Legislature(2003 - 2004)

03/27/2003 01:35 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  announced  his  intention  to  move  SB  31  from                                                               
committee  and that  a committee  substitute, labeled  version I,                                                               
was prepared.                                                                                                                   
SENATOR  WAGONER  motioned to  adopt  version  I as  the  working                                                               
document. The motion carried with no objection.                                                                                 
CHAIR COWDERY informed members that  he had distributed a list of                                                               
bullet points to members and  that Ms. Johnson would describe the                                                               
MS. PHYLLIS JOHNSON,  Vice President and General  Counsel for the                                                               
Alaska  Railroad Corporation  (ARRC), told  members that  she and                                                               
staff from  the Department of  Natural Resources (DNR)  and Wendy                                                               
Lindskoog worked  closely on the  revisions. They used  the basic                                                               
structure of  SB 31 and defined  more steps in the  process. They                                                               
tried  to set  up a  three-tier arrangement.  ARRC still  has the                                                               
ability  to delineate  a  proposed  transportation corridor.  The                                                               
proposed  corridor  would be  500  feet  wide unless  topographic                                                               
obstacles or private land ownership  patterns prevent that width.                                                               
After ARRC  proposes the 500-foot corridor  with additional areas                                                               
for maintenance,  transfer facilities  or other needs,  DNR would                                                               
reserve  the  corridor on  the  state  record subject  to  valid,                                                               
existing rights.  DNR would continue  to manage the  land because                                                               
even though  the corridor  was identified,  ARRC would  not begin                                                               
construction  until funding  is  established. DNR  would have  to                                                               
consult  with  ARRC whenever  it  receives  new applications  for                                                               
leases in  the area  and make  sure that  any uses  it authorizes                                                               
accommodate  the railroad.  ARRC and  DNR would  cooperate on  an                                                               
ongoing  basis  to  identify  the  best  locations  for  railroad                                                               
crossings so  that public access  to resources and  activities is                                                               
reserved and  safety concerns are  addressed. Once  ARRC receives                                                               
funding to begin  construction on some portion of  the route, DNR                                                               
would transfer  the management  of authority  of that  portion to                                                               
ARRC,  subject to  valid  existing rights  and  subject to  DNR's                                                               
continuing authority to identify potential crossings.                                                                           
MS.  JOHNSON  said when  construction  is  completed, ARRC  would                                                               
provide  DNR  with  an  as-built survey  of  the  centerline  and                                                               
corridor  and   100-feet  either  side  of   centerline  for  the                                                               
traditional  200 foot  right-of-way. That  right-of-way would  be                                                               
conveyed to ARRC. The intention is  to preserve the full 500 feet                                                               
as  a  transportation  corridor  that could  be  used  for  other                                                               
purposes. ARRC's  200-foot right-of-way would be  a mini-corridor                                                               
within  the  larger corridor.  ARRC  would  have title  and  full                                                               
authority to  do what it chooses  within the 200 feet.  DNR would                                                               
continue to  manage the remainder  of the 500-foot  corridor. The                                                               
bill also contains  some fallback provisions so that  if, at some                                                               
point in time,  ARRC notifies DNR that it would  never build in a                                                               
segment and that  it is not needed as  a transportation corridor,                                                               
DNR could administer the entire corridor under its statutes.                                                                    
MS.  JOHNSON said  that subsection  (f) on  page 4  is a  special                                                               
provision to  address the  event that  construction of  a natural                                                               
gas pipeline becomes more likely.  If DNR receives an application                                                               
for construction  of that pipeline,  DNR would give  ARRC notice.                                                               
If  able at  that time,  ARRC  would choose  its centerline.  She                                                               
described  subsection (f)  as a  "speak now  or hold  your peace"                                                               
provision for ARRC. If the  centerline were delineated, DNR would                                                               
not allow  the pipeline  to be  constructed within  that 200-foot                                                               
corridor. If ARRC did not  delineate the centerline at that time,                                                               
DNR  would  still have  to  consult  with  ARRC to  minimize  the                                                               
effects on the rail route  when it authorizes construction of the                                                               
natural gas line.                                                                                                               
MS. JOHNSON told members the  following subparagraph (g) reserves                                                               
DNR's right to identify and  permit the appropriate locations for                                                               
future  crossings.  DNR would  work  closely  with ARRC  and  get                                                               
ARRC's  concurrence, which  is limited  to  safety and  operating                                                               
matters.  She  said the  remaining  changes  are similar  to  the                                                               
original  bill and  merely "clean  up loose  ends." For  example,                                                               
ARRC  is directed  to work  with the  federal government  once it                                                               
identifies the route to set  aside and withdraw any federal lands                                                               
that  the  route   might  cross.  It  requires  ARRC   to  do  an                                                               
environmental impact  statement (EIS) when  it gets to  the point                                                               
of  acquiring  federal  lands.   If  the  chosen  route  contains                                                               
privately  owned land,  ARRC would  have to  consider whether  to                                                               
exercise the  power of eminent  domain, negotiate, or  change the                                                               
1:45 p.m.                                                                                                                     
CHAIR COWDERY asked  where a gas line entity would  apply for the                                                               
MS. JOHNSON  replied if the gas  line entity were ready  to apply                                                               
before the railroad  is in the construction process,  it would go                                                               
to  DNR because  the corridor  would be  reserved and  managed by                                                               
DNR.  She said  the wrinkle  is that  DNR would  be obligated  to                                                               
consult with ARRC  and give it the opportunity  to pinpoint where                                                               
the rail line might be located within the 500-foot corridor.                                                                    
SENATOR  WAGONER noted  that version  I contains  provisions that                                                               
address  construction of  the pipeline  prior to  construction of                                                               
the  railroad. However,  one reason  cited as  the need  for this                                                               
legislation  is  to  enable  construction  of  a  rail  link  for                                                               
shipping the  pipe for the  pipeline. He  asked if that  is still                                                               
the  case and  if DNR  or  ARRC would  get the  revenue from  the                                                               
pipeline in the corridor.                                                                                                       
CHAIR  COWDERY said  he  believes  the revenue  would  go to  the                                                               
state. He cited  the need for the railroad to  transport the pipe                                                               
and  acknowledged that  decision would  have  to be  made at  the                                                               
MS. JOHNSON added that ARRC's  designation of the 500-foot right-                                                               
of-way  would  not  entitle  the railroad  to  any  revenue  from                                                               
anything.  The   management  authority  and  revenues   from  any                                                               
contracts within  that corridor would  remain with DNR  until the                                                               
rail  line  is ready  to  be  constructed  and funding  has  been                                                               
identified. A provision on page  3 [subsection (d)] says that DNR                                                               
will give ARRC management authority  for segments of the corridor                                                               
that  are  ready  for  construction  for  the  construction  time                                                               
period. That  includes the  authority to  allow permits  to other                                                               
parties. ARRC  would step  into DNR's shoes  for that  portion of                                                               
the  500-foot right-of-way  where construction  is taking  place.                                                               
When  ARRC has  completed  that construction  and  gives DNR  the                                                               
survey, DNR  would transfer  the full title  to ARRC.  ARRC would                                                               
then  continue  to receive  revenue  from  any contracts  it  has                                                               
within its 200-foot right-of-way.                                                                                               
CHAIR COWDERY  commented that a 200-foot  right-of-way translates                                                               
to 100-feet on  either side of centerline, which  is not adequate                                                               
to build a pipeline.                                                                                                            
MR. BOB LOEFFLER,  Director of the Division of  Land, Mining, and                                                               
Water, Department of Natural Resources (DNR), told members:                                                                     
     We  expect  that  portions   of  the  right-of-way  may                                                                    
     overlap  and it  would provide  an opportunity  for the                                                                    
     railroad  to be  constructed to  provide transport  for                                                                    
     the right-of-way  so those portions  that do  overlap -                                                                    
     they would get the revenue for.                                                                                            
MS. WENDY  LINDSKOOG, Director of  External Affairs,  ARRC, added                                                               
that the  intent was to recognize  that if the railroad  does not                                                               
have  the funds  for  construction of  a rail  line  and the  gas                                                               
pipeline is  ready to move  forward, the  route of the  rail line                                                               
would be much less flexible than  the route of the gas line. This                                                               
language allows  ARRC to at  least survey the  centerline, taking                                                               
into consideration its engineering  requirements, and to identify                                                               
the 100-feet  on either side.  If the  gas line had  to interface                                                               
with the  railroad route, a  mechanism is set  up in the  bill to                                                               
approach that discussion in cooperation with DNR.                                                                               
CHAIR  COWDERY  announced  that  Senator  Dyson  had  joined  the                                                               
SENATOR LINCOLN asked Mr. Loeffler  who would receive the revenue                                                               
from an overlap.                                                                                                                
MR. LOEFFLER replied:                                                                                                           
     ... you prorate  them such that the  portion within the                                                                    
     railroad's  land  would  go to  the  railroad  and  the                                                                    
     portion outside of  the railroad land would  go to DNR.                                                                    
     This is  a very  common occurrence,  which we  have all                                                                    
     over the state and it's pretty straightforward.                                                                            
SENATOR LINCOLN referred to subsection (f) on page 4 and read:                                                                  
     If the  corporation provides a survey  alignment to the                                                                    
     department,   the   department    may   not   authorize                                                                    
     construction of  a natural gas  pipeline within  a 200-                                                                    
     foot  [wide]  corridor center...unless  the  department                                                                    
     does not find a feasible and prudent alternative.                                                                          
She  expressed concern  that the  language would  lead the  state                                                               
into court at  some time. She said legislators  support a natural                                                               
gas  pipeline  and the  likely  route  is  well known,  but  this                                                               
legislation puts the cart before the horse.                                                                                     
CHAIR COWDERY  said the corridor that  would be more of  a "paper                                                               
corridor." It would  not be surveyed until the  railroad needs to                                                               
be  built and  would  most likely  be  identified from  satellite                                                               
1:55 p.m.                                                                                                                     
MS. JOHNSON added that ARRC  envisions the corridor to be loosely                                                               
defined   at   first.  If   the   pipeline   were  proposed   for                                                               
construction, ARRC would consult with  DNR about trying to design                                                               
the pipeline  route so  that it  would not be  a problem  for the                                                               
railroad.  She noted  it is  possible  that ARRC  would have  the                                                               
money  to  survey a  centerline  sooner.  She repeated  that  the                                                               
railroad grade is  more sensitive than the grade  for a pipeline.                                                               
If ARRC  can survey a  centerline, DNR  would try to  establish a                                                               
buffer from the gas line of at least 100 feet.                                                                                  
SENATOR LINCOLN noted  that Ms. Johnson alluded to  the fact that                                                               
a paper survey  could be done fairly soon. She  said if that were                                                               
the  case, the  provisions  of subsection  (g)  would apply.  She                                                               
asked Mr. Loeffler  if the state already has  some information on                                                               
the pipeline  corridor so that it  is not put into  a position of                                                               
having to negotiate out of it.                                                                                                  
MR. LOEFFLER said when he  discussed this with Ms. Johnson; their                                                               
goal was to make sure the  railroad does not become an impediment                                                               
to a gas line. He stated:                                                                                                       
     That  was what  we tried  to accomplish  and what  this                                                                    
     language does is  say where we know where  the gas line                                                                    
      is going to be - if, in fact - if they have a right-                                                                      
     of-way, then they  are a valid existing  right. But, if                                                                    
     we're considering  giving them  a right-of-way,  and it                                                                    
     turns  out that  they're taking  the best  place for  a                                                                    
     railroad, then  we want to  think about it. And  if, in                                                                    
     fact, they can  move without much cost,  then we should                                                                    
     move. But  if they can't  move without a lot  of costs,                                                                    
     then  they should  stay. But  that  thought process  is                                                                    
     what we  want to do. We  just want to be  able to think                                                                    
     about it.                                                                                                                  
     Now the legal - since we  had to put that into language                                                                    
     -  'and thinking  about it'  -  it seems  sort of  more                                                                    
     ambiguous  language, we  used  the language,  'feasible                                                                    
     and  prudent alternative.'  And that's  pretty standard                                                                    
     language  for   DNR  but   it  means,   really,  taking                                                                    
     everything into account  including practicality, safety                                                                    
     and  economics. If  it's better  to move  the gas  line                                                                    
     because it doesn't  cost that much then  we should move                                                                    
     the gas  line. But if it's  not better to move  the gas                                                                    
     line, then  we shouldn't.  And that's really  what that                                                                    
     language means.  It means just  think about  it, taking                                                                    
     into  account  alternatives,  including  economics  and                                                                    
     social and things like that.  So that's what we use the                                                                    
     language for and when we  say think about it that's the                                                                    
     legal  standard we  put  in  there. But  it  is a  very                                                                    
     common  legal   standard  for  DNR  and   so  I  don't,                                                                    
     especially  with  another  state  agency  such  as  the                                                                    
     railroad, the court doesn't strike  me as a very - it's                                                                    
     unlikely - I hope that to be an unlikely event.                                                                            
2:00 p.m.                                                                                                                     
MS.  JOHNSON  said  she  may have  created  a  misimpression  and                                                               
clarified  the survey  of the  centerline  is the  on-the-ground,                                                               
true survey  and is not what  she expects ARRC to  identify soon.                                                               
She said what  ARRC might be able to provide  soon is referred to                                                               
in  Section 1  of  the bill  and  that is  the  delineation of  a                                                               
proposed  500-foot corridor.  ARRC is  hoping to  rely on  aerial                                                               
photographs and  work that has  already been done. That  will not                                                               
be  a survey;  it  will be  a broad-brush  stroke.  She said  the                                                               
survey of the centerline is not likely to happen very soon.                                                                     
SENATOR LINCOLN asked Mr. Loeffler  whether DNR has already begun                                                               
to look at a corridor for a gas line.                                                                                           
MR. LOEFFLER said it has and has some general alignments.                                                                       
SENATOR LINCOLN  asked if it  falls within the  proposed railroad                                                               
MR. LOEFFLER said the railroad has not proposed a route yet.                                                                    
CHAIR  COWDERY  said  it  is  his  understanding  that  the  word                                                               
"survey" does  not mean an on  the ground survey. It  refers to a                                                               
plot plan like one would get to  build a house. Once the house is                                                               
built, an  as-built survey  would be done.  He envisions  a paper                                                               
survey from satellite photos.                                                                                                   
SENATOR LINCOLN noted that Ms.  Johnson said the survey alignment                                                               
was on the ground.                                                                                                              
MS.  JOHNSON explained  the informal  survey that  would rely  on                                                               
satellite  imagery and  existing data  is the  one she  envisions                                                               
ARRC would  use to set  aside the  first description of  the full                                                               
500-foot corridor. A more specific  designation of the centerline                                                               
would be  necessary to coordinate  with a pipeline route.  If the                                                               
gas line  were ready to  begin construction before  the railroad,                                                               
ARRC would  need to define  a specific corridor for  the pipeline                                                               
to stay out of. That would probably  require a lot of work on the                                                               
ground, but not to the point  that markers would be set every few                                                               
CHAIR COWDERY said  witness posts would be required  when a full-                                                               
blown survey  begins. He pointed  out that DNR's fiscal  note for                                                               
the  original bill  was very  expensive. He  did not  accept that                                                               
fiscal  note  because  this  legislation   is  "too  far  in  the                                                               
preliminary stage to put a high fiscal note in."                                                                                
SENATOR  DYSON referred  to subsection  (b) on  page 2  and noted                                                               
that the  Northern Hemisphere  is undergoing  significant changes                                                               
in subsurface  temperatures due  to climate  change, particularly                                                               
in  permafrost and  ice-rich  ground. He  asked  for comments  on                                                               
whether  it would  do  any damage  to version  I  to add  another                                                               
paragraph that said, "minimize  the subsurface stability problems                                                               
by avoiding, where possible, ice  and permafrost rich ground." He                                                               
noted that most  of that ground has already been  surveyed and is                                                               
recorded in the  literature so it should not be  difficult to get                                                               
that information.  He added  that he does  not believe  item (5),                                                               
environmental concerns,  would take  that into  consideration. He                                                               
believes environmental concerns would  focus on wildlife, grasses                                                               
and  fish while  what  he is  referring to  is  a foundation  and                                                               
stability problem.                                                                                                              
SENATOR DYSON said his other concern  is that he would be meeting                                                               
with his  counterparts in Whitehorse,  Yukon Territory,  and they                                                               
are very interested in this  project because it can commercialize                                                               
a lot  of their  mineral wealth. He  suggested adding  "and Yukon                                                               
Territory's" to item (8) so that it would read:                                                                                 
     ...that could contribute significantly to the state's                                                                      
     and Yukon Territory's economic development; and                                                                            
He said  his goal is  to create  a complementary process  so that                                                               
Alaska considers what works for  the Yukon Territory economically                                                               
as the route is determined. He asked for comments.                                                                              
CHAIR  COWDERY  pointed  out  that SB  31  addresses  the  Alaska                                                               
railroad portion, which would terminate at the border.                                                                          
SENATOR DYSON said  if it terminates at the border  but there's a                                                               
huge field of delicate permafrost  right across the border, it is                                                               
a  dumb  idea  to  not  have looked  across  the  border  at  the                                                               
stability of  the rail bed.  He said it  would be foolish  to not                                                               
take  into  account  the  railroad route  over  the  border  when                                                               
designing Alaska's portion. If the  route could be moved north or                                                               
south  to greatly  facilitate  Yukon's  mineral development  with                                                               
very little  difference in cost,  the state would be  foolish not                                                               
to do so.                                                                                                                       
CHAIR COWDERY  said everyone is  in agreement that the  object is                                                               
to connect  this railroad  to Fort  Nelson, British  Columbia. He                                                               
suggested changing "Yukon Territory" to "Canada."                                                                               
SENATOR DYSON was agreeable.                                                                                                    
SENATOR  THERRIAULT  referred to  Section  42.40.465  on page  6,                                                               
which addressed ARRC's ability to  acquire an interest in land in                                                               
Canada,  and   thought  Senator  Dyson's  request   about  citing                                                               
benefits to Canada should be placed in that section.                                                                            
MS. JOHNSON  said she agrees  with Senator Therriault that  it is                                                               
more  logical to  add that  consideration to  the last  paragraph                                                               
that deals  with Canada.  She said Senator  Dyson's request  is a                                                               
reasonable consideration to  take into account. She  said she did                                                               
not catch  all of  Senator Dyson's  concern about  foundation and                                                               
stability  problems, but  believes those  are good  thoughts that                                                               
apply  both   within  and  outside   of  Alaska  for   rail  line                                                               
consideration. She  said that could  easily be added as  a factor                                                               
in  subsection (b)  on page  2. She  pointed out  it fleshes  out                                                               
environmental concerns, but also could  be considered as a way to                                                               
minimize construction costs.                                                                                                    
CHAIR  COWDERY asked  Senator Dyson  to  work with  his staff  to                                                               
prepare suggested language to propose as an amendment.                                                                          
SENATOR  OLSON  expressed  concern   about  including  the  Yukon                                                               
Territory  in this  legislation because  he understands  there is                                                               
opposition to the railroad in  Canada and including that language                                                               
could bring opposition to Alaska's portion of the rail line.                                                                    
SENATOR  DYSON said  he would  be visiting  with Yukon  Territory                                                               
officials  this weekend  on that  very issue.  He said  there are                                                               
some political processes  going on there. Some  of the landowners                                                               
along the way  are not necessarily against the  railroad, but are                                                               
using it  as a  bargaining chip to  accomplish other  motives. He                                                               
heard  strong  support for  the  rail  line from  the  government                                                               
officials and from the groups with mineral interests.                                                                           
CHAIR  COWDERY  noted  he  wrote  a letter  to  the  editor  that                                                               
was published  in the Whitehorse  newspaper and he  received very                                                               
positive  remarks. He  said he  has read  that support  is almost                                                               
unanimous  in the  Yukon  Territory. He  asked  Senator Dyson  to                                                               
report back to the committee after his meeting.                                                                                 
SENATOR WAGONER asked  if there is any reason  other than mineral                                                               
development  and  possibly transporting  the  pipe  to build  the                                                               
pipeline  for the  extension of  the railroad.  He noted  that he                                                               
contacted Linden Transport, which runs  a barge from the Lower 48                                                               
to Alaska every  week. They can't fill the barge  and claim there                                                               
is  no need  for  rail  freight. He  expressed  concern that  the                                                               
Legislature  should  be  addressing  the  long-term  benefits  of                                                               
extending  the railroad  and  who  would pay  the  cost. He  said                                                               
delineating a corridor is one thing  but he wants to know whether                                                               
the state  would be saddled  with the  cost of building  the rail                                                               
CHAIR COWDERY said  he also spoke with Linden  Transport. He said                                                               
that many  tourists would use the  railroad, but that would  be a                                                               
small factor. He asked Mr. Schmitz to address the question.                                                                     
MR.  RICHARD  SCHMITZ,  staff  to   Senator  Cowdery,  said  Mead                                                               
Treadwell from the  Northern Forum informed him  that the largest                                                               
freighters and oil  tankers couldn't go through  the Panama Canal                                                               
so the companies that own the  canal are trying to raise billions                                                               
of dollars  to rebuild it. He  pointed out that because  of ports                                                               
like  Seward, Anchorage,  and Whittier  that are  much closer  to                                                               
Asia,  a rail  link from  Alaska to  Halifax could  carry freight                                                               
faster  than  if that  freight  was  shipped through  the  Panama                                                               
Canal. He  noted that during  its first  ten years 90  percent of                                                               
the  first  trans-continental railroad  freight  was  made up  of                                                               
goods  being shipped  from Asia  to Europe.  In addition,  cruise                                                               
ship companies  are looking  for a circular  tour and  trains are                                                               
very popular.                                                                                                                   
CHAIR COWDERY said  he gave a speech while in  Russia a few years                                                               
ago and  the Russians are  concerned that  China owns all  of the                                                               
land on  either side of the  Panama Canal and that  tariffs might                                                               
be raised to the point  of reducing competitiveness with the East                                                               
SENATOR  THERRIAULT asked  Chair  Cowdery, since  he intended  to                                                               
move  the bill  out  of committee  today,  whether the  committee                                                               
could deal with the suggested  amendments in a conceptual manner.                                                               
He pointed out the bill has referrals to two more committees.                                                                   
CHAIR COWDERY was agreeable.                                                                                                    
SENATOR THERRIAULT said, regarding  Senator Dyson's concern about                                                               
consideration of  soil stability, a  provision could be  added to                                                               
item (5)  or (7)  on page  2. He  suggested adding  the following                                                               
language  to item  (7),  "minimization  of probable  construction                                                               
costs  including, but  not limited  to, steps  to avoid  areas of                                                               
possible instability  due to warming  soil conditions."  He asked                                                               
Senator Dyson if that language would meet his concern.                                                                          
SENATOR  DYSON  said  he  would  specify,  "warming  frozen  soil                                                               
TAPE 03-11, SIDE B                                                                                                            
SENATOR  THERRIAULT  said  he  would   move  that  as  conceptual                                                               
amendment #1 and restated it as:                                                                                                
On page 2, line 15, item (7) would read"                                                                                        
          (7) minimization of probable construction costs                                                                       
     including, but not limited to,  steps to avoid areas of                                                                    
     possible  instability   due  to  warming   frozen  soil                                                                    
SENATOR THERRIAULT asked for unanimous consent.                                                                                 
CHAIR  COWDERY  announced  that  without  objection,  the  motion                                                               
SENATOR THERRIAULT said the second  amendment would deal with the                                                               
issue  of  showing   the  Canadians  that  Alaska   is  not  just                                                               
interested in extending the rail  line to its border. He proposed                                                               
[copying] subsection  (b), lines 4  through 9, to  Sec. 42.40.465                                                               
so that it  shows that Alaska is concerned about  the same things                                                               
in Canada. He  suggested making the first part  of Sec. 42.40.465                                                               
subsection (a).                                                                                                                 
SENATOR  DYSON said  that item  (8), access  to identify  natural                                                               
resources, is of huge interest to Canadians.                                                                                    
SENATOR THERRIAULT  moved his second  suggestion as  a conceptual                                                               
amendment and asked for unanimous consent.                                                                                      
SENATOR  LINCOLN  objected  to  ask a  question.  She  noted  the                                                               
purpose of  Sec. 42.40.465  is to authorize  ARRC to  continue to                                                               
investigate  an  extension  through  Canada.  She  asked  if  the                                                               
Legislature  has  to authorize  the  ARRC  board  to do  that  or                                                               
whether the board could do that on its own.                                                                                     
CHAIR COWDERY  said he  believes the  Legislature needs  to grant                                                               
SENATOR LINCOLN asked  if that is because the  extension would go                                                               
through Canada.                                                                                                                 
2:27 p.m.                                                                                                                     
SENATOR THERRIAULT pointed out that  the second sentence says the                                                               
corporation  may acquire  land so  if ARRC  actually moves  to do                                                               
that, this  amendment would give  ARRC the same  instructions for                                                               
consideration on that land.                                                                                                     
SENATOR LINCOLN said she understands  the suggested amendment but                                                               
is questioning  the entire  section because  she did  not realize                                                               
the Legislature has to give  ARRC permission to acquire land. She                                                               
pointed out that although the  railroad is Alaska-owned the board                                                               
is independent.                                                                                                                 
MS. JOHNSON said she was  not sure whether ARRC needs legislative                                                               
approval  to  acquire  land  outside of  the  United  States  and                                                               
frankly,  when rewriting  the bill  she left  that section  as it                                                               
was.  She said  ARRC has  broad powers  as a  corporation in  its                                                               
corporation  act but  she does  not believe  it addresses  extra-                                                               
territorial rights.  She said  she believes it  does not  hurt to                                                               
include that section  if the Legislature wants ARRC  to have that                                                               
authority.  She  said  she has  one  question  regarding  Senator                                                               
Therriault's proposed amendment and asked  if the intention is to                                                               
move all of subsection (b) on page  2 to page 6 or just to repeat                                                               
subsection (b) on page 6.                                                                                                       
SENATOR  THERRIAULT clarified  that  his intention  is to  repeat                                                               
that subsection.                                                                                                                
SENATOR LINCOLN  noted that SB 31  has a further referral  to the                                                               
Senate Resources Committee where  her question could be addressed                                                               
so she removed her objection.                                                                                                   
SENATOR DYSON  said he appreciated  Senator Therriault's  help on                                                               
the amendments,  but because  Sec. 42.40.465  on page  6 contains                                                               
the  permissive  word  "may"  instead of  "shall"  he  still  has                                                               
concern. He  believes that ARRC  would take into account  a route                                                               
that would  be most  beneficial to both  the Yukon  Territory and                                                               
British Columbia,  but he would  be more comfortable if  the word                                                               
"may" was  changed to "shall."  He then asked that  the committee                                                               
add the  words "and Canada's"  to item (8)  on page 2  before the                                                               
words  "economic  development" so  that  even  if ARRC  does  not                                                               
investigate an extension,  it is still required  to consider what                                                               
might work best for our Canadian neighbors.                                                                                     
SENATOR  THERRIAULT said  the first  amendment  was a  conceptual                                                               
amendment and  that subsection (b)  on page 2 applies  to Alaska.                                                               
Subsection (b)  on page 6 is  directed at Canada. He  expects the                                                               
legal drafter to change Alaska to Canada.                                                                                       
SENATOR DYSON disagreed  and said that because  subsection (b) on                                                               
page 6 is permissive, ARRC may  consider it. He still wants ARRC,                                                               
even if it  only extends to the border, to  consider a route that                                                               
is  beneficial to  our Canadian  neighbors  if and  when it  gets                                                               
extended. He said  he does not want to see  a corridor that dead-                                                               
ends in  Canada and  does not  consider what  might happen  if it                                                               
extends beyond.                                                                                                                 
2:33 p.m.                                                                                                                     
CHAIR  COWDERY asked,  "What  happens in  this if  we  go to  the                                                               
Canadian border and  stop and then the  Canadian railroad decides                                                               
to  come and  join ours?  Are they  living by  our rules  or? You                                                               
know, we hope that would happen but...."                                                                                        
CHAIR COWDERY said what if ARRC  gave no consideration to what is                                                               
across the border and the railroads  end up being 100 miles apart                                                               
at the  border. He wants ARRC  and the Canadian railroad  to have                                                               
that conversation before.                                                                                                       
SENATOR OLSON  asked Ms.  Johnson how much  of the  corridor ARRC                                                               
anticipates having to declare eminent domain on to acquire land.                                                                
MS. JOHNSON  said she has  no idea at  this point. ARRC  does not                                                               
have enough  data about the  potential route. She  suggested that                                                               
Mr. Loeffler might have more  information on the land holdings in                                                               
that area of the state.                                                                                                         
[MR. LOEFFLER was no longer on-line.]                                                                                           
SENATOR OLSON said  there is always a fair  amount of controversy                                                               
associated  with  eminent  domain.  He  said  he  shares  Senator                                                               
Wagoner's   concern   about   encumbering   future   generations,                                                               
especially in light of the fact  that this project will require a                                                               
vast amount of real estate.                                                                                                     
MS.  LINDSKOOG  told members  it  is  important  to note  that  a                                                               
feasibility study has  not been done for this  project. She noted                                                               
that when Governor  Murkowski was a member of the  U.S. Senate he                                                               
had legislation enacted that authorized  funding for a bi-lateral                                                               
commission.  The appointments  for that  commission have  not yet                                                               
been  filled.  That  commission  would  look  at  a  lot  of  the                                                               
questions  that  members  are   asking,  such  as  the  project's                                                               
economic viability and the land issues.                                                                                         
MS.  JOHNSON added  that ARRC  has never  exercised the  right of                                                               
eminent domain.  Although it  has the statutory  power to  do so,                                                               
ARRC needs the  Governor's approval first.  She  then pointed out                                                               
that one  of the changes  made in Version  I was the  addition of                                                               
language to line  10 on page 1, which says  the corridor shall be                                                               
at  least  500-feet  wide  except  where  physical  obstacles  or                                                               
private  land   ownership  patterns  make  a   narrower  corridor                                                               
appropriate. ARRC may well find a  200 or 300-foot corridor to be                                                               
adequate where  development has already  occurred and  land would                                                               
have to be condemned.                                                                                                           
SENATOR OLSON  said the  fact that ARRC  has never  exercised its                                                               
power  of eminent  domain  allays  some of  his  fears. He  noted                                                               
eminent domain could be an abused authority.                                                                                    
SENATOR THERRIAULT referred to the  language Ms. Johnson cited on                                                               
page  1 and  noted the  corporation has  discretion to  use those                                                               
exceptions. He asked if that discretion language is necessary.                                                                  
MS. JOHNSON  said she believes that  ARRC needs to have  a bit of                                                               
flexibility. It  is foreseeable that  there would be  places that                                                               
ARRC  would have  to negotiate  a sale.  If federal  funding were                                                               
involved, there  would be controls  over those  negotiations that                                                               
are additional protections for the  landowner she added. She said                                                               
that ARRC  may have  to take away  some land and  if it  does not                                                               
have the  discretion to judge where  that is, ARRC would  have to                                                               
come back to Juneau every time such a situation comes up.                                                                       
SENATOR  OLSON  agreed   that  ARRC  would  need   to  have  some                                                               
discretion so he favors including that language.                                                                                
SENATOR LINCOLN  noted that  Senator Torgerson  was on  record as                                                               
being  very  concerned  about giving  away  the  state's  mineral                                                               
rights. Because she  shares his concern and  believes that public                                                               
access  should  be  protected  as well,  she  advised  she  would                                                               
address those issues in the Senate Resources Committee.                                                                         
SENATOR  THERRIAULT  moved  CSSB   31(TRA)  from  committee  with                                                               
individual recommendations and zero fiscal note.                                                                                
SENATOR LINCOLN objected to ask whether page 6 has been amended.                                                                
CHAIR COWDERY said it was.                                                                                                      
SENATOR  THERRIAULT suggested  that he  and Senator  Dyson get  a                                                               
look at the committee substitute after it is drafted.                                                                           
CHAIR COWDERY agreed.                                                                                                           
SENATOR LINCOLN  asked if the  committee changed  Senator Dyson's                                                               
request to change page 2.                                                                                                       
SENATOR THERRIAULT  noted that Senator  Dyson is a member  of the                                                               
Senate Resources Committee.                                                                                                     
SENATOR LINCOLN removed her objection.                                                                                          
CHAIR COWDERY  announced CSSB 31`(TRA)  and attached  zero fiscal                                                               
note moved from committee with individual recommendations.                                                                      
There being no further business  to come before the committee, he                                                               
adjourned the meeting at 2:43 p.m.                                                                                              

Document Name Date/Time Subjects