shower MEMBERS ABSENT  All members present OTHER LEGISLATORS PRESENT Representative Holland COMMITTEE CALENDAR  SENATE BILL NO. 191 "An Act approving the transfer of land owned by the Alaska Railroad Corporation to the City of Whittier; and providing for an effective date." - HEARD & HELD CS FOR HOUSE JOINT RESOLUTION NO. 14(TRA) Supporting the completion of the Port MacKenzie Rail Extension and the Northern Rail Extension; supporting the increase in defensive capabilities at Fort Greely, Alaska; encouraging a renewed commitment by the Alaska Railroad to a community-minded approach to future rail expansion; and encouraging the development of critical Arctic infrastructure. - MOVED CSHJR 14(TRA) OUT OF COMMITTEE PREVIOUS COMMITTEE ACTION  BILL: SB 191 SHORT TITLE: TRANSFER OF RAILROAD LAND TO WHITTIER SPONSOR(s): SENATOR(s) GIESSEL 05/09/25 (S) READ THE FIRST TIME - REFERRALS 05/09/25 (S) TRA, CRA 05/15/25 (S) TRA AT 1:30 PM BUTROVICH 205 BILL: HJR 14 SHORT TITLE: PORT MACKENZIE & NORTHERN RAIL EXTENSIONS SPONSOR(s): REPRESENTATIVE(s) MCCABE 03/21/25 (H) READ THE FIRST TIME - REFERRALS 03/21/25 (H) TRA 04/10/25 (H) TRA AT 1:00 PM BARNES 124 04/10/25 (H) Heard & Held 04/10/25 (H) MINUTE(TRA) 04/22/25 (H) TRA AT 1:00 PM BARNES 124 04/22/25 (H) Heard & Held 04/22/25 (H) MINUTE(TRA) 04/24/25 (H) TRA AT 1:00 PM BARNES 124 04/24/25 (H) Moved CSHJR 14(TRA) Out of Committee 04/24/25 (H) MINUTE(TRA) 04/25/25 (H) TRA RPT CS(TRA) 3DP 1NR 04/25/25 (H) DP: MCCABE, STUTES, CARRICK 04/25/25 (H) NR: MINA 05/07/25 (H) TRANSMITTED TO (S) 05/07/25 (H) VERSION: CSHJR 14(TRA) 05/09/25 (S) READ THE FIRST TIME - REFERRALS 05/09/25 (S) TRA 05/15/25 (S) TRA AT 1:30 PM BUTROVICH 205 WITNESS REGISTER SENATOR CATHY GIESSEL, District E Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Sponsor of SB 191. PAIGE BROWN, Staff Senator Cathy Giessel Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Provided a summary of the intent of SB 191. JACKIE WILDE, City Manager City of Whittier Whittier, Alaska POSITION STATEMENT: Testified by invitation on SB 191. CHRISTY TERRY, Vice President Real Estate Alaska Railroad Corporation Anchorage, Alaska POSITION STATEMENT: Testified by invitation on SB 191. REPRESENTATIVE KEVIN MCCABE, District 30 Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Sponsor of HJR 14. BILL O'LEARY, President and Chief Executive Officer (CEO) Alaska Railroad Corporation (ARRC) Anchorage, Alaska POSITION STATEMENT: Testified by invitation on HJR 14. CLARK HOPP, Chief Operating Officer (COO) Alaska Railroad Corporation (ARRC) Anchorage, Alaska POSITION STATEMENT: Testified by invitation on HJR 14. PATRICK SHARROCK, representing self Anchorage, Alaska POSITION STATEMENT: Testified with concerns on HJR 14. DAVID GRIFFIN, Port Director Port McKenzie Matanuska-Susitna Borough Anchorage, Alaska POSITION STATEMENT: Testified in support of HJR 14. JACK BARRETT, Meritage Communities Wasilla, Alaska POSITION STATEMENT: Testified in support of HJR 14. ACTION NARRATIVE 1:40:57 PM CHAIR BJORKMAN called the Senate Transportation Standing Committee meeting to order at 1:40 p.m. Present at the call to order were Senators Tobin, Kiehl, Stedman and Chair Bjorkman. Senator Shower arrived thereafter. SB 191-TRANSFER OF RAILROAD LAND TO WHITTIER  1:41:52 PM CHAIR BJORKMAN announced the consideration of SENATE BILL NO. 191 "An Act approving the transfer of land owned by the Alaska Railroad Corporation to the City of Whittier; and providing for an effective date." 1:42:07 PM SENATOR CATHY GIESSEL, District E, Alaska State Legislature, Juneau, Alaska, advanced to slide 2 and gave a brief overview of SB 191. She surmised that an agreement transferring Alaska Railroad Corporation (ARRC) lands to the City of Whittier would surprise some individuals. 1:42:43 PM SENATOR GIESSEL advanced to slide 3 and gave a brief overview of Whittier: [Original punctuation provided.] Whittier Facts  • Population of 272 • Built during WWII • Ice-Free Deep-Water Port for year -round access • Gets thousands of visitors a year • Popular cruise, fishing and outdoor recreation launch point 1:43:07 PM SENATOR GIESSEL advanced to slide 4 and explained that ARRC owns 85 percent of the developable land surrounding Whittier. She said that Begich Towers was built during WWII and houses the majority of Whittier's population. Slide 4 contains an aerial image of Whittier with overlays to indicate land lots and the ARRC Reserve/Lands Boundary. 1:43:32 PM SENATOR GIESSEL advanced to slide 5 and continued to discuss the proposed land transfer. She emphasized that the City of Whittier wants to grow. She explained that Huna Totem Corporation is building a large dock at the far end of the Whittier Harbor, which would increase local tourism. The Whittier Tunnel provides additional opportunities for growth. Slide 5 contains a map depicting ARRC's areas of interest (AOI). This land transfer would benefit Whittier by providing the opportunity for the city to grow its economic base. In turn, this economic growth would benefit the entire state. 1:44:09 PM SENATOR GIESSEL advanced to slide 6: Original punctuation provided.] Timeline  November 1998  Master lease signed by ARRC and the City of Whittier March 2021  Whittier passes resolution requesting non-essential lands from the Railroad. March 2024  Whittier has initial discussions with Alaska Railroad Corporation (ARRC) October 2024  Memorandum of Understanding signed by ARRC and City of Whittier. SENATOR GIESSEL emphasized that the City of Whittier and ARRC have reached a land transfer agreement for approximately 85 acres. This land is nonessential to rail operations. ARRC would maintain control of railroad infrastructure, while the City of Whittier (as landowner) could build housing, improve the harbor, etc. She emphasized that there is strong local support for the transfer. She stated that, despite the agreement between the City of Whittier and ARRC, ARRC cannot transfer land without legislative approval. She listed the various ways that committee members are familiar with ARRC. She emphasized that the agreement would have a positive impact and opined that SB 191 is a positive bill that displays collaboration and agreement on the part of ARRC. 1:45:47 PM SENATOR STEDMAN clarified that his district has a railroad easement but does not have a railroad. 1:46:03 PM SENATOR KIEHL clarified that the railroad in his district is not ARRC. 1:46:15 PM SENATOR TOBIN asked whether any of the land that ARRC would transfer has been contaminated, and if the citizens of Whittier would be responsible for remediation. 1:46:43 PM SENATOR GIESSEL deferred the question. 1:47:03 PM SENATOR TOBIN noted that Alaska is located on Indigenous lands and asked whether the land might require archeological survey. She pointed out that there may be construction prohibitions if an archeological survey is not completed prior to beginning construction. 1:47:37 PM PAIGE BROWN, Staff, Senator Cathy Giessel, Alaska State Legislature, Juneau, Alaska, emphasized that the City of Whittier wants to grow; however, this is hindered by a lack of developable land. 1:48:07 PM CHAIR BJORKMAN announced invited testimony on SB 191. 1:48:19 PM JACKIE WILDE, City Manager, City of Whittier, Whittier, Alaska, provided a brief history of the land agreement. She said the City of Whittier has been working closely with ARRC for the past 1.5 years to reach an agreement. The land transfer includes land that is nonoperational for ARRC but is core infrastructure for the City of Whittier. She briefly discussed ARRC's terminal master plan and how the reduction of ARRC-owned land would ensure the continuation of that plan. She said the City of Whittier is looking forward to the future of the terminal master plan. In response to the question related to the need for an archeological survey, she explained that the City of Whittier was built for the military and suggested that because of the land's military history, an archeological survey would not be required. She noted that the City of Whittier has begun a waterfront economic development plan and has also entered into an agreement with Huna Totem Corporation for the new double- berth cruise ship dock. The City of Whittier is looking forward to gaining the ability for future growth and economic development. 1:50:25 PM SENATOR STEDMAN asked whether the municipality would subdivide and sell the transferred land. 1:50:39 PM MS. WILDE replied that most of the land is already leased. Those leases would continue. She directed attention to a 39-acre parcel adjacent to Glacier Street that could be developed through private partnerships to build multi-family units. The bay section would allow the City of Whittier to create recreation facilities and would bring additional economic development with cruise ship agencies. 1:51:44 PM SENATOR STEDMAN asked if the deed contains any restrictions. 1:51:59 PM MS. WILDE replied no. She explained that the master lease contains restrictions and the transfer of land would eliminate the master lease (and its restrictions). 1:52:10 PM SENATOR STEDMAN clarified his question. He asked whether the deed includes restrictions that would inhibit the City of Whittier's ability to sell the land. 1:52:23 PM MS. WILDE answered not on the 39-acre parcel. She shared her understanding that the only restrictions contained in the lease apply to the City's tank farm property. She said lease restrictions have not been discussed in negotiations and talks with ARRC. 1:52:45 PM SENATOR STEDMAN commented that development is often inhibited on leased land. He encouraged the City of Whittier to consider this moving forward. He stated that land sales result in greater development and are often more beneficial to the community (as opposed to land that is leased to developers by the municipality). 1:53:00 PM REPRESENTATIVE MCCABE joined the meeting. 1:53:55 PM MS. WILDE concurred and said the majority of Whittier's land is non-taxable. She indicated that properties would be developed and sold in the future. While the City of Whittier does not want to be in the business of real estate, waterfront leases are important to the city's economy and future growth. 1:54:38 PM CHRISTY TERRY, Vice President, Real Estate, Alaska Railroad Corporation (ARRC), Anchorage, Alaska, stated that ARRC has worked closely with the City of Whittier for the past 1.5 years to create a land transfer that holds up the interest of both parties. SB 191 is an essential step in that process. She briefly described the process, which included public work sessions and regular council meetings, among others. ARRC's goal is to reach an agreement that supports economic development while enhancing transportation infrastructure in the region. In response to Senator Tobin's questions about potential remediation and whether an archeological survey may be needed, she said SB 191 is an essential step in the process and would allow ARRC and the Whittier City Council to work through the details, which would include reviewing these types of questions. 1:56:13 PM SENATOR KIEHL recalled a small land sale from ARRC to the City of Whittier within the past 5-6 years. He asked the parcel size and price per acre for that sale. 1:56:34 PM MS. TERRY replied that she did not recall and offered to follow up with this information. She said that ARRC has worked closely with the City of Whittier on the Delong Dock transfer and wondered if this could be the sale he is referring to. 1:56:57 PM SENATOR KIEHL recalled that the parcel of land was adjacent to an existing multi-family building. He noted that SB 191 requires a transfer at the fair market value (FMV) and asked whether there is a rough sense of the value of the 85 acres of land. 1:57:33 PM MS. TERRY replied that the value is roughly $7 million. 1:57:40 PM SENATOR SHOWER joined the meeting. 1:57:46 PM SENATOR KIEHL asked about the per-acre value. 1:58:03 PM MS. TERRY replied that she could provide appraisals for each lot. 1:58:38 PM CHAIR BJORKMAN said that information could be provided at a later time. 1:59:12 PM SENATOR GIESSEL said the requested information would be provided. 1:59:21 PM CHAIR BJORKMAN asked if SB 191 is time sensitive and whether a particular timeframe would facilitate an advantage for one party over the other. 1:59:37 PM SENATOR GIESSEL replied that there is no urgent deadline. 1:59:53 PM CHAIR BJORKMAN held SB 191 in committee. HJR 14-PORT MACKENZIE & NORTHERN RAIL EXTENSIONS  2:00:25 PM CHAIR BJORKMAN announced the consideration of CS FOR HOUSE JOINT RESOLUTION NO. 14(TRA), Supporting the completion of the Port MacKenzie Rail Extension and the Northern Rail Extension; supporting the increase in defensive capabilities at Fort Greely, Alaska; encouraging a renewed commitment by the Alaska Railroad to a community-minded approach to future rail expansion; and encouraging the development of critical Arctic infrastructure. 2:00:49 PM REPRESENTATIVE KEVIN MCCABE, District 30, Alaska State Legislature, Juneau, Alaska, paraphrased from the sponsor statement for HJR 14: [Original punctuation provided.] CS HJR 14 Ver B  SPONSOR STATEMENT  "Supporting the completion of the Port MacKenzie Rail Extension and the Northern Rail Extension; supporting the increase in defensive capabilities at Fort Greely, Alaska; encouraging a renewed commitment by the Alaska Railroad to a community-minded approach to future rail expansion; and encouraging the development of critical Arctic infrastructure." House Joint Resolution 14 advocates for the completion of the Port MacKenzie Rail Extension and the Northern Rail Extension, two critical projects that will enhance Alaska's infrastructure, economic resilience, and national security. As the only U.S. state bordering the Arctic Ocean, Alaska plays a key role in Arctic strategy, defense operations, and resource development. The Port MacKenzie Rail Extension is a cornerstone of Alaska's long-term economic and logistical strategy. By providing a direct rail link between Interior Alaska and tidewater access at Port MacKenzie, Seward, Whittier, and Anchorage, this extension will reduce transportation costs, improve energy security, and expand market access for industries such as mining, agriculture, and natural gas. The completion of this project will not only strengthen supply chains but also increase the state's resiliency by ensuring an alternative transportation corridor in the event of highway disruptions caused by natural disasters, such as earthquakes, or port congestion elsewhere in the state. The Northern Rail Extension remains essential to U.S. national security, particularly with the expansion of the Arctic Mission at Fort Greely. As home to the nation's missile defense system, Fort Greely plays a critical role in protecting the U.S. and its allies. Despite this, it is the only military base in Alaska without rail access. Completing the Northern Rail Extension will provide a reliable, cost-effective means of transporting military equipment, personnel, and supplies, reinforcing the nation's defense posture in the Arctic as geopolitical competition intensifies. Significant progress has already been made. Phase 1 of the Northern Rail Extension, including the Tanana River crossing, has brought the rail line within 70 miles of Delta Junction and Fort Greely. Similarly, the MatanuskaSusitna Borough and the Alaska Railroad have completed nearly two-thirds of the Port MacKenzie Rail Extension, underscoring the project's viability and importance. 2:02:00 PM REPRESENTATIVE MCCABE continued to paraphrase from the sponsor statement for HJR 14: [Original punctuation provided.] This resolution also calls for a community-minded approach to rail expansion, urging the Alaska Railroad to work transparently with residents, businesses, and stakeholders to ensure responsible development. Furthermore, HJR 14 urges Alaska's congressional delegation to advocate for federal support in completing these essential projects, recognizing that while other Arctic nations invest heavily in infrastructure, the United States must act to maintain its leadership in the region. HJR 14 represents a unified commitment to economic growth, national security, and Alaskan resiliency. I respectfully urge my colleagues to join me in supporting this critical resolution. 2:03:14 PM REPRESENTATIVE MCCABE mentioned that the MatanuskaSusitna Borough passed its 2026 budget appropriating $6.7 million to construct a new barge ramp at Port MacKenzie, which would increase cargo capacity and economic potential. He noted that not have a rail extension at Port MacKenzie would be a limiting factor, since cargo could arrive at the port but have difficulty moving beyond it. He noted that the Parks Highway has issues with permafrost and opined that limiting truck traffic on that highway would be helpful to Department of Transportation and Public Facilities (DOTPF). He pointed out economic and resource development benefits for mining operations and for the farming industry in the surrounding communities. He stated that HJR 14 compliments a recent House Resolution to expedite the liquified natural gas (LNG) project. He noted strong federal support. He stated that advancing these projects would bolster national energy and transportation security while ensuring sustained economic benefits to Alaskans. He noted that this is an important part of the Alaska Railroad Corporation's (ARRC) Consolidated Rail Infrastructure and Safety Improvements (CRISI) Program grant application. He emphasized the importance of communicating legislative support. 2:06:18 PM SENATOR STEDMAN recognized the need for an anchor tenant to make the economics work. He opined that HJR 14 is timely. He recommended considering the addition of Fort McMurray, which would take the project to Canada. He surmised that interest in rail access is increasing in the US and Canada. He said this is up to the MatSu delegation and suggested that it might be beneficial. 2:07:43 PM REPRESENTATIVE MCCABE replied that he has considered this. He noted that it is another 100 miles to the Canadian border from Fort Greeley. He shared about conversations with the Minister of Economic Corridors in Alberta, Canada and indicated Canadian support. He emphasized the high cost of that addition. However, many have expressed interest in using Port MacKenzie if the port was connected to the railroad. He noted military interest. He stated that ARRC is actively seeking an anchor tenant. He said Port Mackenzie is 9000 acres that are ready to build and suggested that actively moving towards completion of the railway (and applying for the CRISI grant) is key to unlocking growth in the MatSu and the state. 2:10:03 PM SENATOR STEDMAN clarified that he did not mean to suggest creating a single big project that would end at the Canadian border but had intended to illustrate the opportunity that the Port MacKenzie rail extension would create. 2:10:38 PM REPRESENTATIVE MCCABE indicated his understanding and pointed out that Alaska is the reason the US is an arctic nation. He shared his larger vision for a combined rail that would lead to the North Slope and could potentially unlock the resources available there. 2:11:29 PM [CHAIR BJORKMAN passed the gavel to Vice Chair Tobin.] 2:11:34 PM SENATOR SHOWER emphasized that a rail to Canada would enable the transport of supplies in an emergency. He opined that this - plus the potential for military use and economic development - make a rail to Canada a worthwhile investment. He suggested an amendment that would include language communicating these benefits. 2:12:48 PM REPRESENTATIVE MCCABE expressed uncertainty that an amended version of HJR 14 would have the necessary time and support to move through the legislative process. He briefly discussed resiliency in the event of an earthquake or other natural disaster and surmised that the Port MacKenzie Rail Extension would create greater resiliency for ARRC. He opined that this would also be beneficial to the state. 2:14:08 PM SENATOR SHOWER wondered if there is sufficient time to pass an amended version of HJR 14. 2:14:42 PM VICE CHAIR TOBIN said the committee would discuss this with the sponsor of HJR 14 and suggested that quick action would be required. 2:15:01 PM VICE CHAIR TOBIN announced invited testimony on HJR 14. 2:15:17 PM BILL O'LEARY, President and Chief Executive Officer (CEO), Alaska Railroad Corporation (ARRC), Anchorage, Alaska, expressed support of HJR 14. He stated that ARRC supports rail infrastructure in Alaska in general, and the Port MacKenzie Rail Extension (PMRE) and the Northern Rail Extension (NRE) in particular. He said ARRC has hired an engineering firm to come up with a project estimate for completing PMRE and submitted competitive federal grants for the completion of PMRE and phase two of the NRE. ARRC has also submitted a Congressionally directed spending request to members of Alaska's federal delegation in support of completing phase two of the NRE. ARRC has worked closely with the MatanuskaSusitna Borough, Port MacKenzie staff, and Representative McCabe to identify potential customers for PMRE. He briefly discussed this process. MR. O'LEARY stated that ARRC has also worked with the Matanuska Susitna Borough and Representative McCabe to come up with a funding strategy to complete PMRE in lieu of an anchor tenant. He briefly discussed the CRISI grant and the MatanuskaSusitna Borough's request for $58 million in matching funds from the State of Alaska. He said that ARRC is actively advocating at both the state and federal levels for the advancement of these projects. He said that PMRE and NRE will result in a substantial increase in transportation efficiency in Alaska, as well as new opportunities in resource exports, energy solutions, and cross- industry project development. He emphasized that PMRE and NRE and large projects with statewide benefits and moving them forward will depend on more than ARRC. He opined that HJR 14 is an important opportunity for the legislature to confirm its support of the completion of the PMRE and NRE. 2:18:27 PM CLARK HOPP, Chief Operating Officer (COO), Alaska Railroad Corporation (ARRC), Anchorage, Alaska, expressed support of HJR 14. He said he has 35 years in the construction and railroad industries and would be excited to see both projects completed. 2:19:14 PM SENATOR TOBIN opened public testimony on HJR 14. 2:19:33 PM PATRICK SHARROCK, representing self, Anchorage, Alaska, testified with concerns on HJR 14. He said he has lived in Anchorage for 78 years and has followed the PMRE project for the past 17 years. He briefly discussed information received from ARRC and stated that no indication was made of new mineral developments or port improvements. He noted that close to $200 million was previously spent on the project and questioned the current levels of support. He opined that PMRE is unnecessary and expensive. 2:22:20 PM DAVID GRIFFIN, Port Director, Port McKenzie, Matanuska-Susitna Borough, Anchorage, Alaska, testified in support of HJR 14. He said that Port MacKenzie is owned and operated by the Matanuska Susitna Borough and serves as a marine gateway to Southcentral and Interior Alaska. He briefly described the port and stated that the area is ready for development. He briefly described the PMRE and opined that this extension is key to unlocking Alaska's natural resource potential. He opined that this extension would drive new economic opportunities for Alaska and the US and would positively impact National Security and military operations. He referred to several recent US executive orders and opined that Port MacKenzie is the logical port for natural resources coming from the surrounding area along the railbelt. 2:24:58 PM JACK BARRETT, Meritage Communities, Wasilla, Alaska, testified in support of HJR 14. He briefly discussed the importance of the Port MacKenzie Rail Extension (PMRE). He pointed out large differences in the cost of importing versus exporting items and stated that this needs to be considered. He opined that PMRE has great potential and not finishing the extension would be a missed opportunity. 2:26:48 PM VICE CHAIR TOBIN closed public testimony on HJR 14. 2:26:53 PM SENATOR SHOWER noted that the end of the legislative session is fast approaching and withdrew his request for a friendly amendment to HJR 14. He said that he would like to work with Representative McCabe to draft a separate resolution to address the potential extension of the rail to Canada. 2:27:23 PM SENATOR STEDMAN agreed that there is limited time and the extension from Fort McMurray to Alaska would be better suited for a separate resolution. He suggested moving HJR 14 from committee due to the late date. 2:27:52 PM REPRESENTATIVE MCCABE expressed his appreciation. He reiterated that HJR 14 is necessary for Alaska to receive the CRISI grant. 2:28:35 PM SENATOR STEDMAN noted an upcoming Energy Council and suggested that this would be a good time to discuss the issue. 2:29:13 PM [VICE CHAIR TOBIN solicited the will of the committee.] 2:29:14 PM SENATOR STEDMAN moved to report [CSHJR 14(TRA)], work order 34- LS0776\I, from committee with individual recommendations and attached fiscal note(s). 2:29:31 PM VICE CHAIR TOBIN found no objection and CSHJR 14(TRA) was reported from the Senate Transportation Standing Committee. 2:29:48 PM There being no further business to come before the committee, Vice Chair Tobin adjourned the Senate Transportation Standing Committee meeting at 2:29 p.m.