Legislature(2003 - 2004)
05/04/2004 01:45 PM House TRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SB 31-RAILROAD UTILITY CORRIDOR TO & IN CANADA CHAIR HOLM announced that the first order of business would be CS FOR SENATE BILL NO. 31(RES) am, "An Act relating to a transportation corridor for extension of the Alaska Railroad to Canada and to extension of the Alaska Railroad to connect with the North American railroad system." Number 0084 RICHARD SCHMITZ, Staff to Senator John Cowdery, Alaska State Legislature, explained that SB 31 establishes a series of steps toward the ultimate goal of opening the way to complete a railroad connection between Alaska and the North American rail system. The legislation doesn't require any appropriations, although it allows the Alaska Railroad Corporation (ARRC) to use funds it can obtain to go into Canada and possibly connect with the railroad in British Columbia. He informed the committee that in the Senate Resources Standing Committee there was concern with what would happen if once the corridor is established, the pipeline comes along. The Senate Resources Standing Committee and the Department of Natural Resources developed language specifying what would happen as the process progresses. [With that goal], SB 31 authorizes ARRC to obtain ownership or right-of-way through any of the land "where the federal private". The legislation also mandates a 500-foot corridor for other uses, such as fiber optic cable, power transmission lines, et cetera. Additionally, the corridor would allow specific railroad-related uses, such as depots, material storage, gravel pits, et cetera. Number 0362 BOB LOEFFLER, Director, Mining, Land and Water, Department of Natural Resources (DNR), turned to how DNR deals with the gas line. Mr. Loeffler explained that SB 31 requests that ARRC designate a corridor, which is really managed by DNR. Before a railroad is built, DNR retains the right to authorize the gas line through a lease after consulting with ARRC in order to review possibilities for accommodating future railroads. If the railroad is constructed before a gas line, DNR reserves the right to cross the railroad, authorize a gas line, and retain the revenues. He pointed out that the aforementioned is found in subsections (f) and (g) on pages 4 and 5 of the legislation. Mr. Loeffler opined that the language places DNR in the "driver's seat" in order to ensure that the [railroad and the gas line] are compatible. In response to Chair Holm, Mr. Loeffler confirmed that the legislation doesn't forego the authority of the State of Alaska by giving it to ARRC. MR. SCHMITZ acknowledged the possibility that the railroad could be built at the same time as the gas line or even before the gas line. However, the reality is that a railroad, unlike trucks, can carry the 80-foot sections of pipe for the gas line. Therefore, the railroad has an opportunity to lower the construction costs of a gas line. In fact, if a railroad could save 25 percent of the actual building costs of a gas line, then that would "sort of" pay for building the railroad. For those reasons, throughout the world a number of railroads have been built the same time as a pipeline. To have a railroad connection with rest of North America is a real economic development opportunity and would be a tremendous boost for the oil and gas sector. CHAIR HOLM asked if the right-of-way is fee simple. MR. SCHMITZ answered that it's fee simple for state land. MR. LOEFFLER explained that DNR would retain the land until ARRC has the financing and is ready to build a segment. Once a segment is built, an as-built survey is performed. At that point, ARRC would retain 100 feet plus the necessary sidings while DNR would retain the remainder of the 500-foot corridor. In further response to Chair Holm, Mr. Loeffler explained that although ARRC would obtain a patent from the state, DNR would reserve a couple of things from that patent. He specified that DNR would reserve the ability to transport people. For instance, if a village needed access to good recreation grounds, it's DNR's responsibility. Mr. Loeffler noted that DNR would also reserve the subsurface estate. Number 0820 REPRESENTATIVE MASEK moved to report CSSB 31(RES)am out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, it was so ordered.