Legislature(2003 - 2004)

02/11/2003 01:34 PM Senate TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
         SB 31-RAILROAD UTILITY CORRIDOR TO & IN CANADA                                                                     
CHAIR  COWDERY introduced  former Representative  Jeannette James                                                               
and   invited  her   to  come   forward  and   join  the   Senate                                                               
Transportation Committee.  Chair  Cowdery has cosponsored similar                                                               
legislation and  Representative James has been  the prime sponsor                                                               
of similar legislation in the past.                                                                                             
CHAIR COWDERY explained  that he planned to take  testimony on SB
31 but it  was not his intention to move  the bill from committee                                                               
today.   He said that  transportation ties are very  important to                                                               
Alaska and to  the security of the United States.   Chair Cowdery                                                               
learned,  while  speaking  in  St.  Petersburg,  that  Russia  is                                                               
concerned  that China  owns much  of the  land around  the Panama                                                               
Canal.   The Panama Canal would  be a probable target  if someone                                                               
wanted to  jeopardize shipments to  the East Coast of  the United                                                               
States, another reason to move forward with SB 31.                                                                              
REPRESENTATIVE   JAMES   informed   the  committee   a   railroad                                                               
connection has been her passion over  the last ten years.  Former                                                               
Representative Red Swanson had a  room full of information on the                                                               
railroad and  passed the idea on  to her. She gave  the following                                                               
reasons to support SB 31.                                                                                                       
First, Alaska  is a resource state.   The railroad is  the reason                                                               
all of  the people live in  the Railbelt.  Second,  a railroad is                                                               
important to the security of the State of Alaska.                                                                               
The  Fairbanks  North  Star  Borough's  Railroad  Task  Force  is                                                               
working  to develop  plans for  out-of-grade crossings  and other                                                               
delineations  of the  corridor  passing through  Fairbanks.   The                                                               
Railroad Task Force pointed out  a railroad going east would have                                                               
the  advantage of  being out  of the  earthquake danger  zone. An                                                               
earthquake similar  to the  one in 1964  would cause  more damage                                                               
today so  an alternative transportation  mode to move  people and                                                               
products in and out of Alaska is important.                                                                                     
Statewide support for  a better connection to  the North American                                                               
rail system to access suppliers  and markets for Alaskan products                                                               
is growing.  A rail to road  to water to air system would provide                                                               
an  opportunity  to  create  wealth   in  the  state  and  reduce                                                               
dependence on the rest of the nation.                                                                                           
CHAIR COWDERY  added if  construction of a  gas pipeline  were to                                                               
begin,  the  pipeline  pieces  would probably  be  54  inches  in                                                               
diameter, 1 1/4  inches thick and 80  feet long.  There  is not a                                                               
truck  in Alaska  that can  legally haul  one joint.   If  trucks                                                               
receive an  overweight permit, many  bridges would not  stand the                                                               
weight.  The  railroad could carry the pipe and  supplies for the                                                               
RICHARD  SCHMITZ,  staff  to  Chairman  Cowdery,  introduced  the                                                               
contents of  the SB 31  packet and  pointed to the  corridor maps                                                               
delineating  the proposed  connection. The  first map  highlights                                                               
the  rail  sections into  Fort  Nelson  and Chipmunk  in  British                                                               
Columbia.  These  are  the  existing   extensions  of  the  North                                                               
American  rail system  and almost  definitely the  location of  a                                                               
connection.  The  British   Columbian  government  built  roadbed                                                               
through Chipmunk to Dease Lake,  not far from the Yukon Territory                                                               
border.   The branch leading  to Fort  Nelson is the  most active                                                               
branch serving the tungsten mine, forestry and gas development.                                                                 
He told  members the Alaska  Railroad prepared four  maps showing                                                               
in detail the  proposed route from Eielson Air Force  Base to the                                                               
Canadian border. The route is  well suited for rail construction;                                                               
there  are  no huge  rivers,  high  mountains, seismic  zones  or                                                               
places  with loose  shale.   The connection  follows the  Tintina                                                               
Trench, a  highly mineralized  area rich  for development.   This                                                               
natural trench can be seen from  a satellite photo.  The last two                                                               
maps give detail of the British Columbia Railroad system.                                                                       
MR. SCHMITZ  explained SB  31 provides  for extending  the Alaska                                                               
Railroad  and allows  the Alaska  Railroad Corporation  (ARRC) to                                                               
delineate a  proposed railroad utility  corridor to  the Canadian                                                               
border.  Language  on page  3,  Sec.  42.40.465, allows  ARRC  to                                                               
investigate  extension of  the Alaska  Railroad  to Fort  Nelson.                                                               
The  bill gives  the  corporation the  ability  to negotiate  and                                                               
acquire land  or interest in land  in Canada.  The  bill does not                                                               
appropriate funds.                                                                                                              
He explained that ARRC would  delineate a 500-foot wide corridor,                                                               
a standard railroad corridor that  will provide room for a depot,                                                               
loading  station and  locomotive  repair facility.  The State  of                                                               
Alaska would give  ARRC the state owned lands  through fee simple                                                               
title once the delineation is complete.   The state is not giving                                                               
away anything because the state owns  the land and the state owns                                                               
ARRC so  it will be  transferring the land  from one hand  to the                                                               
CHAIR  COWDERY  thanked  Mr.  Schmitz  for  the  impressive  bill                                                               
SENATOR  WAGONER asked  why  the rail  bed  was established  from                                                               
Chipmunk to Dease Lake.                                                                                                         
MR. SCHMITZ said  British Columbia owns the railroad  in much the                                                               
same way  as Alaska owns the  Alaska Railroad.  There  was a plan                                                               
in the  1960s to  extend the  rail line  to the  Yukon Territory.                                                               
The project  was abandoned  due to a  shortage of  funds, however                                                               
British Columbia continues  to own the right-of-way  and the rail                                                               
SENATOR OLSON  asked if a  decision has  been made to  extend the                                                               
railroad from Whitehorse to Fort Nelson.                                                                                        
MR. SCHMITZ said  the route would be determined later.   It could                                                               
go either  to Fort  Nelson or  to Chipmunk.  He opined  there was                                                               
more interest  in going  toward Fort  Nelson because  the overall                                                               
vision  of  this connection  is  to  head toward  the  population                                                               
centers  of  the  Midwest. Alaska  currently  has  barge  service                                                               
connections  with  the  West  Coast.   At  Prince  Rupert,  B.C.,                                                               
railcars are loaded onto a barge that goes to Whittier.                                                                         
REPRESENTATIVE JAMES said the Canadian  National (CN) Railroad is                                                               
building or  planning to  build rail toward  Fort Nelson.  The CN                                                               
Railroad  is  integrated into  the  North  American rail  system.                                                               
Canadian  interest   in  the   Alaska  Railroad   connection  has                                                               
accelerated  recently  so  the project  would  be  a  cooperative                                                               
SENATOR  OLSON  asked if  the  rail  route  would be  a  Canadian                                                               
decision or an Alaskan-Canadian decision.                                                                                       
CHAIR COWDERY said he did not know.                                                                                             
REPRESENTATIVE JAMES  said, "The decision  as to where  the route                                                               
will go  will be  depending upon the  geology, the  economics and                                                               
where the  resources are  and where the  topography works."   She                                                               
explained that  when Governor Murkowski  was in the  U.S. Senate,                                                               
Rails   to   Resources   legislation  established   a   bilateral                                                               
commission  of 12  Canadians and  12 U.S.  citizens to  conduct a                                                               
feasibility study.  The Canadians  are now getting interested and                                                               
that feasibility  study will determine  where the route  ought to                                                               
be both economically and physically.                                                                                            
CHAIR  COWDERY  said  a  limit   on  grade  must  be  considered.                                                               
Satellite imaging could determine  a "paper" right-of-way and DNR                                                               
should not  go to the  expense of a  physical survey.   ARRC will                                                               
benefit from  the rail  line and should  have funds  available to                                                               
survey when the time comes to build the connection.                                                                             
SENATOR OLSON  asked if the  natural gas pipeline route  had been                                                               
CHAIR COWDERY  said it  would probably be  the shortest  route to                                                               
Chicago and may go through  Calgary, Alberta. There is a proposed                                                               
pipeline route but he did not have it with him.                                                                                 
SENATOR  THERRIAULT directed  attention  to language  on page  3,                                                               
line  12, "under  former AS  19.05.122,"  and said  "and then  of                                                               
course  Section 2  of the  bill, down  at the  bottom of  page 3,                                                               
repeals that section."   He asked "what are we  repealing and why                                                               
are we referring to it after the fact?"                                                                                         
MR. SCHMITZ said, as he understood  it, it repeals a statute that                                                               
addressed some  of the  ways land was  acquired by  the railroad.                                                               
This  legislation  would  replace  it.    He  said  the  railroad                                                               
representatives might know more about that.                                                                                     
SENATOR LINCOLN said she had a  number of questions and wanted to                                                               
know who was going to testify.                                                                                                  
CHAIR COWDERY said ARRC representatives  were present and someone                                                               
was listening on line.                                                                                                          
SENATOR LINCOLN  asked that a railroad  representative respond to                                                               
her questions also.                                                                                                             
CHAIR COWDERY said perhaps Representative  James could answer the                                                               
SENATOR  LINCOLN referred  to  the maps  and  the proposed  route                                                               
segment  between Dot  Lake  and Tanacross  and  then through  Tok                                                               
where  it indicates  railroad alignment  has  not been  precisely                                                               
defined.  She asked why that segment has not been defined.                                                                      
REPRESENTATIVE JAMES  responded the  original plan  was to  go to                                                               
Tetlin, then  up and over  into the  Ladue River Valle,  down the                                                               
Ladue River  to Carmacks in  the Yukon Territory and  into Watson                                                               
Lake.  There is Native land in  the area and that is probably the                                                               
reason  why  the  exact  delineation   of  that  corridor  wasn't                                                               
determined at that time.                                                                                                        
SENATOR  LINCOLN said  she suspected  as much.   She  asked Chair                                                               
Cowdery how  he would anticipate overcoming  that land ownership,                                                               
if that is the case.                                                                                                            
CHAIR  COWDERY recognized  there  were privately  owned lands  to                                                               
deal  with,  which would  be  part  of  the negotiation  if  this                                                               
legislation goes forward.                                                                                                       
SENATOR  LINCOLN said  it  is a  big section  and  three or  four                                                               
communities could be impacted. She  asked if an alternative route                                                               
could be taken so Native lands would be bypassed.                                                                               
REPRESENTATIVE JAMES replied:                                                                                                   
     If  I  might  respond  to  that  issue,  it  would  not                                                                    
     necessarily be  my impression  that we  need to  not go                                                                    
     over   the  Native   lands.  We   need  to   make  that                                                                    
     advantageous for  them for it  to go over  their lands.                                                                    
     Certainly it's the estimate on  this issue is that it's                                                                    
     going to be beneficial  not non-beneficial.  That's yet                                                                    
     to be determined but that would be my evaluation.                                                                          
SENATOR  LINCOLN   asked  if  individual  communities   had  been                                                               
contacted and whether they are  working on the details or whether                                                               
that is not going to start until a later point of the project.                                                                  
REPRESENTATIVE JAMES said that was premature at this time.                                                                      
SENATOR LINCOLN said  it is unknown whether  the communities will                                                               
be amenable to the plan.                                                                                                        
SENATOR  LINCOLN said  last year  the Senate  Resources Committee                                                               
held  extensive  hearings  on this  bill.  There  were  questions                                                               
raised regarding the railroad going  through the corridor for the                                                               
gas  line. She  read the  intent language  added to  the previous                                                               
year's bill:                                                                                                                    
     It  is  the  intent   of  the  legislature  to  reserve                                                                    
     interest   to   the   state  as   necessary   for   the                                                                    
     construction,   maintenance,    operation   and   other                                                                    
     activities for  or related to  a gas pipeline  in state                                                                    
     land  that  may  be  conveyed to  the  Alaska  Railroad                                                                    
     Corporation  under this  act for  the extension  of the                                                                    
     Alaska Railroad to the border of Alaska and Canada.                                                                        
She stated:                                                                                                                     
     I remember a lot of  dialogue on that particular intent                                                                    
     language which  I supported.   Since we don't  know yet                                                                    
     about where we're  going with the gas  pipeline and the                                                                    
     corridor  that's  needed for  that,  we  don't want  to                                                                    
     already have  approved something prematurely  before we                                                                    
     know the needs in that area.                                                                                               
CHAIR COWDERY said the railroad  representatives might be able to                                                               
expand on  that. He said  it is his  belief the gas  pipeline and                                                               
the railroad corridors will be very  close to each other. It will                                                               
be necessary for supplying the pipeline construction.                                                                           
1:58 p.m.                                                                                                                     
GENERAL  PATRICK GAMBLE,  President and  Chief Executive  Officer                                                               
Alaska  Railroad Corporation,  spoke in  support  of SB  31.   He                                                               
informed members  that half of the  Alaska Railroad Corporation's                                                               
mission   statement   pertains    to   community   and   economic                                                               
development. The  railroad is  interested in  looking at  the big                                                               
picture  in  terms  of  economic   development  and  pushing  the                                                               
frontiers  forward.  The  mission   statement  also  says  to  be                                                               
profitable. The railroad takes a  more detailed look when looking                                                               
at   profitability.  Community   and  economic   development  and                                                               
profitability are entwined.                                                                                                     
GENERAL GAMBLE introduced former  Senator Johne Binkley, Chairman                                                               
of  the  Board,  Alaska  Railroad   Corporation,  and  Ms.  Wendy                                                               
Lindskoog, Director of Community Relations.                                                                                     
GENERAL GAMBLE said the Alaska Railroad Corporation sent a                                                                      
letter of support for SB 31.  He amplified the substance of the                                                                 
points of the letter as follows.                                                                                                
     It's the  operational business  of the  Alaska Railroad                                                                    
     to haul stuff  and sometimes we forget that  as we look                                                                    
     in the  details of something  as complex as  what we're                                                                    
     about to discuss. We don't  make a market in the Alaska                                                                    
     Railroad,  we  don't  establish  the  requirements  for                                                                    
     market,  we satisfy  requirements.  We  move goods  and                                                                    
     services  in  between a  supplier  and  the market  and                                                                    
     that's where  our expertise is,  that's what we  do and                                                                    
     that's what our expertise is in.                                                                                           
     Our  expertise is  in  planning. We  are  very good  at                                                                    
     figuring  our  federal  funding,   we're  very  bad  at                                                                    
     figuring  our state  funding because  we don't  get any                                                                    
     funding  from  the state.  That's  good  news. What  we                                                                    
     bring  is  the  ability, through  our  eligibility  for                                                                    
     certain federal  funds, is  the ability  to go  out and                                                                    
     capture those  funds and  bring them  in and  then turn                                                                    
     them into the state.  And  in a way, that's kind of the                                                                    
     railroad's dividend  to the state  is this  movement of                                                                    
     dollars where it's appropriate and authorized.                                                                             
     We  bring to  the forefront  engineering expertise  and                                                                    
     then, of  course, after it's all  built, the operations                                                                    
     expertise to be able to run  the railroad.  So, when we                                                                    
     come and  testify on a  subject like this, this  is our                                                                    
     We  are motivated  as a  private corporation.  In other                                                                    
     words, what we do, we  do through our mission statement                                                                    
     that says -  the mission statement that  this body gave                                                                    
     to  the  railroad   in  the  Transfer  Act   is  to  be                                                                    
     profitable.  There's  a formula  that  helps  us to  be                                                                    
     profitable  and that  formula has  worked for  17 years                                                                    
     very,  very well.  And  so  you will  hear  from me  an                                                                    
     attempt to  try to  steer the  discussion back  to that                                                                    
     formula  that's  worked  so   well  in  an  attempt  to                                                                    
     recreate that as we for  the first time since 1985 look                                                                    
     to push the frontiers of the railroad out again....                                                                        
GENERAL  GAMBLE  said   the  degree  to  which   the  formula  is                                                               
disassembled and broken  up could lead to dysfunction  and a need                                                               
to come back to the legislature  and correct it with the finances                                                               
of the state. The railroad wants  to make net earnings, which are                                                               
plowed  back into  operation and  maintenance. He  concluded that                                                               
the railroad is  pleased to be in the forefront  in support of SB
SENATOR  LINCOLN  said  she  was  not opposed  to  some  sort  of                                                               
railroad  extension but  wants to  make sure  it is  in the  best                                                               
interest of the State of Alaska  and look into the future for the                                                               
uses  of  those  lands.  She said  last  year's  Senate  Resource                                                               
Committee had long discussions on the use of the land.                                                                          
She underscored  two things in  the railroad's letter  of January                                                               
24th.  First was  the land  ownership  question. In  the bill  as                                                               
written, the  Department of Natural Resources  (DNR) shall convey                                                               
those lands  to the Alaska  Railroad on  a fee simple  basis. She                                                               
said she  had some problems  with the 500-foot wide  corridor and                                                               
difficulty with  the idea of  putting more lands into  fee simple                                                               
title to the railroad.                                                                                                          
Second,  she addressed  two sections  in the  bill.   Language on                                                               
page   2,  line   19,  begins   with  the   conveyance  and   the                                                               
corporation's  power of  eminent  domain.   Language  on page  3,                                                               
beginning with  line 13 states,  "If the Alaska  Railroad informs                                                               
the Department of  Natural Resources in writing that  the land is                                                               
necessary for  use as  a utility  corridor, the  department shall                                                               
convey that  land." She stated, "It  is just saying yea,  we have                                                               
use  for it  and the  department simply  conveys that  land under                                                               
that first section  I spoke of."  She asked  for General Gambles'                                                               
response to that.                                                                                                               
SENATOR  LINCOLN noted  the second  part of  the letter  from the                                                               
corporation  stated  concerns  about additional  maintenance  and                                                               
operations  expenses. She  stressed she  had concerns  about that                                                               
and did not know what the railroad's concerns were.                                                                             
GENERAL GAMBLE  said Senator Lincoln  had hit upon  two essential                                                               
elements that are  of similar and equal concern  to the railroad.                                                               
First, land  conveyance is  key to the  success of  the railroad.                                                               
During the history  of building railroads, lands  adjacent to the                                                               
track  were  conveyed to  the  railroads  and  the land  and  the                                                               
minerals on  those lands allowed  the railroads to  be successful                                                               
before  they started  moving the  heavy  freight and  passengers.                                                               
The Transfer Act  of 1985 conveyed land to the  railroad in order                                                               
for  that  land to  be  revenue  producing  and is  an  important                                                               
element of the Alaska Railroad.                                                                                                 
The State  of Alaska said  the railroad would move  passengers as                                                               
well as  freight and  therefore ARRC  cannot maximize  the bottom                                                               
line in the same way as a  standard railroad.  There are no other                                                               
passenger and  freight railroads  running regular service  in the                                                               
country.   The operational ratio  of the  railroad is close  to a                                                               
dollar in and a dollar out.   The revenue from real estate allows                                                               
the railroad to pay the  operations and maintenance bills without                                                               
having  to  come back  to  the  state.    ARRC is  concerned  the                                                               
railroad will run into financial trouble without real estate.                                                                   
GENERAL GAMBLE pointed  out there is about 70 acres  of land with                                                               
each mile of the railroad.   The railroad leases 4,000 plus acres                                                               
of the  36,000 acres originally  conveyed on a fee  simple basis.                                                               
That lease contributes significantly  because real estate is very                                                               
favorable   to  the   railroad.   Net  earnings   added  to   the                                                               
depreciation  are  put  back  in a  capital  program  that  fixes                                                               
things, buys  things, pays  salaries and  allows the  railroad to                                                               
receive matching money for federal  funds.  Federal funds pay for                                                               
construction   while  net   earnings  pay   for  operations   and                                                               
maintenance.  The  railroad expects  when  these  rail lines  are                                                               
linked in,  Canada revenue would  begin to  move up and  down the                                                               
line but the guarantee is the  steady stream of net earnings as a                                                               
result of real estate.                                                                                                          
Second, the railroad exclusivity  enhances safety to the required                                                               
federal limits and allows the  railroad to operate uninterrupted,                                                               
impeded or  disturbed by  the pressures from  the growth  along a                                                               
rail  line.  Seventy percent  of  Alaska's  population growth  is                                                               
along the Railbelt and there  will be significant development and                                                               
growth  along the  extension of  the rail  line to  Canada in  50                                                               
years.  At-grade crossings  are  the number  one  killers in  the                                                               
Lower 48. The railroad cannot control  crossings if it just has a                                                               
priority  right-of-way. If  the railroad  does not  have control,                                                               
many  roads will  cross the  track, which  slows trains  down and                                                               
increases the risks. ARRC, in  cooperation with the Department of                                                               
Transportation and  Public Facilities (DOTPF), would  like to see                                                               
planning for separate grades where the tracks cross the roads.                                                                  
SENATOR  LINCOLN  requested  her   friend,  former  Senator  John                                                               
Binkley,  to come  forward to  address  a question.  She said  as                                                               
Chairman of the Board, it  is Senator Binkley's responsibility to                                                               
move  the  railroad  in  the direction  requested  by  the  board                                                               
members.  Some legislators  expressed  interest  in pushing  this                                                               
legislation forward.  She asked  Senator Binkley if he would have                                                               
requested this  legislation be introduced  as a top  priority for                                                               
the railroad had this plan not come from the legislature.                                                                       
JOHN  BINKLEY,  Chairman  of  the   Board  of  Directors,  Alaska                                                               
Railroad Corporation,  said one of  the primary missions  of ARRC                                                               
is to  facilitate economic  development in  the State  of Alaska.                                                               
He explained:                                                                                                                   
     To  the  extent that  we  can  expand the  railroad  or                                                                    
     enhance  service  to  different   areas  or  work  with                                                                    
     communities,  we want  to  do what  we  can to  promote                                                                    
     economic development and  enhance the opportunities for                                                                    
     Alaskans in  pursuing economic development. So  to that                                                                    
     extent,  we certainly  would pursue  it  to the  extent                                                                    
     that we could  realize that it does  take a significant                                                                    
     amount of  statute changes and specific  legislation to                                                                    
     actually  make this  happen.  We're  encouraged by  the                                                                    
     chairman and  the legislative members who  want to move                                                                    
     this  issue  forward  and give  us  an  opportunity  to                                                                    
     expand the rail line.                                                                                                      
     In  the original  legislation that  created the  Alaska                                                                    
     Railroad  by  Congress,  I   believe  in  1914,  they'd                                                                    
     envisioned a  thousand miles of  rail within  Alaska to                                                                    
     actually  develop Alaska  at that  time. We've  not met                                                                    
     that potential,  we have only about  five hundred miles                                                                    
     of mainline  rail that  we operate on  and so  we think                                                                    
     that the original intent of  Congress and really Alaska                                                                    
     is to  develop some of  the areas of Alaska  with rail.                                                                    
     It's   a   method   of   transportation   that   serves                                                                    
     constituencies well  in those  areas. It's  low impact.                                                                    
     It allows  for the development  of some of  the natural                                                                    
     resources in  that area and  I think it's  an excellent                                                                    
     way to  develop the  resources in  those areas  so we'd                                                                    
     certainly be supportive of that.                                                                                           
SENATOR LINCOLN  said she  did not hear  him answer  whether this                                                               
would have been one of his priorities.                                                                                          
She referred  to Senate Resources Committee  meeting minutes from                                                               
the previous year.  She said  there were a lot of questions about                                                               
the 500 foot  corridor and very strong language  about giving the                                                               
railroad an exclusive right to a  500 foot corridor when maybe it                                                               
should  be a  100 foot  corridor  and maybe  not even  exclusive.                                                               
There was  a question about  transferring the  subsurface mineral                                                               
rights to the  railroad instead of for use by  Alaska.  She asked                                                               
if the Board of Directors had  addressed those concerns.  She had                                                               
not received  a copy of  the board's response to  these concerns.                                                               
She  addressed Chair  Cowdery  and said  she  would appreciate  a                                                               
response to these  legitimate concerns from last  year, which are                                                               
still legitimate.                                                                                                               
TAPE 03-03, SIDE B                                                                                                            
SENATOR LINCOLN questioned:                                                                                                     
     On  page 3,  line 23,  we as  a legislature  are saying                                                                    
     that the  corporation may acquire land  or interests in                                                                    
     land   in   Canada   as   the   corporation   considers                                                                    
     appropriate for  the development,  construction.... Why                                                                    
     would  we give  you the  authority to  acquire land  in                                                                    
     another country?                                                                                                           
SENATOR BINKLEY responded to  Senator Lincoln's previous question                                                               
to  say that  the bill  died in  committee so  the board  has not                                                               
specifically addressed that piece of  legislation. SB 31 was just                                                               
recently introduced  so the board can  take it up and  supply her                                                               
with specific responses.                                                                                                        
SENATOR  LINCOLN  said,   "Because  it  is  the   same  piece  of                                                               
legislation minus the letter of intent."                                                                                        
SENATOR BINKLEY said that is correct.                                                                                           
He said the width of  the right-of-way corridor could be debated.                                                               
The optimum width is something  people could disagree on but come                                                               
to a  compromise on. The  ability to  have exclusive use  of that                                                               
right-of-way and  to be able  to control  the access to  the rail                                                               
line is important  for the safe operation of  the railroad. Where                                                               
the crossings are placed is of great concern.                                                                                   
He said it  is not the intent  of ARRC in any way  to inhibit the                                                               
construction of  a proposed natural  gas pipeline that may  be in                                                               
the same corridor.  He said,  in his opinion, the intent language                                                               
as Senator Lincoln had read it  would not be objectionable to the                                                               
The alignment  of the proposed  railroad corridor,  following the                                                               
Tanana Valley  east, pulls  out of the  narrow area  by Cathedral                                                               
Bluffs and  expands out  past Dot  Lake leading  toward Tanacross                                                               
and Tok. The specific right-of-way  alignment in that area is not                                                               
critical.  The railroad is very  sensitive to grade issues, it is                                                               
important  to stay  on  level  grade or  in  the  low country  if                                                               
possible.  The valley  widens out  where the  Tok River  comes in                                                               
from the south  so there is a lot of  latitude where the railroad                                                               
can  move  to  the  south  before  reaching  Tetlin.  Should  the                                                               
railroad  proceed with  this plan,  ARRC intends  to analyze  the                                                               
ownership of  the land and  the environmental conditions  in that                                                               
area  and route  the  rail line  where it  would  have the  least                                                               
impact  on  the  environmental  conditions  and  avoid  any  land                                                               
ownership conflicts.                                                                                                            
CHAIR  COWDERY  said  some  four-lane  highway  rights-of-way  in                                                               
mountainous  areas require  cuts and  fills that  probably exceed                                                               
500  feet.  A  railroad  needs stations,  repair  facilities  and                                                               
sidetracks.  He asked what the present railroad right-of-way is.                                                                
SENATOR BINKLEY said the right-of-way  is typically 200 feet.  In                                                               
areas requiring  deep fills,  the right-of-way  would potentially                                                               
need to exceed that.                                                                                                            
CHAIR COWDERY said satellite mapping  would identify those areas.                                                               
He asked if  the fiber optic cables on  the railroad right-of-way                                                               
generated revenue.                                                                                                              
GENERAL GAMBLE answered fiber optic  cable is an important source                                                               
of real estate revenue to ARRC.                                                                                                 
SENATOR THERRIAULT referred to three  areas of concern.  He noted                                                               
where  the proposed  right-of-way  reaches  Cathedral Bluffs  and                                                               
turns into a  dashed line on the map, "the  dashed line indicates                                                               
the  area where  the railroad  alignment has  not been  precisely                                                               
defined."  In  the North  Pole  or  Eielson  area down  to  Delta                                                               
Junction, much of that routing is  on the west side of the Tanana                                                               
River  so   impacts  to  communities   are  of   little  concern.                                                               
However, when  the right-of-way leaves  Eielson and  goes through                                                               
the Salcha area,  a 500-foot right-of-way has a  lot of potential                                                               
impact to his constituents.                                                                                                     
When the right-of-way swings down,  comes into the Delta Junction                                                               
area, crosses  the river to  serve the community and  cuts though                                                               
Delta Junction proper, a 500-foot  right-of-way would be of great                                                               
concern.    He  asked  if  that  area  was  already  specifically                                                               
He then said  in the agricultural area, people  have large tracks                                                               
of  land and  the only  possible corridor  would be  across their                                                               
property. Those people have some  notification that something has                                                               
gone on in the  past.  He said he was not  sure if that right-of-                                                               
way was relinquished.                                                                                                           
REPRESENTATIVE   JAMES    offered   the    following   background                                                               
information. In the late 1970s,  the delineation of this railroad                                                               
corridor was  done by air  and a centerline  was put on  the map.                                                               
In  1974,  DOTPF was  told  to  identify  the cost  of  acquiring                                                               
private interests  in that specific  corridor. DOTPF  spent $7500                                                               
and came up  with that cost estimate and a  year later erased the                                                               
route from the maps by  withdrawing the permits. Then legislation                                                               
required DOTPF  to put the  right-of-way back  on the map.  It is                                                               
just a  centerline on  a map with  absolutely no  authority, real                                                               
boundaries or size.                                                                                                             
She said  the Department  of Natural Resources  (DNR) did  a high                                                               
resolution  mapping  over flight  all  the  way to  the  Canadian                                                               
border, down  the river and down  the highway two years  ago. The                                                               
mapping will  provide information  on the topography  and geology                                                               
in  that  area.  In  the  event money  became  available  to  the                                                               
railroad, SB 31  would authorize the railroad  to determine where                                                               
the  route  should be  and  then  come  to  the state  with  that                                                               
information. Putting  this route on  the map notices  anyone with                                                               
interest  in  that land  that  this  might  be  the place  for  a                                                               
SENATOR THERRIAULT  pointed out  the railroad  currently operates                                                               
in a right-of-way  that averages 200 feet wide. He  asked why the                                                               
right-of-way would have to be at least 500 feet in those areas.                                                                 
REPRESENTATIVE   JAMES  said   the  transportation   and  utility                                                               
corridor right-of-way from Fairbanks  to the Seward Peninsula was                                                               
originally 500 feet. In the  future, this proposed transportation                                                               
and utility corridor might contain  the rail, high power electric                                                               
transmission lines,  pipelines or  fiber optic cables.  The issue                                                               
is to  go across  an area  where there  is nothing  developed and                                                               
identify a  500-foot transportation and utility  corridor for the                                                               
future without encroachments.                                                                                                   
SENATOR THERRIAULT  expressed concern  about the  language "shall                                                               
be  at  least 500  feet."    He  said  if transmission  lines,  a                                                               
pipeline, road and  rail need to be included,  the corridor needs                                                               
to be  extra wide. In the  portion of this right-of-way  that has                                                               
development there  already are transmission lines,  there already                                                               
is a  highway and  one pipeline.  Mandating that  it be  500 feet                                                               
will increase the concerns of  the people that already live there                                                               
and  potentially  cause  problems.   Getting  a  500-foot  swathe                                                               
through  Delta  Junction  is  going  to  be  difficult.  It  will                                                               
probably have  to be something less  than 500 feet as  the right-                                                               
of-way  goes  through  Delta Junction  and  perhaps  through  the                                                               
Salcha area.   The wording  says "at least  500 feet" and  has no                                                               
allowance for  these sensitive  areas where  it makes  good sense                                                               
for it to be something less.                                                                                                    
GENERAL GAMBLE said it is amazing to see how the 200-foot right-                                                                
of-way the  railroad maintains has  been squeezed as a  result of                                                               
development. Snowmobile trails develop  in remote areas alongside                                                               
the track and sometimes there is  desire to convert the trails to                                                               
roads.  The  200-foot corridor is wide enough to  put in a second                                                               
track for  a siding or  a double track. Standard  railroad policy                                                               
for safety  is to designate  a margin  so nothing can  get closer                                                               
than 75 feet to a train.   The railroad gets pressure to yield on                                                               
that  75-foot margin.  A  200-foot corridor  is  needed for  rail                                                               
purposes  and  has  worked well.  A  transportation  and  utility                                                               
corridor  with  rail,  road, pipeline  and  power  line  requires                                                               
additional  space. He  asked, "Is  this  part of  a system  we're                                                               
developing  here or  are  we trying  to whittle  this  down to  a                                                               
minimalist approach to a very complex problem?"                                                                                 
SENATOR THERRIAULT  said he  understood development  will squeeze                                                               
in but  there are certain  sections where the railroad  is trying                                                               
to squeeze into developed areas. Unless  they are going to buy up                                                               
huge portions of  privately owned property, there is  going to be                                                               
opposition  and   concern  from  communities.   The  right-of-way                                                               
doesn't have to be 500 feet  from point A to point B; flexibility                                                               
would give  communities a little  bit of comfort.  Delta Junction                                                               
is against the  river and there probably is not  500 feet between                                                               
the river  and the community  in some portions unless  the right-                                                               
of-way was to be placed on the other side of the community.                                                                     
SENATOR  THERRIAULT anticipated  a  lot of  concerns about  going                                                               
through Salcha. He said Salcha  has flooding problems and, during                                                               
his campaign,  his opponent alleged, "the  federal government was                                                               
just fine  if they were flooded  out because they wanted  to move                                                               
people off the  property so the railroad could sweep  in and take                                                               
it from them anyway."                                                                                                           
CHAIR COWDERY ascertained  the communities are not  going to want                                                               
to be bypasses  and will work out a solution  on the right-of-way                                                               
width as the plan develops.                                                                                                     
GENERAL  GAMBLE  referred to  the  community  effort underway  in                                                               
Fairbanks  and   said  that  ARRC's   policy  is  to   work  with                                                               
communities and address issues in great detail.                                                                                 
SENATOR  WAGONER   asked  the  approximate   cost  per   mile  of                                                               
construction of new bed and rail.                                                                                               
GENERAL GAMBLE said  they normally would use a range  of $3 to $8                                                               
million  for  a  project  like  this.  This  corridor  was  first                                                               
surveyed in World War II. Surveying  the center of the track line                                                               
will determine  cost. A reasonable  estimate would be  $5 million                                                               
per mile.                                                                                                                       
SENATOR BINKLEY  said ARRC has  the same shareholders as  DNR and                                                               
the State of  Alaska.  If land is transferred  from one entity to                                                               
another, it really is to benefit the same people.                                                                               
SENATOR LINCOLN noted  they have a different  Board of Directors.                                                               
She referred to the earlier comment  that this corridor is not in                                                               
a seismic  zone. Recently  there was a  fairly big  earthquake in                                                               
that area.  She  asked if they had looked at  how that fault line                                                               
ran in relation to this corridor.                                                                                               
GENERAL  GAMBLE said  ARRC has  looked around  Tok because  of an                                                               
incident there but it has not  looked closely at the other areas.                                                               
A fault line  runs up through Denali National Park  on the way to                                                               
Fairbanks and  over to Tok.   He was not familiar  with the fault                                                               
lines that may run in the other areas.                                                                                          
SENATOR LINCOLN said that might be something to look at.                                                                        
GENERAL GAMBLE said absolutely.                                                                                                 
2:43 p.m.                                                                                                                     
SENATOR LINCOLN  said Governor Murkowski spoke  about seeking the                                                               
support of the  Bush Administration for a rail  extension to Fort                                                               
Greeley but  did not  mention this  project in  his State  of the                                                               
State speech.   She asked  if Governor Murkowski had  pulled away                                                               
from this  project, while seeking  support from the  President of                                                               
the United States  for the extension, why did he  not also say he                                                               
was seeking support for the  funding of this project. She pointed                                                               
out they should  be looking at the bigger picture  for Alaska and                                                               
how to get  revenue coming in. At $5 million  per mile, the state                                                               
better be looking to the federal government she said.                                                                           
CHAIR  COWDERY  said,   "I'm  in  the  Senate  and   not  in  the                                                               
Administration so I  don't know what his motivation  was on these                                                               
statements."  He  understood the Governor was  supportive of this                                                               
REPRESENTATIVE   JAMES  said   the   connection   to  Canada   is                                                               
encompassed in the federal legislation,  Rails to Resources.  The                                                               
bilateral  commission  of  Canadian and  American  citizens  will                                                               
generate a feasibility study and  the rail connection is going to                                                               
be based  on that study.   Millions of  dollars per mile  are not                                                               
going to  be spent to  build a rail line  that does not  have the                                                               
ability to pay for itself over time.                                                                                            
REPRESENTATIVE  JAMES continued  by  saying  Senator Ted  Stevens                                                               
asked the railroad  to estimate the cost of the  rail line to the                                                               
Fort  Greeley Military  Reservation when  there were  talks about                                                               
the missile  base.  The  study of a  highway bridge at  Flag Hill                                                               
includes consideration  of a combination rail  and highway bridge                                                               
and is  a step towards getting  across the Tanana River  into the                                                               
Blair Lakes area.  She questioned,  "If they're going to put in a                                                               
bridge, what [are]  the synergies of doing both rail  and road in                                                               
the event that  we do go ahead  and cross the river  there?"  She                                                               
thought  rail access  through Army  and Air  Force Bases  and the                                                               
Fort   Wainwright  Military   Reservation   must  be   considered                                                               
seriously because of security reasons.                                                                                          
CHAIR  COWDERY clarified  the feasibility  study will  answer the                                                               
question  of whether  the railroad  connection  is beneficial  to                                                               
Alaska and America.                                                                                                             
SENATOR WAGONER  said Chair Cowdery  referred to a  54-inch piece                                                               
of pipe that was  1 1/4 inches thick and 80 feet  long.  He asked                                                               
what  kind of  stress  that  would put  on  the current  railroad                                                               
GENERAL  GAMBLE replied,  "That's a  great question  and it  gets                                                               
right to  one of our  strategic planning elements."  The railroad                                                               
is preparing  for the future  and upgrading the  current railroad                                                               
is the number  one priority with annual  appropriations to insure                                                               
the main  track is ready to  haul the weights expected.  ARRC has                                                               
an  enormous  bridge  program underway  that  will  take  several                                                               
years.  Key sidings  are being  built and  upgraded to  allow the                                                               
heaviest  locomotives   and  trains   to  pull  off.   When  this                                                               
connection goes forward, the whole line will be ready.                                                                          
2:50 p.m.                                                                                                                     
CHAIR COWDERY asked  if the railroad is designed  to haul heavier                                                               
weights than the present highways and bridges.                                                                                  
FORMER SENATOR BINKLEY answered  definitely.  The new locomotives                                                               
weigh  420,000 pounds  spread over  six axels.   The  railroad is                                                               
upgrading to  a standard  115-pound rail and  ties that  are more                                                               
substantial  to  carry  these  heavy  loads.    Trains  can  haul                                                               
substantially  higher loads  than  on a  highway.   The  question                                                               
would be the number of joints of pipe to haul per car.                                                                          
CHAIR COWDERY said he had the weight  of one joint of pipe in his                                                               
files and would share that information.                                                                                         
SENATOR  WAGONER said  he knew  what kind  of stress  that weight                                                               
would put on a highway.  Without special equipment, it should not                                                               
be permitted. He had been  watching the railroad replace ties and                                                               
upgrade the track.                                                                                                              
GENERAL GAMBLE  noted the railroad  is looking at  increasing the                                                               
number of  concrete ties.  A new grade  of concrete  offers great                                                               
strength in  a concrete  railroad tie  and has  a life  span that                                                               
exceeds the forty-year product life of hardwood ties.                                                                           
He noted  the State Historical Preservation  Office declared rail                                                               
bridges  over 50  years  old  as historic.  The  railroad has  to                                                               
conform to  certain state regulations  to capture  the appearance                                                               
of the  original bridge before  repairs. The railroad  works well                                                               
with the  State Historical Preservation  Office and  the projects                                                               
are moving along.                                                                                                               
SENATOR THERRIAULT  mentioned there  are stretches of  highway in                                                               
the Fairbanks North Star Borough  where the road right-of-way has                                                               
been there  for 20 or  30 years.   Now, with the  climate change,                                                               
there are stretches  that have developed a little dip.   He asked                                                               
if the rail line was experiencing dips.                                                                                         
FORMER SENATOR BINKLEY said seasonal  freezing and thawing causes                                                               
a lot of problems and takes  a tremendous amount of money. At the                                                               
beginning  of  every winter  and  every  spring, ARRC  shims  and                                                               
realign  the track  to take  care of  the problem.  There may  be                                                               
areas where the permafrost is starting  to melt but it is handled                                                               
during the course of normal maintenance.                                                                                        
ARRC is conducting  an economic analysis on  changing to concrete                                                               
ties  and heavier  rail. Currently,  every three-foot  section of                                                               
rail weighs 115 pounds and a  141-pound rail that is much deeper,                                                               
heavier and stronger is being  considered. The heavier rail allow                                                               
ties to be spaced less frequently and will carry heavier loads.                                                                 
CHAIR COWDERY said the Bullet  Train travels at speeds of 120-130                                                               
miles per  hour on concrete  ties and does  not have some  of the                                                               
lumbering effect.  He appreciated  that ARRC  is looking  at that                                                               
REPRESENTATIVE JAMES pointed out the purchase of the 500 miles                                                                  
of Alaska track for 22 million dollars was a deal.                                                                              
FORMER SENATOR BINKLEY said it was a bargain.                                                                                   
CHAIR COWDERY  confirmed his intention  to hold SB 31  and gather                                                               
answers  to some  questions.   He added  when the  bill is  heard                                                               
again, DOTPF  and other  departments will  be present  to express                                                               

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